• Incremental Paid Subscribers Total Revenue 128,014 103,644 -19% | --- | --- | |-------|-------| | 2Q22 | 2Q23 | | | | | | | | | | | 0% | 1% | | 0% | 1% | | 1% | 2% | | | | Our high-value Membership subscribers continue to add to the recurring revenue stream Appendix Income Tax Expense/(Benefit) 1,040 427 -59% 2Q23 Investor Presentation 2 The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the "Risk Factors" ...

MarketWise, Inc. (NASDAQ:MKTW) Q2 2023 Earnings Conference Call August 10, 2023 11:00 AM ET Company Participants Jonathan Shanfield - Vice President, Investor Relations Amber Mason - Chief Executive Officer Stephen Park - Interim Chief Financial Officer Lee Harris - Senior Vice President, Financial Planning & Analysis Conference Call Participants Kyle Peterson - Needham Michael Falco - JMP Securities Chad Larkin - Oppenheimer Alex Kramm - UBS Operator Thank you for standing by, and welcome to the MarketWise ...

Subscriber Metrics - As of June 30, 2023, MarketWise had 750,287 Paid Subscribers, a decrease of 148,000 or 16.4% compared to 898,000 Paid Subscribers on June 30, 2022[129] - Free Subscribers increased by 1,000,000, or 6.5%, to 15,948,652 as of June 30, 2023, compared to 14,972,985 a year earlier[145] - Active Free Subscribers decreased by 0.4 million, or 9.5%, to 3.9 million as of June 30, 2023, compared to 4.3 million a year earlier[145] - Total Paid Subscribers decreased by 148 thousand, or 16.4%, to 750 thousand as of June 30, 2023, compared to 898 thousand at June 30, 2022[148] - Total Paid Subscribers decreased by 27 thousand, or 3.5%, to 750 thousand as of June 30, 2023, compared to 777 thousand as of March 31, 2023[149] Revenue and Financial Performance - Net revenue for Q2 2023 was $103.6 million, a decrease of $24.4 million or 19.0% from $128.0 million in Q2 2022, primarily due to a $15.6 million decrease in term subscription revenue and an $8.4 million decrease in membership subscription revenue[183] - For the six months ended June 30, 2023, net revenue was $229.9 million, a decrease of $34.9 million or 13.2% from $264.8 million in the same period of 2022, driven by a $23.3 million decrease in term subscription revenue[190] - Billings for the three months ended June 30, 2023 were $96,170,000, representing an 18.2% decline from $117,507,000 in the same period of 2022[143] - Billings decreased by $21.3 million, or 18.2%, to $96.2 million for the three months ended June 30, 2023, compared to $117.5 million for the same period in 2022[157] - The company experienced a significant decrease in membership subscription revenue due to lower volumes in current and prior years, impacting overall revenue performance[192] Customer Acquisition and Marketing - MarketWise's LTV/CAC ratio was approximately 2.0x, indicating a focus on efficient and profitable customer acquisition[127] - The company aims for a 90-day payback period on marketing spend to ensure efficient customer acquisition[128] - MarketWise's marketing strategy includes a mix of direct-to-paid acquisition and free-to-paid conversions, with direct-to-paid