FiscalNote Holdings, Inc. Reports Fourth Quarter and Full Year 2025 Results: AI Transformation, Workforce Reduction, and Strategic Initiatives

Key Highlights from FiscalNote’s 2025 Financial Report

• Q4 2025 Revenue: \$22.2 million, in line with guidance.
• Adjusted EBITDA: \$2.5 million for Q4, exceeding guidance.
• Full Year 2025 Revenue: \$95.4 million, down 21% year-over-year.
• Full Year Adjusted EBITDA: \$10.3 million, up 5% year-over-year.
• Net Loss: \$(65.2) million for the year, compared to net income of \$9.5 million in 2024.
• Cash and Cash Equivalents: \$26.9 million as of December 31, 2025.
• Annual Recurring Revenue (ARR): \$84.1 million, down 21% (or 9% pro forma excluding divestitures).
• Workforce Reduction: Announced 25% reduction in headcount, leveraging AI and organizational transformation.
• Strategic Initiatives: Expansion of PolicyNote API with Model Context Protocol (MCP) and entry into political prediction markets.
• Path to Positive Free Cash Flow: Company expects to achieve positive Free Cash Flow (TTM basis) by end of Q1 2027.
• Board Strategic Review: Ongoing review of all value-maximizing options, including potential further divestitures.

Financial Performance & Operational Highlights

Quarterly and Annual Results

• Q4 2025 total revenues declined 25% YoY, mainly due to divestitures.
• Subscription revenue represents 95% of total Q4 revenues, up from 92% last year, indicating a stronger focus on core business.
• Gross margin for Q4 was 80%, slightly down from 82% last year.
• Adjusted EBITDA margin remained stable at 11% for both Q4 and full year.
• Cash balance decreased to \$26.9 million from \$35.3 million last year.
• Operating expenses were significantly reduced across all categories, reflecting the company’s cost discipline and transformation efforts.
• Divestitures of non-core assets (Aicel Technologies, Oxford Analytica, Dragonfly Intelligence, TimeBase, Board.org) contributed to revenue and ARR declines but improved operating leverage.

Product and Platform Initiatives

• Migration completed from legacy FiscalNote platform to the new PolicyNote Platform, which shows stronger usage and retention metrics.
• New PolicyNote API with MCP support enables integration of FiscalNote’s data into enterprise workflows, developer apps, and AI decision systems.
• Initial enterprise customers for PolicyNote API include Lumen Technologies and ICE Data Services (subsidiary of Intercontinental Exchange).
• Expansion into political prediction markets via PoliticalPredictions.com and strategic partnerships (e.g., 365Prediction), positioning FiscalNote at the intersection of policy intelligence and outcome-based forecasting.
• AI-powered features launched in PolicyNote: Bill Comparison, Impact Summaries, and integration of advocacy data to enhance customer engagement and workflow efficiency.
• Live briefing series for CQ and Roll Call subscribers launched to deepen engagement with premium editorial brands.

Workforce Transformation and Cost Actions

• FiscalNote is undertaking a 25% reduction in workforce, driven by AI automation, offshoring, and streamlining.
• Cost actions are expected to reduce cash operating expenses by more than 19%.
• Excluding one-time restructuring costs, FiscalNote anticipates positive Free Cash Flow on a trailing twelve-month basis by Q1 2027 and aims to remain Free Cash Flow positive thereafter.
• Company intends to reallocate investments toward scalable product capabilities and emerging growth initiatives.

Strategic Review and Guidance

• The Board of Directors continues an ongoing strategic review of all options to maximize shareholder value, including potential further divestitures.
• No timetable set for completion, and no assurance of any transaction or outcome.
• Initial guidance for 2026:
  • Total revenues: \$20-21 million for Q1 (compared to \$23.1 million prior year).
  • Adjusted EBITDA: ~\$1 million for Q1 (compared to \$1.6 million prior year).
  • Full-year focus on operating leverage, platform adoption, and disciplined execution.
  • Known higher-than-normal Q1 2026 cancellations anticipated due to macroeconomic headwinds, budget constraints, and platform refinement.
  • Continued volatility expected in both private and public sectors.

Risks and Shareholder Considerations

• Significant Net Loss: A net loss of \$65.2 million for 2025 could impact investor sentiment and share price.
• Strategic Review: The ongoing review and potential divestitures could materially affect the company’s business structure and valuation.
• Workforce Reduction: The 25% reduction may signal further cost-cutting, but also operational risks and impacts on morale and execution.
• AI Transformation: Aggressive shift toward AI-driven products and automation may lead to competitive advantages but also carries execution risk.
• Delisting Risk: FiscalNote notes that a failure to comply with NYSE listing standards could lead to delisting, which would trigger debt default and significantly impact shareholder value.
• Market Volatility: Guidance highlights continued unpredictability in both the private and public sectors, affecting revenue visibility.
• Debt and Liquidity: The company continues to carry significant long-term debt (\$119.6 million) and needs to maintain compliance with debt covenants.
• Impact of Divestitures: Revenue and ARR declines are largely due to divestitures, which may make the company more focused but also smaller in scale.
• Free Cash Flow Target: Positive Free Cash Flow forecast by Q1 2027 is a key milestone and may be price sensitive if achieved or missed.

Conclusion

FiscalNote’s Q4 and full-year 2025 results reflect a company undergoing significant transformation: streamlining operations, leveraging AI, divesting non-core assets, and launching new product initiatives. The 25% workforce reduction and focus on AI-driven products are bold moves intended to strengthen cash flow and competitive positioning. However, the substantial net loss, ongoing strategic review, and risks associated with delisting, debt, and market volatility are crucial factors for shareholders. The company’s path to positive Free Cash Flow by Q1 2027 and its expansion into new markets (such as political prediction) may offer upside, but execution risks remain significant.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. All financial data and statements are based on unaudited reports as of March 2026. Investors should review FiscalNote’s official filings and consult their financial advisor before making investment decisions. Past performance is not indicative of future results. The company’s forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from those expressed.

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