Marketwise, Inc. · NASDAQ:MKTW
Marketwise — Ascendant Digital Acquisition — SPAC Merger (April 2021)
46 slides from Marketwise's SPAC merger presentation, Apr 14, 2021
Slide 1: ACND + BSG Company Presentation
ACND + BSG COMPANY 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: Presenters & Management
PRESENTERS & MANAGEMENT Marco Galsim CIO Dale Lynch CFO Mark Arnold CEO Beacon Street Group Ascendant Mark Gerhard CEO David Gomberg President Riaan Hodgson COO
Slide 5: Ascendant Team's Experience and Capital Will Benefit BSG
ASCENDANT TEAM’S EXPERIENCE AND CAPITAL WILL BENEFIT BSG Jagex Revenue Performance Over Time ($M)2 Carefully curated and managed IP to create $1 billion+ revenue long-term franchise Created a premier publisher and developer driven by community engagement Successfully introduced new sustainable monet
Slide 6: Ascendant Was Looking for a Great Acquisition in the Attention Economy
ASCENDANT WAS LOOKING FOR A GREAT ACQUISITION, IN THE ATTENTION ECONOMY 1 ✓ Significant and growing “attention economy” TAM $191B TAM with significant tailwinds, ripe for disruption 2 ✓ Scalable, digitally delivered IP Market leading tech platform with scalable, high-value content, data & analytics
Slide 7: Introducing Beacon Street Group
25806 be INTRODUCING BEACON "_STREETGROUP : . (ay 2 % . ‘ F ‘ a , . ¢ ’ 4 / . / .
Slide 8: Founded with a mission to level the playing field 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
Slide 9: Beacon Street Group at a Glance
BEACON STREET GROUP AT A GLANCE A market leader in delivering high-value and actionable financial research, easy-to-use technology, as well as financial education and a social connection with world-class experts to help self-directed investors meet their financial goals 10M+ Digital Platform Members
Slide 10: Key Drivers of Our Success
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 upsell revenue
Slide 11: Financial Wellness Solutions Have a Huge TAM
As per BMO research report, October 2018 Represents an estimated 33.3% of the 63M U.S. self-directed investors (Celent, U.S. Self-Directed Market Study, 2019) x BSG’s 2020 ARPU of $759. The remaining 67% is believed to be covered in the Asset Managers and Financial Information market sizes Reflects
Slide 12: Personal Investing is Changing in Favor of BSG
Personal investing is Changing in favor of BSG 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-directed ‘Robinhood’ inv
Slide 13: BSG 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 Sell Side Platforms Wall Street Rese
Slide 14: Premium Subscription Content, Software and Tools
Premium Subscription Content, Software and Tools ACTIONABLE IDEAS Software & Tools
Slide 15: Building Relationships and Helping Subscribers
Building Relationships and Helping Subscribers “…you folks have become my teachers and a true resource… educating me on how to invest for the long term. WHAT A GIFT!” - Joe D. “You guys talk about ‘life changing results’… I am actually taking pride in managing our investments. That is a big life cha
Slide 16: Proven, Agile Platform for Launching New Products Quickly
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 17: Diverse Research Portfolio Across Different Asset Classes
Diverse Research Portfolio Across Different Asset Classes SELECTED EXAMPLES CUMULATIVE LIFETIME SPEND1 # OF SUBSCRIBERS1 98K2 215K2 544K2 >$5,000 $600-$5,000 <$600 Ultra High Value Product bundles High Value More advanced investing strategies - Value Investing, Microcaps, Real Estate, Options, Tradi
Slide 18: Marketing Channel Mix (2020)
MARKETING CHANNEL MIX (2020) Direct to Paid Free to Paid 58% 42% vs. MULTI-CHANNEL MARKETING APPROACH 2020 EXTERNAL ORDERS GENERATED External Marketing – Customer Acquisition SELECT DIRECT TO PAID DISPLAY CHANNELS CONVERSION STATS (2020) Order Form Click-through Rate1 10.1% 8.1% Order Form Conversio
Slide 19: Best-in-Class Business Model Tailored for High Value Subscribers
Subscriber figures shown as of December 31, 2020 Represents cumulative free-to-paid conversion rate for the period January 1, 2018 to December 31, 2020. Calculated as (number of free subscribers who purchased a subscription during the period) / (average number of free subscribers during the period)
Slide 20: Subscriber Demographics
Subscriber Demographics Paid Subscribers by Generation (Age 25+)1 Paid Subscribers by Net Assets1 Source: Experian data
Slide 21: Vision & Growth Strategy
VISION & GROWTH STRATEGY
Slide 22: Strategic Initiatives are Driving and Accelerating Growth
Strategic Initiatives are Driving and Accelerating Growth DRAMATIC SCALING OF ENTERPRISE (PAST 3 YEARS) Strategic acquisitions (6 operating subsidiaries) Broadened product offerings, including adding 27+ editors & 110+ publications and built or acquired software and tools to complement premium conte
Slide 23: Our Vision
OUR VISION To become THE de-facto financial wellness Solutions platform for self-directed investors Grow / Optimize Marketing & Customer Acquisition Invest in Brand Marketing Build/Buy Addt’l Content, Products & Brands Invest in Technology, Data & Analytics Establish Partnerships & M&A Leverage exis
Slide 24: Track Record of Efficient and Highly Accretive Capital Allocation
