Marketwise, Inc. · NASDAQ:MKTW
Marketwise — Ascendant Digital Acquisition — SPAC Merger (March 2021)
36 slides from Marketwise's SPAC merger presentation, Mar 31, 2021
Slide 1: Management Presentation
MANAGEMENT PRESENTATIONMANAGEMENT PRESENTATION
Slide 2: Important Information
IMPORTANT INFORMATION About this Presentation This investor presentation (this “Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to a proposed business combination (the “Business Combination”) between Ascendant Digital Acquisi
Slide 3: Important Information
IMPORTANT INFORMATION This Presentation also includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, Adjusted CFFO, Adjusted CFFO Conversion, Adjusted Free Cash Flow, and Adjusted Free Cash Flow Margin and
Slide 4: Ascendant was looking for a great acquisition in the attention economy
ASCENDANT WAS LOOKING FOR A GREAT ACQUISITION, IN THE ATTENTION ECONOMY Significant and growing “attention $191B TAM with significant tailwinds, ripe for disruption 1 ✓ economy” TAM Market leading tech platform with scalable, high-value Scalable, digitally delivered IP 2✓ content, data & analytics 1
Slide 5: Introducing Beacon Street Group
c= _ a a NTRODUCING BEACON STREET GROUP ye.
Slide 6: Leading subscription services platform for self-directed investors
Founded with a mission to level the playing field for self-directed investors Today we are a Leading Subscription Services Platform serving millions of self-directed investors A diverse portfolio of operating brands serving as a trusted source for financial research, education and actionable ideas 6
Slide 7: Beacon Street Group at a Glance
BEACON STREET GROUP AT A GLANCE A market leader in delivering high-value and actionable 10M+ 850K+ $759 financial research, easy-to- Digital Paid Digital Industry Leading 2 Platform Subscribers at 2020 ARPU use technology, as well as 1 Members at 12/31/20 financial education and a 12/31/20 social co
Slide 8: Business Overview
Slide 9: Key Drivers of Our Success
KEY DRIVERS OF OUR SUCCESS POWERFUL CONTENT CUSTOMER FOCUS SCALABLE MODEL DATA / TECHNOLOGY PLATFORM • Compelling content fosters • Customer centricity through • Industry-leading ROI on new • Real-time campaign relationships between readers every stage of a subscriber’s customer acquisition feedback
Slide 10: Financial Wellness Solutions Have a Huge TAM
FINANCIAL WELLNESS SOLUTIONS HAVE A HUGE TAM $191B Global Total Addressable Market 63M 4 2020 US Self-directed Investors Financial 1 Information , $64B 19% 3 Asset Managers , 2017-2019 CAGR for Online Revenue $111B 5 from Global Self-directed Investors Investment 2 Research , $16B 1. As per BMO rese
Slide 11: Personal Investing Is Changing in Favor of BSG
PERSONAL INVESTING IS CHANGING IN …the markets are no longer FAVOR OF BSG reserved for institutional investors or HNWI. The goal of AGING POPULATION GROWING THE PIE 1 • 17% of U.S. population is 65+• 72% of millennials identify as self- democratizing the financial 3 directed investors (~$22T of • 10
Slide 12: Premium Subscription Content, Software and Tools
PREMIUM SUBSCRIPTION CONTENT, SOFTWARE AND TOOLS ACTIONABLE IDEAS SOFTWARE & TOOLS Forever Portfolio Buy These 20 Stocks Today and Hold Them Forever! 12PREMIUM SUBSCRIPTION CONTENT, SOFTWARE AND TOOLS ACTIONABLE IDEAS SOFTWARE & TOOLS Forever Portfolio Buy These 20 Stocks Today and Hold Them Forever
Slide 13: Building Relationships and Helping Subscribers
BUILDING RELATIONSHIPS AND HELPING SUBSCRIBERS “…you folks have become my “You guys talk about ‘life changing teachers and a true resource… results’… I am actually taking pride educating me on how to invest for in managing our investments. That the long term. WHAT A GIFT!” is a big life change. ” -
Slide 14: Proven, Agile Platform for Launching New Products Quickly
