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MARKETWISE, INC. - Quarter Report: 2023 September (Form 10-Q)


d
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to         
Commission File Number: 001-39405
MarketWise, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware87-1767914
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
1125 N. Charles Street Baltimore, Maryland
21201
(Address of principal executive offices)(Zip Code)
(888) 261-2693
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A common stock, $0.0001 par value per shareMKTWThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                ☑ Yes    ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                ☑ Yes    ☐ No
Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 12 (a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No
As of November 6, 2023, there were 39,147,437 shares of the registrant’s Class A common stock and 288,342,303 shares of the registrant’s Class B common stock, each with a par value of $0.0001 per share, outstanding.
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TABLE OF CONTENTS


Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as such are not historical facts. This includes, without limitation, statements regarding our financial position and business strategy, and the plans and objectives of management for our future operations. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would,” and similar expressions may identify forward-looking statements, 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 report, 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 Investment Advisers Act of 1940, as amended (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;
our ability to maintain and protect our intellectual property; and
other factors detailed under the section of our Annual Report on Form 10-K for the year ended December 31, 2022 entitled “Risk Factors.”
These forward-looking statements are based on information available as of the date of this report and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Additionally, as a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Accordingly, forward-
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looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements for any reason, except as may be required under applicable securities laws.

PART 1—FINANCIAL INFORMATION

Item 1. Financial Statements.
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MARKETWISE, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)
September 30, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$194,023 $158,575 
Accounts receivable5,958 4,040 
Prepaid expenses11,396 11,725 
Related party receivables1,003 1,512 
Deferred contract acquisition costs97,525 99,960 
Other current assets3,058 3,363 
Total current assets312,963 279,175 
Property and equipment, net748 892 
Operating lease right-of-use assets7,921 9,468 
Intangible assets, net14,271 16,047 
Goodwill31,392 31,307 
Deferred contract acquisition costs, noncurrent76,527 97,658 
Deferred tax assets7,751 7,332 
Other assets372 629 
Total assets$451,945 $442,508 
Liabilities and stockholders’ deficit
Current liabilities:
Trade and other payables$1,950 $686 
Related party payables, net1,305 1,004 
Accrued expenses42,711 45,976 
Deferred revenue and other contract liabilities293,528 315,231 
Operating lease liabilities1,504 1,484 
Other current liabilities21,423 21,125 
Total current liabilities362,421 385,506 
Deferred revenue and other contract liabilities, noncurrent325,688 348,273 
Other liabilities, noncurrent3,597 1,281 
Tax receivable agreement liability, noncurrent2,096 — 
Operating lease liabilities, noncurrent4,743 5,831 
Total liabilities698,545 740,891 
Commitments and Contingencies— — 
Stockholders’ deficit:
Common stock - Class A, par value of $0.0001 per share, 950,000,000 shares authorized; 34,096,437 and 29,039,655 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
Common stock - Class B, par value of $0.0001 per share, 300,000,000 shares authorized; 288,342,303 and 291,092,303 shares issued and outstanding at September 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 September 30, 2023 and December 31, 2022, respectively
— — 
Additional paid-in capital113,139 106,852 
Accumulated other comprehensive income55 44 
Accumulated deficit(126,482)(128,125)
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MARKETWISE, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share and per share data)
Total stockholders’ deficit attributable to MarketWise, Inc.(13,256)(21,197)
Noncontrolling interest(233,344)(277,186)
Total stockholders’ deficit(246,600)(298,383)
Total liabilities, noncontrolling interest, and stockholders’ deficit$451,945 $442,508 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MARKETWISE, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net revenue$105,799 $119,297 $334,777 $383,383 
Related party revenue351 637 1,250 1,363 
Total net revenue106,150 119,934 336,027 384,746 
Operating expenses:
Cost of revenue (1)
13,812 14,482 43,737 48,328 
Sales and marketing (1)
52,466 51,635 150,226 184,922 
General and administrative (1)
25,005 28,986 80,667 79,895 
Research and development (1)
2,085 2,173 6,778 6,740 
Depreciation and amortization1,001 836 2,979 2,053 
Impairment of intangible assets584 — 584 — 
Related party expense155 96 487 290 
Total operating expenses95,108 98,208 285,458 322,228 
Income from operations11,042 21,726 50,569 62,518 
Other income (expense), net182 (3,651)807 15,568 
Interest income (expense), net1,511 (183)3,062 (572)
Income before income taxes12,735 17,892 54,438 77,514 
Income tax expense691 1,383 2,046 3,945 
Net income12,044 16,509 52,392 73,569 
Net income attributable to noncontrolling interests11,904 20,521 50,749 59,875 
Net income (loss) attributable to MarketWise, Inc.$140 $(4,012)$1,643 $13,694 
Earnings per share – basic$0.00 $(0.17)$0.05 $0.59 
Earnings per share – diluted$0.00 $(0.17)$0.05 $0.59 
Weighted average shares outstanding – basic32,910 23,533 30,883 23,233 
Weighted average shares outstanding – diluted33,632 23,566 31,996 23,267 
(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
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MARKETWISE, INC.
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(In thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net income$12,044 $16,509 $52,392 $73,569 
Other comprehensive income (loss):
Cumulative translation adjustment25 11 (100)
Total comprehensive income$12,069 $16,515 $52,403 $73,469 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MARKETWISE, INC.
Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited)
(In thousands, except share and per share data)

Common Stock - Class ACommon Stock - Class BPreferred StockAdditional paid-in capitalAccumulated deficitAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Deficit Attributable to MarketWise, Inc.Noncontrolling InterestTotal Stockholders’ Deficit
SharesAmountSharesAmountSharesAmount
Balance at July 1, 202222,505,103 $291,092,303 $29 — $— $90,048 $(128,409)$(115)$(38,445)$(321,162)$(359,607)
Equity-based compensation— — — — — — 2,153 — — 2,153 — 2,153 
Issuance of common stock - warrant exchanges5,939,739 — — — — 14,400 — — 14,401 — 14,401 
Vesting of restricted stock units377,660 — — — — — — — — — — — 
Restricted stock units withheld to pay taxes— — — — — — (511)— — (511)— (511)
Acquisition of noncontrolling interest - Chaikin— — — — — — (1,257)— — (1,257)960 (297)
Distributions— — — — — — — — — — (677)(677)
Foreign currency translation adjustments— — — — — — — — — 
Net income— — — — — — — (4,012)— (4,012)20,521 16,509 
Balance at September 30, 202228,822,502 $291,092,303 $29 — $— $104,833 $(132,421)$(109)$(27,665)$(300,358)$(328,023)


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MARKETWISE, INC.
Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited)
(In thousands, except share and per share data)
Common Stock - Class ACommon Stock - Class BPreferred StockAdditional paid-in capitalAccumulated deficitAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Deficit Attributable to MarketWise, Inc.Noncontrolling InterestTotal Stockholders’ Deficit
SharesAmountSharesAmountSharesAmount
Balance at July 1, 202332,073,995 $289,842,303 $29 — $— $112,146 $(126,622)$30 $(14,414)$(242,837)$(257,251)
Equity-based compensation— — — — — — 2,932 — — 2,932 — 2,932 
Vesting of restricted stock units522,442 — — — — — — — — — — — 
Restricted stock units withheld to pay taxes— — — — — — (415)— — (415)— (415)
Cash dividends declared ($0.01 per share)
— — — — — — (462)— — (462)— (462)
Distributions— — — — — — — — — — (3,649)(3,649)
Issuance per redemption of Class B shares for Class A1,500,000 — (1,500,000)— — — (1,062)— — (1,062)1,238 176 
Foreign currency translation adjustments— — — — — — — — 25 25 — 25 
Net income— — — — — — — 140 — 140 11,904 12,044 
Balance at September 30, 202334,096,437 $288,342,303 $29 — $— $113,139 $(126,482)$55 $(13,256)$(233,344)$(246,600)
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MARKETWISE, INC.
Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited)
(In thousands, except share and per share data)
Common Stock - Class ACommon Stock - Class BPreferred StockAdditional paid-in capitalAccumulated deficitAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Deficit Attributable to MarketWise, Inc.Noncontrolling InterestTotal Stockholders’ Deficit
SharesAmountSharesAmountSharesAmount
Balance at January 1, 202224,718,402 $291,092,303 $29 — $— $97,548 $(146,115)$(9)$(48,545)$(356,717)$(405,262)
Equity-based compensation— — — — — — 7,190 — — 7,190 — 7,190 
Proceeds from issuance of common stock161,178 — — — — — 517 — — 517 — 517 
Issuance of common stock - warrant exchanges5,939,739 — — — — 14,400 — — 14,401 — 14,401 
Repurchases of stock(2,484,717)— — — — — (13,054)— — (13,054)— (13,054)
Vesting of restricted stock units487,900 — — — — — — — — — — — 
Restricted stock units withheld to pay taxes— — — — — — (511)— — (511)— (511)
Acquisition of noncontrolling interest - Chaikin— — — — — — (1,257)— — (1,257)960 (297)
Distributions— — — — — — — — — — (4,476)(4,476)
Foreign currency translation adjustments— — — — — — — — (100)(100)— (100)
Net income— — — — — — — 13,694 — 13,694 59,875 73,569 
Balance at September 30, 202228,822,502 $291,092,303 $29 — $— $104,833 $(132,421)$(109)$(27,665)$(300,358)$(328,023)

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MARKETWISE, INC.
Condensed Consolidated Statement of Stockholders’ Deficit (Unaudited)
(In thousands, except share and per share data)
Common Stock - Class ACommon Stock - Class BPreferred StockAdditional paid-in capitalAccumulated deficitAccumulated Other Comprehensive Income (Loss)Total Stockholders’ Deficit Attributable to MarketWise, Inc.Noncontrolling InterestTotal Stockholders’ Deficit
SharesAmountSharesAmountSharesAmount
Balance at January 1, 202329,039,655 $291,092,303 $29 — $— $106,852 $(128,125)$44 $(21,197)$(277,186)$(298,383)
Equity-based compensation— — — — — — 10,313 — — 10,313 — 10,313 
Proceeds from issuance of common stock648,849 — — — — — 332 — — 332 — 332 
Vesting of restricted stock units1,657,933 — — — — — — — — — — — 
Restricted stock units withheld to pay taxes— — — — — — (1,521)— — (1,521)— (1,521)
Cash dividends declared ($0.01 per share)
— — — — — — (902)— — (902)— (902)
Distributions— — — — — — — — — — (9,212)(9,212)
Issuance per redemption of Class B shares for Class A2,750,000 — (2,750,000)— — — (1,935)— — (1,935)2,305 370 
Foreign currency translation adjustments— — — — — — — — 11 11 — 11 
Net income— — — — — — — 1,643 — 1,643 50,749 52,392 
Balance at September 30, 202334,096,437 $288,342,303 $29 — $— $113,139 $(126,482)$55 $(13,256)$(233,344)$(246,600)

The accompanying notes are an integral part of these condensed consolidated financial statements.
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MARKETWISE, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended September 30,
20232022
Cash flows from operating activities:
Net income$52,392 $73,569 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization2,979 2,053 
Impairment and other charges584 287 
Stock-based compensation10,313 7,190 
Change in fair value of warrant liabilities and other liabilities, noncurrent2,316 (15,626)
Deferred taxes2,046 3,649 
Unrealized losses (gains) on foreign currency(91)
Noncash lease expense1,590 1,616 
Changes in operating assets and liabilities:
Accounts receivable(1,918)3,241 
Related party receivables and payables, net810 (1,140)
Prepaid expenses329 2,371 
Other current assets and other assets562 (774)
Deferred contract acquisition costs23,566 486 
Trade and other payables1,189 (1,516)
Accrued expenses(3,265)(7,151)
Deferred revenue(44,288)(24,759)
Operating lease liabilities(1,111)(1,486)
Other current and long-term liabilities(3,198)(4,156)
Net cash provided by operating activities44,901 37,763 
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired(170)(12,770)
Acquisition of noncontrolling interests, including transaction costs— (297)
Purchases of property and equipment(60)(35)
Capitalized software development costs(1,428)(136)
Net cash used in investing activities(1,658)(13,238)
Cash flows from financing activities:
Proceeds from related party notes receivable, net— 737 
Proceeds from issuance of common stock332 517 
Repurchases of stock— (13,054)
Restricted stock units withheld to pay taxes(1,520)(511)
Dividends paid(299)— 
Distributions to noncontrolling interests(6,319)(4,476)
Net cash used in financing activities(7,806)(16,787)
Effect of exchange rate changes on cash11 (100)
Net increase in cash, cash equivalents and restricted cash35,448 7,638 
Cash, cash equivalents and restricted cash — beginning of period158,575 139,578 
Cash, cash equivalents and restricted cash — end of period$194,023 $147,216 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)

1.    Organization
MarketWise, Inc. (“MarketWise,” “the Company,” “we,” “us,” or “our”) is a holding company that has no material assets other than its ownership in MarketWise, LLC, and operates and controls all of the businesses and operations of MarketWise, LLC and its subsidiaries. The Company provides independent investment research for investors around the world. We believe we are a leading content and technology multi-brand platform for self-directed investors. We offer a comprehensive portfolio of high-quality, independent investment research, as well as several software and analytical tools, on a subscription basis.
While our headquarters are in Baltimore, Maryland, we operate multiple subsidiaries in the United States.
On July 21, 2021, MarketWise, Inc. became a publicly traded company as a result of completing the business combination, recapitalization and other transactions with Ascendant Digital Acquisition Corp. (“ADAC” or “Sponsor”), a special purpose acquisition company, MarketWise, LLC, all of the members of MarketWise, LLC (the “MarketWise Members”), and Shareholder Representative Services LLC (collectively, the “Transactions”).

