Marketwise, Inc. · NASDAQ:MKTW
Marketwise — Investor Presentation (March 2022)
29 slides from Marketwise's investor presentation, Mar 23, 2022
Slide 1: Investor Presentation March 23, 2022
Investor Presentation March 23, 2022
Slide 2: Important Information: Cautionary Statement Regarding Forward-Looking Statements
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 o
Slide 3: Management
3 MANAGEMENT MARCO GALSIM CIO DALE LYNCH CFO MARK ARNOLD CEO & Chairman MarketWise GARY ANDERSON General Counsel CYNTHIA CHERRY Sr. Director of Human Resources MARCO FERRI Director of Business Development
Slide 4: Our Vision
4 OUR VISION TO BECOME THE DE-FACTO FINANCIAL WELLNESS SOLUTIONS PLATFORM FOR SELF-DIRECTED INVESTORS Grow / Optimize Marketing & Customer Acquisition Invest in Brand Marketing Build/Buy Addt’l Content, Products & Brands Invest in Technology, Data & Analytics Establish Partnerships & M&A • Leverage
Slide 5: Founded with a mission to level the playing field for self-directed investors
5 Founded with a mission to level the playing field for self-directed investors Today we are a Leading Multi-Brand 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 acti
Slide 6: MarketWise at a Glance
MARKETWISE AT A GLANCE 6 ~15M Digital Platform Members2 at 12/31/21 ~1M Paid Digital Subscribers at 12/31/21 $742 Industry Leading ARPU as of Q4 ‘213 $730M TTM Q4 ‘21 Billings4 +33% YoY Growth 27% TTM Q4 ‘21 Adjusted Free Cash Flow Margin5 99.9% TTM Q4 ‘21 Adjusted CFFO Conversion6 (Low Capex) 1.As
Slide 7: Key Drivers of Our Success
7 KEY DRIVERS OF OUR SUCCESS DATA / TECHNOLOGY • Real-time campaign feedback, AI and rapid scalability • Machine learning and advanced analytics drive increased upsell yield SCALABLE MODEL • Industry-leading ROI on new customer acquisition • Upsell to higher ARPU products with almost all of the upse
Slide 8: Investment Highlights
8 INVESTMENT HIGHLIGHTS 1 Significant and growing “attention economy” TAM $129B TAM with significant tailwinds, ripe for disruption 2 Scalable, digitally delivered IP Market leading tech platform with scalable, high-value content, data & analytics 3 Large, thriving community ~15M self-directed inves
Slide 9: Financial Wellness Solutions Market Size
9 1. Represents an estimated 33.3% of the 75M U.S. self-directed investors (Celent, Self Directed Retail Investor Market Study, March 2021) x MarketWise’s 3-year average ARPU (2019-2021) of $718. The remaining 66.7% is believed to be covered in the Asset Managers market sizes 2. Reflects addressable
Slide 10: Personal Investing Is Changing in Favor of MarketWise
10 PERSONAL INVESTING IS CHANGING IN FAVOR OF MARKETWISE AGING POPULATION • 17% of U.S. population is 65+1 • 10,000 Americans retiring every day, creating consistent demand velocity2 GROWING THE PIE • 72% of millennials identify as self- directed investors3 (~$22T of net worth)3 • Rise of self-direc
Slide 11: Premium Subscription Content, Software and Tools
PREMIUM SUBSCRIPTION CONTENT, SOFTWARE AND TOOLS ACTIONABLE IDEAS SOFTWARE & TOOLS 11
Slide 12: Proven, Agile Platform for Launching New Products Quickly with Low Risk
Detect new demand and investment trends in the financial marketplace through observation, research and analysis DETECT Identify a financial expert that has a personal passion for a specific area of growing customer interest and can provide unique insights ANALYZE Launch new products within weeks. Ta
Slide 13: Diverse Research Portfolio Across Different Asset Classes
13 DIVERSE RESEARCH PORTFOLIO ACROSS DIFFERENT ASSET CLASSES SELECTED EXAMPLES CUMULATIVE LIFETIME SPEND1 # OF SUBSCRIBERS1 129K2 245K2 598K2 >$5,000 $600-$5,000 <$600 Ultra High Value Product bundles High Value More advanced investing strategies - Value Investing, Microcaps, Real Estate, Options, T
Slide 14: Marketing Channel Mix (2021)
MARKETING CHANNEL MIX (2021) Direct to Paid Free to Paid 68% 32% vs. MULTI-CHANNEL MARKETING APPROACH 2021 EXTERNAL ORDERS GENERATED EXTERNAL MARKETING – CUSTOMER ACQUISITION SELECT DIRECT TO PAID DISPLAY CHANNELS CONVERSION STATS (2021) Order Form Click- through Rate1 12.0% 6.6% Order Form Conversi
Slide 15: Best-in-Class Business Model Tailored for High Value Subscribers