PROVEN, AGILE PLATFORM FOR 160+ LAUNCHING NEW PRODUCTS QUICKLY 130+ WITH LOW RISK 90+ Detect new demand and investment DETECT trends in the financial marketplace through observation, research and analysis <50 Identify a financial expert that has a ANALYZE personal passion for a specific area of grow
Slide 15: Diverse Research Portfolio Across Different Asset Classes
DIVERSE RESEARCH PORTFOLIO ACROSS DIFFERENT ASSET CLASSES DIVERSE RESEARCH PRODUCTS # OF CUMULATIVE SELECTED 1 1 (% OF BILLINGS - 2018-2020) SUBSCRIBERS LIFETIME SPEND EXAMPLES • Newswire Other 5% Free • Investor Hour Commodities 3% 9.5M General market commentary, current • The Weekly Pulse Bundle 1
Slide 16: Best-in-Class Business Model Tailored for High Value Subscribers
BEST-IN-CLASS BUSINESS MODEL TAILORED FOR HIGH VALUE SUBSCRIBERS CUMULATIVE FREE-TO-PAID CUMULATIVE HIGH-VALUE CUMULATIVE ULTRA CONVERSION RATE CONVERSION RATE CONVERSION RATE 2 3 4 6% 37% 31% TOTAL HIGH VALUE TOTAL ULTRA HIGH FREE TOTAL PAID SUBSCRIBERS VALUE SUBSCRIBERS SUBSCRIBERS SUBSCRIBERS (To
Slide 17: Financial Highlights
FINANCIAL HIGHLIGHTS $549M 77% $759 >5x 1 2 2020 Billings 2020 Billings 2020 ARPU LTV/CAC Ratio growth INDUSTRY-LEADING UNIT TRACK RECORD OF SCALE ECONOMICS GROWTH 97% 24% 99.8% 2018-2020 2020 Adjusted Free 2020 Adjusted CFFO 3 4 Cash Flow Margin Conversion Subscription Billings PREMIER CASH FLOW RE
Slide 18: Superior Unit Economics – 2020
SUPERIOR UNIT ECONOMICS – 2020… “….with an LTV/CAC ratio of 3 or Avg. Customer Lifetime Billings ~$2,700 higher, investing an incremental High Variable Margin dollar in acquiring new customers has 1 LTV/CAC Ratio >5x a greater expected return than retaining that dollar as profit…” 90 Days 7-9 Months
Slide 19: Subscribers Spending More Initially and Increasing Spend Over Time
… WITH SUBSCRIBERS SPENDING MORE INITIALLY AND INCREASING THAT SPEND OVER TIME 2020 Cohort 2019 Cohort 2018 Cohort 2017 Cohort 2016 Cohort 2015 Cohort Year 1 Year 2 Year 3 Year 4 Year 5 CUMULATIVE SPEND BY COHORT OVER TIME 19… WITH SUBSCRIBERS SPENDING MORE INITIALLY AND INCREASING THAT SPEND OVER T
Slide 20: Vision & Growth Strategy
VISION & GROWTH STRATEGY 20VISION & GROWTH STRATEGY 20
Slide 21: Strategic Initiatives Are Driving and Accelerating Growth
STRATEGIC INITIATIVES ARE DRIVING AND ACCELERATING GROWTH KEY INITIATIVES (PAST 3 YEARS) 225 11,000,000 10.4 • Strategic acquisitions (6 operating subsidiaries) 8.9 9,000,000 • Broadened product offerings, including adding 27+ 175 7.5 editors & 110+ publications and built or acquired $158 software a
Slide 22: Our Vision to Become the De-Facto Financial Wellness Solutions Platform
OUR VISION TO BECOME THE DE-FACTO FINANCIAL WELLNESS SOLUTIONS PLATFORM FOR SELF-DIRECTED INVESTORS Grow / Optimize Build/Buy Invest in & Deepen Invest in Establish Invest in Brand Expand Marketing & Addt’l Content, Community Technology, Data Partnerships Marketing Internationally Customer Acquisiti
Slide 23: Track Record of Efficient and Accretive Capital Allocation
… WITH A TRACK RECORD OF EFFICIENT AND HIGHLY ACCRETIVE CAPITAL ALLOCATION ORIGINAL SALES 2020 SALES YEAR FOCUS AREA BUILD OR BUY ($ MILLIONS) ($ MILLIONS) Transaction 1 2010 Macro Build -- $120 Transaction 2 2013 Risk Allocation Buy $1 $30 Transaction 3 2014 Macro Buy $5 $110 Transaction 4 2015 Com
Slide 24: Forecasted Key Performance Indicators
FORECASTED KEY PERFORMANCE INDICATORS ARPU decline due to 1 PAID SUBSCRIBERS (IN THOUSANDS) ARPU significant subscriber growth; future As of Feb. 28, 2021 1,310 monetization will $792 drive accretion 978k, 78% YoY Growth $759 1,084 New Estimate $717 Prior Estimate Historical 857 $599 553 526 $478 20
Slide 25: Highly Attractive Long-Term Growth at Scale