2.    Summary of Significant Accounting Policies
Basis of Consolidation
The accompanying condensed consolidated financial statements include the accounts of MarketWise, Inc. and its subsidiary, MarketWise, LLC, a variable interest entity (“VIE”) for which MarketWise, Inc. is deemed to be the primary beneficiary.
MarketWise, Inc. is a holding company that owns a minority economic interest in MarketWise, LLC but, through its role as the managing member of MarketWise, LLC, controls all of the business and operations of MarketWise, LLC. Therefore, MarketWise, LLC and its subsidiaries are included in the Company’s condensed consolidated financial statements. As of September 30, 2023, MarketWise, Inc. had a 10.6% ownership interest in MarketWise, LLC.
The Company determined that MarketWise, LLC is the primary beneficiary of a VIE, and therefore, the assets, liabilities, and results of operations of that VIE are included in the Company’s condensed consolidated financial statements.
The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation.
The accompanying statements of operations include certain expenses incurred by, and charged to us by, a related party for general corporate services. These expenses are based primarily on direct usage when identifiable, direct capital expenditures, or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying condensed consolidated financial statements, including the assumptions regarding these expenses from this related party, are reasonable. Actual results may differ from these expenses, assumptions and estimates. The amounts recorded in the accompanying condensed consolidated financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity.
Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements and the related footnote disclosures have been prepared by us in accordance with GAAP for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2022 consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of management, the
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly our financial position as of September 30, 2023, the results of operations, comprehensive income, stockholders’ deficit, and cash flows for the three and nine months ended September 30, 2023 and 2022. The results of operations for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results to be expected for the full year. The information contained herein should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”). Management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these condensed financial statements.
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying condensed consolidated financial statements include, but are not limited to, the fair value of common units, derivatives, warrants, valuation of assets acquired and liabilities assumed in business combinations, useful lives of intangible assets with definite lives, benefit period of deferred contract acquisition costs, determination of standalone selling prices, estimated life of lifetime customers, recoverability of goodwill and long-lived assets, valuation allowances on deferred tax assets, the incremental borrowing rates to calculate lease liabilities and right-of-use (“ROU”) assets and certain accruals. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates.
Emerging Growth Company
We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our unaudited condensed financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Noncontrolling Interest
Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A common stock ownership of the Company.
Net income for the three and nine months ended September 30, 2023 and 2022 was attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests.
As of September 30, 2023, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 10.6% and the noncontrolling interest was 89.4%. For the three months ended September 30, 2023, net income attributable to controlling interests included a $691 tax provision, and for the nine months ended September 30, 2023, net income attributable to controlling interests included a $2,046 tax provision, both of which were solely attributable to the controlling interest.
As of September 30, 2022, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 9.0% and the noncontrolling interest was 91.0%. For the three months ended September 30, 2022 net income attributable to controlling interests included a $3,868 loss on warrant liabilities and a $1,383 tax provision, and for the nine months ended September 30, 2022 net income attributable to controlling interests included a $14,931 gain on warrant liabilities and a $3,945 tax provision, both of which were solely attributable to the controlling interest.

3.    Revenue Recognition
Disaggregation of revenues
The following table depicts the disaggregation of revenue according to customer type and is consistent with how we evaluate our financial performance. We believe this depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
Three Months Ended September 30, 2023
SubscriptionsAdvertisingRevenue Share (Related Party)Revenue Share (Third-party)Total
Timing of transfer:
Transferred over time$105,581 $— $— $— $105,581 
Transferred at a point in time— 192 351 26 569 
Total$105,581 $192 $351 $26 $106,150 
Three Months Ended September 30, 2022
SubscriptionsAdvertisingRevenue Share (Related Party)Revenue Share (Third-party)Total
Timing of transfer:
Transferred over time$118,990 $— $— $— $118,990 
Transferred at a point in time— 169 637 138 944 
Total$118,990 $169 $637 $138 $119,934 
Nine Months Ended September 30, 2023
SubscriptionsAdvertisingRevenue Share (Related Party)Revenue Share (Third-party)Total
Timing of transfer:
Transferred over time$334,141 $— $— $— $334,141 
Transferred at a point in time— 508 1,250 128 1,886 
Total$334,141 $508 $1,250 $128 $336,027 
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Nine Months Ended September 30, 2022
SubscriptionsAdvertisingRevenue Share (Related Party)Revenue Share (Third-party)Total
Timing of transfer:
Transferred over time$382,321 $— $— $— $382,321 
Transferred at a point in time— 606 1,363 456 2,425 
Total$382,321 $606 $1,363 $456 $384,746 
Revenue recognition by subscription type was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Membership subscriptions$48,177 $46,915 $137,988 $148,219 
Term subscriptions57,404 72,075 196,153 234,102 
Non-subscription revenue569 944 1,886 2,425 
Total$106,150 $119,934 $336,027 $384,746 
Revenue for the membership and term subscription types are determined based on the terms of the subscription agreements. Non-subscription revenue consists of revenue from advertising and other revenue from revenue share arrangements and the sale of print products and events, such as webinars and conferences.
Net revenue by principal geographic areas was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
United States$106,150 $119,707 $335,936 $384,419 
International— 227 91 327 
Total$106,150 $119,934 $336,027 $384,746 
Revenue by location is determined by the billing entity for the customer.
Contract Balances
The timing of revenue recognition, Billings, cash collections and refunds affects the recognition of accounts receivable, contract assets and deferred revenue. Our current deferred revenue balance in the condensed consolidated balance sheets includes an obligation for refunds for contracts where the provision for refund has not lapsed. Accounts receivable, deferred revenue and obligation for refunds are as follows:
As of
September 30, 2023December 31, 2022
Contract balances
Accounts receivable$5,958 $4,040 
Obligations for refunds$3,302 $4,676 
Deferred revenue – current$290,226 $310,555 
Deferred revenue – non-current$325,688 $348,273 
We recognized $69,978 and $72,852 of revenue during the three months ended September 30, 2023 and 2022, respectively, and $256,627 and $266,246 during the nine months ended September 30, 2023 and 2022, respectively, that was included within the beginning contract liability balance of the respective periods. The Company has collected all amounts included in deferred revenue other than $5,958 and $4,040 as of September 30, 2023 and December 31, 2022, respectively, related to the timing of cash settlement with our credit card processors.
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Assets Recognized from Costs to Obtain a Contract with a Customer
The following table presents the opening and closing balances of our capitalized costs associated with contracts with customers:
Balance at January 1, 2023$197,618 
Royalties and sales commissions – additions22,989 
Revenue share and cost per acquisition fees – additions36,526 
Amortization of capitalized costs(83,081)
Balance at September 30, 2023$174,052 
We did not recognize any impairment on capitalized costs associated with contracts with customers for the three and nine months ended September 30, 2023 and 2022.
Remaining Performance Obligations
As of September 30, 2023, the Company had $619,216 of remaining performance obligations presented as deferred revenue in the condensed consolidated balance sheets. We expect to recognize approximately 47% of that amount as revenues over the next twelve months, with the remainder recognized thereafter.

4.    Acquisitions
2023 Acquisition
In July 2023, the Company acquired a business for cash of $170 and the transaction was accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company does not consider this acquisition to be material.
Buttonwood Publishing
During third quarter 2022, we acquired 100% ownership of certain assets and liabilities from Crowdability, Inc. (“Buttonwood Publishing transaction”), a provider of financial newsletters, for cash of $12,770. The Buttonwood Publishing transaction was accounted for using the acquisition method of accounting for business combinations. The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date:
Right of use asset$50 
Goodwill8,019 
Tradenames709 
Customer relationships9,350 
Total assets acquired18,128 
Deferred revenue, current(2,648)
Operating lease liabilities, current(22)
Operating lease liabilities, noncurrent(28)
Deferred revenue, noncurrent(2,660)
Liabilities assumed(5,358)
Net assets acquired$12,770 
The excess purchase consideration over the fair values of assets acquired and liabilities assumed was recorded as goodwill. The acquired intangible assets related to the Buttonwood Publishing transaction are amortized over their estimated useful lives. Accordingly, the tradenames are amortized over 9.0 years and customer relationships are amortized over 6.5 years. Amortization for the acquired intangible assets was $382 and $217 for the three months ended September 30, 2023 and 2022, respectively, and $1,135 for the nine months ended September 30, 2023.
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Revenue from Buttonwood Publishing was $987 and $788 for the three months ended September 30, 2023 and 2022, respectively, and $3,233 for the nine months ended September 30, 2023.

5.    Goodwill and Intangible Assets, Net
Goodwill
The carrying amounts of goodwill are as follows:
Balance at December 31, 2022$31,307 
Acquisition85 
Balance at September 30, 2023$31,392 
Intangible assets, net
Intangible assets, net consisted of the following as of the dates indicated:
September 30, 2023
CostAccumulated AmortizationNet Book ValueWeighted-Average Remaining Useful Life (in years)
Finite-lived intangible assets:
Customer relationships$21,793 $(12,410)$9,383 4.8
Tradenames4,297 (2,662)1,635 5.4
Capitalized software development costs4,500 (2,334)2,166 3.8
Finite-lived intangible assets, net30,590 (17,406)13,184 
Indefinite-lived intangible assets:
Internet domain names1,087 — 1,087 
Indefinite-lived intangible assets, net1,087 — 1,087 
Intangible assets, net$31,677 $(17,406)$14,271 
December 31, 2022
CostAccumulated AmortizationNet Book ValueWeighted-Average Remaining Useful Life (in years)
Finite-lived intangible assets:
Customer relationships$21,718 $(9,924)$11,794 5.4
Tradenames4,287 (2,265)2,022 5.8
Capitalized software development costs3,002 (1,858)1,144 2.0
Finite-lived intangible assets, net29,007 (14,047)14,960 
Indefinite-lived intangible assets:
Internet domain names1,087 — 1,087 
Indefinite-lived intangible assets, net1,087 — 1,087 
Intangible assets, net$30,094 $(14,047)$16,047 
During the three months ended September 30, 2023, the Company determined that impairment indicators were present due to continuing losses with respect to its Buttonwood Publishing business which it had acquired during 2022. As a result, the Company recorded an impairment loss on Buttonwood Publishing’s intangible assets totaling
20

MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
$584. The Company used a with and without method to determine the fair value of the customer relationships and a relief from royalty method to determine the fair value of the tradenames.
We recorded amortization expense related to finite-lived intangible assets of $936 and $760 for the three months ended September 30, 2023 and 2022, respectively, and $2,775 and $1,793 for the nine months ended September 30, 2023 and 2022, respectively, within depreciation and amortization in the accompanying condensed consolidated statement of operations. These amounts include amortization of capitalized software development costs of $187 and $133 for the three months ended September 30, 2023 and 2022, respectively, and $476 and $368 for the nine months ended September 30, 2023 and 2022, respectively.
We recorded additions to capitalized software development costs of $526 and $1,498 for the three and nine months ended September 30, 2023, respectively. We recorded additions to capitalized software development costs of $55 and $136 for the three and nine months ended September 30, 2022, respectively.
As of September 30, 2023, the total expected future amortization expense for finite-lived intangible assets is as follows:
Remainder of 2023$992 
20243,442 
20252,879 
20262,462 
20271,554 
Thereafter1,855 
Finite-lived intangible assets, net$13,184 

