0001805651FalseNovember 7, 202400018056512024-11-072024-11-07

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2024
MarketWise, Inc.
(Exact name of registrant as specified in its charter)
Delaware
001-39405
87-1767914
(State or other jurisdiction
of incorporation)		(Commission File Number)(I.R.S. Employer Identification No.)
1125 N. Charles St.
Baltimore,Maryland21201
(Address of principal executive offices, including zip code)
(888) 261-2693
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, $0.0001 par value per shareMKTWThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition.
On November 7, 2024, MarketWise, Inc.(the “Company”) issued an earnings press release announcing its financial results for the third quarter ended September 30, 2024. A copy of the earnings press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is herein incorporated by reference.
The foregoing information (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No.Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MarketWise, Inc.
Date: November 7, 2024
By:/s/ Erik Mickels
Name:Erik Mickels
Title:Chief Financial Officer


MarketWise Reports Net Income of $22.7 Million and Net Revenue of $97.2 Million for Third Quarter 2024

BALTIMORE, MD -- (GLOBE NEWSWIRE)—MarketWise, Inc. (NASDAQ: MKTW) (“MarketWise” or the “Company”), a leading multi-brand digital subscription services platform that provides premium financial research, software, education, and tools for self-directed investors, today reported financial results for third quarter 2024.
Third Quarter 2024 Highlights(1)
▪Paid Subscribers were 592 thousand as of September 30, 2024 compared with 774 thousand as of September 30, 2023
▪Total Net Revenue was $97.2 million in third quarter 2024 compared with $106.2 million in third quarter 2023
▪Total Billings was $48.9 million in third quarter 2024 compared with $95.5 million in third quarter 2023
▪Net Income was $22.7 million in third quarter 2024 compared with $12.0 million in third quarter 2023
▪Cash and Cash Equivalents were $94.1 million as of September 30, 2024
(1)    See “Key Business Metrics and Non-GAAP Financial Measures” below. For a reconciliation of Adjusted CFFO and Adjusted CFFO margin, see “Non-GAAP Measures” below.
Dr. David “Doc” Eifrig, Interim Chief Executive Officer, commented, “I have been around this Company for two decades and have seen many business cycles and changes along the way. One thing that has remained constant is our commitment to providing high-quality independent research that empowers our customers. My deepest gratitude goes to the more than 400 employees dedicated to the experience of our subscribers. During my first 90 days, I have focused on evaluating the culture, capabilities, products, and processes at our Company. And while not yet evident in our Q3 financial results, I feel confident we are making progress.”
Eifrig continued, "During the third quarter, we began to optimize parts of our business, which we believe will improve revenue and margins going forward. Further, we believe our new brand launches coupled with a strong product pipeline in Q4 will result in an inflection point in our Billings, after several quarters of sequential declines. Specifically, while our average monthly Billings during Q3 were approximately $16 million, our October Billings totaled approximately $19 million. While not yet a trend, we believe seedlings like these will bear fruit. Lastly, we are in the process of advancing our strategic priorities which will guide our Company’s efforts around revenue growth, margin expansion, and inorganic opportunities. I remain bullish and honored to lead our Company and the team we have in place to deliver for our customers, shareholders, and employees. We sell trust and honest ideas with innovative technology to help our subscribers learn, invest, and lead a healthier and wealthier life.”
YTD September 2024 Highlights(1)
▪Total Net Revenue for the nine months ended September 30, 2024 was $311.2 million, a decrease of 7% compared with the same period in prior year.
▪Total Billings for the nine months ended September 30, 2024 was $183.7 million, a decrease of 36.4% compared with the same period in prior year.
▪Net Income for the nine months ended September 30, 2024 was $66.7 million, an increase of 27% compared with the same period in prior year.
▪Net Cash Used in Operating Activities was $28.1 million for the nine months ended September 30, 2024, compared with Net Cash Provided by Operating Activities of $44.9 million for the same period in prior year.
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Our summary results are as follows:
(Unaudited)3Q 20234Q 20231Q 20242Q 20243Q 2024TTM 3Q 2024
Paid Subscribers (in thousands)774737683645592592
Total net revenue (in millions)$106.2$112.2$109.0$105.0$97.2$423.4
New "Marketing" Billings (1)$73.7$67.7$54.8$38.7$32.3$193.5
Net "Renewal" Billings (2)$20.8$21.6$21.4$17.1$15.7$75.9
Other Billings (3)$1.0$4.2$1.0$1.8$0.9$7.9
Total Billings$95.5$93.6$77.2$57.6$48.9$277.3
ARPU$496$503$492$456$417$417
Net income (in millions)$12.0$1.9$22.7$21.2$22.7$68.6
CFFO (in millions)$12.1$15.7$(18.5)$(3.8)$(5.8)$(12.4)
Adjusted CFFO (in millions)$12.1$19.7$(18.5)$(3.8)$(5.8)$(8.4)
(1) Includes billings from all new subscription sales to new and existing subscribers.
(2) Includes billings attributable to renewal and maintenance fee payments. Excludes Membership sales.
(3) Includes primarily billings from Revenue Share, Advertising, and Conferences.
Balance Sheet and Capital Structure
