Core Insights - MarketWise, Inc. (NASDAQ: MKTW) is currently underfollowed and undercovered among investors, indicating a potential opportunity for investment [1] - The company faced significant challenges last year, including the closure of one of its business units and the resignation of its founder and CEO, which may impact its future performance [1] Company Overview - MarketWise, Inc. operates in a sector that has seen limited investor attention, suggesting that it may be undervalued [1] - The company is part of a broader market trend where small to mid-cap companies are often less researched, presenting asymmetric investment opportunities [1] Investment Perspective - The analysis highlights the importance of diligent research in identifying potential investment opportunities within undercovered companies [1] - The focus on technology, software, electronics, and energy transition sectors aligns with current market trends and investor interests [1]

Core Viewpoint - MarketWise, Inc. will implement a 1-for-20 reverse stock split to enhance its stock price and meet Nasdaq listing requirements, effective April 2, 2025 [1][6]. Group 1: Reverse Stock Split Details - The reverse stock split will reduce the number of issued and outstanding Class A common stock from approximately 49,487,262 shares to about 2,474,363 shares, and Class B common stock from approximately 276,623,803 shares to about 13,831,190 shares [3]. - The authorized Class A common stock will decrease from 950,000,000 shares to 47,500,000 shares, and Class B common stock from 300,000,000 shares to 15,000,000 shares [5]. - Fractional shares resulting from the reverse stock split will be paid in cash based on the closing price on April 2, 2025 [6]. Group 2: Rationale and Expectations - The reverse stock split aims to bring the stock price into a range more aligned with the company's market capitalization, making it more appealing to institutional investors and improving market perception [3]. - The company believes that the higher share price will help meet Nasdaq's minimum bid price requirement of $1.00 per share [6]. Group 3: Company Overview - MarketWise is a leading multi-brand digital subscription services platform that provides premium financial research, software, education, and tools for self-directed investors [7]. - The company has over 25 years of operating history and serves millions of subscribers, offering its products through various digital platforms [8].