6.    Fair Value Measurements
The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated:
September 30, 2023
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds$125,311 $— $— $125,311 
Total assets125,311 — — 125,311 
Liabilities:
Profits interests, noncurrent— — 643 643 
Derivative liabilities, noncurrent— — 2,954 2,954 
Total liabilities$— $— $3,597 $3,597 
December 31, 2022
Level 1Level 2Level 3Aggregate Fair Value
Assets:
Money market funds$80,327 $— $— $80,327 
Total assets80,327 — — 80,327 
Liabilities:
Derivative liabilities, noncurrent— — 1,281 1,281 
Total liabilities$— $— $1,281 $1,281 
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
The level 3 liabilities relate to certain employee contracts with embedded derivatives and profits interests, see Note 8 – Derivative Financial Instruments and Note 9 – Stock-Based Compensation, respectively.
The following table provides quantitative information regarding Level 3 fair value measurements inputs for the derivative liabilities at their measurement dates:
As of
September 30, 2023December 31, 2022
Volatility39.80 %37.30 %
Discount rate22.40 %21.80 %
Credit spread1.70 %0.20 %
Risk-free rate3.50 %3.50 %
The following table provides quantitative information regarding Level 3 fair value measurements inputs for the profits interests at the measurement date:
As of
September 30, 2023
Discount rate22.80 %
Discount for lack of marketability30.50 %
The following table summarizes the change in fair value of the liabilities during the nine months ended September 30, 2023 and 2022:
Balance at January 1, 2023$1,281 
Establishment of profits interests liability (see Note 9 – Stock-Based Compensation)
1,010 
Change in fair value of profits interests liability(367)
Change in fair value of derivative instruments1,673 
Balance at September 30, 2023$3,597 
Balance at January 1, 2022$31,347 
Change in fair value of derivative instruments(15,626)
Warrants exchanged for Class A common stock (see Note 15 – Warrant Exchange)
$(14,401)
Balance at September 30, 2022$1,320 

7.    Balance Sheet Components
Capitalized Implementation Costs
We capitalized cloud computing implementation costs for customer-relationship management, revenue management, and enterprise resource planning systems of $0 and $360 for the three months ended September 30, 2023 and 2022, respectively, and $71 and $1,392 for the nine months ended September 30, 2023 and 2022, respectively. The capitalized implementation costs are capitalized within other current assets and other assets on the condensed consolidated balance sheets. Amortization expense related to capitalized cloud computing
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
implementation costs was $238 and $133, for the three months ended September 30, 2023 and 2022, respectively, and $689 and $145 for the nine months ended September 30, 2023 and 2022, respectively.
Property and Equipment, Net
Property and equipment, net consists of the following:
As of
Estimated Useful LivesSeptember 30, 2023December 31, 2022
Furniture and fixtures5 years$960 $960 
Computers, software and equipment3 years1,518 1,458 
Leasehold improvementsShorter of estimated useful life or remaining term of lease1,271 1,278 
3,749 3,696 
Less: Accumulated depreciation and amortization(3,001)(2,804)
Total property and equipment, net$748 $892 
Depreciation and amortization expense for property and equipment was $65 and $76 for the three months ended September 30, 2023 and 2022, respectively, and $204 and $260 for the nine months ended September 30, 2023 and 2022, respectively.
Accrued Expenses
Accrued expenses consist of the following:
As of
September 30, 2023December 31, 2022
Commission and variable compensation$22,510 $24,207 
Payroll and benefits4,357 5,258 
Other accrued expenses15,844 16,511 
Total accrued expenses$42,711 $45,976 

8.    Derivative Financial Instruments
Prior to the closing of the Transactions, as part of our compensation and employee retention strategy, we entered into contracts with key employees and independent contractors which contain embedded derivatives. These contracts are intended to compensate the employees or independent contractors for services provided and retain their future services. These embedded derivative instruments are issued in the form of phantom interests in Net Income, as defined by our board of directors (the “Board”), that grant the holder value equal to a percentage of Net Income multiplied by a price multiple. All derivative instruments are recorded at fair value as derivative liabilities on our condensed consolidated balance sheets.
As of September 30, 2023, there is one embedded derivative instrument outstanding. The following table presents information on the location and amounts of derivative instrument gains and losses:
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Derivatives Not Designated as
Hedging Instruments
Location of Gain (Loss) Recognized in Income Statement
WarrantsOther income, net$— $(3,868)$— $14,931 
Phantom Interests in Net IncomeGeneral and administrative(972)(160)(1,673)695 
Total$(972)$(4,028)$(1,673)$15,626 
See Note 6 – Fair Value Measurements for more information regarding the valuation of our derivative instruments.

9.    Stock-Based Compensation
Included within cost of revenue, sales and marketing, and general and administrative expenses are total stock-based compensation expenses as follows:
Three months ended September 30,Nine months ended September 30,
2023202220232022
Cost of revenue$688 $438 $2,379 $1,496 
Sales and marketing711 514 2,519 1,655 
General and administrative2,176 1,201 6,058 4,039 
Total stock based-compensation expense$3,575 $2,153 $10,956 $7,190 
Total stock-based compensation expense for the three and nine months ended September 30, 2023 and 2022 includes expenses related to our MarketWise, Inc. 2021 Incentive Award Plan (the “2021 Incentive Award Plan”) our 2021 Employee Stock Purchase Plan (“ESPP”), and profits interests as follows:
Three months ended September 30,Nine months ended September 30,
2023202220232022
2021 Incentive Award Plan$2,848 $2,086 $10,037 $6,828 
Employee Stock Purchase Plan84 67 276 362 
Profits interests643 — 643 — 
Total stock-based compensation expense$3,575 $2,153 $10,956 $7,190 
2021 Incentive Award Plan
As of September 30, 2023, The Company has reserved a total of 33,960,802 shares of MarketWise Class A common stock for issuance pursuant to the 2021 Incentive Award Plan.
During the nine months ended September 30, 2023, we granted 5,098,818 restricted stock units (“RSUs”) and 715,000 fully vested shares of Class A common stock to certain employees and service providers in aggregate under our 2021 Incentive Award Plan.
For employees and service providers, both RSUs and stock appreciation rights (“SARs”) are primarily time-based and typically vest ratably over four years, as specified in the individual grant notices. The RSUs may entitle the recipients to dividend equivalents if approved by the Plan Administrator, which are subject to the same vesting terms and accumulate during the vesting period. Upon vesting, the RSU holder will be issued a corresponding number of the Company’s Class A common stock. The SARs will be settled in the Company’s Class A common stock upon exercise. The shares to be issued upon exercise of a SAR will have a total market value equal to the
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
SAR value calculated as (x) number of shares underlying such SAR, multiplied by (y) any excess of the Company’s share value on the date of exercise over the exercise price set in each individual grant notice.
The fair value of the RSU is the same as the Company’s share price on the date of grant. The fair value of the SARs was determined using a Black-Scholes model.
The activities of the RSUs and SARs and the related weighted average grant-date fair value of the respective share classes, including granted, exercised and forfeited, from January 1, 2023 to September 30, 2023, are summarized as follows:
RSUsSARs
UnitsWeighted-Average Grant Date Fair ValueUnitsWeighted-Average Grant Date Fair Value
Outstanding at January 1, 20236,261,543 $3.45 1,747,473 $4.05 
Granted5,098,818 1.79 — — 
Exercised or vested(2,259,892)3.28 — — 
Forfeited(604,232)2.94 (92,885)4.05 
Outstanding at September 30, 2023
8,496,237 $2.53 1,654,588 $4.05 
Exercisable at September 30, 2023— $— 829,619 $4.05 
The stock compensation expense related to the RSU and SAR grants was $2,848 and $2,086 for the three months ended September 30, 2023 and 2022, respectively, and $8,893 and $6,828 for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, 829,619 of the SARs were exercisable and they have a remaining contractual term of 8.0 years. For the fully vested shares, during the nine months ended September 30, 2023, we issued 417,684 shares of Class A common stock after withholding for taxes, resulting in compensation expense of $1,144.
Employee Stock Purchase Plan
As of September 30, 2023, The Company has reserved for issuance a total of 6,728,300 shares of Class A common stock for the ESPP. The most recent offering period began on July 1, 2023 and ends on December 31, 2023. As of September 30, 2023, $230 has been withheld on behalf of employees for the December 31, 2023 purchase date.
The Company recognized $84 and $67 of stock-based compensation expense related to the ESPP during the three months ended September 30, 2023 and 2022, respectively, and $276 and $362 for the nine months ended September 30, 2023 and 2022, respectively. On each purchase date, eligible employees may purchase the shares at a price per share equal to 85% of the lesser of the fair market value of the Company’s Class A common stock on (1) the first trading day of the offering period, or (2) the last trading day of the offering period. The Company issued 231,165 shares of Class A common stock for $332,184 related to employee purchases under the ESPP during the nine months ended September 30, 2023.
Profits Interests
During the three months ended September 30, 2023, the Company granted fully vested profits interests in a subsidiary of the Company to an employee. The profits interests are accounted for under ASC 718, Compensation—Stock Compensation, and are classified as liability awards, which requires that the awards be remeasured to fair value at the end of each reporting period until the liability is settled. The Company recognized $643 of stock-based compensation expense related to the profits interests during the three months ended September 30, 2023.

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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
10.    Earnings Per Share
The following tables set forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022:
Three months ended September 30,Nine months ended September 30,
2023202220232022
Basic earnings per share:
Numerator:
Net income$12,044 $16,509 $52,392 $73,569 
Less: Net income attributable to noncontrolling interests11,904 20,521 50,749 59,875 
Net income attributable to Class A common stockholders$140 $(4,012)$1,643 $13,694 
Denominator:
Weighted average shares outstanding (in thousands)32,910 23,533 30,883 23,233 
Basic earnings per share$0.00 $(0.17)$0.05 $0.59 
Diluted earnings per share:
Numerator:
Net income$12,044 $16,509 $52,392 $73,569 
Less: Net income attributable to noncontrolling interests11,904 20,521 50,749 59,875 
Net income attributable to Class A common stockholders$140 $(4,012)$1,643 $13,694 
Denominator:
Weighted average shares outstanding (in thousands)33,632 23,566 31,996 23,267 
Diluted earnings per share$0.00 $(0.17)$0.05 $0.59 
The Company’s potentially dilutive securities and their impact on the computation of diluted earnings per share is as follows:
Public and private placement warrants: the public and private placement warrants were "out of the money" during the three and nine months ended September 30, 2022, therefore, net income per share excludes any impact of the 20,699,993 public warrants and 10,280,000 private placement warrants. The warrants were exchanged in September 2022 and there are no warrants outstanding as of September 30, 2023.
Sponsor and MarketWise management member earnout shares: the 3,051,000 Sponsor earnout shares and the 2,000,000 MarketWise management member earnout shares granted in connection with the closing of the Transactions held in escrow are excluded from the earnings per share computation in both periods since the earnout contingency has not been met.
Restricted stock units: The basic earnings per share calculation includes the impact of vested RSUs. The diluted earnings per share calculation includes the impact of unvested RSUs where the impact is dilutive, unless the Company has a net loss. The diluted earnings per share calculations above exclude certain RSUs
26

MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
with performance conditions, since the performance conditions were not met, and such RSUs were forfeited as of June 30, 2023.
Stock appreciation rights: The diluted earnings per share calculation for the three and nine months ended September 30, 2023 and 2022 excludes the impact of SARs since the effect was antidilutive.
ESPP: The basic earnings per share calculation includes the impact of the shares that were issued under the ESPP as of June 30, 2023 and 2022. The diluted earnings per share calculation includes the impact of dilutive shares and excludes the impact of antidilutive shares under the ESPP as of September 30, 2023 and 2022.

11.    Income Taxes
We are subject to U.S. federal and state taxes with respect to our allocable share of any taxable income or loss of MarketWise, LLC, as well as any stand-alone income or loss we generate. MarketWise, LLC is treated as a partnership for U.S. income tax purposes and for most applicable state and local income tax purposes and generally does not pay income taxes in most jurisdictions. Instead, MarketWise, LLC’s taxable income or loss is passed through to its members, including us.
Our effective income tax rate was 5.4% and 3.8% for the three and nine months ended September 30, 2023, respectively, and 7.7% and 5.1% for the three and nine months ended September 30, 2022, respectively. The main driver of the effective income tax rate for the three and nine months ended September 30, 2022 was the income allocation to the non-controlling interest. The main driver of the decrease in the effective tax rate from the three months ended September 30, 2022 is the change in the income allocation to the non-controlling interest. Our effective tax rate for the three and nine months ended September 30, 2023 differs from the U.S. federal statutory rate primarily because we generally do not record income taxes for the noncontrolling portion of pre-tax income.
As a result of the reverse capitalization in 2021, we recorded a deferred tax asset resulting from the outside basis difference in our interest in MarketWise, LLC. The Company considers both positive and negative evidence when measuring the need for a valuation allowance. A valuation allowance is not required to the extent that, in management’s judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more likely than not (a likelihood of more than 50%) that the Company’s deferred tax assets will be realized.
In evaluating the need for a valuation allowance on the deferred tax asset, the company considered positive evidence related to its historic earnings, forecasted income and reversal of temporary differences. Therefore, the Company recorded a valuation allowance in the amount of $29,088 for certain deferred tax assets that are not more likely than not to be realized.
As part of the reverse capitalization in 2021, we entered into a Tax Receivable Agreement (“TRA”) with certain stockholders. Pursuant to our election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder, we expect to receive a step up in the tax basis of our ownership in MarketWise, LLC as exchanges of the LLC Units (as defined herein) occur. These increases in tax basis may reduce the amount we may otherwise pay to various tax authorities in the future. The TRA liability represents approximately 85% of the calculated tax savings based on basis adjustments and other carryforward attributes assumed that we anticipate being able to utilize in future years. We will retain the remaining 15% of calculated tax savings. The payments contemplated by the TRA are not conditioned upon any continued ownership interest in MarketWise, LLC. The timing and amount of aggregate payments due pursuant to the TRA may vary based on several factors including the timing and amount of future taxable income, as well as future applicable tax rates. As such, significant inputs and assumptions are used to estimate the future expected payments under the TRA. During the three and nine months ended September 30, 2023, Members of MarketWise, LLC exchanged an aggregate of 1,500,000 and 2,750,000 common units of MarketWise, LLC (“LLC Units”) together with an equal number of shares of Class B common stock for 1,500,000 and 2,750,000 newly-issued shares of Class A common stock, respectively. As a result, we have recorded a liability of $2,096 under the TRA as of September 30, 2023. No payments have been made under the TRA and no payments are expected in the next 12 months.
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
As of September 30, 2023, we had no unrecognized tax positions and believe there will be no changes to uncertain tax positions within the next 12 months.

