Core Insights - MarketWise (NASDAQ: MKTW) shares have increased nearly 70% since April, driven by price appreciation and dividends [1] Company Analysis - The company is focused on undercovered companies, with a watchlist of up to 100 companies [1] - Areas of interest include technology, software, electronics, and energy transition [1] - The analysis aims to identify asymmetric investment opportunities for achieving market-beating returns [1] Investment Background - The individual has over 7 years of personal investment experience across a broad range of global companies [1] - Professional investment experience has been accumulated through extensive analysis of numerous companies [1] - The individual holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1]

Financial Performance - Total net revenue for Q2 2025 was $80.0 million, with net income of $15.3 million[4] - Billings for Q2 2025 were $58.2 million, representing a 10% year-over-year increase on an adjusted basis[4] - Average revenue per user (ARPU) increased to $474, indicating strong customer value perception[5] - Total net revenue for Q2 2025 was $79,950, down 23.9% from $105,046 in Q2 2024[29] - Net income for Q2 2025 was $15,310, down 27.9% from $21,240 in Q2 2024[34] - EBITDA for Q2 2025 was $15,654, a decrease of 26.7% from $21,347 in Q2 2024[34] - Net income for the year to date June 30, 2025, is $32,151,000, a decrease of 27% compared to $43,952,000 in 2024[36] Cash Flow and Operating Activities - Cash from operating activities improved to $17.8 million, an increase of over $20 million compared to Q2 2024[4] - Cash flows from investing activities show a net cash used of $561,000, compared to $748,000 in 2024, indicating a reduction in investment outflows[36] - Net cash provided by operating activities is $19,575,000, a significant improvement from a net cash used of $22,306,000 in the previous year[36] - Cash from operating activities and free cash flow are projected to be approximately $30 million, reflecting over a $50 million improvement compared to FY 2024[19] - Free Cash Flow for Q2 2025 was $17,503, compared to $(4,291) in Q2 2024, marking a 507.9% increase[29] Balance Sheet and Assets - The company has a strong balance sheet with $69.1 million in cash and no outstanding debt[4] - Total assets as of June 30, 2025, were $211,753, down from $259,515 as of December 31, 2024[35] - Total liabilities as of June 30, 2025, were $438,771, a decrease from $477,439 as of December 31, 2024[35] - Cash, cash equivalents, and restricted cash at the end of the period is $69,112,000, down from $109,342,000 in the previous year[36] Dividends and Shareholder Returns - A quarterly and special dividend totaling $0.40 per Class A share was announced[4] Future Outlook and Guidance - The company expects billings to increase by approximately 20% compared to the annualized 2H 2024 billings, targeting around $250 million[19] - FY 2025 guidance indicates the company is on track to meet previously communicated targets[3] - The company anticipates fluctuations in Adjusted CFFO and Adjusted CFFO Margin as it invests in its growth strategy[25] Subscriber Growth and Engagement - The company is focused on increasing the number of paid subscribers and enhancing customer engagement and retention[3] Adjusted Metrics - Adjusted CFFO for Q2 2025 was $17,842, a significant increase from $(3,795) in Q2 2024, representing a change of 570.1%[29] - Adjusted CFFO margin for Q2 2025 was 30.7%, compared to (6.6%) in Q2 2024[29] Other Financial Metrics - Capital expenditures in Q2 2025 were $(339), a decrease of 31.7% from $(496) in Q2 2024[29] - Deferred revenue decreased by $33,107,000, compared to a decrease of $86,852,000 in 2024, indicating a potential improvement in revenue recognition[36] - Stock-based compensation increased slightly to $5,698,000 from $5,464,000 in the previous year[36] - The company experienced a change in fair value of contingent consideration of $(1,441,000), contrasting with a gain of $764,000 in 2024[36] - The company’s depreciation and amortization expenses decreased to $1,031,000 from $1,362,000 in the prior year[36]