Subscriber Metrics - Paid Subscribers decreased by 231 thousand, or 31.4%, to 506 thousand as of December 31, 2024, compared to 737 thousand as of December 31, 2023[272]. - Free Subscribers decreased by 2.4 million, or 14.4%, to 14.1 million as of December 31, 2024, compared to 16.4 million as of December 31, 2023[292]. - Active Free Subscribers decreased by 0.7 million, or 18.1%, to 3.3 million as of December 31, 2024, compared to 4.1 million as of December 31, 2023[292]. - The high-value composition rate was 56% of Paid Subscribers as of December 31, 2024, indicating a strong retention of high-value customers[280]. - 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[298]. Financial Performance - Total net revenue was $408.7 million for the full year 2024, down from $448.2 million for the full year 2023, representing a decrease of 8.8%[272]. - Net revenue for 2024 was $405.357 million, a decrease from $443.245 million in 2023, reflecting ongoing challenges in subscriber engagement[331]. - Net income increased to $93.1 million for the full year 2024, compared to $54.3 million for the full year 2023, marking a growth of 71.6%[272]. - Average Revenue Per User (ARPU) decreased by 21.7% to $394 as of December 31, 2024, down from $503 as of December 31, 2023[279]. - Total Billings were $239.1 million for the full year 2024, a decline of 37.4% from $382.4 million for the full year 2023[272]. Revenue and Billing Details - Total Billings decreased by $143.3 million, or 37.5%, to $239.1 million in 2024 compared to $382.4 million in 2023, primarily due to the winding down of Legacy Research Group brands[312]. - New Marketing Billings decreased by $115.5 million, or 41.5%, to $162.8 million in 2024 compared to $278.3 million in 2023, driven by ceasing new sales campaigns within Legacy Research Group brands[307]. - Net Renewal Billings decreased by $26.5 million, or 27.3%, to $70.3 million in 2024 compared to $96.8 million in 2023, due to a significant decrease in average Paid Subscribers[309]. - Term subscription revenue decreased by $41.4 million, while membership subscription revenue increased by $3.6 million during the same period[335]. Operating Expenses and Cost Management - Operating expenses totaled $319.713 million in 2024, down from $396.377 million in 2023, indicating cost management efforts[331]. - Sales and marketing expenses decreased by $37.9 million or 19.1%, primarily due to reduced marketing spend and lower amortization of deferred contract acquisition costs[339]. - General and administrative expenses decreased by $34.5 million or 27.5%, driven by a reduction in headcount and stock-based compensation[340]. - The company incurred separation costs of approximately $2.3 million related to the Legacy Reorganization within general and administrative expenses[383]. Cash Flow and Liquidity - Adjusted cash flow from operations (CFFO) was $(22.15) million in 2024, a decline of 133.4% from $66.4 million in 2023[353]. - The estimated amount of cash float was approximately $119.7 million as of December 31, 2024, slightly down from $120.5 million in 2023[362]. - Interest income earned on cash portfolio was $5.9 million in 2024, compared to $5.7 million in 2023[364]. - As of December 31, 2024, the company's principal sources of liquidity included cash, cash equivalents, and restricted cash totaling $97.9 million[367]. - For the year ended December 31, 2024, net cash used in operating activities was $22.2 million, primarily due to a net income of $93.1 million adjusted for non-cash items and changes in operating assets and liabilities[387]. Impairment and Tax Obligations - Impairment losses related to Legacy Research and Buttonwood Publishing businesses amounted to $4.445 million in 2024[324]. - Impairment losses increased by 72.1% to $4.4 million in 2024, attributed to charges related to deferred contract acquisition costs and intangible assets[341]. - The company expects to incur significant payment obligations under the Tax Receivable Agreement, which may adversely affect its liquidity and financial condition if not managed properly[370]. Shareholder Returns and Capital Management - The share repurchase program authorized up to $35.0 million, with $13.1 million spent to repurchase 2,484,717 shares during the year ended December 31, 2022[376]. - In 2023, the company initiated paying dividends to Class A common stockholders and distributions to holders of LLC Units, totaling $5.7 million in dividends paid[393]. - The company made a quarterly tax distribution of $15.1 million in January 2025, which exceeded its corporate tax liability and allowed for a special dividend declaration[371]. Accounting and Revenue Recognition - Subscription revenues are recognized evenly over the duration of the subscriptions, reflecting the consideration expected in exchange for services[399]. - The estimated life of membership customers was determined to be five years for the years ended December 31, 2024, 2023, and 2022[400]. - The amortization period for capitalized contract costs was approximately four years for each of the years ended December 31, 2024, 2023, and 2022[402]. - Management evaluates significant accounting estimates and assumptions that affect reported amounts of assets, liabilities, revenue, costs, and expenses[396]. - The company recognizes revenue related to membership subscriptions over the estimated customer lives, which is five years[400].

Core Insights - MarketWise, Inc. reported a sequential increase in Billings of over $55 million for Q4 2024, reflecting a 10% growth compared to Q3 2024, and a return to profitability [3] - The company anticipates continued growth in Q1 2025, with Billings over 10% higher than the same period in Q4 2024, driven by compelling content and successful customer acquisition [3] - A reverse stock split is expected to enhance the company's market perception and attract institutional investors [3] - The Board approved a quarterly dividend of $0.01 and authorized a share repurchase program of up to $50 million, indicating a commitment to return capital to shareholders [3] Q4 2024 Highlights - Paid Subscribers decreased to 506 thousand from 737 thousand year-over-year [5] - Total Net Revenue for Q4 2024 was $97.5 million, down from $112.2 million in Q4 2023 [5] - Total Billings for Q4 2024 were $55.4 million, a decrease from $93.6 million in Q4 2023 [5] - Net Income for Q4 2024 was $26.4 million, significantly up from $1.9 million in Q4 2023 [5] - Cash from Operating Activities was $6.0 million, down from $17.5 million in Q4 2023 [5] Full Year 2024 Highlights - Total Net Revenue for the year was $408.7 million, an 8.8% decrease from the previous year [6] - Total Billings for the year were $239.1 million, a 37.5% decrease compared to the prior year [6] - Net Income for the year was $93.1 million, a 71.5% increase from the previous year [6] - Net Cash Used in Operating Activities was $22.2 million, compared to a net cash provided of $62.4 million in the prior year [6] Financial Metrics - The company reported an Average Revenue Per User (ARPU) of $394 for Q4 2024, down from $503 in Q4 2023 [7] - Adjusted Cash Flow from Operations (CFFO) for Q4 2024 was $5.985 million, a 72.1% decrease from $21.467 million in Q4 2023 [24] - The Adjusted CFFO Margin for Q4 2024 was 10.8%, down from 22.9% in Q4 2023 [24] Balance Sheet and Capital Structure - As of December 31, 2024, cash and cash equivalents were $97.9 million, down from $155.2 million at the end of 2023 [8] - Total assets decreased to $259.5 million from $396.6 million year-over-year [31] - Total liabilities were $477.4 million, down from $685.5 million at the end of 2023 [31]