12.    Related Party Transactions
We have certain revenue share agreements with related parties. Accordingly, we recognized revenue from related parties of $351 and $637 for the three months ended September 30, 2023 and 2022, respectively, and $1,250 and $1,363 for the nine months ended September 30, 2023 and 2022, respectively.
We incurred costs related to revenue share agreements with related parties which are capitalized within deferred contract acquisition costs. We capitalized $1,952 and $397 for the three months ended September 30, 2023 and 2022, respectively, and $4,039 and $2,167 for the nine months ended September 30, 2023 and 2022, respectively.
Additionally, a related party provided call center support and other services to the Company for which we recorded an expense within cost of revenue of $80 and $186 for the three months ended September 30, 2023 and 2022, respectively, and $433 and $680 for the nine months ended September 30, 2023 and 2022, respectively.
A related party provided marketing and copywriting services to the Company for which we recorded an expense within cost of revenue of $644 and $1,229 for the three and nine months ended September 30, 2023, respectively, and $86 for the three months ended September 30, 2022.
A related party also provided certain corporate functions to the Company and the costs of these services are charged to us. We recorded $24 and $21 for the three months ended September 30, 2023 and 2022, respectively, and $78 and $64 for the nine months ended September 30, 2023 and 2022, respectively, within related party expense in the accompanying condensed consolidated statement of operations. We held balances of $1,015 and $1,043 as of September 30, 2023 and December 31, 2022, respectively, of related party payables related to revenue share expenses, call center support, and the services noted above. The balances with our related party are presented net and are included in related party payables, net in the condensed consolidated balance sheet.
We earned fees and provided certain accounting and marketing services to companies owned by certain of MarketWise’s Class B stockholders. As a result, we recognized $97 and $225 in other income, net for the three months ended September 30, 2023 and 2022, respectively, and $604 and $478 for the nine months ended September 30, 2023 and 2022, respectively. Related party receivables related to these services were $97 and $403 as of September 30, 2023 and December 31, 2022, respectively.
We lease offices from related parties. Lease payments made to related parties were $441 and $418 for the three months ended September 30, 2023 and 2022, respectively, and $1,309 and $1,337 for the nine months ended September 30, 2023 and 2022, respectively. Rent expense of $602 and $588 for the three months ended September 30, 2023 and 2022, respectively, and $1,802 and $1,729 for the nine months ended September 30, 2023 and 2022, respectively, related to leases with related parties, and was recognized in general and administrative expenses.
At September 30, 2023 and December 31, 2022, ROU assets of $7,804 and $9,210 and lease liabilities of $6,124 and $7,041, respectively, are associated with leases with related parties.
In April 2020 we provided a loan to a related party and recognized a related party note receivable from the unitholder of $1,148. We recognized $6 and $16 in interest income for the three and nine months ended September 30, 2022, respectively. This loan was repaid in October 2022.

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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
13.    Supplemental Cash Flow Information
Supplemental cash flow disclosures are as follows:
Nine Months Ended September 30,
20232022
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest$675 $589 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases(1,486)(1,731)
Operating lease right-of-use assets obtained in exchange for lease obligations(76)(795)
Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions— (50)
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Capitalized software included in accounts payable71 120 
Recording of deferred tax assets and capital contribution related to exchanges of Class B common stock to Class A common stock2,466 — 
As of September 30,
20232022
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents$194,023 $147,216 
Restricted cash— — 
Total$194,023 $147,216 
14.    Stockholders’ Equity
The Company’s capital stock consists of (i) issued and outstanding Class A common stock with a par value of $0.0001 per share, and (ii) issued and outstanding Class B common stock with a par value of $0.0001 per share.
The table set forth below reflects information about the Company’s equity, as of September 30, 2023. The 3,051,000 Sponsor earnout shares held in escrow and the 2,000,000 management member earnout shares are considered contingently issuable shares and therefore excluded from the number of Class A common stock issued and outstanding in the table below.
AuthorizedIssuedOutstanding
Common stock – Class A950,000,000 34,096,437 34,096,437 
Common stock – Class B300,000,000 288,342,303 288,342,303 
Preferred stock100,000,000 — — 
Total1,350,000,000 322,438,740 322,438,740 
Each share of Class A and Class B common stock entitles the holder to one vote per share. Only holders of Class A common stock have the right to receive dividends. In the event of liquidation, dissolution or winding up of the affairs of the Company, only holders of Class A common stock have the right to receive liquidation proceeds, while the holders of Class B common stock are entitled to only the par value of their shares. Class B common stock can be issued only to members of MarketWise, LLC, their respective successors and permitted transferees. Under the terms of the Third Amended and Restated Limited Liability Company Operating Agreement of MarketWise, LLC (the “MarketWise Operating Agreement”), and subject to certain restrictions set forth therein, the MarketWise Members are entitled to have their LLC Units redeemed or exchanged for shares of our Class A common stock, at
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MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
our option. If redeemed for cash at the Company’s option, such cash would have to be generated through an offering of shares to the market such that there would not be any situation where there would be a net cash obligation to the Company for such redemption. Shares of our Class B common stock held by any such redeeming or exchanging MarketWise Member will be canceled for no additional consideration on a one-for-one basis with the redeemed or exchanged LLC Units whenever such MarketWise Member’s LLC Units are so redeemed or exchanged. The MarketWise Members may exercise such redemption rights for as long as their LLC Units remain outstanding. Our Board has discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.
On May 11, 2023, our Board declared a cash dividend to its Class A common stockholders in the amount of $0.01 per share, totaling $0.4 million, and a cash distribution to holders of LLC Units in the amount of $0.01 per unit, totaling $2.9 million, to stockholders and unitholders of record as of the close of business on June 1, 2023. On July 20, 2023, $0.3 million of the dividends and the full distribution of $2.9 million was paid to stockholders and unitholders, respectively.
On August 3, 2023, the Board declared a cash dividend to its Class A common stockholders in the amount of $0.01 per share, totaling $0.5 million, and a cash distribution to holders of LLC Units in the amount of $0.01 per unit, totaling $2.9 million, to stockholders and unitholders of record as of the close of business on September 5, 2023. On October 26, 2023, $0.3 million of the dividends and the full distribution of $2.9 million was paid to stockholders and unitholders, respectively.
Certain of the dividends are attributable to earnout shares and dividend equivalents are attributable to unvested RSUs, and are therefore forfeitable. The Company recorded the full dividend payable as a charge to additional paid-in capital on the declaration date, and forfeitures are reversed as they occur.
The Company intends to pay dividends quarterly in the future, subject to Board approval of any such dividends. Dividends payable and distributions payable are included in other current liabilities in the condensed consolidated balance sheet.
During the three and nine months ended September 30, 2023, pursuant to the terms of the MarketWise Operating Agreement, MarketWise Members exchanged an aggregate of 1,500,000 and 2,750,000 LLC Units, together with an equal number of shares of Class B common stock for 1,500,000 and 2,750,000 newly-issued shares of the Company’s Class A common stock, respectively. As a result of the exchanges, the Company recognized adjustments to non-controlling interests. As of September 30, 2023, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 10.6% and the noncontrolling interest was 89.4%.
On November 4, 2021, our Board authorized the repurchase of up to $35.0 million in aggregate of shares of the Company’s Class A common stock. We did not repurchase any shares during the three and nine months ended September 30, 2023. We did not repurchase any shares during the three months ended September 30, 2022, and we repurchased 2,484,717 shares totaling $13.1 million in aggregate, including fees and commissions of $25 for the nine months ended September 30, 2022. Since the inception of the program we have repurchased 2,984,987 total shares. The maximum dollar value of shares that may yet to be purchased under the plan was $18.6 million as of September 30, 2023. The share repurchase program expired by its terms on November 3, 2023.
For each share of Class A common stock the Company repurchased under the share repurchase program, MarketWise, LLC, the Company’s direct subsidiary, redeemed one LLC Unit held by the Company, decreasing the percentage ownership of MarketWise, LLC by the Company and relatively increasing the ownership by the other unitholders.

15.    Warrant Exchange
On August 17, 2022, we commenced an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to our outstanding Public Warrants and Private Placement Warrants to purchase shares of Class A common stock at $11.50 per share. Each holder was offered the opportunity to receive 0.1925 shares of
30

MARKETWISE, INC.
Notes to the Condensed Consolidated Financial Statements (Unaudited)
(Dollar amounts in thousands, except share, unit, per share, and per unit data)
Class A common stock in exchange for each outstanding warrant tendered by the holder and exchanged pursuant to the Offer. Concurrently with the Offer, we solicited consents from holders of the warrants to amend the warrant agreement that governs all of the warrants (the “Warrant Agreement”) to permit us to require that each warrant outstanding upon the closing of the Offer be exchanged for 0.17325 shares of Class A common stock, which is a ratio 10% less than the exchange ratio applicable to the Offer (such amendment, the “Warrant Amendment”).
On September 14, 2022, we concluded the Offer and Consent Solicitation with approximately 96% of the outstanding warrants validly tendered and not withdrawn prior to the expiration of the Offer and Consent Solicitation. Accordingly, on September 19, 2022, we issued 5,725,681 shares of Class A common stock in exchange for the 29,743,932 warrants tendered in the Offer.
Additionally, we received the requisite approval of warrant holders to enter into the Warrant Amendment. Accordingly, we and Continental Stock Transfer & Trust Company entered into the Warrant Amendment, dated September 15, 2022, and we exercised our right, in accordance with the terms of the Warrant Amendment, to exchange each warrant that was outstanding upon the closing of the Offer for 0.17325 shares of Class A common stock per warrant. On September 30, 2022, we issued 214,058 shares of Class A common stock in exchange for the 1,236,061 outstanding warrants after closing of the Offering. As a result, there are no outstanding warrants as of September 30, 2022, and the warrants were delisted from trading on the Nasdaq. In connection with the warrant exchange, we paid out a de minimis amount of cash in lieu of fractional shares.
We incurred $2.1 million of costs directly related to the warrant exchange, consisting primarily of dealer manager fees and professional, legal, printing, filing, regulatory, and other costs during the three months ended September 30, 2022. These costs were recorded in general and administrative expenses on the condensed consolidated statements of operations as the transactions did not generate any proceeds to us and therefore the costs did not qualify to be deferred or charged to additional paid-in-capital under ASC 340-10-S99-1.

16.    Subsequent Events
Subsequent events have been evaluated through November 9, 2023, which is the date that the financial statements were issued.
On October 18, 2023, our Board declared a special cash dividend to the Company’s Class A common stockholders in the amount of $0.15 per share and a special cash distribution to holders of LLC Units in the amount of $0.15 per unit, totaling approximately $50 million in the aggregate, to stockholders and unitholders of record as of the close of business on November 10, 2023. The special dividend and distribution will be paid on December 1, 2023.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the financial condition and results of operations of MarketWise, Inc., a Delaware corporation (“MarketWise,” “we,” “us,” and “our”), should be read together with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”). The following discussion contains forward-looking statements. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ materially from those projected in the forward-looking statements include, but are not limited to, those discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” in this report.
Overview
We are a leading multi-brand platform of subscription businesses that provides premium financial research, software, education, and tools for self-directed investors. We offer a comprehensive portfolio of high-quality, independent investment research, as well as several software and analytical tools, on a subscription basis.
MarketWise started in 1999 with the simple idea that, if we could publish intelligent, independent, insightful, and in-depth investment research and treat the subscriber the way we would want to be treated, then subscribers would renew their subscriptions and stay with us. Over the years, we have expanded our business into a comprehensive suite of investment research products and solutions. We now produce a diversified product portfolio from a variety of financial research brands such as Stansberry Research, Palm Beach Research, Chaikin Analytics, and InvestorPlace. Our entire investment research product portfolio is 100% digital and channel agnostic, and we offer all of our research across a variety of platforms, including desktop, laptop, and mobile devices, including tablets and mobile phones.
Today, we benefit from the confluence of a leading editorial team, diverse portfolio of content and brands, and comprehensive suite of investor-centric tools that appeal to a broad subscriber base.
In October 2023, the Company announced a number of board and leadership changes that included the Company’s founder returning as Chairman of the Board and CEO, and that it has initiated an internal review of current operations with the intent to enhance alignment, improve efficiency, and increase cash flow and intrinsic value of the business.
As a result of continuing losses, the Company recorded an impairment loss on Buttonwood Publishing’s intangible assets totaling $584 during the third quarter of 2023. We will continue to evaluate our Buttonwood Publishing business for additional impairment (if any), which could have a material impact on our results of operations. The remaining intangible assets of Buttonwood Publishing comprised $7.7 million of our remaining $14.3 million balance of intangible assets, net as of September 30, 2023. See Note 5 – Goodwill and Intangible Assets, Net to our unaudited condensed consolidated and combined financial statements included elsewhere in this Form 10-Q for further details.

