FiscalNote (NOTE) Q3 2025: Corporate Multi-Year Contracts Jump 2.5x, Driving Revenue Visibility
FiscalNote’s disciplined cost controls and migration to PolicyNote are stabilizing core ARR, while enterprise win rates and multi-year contract penetration signal a more durable revenue base ahead. Corporate segment momentum is offsetting federal sector volatility, and automation initiatives are beginning to show up in both product velocity and operational leverage. The company’s narrowed guidance and focus on retention and product-led growth set the stage for a more resilient business model into 2026.
Summary
- Enterprise Win Rate Expansion: Corporate client win rates rose another 400 basis points, reflecting successful product repositioning.
- Multi-Year Contract Penetration: Multi-year deals now comprise 50% of new logo ARR, up from 20% earlier in 2024.
- PolicyNote Migration Nears Completion: Legacy platform transition is nearly done, setting up for improved retention and engagement in 2026.
Performance Analysis
FiscalNote’s Q3 2025 results reflect a business in disciplined transition, with total revenue of $22.4 million and adjusted EBITDA of $2.2 million, both within or above guidance. Subscription revenue held steady at 94% of total, underscoring the company’s recurring revenue model, even as absolute figures declined YoY due to strategic divestitures. Pro forma, subscription revenue was $1.8 million lower than last year, driven by the ongoing transition to PolicyNote and the impact of divested businesses.
Cost discipline was the clear financial highlight, with operating expenses down 11% YoY, and pro forma OPEX down 8%, as automation and efficiency measures took hold. Gross margin remained robust at 79% GAAP and 87% adjusted, reflecting both the high-value nature of PolicyNote and ongoing cost management. Notably, cash and equivalents of $31.8 million provide sufficient liquidity to fund continued transformation and product development.
- Corporate Segment Outperformance: Strong new logo momentum and higher average contract values offset federal sector weakness.
- Federal Sector Drag: Extended government shutdown and spending restrictions contributed to a $2-3 million revenue headwind for the year.
- Retention Metrics Stabilizing: Net revenue retention improved 200 basis points sequentially, signaling early benefits from product upgrades and migration.
FiscalNote’s operating leverage is increasingly visible, with nine consecutive quarters of positive adjusted EBITDA and a clear focus on driving more dollars to the bottom line as automation and product-led growth initiatives mature.
Executive Commentary
"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."
Josh Resnick, CEO and President
"The August transactions replaced and or amended these convertible notes, reducing their balance and eliminating most of our annual PIC 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."
John Slabaugh, CFO and Chief Investment Officer
Strategic Positioning
1. Corporate Segment as Growth Engine
FiscalNote’s pivot to enterprise and corporate clients is yielding tangible results, with win rates up 400 basis points sequentially and 500 basis points year to date. The company’s restructuring of global data packages, which extend use cases for large enterprises, is driving higher average contract values and more multi-year deals. This shift not only boosts revenue visibility but also positions the company to weather volatility in public sector demand.
2. PolicyNote Migration and Product-Led Growth
The migration of legacy customers to PolicyNote, FiscalNote’s AI-powered policy intelligence platform, is nearly complete, with minimal churn observed during the transition. The platform saw over 35 major enhancements year to date, including AI-driven legislative drafting, bill comparison, and tariff impact reports. Usage metrics indicate high engagement and stickiness, which management expects will drive improvements in gross and net revenue retention in 2026.
3. Automation and Operational Efficiency
Automation is emerging as a core lever for both product velocity and cost management, with agentic AI deployed in R&D yielding faster feature launches and higher productivity. Internal automation is also reducing manual workload, contributing to sustained margin expansion. Management flagged continued automation as a key focus for 2026, with expectations for both top-line and bottom-line impact as these initiatives scale.
4. Balance Sheet and Capital Structure Reset
Recent refinancing and restructuring of convertible notes have extended maturities by four years, eliminated most annual payment-in-kind (PIK) interest, and enabled refinancing of the senior term loan. This has removed near-term refinancing risk and provided flexibility to invest in product and growth initiatives, supporting the company’s product-led strategy.
Key Considerations
FiscalNote’s Q3 was defined by operational discipline, a sharpened focus on core growth levers, and early signs that the PolicyNote migration is delivering on its promise of higher engagement and retention. The company’s ability to offset federal sector weakness with corporate momentum is a critical proof point for its evolving business model.
Key Considerations:
- Enterprise-Driven Mix Shift: Corporate multi-year contracts now represent half of new logo ARR, deepening revenue durability.
- Product Innovation Velocity: Over 35 PolicyNote enhancements in 2025 are reinforcing customer engagement and platform stickiness.
- Cost Discipline Sustainability: Automation and efficiency measures are driving OPEX down and supporting margin expansion.
- Federal Sector Volatility: Ongoing government shutdowns and budget constraints remain a near-term drag, but corporate outperformance is cushioning the impact.
Risks
Federal sector volatility, including extended shutdowns and spending constraints, continues to create uncertainty for the public sector business, with a $2-3 million revenue impact in 2025. Retention improvements hinge on full PolicyNote adoption and sustained engagement, and any disruption to the migration or product roadmap could slow the stabilization of ARR. Execution risk remains around scaling automation and maintaining cost discipline as the company pivots to growth.
Forward Outlook
For Q4 2025, FiscalNote guided to:
- Total revenue of $22 to $23 million
- Adjusted EBITDA of approximately $2 million
For full-year 2025, management narrowed guidance to:
- Revenue of $95 to $96 million
- Adjusted EBITDA of approximately $10 million
Management highlighted continued focus on innovation, automation, and disciplined cash management as drivers for 2026, with a strong cash position supporting ongoing investment. ARR growth guidance will be addressed with the 2026 outlook, but current trends in retention and engagement are viewed as leading indicators.
- Further automation expected to enhance productivity and feature velocity
- Completion of PolicyNote migration to unlock higher retention and upsell potential
Takeaways
FiscalNote’s Q3 demonstrated that disciplined execution, cost control, and a successful product migration can stabilize a recurring revenue business even amid sector-specific headwinds. The company’s focus on enterprise clients, automation, and product-led growth is beginning to translate into improved win rates, higher-value contracts, and a more resilient revenue base.
- Corporate Resilience: Corporate segment strength is offsetting public sector weakness, validating the strategic pivot and supporting future growth.
- Product-Led Transformation: PolicyNote enhancements and successful migration are driving engagement, setting up for improved retention and upsell in 2026.
- Automation as a Margin Lever: Early automation gains are visible in R&D and operations, with more impact expected as these initiatives scale.
Conclusion
FiscalNote’s Q3 results mark a turning point as the company transitions from restructuring to stabilization and early growth. With enterprise momentum, a nearly complete platform migration, and a strengthened balance sheet, the company is positioned to pursue durable growth and margin expansion in 2026.
Industry Read-Through
FiscalNote’s experience highlights several sector trends: The shift from legacy to AI-enabled SaaS platforms is accelerating, with customer migration and product engagement critical to retention. Federal sector volatility remains a risk for all government-focused SaaS vendors, underscoring the value of diversified corporate revenue. Automation and operational efficiency are now table stakes, with successful adopters able to expand margins even in a muted growth environment. Investors should watch for similar migration and automation-driven margin stories across the policy intelligence, compliance, and adjacent SaaS industries.