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
second quarter 2023.
Second Quarter 2023 Key Performance
Highlights |
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
YTD |
(Unaudited) |
|
2Q 2023 |
|
2Q 2022 |
|
% Change |
|
2Q 2023 |
|
2Q 2022 |
|
% Change |
Total Subscribers (in thousands) |
|
|
16,699 |
|
|
15,871 |
|
5.2 |
% |
|
|
|
|
|
|
Paid Subscribers (in thousands) |
|
|
750 |
|
|
898 |
|
(16.5 |
)% |
|
|
|
|
|
|
Total net revenue (in millions) |
|
$ |
103.6 |
|
$ |
128.0 |
|
(19.1 |
)% |
|
$ |
229.9 |
|
$ |
264.8 |
|
(13.2 |
)% |
Billings (in millions) |
|
$ |
96.2 |
|
$ |
117.5 |
|
(18.1 |
)% |
|
$ |
193.3 |
|
$ |
253.5 |
|
(23.7 |
)% |
ARPU |
|
$ |
490 |
|
$ |
580 |
|
(15.5 |
)% |
|
|
|
|
|
|
Net income (in millions) |
|
$ |
9.7 |
|
$ |
34.0 |
|
(71.5 |
)% |
|
$ |
40.3 |
|
$ |
57.1 |
|
(29.4 |
)% |
CFFO (in millions) |
|
$ |
29.0 |
|
$ |
26.8 |
|
8.2 |
% |
|
$ |
32.8 |
|
$ |
27.9 |
|
17.6 |
% |
Adjusted CFFO (in millions) |
|
$ |
29.0 |
|
$ |
26.8 |
|
8.2 |
% |
|
$ |
32.8 |
|
$ |
27.9 |
|
17.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Second Quarter 2023
Highlights(1)
- Total net revenue was $103.6 million
in second quarter 2023 compared to $128.0 million in second quarter
2022
- Total Billings was $96.2 million in
second quarter 2023 compared to $117.5 million in second quarter
2022
- Net income was $9.7 million in
second quarter 2023 compared to $34.0 million in second quarter
2022
- Cash flow from operations (“CFFO”)
was $29.0 million in second quarter 2023 compared to $26.8 million
in second quarter 2022
- Adjusted CFFO, a non-GAAP measure,
was $29.0 million in second quarter 2023 compared to $26.8 million
in second quarter 2022
- CFFO margin was 28.0% in second
quarter 2023 compared to 20.9% in second quarter 2022
- Adjusted CFFO margin, a non-GAAP
measure, was 30.1% in second quarter 2023 compared to 22.8% in
second quarter 2022
- Deferred revenue was $628.4 million
as of June 30, 2023 compared to $701.1 million as of
June 30, 2022
- Paid Subscribers were 750 thousand
as of June 30, 2023 compared to 898 thousand as of
June 30, 2022
- Free Subscribers were 15.9 million
as of June 30, 2023 compared to 15.0 million as of
June 30, 2022. Active Free Subscribers were 3.9 million as of
June 30, 2023 compared to 4.3 million as of June 30, 2022
(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.
Amber Lee Mason, Chief Executive Officer of MarketWise,
commented, “We have seen recent signs of stabilization in many of
our operating metrics. Subscriber engagement and conversion rates
are beginning to improve. However, market volatility and economic
uncertainty continued to affect our business throughout the
quarter.”
Ms. Mason continued, “Our publishers and editors are bringing
new product to market, focused on artificial intelligence,
global-macro themes, and their impact on the future of financial
markets. Our disciplined approach to overhead and direct marketing
expense has positioned us to capitalize on new opportunities and
grow our community as self-direct investors return the market.”
Second Quarter 2023 Financial & Operational
Results
Net revenue decreased by $24.4 million, or 19.0%, to $103.6
million in second quarter 2023 compared to $128.0 million in second
quarter 2022. The decrease in net revenue was primarily driven by a
$15.6 million decrease in term subscription revenue and a $8.4
million decrease in membership subscription revenue.
Term subscription revenue decreased during the three months
ended June 30, 2023 primarily due to lower Billings as compared to
the 2022 period, which was driven by reduced engagement of
prospective and existing subscribers in the 2022 period. Membership
subscription revenue, which is initially deferred and recognized
over a five-year period, decreased during the three months ended
June 30, 2023 as a result of lower volume of membership
subscriptions in current and prior years.