Key Factors Affecting Our Performance
We believe that our growth and future success are dependent upon several factors, including those below and those noted in the “Risk Factors” section in the Annual Report. The key factors below represent significant business opportunities as well as challenges that we must successfully address in order to continue our growth and improve our financial results.
Growing our subscriber base with compelling unit economics. We are highly focused on continuing to acquire new subscribers to support our long-term growth. Our marketing spend is a large driver of new
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subscriber growth. At the heart of our marketing strategy is our compelling unit economics that combine long-term subscriber relationships, highly scalable content delivery, cost-effective customer acquisition, and high-margin conversions.
Our Paid Subscribers as of December 31, 2022 generated average customer lifetime Billings of approximately $1,815, resulting in a LTV/CAC (as defined below) ratio of approximately 2.0x. On average, it takes us approximately 0.6 to 1.5 years for a Paid Subscriber’s cumulative net revenue to exceed the total cost of acquiring that subscriber (which includes fixed costs, such as marketing salaries). For more information on our LTV/CAC ratio and the components of this ratio, see “—Definitions of Metrics.
We adjust our marketing spend to drive efficient and profitable customer acquisition. We can adjust our marketing spend in near real-time, and we monitor costs per acquisition relative to the cart value of the initial subscription. We seek 90-day payback periods to cover this variable component of the direct marketing spend.
As of September 30, 2023, our Paid Subscriber base was 774 thousand, down 120 thousand, or 13.4% as compared to 894 thousand at September 30, 2022. Our Paid Subscriber base is comprised of subscribers obtained through both direct-to-paid acquisition and free-to-paid conversions. Since 2019, direct-to-paid acquisition has accounted for approximately two-thirds of our annual Paid Subscriber acquisition, and is largely driven by display ads and targeted email campaigns.
Our free subscription products also serve as a significant source of new Paid Subscribers, accounting for approximately one-third of our annual Paid Subscriber acquisition since 2019. Our free-to-paid and active free-to-paid conversion rate reflects the rate at which Free Subscribers and Active Free Subscribers purchase paid subscription products. Our annual free-to-paid and annual active free-to-paid conversion rates were approximately 1% to 2% and 2% to 4%, respectively, between 2020 and 2022. Over that same three year period, our cumulative free-to-paid and cumulative active free-to-paid conversion rates were 4% and 10%, respectively.
Retaining and expanding relationships with existing subscribers. We believe that we have a significant opportunity to expand our relationships with our large base of Free and Paid Subscribers. Thanks to the quality of our products, we believe our customers will continue their relationship with us and extend and increase their subscriptions over time. As we deepen our engagement with our subscribers, our customers tend to purchase more and higher-value products. Our ARPU (as defined below) as of September 30, 2023 was $496, which decreased 10.8% from $556 as of September 30, 2022. For more information on ARPU, see “Key Business Metrics—Average Revenue Per User.
Conversion rates are important to our business because they are an indicator of how engaged and how well we are connecting with our subscribers. The time it takes our customers to move from our free products to our lower-priced paid subscriptions and eventually to high-end products and membership “bundled” offerings impacts our growth in net revenue, Billings, and ARPU.
Our high-value composition rate reflects the portion of our Paid Subscribers that, over their lifetime, purchased more than $600 of our products. We believe our high-value composition rate reflects our ability to retain existing subscribers through renewals and our ability to expand our relationship with them when those subscribers purchase higher-value subscriptions. Our ultra high-value composition rate reflects the portion of our high-value subscribers that have purchased more than $5,000 of our products over their lifetime. We believe our ultra high-value composition rate reflects our ability to successfully build lifetime relationships with our subscribers, often across multiple products and brands. These high-value and ultra high-value subscribers are at the heart of our business model, and are particularly important in periods of time when we are bringing in fewer new subscribers. These high-value and ultra high-value subscribers continue to see the value in our products and are continuing to purchase products at rates similar to historic trends, which is currently driving the majority of our Billings. As of September 30, 2023, our high-value composition rate was 47%. Our ultra high-value composition rate – ultra high-value subscribers as a percent of high-value subscribers – was 39%.
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Definitions of Metrics
Throughout this discussion and analysis, a number of our financial and operating metrics are referenced which we do not consider to be key business metrics, but which we review to monitor performance, and which we believe may be useful to investors. These are:
Annual free-to-paid and annual active free-to-paid conversion rates: The Company has historically defined free-to-paid conversion rate as the number of Free Subscribers who purchased a subscription during the period divided by the average number of Free Subscribers during the period. In addition, the Company has historically defined active free-to-paid conversion rate as the number of Active Free Subscribers who purchased a subscription during the period divided by the average number of Active Free Subscribers during the period. There have been no changes to the calculation of free-to-paid or active free-to-paid conversion rates. However, the Company has revised the definition of free-to-paid and active free-to-paid conversion rates to provide clarity in how they are calculated.
We calculate our free-to-paid conversion rate as the sum of (i) the number of Free Subscribers who purchased their first subscription during the period and (ii) the number of Free Subscribers who purchased their first subscription during the period after six months of not having an active paid subscription across all of MarketWise divided by the average number of Free Subscribers during the period. We calculate our active free-to-paid conversion rate as the sum of (i) the number of Active Free Subscribers who purchased their first subscription during the period and (ii) the number of Active Free Subscribers who purchased their first subscription during the period after six months of not having an active paid subscription across all of MarketWise divided by the average number of Active Free Subscribers during the period. We believe our free-to-paid and active free-to-paid conversion rates are indicators of the type of Free Subscribers that we are signing up and the quality of our content and marketing efforts. Investors should consider free-to-paid and active free-to-paid conversion rates as two of the factors in evaluating our ability to maintain a robust pipeline for new customer acquisition.
Cumulative free-to-paid and cumulative active free-to-paid conversion rates: We calculate our cumulative free-to-paid conversion rate as the sum of (i) the number of Free Subscribers who purchased their first subscription during the trailing three-year period and (ii) the number of Free Subscribers who purchased their first subscription during the trailing three-year period after six months of not having an active paid subscription across all of MarketWise divided by the average number of Free Subscribers during the trailing three-year period. We calculate our cumulative active free-to-paid conversion rate as the sum of (i) the number of Active Free Subscribers who purchased their first subscription during the trailing three-year period and (ii) the number of Active Free Subscribers who purchased their first subscription during the trailing three-year period after six months of not having an active paid subscription across all of MarketWise divided by the average number of Active Free Subscribers during the trailing three-year period.
High-value composition rate: Our high-value composition rate reflects the number of Paid Subscribers who have purchased >$600 in aggregate over their lifetime as of a particular point in time divided by the total number of Paid Subscribers as of that same point in time.
Landing Page Visits: The cumulative number of visits to our standalone web pages created specifically for each marketing campaign. We believe landing page visits are a measure of customer engagement.
LTV/CAC ratio: We calculate LTV/CAC ratio as LTV divided by CAC. We use LTV/CAC ratio because it is a standard metric for subscription-based businesses, and we believe that an LTV/CAC ratio above 3x is considered to be indicative of strong profitability and marketing efficiency. We believe that an increasing LTV per subscriber reflects our existing subscribers recognizing our value proposition, which will expand their relationship with us across our platform over time, either through a combination of additional product purchases or by joining our membership offerings. Investors should consider this metric when evaluating our ability to achieve a return on our marketing investment. Lifetime value (“LTV”) represents the average margin on average customer lifetime Billings (that is, the estimated cumulative spend across a customer’s lifetime). Customer acquisition cost (“CAC”) is defined as direct marketing spend, plus external revenue share expense,
34


