FiscalNote's AI-Powered Policy Platform: A Strategic Catalyst for Long-Term Growth in Regulatory Intelligence

FiscalNote Holdings, Inc. (NYSE: NOTE) has emerged as a pivotal player in the AI-driven regulatory intelligence sector, leveraging its PolicyNote platform to address a critical gap in the market: the need for real-time, data-driven insights into policy and regulatory shifts. The company's Q2 2025 earnings report underscores a strategic pivot toward AI innovation, operational discipline, and market expansion, positioning it as a compelling long-term investment amid the broader transformation of government technology.

AI as the Core of FiscalNote's Value Proposition

The PolicyNote platform, now the cornerstone of FiscalNote's offerings, has demonstrated robust adoption metrics. By June 2025, daily active users on PolicyNote surpassed those of the legacy FiscalNote platform, a milestone reflecting the platform's enhanced AI capabilities. These include:
- Legislative forecasting and bill discovery: AI models analyze global legislative trends to predict outcomes and identify emerging regulatory risks.
- Tariff Tracker: A rapid-response tool launched in April 2025 to help clients navigate U.S. trade policy shifts, generating $1 million in pipeline opportunities within weeks.
- AI-powered legislative drafting: A July 2025 addition enabling users to draft policy proposals with machine-assisted precision.
- Social listening for policy signals: An August 2025 feature that surfaces early-stage policy trends from public discourse and social media.

These tools are not generic large language models (LLMs) but specialized AI trained on decades of regulatory data, giving FiscalNote a unique edge in a sector where accuracy and context are paramount.

Strategic Divestitures and Operational Efficiency

While Q2 2025 revenue fell 21% year-over-year on an as-reported basis, this decline was driven by the divestiture of non-core assets, including the sale of its Australia subsidiary, TimeBase, to Thomson Reuters for $6.5 million. On a pro forma basis (excluding divestitures), revenue declined just 8%, and adjusted EBITDA surged 58%, reflecting disciplined cost management and margin expansion. The company's ability to streamline operations while investing in AI innovation highlights its strategic agility.

FiscalNote's focus on product-led growth is evident in its customer acquisition trends. New corporate clients entered multiyear contracts at more than double the rate of Q2 2024, with win rates improving by 400 basis points. This momentum is driven by the PolicyNote platform's ability to address pain points in sectors ranging from corporate compliance to public-sector governance.

Market Expansion and Global Payment Innovation

FiscalNote's Q2 developments also signal a broader push into international markets. The company announced plans to integrate stablecoins for global payments following the passage of the GENIUS Act, a move that aligns with its mission to simplify cross-border regulatory compliance. This innovation could unlock new revenue streams in emerging markets, where digital currencies are increasingly used for transactions.

Geographically, FiscalNote serves 45 of the Fortune 100 companies and operates in over 100 countries, with 49% of its revenue coming from the private sector. Its AI-driven tools are particularly valuable in volatile regulatory environments, such as the U.S. federal sector, where policy shifts can have immediate economic impacts.

Financial Guidance and Long-Term Outlook

FiscalNote reaffirmed its 2025 full-year guidance of $94–$100 million in revenue and $10–$12 million in adjusted EBITDA, with Q3 2025 guidance of $22–$23 million in revenue and $2 million in adjusted EBITDA. While ARR remains a near-term challenge (down 8% pro forma), management is confident in a return to growth in H2 2025, citing stronger sales pipelines and improved customer engagement.

Investment Thesis: A Sector Leader in AI-Driven Governance

FiscalNote's strategic positioning in the $10 billion global regulatory intelligence market is underpinned by three key factors:
1. AI Differentiation: Its specialized policy AI outperforms generic LLMs, offering clients actionable insights rather than speculative outputs.
2. Scalable Product-Led Growth: The PolicyNote platform's self-serve features and rapid deployment capabilities reduce customer acquisition costs.
3. Global Expansion Potential: Stablecoin integration and AI-powered social listening open doors to emerging markets, where regulatory complexity is rising.

For investors, FiscalNote represents a high-conviction opportunity in the AI-for-government sector. While near-term ARR challenges persist, the company's focus on margin expansion, product innovation, and international markets positions it to capitalize on the long-term trend of AI-driven governance. As regulatory environments grow more complex, FiscalNote's PolicyNote platform is poised to become an indispensable tool for enterprises and governments alike.

Conclusion
FiscalNote's Q2 2025 results highlight a company in transition—shifting from legacy operations to a future powered by AI and global regulatory intelligence. For investors seeking exposure to the intersection of AI and governance, FiscalNote offers a compelling case study in strategic reinvention. With a clear roadmap for growth and a platform that addresses a universal need, the company is well-positioned to deliver durable returns as it navigates the evolving regulatory landscape.