MarketWise Inc.
03/06/2026 | Press release | Distributed by Public on 03/06/2026 05:04
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
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," "the Company," "we," "us," and "our"), should be read together with our audited consolidated financial statements as of December 31, 2025 and 2024 and for each of the years ended December 31, 2025, 2024 and 2023 included elsewhere in this 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 sections entitled "Risk Factors" and "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, Chaikin Analytics, Altimetry, TradeSmith, InvestorPlace, and Brownstone Research. 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 a comprehensive suite of investor-centric tools that appeal to a broad subscriber base.
2025 Highlights
▪Paid Subscribers were 374 thousand as of December 31, 2025 compared with 506 thousand as of December 31, 2024
▪Total net revenue was $328.1 million for full year 2025 compared with $408.7 million for full year 2024 (1)
▪Total Billings was $271.2 million for full year 2025 compared with $239.1 million for full year 2024
▪Net income was $64.0 million for full year 2025 compared with $93.1 million for full year 2024
▪Cash from Operating Activities ("CFFO") was $46.0 million for full year 2025 compared with $(22.2) million for full year 2024
▪Cash and cash equivalents were $70.1 million as of December 31, 2025, and no debt outstanding
(1) Net Revenue (a GAAP measure) represents Billings that are recognized over the term of the subscription, which can be multiple years. Billings are amounts invoiced to customers in the period and is thus indicative of the current operating environment and demand for our products.
The following table presents CFFO, and the related margin as a percentage of net revenue, and Adjusted CFFO (as defined below), a non-GAAP measure, and the related margin as a percentage of Billings, for each of the periods
presented. For more information on Adjusted CFFO and Adjusted CFFO Margin (as defined below), see "- Non-GAAP Financial Measures."
| (In thousands) | Year Ended December 31, | |||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 45,958 | $ | (22,150) | $ | 62,428 | ||||||||||||||
| Total net revenue | 328,122 | 408,701 | 448,182 | |||||||||||||||||
| Net cash provided by (used in) operating activities margin | 14.0 | % | (5.4 | %) | 13.9 | % | ||||||||||||||
| Adjusted CFFO | $ | 45,958 | $ | (22,150) | $ | 66,368 | ||||||||||||||
| Billings | 271,195 | 239,083 | 382,411 | |||||||||||||||||
|
Adjusted CFFO Margin
|
16.9 | % | (9.3 | %) | 17.4 | % | ||||||||||||||
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 this 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 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 defined below) as of December 31, 2025 generated average customer lifetime Billings of approximately $2,031, resulting in a LTV/CAC (as defined below) ratio of approximately 2.0x compared to 1.3x at December 31, 2024. For more information on Billings and our LTV/CAC ratio and the components of this ratio, see "-Key Business Metrics" and "-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.
As of December 31, 2025, our Paid Subscriber base was 374 thousand, down 132 thousand, or 26.0% as compared to 506 thousand at December 31, 2024, primarily related to elevated churn associated with the shutdown of our Legacy Research business. At the time of shutdown, paid Legacy Research subscribers were given replacement subscriptions to other affiliates within MarketWise for at least the duration of their original subscription. These subscribers accounted for 58 thousand or approximately 44% of the overall 132 thousand decrease in the year, with the remainder of the decline primarily coming from lower value subscribers.
Our Paid Subscriber base is comprised of subscribers obtained through both direct-to-paid acquisition and free-to-paid conversions. Since 2023, direct-to-paid acquisition has accounted for approximately 48% 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 52% of our annual Paid Subscriber acquisition.
Retaining and expanding relationships with existing subscribers. We believe that we have a significant opportunity to expand our relationships with our large base of Active Free Subscribers 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 December 31,
2025 was $670, which increased 70.1% from $394 as of December 31, 2024. For more information on ARPU, see "Key Business Metrics - Average Revenue Per User."
Our high-value composition rate reflects the percentage of Paid Subscribers that have purchased more than $600 of our products over their lifetime. 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 percentage of Paid 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. As of December 31, 2025, 63% of our Paid Subscribers were high-value subscribers and 30% of our Paid Subscribers were ultra high-value subscribers.
We may face challenges and uncertainty in retaining and expanding relationships with existing subscribers due to the wind-down of operations of Legacy Research announced in February 2024 and any reputational harm associated with misconduct of former employees as discussed in the Risk Factor "Failure to maintain and protect our reputation for trustworthiness and independence may harm our business" included elsewhere in this annual report.
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:
High-value composition rate: High-value composition rate is the number of high-valued subscribers divided by Paid Subscribers. High-value subscribers are Paid Subscribers who have purchased >$600 in aggregate over their lifetime.
