Core Insights - MarketWise, Inc. reported a decline in paid subscribers and total net revenue for Q3 2024 compared to the same period in 2023, with paid subscribers decreasing from 774 thousand to 592 thousand and total net revenue dropping from $106.2 million to $97.2 million [2][4][5] - Despite the revenue decline, the company achieved a net income of $22.7 million in Q3 2024, up from $12.0 million in Q3 2023, indicating improved profitability [2][4][5] - The company is optimistic about future growth, citing an increase in October billings to approximately $19 million, suggesting potential recovery after several quarters of decline [3][4] Financial Performance - Total 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 [4] - Total billings for the same period were $183.7 million, reflecting a significant decrease of 36.4% year-over-year [4] - The net income for the nine months ended September 30, 2024, was $66.7 million, an increase of 27% compared to the previous year [4] Subscriber Metrics - The number of paid subscribers decreased to 592 thousand as of September 30, 2024, down from 774 thousand a year earlier [2][5] - Average revenue per user (ARPU) for Q3 2024 was $417, down from $496 in Q3 2023 [6] Cash Flow and Capital Structure - As of September 30, 2024, the company had cash and cash equivalents of $94.1 million, a decrease from $155.2 million at the end of 2023 [7][25] - The company reported net cash used in operating activities of $28.1 million for the nine months ended September 30, 2024, compared to net cash provided of $44.9 million in the same period of the previous year [4][27] Strategic Outlook - The interim CEO emphasized ongoing efforts to optimize business operations, improve revenue and margins, and advance strategic priorities for growth [3] - The company plans to continue launching new brands and enhancing its product pipeline, which is expected to contribute to future revenue growth [3]

Subscriber Metrics - Paid Subscribers decreased to 592 thousand as of September 30, 2024, down 182 thousand or 23.5% from 774 thousand as of September 30, 2023[95] - Free Subscribers decreased by 1.0 million, or 6.4%, to 15.3 million as of September 30, 2024, compared to 16.3 million at the same date in 2023[107] - Active Free Subscribers decreased by 0.7 million, or 17.5%, to 3.3 million as of September 30, 2024, compared to 4.0 million as of September 30, 2023[107] - Total Paid Subscribers decreased by 182 thousand, or 23.5%, to 592 thousand as of September 30, 2024, compared to 774 thousand at the same date in 2023[110] - The high-value composition rate was 52% of Paid Subscribers as of September 30, 2024[100] 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[95] - Net income increased to $22.7 million in Q3 2024, compared to $12.0 million in Q3 2023[95] - For the nine months ended September 30, 2024, net revenue was $311,223, a decrease of 7.4% from $336,027 in the same period of 2023[136] - The net income for the nine months ended September 30, 2024, was $66.7 million, up from $52.4 million in the same period of 2023[159] Revenue and Billings - Total Billings in Q3 2024 were $48.9 million, down 48.8% from $95.5 million in Q3 2023[95] - New Marketing Billings were $32.3 million in Q3 2024, down 56.1% from $73.7 million in Q3 2023[105] - Net Renewal Billings were $15.7 million in Q3 2024, a decrease of 24.2% from $20.8 million in Q3 2023[105] - The decrease in net revenue was primarily driven by a $7.7 million decrease in term subscription revenue and a $1.0 million decrease in membership subscription revenue[129] - Total Billings decreased by $46.6 million, or 48.8%, to $48.9 million for the third quarter 2024, compared to $95.5 million for the third quarter 2023[112] Expenses and Cost Management - Total operating expenses for the three months ended September 30, 2024, were $75,284, down 20.8% from $95,108 in the same period of 2023[131] - Sales and marketing expenses decreased by 30.2% to $36,644, primarily due to a reduction in marketing spend and workforce[133] - Total operating expenses for the nine months ended September 30, 2024, were $246,432, down 13.7% from $285,458 in the same period of 2023[139] - Cost of revenue for the nine months ended September 30, 2024, decreased by 9.3% to $39,649, primarily due to a reduction in credit card fees and salaries[140] Cash Flow and Financing - Cash and cash equivalents stood at $94.1 million as of September 30, 2024[95] - The company reported a cash float of approximately $119.9 million as of September 30, 2024, compared to $120.5 million at the end of 2023[151] - For the nine months ended September 30, 2024, net cash used in operating activities was $28.1 million, a decrease from $44.9 million provided in the same period of 2023[159] - Net cash used in financing activities increased to $32.1 million for the nine months ended September 30, 2024, from $7.8 million in the same period of 2023[163] Management and Organizational Changes - The company appointed Dr. David Eifrig as Interim CEO in August 2024, with founder Porter Stansberry remaining on the Board[95] - The company plans to discontinue reporting Free Subscribers and will only report Active Free Subscribers starting from the first quarter of 2025[107] - The company incurred separation costs of approximately $1.3 million and $2.3 million for the three and nine months ended September 30, 2024, respectively, due to the Legacy Reorganization[154] - The annualized compensation cost savings associated with terminated employees from the Legacy Reorganization is estimated at $16.1 million[154] Other Financial Metrics - Average Revenue Per User (ARPU) was $417 as of September 30, 2024, a decrease of 15.9% from $496 as of September 30, 2023[100] - Adjusted CFFO for the three months ended September 30, 2024, was $(5,829) thousand, a decrease of 148.4% compared to $12,055 thousand for the same period in 2023[146] - Adjusted CFFO Margin for the three months ended September 30, 2024, was (11.9)%, down from 12.6% in the prior year[149] - Non-cash items in operating activities included stock-based compensation expense of $8.7 million and depreciation and amortization of $2.0 million for the nine months ended September 30, 2024[159]

