10-Q - MARKETWISE, INC. (0001805651) (Filer)

Thu, May 8, 11:39 AM (3 days ago)

**MarketWise, Inc. (MKTW) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $83.5 million, down 23.4% YoY due to decreased term and membership subscription revenue. - **Net Income:** $16.8 million, down 26.4% YoY. - **Operating Expenses:** $66.7 million, down 23.7% YoY, with significant reductions in sales and marketing, and general and administrative expenses. - **Cash Flow:** Positive operating cash flow of $1.7 million, a significant improvement from a negative $18.5 million in Q1 2024. - **Profit Margins:** Operating margin of 20.1%, net margin of 20.2%. - **Earnings per Share (EPS):** Basic EPS of $0.43, diluted EPS of $0.41. **Key Metrics & Trends:** - **Paid Subscribers:** 473,407, down 30.7% YoY due to lower customer acquisition and elevated churn from the shutdown of Legacy Research. - **ARPU:** $419, down 14.9% YoY. - **Billings:** $70.5 million, down 8.8% YoY, with decreases in new marketing billings, net renewal billings, and other billings. - **High-value & Ultra High-value Composition Rates:** 58% and 26%, respectively. **Uncertainties & Future Operations:** - **Subscriber Base:** Expects a further decrease in Q2 2025 due to remaining churn of low ARPU Legacy Research subscribers. - **Marketing Spend:** Adjusts marketing spend to drive efficient and profitable customer acquisition. - **Legacy Research:** Completed reorganization and operational transition plans; expects to dissolve legal entities in Q2 2025. - **Share Repurchase Program:** Authorized up to $50 million; repurchased approximately $219,000 worth of shares through May 8, 2025. - **Tax Receivable Agreement:** Liability of $3.7 million as of March 31, 2025; no significant payments expected in the next 12 months. **Impact on Future Operations:** - **Growth Strategy:** Focuses on growing subscriber base, retaining and expanding relationships with existing subscribers, and managing growth effectively. - **Liquidity & Capital Resources:** Expects to support working capital and capital expenditure requirements for at least the next 12 months; may seek additional financing if needed. - **Market Risks:** Faces risks related to economic conditions, regulatory environment, and competition.