accounting for approximately two-thirds of annual Paid Subscriber acquisition since 2019[129] - The average monthly churn rate as of June 30, 2023, was near the higher end of the range of 1.8% to 2.7% observed between 2020 and 2022[150] - The payback period for subscriber acquisition costs was estimated at 1.5 years for the year ended December 31, 2022, reflecting increased customer acquisition costs[154] Operating Expenses - Total operating expenses for Q2 2023 were $94.7 million, down $9.9 million or 9.5% from $104.6 million in Q2 2022, with significant reductions in sales and marketing expenses by $16.0 million or 24.6%[186] - Total operating expenses for the six months ended June 30, 2023 were $190.4 million, a decrease of $33.7 million or 15.0% from $224.0 million in the same period of 2022[194] - General and administrative expenses increased by $7.3 million or 35.7% in Q2 2023 compared to Q2 2022, primarily due to increases in sales and franchise taxes and incentive compensation[189] - Research and development expenses remained relatively stable, with a slight increase of $0.1 million or 2.6% in Q2 2023 compared to Q2 2022[186] Cash Flow and Liquidity - Adjusted cash flow from operations (CFFO) for Q2 2023 was $29.0 million, an increase of 8.2% from $26.8 million in Q2 2022, with an adjusted CFFO margin of 30.1%[201] - Adjusted CFFO for the three months ended June 30, 2023, was $28.978 million, an increase of 8.2% from $26.794 million in the same period of 2022[206] - Net cash provided by operating activities for the six months ended June 30, 2023, was $32.846 million, up 17.9% from $27.862 million in 2022[227] - The net cash provided by operating activities margin increased from 10.5% for the six months ended June 30, 2022, to 14.3% for the same period in 2023[209] - Cash flow from operations increased by $5.0 million, or 17.9%, for the six months ended June 30, 2023, primarily due to net income adjustments[209][228] Shareholder Returns and Dividends - On May 11, 2023, the Board declared a cash dividend of $0.01 per share, totaling $0.4 million for Class A common stockholders[233] - The total amount of the distribution payment to common unit holders was approximately $2.9 million[233] - The company did not repurchase any shares during the three months ended June 30, 2023, but has repurchased a total of 2,984,987 shares since the program's inception[221] Deferred Revenue and Future Expectations - Deferred revenue as of June 30, 2023, was $628.4 million, with $288.4 million expected to be recognized as net revenue over the next 12 months[217] - The company expects operating cash flows to improve as operational efficiency increases and economies of scale are realized[215] - The company anticipates that net revenue will fluctuate due to the timing and mix of term and membership subscriptions[161] Accounting Policies - Management believes that "Revenue Recognition" and "Transactions and Valuation of Goodwill and Other Acquired Intangible Assets" are critical accounting policies for understanding financial condition[236]