Billings decreased by $21.3 million, or 18.2%, to $96.2 million
for the quarter ended June 30, 2023 as compared to $117.5 million
for the quarter ended June 30, 2022. We believe the decrease is due
in large part to reduced engagement of prospective and existing
subscribers. Levels of engagement had plateaued during the second
half of 2021 and first half of 2022. The second half of 2022 saw
further declines with uncertainty stemming from external factors
such as 40-year high inflation, volatility across asset classes,
federal reserve tightening, and the war in Ukraine, which we
believe further contributed to prospective and existing subscribers
delaying their purchases through second quarter 2023.
Billings decreased by $1.0 million, or 1.0%, to $96.2 million
for second quarter 2023 as compared to $97.2 million for first
quarter 2023. With overall consumer engagement, as measured by
landing pages, slightly up versus first quarter 2023, we attribute
the decline in Billings to lower overall conversion rates on our
various marketing campaigns within the quarter.
Net income decreased by $24.3 million, or 71.4%, to $9.7 million
for second quarter 2023 as compared to $34.0 million for second
quarter 2022.
CFFO increased by $2.2 million, or 8.2%, from $26.8 million in
second quarter 2022 to $29.0 million in second quarter 2023. CFFO
for second quarter 2023 improved primarily due to net income of
$9.7 million, adjusted for net non-cash items which increased cash
by $5.3 million, and net changes in our operating assets and
liabilities which increased cash by $13.9 million
Adjusted CFFO increased by $2.2 million, or 8.2%, from $26.8
million in second quarter 2022 to $29.0 million in second quarter
2023, primarily driven by a decrease in operating expenses as a
result of cost reduction initiatives.
Total Paid Subscribers decreased by 148 thousand, or 16.4%, to
750 thousand as of June 30, 2023 as compared to 898 thousand at
June 30, 2022, driven by softening consumer engagement that began
in third quarter 2022 as well as a significant decrease in direct
marketing spend as we focus on maintenance of profitability.
Total Paid Subscribers decreased by 27 thousand, or 3.5%, to 750
thousand as of June 30, 2023 as compared to 777 thousand as of
March 31, 2023. Gross new subscribers increased 11% compared to
first quarter 2023. However, this level of acquisition is still
below historical levels and was not able to offset a normalized
quarter of subscriber churn.
Free Subscribers increased by 1.0 million, or 6.5%, to 15.9
million at June 30, 2023 compared to 15.0 million at June 30, 2022.
As of June 30, 2023, Active Free Subscribers decreased by 0.4
million, or 9.5%, to 3.9 million, compared to 4.3 million as of
June 30, 2022. The year over year decline in Active Free
Subscribers is a result of decreased engagement with our Free
Subscriber community as consumer engagement continues to be
soft.
Free Subscribers increased by 0.3 million, or 1.7%, to 15.9
million as of June 30, 2023 as compared to 15.7 million as of March
31, 2023. As of June 30, 2023, Active Free Subscribers decreased by
0.1 million, or 2.9% to 3.9 million, compared to 4.0 million as of
March 31, 2023.
