FiscalNote Q3 2025 Earnings Report

FiscalNote EPS Results

• Actual EPS: -$1.73
• Consensus EPS: -$0.84
• Beat/Miss: Missed by -$0.89
• One Year Ago EPS: N/A

FiscalNote Revenue Results

• Actual Revenue: $22.43 million
• Expected Revenue: $22.83 million
• Beat/Miss: Missed by -$397.00 thousand
• YoY Revenue Growth: N/A

FiscalNote Announcement Details

• Quarter: Q3 2025
• Date: 11/6/2025
• Time: After Market Closes
• Conference Call Date: Thursday, November 6, 2025
• Conference Call Time: 5:00PM ET

FiscalNote (NYSE:NOTE) provides enterprise software and data services designed to help organizations monitor, understand and respond to changes in legislation, regulation, public policy and geopolitical conditions. Its platforms use artificial intelligence, machine learning and data analytics to organize information from government and other public sources, helping customers assess potential risks and opportunities.

The company’s offerings include legislative and regulatory monitoring, policy analysis, stakeholder engagement and advocacy tools. Its products and brands have included FiscalNote, CQ, VoterVoice and Oxford Analytica, serving businesses, government agencies, nonprofit organizations, financial institutions and professional services firms. These solutions are intended to support compliance, government affairs, public affairs, risk management and strategic decision-making.

FiscalNote was founded in 2013 by Tim Hwang, who has served as the company’s chief executive officer. The company became publicly traded on the New York Stock Exchange in 2022 following a business combination with Duddell Street Acquisition Corp. FiscalNote serves customers in the United States and internationally, with its products incorporating information and policy developments from multiple jurisdictions.

FiscalNote Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q3 results met or beat guidance with $22.4M in revenue and $2.2M adjusted EBITDA (10% margin), and management narrowed full‑year 2025 guidance to $95–96M revenue and ~$10M adjusted EBITDA.
• Positive Sentiment: Annual recurring revenue showed initial stabilization—$84.8M ARR with a pro‑forma sequential increase of $0.1M and 98% net revenue retention—and the company is near completion of migrating accounts to PolicyNote, which has had 35+ major enhancements and strong usage signals.
• Positive Sentiment: Corporate sales momentum improved materially—enterprise win rates rose ~400 bps QoQ (YTD +500 bps), average contract values increased, and multi‑year corporate contracts now represent ~50% of new logo ARR (up from ~20% in early 2024), boosting revenue visibility.
• Neutral Sentiment: Headwinds include federal sector disruption (extended shutdown estimated to cost ~$2–3M this year) and prior divestitures that lowered YoY revenue, but the company strengthened its balance sheet—refinanced debt, extended maturities ~4 years, reduced convertible note obligations, and ended Q3 with ~$31.8M in cash.

Presentation

[Operator]

Good evening. My name is Tamika, and I will be your conference operator today. At this time, I would like to welcome everyone to the FiscalNote Holdings Incorporated Third Quarter 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star followed by the number one. Thank you. With that, I will now turn the call over to the company to begin. Please go ahead.

[Bob Burrows, Head of Investor Relations at FiscalNote]

Good evening. My name is Bob Burrows, Investor Relations for FiscalNote, and we are pleased you all could join us. The purpose of today's call is to discuss FiscalNote's third quarter 2025 financial results and guidance for both the fourth quarter and full year of 2025. Joining me with prepared comments are Josh Resnik, CEO and President, and Jon Slabaugh, CFO and Chief Investment Officer. Other members of the senior management team will be available as needed during the Q&A session that will follow these prepared comments. Please note today's press release, related current report on Form 8-K, and updated version of the corporate overview presentation can all be found on the Investor Relations portion of the company website. In terms of important housekeeping, please take note of the following. During this call, we may make certain statements related to our business that are forward-looking statements under federal securities laws.

[Bob Burrows, Head of Investor Relations at FiscalNote]

These statements are not guarantees of future performance, but rather are subject to a variety of risks and uncertainties. Our actual results could differ materially from expectations reflected in any forward-looking statements. For discussion of the material risks and important factors that could affect our actual results, as well as the risks and other important factors discussed in today's earnings release, please refer to our SEC filings, which are available either on our company website or the Securities and Exchange Commission's Edgar system. Additionally, non-GAAP financial measures will be discussed on this conference call. Please refer to the tables in our earnings release or the updated version of the corporate overview presentation for reconciliation of these measures to the most directly comparable GAAP financial measure. Finally, we use key performance indicators, or KPIs, in evaluating the performance of our business.