Financial Performance - Total net revenue for Q2 2025 was $80.0 million, a decrease of 23.9% compared to $105.0 million in Q2 2024[133] - Total net revenue for the second quarter 2025 was $79.95 million, a decrease from $105.05 million in the second quarter 2024[183] - Net income for Q2 2025 was $15.3 million, a decrease of 27.9% compared to $21.2 million in Q2 2024[213] - EBITDA for Q2 2025 was $15.7 million, down 26.7% from $21.3 million in Q2 2024[213] - Total net revenue for the six months ended June 30, 2025, was $163,457, a decrease of $50,580 or 23.6% compared to $214,037 in 2024[192] Subscriber Metrics - The paid subscriber base decreased by 251,000, or 39.0%, to 394,000 as of June 30, 2025, compared to 645,000 a year earlier[152] - Active free subscribers decreased by 2.5 million, or 52.9%, to 2.3 million as of June 30, 2025, down from 4.8 million a year earlier[149] - Subscriber churn rate ranged from approximately 2.4% to 3.3% per month between 2022 and 2024, with a net revenue retention rate averaging over 55% during the same period[155] Cash Flow and Operating Activities - Net cash provided by operating activities improved to $17.8 million in Q2 2025, an increase of $21.6 million compared to a cash outflow of $3.8 million in Q2 2024[133] - Adjusted CFFO for the three months ended June 30, 2025, was $17,842, a significant increase from $(3,795) in 2024, representing a change of 570.1%[204] - Free Cash Flow for the three months ended June 30, 2025, was $17,503, compared to $(4,291) in 2024, reflecting a change of 507.9%[211] - Net cash provided by operating activities for the six months ended June 30, 2025, was $19,575, down 187.8% from $(22,306) in 2024[209] - For the six months ended June 30, 2025, net cash provided by operating activities was $19.6 million, compared to a net cash used of $22.3 million in the same period of 2024[230][231] Revenue Composition - The average revenue per user (ARPU) increased by 3.9% to $474 in Q2 2025, compared to $456 in Q2 2024[148] - Average Revenue Per User (ARPU) increased by $18, or 3.9%, to $474 as of June 30, 2025, compared to $456 as of June 30, 2024[157] - Term subscription revenue decreased by $17.8 million, primarily due to the wind down of Legacy Research, which contributed $11.5 million to this decline[187] Expenses and Cost Management - Operating expenses for the second quarter 2025 totaled $65.14 million, down from $83.71 million in the second quarter 2024[183] - Total operating expenses for the three months ended June 30, 2025, were $65,139, down $18,573 or 22.2% from $83,712 in 2024[188] - Sales and marketing expenses decreased by $11,096 or 26.0%, primarily due to a $10.5 million decrease in amortization of deferred contract acquisition costs[190] - Operating expenses for the six months ended June 30, 2025, totaled $131,866, down $39,282 or 23.0% from $171,148 in 2024[195] Shareholder Returns and Capital Management - The company announced a quarterly and special dividend totaling $0.40 per Class A share on August 1, 2025[133] - The company repurchased 117,673 shares for a total of $1.9 million during the three and six months ended June 30, 2025[226] - Quarterly tax distributions of $22.8 million were made to MarketWise Members in Q2 2025, exceeding the corporate tax liability[223] - The company expects to incur a Tax Receivable Agreement liability of $4.3 million as of June 30, 2025[222] - Net cash used in financing activities for the six months ended June 30, 2025, was $47.8 million, primarily due to distributions to noncontrolling interests[234] Future Outlook and Strategic Initiatives - The company expects fluctuations in Adjusted CFFO and Adjusted CFFO Margin in future periods as it invests in its growth strategy[206] - The company anticipates future capital requirements will depend on subscription growth rates and the introduction of new products[221] - The payback period for customer acquisition costs was estimated at 1.7 years for 2024 and 2023, and 1.6 years for 2022[159] Other Financial Metrics - Cash and cash equivalents stood at $69.1 million as of June 30, 2025, with no debt outstanding[133] - As of June 30, 2025, the company's cash float was approximately $87.8 million, down from $119.7 million as of December 31, 2024[215] - The LTV/CAC ratio was approximately 1.3x, indicating the average customer lifetime billings relative to customer acquisition costs[136] - The high-value composition rate was 63% and the ultra high-value composition rate was 30% as of June 30, 2025[140]