plus retention and renewal expenses, plus copywriting and marketing salaries, plus telesales salaries and commissions, plus customer service commissions.
Net revenue retention: Net revenue retention is defined as Billings from all prior period cohorts in the current period, divided by all Billings from the prior period. We believe that a high net revenue retention rate is a measure of customer retention and an indicator of the engagement of our subscribers with our products. Investors should consider net revenue retention as an ongoing measure when evaluating our subscribers’ interest in continuing to subscribe to our products and spending more with us over time.
Ultra high-value composition rate: Our ultra high-value composition rate reflects the number of Paid Subscribers who have purchased >$5,000 in aggregate over their lifetime as of a particular point in time divided by the number of high-value subscribers as of that same point in time. We believe our ultra high-value composition rate reflects our ability to successfully build lifetime relationships with our subscribers, often across multiple products and brands. Investors should consider ultra high-value composition rate as a factor in evaluating our ability to retain and expand our relationship with our subscribers.
Key Business Metrics
We review the following key business metrics to measure our performance, identify trends, formulate financial projections, and make strategic decisions. 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.
As of and for the
Three Months Ended September 30,
As of and for the
Nine Months Ended September 30,
As of and for the
Three Months Ended June 30, 2023
20232022% change20232022% change% change
Free Subscribers16,341,577 15,415,263 6.0 %16,341,577 15,415,263 6.0%15,948,652 2.5 %
Paid Subscribers773,827 893,764 (13.4)%773,827 893,764 (13.4)%750,287 3.1 %
ARPU$496 $556 (10.8)%$496 $556 (10.8)%$490 1.2 %
Billings (in thousands)$95,513 $105,062 (9.1)%$288,854 $358,564 (19.4)%$96,170 (0.7)%
Free Subscribers. 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. Free subscriptions are often daily publications that include some commentary about the stock market, investing ideas, or other specialized topics. Included within our free publications are advertisements and editorial support for our current marketing campaigns. While subscribed to our publications, Free Subscribers learn about our editors and analysts, get to know our products and services, and learn more about ways we can help them be a better investor.
In order to better describe our universe of Free Subscribers, we recognize sub-categories of Free Subscribers – Active and Passive Free Subscribers. 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. Our analysis indicates that this population of Active Free Subscribers is more likely to continue to consume content and convert to a Paid Subscriber. Passive Free Subscribers represent those individuals who have not directly received our content during the most recent quarter, however, they remain included in our Free Subscriber population as defined above and may continue to consume content from our platforms. We expect the composition of our Active and Passive Free Subscribers will change over time as we refine our marketing and data analysis techniques aimed at converting Free Subscribers to Paid Subscribers.
Free Subscribers increased by 0.9 million, or 6.0%, to 16.3 million at September 30, 2023 as compared to 15.4 million at September 30, 2022. As of September 30, 2023, Active Free Subscribers decreased by 0.3 million, or 6.9%, to 4.0 million, compared to 4.3 million as of September 30, 2022. The year over year decline
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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 0.4 million, or 2.5% to 16.3 million as of September 30, 2023 as compared to 15.9 million as of June 30, 2023. As of September 30, 2023, Active Free Subscribers increased by 41 thousand, or 1.0% to 4.0 million, compared to 3.9 million as of June 30, 2023.
Paid Subscribers. We define Paid Subscribers as the total number of unique subscribers with at least one paid subscription at the end of the period. We view the number of Paid Subscribers at the end of a given period as a key indicator of the attractiveness of our products and services, as well as the efficacy of our marketing in converting Free Subscribers to Paid Subscribers and generating direct-to-paid acquisitions. We grow our Paid Subscriber base through marketing directly to prospective and existing subscribers across a variety of media, channels, and platforms.
Total Paid Subscribers decreased by 120 thousand, or 13.4%, to 774 thousand as of September 30, 2023 as compared to 894 thousand at September 30, 2022, driven by softening consumer engagement that began in third quarter 2022 as well as a significant decrease in direct marketing spend over the past four quarters in total as we focus on maintenance of profitability.
Total Paid Subscribers increased by 24 thousand, or 3.1%, to 774 thousand as of September 30, 2023 as compared to 750 thousand as of June 30, 2023. Gross new subscribers increased 87% compared to second quarter 2023 as we increased our marketing spend significantly in the face of favorable per unit costs and acceptable paybacks on these investments.
Subscriber count churn has ranged from approximately 1.8% to 2.7% per month between 2020 and 2022. As of September 30, 2023, the average monthly churn over the trailing twelve months was near the higher end of this range. Almost all of the subscribers who churned in third quarter 2023 did so having owned only one entry level publication. This is evidenced by the fact that their ARPU approximately matched the subscription price of our entry level publications. We believe our net revenue retention rate, which has averaged over 80% from 2020 to 2022, is a more meaningful gauge of subscriber satisfaction.
Average Revenue Per User. We calculate ARPU as the trailing four quarters of net Billings divided by the average number of quarterly total Paid Subscribers over that period. We believe ARPU is a key indicator of how successful we are in attracting subscribers to higher-value content. We believe that our high ARPU is indicative of the trust we build with our subscribers and of the value they see in our products and services.
ARPU decreased by $60, or 10.8%, to $496 as of September 30, 2023 as compared to $556 as of September 30, 2022. The year-over-year decrease was driven by a 24% decrease in trailing four quarter Billings, while trailing four quarter Paid Subscribers only decreased by 14%. The decrease in trailing four quarter Billings was driven by reduced engagement of prospective and existing subscribers, as further discussed in —Billings below.
ARPU increased by $6, or 1.2%, to $496 as of September 30, 2023 as compared to $490 as of June 30, 2023. The sequential increase was driven by a 4% decrease in trailing average Paid Subscribers, while trailing four-quarter Billings decreased only 2%.
While they have been in decline up until this quarter, our ARPUs remain high relative to other subscription businesses, and we attribute this to the quality of our content and effective sales and marketing efforts regarding higher value content, bundled subscriptions and membership subscriptions. These subscriptions have compelling economics that allow us to recoup our initial marketing spend made to acquire these subscribers. Specifically, our payback period was estimated at 1.5 years, 0.9 years, and 0.6 years for the years ended December 31, 2022, 2021 and 2020, respectively. We have experienced an increase in the 2022 payback period primarily due to a combination of increased customer acquisition costs and the hesitancy of these subscribers to make additional purchases. The payback period reached the low side of the historical range in 2020 as a result of expanded conversion rates and, to a far lesser degree, decreasing costs for media spend as demand dropped as
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a result of the pandemic. We have seen the costs for media spend revert back to higher rates in 2021 which continued through third quarter 2023.
Billings. Billings represents amounts invoiced to customers. We measure and monitor our Billings because it provides insight into trends in cash generation from our marketing campaigns. We generally bill our subscribers at the time of sale and receive full cash payment up front, and defer and recognize a portion of the related revenue ratably over time for term and membership subscriptions. For certain subscriptions, we may invoice our Paid Subscribers at the beginning of the term, in annual or monthly installments, and, from time to time, in multi-year installments. Only amounts invoiced to a Paid Subscriber in a given period are included in Billings. While we believe that Billings provides valuable insight into the cash that will be generated from sales of our subscriptions, this metric may vary from period to period for a number of reasons and, therefore, Billings has a number of limitations as a quarter-over-quarter or year-over-year comparative measure. These reasons include, but are not limited to, the following: (i) a variety of contractual terms could result in some periods having a higher proportion of annual or membership subscriptions than other periods; (ii) fluctuations in payment terms may affect the Billings recognized in a particular period; and (iii) the timing of large campaigns may vary significantly from period to period.
Billings decreased by $9.5 million, or 9.1%, to $95.5 million for the three months ended September 30, 2023 as compared to $105.1 million for the three months ended September 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 third quarter 2023.
Approximately 40% of our Billings during the three months ended September 30, 2023 came from membership subscriptions, 59% from term subscriptions, and 1% from other Billings, as compared to 33% from membership subscriptions, 66% from term subscriptions, and 1% from other Billings during the three months ended September 30, 2022.
Billings decreased by $0.7 million, or 0.7%, to $95.5 million for the three months ended September 30, 2023 as compared to $96.2 million for the three months ended June 30, 2023. With overall consumer engagement, as measured by landing pages, as well as overall conversion rates up versus second quarter 2023, we attribute the modest decline in Billings to a continuance of subscriber delays in purchasing higher price point subscriptions as they continue to navigate the uncertain economy.

Components of Our Results of Operations
Net Revenue
We generate net revenue primarily from delivering term and membership subscription-based financial research, publications, and SaaS offerings to individual subscribers through our online platforms, advertising arrangements, print products, events, and revenue share agreements.
Net revenue is recognized ratably over the duration of the subscriptions, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. In addition to term subscriptions, we offer membership subscriptions where we receive a large upfront payment when the subscriber enters into the contract, and for which we will receive a lower annual maintenance fee thereafter. Subscribers are typically billed in advance of the subscriptions. Much of our net revenue is generated from subscriptions entered into during previous periods. Consequently, any decreases in new subscriptions or renewals in any one period may not be immediately reflected as a decrease in net revenue for that period, but could negatively affect our net revenue in future quarters. This also makes it difficult for us to rapidly increase our net revenue through the sale of additional subscriptions in any period, as net revenue is recognized over the term of the subscription agreement. We expect subscription net revenue to fluctuate due to the timing and relative mix in recent and prior periods between term subscriptions and related renewals, and membership subscriptions and related maintenance fees.
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We also recognize net revenue through revenue share agreements where we earn a commission for successful sales by other parties generated through the use of our customer list. We expect advertising and other net revenue to increase in absolute dollars as our business grows.
Employee Compensation Costs
Employee compensation costs, or payroll and payroll-related costs, include salaries, bonuses, benefits, and stock-based compensation for employees classified within cost of revenue, sales and marketing, and general and administrative, and also includes sales commissions for sales and marketing employees.
We recognized stock-based compensation expenses related to our 2021 Incentive Award Plan, our ESPP, and our profits interests awards of $3.6 million and $2.2 million during the three months ended September 30, 2023 and 2022, and $11.0 million and $7.2 million during the nine months ended September 30, 2023 and 2022, respectively.
The total amount of stock-based compensation expense included within each of the respective line items in the condensed consolidated statement of operations is as follows:
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Cost of revenue$688 $438 $2,379 $1,496 
Sales and marketing711 514 2,519 1,655 
General and administrative2,176 1,201 6,058 4,039 
Total stock based-compensation expense$3,575 $2,153 $10,956 $7,190 
Cost of Revenue
Cost of revenue consists of costs associated with producing and publishing our content, including payroll, payroll-related costs and stock-based compensation expenses related to the 2021 Incentive Award Plan and the ESPP, hosting fees, customer service, credit card processing fees, product costs, and allocated overhead. Cost of revenue is exclusive of depreciation and amortization, which is shown as a separate line item.
We expect cost of revenue to increase as our business grows, including as a result of new acquisitions, joint ventures, and other strategic transactions. However, the level and timing of our variable compensation may not match the pattern of how net revenue is recognized over the subscription term. Therefore, we expect that our cost of revenue will fluctuate as a percentage of net revenue in the future.
Sales and Marketing
Sales and marketing consists of costs associated with marketing and selling our products and services, including payroll, payroll-related costs and stock-based compensation expenses related to the 2021 Incentive Award Plan and the ESPP, amortization of deferred contract acquisition costs, agency costs, advertising campaigns, and branding initiatives. Sales and marketing expenses are exclusive of depreciation and amortization shown as a separate line item.
We expect that our sales and marketing expense will increase in absolute dollars and continue to be our largest operating expense for the foreseeable future as we expand our sales and marketing efforts. However, because we incur sales and marketing expenses up front when we launch campaigns to drive sales, while we recognize net revenue ratably over the underlying subscription term, we expect that our sales and marketing expense will fluctuate as a percentage of our net revenue over the long term. Sales and marketing expenses may fluctuate further as a result of acquisitions, joint ventures, or other strategic transactions we undertake in the future.
Research and Development
Research and development consists of costs associated with technical services, including payroll, payroll-related costs and stock-based compensation expenses related to the 2021 Incentive Award Plan and the ESPP, software
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expenses, and hosting expenses. Research and development expenses are exclusive of depreciation and amortization shown as a separate line item.
We expect that our research and development expense will increase in absolute dollars as our business grows, including as a result of new acquisitions, joint ventures, and other strategic transactions, particularly as we incur additional costs related to continued investments in our platform.
General and Administrative
General and administrative consists of costs associated with our finance, legal, information technology, human resources, executive, and administrative personnel, including payroll, payroll-related costs and stock-based compensation expenses related to the 2021 Incentive Award Plan, the ESPP, and profits interests awards, legal fees, corporate insurance, office expenses, professional fees, and travel and entertainment costs.
We expect to continue to incur general and administrative expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations, and professional services. General and administrative expenses may fluctuate further as a result of acquisitions, joint ventures, or other strategic transactions we undertake in the future.
Depreciation and Amortization
Depreciation and amortization expenses consist of amortization of trade names, customer relationship intangibles, and software development costs, as well as depreciation on other property and equipment such as leasehold improvements, furniture and fixtures, and computer equipment. We expect depreciation and amortization expenses to increase on an absolute dollar basis as our business grows, including as a result of new acquisitions, joint ventures, and other strategic transactions, but to remain generally consistent as a percentage of total net revenue.
Impairment of Intangible Assets
Impairment of intangible assets consists of impairment losses related to our Buttonwood Publishing business.
Related Party Expense
Related party expenses primarily consist of board of director compensation, revenue share expenses, and costs for certain corporate functions performed by a related party.
Other Income, Net
Other income, net primarily consists of the net gains on our embedded derivative instruments.
Interest Income (Expense), Net
Interest income (expense), net primarily consists of interest income from our money market accounts, as well as interest expense related to our 2021 Credit Facility.
Net Income Attributable to Noncontrolling Interests
As of September 30, 2023, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 10.6% and the noncontrolling interest was 89.4%. For the three and nine months ended September 30, 2023, net income attributable to controlling interests included a $0.7 million tax provision and a $2.0 million tax provision, respectively, both of which were solely attributable to the controlling interest.
As of September 30, 2022, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 9.0% and the noncontrolling interest was 91.0%. For the three months ended September 30, 2022 net income attributable to controlling interests included a $3.9 million loss on warrant liabilities and a $1.4 million tax provision, and for the
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nine months ended September 30, 2022 net income attributable to controlling interests included a $14.9 million gain on warrant liabilities and a $3.9 million tax provision, both of which were solely attributable to the controlling interest.