MarketWise, Inc. (NASDAQ:MKTW) Q1 2023 Earnings Conference Call May 11, 2023 11:00 AM ET Company Participants Jonathan Shanfield - VP, IR Amber Mason - CEO Stephen Park - Interim CFO Lee Harris - SVP, Financial Planning & Analysis Conference Call Participants Kyle Peterson - Needham Jason Helfstein - Oppenheimer Operator Thank you and welcome to the MarketWise First Quarter 2023 Earnings Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference ...

1Q23 Investor Presentation This presentation (this "Presentation") contains forward-looking statements within the meaning of the federal securities laws, including statements regarding the financial position, business strategy, and the plans and objectives of management for future operations of MarketWise, Inc. (the "Company," "we," "us," or "our"). These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," ...

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, 2023 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 ...

$729.9 $548.8 $459.5 $310.1 $151.4 $100.9 2019 2020 2021 2022 4Q21 4Q22 adjusted CFFO Conversion³ (LOW Capex) 99.7% 99.8% 99.9% 99.9% 100.0% 98.3% | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|--------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | $134.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $69.0 | | $59.3 | | | | | | | | | | | | | $5.0 | $18.4 | | | | | | | 1. Billings represents amounts i ...

Financial Performance - Total net revenue decreased by $36.8 million, or 6.7%, from $549.2 million in 2021 to $512.4 million in 2022, primarily due to a $38.1 million decrease in term subscription revenue[268]. - Net revenue for the year ended December 31, 2022 was $512.4 million, a decrease of $36.8 million or 6.7% from $549.2 million in 2021, primarily due to a $38.1 million decrease in term subscription revenue[346]. - Net income for the year ended December 31, 2022 was $101.2 million, a significant improvement compared to a net loss of $953.9 million in 2021[343]. - The company reported a net income attributable to MarketWise, Inc. of $18.0 million for the year ended December 31, 2022, compared to a net loss of $1.0 billion in 2021[342]. Subscriber Metrics - As of December 31, 2022, the paid subscriber base was 841 thousand, down 130 thousand, or 13.4%, compared to 972 thousand in 2021[281]. - Total Paid Subscribers decreased by 130 thousand, or 13.4%, to 841 thousand as of December 31, 2022 compared to 972 thousand in 2021[298]. - Free Subscribers increased by 2.0 million, or 14.6%, to 15.7 million as of December 31, 2022 compared to 13.7 million in 2021[295]. - Average revenue per user (ARPU) decreased by 30.1% from $742 in 2021 to $519 in 2022[283]. - The average annual free-to-paid conversion rate was approximately 1% to 2% between 2020 and 2022, with a cumulative free-to-paid conversion rate of 4%[282]. - Subscriber count churn ranged from approximately 1.8% to 2.7% per month between 2020 and 2022, with a net revenue retention rate averaging over 80%[301]. Cash Flow and Operating Activities - Net cash provided by operating activities decreased by $15.3 million, or 24.0%, from $63.6 million in 2021 to $48.4 million in 2022[265]. - The company reported a net cash provided by operating activities of $48.4 million in 2022, down 24.0% from $63.6 million in 2021[377]. - Cash flow from operations increased by $7.8 million, or 13.9%, from $55.9 million in 2020 to $63.6 million in 2021[270]. - Adjusted CFFO decreased by $137.8 million, or 69.9%, from $197.1 million in 2021 to $59.3 million in 2022, driven by the decrease in Billings[266]. - Adjusted CFFO Margin was 12.9% in 2022, down from 27.0% in 2021, reflecting the decrease in Adjusted CFFO[371]. Revenue Composition - Approximately 36% of Billings in 2022 came from membership subscriptions, down from 42% in 2021[309]. - Membership subscription revenue increased due to the recognition of deferred revenue from prior years, contributing positively to overall revenue for 2022[347]. - Revenue from Buttonwood Publishing, acquired in August 2022, was $2.0 million for the year ended December 31, 2022, indicating successful integration of the new business[346]. Operating Expenses - Total operating expenses decreased significantly by $1.1 billion or 72.0% from $1.5 billion in 2021 to $425.1 million in 2022, driven by reductions in cost of revenue and general and administrative expenses[349]. - Cost of revenue decreased by $176.6 million or 73.8% from $239.3 million in 2021 to $62.7 million in 2022, primarily due to a $170.5 million decrease in stock-based compensation expense related to Class B Units[350]. - Sales and marketing expenses decreased by $61.6 million or 20.7% from $296.9 million in 2021 to $235.3 million in 2022, largely due to a $46.4 million decrease in stock-based compensation expense related to Class B Units[352]. - General and administrative expenses decreased by $845.4 million or 88.0% from $960.2 million in 2021 to $114.8 million in 2022, reflecting significant cost reduction initiatives[349]. - Research and development expenses increased by $1.3 million or 17.8% from $7.5 million in 2021 to $8.8 million in 2022, as the company continues to invest in its platform[349]. Future Outlook and Financing - The company expects fluctuations in Adjusted CFFO and Adjusted CFFO Margin in future periods as it invests in its growth strategy[376]. - Future capital requirements will depend on subscription growth rates and the introduction of new products[386]. - The company may need to seek additional equity or debt financing in the future, which could affect its ability to compete successfully[387]. Acquisitions and Goodwill - Revenue from Chaikin Analytics, acquired in January 2021, was $7.5 million for the year ended December 31, 2021[358]. - Goodwill is recorded as the excess of purchase consideration over the fair values of identifiable assets and liabilities acquired, requiring significant estimates and assumptions[420]. Stock-Based Compensation - Total stock-based compensation expenses decreased to $9.0 million in 2022 from $1,063.4 million in 2021[322]. - Class B Units were historically classified as liabilities and remeasured to fair value, impacting stock-based compensation expense[421]. - The fair value of Class B Units was estimated using a two-step valuation approach, considering market and discounted cash flow methods[424].