YEAR FOCUS AREA BUILD OR BUY ORIGINAL SALES ($ MILLIONS) 2020 SALES ($ MILLIONS) 2010 Macro Build -- $120 2013 Risk Allocation Buy $1 $30 2014 Macro Buy $5 $110 2015 Commodities Buy $12 $25 2016 Trading Build -- $30 2017 Growth Buy $28 $67 2019 Growth / SPACs Build -- $32 2019 Software Build -- $7 2
Slide 25: Business Development Case Study
BUSINESS DEVELOPMENT CASE STUDY Formed new brand in early 2019 with well known investor as a partner (no upfront capital) First paid publication launched in April 2019 Launch generated $11M in Net Revenue with approximately 3,000 paid subscribers Lower priced product launched in Dec 2019 paving the
Slide 26: Financial Overview
FINANCIAL, OVERVIEW
Slide 27: Financial Highlights
Financial Highlights SCALE $549M 2020 Billings 97% 2018-2020 Subscription Billings RECURRING REVENUE BASE 24% 2020 Adjusted Free Cash Flow Margin3 77% 2020 Billings growth TRACK RECORD OF GROWTH STRONG MARGIN PROFILE >5x LTV/CAC Ratio2 INDUSTRY-LEADING UNIT ECONOMICS 99.8% 2020 Adjusted CFFO Convers
Slide 28: Superior Unit Economics – 2020
SUPERIOR UNIT ECONOMICS – 2020… Avg. Customer Lifetime Billings $2,700 High Variable Margin LTV/CAC1 Ratio >5x “….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 Breakev
Slide 29: Subscribers Spending More Initially and Increasing Spend Over Time
SUBSCRIBERS SPENDING MORE INITIALLY AND INCREASING THAT SPEND OVER TIME Cumulative Spend By Cohort Over Time 2015 Cohort 2016 Cohort 2017 Cohort 2018 Cohort 2019 Cohort 2020 Cohort
Slide 30: Forecasted Key Performance Indicators
Forecasted Key performance indicators Paid Subscribers (in THOUSANDs) ARPU1 Based on trailing four quarter net billings /average number of trailing four quarter paid subscribers 24% CAGR 1,001K (77% YoY Growth) As of Mar. 31, 2021 ARPU decline due to significant subscriber growth; future monetizatio
Slide 31: Highly Attractive Long-Term Growth at Scale
HIGHLY Attractive Long-Term Growth at SCALE Billings represents amounts invoiced to customers Adjusted FCF = Adjusted CFFO - Capital Expenditures. Adjusted CFFO is calculated as net cash provided by operating activities plus profits distributions to Class B unitholders included in stock based compen
Slide 32: Key Forecast Assumptions
Key Forecast Assumptions Continued strong new free and paid subscriber growth Trend-like conversion rate inputs Revenue retention rate of 95%+ each year Trend-like subscriber count churn at ~1.7% per month Stable product pricing GAAP revenue: ~35% to 38% of Billings each year, plus the current porti
Slide 33: Long-term Financial Objectives
Long-term financial Objectives Sustained Target “Adjusted rule of 50”1 financial Profile KEY GROWTH DRIVERS KEY PROFITABILITY DRIVERS Paid marketing spend New products/markets M&A Paid marketing spend Conversion/upsells ROIs Adjusted Rule of 50 equals annual GAAP Revenue Growth Rate plus Adjusted FC
Slide 34: Transaction Overview
TRANSACTION OVERVIEW
Slide 35: Transaction Summary
Transaction Summary ACND has agreed to combine with BSG in a transaction with an implied total enterprise value of $3.024 billion This transaction represents an attractive pro forma multiple of 5.4x 2021P GAAP Revenue and 14.3x 2021P Adjusted Free Cash Flow Concurrent with this transaction, BSG and
Slide 36: Benchmarking vs. Public Comparables
Sources: FactSet as of 1/29/2021, Wall Street research Notes: Consumer / SMB Tech Subscription group includes: CHGG, DBX, GDDY, HUBS, MTCH, NFLX, SPOT, SQ, SVMK, WIX; Digital Subscription and Info Services group includes: CSGP, ENV, FDS, FORR, INFO, IT, MORN, MSCI, NYT Adjusted Free Cash Flow = Adju
Slide 37: 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 ultim
Slide 38: Industry Leading Comps - Consumer / SMB Tech Subscription
Industry Leading Comps - Consumer / SMB Tech Subscription Sources: FactSet, CapitalIQ, Wall Street research, public filings & transcripts Square ARPU represents Cash App HubSpot reports ARPU, but it was not included due to difference in customer type (1) (2)
Slide 39: Industry Leading Comps - Digital Subscription and Info Services
Industry Leading Comps - Digital Subscription and Info Services Sources: FactSet, CapitalIQ, Wall Street research, public filings & transcripts (1) Gartner churn represents global technology sales (1)
Slide 40: 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 41: Q&A
Q&A
Slide 42: Appendix
APPENDIX
Slide 43: Historical Key Performance Indicators
Historical Key performance indicators Free Subscribers (in THOUSANDs) Paid Subscribers (in THOUSANDs) ARPU1 26% CAGR 24% CAGR 86% CAGR Based on trailing four quarter net billings / average number of trailing four quarter paid subscribers
Slide 44: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS (S in 000) 2018 2019 2020 Net Cash Provided by Operating Activities 76,493 54,201 55,875 Plus: 17,135 14,831 78,398
Slide 45: GAAP Income Statement
GAAP Income Statement Within our expenses historically are stock-based compensation expenses related to the Class B Units. Because Beacon Street Group, LLC’s current operating agreement includes puts and calls for the Class B units, these current Class B Units are classified as liabilities as oppose
Slide 46: Quarterly Metrics
Quarterly Metrics Billings represents amounts invoiced to customers Includes unusually large related party working capital impact; should not be recurring as related party working capital transactions are expected to be minimal going forward 2 2 2 2
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