Results of Operations
The following table sets forth our results of operations for the periods presented:
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net revenue$105,799 $119,297 $334,777 $383,383 
Related party revenue351 637 1,250 1,363 
Total net revenue106,150 119,934 336,027 384,746 
Operating expenses:
Cost of revenue(1)
13,812 14,482 43,737 48,328 
Sales and marketing(1)
52,466 51,635 150,226 184,922 
General and administrative(1)
25,005 28,986 80,667 79,895 
Research and development(1)
2,085 2,173 6,778 6,740 
Depreciation and amortization1,001 836 2,979 2,053 
Impairment of intangible assets584 — 584 — 
Related party expense155 96 487 290 
Total operating expenses95,108 98,208 285,458 322,228 
Income from operations11,042 21,726 50,569 62,518 
Other income (expense), net182 (3,651)807 15,568 
Interest income (expense), net1,511 (183)3,062 (572)
Income before income taxes12,735 17,892 54,438 77,514 
Income tax expense691 1,383 2,046 3,945 
Net income12,044 16,509 52,392 73,569 
Net income attributable to noncontrolling interests11,904 20,521 50,749 59,875 
Net income (loss) attributable to MarketWise, Inc.$140 $(4,012)$1,643 $13,694 
(1)Cost of revenue, sales and marketing, general and administrative, and research and development expenses are exclusive of depreciation and amortization shown as a separate line item.
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The following table sets forth our consolidated statements of operations data expressed as a percentage of net revenue for the periods indicated:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net revenue100.0 %100.0 %100.0 %100.0 %
Operating expenses:
Cost of revenue(1)
13.0 %12.1 %13.0 %12.6 %
Sales and marketing(1)
49.4 %43.1 %44.7 %48.1 %
General and administrative(1)
23.6 %24.2 %24.0 %20.8 %
Research and development(1)
2.0 %1.8 %2.0 %1.8 %
Depreciation and amortization0.9 %0.7 %0.9 %0.5 %
Impairment of intangible assets0.6 %— %0.2 %— %
Related party expense0.1 %0.1 %0.1 %0.1 %
Total operating expenses89.6 %81.9 %85.0 %83.8 %
Income from operations10.4 %18.1 %15.0 %16.2 %
Other income (expense), net0.2 %(3.0)%0.2 %4.0 %
Interest income (expense), net1.4 %(0.2)%0.9 %(0.1)%
Income before income taxes12.0 %14.9 %16.2 %20.1 %
Income tax expense0.7 %1.2 %0.6 %1.0 %
Net income11.3 %13.8 %15.6 %19.1 %
Net income attributable to noncontrolling interests11.2 %17.1 %15.1 %15.6 %
Net income (loss) attributable to MarketWise, Inc.0.1 %(3.3)%0.5 %3.6 %
(1)Cost of revenue, sales and marketing, general and administrative, and research and development expenses are exclusive of depreciation and amortization shown as a separate line item.
Comparison of Three Months Ended September 30, 2023 and Three Months Ended September 30, 2022
Net Revenue
(In thousands)Three Months Ended September 30,$ Change% Change
20232022
Net revenue$106,150 $119,934 $(13,784)(11.5)%
Net revenue decreased by $13.8 million, or 11.5%, from $119.9 million for the three months ended September 30, 2022 to $106.2 million for the three months ended September 30, 2023. The decrease in net revenue was primarily driven by a $14.7 million decrease in term subscription revenue, partially offset by a $1.3 million increase in membership subscription revenue.
Term subscription revenue decreased during the three months ended September 30, 2023 primarily due to lower Billings as compared to the 2022 period, which was driven by reduced engagement of prospective and existing subscribers in the 2022 period. Membership subscription revenue, which is initially deferred and recognized over a five-year period, increased during the three months ended September 30, 2023 as a result of an increase in Billings related to membership subscriptions in the current period.
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Operating Expenses
(In thousands)Three Months Ended September 30,$ Change% Change
20232022
Operating expenses:
Cost of revenue$13,812 $14,482 $(670)(4.6)%
Sales and marketing52,466 51,635 831 1.6 %
General and administrative25,005 28,986 (3,981)(13.7)%
Research and development2,085 2,173 (88)(4.0)%
Depreciation and amortization1,001 836 165 19.7 %
Impairment of intangible assets584 — 584 N/M
Related party expenses155 96 59 61.5 %
Total operating expenses$95,108 $98,208 $(3,100)(3.2)%
Cost of Revenue
Cost of revenue decreased by $0.7 million, or 4.6%, from $14.5 million for the three months ended September 30, 2022 to $13.8 million for the three months ended September 30, 2023, primarily driven by a $0.7 million decrease in salaries, taxes and benefits, and a $0.2 million decrease in credit card fees. This was partially offset by a $0.2 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan.
Sales and Marketing
Sales and marketing expense increased by $0.8 million, or 1.6%, from $51.6 million for the three months ended September 30, 2022 to $52.5 million for the three months ended September 30, 2023, primarily driven by a $3.4 million increase in amortization of deferred contract acquisition costs, a $0.3 million increase in outside labor, and a $0.2 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan. This was partially offset by a $3.0 million decrease in marketing expense, as we have reduced our marketing spend as part of our cost reduction initiatives.
General and Administrative
General and administrative expense decreased by $4.0 million, or 13.7%, from $29.0 million for the three months ended September 30, 2022 to $25.0 million for the three months ended September 30, 2023, primarily driven by a $2.9 million decrease in professional fees, a $1.0 million decrease in severance expense, a $0.4 million decrease in salaries, taxes and benefits, a $0.3 million decrease in software expense, and a $0.3 million decrease in insurance expense. This was partially offset by a $1.6 million increase in incentive compensation, and a $1.0 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan, the ESPP, and profits interests awards.
Impairment of Intangible Assets
During the three months ended September 30, 2023, we determined that impairment indicators were present with respect to our Buttonwood Publishing business which we had acquired during 2022, due to continuing losses. As a result, we recorded an impairment loss on Buttonwood Publishing’s intangible assets totaling $584.

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Comparison of Nine Months Ended September 30, 2023 and Nine Months Ended September 30, 2022
Net Revenue
(In thousands)Nine Months Ended September 30,$ Change% Change
20232022
Net revenue$336,027 $384,746 $(48,719)(12.7)%
Net revenue decreased by $48.7 million, or 12.7%, from $384.7 million for the nine months ended September 30, 2022 to $336.0 million for the nine months ended September 30, 2023. The decrease in net revenue was primarily driven by a $37.9 million decrease in term subscription revenue, a $10.2 million decrease in membership subscription revenue and a $0.5 million decrease in non-subscription revenue.
Term subscription revenue decreased during the nine months ended September 30, 2023 primarily due to lower Billings as compared to the 2022 period, which was driven by reduced engagement of prospective and existing subscribers in the 2022 period. Membership subscription revenue, which is initially deferred and recognized over a five-year period, decreased during the nine months ended September 30, 2023 as a result of lower volume of membership subscriptions in current and prior years.
Operating Expenses
(In thousands)Nine Months Ended September 30,$ Change% Change
20232022
Operating expenses:
Cost of revenue$43,737 $48,328 $(4,591)(9.5)%
Sales and marketing150,226 184,922 (34,696)(18.8)%
General and administrative80,667 79,895 772 1.0 %
Research and development6,778 6,740 38 0.6 %
Depreciation and amortization2,979 2,053 926 45.1 %
Impairment of intangible assets584 — 584 N/M
Related party expenses487 290 197 67.9 %
Total operating expenses$285,458 $322,228 $(36,770)(11.4)%
Cost of Revenue
Cost of revenue decreased by $4.6 million, or 9.5%, from $48.3 million for the nine months ended September 30, 2022 to $43.7 million for the nine months ended September 30, 2023, primarily driven by a $2.1 million decrease in salaries, taxes and benefits, a $1.6 million decrease in credit card fees, a $1.3 million decrease in outside labor, primarily related to customer service, and a $0.6 million decrease related to subscription printing and postage. This was partially offset by a $0.9 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan and the ESPP, and a $0.3 million increase in freelance editorial expense.
Sales and Marketing
Sales and marketing expense decreased by $34.7 million, or 18.8%, from $184.9 million for the nine months ended September 30, 2022 to $150.2 million for the nine months ended September 30, 2023, primarily driven by a $47.2 million decrease in marketing expense as we have reduced our marketing spend as part of our cost reduction initiatives and due to higher per unit subscriber acquisition costs, and a $0.7 million decrease in conference expense. This was partially offset by a $11.5 million increase in amortization of deferred contract acquisition costs, a $1.1 million increase in salaries, taxes and benefits, and a $0.9 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan and the ESPP.
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General and Administrative
General and administrative expense increased by $0.8 million, or 1.0%, from $79.9 million for the nine months ended September 30, 2022 to $80.7 million for the nine months ended September 30, 2023, primarily driven by a $6.3 million increase in incentive compensation, a $2.8 million increase related to sales tax, a $2.0 million increase in stock-based compensation expense related to awards under the 2021 Incentive Award Plan, the ESPP, and profits interests awards, and a $1.0 million increase in outside labor. This was partially offset by a $3.3 million decrease in salaries, taxes and benefits, a $2.8 million decrease in professional fees, a $1.4 million decrease in severance expense, a $1.3 million decrease in professional fees, a $0.8 million decrease in insurance expense, a $0.8 million decrease in non-software subscriptions, and a $0.7 million decrease in software expense.
Impairment of Intangible Assets
During the nine months ended September 30, 2023, we determined that impairment indicators were present with respect to our Buttonwood Publishing business which we had acquired during 2022, due to continuing losses. As a result, we recorded an impairment loss on Buttonwood Publishing’s intangible assets totaling $584.
Non-GAAP Financial Measures
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 below 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.
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
20232022% change20232022% change
Adjusted CFFO$12,055$13,091(7.9)%$44,901$40,9539.6%
Adjusted CFFO Margin12.6 %12.5 %15.5 %11.4 %
Adjusted CFFO / Adjusted CFFO Margin
In addition to our results determined in accordance with GAAP, we disclose the non-GAAP financial measures Adjusted CFFO and Adjusted CFFO Margin. We define Adjusted CFFO as cash flow from operations plus or minus any non-recurring items. We define Adjusted CFFO Margin 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.
Adjusted CFFO and Adjusted CFFO Margin have limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of other GAAP financial measures, such as cash flow from operations or operating cash flow margin. Some of the limitations of using Adjusted CFFO and Adjusted CFFO Margin are that these metrics may be calculated differently by other companies in our industry.
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.
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The following table provides a reconciliation of net cash provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted CFFO for each of the periods presented:
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
20232022% change20232022% change
Net cash provided by operating activities$12,055 $9,901 21.8%$44,901 $37,763 18.9%
Non-recurring expenses— 3,190 (100.0)%— 3,190 (100.0)%
Adjusted CFFO $12,055 $13,091 (7.9)%$44,901 $40,953 9.6%
N/M: Not meaningful