[Bob Burrows, Head of Investor Relations at FiscalNote]

These include annual recurring revenue, or ARR, and net revenue retention, or NRR. With that, I'd like to turn the call now over to FiscalNote CEO and President, Josh Resnik. Josh?

[Josh Resnik, CEO and President at FiscalNote]

Thank you, Bob, and thanks to everyone for joining us today. I'm glad to be here to discuss FiscalNote's third quarter 2025 results and to share an update on the progress we've made on our strategic objectives. We've been clear and consistent as to our priorities. Put simply, we continue to take a disciplined, focused approach to managing the business, and you see that reflected in our adjusted EBITDA profitability, as well as our management of the balance sheet and progress toward free cash flow. This, in turn, enables us to build a durable foundation for long-term profitable growth. In Q3, revenue totaled $22.4 million, in line with guidance, and adjusted EBITDA was $2.2 million, exceeding guidance. This translates to a margin of 10% and represents the fifth consecutive quarter of adjusted EBITDA margins at or above 10%.

[Josh Resnik, CEO and President at FiscalNote]

Reflecting the ongoing benefits of our cost discipline, sharper prioritization of core growth initiatives, and improving operating leverage. On a pro forma basis, excluding non-cash and other non-recurring charges, and the impact of the 2024 divestitures, OpEx decreased by approximately 8%. Reflecting continued cost discipline and operating efficiency. On this front, we're adopting additional automation-based approaches to certain aspects of our operations, which should drive higher productivity across the enterprise and yield incremental improvements to our overall profile over time. During the quarter, we also shored up our balance sheet, with maturities extended out by four years, thus strengthening our capital structure and providing long-term flexibility to execute on our strategy. I'll turn to growth and commercial momentum now. This quarter, we stabilized ARR with a modest quarter-to-quarter increase on a pro forma basis.

[Josh Resnik, CEO and President at FiscalNote]

This signals an initial stabilization of the core business and underscores that the strategic actions we're taking are starting to produce tangible results. Most importantly, it reflects early traction as we continue building a product-led organization positioned for higher levels of long-term growth. I'll explain some of the factors behind the current results, and we'll also walk through how this fits in the context of our transformation of the business. Inbound demand remains strong, indicating a continued need for our solution, as well as specific interest in PolicyNote, and our teams are maintaining a healthy sales pipeline. Corporate new logo sales also showed continued momentum in Q3. I noted last quarter that win rates among enterprise clients rose 400 basis points quarter over quarter. In Q3, we saw that momentum continue with another 400 basis point improvement in that segment when compared with Q2.

[Josh Resnik, CEO and President at FiscalNote]

Year to date, across all corporate segments, win rates are up 500 basis points overall. Equally important, we're not just winning more; we're winning higher value deals. Average contract values have trended meaningfully upward over the course of the year. Notably, corporate multi-year contracts for our policy data now account for approximately 50% of new logo ARR, up from about 20% in early 2024. A 2.5x increase that strengthens revenue visibility and is expected to support further improvements in gross retention in 2026. This progress in corporates is especially noteworthy in light of the ongoing volatility in the federal space, including continued disruption this quarter due to the extended government shutdown. Strong corporate performance has helped offset that pressure and should serve as a solid foundation for further growth as conditions in the federal sector stabilize over time.

[Josh Resnik, CEO and President at FiscalNote]

Our product innovation continues to underpin this progress, and in Q3, we released a series of meaningful enhancements to PolicyNote, including AI-powered legislative drafting, social listening to identify early policy signals, upgraded reporting, and AI-generated tariff impact reports. More recently, we launched bill comparison, an AI-driven capability that allows users to instantly redline and compare versions of pending bills, a powerful example of our ability to leverage advanced AI to deliver meaningful incremental value to our users and increasingly move towards automating customer workflows. Year to date, our product team has now launched more than 35 major enhancements to the PolicyNote platform since its launch in January. These continuous improvements are reinforcing PolicyNote as a cornerstone of our ecosystem and a key contributor to strengthening customer engagement and retention.