LTV/CAC ratio: We calculate LTV/CAC ratio as LTV divided byCAC. 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, plusexternal revenue share expense, plusretention and renewal expenses, pluscopywriting and marketing salaries, plustelesales salaries and commissions, pluscustomer service commissions.
Net revenue retention: Net revenue retention is defined as Billings from all prior period cohorts in the current period, divided byall 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.
Subscriber count churn rate:Our subscriber count churn rate is defined as the number of paid subscribers who either cancelled or failed to renew all of their paid subscriptions during the period divided by the number of unique paid subscribers at the beginning of the period plus the number of new subscribers obtained during the period. Monthly subscriber count churn rate is defined by the annual subscriber count churn divided by twelve months.
Ultra high-value composition rate: Ultra high-value composition rate is the number of ultra high-valued subscribers divided by Paid Subscribers. Ultra high-value subscribers are Paid Subscribers who have purchased >$5,000 in aggregate over their lifetime.
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.
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Active Free Subscribers | 2,037,313 | 3,331,437 | 4,067,199 | |||||||||||||||||
| Paid Subscribers | 374,163 | 505,889 | 737,140 | |||||||||||||||||
| ARPU | $ | 670 | $ | 394 | $ | 503 | ||||||||||||||
| New "Marketing" Billings (in thousands) | $ | 199,133 | $ | 162,782 | $ | 278,260 | ||||||||||||||
| Net "Renewal" Billings (in thousands) | $ | 65,359 | $ | 70,313 | $ | 96,767 | ||||||||||||||
| Other Billings (in thousands) | $ | 6,703 | $ | 5,988 | $ | 7,384 | ||||||||||||||
| Total Billings (in thousands) | $ | 271,195 | $ | 239,083 | $ | 382,411 | ||||||||||||||
Active Free Subscribers. Active Free Subscribers are defined as unique subscribers who have subscribed to one of our free investment publications via a valid email address and who have received and/or consumed our content during the quarter, 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, Active 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. Since 2023, approximately 52% of our new Paid Subscribers come from free to paid conversions.
Active Free Subscribers decreased by 1.3 million, or 38.8%, to 2.0 million as of December 31, 2025 as compared to 3.3 million as of December 31, 2024. The year over year decrease in Active Free Subscribers is a result of fewer free subscribers in total, a reduced number of free products available as we rationalize our offerings, and more targeted email sends.
Active Free Subscribers decreased by 0.7 million, or 18.1%, to 3.3 million as of December 31, 2024 as compared to 4.1 million as of December 31, 2023. The year over year decrease was primarily driven by the shutdown of our Legacy Research business in early 2024.
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 132 thousand, or 26.0%, to 374 thousand as of December 31, 2025 as compared to 506 thousand as of December 31, 2024, primarily related to elevated churn associated with the shutdown of our Legacy Research business. At the time of shutdown, paid Legacy Research subscribers were given replacement subscriptions to other affiliates within MarketWise for at least the duration of their original subscription. These subscribers accounted for 58 thousand or approximately 44% of the overall 132 thousand decrease in the year, with the remainder of the decline primarily coming from lower value subscribers.
Total Paid Subscribers decreased by 231 thousand, or 31.4%, to 506 thousand as of December 31, 2024 as compared to 737 thousand as of December 31, 2023, driven by continued soft consumer engagement as well as elevated churn due to expiring subscriptions in our Legacy Research Group which likely came as a result of the wind down of this business which occurred during 2024. Additionally, direct marketing spend decreased as we managed profitability given the aforementioned factors. The decrease was further compounded by the loss of
approximately 20 thousand Paid Subscribers as part of sale of the Money Map Press, LLC Business in fourth quarter 2024.
Subscriber count churn rate has ranged from approximately 2.4% to 3.7% per month between 2023 and 2025. Almost all of the subscribers who churned in 2025 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 improved from 53% in 2024 to 91% in 2025, is a more meaningful gauge of subscriber satisfaction.
Average Revenue Per User ("ARPU"). We calculate ARPU as the trailing four quarters of net Billings divided bythe 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 increased by $276, or 70.1%, to $670 as of December 31, 2025 as compared to $394 as of December 31, 2024. The year-over-year increase was driven by a 13% increase in trailing four quarter Billings, while trailing four quarter average Paid Subscribers decreased by (33)%. The increase in trailing four quarter Billings was driven by successful campaigns involving our software products, as further discussed in -Billingsbelow. The decrease in trailing four quarter Paid Subscribers is also driven by the winding down of our Legacy Research Group business during 2024.
ARPU decreased by $109, or 21.7%, to $394 as of December 31, 2024 as compared to $503 as of December 31, 2023. The year-over-year decrease was driven by a 37% decrease in trailing four quarter Billings, while trailing four quarter average Paid Subscribers only decreased by 20%. The decrease in trailing four quarter Billings was driven by reduced engagement of prospective and existing subscribers, as further discussed in -Billingsbelow. The decrease in trailing four quarter Paid Subscribers is also driven by the winding down of our Legacy Research Group business during 2024. 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.