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”):
(In
thousands) |
|
Second Quarter |
|
|
|
Year to Date June 30, |
|
|
|
|
2023 |
|
2022 |
|
% Change |
|
2023 |
|
2022 |
|
% Change |
Net cash provided by operating activities |
|
$ |
28,978 |
|
|
$ |
26,794 |
|
|
8.2% |
|
$ |
32,846 |
|
|
$ |
27,862 |
|
|
17.9% |
Non-recurring expenses |
|
|
— |
|
|
|
— |
|
|
NM |
|
|
— |
|
|
|
— |
|
|
NM |
Adjusted CFFO |
|
$ |
28,978 |
|
|
$ |
26,794 |
|
|
8.2% |
|
$ |
32,846 |
|
|
$ |
27,862 |
|
|
17.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities |
|
$ |
28,978 |
|
|
$ |
26,794 |
|
|
8.2% |
|
$ |
32,846 |
|
|
$ |
27,862 |
|
|
17.9% |
Total net revenue |
|
|
103,644 |
|
|
|
128,014 |
|
|
(19.0)% |
|
|
229,877 |
|
|
|
264,812 |
|
|
(13.2)% |
Net cash provided by operating
activities margin |
|
|
28.0 |
% |
|
|
20.9 |
% |
|
|
|
|
14.3 |
% |
|
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted CFFO |
|
$ |
28,978 |
|
|
$ |
26,794 |
|
|
8.2% |
|
$ |
32,846 |
|
|
$ |
27,862 |
|
|
17.9% |
Billings |
|
|
96,170 |
|
|
|
117,507 |
|
|
(18.2)% |
|
|
193,341 |
|
|
|
253,502 |
|
|
(23.7)% |
Adjusted CFFO margin |
|
|
30.1 |
% |
|
|
22.8 |
% |
|
|
|
|
17.0 |
% |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM: Not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends
On July 20, 2023, the Company paid a cash dividend to its Class
A common stockholders in the amount of $0.01 per share, totaling
$0.3 million, and a cash distribution to holders of common
units of MarketWise, LLC (“LLC Units”) in the amount of $0.01 per
unit, totaling $2.9 million.
On August 3, 2023, the Company’s Board declared a cash dividend
to its Class A common stockholders in the amount of $0.01 per share
and a cash distribution to holders of LLC Units in the amount of
$0.01 per unit. The dividend and distribution will be paid on
October 26, 2023, to stockholders and unitholders of record as of
the close of business on September 5, 2023. The total amount of the
dividend to Class A common stockholders is expected to be
approximately $0.5 million and the total amount of the distribution
to unitholders is expected to be approximately $2.9 million.
MarketWise Inc.’s Class A common stock trades on the NASDAQ
Global Market under the symbol "MKTW." As of June 30, 2023, the
Company had 32,073,995 Class A common shares and 289,842,303 Class
B common shares issued and outstanding. The Company's common stock
market capitalization was approximately $595.5 million, based on
the closing price of publicly traded Class A common shares of $1.85
on August 9, 2023.
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 20 years of operating history, MarketWise is
currently comprised of 13 primary customer facing brands, offering
more than 200 products, and serving a community 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 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.
Conference Call Details
As previously announced, the Company will hold a live video
webcast of the earnings conference call to discuss its Second
Quarter 2023 results on Thursday, August 10, 2023 at 11:00 a.m.
Eastern Time. Interested investors and other parties may also
listen to a simultaneous webcast of the conference call by logging
onto the investor relations section of the Company’s website at
investors.marketwise.com. The online replay of the webcast will
remain available for a limited time following the call.
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.
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, 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.
Table 1. Income Statement
(Unaudited, in
thousands) |
|
Second Quarter |
|