Company Overview - 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 [2] - The company has over 25 years of operating history and serves millions of Free and Paid Subscribers [2] - MarketWise aims to become the leading financial solutions platform for self-directed investors [2] Upcoming Financial Results - MarketWise plans to release its third quarter 2024 financial results before the market opens on November 7, 2024 [1] - An earnings press release will be provided alongside the required SEC filings, containing supplemental information [1] - Investors can submit written questions to the company via email [1]

Financial Results - MarketWise, Inc. announced its financial results for Q2 2024, ending June 30, 2024[3] - The letter to shareholders was issued on August 14, 2024[3] Company Classification - The company is classified as an emerging growth company[2] Reporting Details - The report includes a cover page interactive data file embedded within the Inline XBRL document[4] Management - Erik Mickels serves as the Chief Financial Officer of MarketWise, Inc.[5]

get 1 首页 - p / 100 Igor Kutyaev Investment thesis I previously covered MarketWise, Inc. (NASDAQ:MKTW) in April and gave it a Buy recommendation. My bullish arguments were based on the company's capital light and highly profitable business model coupled with its Founder, Porter Stansberry returning as CEO. Subsequently, the company's fundamentals have deteriorated further, but more significantly, Porter has since resigned, as covered by fellow SA Author Daniel Jones. Shares fell nearly 30% yesterday followin ...

Core Viewpoint - MarketWise, Inc. has declared a quarterly cash dividend of $0.01 per share for Class A common stock and a comparable distribution for MarketWise, LLC units, to be paid on September 25, 2024, with a record date of August 15, 2024 [1] 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 [2][3] - The company has over 20 years of operating history and serves millions of Free and Paid Subscribers, offering trusted sources for high-value financial research and actionable investment ideas [3] - MarketWise operates as a 100% digital, direct-to-customer company, delivering its research across various platforms including mobile, desktops, and tablets [3]

Core Viewpoint - MarketWise, Inc. has filed its quarterly report for Q1 2024 and a CEO letter to shareholders, highlighting its position as a leading digital subscription services platform for self-directed investors [1]. Company Overview - MarketWise is a multi-brand subscription services platform focused on providing premium financial research, software, education, and tools for investors [2]. - The company has over 20 years of operational history and serves millions of Free and Paid Subscribers, offering trusted financial research and actionable investment ideas [3]. - MarketWise operates as a 100% digital, direct-to-customer company, delivering its services across various platforms including mobile, desktops, and tablets [3]. Recent Developments - The quarterly report on Form 10-Q for the quarter ended March 31, 2024, was filed with the SEC on May 15, 2024, and is accessible on the company's website [1].

