FiscalNote, a pioneering AI-driven enterprise SaaS technology provider, has emerged as a trailblazer in the dynamic landscape of policy, regulatory, and geopolitical intelligence. With a rich history spanning over a decade, this remarkable company has cemented its position as an indispensable partner for organizations navigating the ever-evolving complexities of the legislative, regulatory, and macroeconomic environments.
Founded in 2012 by three individuals in a Motel 6 room in Silicon Valley, FiscalNote set out to help customers make sense of the complicated and constantly changing world of regulations, policies, and geopolitical information. The company’s mission was to deliver a proprietary AI-enabled platform that aggregates and organizes this data, making it accessible and actionable for decision-makers worldwide. Over the past 12 years, FiscalNote has grown from those three founders to become the market-leading AI platform for the regulatory, legislative policy, and geopolitical intelligence sectors.
Throughout its journey, FiscalNote has faced various challenges, including the need to continually push the boundaries of innovation to stay ahead of the market. The company has evolved from aggregating the world’s legal data to implementing predictive analytics, advancing cloud collaboration, and now exploring generative AI – all while remaining true to customer needs and fostering a great workplace environment. Despite facing macro-economic headwinds, competitive pressures, and delays in launching certain product enhancements, FiscalNote has remained resilient and focused on its core mission.
Today, FiscalNote boasts a deep reservoir of technical expertise, proprietary data, and analytical tools, serving thousands of customers ranging from the White House to the Department of Defense to almost half the Fortune 100. The company has grown to employ several hundred passionate individuals around the world, all dedicated to serving its diverse and growing customer base.
Financials
Financially, FiscalNote has demonstrated its resilience and commitment to profitability. As of the third quarter of 2024, the company reported total revenues of $29.4 million and adjusted EBITDA of $3.4 million, both exceeding previous forecasts. Notably, this marked the company’s fifth consecutive quarter of positive adjusted EBITDA performance, a significant milestone in its journey towards sustainable growth and profitability.
For the most recent fiscal year (2023), FiscalNote reported revenue of $132.65 million, with a net income of -$115.46 million. The company’s operating cash flow (OCF) stood at -$35.49 million, while free cash flow (FCF) was -$43.43 million. In the most recent quarter (Q3 2024), revenue was $29.44 million, with a net income of -$14.94 million. OCF for the quarter was -$2.56 million, and FCF was -$9.44 million. The company experienced a year-over-year revenue decline of 13.4%, primarily due to the divestiture of the Board.org business, which contributed $3.6 million in revenue in Q3 2023. This decline was partially offset by an increase in revenue from the Dragonfly acquisition completed in January 2023.
FiscalNote operates in a single operating segment, providing technology-enabled solutions that empower organizations to manage policy, address regulatory developments, and mitigate global risk. The company’s revenue structure is primarily subscription-based, accounting for approximately 93% of total revenues. These subscription revenues are earned from arrangements that provide customers the right to use FiscalNote’s software and products in a cloud-based infrastructure. The remaining 7% of revenue comes from advisory, advertising, and other sources, including revenue from books and events.
Liquidity
In a strategic move to further bolster its financial position, FiscalNote announced the divestiture of its non-core Aicel Technologies subsidiary for $9.65 million in total consideration. This transaction not only streamlines the company’s operations but also strengthens its balance sheet, enabling FiscalNote to focus on its core competencies and drive even greater efficiencies.
As of Q3 2024, FiscalNote’s debt-to-equity ratio stood at 5.78, with total debt of $251.64 million and equity of $43.46 million. The company had $23.59 million in cash and short-term investments. FiscalNote has a $150 million senior credit facility, of which $93.36 million was outstanding as of Q3 2024. The facility also includes an uncommitted incremental loan facility of up to $100 million. The company’s current ratio and quick ratio both stand at 0.81.
Strategic Appointments and Leadership Transition
Reflecting the company’s unwavering focus on innovation, FiscalNote recently appointed Can Babaoglu as its Chief Product Officer. Babaoglu, a seasoned product development and growth expert, will spearhead the conceptualization, development, and expansion of FiscalNote’s AI-powered product offerings, further enhancing the company’s ability to provide cutting-edge solutions to its global customer base.
Amidst this backdrop of operational and financial success, FiscalNote has also navigated its own leadership transition. The company announced that its co-founder and long-time CEO, Tim Hwang, will transition to the role of Executive Chairman, paving the way for Josh Resnik, the current President and Chief Operating Officer, to assume the position of Chief Executive Officer effective January 1, 2025. This strategic move underscores FiscalNote’s commitment to leveraging fresh perspectives and new leadership to drive the company’s next phase of growth.
Corporate Sustainability and Future Outlook
The company’s commitment to sustainability and social responsibility is also noteworthy. FiscalNote has published its third annual Corporate Sustainability Overview, outlining its environmental, social, and governance initiatives, further demonstrating its holistic approach to corporate stewardship.
Looking ahead, FiscalNote remains well-positioned to capitalize on the growing demand for policy, regulatory, and geopolitical intelligence. The company’s robust product pipeline, including the recently launched Copilot for Policy and Copilot for Global Intelligence, showcases its ability to leverage AI and data science to deliver innovative solutions that empower its customers.
FiscalNote closely monitors Annual Recurring Revenue (ARR) and Net Revenue Retention (NRR) as indicators of the company’s revenue trends and growth potential. As of September 30, 2024, ARR was $109.5 million, while NRR was 99%, indicating strong customer retention and upsell/cross-sell performance.
While the majority of FiscalNote’s revenues, around 79%, are derived from North America, the company has been expanding its international footprint. Revenues from Europe, Australia, and Asia made up 15%, 1%, and 5% of total revenues respectively in the first nine months of 2024. This geographic diversification helps mitigate FiscalNote’s exposure to any single regional market.
In terms of future guidance, FiscalNote has provided an outlook for Q4 2024, projecting approximately $29 million in total revenue and $2.5 million in adjusted EBITDA. For the full year 2024, the company has revised its guidance to $120 million in total revenue (down from the previous forecast of $121 million) and $9 million in adjusted EBITDA (up from the previous forecast of $8 million). The revenue revision was attributed to the divestiture of Aicel and lower anticipated advisory revenue, offset by improved operating leverage from operational initiatives.
As FiscalNote continues to navigate the dynamic landscape of policy, regulation, and global intelligence, the company’s unwavering focus on innovation, customer-centricity, and financial discipline positions it as a formidable player in this rapidly evolving market. With a strong leadership team, a diverse product portfolio, and a commitment to sustainable growth, FiscalNote is poised to cement its status as a technology leader at the forefront of the intersection between policy, regulation, and the transformative power of artificial intelligence.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.