As of September 30, 2024 the consolidated Cash balance was $94.1 million as compared with $155.2 million at December 31, 2023. The majority of the decline in cash related to activity that occurred in the first half of this year. For the nine months ended September 30, 2024, interest income earned totaled $4.8 million.
Consistent with previous disclosure, the Company began making required tax distribution payments in the third quarter of 2024. Tax distributions of approximately $6 million were made during the quarter and are reflected in our statement of cash flows as cash used in financing activities. We will continue to make required quarterly tax distributions in future periods, which we expect to be significant. The amount of future tax distributions however, will be dependent on a variety of factors.
The Company’s $150 million credit facility matured on October 29, 2024, with no amounts outstanding. While the Company currently has no immediate needs for external capital, and the business plan is fully funded, the Company may in the future consider entering into a new credit facility to enhance optionality around capital allocation alternatives.
MarketWise Inc.’s Class A common stock trades on the NASDAQ Global Market under the symbol "MKTW." As of September 30, 2024, the Company had 39,381,380 Class A common shares and 279,890,147 Class B common shares issued and outstanding.
About MarketWise
Founded with a mission to level the playing field for self-directed investors, today MarketWise is a leading multi-brand subscription services platform providing premium financial research, software, education, and tools for investors.
With more than 25 years of operating history, MarketWise serves a community of millions of free and paid subscribers. MarketWise’s products are a trusted source for high-value financial research, education, actionable investment ideas, and investment software. MarketWise is a 100% digital, direct-to-customer company offering its
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research across a variety of platforms including mobile, desktops, and tablets. MarketWise has a proven, agile, and scalable platform and our vision is to become the leading financial solutions platform for self-directed investors.
Key Business Metrics and Non-GAAP Financial Measures
In this release we discuss certain key business metrics, which we believe provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies who may calculate similarly titled metrics in a different way.
Billings is defined as amounts invoiced to customers.
Free Subscribers are defined as unique subscribers who have subscribed to one of our free investment publications via a valid email address and continue to remain directly opted in, excluding any Paid Subscribers who also have free subscriptions. Active Free Subscribers are those Free Subscribers with whom we have engaged during the most recent quarter and represent those individuals who have received and/or consumed our content on a regular basis during that same quarter.
Paid Subscribers are defined as the total number of unique subscribers with at least one paid subscription at the end of the period.
Average revenue per user or ARPU is defined as the trailing four quarters of net Billings divided by the average number of quarterly total Paid Subscribers over that period.
In addition to our results determined in accordance with GAAP, we believe that the below non-GAAP financial measures are useful in evaluating our ability to generate cash. We use the below non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. This non-GAAP financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies. A reconciliation is provided above for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
Adjusted CFFO is defined as cash flow from operations plus or minus any non-recurring items.
Adjusted CFFO Margin is defined as Adjusted CFFO as a percentage of Billings.
We believe that Adjusted CFFO and Adjusted CFFO Margin are useful indicators that provide information to management and investors about our ability to generate cash (without the effects of non-recurring items), and for internal planning and forecasting purposes.
We expect Adjusted CFFO and Adjusted CFFO Margin to fluctuate in future periods as we invest in our business to execute our growth strategy. These activities, along with any non-recurring items as described above, may result in fluctuations in Adjusted CFFO and Adjusted CFFO Margin in future periods.
Non-GAAP Measures
The following table provides a reconciliation of net cash provided by operating activities to Adjusted CFFO, and net cash provided by operating activities margin as a percentage of total net revenue to Adjusted CFFO Margin, in each case, the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (“GAAP”):
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(In thousands)Third QuarterYear to Date September 30,
20242023% Change20242023% Change
Net cash (used in) provided by operating activities$(5,829)$12,055 (148.4)%$(28,135)$44,901 (162.7)%
Non-recurring expenses— — NM— — NM
Adjusted CFFO$(5,829)$12,055 (148.4)%$(28,135)$44,901 (162.7)%
Net cash (used in) provided by operating activities$(5,829)$12,055 (148.4)%$(28,135)$44,901 (162.7)%
Total net revenue97,186 106,150 (8.4)%311,223 336,027 (7.4)%
Net cash (used in) provided by operating activities margin(6.0 %)11.4 %(9.0 %)13.4 %
Adjusted CFFO$(5,829)$12,055 (148.4)%$(28,135)$44,901 (162.7)%
Billings48,929 95,513 (48.8)%183,728 288,854 (36.4)%
Adjusted CFFO margin(11.9 %)12.6 %(15.3 %)15.5 %
NM: Not meaningful

Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the financial position, business strategy, and the plans and objectives of management for future operations of MarketWise. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections, and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including, but not limited to: our ability to attract new subscribers and to persuade existing subscribers to renew their subscription agreements with us and to purchase additional products and services from us; our ability to adequately market our products and services, and to develop additional products and product offerings; our ability to manage our growth effectively, including through acquisitions; failure to maintain and protect our reputation for trustworthiness and independence; our ability to attract, develop, and retain capable management, editors, and other key personnel; our ability to grow market share in our existing markets or any new markets we may enter; adverse or weakened conditions in the financial sector, global financial markets, and global economy; current macroeconomic events, including heightened inflation, rise in interest rates and the potential for an economic recession; failure to comply with laws and regulations or other regulatory action or investigations, including the Advisers Act; our ability to respond to and adapt to changes in technology and consumer behavior; failure to successfully identify and integrate acquisitions, or dispose of assets and businesses; our public securities’ potential liquidity and trading; the impact of the regulatory environment and complexities with compliance related to such environment; our future capital needs; our ability to maintain an effective system of internal control over financial reporting, and to address and remediate existing material weaknesses in our internal control over financial reporting; and other factors beyond our control.
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” section of our filings with the U.S. Securities and Exchange Commission (the “SEC”). These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks,
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uncertainties and assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. We do not give any assurance that we will achieve our expectations.

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Table 1. Income Statement
(Unaudited, in thousands)Third QuarterYear to Date September 30,
2024202320242023
Net revenue$96,975 $105,799 $309,761 $334,777 
Related party revenue211 351 1,462 1,250 
Total net revenue97,186 106,150 311,223 336,027 
Operating expenses:
Cost of revenue(1)
12,902 13,812 39,649 43,737 
Sales and marketing(1)
36,644 52,466 126,663 150,226 
General and administrative(1)
22,480 25,005 70,796 80,667 
Research and development(1)
2,614 2,085 6,934 6,778 
Depreciation and amortization635 1,001 1,997 2,979 
Impairment of intangible assets— 584 — 584 
Related party expense9 155 393 487 
Total operating expenses75,284 95,108 246,432 285,458 
Income from operations21,902 11,042 64,791 50,569 
Other income, net632 182 210 807 
Interest income, net1,185 1,511 4,184 3,062 
Income before income taxes23,719 12,735 69,185 54,438 
Income tax expense973 691 2,487 2,046 
Net income22,746 12,044 66,698 52,392 
Net income attributable to noncontrolling interests21,026 11,904 61,777 50,749 
Net income attributable to MarketWise, Inc.$1,720 $140 $4,921 $1,643 
(1)    Cost of revenue, sales and marketing, general and administrative, and research and development expenses are exclusive of depreciation and amortization shown as a separate line item