Year to Date June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue |
|
$ |
103,363 |
|
|
$ |
127,466 |
|
|
$ |
228,978 |
|
|
$ |
264,086 |
|
Related party revenue |
|
|
281 |
|
|
|
548 |
|
|
|
899 |
|
|
|
726 |
|
Total net revenue |
|
|
103,644 |
|
|
|
128,014 |
|
|
|
229,877 |
|
|
|
264,812 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Cost of revenue(1) |
|
|
14,635 |
|
|
|
16,229 |
|
|
|
29,925 |
|
|
|
33,846 |
|
Sales and marketing(1) |
|
|
49,033 |
|
|
|
65,050 |
|
|
|
97,760 |
|
|
|
133,287 |
|
General and administrative(1) |
|
|
27,629 |
|
|
|
20,364 |
|
|
|
55,662 |
|
|
|
50,909 |
|
Research and development(1) |
|
|
2,230 |
|
|
|
2,289 |
|
|
|
4,693 |
|
|
|
4,567 |
|
Depreciation and amortization |
|
|
994 |
|
|
|
613 |
|
|
|
1,978 |
|
|
|
1,217 |
|
Related party expense |
|
|
204 |
|
|
|
97 |
|
|
|
332 |
|
|
|
194 |
|
Total operating expenses |
|
|
94,725 |
|
|
|
104,642 |
|
|
|
190,350 |
|
|
|
224,020 |
|
Income from operations |
|
|
8,919 |
|
|
|
23,372 |
|
|
|
39,527 |
|
|
|
40,792 |
|
Other income, net |
|
|
238 |
|
|
|
11,923 |
|
|
|
625 |
|
|
|
19,219 |
|
Interest income (expense),
net |
|
|
1,013 |
|
|
|
(218 |
) |
|
|
1,551 |
|
|
|
(389 |
) |
Income before income
taxes |
|
|
10,170 |
|
|
|
35,077 |
|
|
|
41,703 |
|
|
|
59,622 |
|
Income tax expense |
|
|
427 |
|
|
|
1,040 |
|
|
|
1,355 |
|
|
|
2,562 |
|
Net income |
|
|
9,743 |
|
|
|
34,037 |
|
|
|
40,348 |
|
|
|
57,060 |
|
Net income attributable to
noncontrolling interests |
|
|
9,707 |
|
|
|
22,156 |
|
|
|
38,845 |
|
|
|
39,354 |
|
Net income attributable to
MarketWise, Inc. |
|
$ |
36 |
|
|
$ |
11,881 |
|
|
$ |
1,503 |
|
|
$ |
17,706 |
|
(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 |
Table 2. Balance Sheet
(Unaudited, in
thousands, except share and per share data) |
June 30, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
187,022 |
|
|
$ |
158,575 |
|
Accounts receivable |
|
3,138 |
|
|
|
4,040 |
|
Prepaid expenses |
|
10,416 |
|
|
|
11,725 |
|
Related party receivables |
|
1,008 |
|
|
|
1,512 |
|
Deferred contract acquisition costs |
|
99,854 |
|
|
|
99,960 |
|
Other current assets |
|
2,867 |
|
|
|
3,363 |
|
Total current assets |
|
304,305 |
|
|
|
279,175 |
|
Property and equipment,
net |
|
799 |
|
|
|
892 |
|
Operating lease right-of-use
assets |
|
8,459 |
|
|
|
9,468 |
|
Intangible assets, net |
|
15,180 |
|
|
|
16,047 |
|
Goodwill |
|
31,307 |
|
|
|
31,307 |
|
Deferred contract acquisition
costs, noncurrent |
|
77,822 |
|
|
|
97,658 |
|
Deferred tax assets |
|
7,265 |
|
|
|
7,332 |
|
Other assets |
|
459 |
|
|
|
629 |
|
Total assets |
$ |
445,596 |
|
|
$ |
442,508 |
|
Liabilities and
stockholders’ deficit |
|
|
|
Current liabilities: |
|
|
|
Trade and other payables |
$ |
3,127 |
|
|
$ |
686 |
|
Related party payables, net |
|
422 |
|
|
|
1,004 |
|
Accrued expenses |
|
38,358 |
|
|
|
45,976 |
|
Deferred revenue and other contract liabilities |
|
288,375 |
|
|
|
315,231 |
|
Operating lease liabilities |
|
1,507 |
|
|
|
1,484 |
|
Other current liabilities |
|
22,828 |
|
|
|
21,125 |
|
Total current liabilities |
|
354,617 |
|
|
|
385,506 |
|
Deferred revenue and other
contract liabilities, noncurrent |
|
340,032 |
|
|
|
348,273 |
|
Derivative liabilities,
noncurrent |
|
1,982 |
|
|
|
1,281 |
|
Tax receivable agreement
liability, noncurrent |
|
1,095 |
|
|
|
— |
|
Operating lease liabilities,
noncurrent |
|
5,121 |
|
|
|
5,831 |
|
Total liabilities |
|
702,847 |
|
|
|
740,891 |
|
Commitments and
Contingencies |
|
— |
|
|
|
— |
|
Stockholders’ deficit: |
|
|
|
Common stock - Class A, par value of $0.0001 per share, 950,000,000
shares authorized; 32,073,995 and 29,039,655 shares issued and
outstanding at June 30, 2023 and December 31, 2022,