Financial Data and Key Metrics Changes - For the full year 2022, the company generated $512.4 million in revenue, a decline of 6.7% compared to the prior year [16] - Billings decreased by 37% year-over-year to $459.5 million, and adjusted cash flow from operations was $59.3 million, down from $197.1 million in 2021 [16] - In Q4 2022, GAAP revenue was $127.7 million, a decrease of 13% from $146.7 million in Q4 2021 [30] - Net income for Q4 2022 was $4.3 million, compared to $8.6 million in Q4 2021 [43] - Adjusted cash flow from operations in Q4 2022 was $18.4 million, with an adjusted CFFO margin of 18.2%, up from 3.3% in the previous year [44] Business Line Data and Key Metrics Changes - The paid subscriber base declined from 972,000 at the end of Q4 2021 to 841,000 in Q4 2022, a decrease of 13.4% [36] - Membership subscriptions accounted for 35% of billings in Q4 2022, down from 45% in Q4 2021, while term subscriptions made up 63% of billings, down from 54% [31] - The company introduced 49 new publications in 2022 and retired 33 underperforming publications [18][19] Market Data and Key Metrics Changes - Landing page visits were approximately 26 million in Q4 2022, down 5% from Q3 2022 and down approximately 30% year-over-year [28] - The overall conversion rate remained flat compared to the previous quarter, but declined by approximately five basis points compared to 2021 [29] Company Strategy and Development Direction - The company aims to improve operational efficiency and financial performance, focusing on cost reductions and enhancing subscriber engagement [10][12] - There is a commitment to talent acquisition and retention, with plans to hire a new CFO and COO to support growth [15][47] - The company is exploring opportunities for mergers and acquisitions while ensuring sound financial transactions [25][26] Management's Comments on Operating Environment and Future Outlook - Management noted that market volatility and economic uncertainty have impacted investor engagement and purchasing behavior [16][115] - The company is optimistic about improving operations and performance, emphasizing control over internal factors [47] - Management acknowledged the challenges posed by the current economic environment but expressed confidence in the company's ability to generate cash flow and maintain profitability [76] Other Important Information - The company achieved approximately $74 million in total savings in 2022, with $40 million from direct marketing and $36 million from overhead reductions [17][39] - The capital structure was improved by exchanging outstanding warrants for shares, increasing public shares by approximately 26% [23] Q&A Session Summary Question: Can you help bridge your comments around the first quarter outlook? - Management noted that while landing page visits are tracking positively, conversion rates have deteriorated, impacting billings [52] Question: How are you thinking about the strategy to convert free subscribers into paying customers? - Management is testing various messages to inspire free subscribers to convert, aiming to increase engagement and conversion rates [61] Question: Will you proceed with M&A deals without a permanent CFO? - Management confirmed that they are comfortable proceeding with M&A activities without a CFO, relying on the expertise of the Chief Corporate Development Officer [92] Question: Can you provide more details on severance and professional fees for the full year? - Management indicated that severance was a one-time charge and professional fees are expected to improve as they manage costs [120]

Financial Data and Key Metrics Changes - For Q3 2022, the company reported revenues of $119.9 million, a decline of 14.7% compared to $140.7 million in Q3 2021 [9][31] - Billings decreased by 23.9% year-over-year to $105.1 million, down from $139.1 million in the previous year [10][31] - Adjusted cash flow from operations was $13.1 million, down from $34.7 million in the same quarter last year, with an adjusted CFFO margin of 12.5% compared to 25.2% last year [10][42] Business Line Data and Key Metrics Changes - The decline in revenue was primarily driven by a $16.9 million decrease in term subscription revenue [31] - Approximately 33% of billings came from membership subscriptions, while 66% came from term subscriptions, indicating a shift from the previous year where 45% were from membership subscriptions [33] Market Data and Key Metrics Changes - The company noted a decline in consumer engagement and fewer new subscribers due to ongoing market volatility and reduced direct marketing spend [10][28] - Landing feature visits were approximately 27 million, down 15% from both Q1 and Q2 2022 [29] Company Strategy and Development Direction - The company is focusing on cost reduction initiatives targeting $74 million in total expense savings, with a goal of reducing overhead by approximately $37 million [34][36] - New content was launched, including five new publications addressing current market themes such as healthcare investing and options trading strategies [15] - The integration of data science and AI into operations is ongoing, aimed at improving conversion rates and reducing customer churn [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that as the economy stabilizes and inflation is controlled, investor engagement will return [8] - The company is managing its business prudently by focusing on efficiencies and maintaining margins in the current market environment [13][46] Other Important Information - A tender offer was initiated to exchange all outstanding warrants for shares of Class A common stock, increasing public shares by approximately 26% [21][45] - The company executed a small acquisition of a publishing group to enhance its existing media entity [24] Q&A Session Summary Question: Concerns about cash costs and future expectations - Management acknowledged the increase in cash costs and explained that one-time items affected the cash flow calculations, with expectations for continued cost reductions [51][54] Question: Impact of inflation on subscriptions - Management indicated that while high-value customers are less sensitive to inflation, overall engagement has slowed due to market volatility [76][80] Question: Monetization opportunities beyond subscriptions - Management highlighted the potential for new revenue streams through the recently launched marketwise.com, which could enhance subscriber acquisition and ad-based revenue [85][86]