Core Insights - MarketWise, Inc. has appointed Erik Mickels as Chief Operating and Financial Officer to enhance operational excellence and financial strategy [1][3] - Mickels has over 25 years of experience in strategic transformation and has successfully guided acquisitions and initiatives, including the sale of a billion-dollar subsidiary [2] - The company aims to provide trusted financial insights to self-directed investors, emphasizing the growing demand for independent financial guidance [3] Company Overview - MarketWise is a leading multi-brand subscription services platform focused on empowering self-directed investors through premium financial research, software, education, and tools [4] - The company serves millions of free and paid subscribers, offering a digital, direct-to-customer model across various platforms [5] - MarketWise's vision is to become the leading financial solutions platform for self-directed investors, leveraging its agile and scalable platform [5]

Core Points - MarketWise, Inc. declared a quarterly cash dividend of $0.20 per share for Class A common stock and an equivalent distribution for Class B common stock [1][2] - A special dividend of $0.20 per share for Class A common stock was also announced, with both dividends scheduled for payment on September 25, 2025 [2] - The Record Date for the dividends is set for August 15, 2025 [2] - MarketWise plans to release its second quarter 2025 financial results on August 7, 2025, before market opening [2][3] Company Overview - MarketWise is a leading multi-brand digital subscription services platform focused on providing premium financial research, software, education, and tools for self-directed investors [4][5] - The company has over 25 years of operating history and serves millions of free and paid subscribers [5] - MarketWise operates as a 100% digital, direct-to-customer company, offering its research across various platforms including mobile, desktops, and tablets [5]

Core Insights - MarketWise, Inc. is a leading multi-brand digital subscription services platform focused on providing premium financial research, software, education, and tools for self-directed investors [4][5] - The Chief Financial Officer, Erik Mickels, will participate in one-on-one meetings at the UBS 2025 Fintech One-on-One Conference on September 10, 2025, in New York City [1] - The UBS 2025 Fintech One-on-One Conference aims to provide access to management teams to discuss advancements in technology and data within the financial sector [3] Company Overview - MarketWise has over 25 years of operating history and serves millions of free and paid subscribers [5] - The company offers a range of products that are recognized as high-value sources for financial research, education, actionable investment ideas, and investment software [5] - MarketWise operates as a 100% digital, direct-to-customer company, delivering its research across various platforms including mobile, desktops, and tablets [5] - The company's vision is to become the leading financial solutions platform for self-directed investors [5]

Group 1 - MarketWise (NASDAQ: MKTW) is currently experiencing a positive period, presenting an attractive potential return for investors [1] - The company faced a volatile year in 2024, with declining free cash flows impacting investor confidence [1]

Core Insights - MarketWise, Inc. has appointed Dr. David "Doc" Eifrig as the permanent Chief Executive Officer, effective immediately, after serving as interim CEO since August 2024 [1][2] - Dr. Eifrig has achieved improved financial performance during his interim tenure and has gained the confidence of the Board, employees, and shareholders [2][3] - The company aims to continue building momentum and pursue new opportunities under Dr. Eifrig's leadership, emphasizing the importance of self-directed investing [3][5] Company Overview - MarketWise is a leading multi-brand digital subscription services platform that provides premium financial research, software, education, and tools for investors [7][8] - The company has a 25-year operating history, consisting of 11 primary customer-facing brands and over 140 products, serving a community of more than 3 million subscribers [8] - MarketWise operates as a 100% digital, direct-to-customer company, offering its research across various platforms including mobile, desktops, and tablets [8]