[Josh Resnik, CEO and President at FiscalNote]

Usage trends on PolicyNote remain overwhelmingly positive across all nature of metrics that we track internally, including the behaviors that indicate high usage frequency, product stickiness, and highly valuable integration into customer workflows. We view these patterns as early indicators of future improvements to gross and net retention, and combined with our increasing success in new logo sales, they're expected to serve as the foundation for durable long-term growth. This is why we have placed a focus on moving our existing customers onto PolicyNote, and to that end, migration to PolicyNote continues to go well, with the vast majority of accounts using our legacy FiscalNote platform having been successfully transitioned to PolicyNote. This will put us in position to have completed the migration from the legacy FiscalNote platform by the end of this calendar year as planned.

[Josh Resnik, CEO and President at FiscalNote]

As for our 2025 guidance, Jon will walk through that in more detail. Importantly, the update we have given for both total revenues and adjusted EBITDA remain within our previous ranges and reflect our current outlook on the business with two months before year-end. In summary, we continue to see growing momentum in our corporate pipeline and steady progress in our migration of PolicyNote, which together provide a clear path to renewed sustainable growth. These results reflect steady execution, disciplined management, and tangible progress against our strategic priorities. While there is still work ahead, the trajectory is positive, and we remain confident in our ability to deliver sustainable growth, expanding profitability, and long-term value for shareholders. With that, I will turn it over to Jon to walk through the financials in more detail. Jon.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

Thank you, Josh. Good evening, and thank you for joining us. In the third quarter, FiscalNote successfully met its previous guidance for both total revenue and adjusted EBITDA. As a result, we're updating our full-year revenue guidance to a range of $95 million-$96 million, with adjusted EBITDA projected to be approximately $10 million. Both figures remain within our previously established ranges. This updated guidance reflects the strong performance observed in our core business, while also accounting for the specific impacts of our public sector business due to unusual disruptions in the federal sector. Overall, operationally, the business is showing resilience and indications of stabilization in the core policy products. Underlying our operations, we also secured our capital structure in a way that affords us the runway and flexibility necessary to execute on our product-led strategy.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

On that note, FiscalNote previously had several convertible notes on its balance sheet, all subordinate to our senior term loan. These notes carried significant payment and maturity obligations starting in 2025 and continuing into 2026 and 2027, preventing the company from refinancing its senior debt. The August transactions replaced and/or amended these convertible notes, reducing their balance and eliminating most of our annual PIK interest. These transactions enabled FiscalNote to refinance its senior term loan, and collectively, the transactions allow us to better manage our capital structure and provide a stronger foundation for our product-led growth strategy moving forward. The new debt stack can be found in both the revised corporate overview presentation issued today in conjunction with our earnings release and in the Form 10-Q. With that as a backdrop, let me dive into some of the key drivers behind our Third Quarter financial results.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

Total revenue for Q3 2025 was $22.4 million, above the midpoint of our forecast of $21.23 million. When compared to the prior year, revenue was $7 million lower, primarily due to the divestiture of Aicel in October 2024, Oxford Analytica and Dragonfly at the end of Q1 2025, and Timebase at the end of Q2 2025. Subscription revenue, which remains the cornerstone of our business, was $21.2 million for the quarter, $6 million lower, again largely due to divestitures. Subscription revenue accounted for 94% of total revenue, slightly higher than our historical trend of 92%. On a pro forma basis, after adjusting for the impact of the mentioned divestitures, Q3 2025 subscription revenue was $1.8 million lower than the prior year period, reflecting our continued transition to PolicyNote from the legacy Fiscal Note platform. As of Q3 2025, annual recurring revenue was $84.8 million versus $92.2 million.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

In 2024, on a pro forma basis, a decline of $7.4 million. As Josh spoke to earlier, on a sequential basis, Q3 2025 ARR increased by $100,000 versus Q2 2025 on a pro forma basis, adjusting for the divestitures. This is an important indicator of our mounting momentum for our PolicyNote platform launched in January of this year. For the third quarter 2025, net revenue retention was 98%. Level with the prior year and up 200 basis points over the second quarter on a pro forma basis. Principal operating expenses in Q3 2025 extended the trend of year-over-year decreases, reflecting the impact of ongoing efficiency measures initiated in 2023, advanced in 2024, and maintained across 2025. Such discipline is essential to our path to expanding operating margins and adjusted EBITDA going forward.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

