FiscalNote’s Strategic Divestitures Signal a Sharper Focus on Core Growth Amid Balance Sheet Restructuring
16min read In a move that underscores its commitment to financial discipline, fiscalnote holdings (NYSE: NOTE) has announced two major divestitures in early 2025, marking a pivotal shift toward streamlining operations and reducing debt. By offloading non-core assets—its Australian subsidiary TimeBase to Thomson Reuters and its Global Intelligence division (Oxford Analytica and Dragonfly) to Dow Jones—the company aims to sharpen its focus on its high-margin PolicyNote platform, an AI-driven policy intelligence tool. The transactions, worth a combined $46.5 million, reflect a strategic pivot to prioritize profitability over geographic and product diversification.
The first divestiture, the sale of TimeBase to Thomson Reuters for $6.5 million, highlights FiscalNote’s exit from a market where its returns were limited. Acquired in 2021 for $19.5 million, TimeBase contributed just $1.3 million to FiscalNote’s $120.3 million in 2024 GAAP revenue. While the transaction remains subject to Australian antitrust approval, proceeds will be directed toward reducing its senior term loan, a critical step in deleveraging. The second deal, selling Oxford Analytica and Dragonfly to Dow Jones for $40 million, is expected to close in Q1 2025 and will further reduce debt by over 60% year-over-year.
These moves are part of a broader restructuring effort. FiscalNote’s CEO Josh Resnik emphasized that the divestitures align with a “focus on core products, profitability, and operational simplicity.” The company has reaffirmed its 2025 guidance of $94–$100 million in revenue and $10–$12 million in adjusted EBITDA, suggesting confidence in its streamlined model. By shedding underperforming assets, FiscalNote is redirecting resources to its PolicyNote platform, which already serves 40% of Fortune 500 companies and governments, and which Resnik calls “the engine of future growth.”
The strategic calculus is clear: PolicyNote’s AI-driven analytics, which predict regulatory changes and assess geopolitical risks, operate with higher margins than the legacy subsidiaries. For instance, TimeBase’s contribution to revenue was dwarfed by its integration costs, while Oxford Analytica’s geopolitical analysis overlapped with competitors like S&P Global. By concentrating on PolicyNote, FiscalNote aims to reduce complexity and capitalize on its 35% annual recurring revenue growth since 2021.
However, risks remain. The company’s reliance on U.S. government contracts—which account for 40% of revenue—could be vulnerable to federal budget cuts. Additionally, the divestitures leave FiscalNote with a smaller geographic footprint, potentially limiting its ability to respond to regional regulatory shifts. The Safe Harbor disclosures also note cybersecurity risks, a concern given its role in handling sensitive data for clients.
Investors appear cautiously optimistic. FiscalNote’s stock rose 8% on the announcement, outperforming the S&P 500’s flat trajectory during the same period. Analysts at Jefferies noted that the moves “de-risk the balance sheet” while positioning the company for “free cash flow breakeven by 2026,” a key milestone.
In conclusion, FiscalNote’s divestitures represent a disciplined approach to corporate restructuring. By offloading non-core assets, reducing debt, and focusing on its high-margin PolicyNote platform, the company is addressing its financial challenges while positioning itself to capitalize on growing demand for AI-driven regulatory intelligence. With a deleveraged balance sheet and a product that commands premium pricing, FiscalNote’s strategy—backed by reaffirmed guidance and operational clarity—suggests it is moving toward sustainable growth. Yet, execution remains critical: maintaining client retention, avoiding further write-downs, and navigating geopolitical headwinds will be essential to realizing its vision. For now, the moves signal a clear-eyed prioritization of what matters most—profitability and focus—in a crowded intelligence market.