HIGHLY ATTRACTIVE LONG-TERM GROWTH AT SCALE 1 REVENUE ($ IN MILLIONS) BILLINGS ($ IN MILLIONS) $980.5 $729.0 New Estimate New Estimate Prior Estimate Prior Estimate $751.2 $561.4 $548.8 $364.2 $272.2 $238.4 $310.1 $280.5 2018 2019 2020 2021P 2022P 2018 2019 2020 2021P 2022P 2 3 ADJUSTED FREE CASH FL
Slide 26: Long-Term Financial Objectives
LONG-TERM FINANCIAL OBJECTIVES KEY GROWTH DRIVERS KEY PROFITABILITY DRIVERS • Paid marketing spend• Paid marketing spend • New products/markets• Conversion/upsells • M&A• ROIs SUSTAINED TARGET 1 “ADJUSTED RULE OF 50” FINANCIAL PROFILE 1.Adjusted Rule of 50 equals annual GAAP Revenue Growth Rate plus
Slide 27: Investment Highlights
INVESTMENT HIGHLIGHTS $191B TAM with significant tailwinds, ripe for disruption ✓ Market leading tech platform with scalable high-value and proprietary content, data & analytics ✓ ✓ 10M+ self-directed investors, growing 78% from 2018 to 2020 ✓ 12 primary customer facing brands offering 160+ products
Slide 28: BSG vs. Comps: Best in Class with Significant Upside Potential
BSG VS. COMPS: BEST IN CLASS WITH SIGNIFICANT UPSIDE POTENTIAL 2021P ADJ. FREE CASH FLOW MARGIN (%) 2020-2022P ADJ. FREE CASH FLOW CAGR (%) 2020-2022P GAAP REVENUE CAGR (%) 28.1% 41.5% 51.5% 51.3% 15.7% 15.6% 21.6% 10.0% 7.7% 1 1 BSG Consumer / SMB Tech Digital Subscription BSG Consumer / SMB Tech D
Slide 29: Public Comparables Rationale
PUBLIC COMPARABLES RATIONALE Consumer / SMB Tech Subscription • BSG is a direct to consumer, tech-enabled, subscription-based business whose success is driven by its ability to directly connect with retail investors, get them interested enough to click through and to subscribe and whose value is ult
Slide 30: Consumer / SMB Tech Subscription Metrics
CONSUMER / SMB TECH SUBSCRIPTION METRICS ($ in millions, except per share data) Financial Metrics Operational Metrics (Q4 2020) Revenue YoY Growth Rev CAGR Gross Margin Annual Monthly LTV / Company '20-'21 '21-'22 '20-'22 2020 2021E ARPU Churn CAC Beacon Street Group 54.1% 29.9% 41.5% 85.7% 86.8% $
Slide 31: Digital Subscription and Info Services Metrics
DIGITAL SUBSCRIPTION AND INFO SERVICES METRICS ($ in millions, except per share data) Financial Metrics Operational Metrics (Q4 2020) Revenue YoY Growth Rev CAGR Gross Margin Annual Monthly LTV / Company '20-'21 '21-'22 '20-'22 2020 2021E ARPU Churn CAC Beacon Street Group 54.1% 29.9% 41.5% 85.7% 86
Slide 32: Illustrative Sources & Uses
ILLUSTRATIVE SOURCES & USES ($M) TRANSACTION SOURCES USES SUMMARY ACND Cash Held in Trust $414 Cash to Balance Sheet $150 PIPE Raise Proceeds 150 Transaction Fees & Expenses 40 1 Sellers’ Equity Rollover 2,537 Cash to Sellers 374 • ACND has agreed to combine with BSG Sellers’ Equity Rollover 2,537 i
Slide 33: Appendix
APPENDIX 33APPENDIX 33
Slide 34: Historical Key Performance Indicators
HISTORICAL KEY PERFORMANCE INDICATORS FREE SUBSCRIBERS PAID SUBSCRIBERS 1 ARPU (IN THOUSANDS) (IN THOUSANDS) $759 857 9,530 $599 $478 553 526 5,027 2,741 2018 2019 2020 2018 2019 2020 2018 2019 2020 1.Based on trailing four quarter net billings / average number of trailing four quarter paid subscrib
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS ($ in 000's) 2018 2019 2020 Net Cash Provided by Operating Activities 76,493 54,201 55,875 Plus: Profits distributions to Class B unitholders included in stock based compensation expense 17,135 14,831 78,398 Adj. CFFO (Adjusted Cash Flow from Operations) 93,628 69,032 134,27
Slide 36: GAAP Income Statement
GAAP INCOME STATEMENT % Variance ($ in 000's) 2018 2019 2020 '18 v '19 '19 v '20 2018 2019 2020 Total Revenue 238,449 272,223 364,179 14% 34% Total Revenue 100% 100% 100% Operating Expenses Operating Expenses Cost of Revenue 5 7,643 4 2,553 154,605 -26% 263% Cost of Revenue 24% 16% 42% Sales and Mar
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