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Table 2. Balance Sheet
(Unaudited, in thousands, except share and per share data)September 30, 2024December 31, 2023
Assets
Current assets:
Cash and cash equivalents$94,111 $155,174 
Accounts receivable2,224 4,528 
Prepaid expenses8,993 9,305 
Related party receivables930 5,182 
Deferred contract acquisition costs64,757 91,480 
Other current assets1,480 2,172 
Total current assets172,495 267,841 
Property and equipment, net567 690 
Operating lease right-of-use assets5,801 7,331 
Intangible assets, net7,687 6,255 
Goodwill33,560 31,038 
Deferred contract acquisition costs, noncurrent49,746 73,420 
Deferred tax assets8,469 9,693 
Other assets26 287 
Total assets$278,351 $396,555 
Liabilities and stockholders’ deficit
Current liabilities:
Trade and other payables$2,326 $559 
Related party payables, net1,133 1,137 
Accrued expenses22,370 55,041 
Deferred revenue and other contract liabilities229,735 287,751 
Operating lease liabilities1,639 1,446 
Other current liabilities26,769 27,959 
Total current liabilities283,972 373,893 
Long-term liabilities – related party316 — 
Deferred revenue and other contract liabilities, noncurrent233,096 304,342 
Other liabilities, noncurrent2,313 2,151 
Related party tax receivable agreement liability, noncurrent2,669 746 
Operating lease liabilities, noncurrent3,100 4,366 
Total liabilities525,466 685,498 
Commitments and Contingencies— — 
Stockholders’ deficit:
Common stock - Class A, par value of $0.0001 per share, 950,000,000 shares authorized; 39,381,380 and 36,384,981 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively4 4 
Common stock - Class B, par value of $0.0001 per share, 300,000,000 shares authorized; 279,890,147 and 288,092,303 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively28 29 
Preferred stock - par value of $0.0001 per share, 100,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively— — 
Additional paid-in capital101,857 115,164 
Accumulated other comprehensive income56 65 
Accumulated deficit(121,422)(126,343)
Total stockholders’ deficit attributable to MarketWise, Inc.(19,477)(11,081)
Noncontrolling interest(227,638)(277,862)
Total stockholders’ deficit(247,115)(288,943)
Total liabilities and stockholders’ deficit$278,351 $396,555 

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Table 3. Cash Flows
(Unaudited, in thousands)Year to Date September 30,
20242023
Cash flows from operating activities:
Net income$66,698 $52,392 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization1,997 2,979 
Impairment and other charges— 584 
Stock-based compensation8,668 10,956 
Change in fair value of contingent consideration269 — 
Change in fair value of derivative and other liabilities, noncurrent— 1,673 
Deferred taxes2,136 2,046 
Unrealized (gains) losses on foreign currency(128)5 
Noncash lease expense1,530 1,590 
Changes in operating assets and liabilities:
Accounts receivable2,304 (1,918)
Related party receivables and payables, net3,588 810 
Prepaid expenses312 329 
Other current assets and other assets953 562 
Deferred contract acquisition costs50,397 23,566 
Trade and other payables2,176 1,189 
Accrued expenses(32,671)(3,265)
Deferred revenue – current and noncurrent(133,595)(44,288)
Operating lease liabilities – current and noncurrent(1,073)(1,111)
Other current and long-term liabilities(1,696)(3,198)
Net cash (used in) provided by operating activities(28,135)44,901 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired— (170)
Purchases of property and equipment(52)(60)
Capitalized software development costs(736)(1,428)
Net cash used in investing activities(788)(1,658)
Cash flows from financing activities:
Proceeds from issuance of common stock213 332 
Repurchases of stock(10,803)— 
Restricted stock units withheld to pay taxes(1,368)(1,520)
Dividends paid(1,113)(299)
Distributions to noncontrolling interests(19,060)(6,319)
Net cash used in financing activities(32,131)(7,806)
Effect of exchange rate changes on cash(9)11 
Net increase in cash, cash equivalents and restricted cash(61,063)35,448 
Cash, cash equivalents and restricted cash — beginning of period155,174 158,575 
Cash, cash equivalents and restricted cash — end of period$94,111 $194,023 

MarketWise Investor Relations Contact
Erik Mickels – Chief Financial Officer
(800) 290-4113
Email: ir@marketwise.com
MarketWise Media Contact
Email: media@marketwise.com
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v3.24.3
Document and Entity Information Document
Nov. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2024
Entity Registrant Name MarketWise, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39405
Entity Tax Identification Number 87-1767914
Entity Address, Address Line One 1125 N. Charles St.
Entity Address, City or Town Baltimore,
Entity Address, State or Province MD
Entity Address, Postal Zip Code 21201
City Area Code (888)
Local Phone Number 261-2693
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, $0.0001 par value per share
Trading Symbol MKTW
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001805651
Amendment Flag false
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