Financial Results - MarketWise, Inc. announced preliminary selected unaudited financial results for Q4 2024 on January 15, 2025[6]. - The financial updates include operational metrics that will be detailed in the press release[6]. Dividends - The Board of Directors declared a special dividend of $0.03 per share for Class A common stock, payable on February 26, 2025[9]. - The Record Date for the special dividend is set for January 29, 2025[9]. Investor Relations - The company has prepared an investor presentation to discuss its business with investors and analysts[8]. - The investor presentation is available on the company's investor relations site[8]. - The press release detailing financial updates is available as Exhibit 99.1[11]. - The company continues to engage with stakeholders to provide insights into its business strategy[8]. Company Classification - MarketWise, Inc. is classified as an emerging growth company under the Securities Act[4]. Accounting Standards - The company is not using the extended transition period for new financial accounting standards[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 [1][3][4] - The Chief Financial Officer, Erik Mickels, will host in-person meetings at the UBS Financial Services Forum on February 11, 2025 [1] Company Overview - MarketWise was founded with the mission to level the playing field for self-directed investors and has over 25 years of operating history [3][4] - The company serves millions of free and paid subscribers, offering trusted financial research, education, actionable investment ideas, and investment software [4] - MarketWise operates as a 100% digital, direct-to-customer company, providing research across various platforms including mobile, desktops, and tablets [4] - The company aims to become the leading financial solutions platform for self-directed investors with a proven, agile, and scalable platform [4]

Core Viewpoint - MarketWise, Inc. reported preliminary financial and operational updates for Q4 2024, highlighting a significant sequential increase in billings and a return to cash generation, with expectations to release full year 2024 results in March 2025 [1][4]. Financial Performance - Billings for Q4 2024 totaled approximately $55 million, representing over a 10% sequential increase compared to Q3 2024 [8]. - The estimated cash and cash equivalents increased from $94 million at September 30, 2024, to $98 million at December 31, 2024 [8]. - The company returned to positive cash flow generation in Q4 2024 after three quarters of negative cash flow [8]. Shareholder Returns - A special dividend of $0.03 per share was announced, totaling approximately $1.3 million, to be paid on February 26, 2025, to shareholders of record as of January 29, 2025 [6][8]. Subscriber Metrics - As of December 31, 2024, consolidated paid subscribers were 506 thousand, while active free subscribers were 3.3 million [8]. Strategic Outlook - The interim CEO expressed confidence in the company's strategic pillars of growth, efficiency, and new business, indicating potential for increasing intrinsic value per share over time [4]. - The company plans to report full and audited results for the fourth quarter and year ended December 31, 2024, no later than March 31, 2025 [7].

Core Viewpoint - MarketWise, Inc. is actively participating in the 27th Annual Needham Growth Conference, showcasing its commitment to engaging with investors and promoting its digital subscription services platform for self-directed investors [1][3]. Company Overview - MarketWise is a leading multi-brand digital subscription services platform that provides premium financial research, software, education, and tools for self-directed investors [1][4]. - The company has over 25 years of operating history and serves millions of free and paid subscribers, offering trusted financial research and actionable investment ideas [5]. - MarketWise operates as a 100% digital, direct-to-customer company, delivering its services across various platforms including mobile, desktops, and tablets [5]. Conference Details - The 27th Annual Needham Growth Conference is scheduled from January 9-17, 2025, featuring presentations, fireside chats, thematic panels, and one-on-one meetings for qualified institutional, private equity, and venture capital investors [3]. - Chief Financial Officer Erik Mickels will host virtual meetings during the conference on January 16, 2025 [1].