1.Subscriber figures shown as of December 31, 2021 2.Represents cumulative free-to-paid conversion rate for the period January 1, 2019 to December 31, 2021. Calculated as (number of free subscribers who purchased a subscription during the period) / (average number of free subscribers during the peri
Slide 16: Subscriber Demographics
16 SUBSCRIBER DEMOGRAPHICS PAID SUBSCRIBERS BY GENERATION (AGE 25+)1 PAID SUBSCRIBERS BY NET ASSETS1 1.Source: Experian data as of December 31, 2021
Slide 17: Track Record of Efficient and Highly Accretive Capital Allocation
YEAR FOCUS AREA BUILD OR BUY ORIGINAL BILLINGS ($ MILLIONS) 2021 BILLINGS ($ MILLIONS) 2010 Macro Build -- $171 2013 Risk Allocation Buy $1 $67 2014 Macro Buy $5 $149 2015 Commodities Buy $12 $24 2016 Trading Build -- $19 2017 Growth Buy $28 $93 2019 Growth / SPACs Build -- $28 2019 Software Build -
Slide 18: Financial Overview
MarketWise Financial Overview
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS SCALE $730M TTM Q4 ‘21 Billings 99% Q1 2020-Q4 2021 Subscription Billings RECURRING REVENUE BASE 27% TTM Q4 ‘21 Adjusted Free Cash Flow Margin3 33% TTM Q4 ‘21 Billings growth TRACK RECORD OF GROWTH STRONG MARGIN PROFILE 4x LTV/CAC Ratio2 INDUSTRY-LEADING UNIT ECONOMICS 19 99.9%
Slide 20: Superior Unit Economics – 2021
20 SUPERIOR UNIT ECONOMICS – 2021 Avg. Customer Lifetime Billings $2,600 High Variable Margin LTV/CAC1 Ratio 4x “….with an LTV/CAC ratio of 3 or higher, investing an incremental dollar in acquiring new customers has a greater expected return than retaining that dollar as profit…” 90 Days CPA2 Breake
Slide 21: Key Performance Indicators
KEY PERFORMANCE INDICATORS 21 PAID SUBSCRIBERS (IN THOUSANDS) 1.Average Revenue Per User (“ARPU”) = trailing four quarter net Billings /average number of trailing four quarter paid subscribers ARPU1 ARPU has modestly decreased due to influx of new subscribers in recent periods
Slide 22: Highly Attractive Long-Term Growth at Scale
22 HIGHLY ATTRACTIVE LONG-TERM GROWTH AT SCALE 1.Billings represents amounts invoiced to customers 2.Adjusted CFFO = net cash provided by operating activities plus profits distributions to Class B unitholders included in stock-based compensation expense plus or minus any non-recurring items. Adjuste
Slide 23: Market Observations First Quarter 2022
MARKET OBSERVATIONS FIRST QUARTER 2022 • During 2022, markets have experienced a major reset driven by Russia’s invasion of Ukraine, an increasingly aggressive Fed stance, and inflation spiking to 40-year highs • The confluence of market-moving events has resulted in increased volatility to engageme
Slide 24: Long-Term Financial Objectives
LONG-TERM FINANCIAL OBJECTIVES 24 KEY GROWTH DRIVERS KEY PROFITABILITY DRIVERS • Paid marketing spend • New products/markets • M&A • Paid marketing spend • Conversion/upsells • ROIs BALANCE LONG-TERM GROWTH WITH PROFITABILITY
Slide 25: Appendix
MarketWise Appendix
Slide 26: MarketWise Provides Diverse, Actionable & Affordable Content
INSTITUTIONAL INFO SERVICES INSTITUTIONAL RESEARCH SPECIALTY FINANCIAL RESEARCH ONLINE BROKERS ONLINE NEWSLETTERS GENERAL FINANCIAL PUBLICATIONS ONLINE TOOLS SOCIAL MEDIA COMMUNITIES ACTIONABLE CONTENT DATA & INFO DIVERSIFIED PRODUCT OFFERING FULL RANGE OF PRICES 26 Sell Side Platforms Wall Street R
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION 271.Represents a discretionary, one-time, lifetime-award non-employee bonus payment of $10M to the Company’s founder, who is a Class B stockholder
Slide 28: GAAP Income Statements – Q4
GAAP INCOME STATEMENTS – Q4 28 1.Stock-based compensation expense is primarily related to the Class B Units. Prior to the Transactions (as defined in our Annual Report on Form 10-K), the Class B Units were classified as liabilities as opposed to equity and remeasured to fair value at the end of each
Slide 29: GAAP Income Statements – FY
GAAP INCOME STATEMENTS – FY 29 1.Stock-based compensation expense is primarily related to the Class B Units. Prior to the Transactions (as defined in our Annual Report on Form 10-K), the Class B Units were classified as liabilities as opposed to equity and remeasured to fair value at the end of each