The following table provides the calculation of net cash provided by operating activities as a percentage of total net revenue, the most directly comparable financial measure in accordance with GAAP, and Adjusted CFFO Margin for each of the periods presented:
(In thousands)Three Months Ended September 30,Nine Months Ended September 30,
20232022% change20232022% change
Net cash provided by operating activities$12,055$9,90121.8%$44,901$37,76318.9%
Total net revenue106,150119,934(11.5)%336,027384,746(12.7)%
Net cash provided by operating activities margin11.4 %8.3 %13.4 %9.8 %
Adjusted CFFO$12,055$13,091(7.9)%$44,901$40,9539.6%
Billings95,513105,062(9.1)%288,854358,564(19.4)%
Adjusted CFFO Margin 12.6 %12.5 %15.5 %11.4 %
Net cash provided by operating activities margin increased from 8.3% for the three months ended September 30, 2022 to 11.4% for the three months ended September 30, 2023 primarily due to the increase in net cash provided by operating activities. Cash flow from operations increased by $2.2 million, or 21.8%, from $9.9 million for the three months ended September 30, 2022 to $12.1 million for the three months ended September 30, 2023, primarily due to net income of $12.0 million, adjusted for net non-cash items which increased cash by $7.4 million, and net changes in our operating assets and liabilities which reduced cash by $7.4 million. Third quarter 2022 included certain one-time costs related to our cost reduction initiatives and professional fees related to our warrant exchange transaction.
Net cash provided by operating activities margin increased from 9.8% for the nine months ended September 30, 2022 to 13.4% for the nine months ended September 30, 2023 primarily due to the increase in net cash provided by operating activities. Cash flow from operations increased by $7.1 million, or 18.9%, from $37.8 million for the nine months ended September 30, 2022 to $44.9 million for the nine months ended September 30, 2023, primarily due to net income of $52.4 million, adjusted for net non-cash items which increased cash by $19.8 million, and net changes in our operating assets and liabilities which reduced cash by $27.3 million.
Billings represents amounts invoiced to customers. We generally bill our subscribers at the time of sale and receive full cash payment up front, and in accordance with GAAP, we defer and recognize a portion of the related revenue ratably over time for term and membership subscriptions. For certain subscriptions, we may invoice our Paid Subscribers at the beginning of the term, in annual or monthly installments, and, from time to time, in multi-year installments.
Adjusted CFFO margin increased from 12.5% for three months ended September 30, 2022 to 12.6% for the three months ended September 30, 2023 primarily due to the decrease in Billings. Adjusted CFFO decreased by $1.0 million, or 7.9%, from $13.1 million for the three months ended September 30, 2022 to $12.1 million for the
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three months ended September 30, 2023. The difference between Adjusted CFFO and CFFO in third quarter 2022 is $3.2 million, which are one-time costs related to our cost reduction initiatives and professional fees related to our warrant exchange transaction.
Adjusted CFFO margin increased from 11.4% for the nine months ended September 30, 2022 to 15.5% for the nine months ended September 30, 2023 due to the increase in Adjusted CFFO and the decrease in Billings. Adjusted CFFO increased by $3.9 million, or 10%, from $41.0 million for the nine months ended September 30, 2022 to $44.9 million for the nine months ended September 30, 2023, primarily driven by a decrease in operating expenses as a result of cost reduction initiatives.
Liquidity and Capital Resources
General
A substantial portion of our cash on hand is the result of the nature of our subscription business. We receive cash up front from our sales of annual, multi-year, and membership subscriptions. For tax and GAAP purposes, however, this revenue is deferred and recognized over the term of the subscription, or in the case of membership subscriptions, over four years for tax and five years for GAAP. Tax distributions are made to MarketWise Members to satisfy their tax obligations when revenue is recognized for tax purposes, not when cash is received. The timing difference between when cash is received and when tax distributions are made results in an accumulation of cash on our balance sheet.
We refer to this accumulation of cash as our “float” which we view as a valuable resource that we may invest or use to expand our operations. We expect that as we grow our business, the amount of our float will increase.
The Company estimates that the amount of float was approximately $108.6 million and $94.1 million as of September 30, 2023 and December 31, 2022, respectively.
The Company invests a portion of this cash in financial instruments to achieve reasonable returns on a risk-adjusted basis. The investment allocation decisions are based in part on the anticipated liquidity requirements of the Company including working capital, estimated tax related distributions, and broader capital allocation objectives.
For the three and nine months ended September 30, 2023, the Company earned interest income of $1.7 million and $3.6 million, respectively, on our cash portfolio.
As of September 30, 2023, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $194.0 million. Cash and cash equivalents are comprised of bank deposits, money market funds, and certificates of deposit. Restricted cash is comprised of reserves held with credit card processors for chargebacks and refunds. We have financed our operations primarily through cash received from operations, and our sources of liquidity have enabled us to make continued investments in supporting the growth of our business. Our 2021 Credit Facility (as defined and further discussed below) can be used to finance permitted acquisitions, for working capital and general corporate purposes. We expect that our operating cash flows, in addition to cash on hand, will enable us to continue to make investments in the future, and to pay dividends. We expect our operating cash flows to further improve as we increase our operational efficiency and experience economies of scale.
We believe that our existing cash and cash equivalents and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months. While we believe that our existing cash and cash equivalents and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for the long term, our future capital requirements will depend on many factors, including our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from subscribers, the pace of expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, and the level of costs to operate as a public company. We may, in the future, enter into arrangements to acquire or invest in complementary businesses, products, and technologies.
We have incurred and we will continue to incur public company expenses related to our operations, plus we expect to incur payment obligations under the Tax Receivable Agreement in the future, which we expect to be
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significant. MarketWise, Inc. intends to cause MarketWise, LLC to make distributions to MarketWise, Inc. in an amount sufficient to allow MarketWise, Inc. to pay its tax obligations and operating expenses, including distributions to fund any payments due under the Tax Receivable Agreement. If MarketWise, LLC does not have sufficient cash to fund distributions to MarketWise, Inc. in amounts sufficient to cover MarketWise, Inc.’s obligations under the Tax Receivable Agreement, it may have to borrow funds, which could materially adversely affect its liquidity and financial condition and subject it to various restrictions imposed by any such lenders. To the extent that MarketWise, Inc. is unable to make timely payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid. For additional information regarding the Tax Receivable Agreement, see the section entitled “ Management’s Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital Resources—Tax Receivable Agreement” in the Annual Report.
Furthermore, to the extent we have taxable income, we will make distributions to the MarketWise Members in amounts sufficient for MarketWise Members to pay taxes due on their share of MarketWise income at prevailing individual income tax rates, which for the 2023 tax year the highest federal, state and local tax rate the Company used was 49.75%. Such amounts will be reflected in MarketWise, Inc.’s statement of cash flows as cash used in financing activities, and so will not decrease the amount of cash from operations or net income reflected in MarketWise, Inc.’s financial statements. However, such distributions will decrease the amount of cash available to us for use in our business.
We may be required to seek additional equity or debt financing. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in continued innovation, we may not be able to compete successfully, which would harm our business, operations, and financial condition.
Share Repurchase Program
As previously disclosed in our Annual Report, on November 4, 2021, our Board authorized the repurchase of up to $35.0 million in aggregate of shares of the Company’s Class A common stock. We did not repurchase any shares during the three months ended September 30, 2023. During the nine months ended September 30, 2022, we repurchased 2,484,717 shares totaling $13.1 million in the aggregate, including fees and commissions of $25. Since the inception of the program, we have repurchased 2,984,987 total shares. The share repurchase program expired by its terms on November 3, 2023.
For each share of Class A common stock the Company repurchased under the share repurchase program, MarketWise, LLC, the Company’s direct subsidiary, redeemed one LLC Unit held by the Company, decreasing the percentage ownership of MarketWise, LLC by the Company and relatively increasing the ownership by the other unitholders.
Credit Facility
In 2021, MarketWise, LLC, entered into a loan and security agreement (as amended the “Loan and Security Agreement”) providing for up to $150 million of commitments under a revolving credit facility (the “2021 Credit Facility”), including a $5 million letter of credit sublimit, and allows for revolving commitments under the 2021 Credit Facility to be increased or new term commitments to be established by up to $65 million. The existing lenders under the 2021 Credit Facility are entitled, but not obligated, to provide such incremental commitments. The 2021 Credit Facility has a term of three years, maturing on October 29, 2024. On May 2, 2023, MarketWise, LLC entered into the First Amendment to the Loan and Security Agreement, which provides, among other things, a transition away from LIBOR to SOFR as the basis for the interest rate.
The 2021 Credit Facility is guaranteed by MarketWise, LLC’s direct and indirect material U.S. subsidiaries, subject to customary exceptions (the “Guarantors”), pursuant to a guaranty by the Guarantors in favor of HSBC Bank USA, National Association, as agent (the “Guaranty”). Borrowings under the 2021 Credit Facility are secured by a first-priority lien on substantially all of the assets of MarketWise, LLC and the Guarantors, subject to customary exceptions.
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Borrowings will bear interest at a floating rate depending on MarketWise, LLC’s Net Leverage Ratio (as defined in the Loan and Security Agreement). As of September 30, 2023, there were no outstanding advances under the 2021 Credit Facility.
The Loan and Security Agreement contains customary affirmative and negative covenants for transactions of this type, and contains financial maintenance covenants that require MarketWise, LLC to maintain an Interest Coverage Ratio and Net Leverage Ratio (both as defined in the Loan and Security Agreement), and provides for a number of customary events of default, which could result in the acceleration of obligations and the termination of lending commitments under the Loan and Security Agreement. As of September 30, 2023, we were in compliance with these covenants.
Cash Flows
The following table presents a summary of our consolidated cash flows provided by (used in) operating, investing, and financing activities for the periods indicated:
(In thousands)Nine Months Ended September 30,
20232022
Net cash provided by operating activities$44,901 $37,763 
Net cash used in investing activities(1,658)(13,238)
Net cash used in financing activities(7,806)(16,787)
Operating Activities
For the nine months ended September 30, 2023, net cash provided by operating activities was $44.9 million, primarily due to net income of $52.4 million, adjusted for net non-cash items which increased cash by $19.8 million, and net changes in our operating assets and liabilities which reduced cash by $27.3 million, largely due to timing differences in the net receipt of cash. The non-cash items include stock-based compensation expense and depreciation and amortization of $10.3 million and $3.0 million, respectively. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue, which reduced cash by $44.3 million due to our overall decrease in sales, a decrease in other current and long-term liabilities which reduced cash by $3.2 million, and a decrease in accrued expenses, which decreased cash by $3.3 million, partially offset by a decrease in deferred contract acquisition costs, which increased cash by $23.6 million.
For the nine months ended September 30, 2022, net cash provided by operating activities was $37.8 million, primarily due to net income of $73.6 million, adjusted for net non-cash items which reduced cash by $0.9 million, and net changes in our operating assets and liabilities which reduced cash by $34.9 million, largely due to timing differences in the net receipt of cash. The non-cash items include a change in fair value of derivative liabilities of $15.6 million, which was partially offset by stock-based compensation expense and deferred income taxes of $7.2 million and $3.6 million, respectively. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue, which reduced cash by $24.8 million due to our overall decrease in sales, a decrease in accrued expenses, which decreased cash by $7.2 million, a decrease in other current and long-term liabilities, which decreased cash by $4.2 million, partially offset by a decrease in accounts receivable due to our overall decrease in sales, which increased cash by $3.2 million.
Investing Activities
For the nine months ended September 30, 2023, net cash used in investing activities was $1.7 million, primarily driven by $1.4 million of capitalized software development costs.
For the nine months ended September 30, 2022, net cash used in investing activities was $13.2 million, primarily driven by the payment of $12.8 million related to the Buttonwood Publishing transaction.
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Financing Activities
For the nine months ended September 30, 2023, net cash used in financing activities was $7.8 million, primarily due to $6.3 million in distributions to noncontrolling interests and $1.5 million in restricted stock units withheld to pay taxes.
For the nine months ended September 30, 2022, net cash used in financing activities was $16.8 million, primarily due to $13.1 million in share repurchases and $4.5 million in distributions to noncontrolling interests.
On August 3, 2023, the Board declared a cash dividend to the Company’s Class A common stockholders in the amount of $0.01 per share and a cash distribution to its common unit holders in the amount of $0.01 per unit. The dividend and distribution was 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 payment to Class A common stockholders was $0.5 million and the total amount of the distribution payment to common unit holders was approximately $2.9 million. The Company intends to pay dividends quarterly in the future, subject to Board approval of any such dividends.
On October 18, 2023, our Board declared a cash dividend to its Class A common stockholders in the amount of $0.01 per share, totaling $0.4 million, and a cash distribution to holders of LLC Units in the amount of $0.01 per unit, totaling $2.9 million, to stockholders and unitholders of record as of the close of business on December 25, 2023. The dividend and distribution will be paid on January 25, 2024.
On October 18, 2023, our Board also declared a special cash dividend to the Company’s Class A common stockholders in the amount of $0.15 per share and a special cash distribution to holders of LLC Units in the amount of $0.15 per unit, totaling approximately $50 million in the aggregate, to stockholders and unitholders of record as of the close of business on November 10, 2023. The special dividend and distribution will be paid on December 1, 2023.
Critical Accounting Estimates
Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs, and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
Management believes that, of our significant accounting policies, which are described in Note 2 to our consolidated financial statements for the year ended December 31, 2022 in our Annual Report, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, management believes that “Revenue Recognition” and “Transactions and Valuation of Goodwill and Other Acquired Intangible Assets” are the two policies that are the most critical to aid in fully understanding and evaluating our condensed consolidated financial condition and results of operations. Refer to the 2022 Annual Report on Form 10-K for further discussion of these two policies. During the three months ended September 30, 2023, there were no material changes to these policies.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.

Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
49


Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, and as a result of the material weaknesses described below, our principal executive officer and principal financial officer concluded that, as of September 30, 2023, our disclosure controls and procedures were not effective. In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the condensed consolidated financial statements for the periods covered by and included in this Quarterly Report on Form 10-Q fairly state, in all material respects, our financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP.
As previously reported, in connection with the audit of our consolidated financial statements for the year ended December 31, 2020, our management determined that material weaknesses existed in our internal control over financial reporting related to: (i) a lack of contemporaneous documentation and account reconciliation, and (ii) the lack of a formal or documented risk assessment process. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Remediation Efforts to Address the Material Weaknesses
We have taken a number of remediation actions since the identification of the material weakness through September 30, 2023, including:
hiring personnel with appropriate levels of experience in accounting, technology, risk assessment, and internal controls;
establishing a comprehensive SOX program that includes the documentation and assessment of the Company’s risks and internal controls over financial reporting to comply with the Sarbanes-Oxley Act;
implementing an annual risk assessment process over financial reporting;
implementing an annual cyber security risk assessment process;
establishing a Disclosure Task Force with participants across business units to ensure the completeness and accuracy of financial reporting disclosures;
establishing regular director and executive management meetings to oversee Company risks and performance;
implementing a new revenue recognition application and associated internal controls over financial reporting; and
enhancing account reconciliation processes and internal controls, leveraging the use of a reconciliation application, and training of accounting personnel.
While significant progress has been made to enhance our internal control over financial reporting, we are still in the process of building and enhancing our processes, procedures, and controls. Additional time is required to complete the remediation of these material weaknesses and the assessment to ensure the sustainability of these remediation actions. We believe the above actions, when complete, will be effective in the remediation of the material weaknesses described above. As such, we have not concluded that the material weaknesses have been fully remediated as of September 30, 2023.
Changes in Internal Control Over Financial Reporting
Other than as described above, there have been no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.
Not applicable.

Item 1A. Risk Factors.
Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
In November 2021, our Board authorized the repurchase of up to $35.0 million in aggregate of shares of the Company’s Class A common stock. There were no share repurchases made by or on behalf of the Company of its common stock during the three months ended September 30, 2023. The maximum dollar value of shares that may yet to be purchased under the plan was $18.6 million as of September 30, 2023. The share repurchase program expired by its terms on November 3, 2023.
During the three and nine months ended September 30, 2023, pursuant to the terms of the MarketWise Operating Agreement, members of MarketWise, LLC exchanged an aggregate of 1,500,000 and 2,750,000 LLC Units, together with an equal number of shares of Class B common stock for 1,500,000 and 2,750,000 newly-issued shares of the Company’s Class A common stock, respectively. These shares of Class A common stock were issued in reliance on an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities.
Not applicable.

Item 4. Mine Safety Disclosures.
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Not applicable.

Item 5. Other Information.
Not applicable.
Item 6. Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
Exhibit No.Description
3.1
3.2
10.1
10.2
10.3+
10.4+
10.5+
10.6+
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Definition Linkbase Document
101.DEFXBRL Taxonomy Extension Label Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
† The annexes, schedules, and certain exhibits to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby agrees to furnish supplementally a copy of any omitted annex, schedule, or exhibit to the SEC upon request.
+ Indicates a management contract or compensatory plan

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
MARKETWISE, INC.
Date: November 9, 2023
By:
/s/ Erik Mickels
Name:
Erik Mickels
Title:
Chief Financial Officer
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