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for MarketWise, Inc. as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, reflect a decrease in total assets and liabilities compared to December 31, 2024, with net revenue of **$83.5 million** and net income of **$16.8 million** for Q1 2025, and improved positive cash flow from operations of **$1.7 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets to **$239.6 million** as of March 31, 2025, from **$259.5 million** at year-end 2024, primarily due to a reduction in cash and cash equivalents, while total liabilities also decreased to **$457.3 million** from **$477.4 million**, mainly from a reduction in deferred revenue Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $79,178 | $97,876 | | Total current assets | $152,910 | $168,833 | | Total assets | $239,560 | $259,515 | | **Liabilities & Stockholders' Deficit** | | | | Deferred revenue (current) | $213,004 | $217,973 | | Total current liabilities | $248,192 | $260,208 | | Total liabilities | $457,291 | $477,439 | | Total stockholders' deficit | $(217,731) | $(217,924) | [Condensed Consolidated Statement of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For the three months ended March 31, 2025, total net revenue was **$83.5 million**, a **23.4%** decrease from **$109.0 million** in the same period of 2024, resulting in net income of **$16.8 million** and diluted net income per Class A common share of **$0.41** Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total net revenue | $83,507 | $108,991 | | Total operating expenses | $66,727 | $87,436 | | Income from operations | $16,780 | $21,555 | | Net income | $16,841 | $22,712 | | Net income attributable to MarketWise, Inc. | $890 | $1,657 | | Net income per Class A common share – diluted | $0.41 | $0.85 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated **$1.7 million** in cash from operating activities in Q1 2025, a significant improvement from the **$18.5 million** used in Q1 2024, resulting in a net decrease in cash of **$18.7 million** for the quarter, ending with a cash balance of **$79.2 million** Q1 2025 vs Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,733 | $(18,511) | | Net cash used in investing activities | $(222) | $(252) | | Net cash used in financing activities | $(20,209) | $(5,198) | | **Net decrease in cash** | **$(18,698)** | **$(23,999)** | | **Cash at end of period** | **$79,178** | **$131,175** | [Notes to the Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20the%20financial%20statements%20%28unaudited%29) The notes provide detailed explanations of accounting policies and financial statement components, including a **1-for-20** reverse stock split, **$415.1 million** in remaining performance obligations, a **$50 million** share repurchase program, and a Tax Receivable Agreement (TRA) liability of **$3.7 million** - Effective April 2, 2025, the company executed a **1-for-20** reverse stock split for its Class A and Class B common stock. All share and per-share data in the financial statements have been retroactively adjusted[40](index=40&type=chunk)[45](index=45&type=chunk) - As of March 31, 2025, the company had **$415.1 million** in remaining performance obligations (deferred revenue), with approximately **51%** expected to be recognized as revenue over the next twelve months[54](index=54&type=chunk) - In February 2025, the Board authorized a stock repurchase program of up to **$50 million** of Class A common stock. Subsequent to the quarter end, the company repurchased **20,306** shares for **$219 thousand** through May 8, 2025[97](index=97&type=chunk)[107](index=107&type=chunk) - The liability under the Tax Receivable Agreement (TRA) increased to **$3.7 million** as of March 31, 2025, following the exchange of **261,634** LLC Units for Class A common stock during the quarter[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the year-over-year decline in revenue and paid subscribers primarily to the shutdown of the Legacy Research business, despite which Q1 2025 Billings increased **27.3%** sequentially to **$70.5 million**, and cash from operations improved by **$20.2 million** year-over-year, with new non-GAAP measures and a **$50 million** share repurchase program introduced [Key Business Metrics](index=31&type=section&id=Key%20Business%20Metrics) Key metrics show a decline in subscribers year-over-year, largely due to the shutdown of the Legacy Research business, with Paid Subscribers falling **30.7%** to **473 thousand**, while Total Billings decreased **8.8%** YoY to **$70.5 million** but showed strong sequential growth of **27.3%** from Q4 2024, and Average Revenue Per User (ARPU) decreased **14.8%** YoY to **$419** Key Business Metrics Comparison | Metric | Q1 2025 | Q1 2024 | % Change (YoY) | Q4 2024 | % Change (QoQ) | | :--- | :--- | :--- | :--- | :--- | :--- | | Paid Subscribers | 473,407 | 683,436 | (30.7)% | 505,889 | (6.4)% | | ARPU | $419 | $492 | (14.8)% | $394 | 6.3% | | Total Billings (in thousands) | $70,456 | $77,222 | (8.8)% | $55,355 | 27.3% | - The decline in Paid Subscribers is primarily attributed to lower customer acquisition and elevated churn associated with the shutdown of the Legacy Research