Looking at expenses in more detail, Q3 2025 cost of revenue decreased by $1.5 million, or 23% versus prior year. R&D decreased by $1.2 million, or 36%. Sales and marketing decreased by $2.8 million, or 31%, and editorial decreased by $1.4 million, or 30%. As for G&A, we saw an increase of $3.3 million, or 31%, which included approximately $3.1 million of non-cash charges and approximately $4.3 million of cash costs related to our refinancing activities, the sale of Timebase, as well as other non-recurring costs, which we recorded in G&A during the quarter. Excluding these items, G&A would have declined year-over-year as well. Total Q3 2025 operating expenses fell by $4 million, or 11%, versus the prior year. On a pro forma basis, excluding non-cash and other non-recurring charges and the impact of the 2024 divestitures, OpEx decreased by approximately $1.7 million, or 8%.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

Q3 2025 gross margin was 79%. Level with the prior year on a GAAP basis. Q3 2025 adjusted gross margin was 87% as compared to 86% in the prior year. Both reflect the impact of disciplined cost management. Adjusted EBITDA was a positive $2.2 million, a decline over the prior year due to the mentioned divestitures, but slightly above the guidance we gave and the ninth consecutive quarter of positive performance on this important profitability metric. Going forward, we will continue to drive increasing operating leverage across the business while steadily expanding our top line through product-led growth. Cash and cash equivalents, including short-term investments, at the end of Q3 2025 were $31.8 million, reflecting a sufficient cash level to fund our continuing progress, turning around the core business and transitioning into a durable and sustainable growth engine. Finally, let me speak to guidance.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

We are updating our guidance, remaining within our previous guidance range. Specifically, we are narrowing the forecast to now expect full-year 2025 revenue of approximately $95 million-$96 million from a previous range of $94 million-$100 million. Full-year 2025 adjusted EBITDA is approximately $10 million from a previous range of $10 million-$12 million. As a consequence, we are expecting fourth quarter 2025 total revenues of $22 million-$23 million and adjusted EBITDA of approximately $2 million. Overall, our Q3 and year-to-date performance demonstrate a healthy business with increasing strength and resilience. Our streamlined operating plan prioritizes innovation, consistently generating positive customer feedback and highlighting the value of PolicyNote's enhancement since its January launch. We are also committed to prudent cash management, controlling capital expenditures, reducing cash interest expense, and operating expenses.

[Jon Slabaugh, CFO and Chief Investment Officer at FiscalNote]

These efforts are all aimed at accelerating our progress towards positive free cash flow and sustainable, profitable long-term growth. Year to date, we have achieved a great deal in 2025, and we are encouraged by the clear positive trends we are seeing across the product and customer metrics, which drive everything. We know we are on the right path, and we look forward to reporting our continued success in establishing durable growth in the business and creating substantial value for customers and shareholders alike. That concludes my prepared remarks. I'll turn it over to the operator to begin the question and answer session. Operator.

[Operator]

At this time, if you would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question is from the line of Mike Latimore with Northland Capital Markets.

[Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets]

Great. Thanks. Yeah. Good evening. Good to see the ARR and our improvement here. Nice to see. Thanks, Josh. I think you said that ACV of deals or ACV overall is getting bigger. Can you give a little more color around that? Is it more users at current customers, more usage across the customer base, or some solid cross-sells like global data?

[Josh Resnik, CEO and President at FiscalNote]

Sure, Mike. Thanks for the question. The single biggest driver behind the higher ACVs really is leveraging global data more. We've done some work to restructure our global data packages, and I think have done a very good job bringing those to market. That, in turn, extends use cases through the enterprise, which makes it prime for our larger corporate clients, the larger enterprise and extending down through the mid-market. We see a lot of potential for that going forward as well.

[Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets]

Got it. Yeah. Okay. Even migrating customers to PolicyNote, sometimes when companies do those kind of migrations, they see churn pick up. It seems like we have not seen any change materially in churn with these migrations. Is that fair?

[Josh Resnik, CEO and President at FiscalNote]

Yeah, that's correct. We haven't really seen any meaningful migration-related churn. We've had a very positive experience moving customers onto PolicyNote, both in terms of how the migration itself has gone, but also, as we've mentioned, with the usage metrics and engagement that we see once customers are on there.

[Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets]

Got it. Okay. I think you highlighted new logo bookings were good again. I just wanted to clarify that you said that. Was that trajectory as expected or any different from what you were thinking?

[Josh Resnik, CEO and President at FiscalNote]

Yes, that's correct. We did see continued improvement in new logo bookings for corporates in particular, where we do expect to see continued improvements and advancements over time. What we've seen has been success on win rates, success on the higher ACVs, and success in continuing to sign new customers to multi-year commitments. Again, we think that's a factor of better execution that we've seen, better offerings that we have, both in terms of PolicyNote, specifically the global data packages and the like. We believe that we're delivering significant value to these customers and can continue to drive improvements in ACVs over time.

[Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets]

Yeah. And then just one question on kind of operating efficiency. I think you mentioned that there might be opportunities for more automation within the business over time. I guess, can you just provide a little more detail on that and maybe the magnitude of the effect there?

[Josh Resnik, CEO and President at FiscalNote]

Sure, Mike. I'd be happy to do that. What I'm referring to there are areas where we're really starting to see some tangible success in different areas of the business, leveraging automation in different ways. For example, we've been doing a better job of taking advantage of opportunities with using agentic AI in our coding with our R&D teams. We've seen that reflected in tangible success with new features that we've been able to launch much more quickly, leveraging agentic AI than what we would have been able to do without. That's an example where I expect to see much higher productivity, which will enable us to drive more advanced features for our customers more quickly, which should help improve productivity and top line.

[Josh Resnik, CEO and President at FiscalNote]

With the way we're operating the business, our expanding margins, more and more of those top line dollars will flow right to the bottom line. There are also other areas of the business where we're leveraging more automation and actually driving internal efficiencies, being able to accomplish more with less. I expect we'll see both flavors of improvements continue over time. It'll be a real focus of ours for 2026. No tangible discussion around that until we get to talk about 2026 numbers at a later point, but it's something that we're really starting to see some uptake and opportunity there.

[Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets]

Okay. Sounds good. Best of luck.

[Josh Resnik, CEO and President at FiscalNote]

Thanks, Mike.

[Operator]

As a reminder to ask a question, press star followed by the number one on your telephone keypad. Your next question is from Zach Cummins with B. Riley Securities.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Hi there. This is Ethan Widell calling in for Zach Cummins. Thanks for taking my questions. To start, it sounds like good news with ARR stabilizing. Can you maybe speak a little bit to your expectations with regard to a timeline for renewed year-over-year ARR growth?

[Josh Resnik, CEO and President at FiscalNote]

Thanks for the question, Ethan. We do not guide on ARR, so we are not providing specific guidance there. At a later point, as we talk about 2026, we will start to talk specifically about what that looks like. What I will say is that, generally speaking, we are encouraged by the progress that we are seeing in the business. We have talked a lot about the transformation that we have made operationally, the transformation that we have seen through PolicyNote, and we are encouraged by this early traction and stabilization that we are seeing now. The single biggest lever for us in the long term is going to be around gross retention and net retention.

[Josh Resnik, CEO and President at FiscalNote]

As we've said, part of the foundation for those improvements in gross retention will come through PolicyNote, the better product, the higher engagement, better experience, etc., as well as what we're able to do with multi-years from a new logo standpoint. We're going to keep pushing on the new logo improvements as well. When we're talking about kind of what you can expect on a year-over-year basis in the future, that'll be a discussion at a later point.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Understood. I appreciate that, color. With regard to the federal government shutdown, can you maybe quantify the impact that you're seeing there? When you speak to volatility in the federal space, is that primarily from the shutdown, or are there other elements at play there?

[Josh Resnik, CEO and President at FiscalNote]

Yeah. In regards to federal government, we've talked about this throughout the year as we've been seeing the developments in federal. We talked previously about the fact that just through the efficiency efforts within federal, limitations on spending and the like, that we were seeing some friction and impact to that segment of our business over the course of the year. We're now seeing some added impact through the extended shutdown. The extent of that impact is not perfectly clear because, again, the length of the shutdown is still remaining unclear. I would say, though, for the full year, you could estimate the overall impact at somewhere between $2 million and $3 million.

[Ethan Widell, Senior Equity Research Associate at B. Riley Securities]

Understood. I appreciate it. Thank you.

[Operator]

There are no further questions, Mr. Burrows. I turn the call back over to you for closing remarks.

[Bob Burrows, Head of Investor Relations at FiscalNote]

Thank you, Tamika. That concludes our call this evening, and we appreciate everyone's participation and look forward to speaking with all of you again in the future. Good night.

[Operator]

This concludes today's conference call. You may now disconnect.

Participants

Executives

• Jon Slabaugh, CFO and Chief Investment Officer
• Josh Resnik, CEO and President
• Bob Burrows, Head of Investor Relations

Analysts

• Ethan Widell, Senior Equity Research Associate at B. Riley Securities
• Mike Latimore, Managing Director and Senior Research Analyst at Northland Capital Markets