Core Viewpoint - MarketWise, Inc. has filed its quarterly report for Q1 2024 and a CEO letter to shareholders, highlighting its ongoing commitment to providing premium financial research and tools for self-directed investors [1]. Company Overview - MarketWise is a leading multi-brand digital subscription services platform focused on leveling the playing field for self-directed investors by offering premium financial research, software, education, and tools [2]. - The company has over 20 years of operating history and serves millions of Free and Paid Subscribers, providing trusted financial research and actionable investment ideas [3]. - MarketWise operates as a 100% digital, direct-to-customer company, delivering its research across various platforms including mobile, desktops, and tablets [3]. - The company's vision is to become the leading financial solutions platform for self-directed investors, leveraging its proven, agile, and scalable platform [3].

[Shareholder Letter](index=1&type=section&id=Shareholder%20Letter) This letter details MarketWise's Q1 2024 financial performance, addresses operational challenges, outlines new growth strategies, and explains changes in compensation and capital allocation priorities [Q1 2024 Financial Highlights](index=1&type=section&id=Q1%202024%20Financial%20Highlights) MarketWise reported a decline in key financial metrics for the first quarter of 2024 compared to the same period in 2023 Q1 2024 Financial Performance | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Revenue | $109.0 million | $126.2 million | -13.6% | | Net Income | $22.7 million | $30.6 million | -25.8% | | Paid Subscribers | 683,000 | 777,000 | -12.1% | [Addressing Recent Challenges](index=1&type=section&id=Addressing%20Recent%20Challenges) The company is navigating the after-effects of the 'Covid bubble' and a significant operational crisis at Legacy Research Group, leading to major realignment and negative impact on billings [Impact of the 'Covid Bubble'](index=1&type=section&id=Impact%20of%20the%20'Covid%20Bubble') The company experienced a surge of new subscribers during 2020-2021 who did not convert into long-term customers, leading to disappointing results - The company experienced a surge of new subscribers during 2020-2021, described as "stimulus check-sporting speculators chasing momentum," who did not convert into long-term customers at expected rates, leading to disappointing results in 2022 and 2023[4](index=4&type=chunk)[5](index=5&type=chunk) [Operational Restructuring and Legacy Research Realignment](index=1&type=section&id=Operational%20Restructuring%20and%20Legacy%20Research%20Realignment) The company implemented significant cost reductions and headcount cuts, while reorganizing Legacy Research Group due to ethical issues, impacting billings - Upon returning in October 2023, the CEO initiated cost-cutting measures, reducing G&A costs by about **15% YoY** and decreasing headcount by over **20%** (from 672 to 535) between September 2023 and April 2024[6](index=6&type=chunk)[7](index=7&type=chunk) - The company had to wind down and reorganize its Legacy Research Group due to serious ethical departures, including an editor being paid to recommend low-quality stocks[8](index=8&type=chunk) - The realignment of Legacy Research led to a sharp decline in its billings, from **$30 million** in Q4 2023 to **$16 million** in Q1 2024, with further declines expected[9](index=9&type=chunk) - The company repurchased **7.2 million** MarketWise LLC units for **$10.8 million** from two terminated senior managers of Legacy Research, acquiring the equity at a discount to market value[12](index=12&type=chunk) [New Growth Initiatives](index=2&type=section&id=New%20Growth%20Initiatives) MarketWise is focusing on re-launching proven brands like Brownstone Research and Wide Moat Research, emphasizing high-quality content and brand-building marketing to attract long-term subscribers - The company is re-launching Brownstone Research, with founder Jeff Brown returning to the company after leaving in early 2023 due to conflicts with previous management[19](index=19&type=chunk)[20](index=20&type=chunk) - Wide Moat Research, founded by REIT expert Brad Thomas, is being relaunched with an expanded mandate to cover long-term investing across the entire