business[136](index=136&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Net revenue decreased by **23.4%** to **$83.5 million** in Q1 2025 from **$109.0 million** in Q1 2024, primarily driven by a **$17.7 million** decrease in term subscription revenue and a **$7.7 million** decrease in membership subscription revenue due to the wind-down of Legacy Research, while total operating expenses fell **23.7%** to **$66.7 million** - The decrease in net revenue was primarily driven by the wind-down of the Legacy Research business, which contributed **$11.6 million** to the decrease in term subscription revenue and **$7.3 million** to the decrease in membership subscription revenue[171](index=171&type=chunk) - Sales and marketing expenses decreased by **$13.2 million** (**27.9%**), mainly due to a **$10.2 million** decrease in amortization of deferred contract acquisition costs and a **$2.0 million** decrease in salaries, taxes, and benefits[173](index=173&type=chunk)[175](index=175&type=chunk) - General and administrative expenses decreased by **$6.5 million** (**27.2%**), driven by a **$1.6 million** gain on lease termination, a **$1.2 million** gain on contingent consideration, and a **$1.4 million** decrease in stock-based compensation[173](index=173&type=chunk)[176](index=176&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company introduced two new non-GAAP measures, Free Cash Flow and EBITDA, with Adjusted CFFO at **$1.7 million**, Free Cash Flow at **$1.5 million**, and EBITDA at **$17.5 million** for Q1 2025, providing additional insight into liquidity and operating performance - Two new non-GAAP financial measures were introduced this quarter: **Free Cash Flow** and **EBITDA**, to supplement existing measures and provide additional insight into liquidity and operating performance[178](index=178&type=chunk) Non-GAAP Financial Measures Reconciliation (in thousands) | Measure | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,733 | $(18,511) | | **Adjusted CFFO** | **$1,733** | **$(18,511)** | | **Free Cash Flow** | **$1,511** | **$(18,763)** | | Net income | $16,841 | $22,712 | | **EBITDA** | **$17,469** | **$22,482** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company's principal source of liquidity is its cash balance of **$79.2 million** as of March 31, 2025, supplemented by a cash 'float' from upfront subscription payments estimated at **$107.7 million**, and supported by a **$50 million** share repurchase program authorized in February 2025 - The company manages a cash 'float' from upfront subscription payments, estimated at approximately **$107.7 million** as of March 31, 2025, which it may invest or use to expand operations[192](index=192&type=chunk) - A stock repurchase program of up to **$50 million** of Class A common stock was authorized on February 28, 2025, with repurchases authorized for the next **12** months[203](index=203&type=chunk) - In March 2025, as part of the Legacy Research reorganization, the company terminated an office lease, resulting in a **$380 thousand** impairment loss on assets and a **$1.6 million** gain on the termination[206](index=206&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company has stated that this item is not applicable for the reporting period - No quantitative and qualitative disclosures about market risk were provided, as the item was deemed not applicable[215](index=215&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective[216](index=216&type=chunk) - No changes occurred in the company's internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[217](index=217&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) The company reported that this item is not applicable, indicating no material legal proceedings during the period - Not applicable[221](index=221&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - There have been no material changes in the risk factors disclosed in the company's Annual Report[222](index=222&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported that this item is not applicable - Not applicable[223](index=223&type=chunk) [Other Information](index=45&type=section&id=Item%205.%20Other%20Information) The company reported that this item is not applicable, indicating no other material information to disclose for the period - Not applicable[226](index=226&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO, and XBRL data files ```

Company Overview - MarketWise, Inc. is a leading multi-brand digital subscription services platform that provides premium financial research, software, education, and tools for self-directed investors [4] - The company has over 25 years of operating history and serves millions of free and paid subscribers [5] - MarketWise operates as a 100% digital, direct-to-customer company, offering its research across various platforms including mobile, desktops, and tablets [5] Upcoming Events - The Chief Financial Officer, Erik Mickels, will host virtual meetings at the UBS SMID-Cap Multisector Virtual Conference on June 24, 2025 [1] - The inaugural UBS SMID-Cap Multisector Virtual Conference aims to showcase small and mid-cap companies and connect them with diverse investors across multiple US regions [3]