Marketwise, Inc. · NASDAQ:MKTW
Marketwise — Q2 2023 Earnings Presentation
18 slides from Marketwise's earnings presentation, Aug 10, 2023
Slide 1: Second Quarter 2023 Earnings Supplemental Presentation
Second Quarter 2023 Earnings Supplemental Presentation
Slide 2: Important Information: Cautionary Statement Regarding Forward-Looking Statements
2 IMPORTANT INFORMATION Cautionary Statement Regarding Forward-Looking Statements 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
Slide 3: Important Information: Non-GAAP Financial Measures
3 IMPORTANT INFORMATION Cautionary Statement Regarding Forward-Looking Statements Non-GAAP Financial Measures This Presentation also includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, Adjusted CFFO and
Slide 4: Second Quarter 2023 Highlights
MARKETWISE – SECOND QUARTER 2023 HIGHLIGHTS 4 • Market volatility and macroeconomic uncertainty continues to impact subscriber engagement and conversion metrics • Landing page visits were up approximately 10%, in 2Q23 compared to 1Q23 • For much of the quarter, engagement and conversions were slight
Slide 5: Second Quarter 2023 Financial Overview
MARKETWISE - SECOND QUARTER 2023 FINANCIAL OVERVIEW 5 3.9M (9%) YoY ARPU 750K (16%) YoY PAID SUBSCRIBERS $9.7M (71%) YoY NET INCOME CFFO $29.0M +8% YoY $490 (16%) YoY $103.6M (19%) YoY TOTAL NET REVENUE ACTIVE FREE SUBSCRIBERS $96.2M (18%) YoY BILLINGS ADJUSTED CFFO $29.0M +8% YoY
Slide 6: Revenue & Billings
MARKETWISE – REVENUE & BILLINGS 6 • 2Q23 Revenues of $103.6 million, down $22.6 million, or 17.9%, from 1Q23 • 2Q23 Billings of $96.2 million, down $1.0 million, or 1.0%, as compared to prior quarter - Membership Billings made up 36% of total in 2Q23 as compared to 37% in 1Q23 • Continued impact of
Slide 7: Subscribers
MARKETWISE – SUBSCRIBERS 7 • Active Free Subscribers measures currently targeted members of our free subscriber community – those who have been actively engaged in our communications and offerings over the past 90 days • Active Free Subscribers declined 116K, or 2.9%, from 1Q23 reflecting continued
Slide 8: Adjusted CFFO & Margin
MARKETWISE – ADJUSTED CFFO & MARGIN 8 • Adjusted CFFO of $29.0 million for 2Q23 as compared to $3.9 million for 1Q23 • $2.2 million, or 8%, higher than 2Q22 • June 2023 YTD Adjusted CFFO margin equal to 17% as compared to 11% for first half of 2022 23% 12% 18% 4% 30% 24% 27% 13%22% For a reconciliat
Slide 9: Average Revenue Per User
MARKETWISE – AVERAGE REVENUE PER USER 9 • ARPU declined to $490 in 2Q, down 0.8% from the prior quarter • Over the past year, Billings have declined faster than the decline in Paid Subscribers – further reducing ARPU • Subscribers have slowed the pace of additional purchases likely related to the im
Slide 10: MarketWise – Revenue Retention
10 • Existing cohorts represent long-term subscribers providing a stable recurring revenue base • Our goal is to establish multi-year relationships with our subscribers • High-Value Membership subscribers continue to add to the recurring revenue stream MARKETWISE – REVENUE RETENTION
Slide 11: Net Renewal and Upgrade Revenue
MARKETWISE – NET RENEWAL AND UPGRADE REVENUE 11 • Renewal Billings and Upgrades produce reliable and steady billings from current customer base • Approximately $37 million on average in net renewal and upgrade billings over past 5 quarters
Slide 12: Membership Subscribers
MARKETWISE – MEMBERSHIP SUBSCRIBERS 12 • Membership subscribers make up the majority of our high- and ultra-high value subscribers • On average membership subscribers purchase approximately 5 additional subscriptions – including an additional membership subscription • Membership subscribers typicall
Slide 13: Active Cumulative Spend
MARKETWISE – ACTIVE CUMULATIVE SPEND 13 • Active Cumulative spend at 2Q23 equal to $3,836 per paid subscriber, an increase of 5% from 1Q23 and 28% since 2Q22 • Majority of subscriber churn tends to be from introductory, low-cost subscriptions with a total value of less than $100
Slide 14: MarketWise – Market Observations 2Q23
14 MARKETWISE – MARKET OBSERVATIONS 2Q23 • Markets continued to be impacted by the ongoing economic and market volatility • Engagement, as measured by landing page visits, was up 10% sequentially between 1Q23 and 2Q23 but is still down 12% since 2Q22 • Schwab DAT’s during 1Q23 increased 9% and were
Slide 15: Appendix
MarketWise Appendix
Slide 16: Non-GAAP Reconciliation – 2Q23
NON-GAAP RECONCILIATION – 2Q23 161.In 3Q21, represents a discretionary, one-time, lifetime-award non-employee bonus payment of $10M to the Company’s founder, who is a Class B stockholder. In 3Q22, represents costs associated with our warrant tender offer ($2.1M) and severance costs related to our co
Slide 17: Income Statements – 2Q23
INCOME STATEMENTS – 2Q23 17 1.Stock-based compensation expense is related to our Incentive Award Plan and our Employee Stock Purchase Plan (ESPP) ($ in 000's) 2Q22 2Q23 % Variance Total Revenue 128,014 103,644 -19% Operating Expenses Cost of Revenue 16,229 14,635 -10% Sales and Marketing 65,050 49,0
Slide 18: Glossary and Definitions
GLOSSARY AND DEFINITIONS 18 • Active Cumulative Spend - (cumulative lifetime net cash collections)/(year end active subscribers) • Adjusted CFFO - net cash provided by operating activities plus profits distributions to Class B unitholders included in stock-based compensation expense plus or minus an