financial landscape[20](index=20&type=chunk) - New and re-born franchises will be characterized by: ultra-high-quality content at premium rates, analysts with bona fide expertise, and marketing designed for brand value and immediate ROI[21](index=21&type=chunk)[24](index=24&type=chunk) - Future marketing will focus more on branding and offering tools for specific investor types, capitalizing on the "democratization" of finance trend[28](index=28&type=chunk)[29](index=29&type=chunk) [Our New Compensation Structure](index=4&type=section&id=Our%20New%20Compensation%20Structure) The company has fundamentally restructured its compensation to eliminate incentives for inefficient marketing, aligning employee incentives with long-term shareholder value and profitable growth - The previous compensation structure, based on fixed-rate royalty payments on net Billings, incentivized maximizing marketing spending, even on unprofitable campaigns like selling **$49** subscriptions that did not lead to long-term customers[30](index=30&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) - Senior operators will now be paid a salary with bonuses based on a formula rewarding a combination of revenue growth and operating margin, shifting the focus from 'growth at any cost'[36](index=36&type=chunk) - Across the company, bonus and incentive pay will be split **50/50** between cash and stock, with a four-year vesting schedule to promote long-term alignment[37](index=37&type=chunk) - All employees will receive an initial stock grant, with future grants contingent on the company increasing its per-share intrinsic value[39](index=39&type=chunk) [Capital Allocation](index=5&type=section&id=Capital%20Allocation) The company prioritizes share repurchases, plans to continue regular quarterly dividends, and may consider a special dividend, while earning interest on cash - The company has four main options for its cash: invest in its brands, repurchase shares, invest in other industries, or pay dividends[43](index=43&type=chunk) - Share buybacks are considered the best use of excess cash, but are not practical currently because the limited public float of A-shares would make a significant buyback 'tantamount to taking the company private'[44](index=44&type=chunk) - The company plans to continue paying its regular quarterly dividend and will evaluate a potential special dividend at the end of the year[46](index=46&type=chunk) [Additional Performance Measures and Intrinsic Value](index=6&type=section&id=Additional%20Performance%20Measures%20and%20Intrinsic%20Value) The CEO advocates using non-GAAP 'Billings' to assess intrinsic value, distinguishing between lower-margin 'New Marketing Billings' and higher-margin 'Renewal Billings' to focus on long-term recurring revenue growth - The CEO uses a model based on 'Billings' (cash received from customers) rather than GAAP 'Revenue' to evaluate the business, due to the lag in revenue recognition for multi-year subscriptions[48](index=48&type=chunk)[51](index=51&type=chunk) Billings Performance (in millions) | Billings Category (in millions) | 2022 | 2023 | TTM 3/31/24 | | :--- | :--- | :--- | :--- | | New "Marketing" Billings | $333.6 | $278.3 | $266.3 | | Net "Renewal" Billings | $120.3 | $96.8 | $89.1 | | **Total Billings** | **$459.5** | **$382.4** | **$362.5** | - In the CEO's valuation model, high-margin 'Renewal Billings' are the most important factor and are assigned a higher multiple than 'Marketing Billings'[52](index=52&type=chunk)[53](index=53&type=chunk) - Increasing Recurring and Membership Billings is identified as critical to increasing the company's overall intrinsic value, a goal now directly supported by the new compensation structure[55](index=55&type=chunk) [Conclusion](index=7&type=section&id=Conclusion) Despite recent difficulties and the effort to wind down Legacy Research, the CEO expresses strong confidence in the company's future, anticipating positive developments - The CEO reiterates confidence in the company's people, products, and processes, and is more certain of future success today than at the start of the year[56](index=56&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39405 MarketWise, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware 87-1767914 (State or other jurisdiction of incorpor ...