Company Overview - MarketWise is a leading multi-brand subscription services platform providing 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 [1] - MarketWise operates as a 100% digital, direct-to-customer company, offering its research across mobile, desktops, and tablets [1] - The company aims to become the leading financial solutions platform for self-directed investors [1] Emerging Growth Conference Participation - MarketWise has been invited to present at the Emerging Growth Conference on January 15, 2025 [5] - The presentation will be conducted by the company's Chief Financial Officer, Erik Mickels, and will include a live, interactive Q&A session [6][7] - The presentation is scheduled for 11:25 AM Eastern time and will last for 30 minutes [7] - The conference focuses on companies with strong management teams, innovative products, and long-term growth potential, targeting individual and institutional investors, as well as investment advisors and analysts [3][8] Investor Engagement - MarketWise invites individual and institutional investors, advisors, and analysts to attend its real-time, interactive presentation at the Emerging Growth Conference [6] - An archived webcast of the presentation will be available on the Emerging Growth Conference website and YouTube channel for those unable to attend live [7]

Financial Performance - Total Net Revenue for Q3 2024 was $97.2 million, a decrease of 8.4% compared to $106.2 million in Q3 2023[2] - Total net revenue for Q3 2024 was $97.186 million, a decrease of 8.9% compared to $106.150 million in Q3 2023[26] - Year-to-date Net Revenue for the nine months ended September 30, 2024 was $311.2 million, a decrease of 7% compared to the same period in the prior year[5] Subscriber Metrics - Paid Subscribers decreased to 592 thousand as of September 30, 2024, down from 774 thousand a year earlier, representing a decline of 23.5%[2] - The company plans to focus on attracting new subscribers and enhancing product offerings to drive future growth[24] Billing Information - Total Billings for Q3 2024 were $48.9 million, a significant decrease of 48.8% compared to $95.5 million in Q3 2023[2] - Year-to-date Total Billings for the nine months ended September 30, 2024 were $183.7 million, a decrease of 36.4% compared to the same period in the prior year[5] Income and Profitability - Net Income for Q3 2024 was $22.7 million, an increase of 89.2% compared to $12.0 million in Q3 2023[2] - Net income for Q3 2024 was $22.746 million, representing an increase of 88.5% from $12.044 million in Q3 2023[26] - Year-to-date Net Income for the nine months ended September 30, 2024 was $66.7 million, an increase of 27% compared to the same period in the prior year[5] - Net income for the year to date 2024 is $66,698, compared to $52,392 in the same period of 2023, representing a year-over-year increase of 27.5%[28] Cash and Liquidity - Cash and Cash Equivalents stood at $94.1 million as of September 30, 2024, down from $155.2 million at the end of 2023[8] - Cash and cash equivalents decreased to $94.111 million as of September 30, 2024, down from $155.174 million at the end of 2023[27] - Cash, cash equivalents, and restricted cash at the end of the period for 2024 is $94,111, down from $194,023 at the end of the same period in 2023[28] Operating Expenses - Operating expenses for Q3 2024 totaled $75.284 million, down 20.8% from $95.108 million in Q3 2023[26] Cash Flow - The company reported a Net Cash Used in Operating Activities of $28.1 million for the nine months ended September 30, 2024, compared to a Net Cash Provided of $44.9 million for the same period in the prior year[6] - Net cash used in operating activities for the year to date 2024 is $(28,135), a significant decrease from $44,901 in the same period of 2023[28] - Cash flows from investing activities show a net cash used of $(788) for the year to date 2024, compared to $(1,658) in the same period of 2023[28] - Net cash used in financing activities for the year to date 2024 is $(32,131), an increase from $(7,806) in the same period of 2023[28] Assets and Liabilities - Total current assets were $172.495 million, a significant decline from $267.841 million at the end of 2023[27] - Total liabilities decreased to $525.466 million as of September 30, 2024, compared to $685.498 million at the end of 2023[27] - The accumulated deficit improved to $(121.422) million as of September 30, 2024, from $(126.343) million at the end of 2023[27] Deferred Revenue and Costs - Deferred revenue for the year to date 2024 has increased to $(133,595) from $(44,288) in the same period of 2023, indicating a rise of 201.5%[28] - The company has incurred $50,397 in deferred contract acquisition costs for the year to date 2024, compared to $23,566 in the same period of 2023, reflecting a growth of 113%[28] Related Party Revenue - Related party revenue for Q3 2024 was $211 thousand, down from $351 thousand in Q3 2023[26] Stock-Based Compensation - The company reported a decrease in stock-based compensation to $8,668 for the year to date 2024, down from $10,956 in the same period of 2023[28] Accounts Receivable - The company reported a decrease in accounts receivable to $2,304 for the year to date 2024, compared to a negative $(1,918) in the same period of 2023[28]