respectively |
|
3 |
|
|
|
3 |
|
Common stock - Class B, par value of $0.0001 per share, 300,000,000
shares authorized; 289,842,303 and 291,092,303 shares issued and
outstanding at June 30, 2023 and December 31, 2022,
respectively |
|
29 |
|
|
|
29 |
|
Preferred stock - par value of $0.0001 per share, 100,000,000
shares authorized; 0 shares issued and outstanding at June 30,
2023 and December 31, 2022, respectively |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
112,146 |
|
|
|
106,852 |
|
Accumulated other comprehensive loss |
|
30 |
|
|
|
44 |
|
Accumulated deficit |
|
(126,622 |
) |
|
|
(128,125 |
) |
Total stockholders’ deficit attributable to MarketWise, Inc. |
|
(14,414 |
) |
|
|
(21,197 |
) |
Noncontrolling interest |
|
(242,837 |
) |
|
|
(277,186 |
) |
Total stockholders’ deficit |
|
(257,251 |
) |
|
|
(298,383 |
) |
Total liabilities, noncontrolling interest, and
stockholders’ deficit |
$ |
445,596 |
|
|
$ |
442,508 |
|
Table 3. Cash Flows
(Unaudited, in
thousands) |
|
Year to Date June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
Cash flows from
operating activities: |
|
|
|
|
Net income |
|
$ |
40,348 |
|
|
$ |
57,060 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
1,978 |
|
|
|
1,217 |
|
Impairment of right-of-use assets |
|
|
— |
|
|
|
287 |
|
Stock-based compensation |
|
|
7,381 |
|
|
|
5,037 |
|
Change in fair value of derivative liabilities – other |
|
|
701 |
|
|
|
(19,654 |
) |
Deferred taxes |
|
|
1,356 |
|
|
|
2,454 |
|
Unrealized gains on foreign currency |
|
|
(26 |
) |
|
|
(132 |
) |
Noncash lease expense |
|
|
1,053 |
|
|
|
906 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
902 |
|
|
|
4,495 |
|
Related party receivables and payables, net |
|
|
(78 |
) |
|
|
(479 |
) |
Prepaid expenses |
|
|
1,309 |
|
|
|
3,802 |
|
Other current assets and other assets |
|
|
666 |
|
|
|
(615 |
) |
Deferred contract acquisition costs |
|
|
19,942 |
|
|
|
(5,617 |
) |
Trade and other payables |
|
|
2,408 |
|
|
|
(2,804 |
) |
Accrued expenses |
|
|
(7,618 |
) |
|
|
(2,586 |
) |
Deferred revenue |
|
|
(35,097 |
) |
|
|
(9,120 |
) |
Operating lease liabilities |
|
|
(731 |
) |
|
|
(981 |
) |
Other current and long-term liabilities |
|
|
(1,648 |
) |
|
|
(5,408 |
) |
Net cash provided by operating activities |
|
|
32,846 |
|
|
|
27,862 |
|
Cash flows from
investing activities: |
|
|
|
|
Purchases of property and equipment |
|
|
(46 |
) |
|
|
(26 |
) |
Capitalized software development costs |
|
|
(913 |
) |
|
|
(81 |
) |
Net cash used in investing activities |
|
|
(959 |
) |
|
|
(107 |
) |
Cash flows from
financing activities: |
|
|
|
|
Proceeds from related party notes receivable, net |
|
|
— |
|
|
|
294 |
|
Proceeds from issuance of common stock |
|
|
332 |
|
|
|
517 |
|
Repurchases of stock |
|
|
— |
|
|
|
(13,054 |
) |
Restricted stock units withheld to pay taxes |
|
|
(1,106 |
) |
|
|
— |
|
Distributions to noncontrolling interests |
|
|
(2,652 |
) |
|
|
(3,799 |
) |
Net cash used in financing activities |
|
|
(3,426 |
) |
|
|
(16,042 |
) |
Effect of exchange rate
changes on cash |
|
|
(14 |
) |
|
|
(106 |
) |
Net increase in cash, cash
equivalents and restricted cash |
|
|
28,447 |
|
|
|
11,607 |
|
Cash, cash equivalents and
restricted cash — beginning of period |
|
|
158,575 |
|
|
|
139,578 |
|
Cash, cash equivalents and
restricted cash — end of period |
|
$ |
187,022 |
|
|
$ |
151,185 |
|
MarketWise Investor Relations Contact
Jonathan Shanfield – MarketWise Investor RelationsJamie
Lillis – Solebury Strategic Communication(800) 290-4113Email:
ir@marketwise.com
MarketWise Media ContactEmail:
media@marketwise.com
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