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.
While Net Revenue and Billings are both related to sales of our products, there are key differences in how those sales are recognized. From a Net Revenue perspective, substantially all of the amounts invoiced to customers are originally reported as deferred revenue on our Balance Sheet and is subsequently recognized as Net Revenue over a period up to 5 years; whereas Billings, as defined above, represents amounts invoiced to customers in each period, and provides more insight from a cash generation perspective. As a result, there will be a perpetual disconnect between Billings and Net Revenue.
We break down our Billings into three sub-categories: New Marketing Billings, Net Renewal Billings, and Other Billings.
New Marketing Billings are Billings from all new subscription sales. New Marketing Billings increased by $36.4 million, or 22.3%, to $199.1 million in 2025 as compared to $162.8 million in 2024. The increase was primarily driven by sales of our software related content and to a lesser extent, sales of our entry level products.
New Marketing Billings decreased by $115.5 million, or 41.5%, to $162.8 million in 2024 as compared to $278.3 million in 2023. The decrease was primarily driven by ceasing new sales campaigns within our Legacy Research Group brands, which began winding down operations in mid-February 2024. The balance of the decline was due to continuing soft engagement and reluctance of existing subscribers to purchase additional higher priced subscriptions.
Net Renewal Billings are Billings from renewals and maintenance fee payments. Net Renewal Billings decreased by $5.0 million, or 7.0%, to $65.4 million in 2025 as compared to $70.3 million in 2024. This was primarily a function of a significant decrease (approximately 200 thousand) in average Paid Subscribers in 2025 versus 2024. The loss of renewal billings due to decreased subscribers was somewhat offset by an increased renewal rate on those subscriptions that were available for renewal.
Net Renewal Billings decreased by $26.5 million, or 27.3%, to $70.3 million in 2024 as compared to $96.8 million in 2023. This was primarily a function of a significant decrease (approximately 150 thousand) in average Paid Subscribers in 2024 versus 2023.
Other Billings are Billings from revenue share, advertising and conferences. Other Billings increased by $0.7 million or 11.9% to $6.7 million in 2025 as compared to $6.0 million in 2024 as a result of increasing revenue share activity with external parties.
Other Billings decreased by $1.4 million or 18.9% to $6.0 million in 2024 as compared to $7.4 million in 2023 as a result of decreasing revenue share activity with external parties.
Total Billings increased by $32.1 million, or 13.4%, to $271.2 million in 2025 as compared to $239.1 million in 2024. The increase was primarily driven by sales of new products, particularly our software related content and was somewhat offset by a slight decrease in renewal sales related to a decline in subscribers.
Billings decreased by $143.3 million, or 37.5%, to $239.1 million in 2024 as compared to $382.4 million in 2023. The decrease was primarily driven by the winding down of our Legacy Research Group brands which began in mid-February 2024.
Components of MarketWise's Results of Operations
Net Revenue
We generate net revenue primarily from services provided in 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.
We earn net revenue from the sale of advertising placements on our websites and from the sale of print products and events. 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.
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. Stock-based compensation includes amounts related to our 2021 Incentive Award Plan, our ESPP, and profits interests.
Cost of Revenue
Cost of revenue consists primarily of employee compensation costs associated with producing and publishing our content, 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.
Sales and Marketing
Sales and marketing expenses consist primarily of employee compensation costs, 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.
General and Administrative
General and administrative expenses consist primarily of employee compensation costs associated with our finance, legal, information technology, human resources, executive, and administrative personnel, legal fees, corporate insurance, office expenses, professional fees, and travel and entertainment costs.
Research and Development
Research and development expenses consist primarily of employee compensation costs, technical services, software expenses, and hosting expenses associated with maintaining and enhancing the functionality of our platforms, including our software and analytical tools. Research and development expenses are exclusive of depreciation and amortization shown as a separate line item.
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.
Impairment of Intangible Assets
Impairment of intangible assets consists of impairment losses related to our Legacy Research and Buttonwood Publishing businesses.
Related Party Expense
Related party expenses primarily consist of Board of Director compensation, revenue share expenses and expenses for certain corporate functions performed by a related party for certain historic periods.
Other Income (Expense), Net
Other income (expense), net primarily consists of the net gains or losses on our embedded derivative instruments.
Interest (Expense) Income, Net
Interest (expense) income, net primarily consists of interest income from our money market accounts.
Net Income Attributable to Noncontrolling Interests
As of December 31, 2025, MarketWise, Inc.'s controlling interest in MarketWise, LLC was 15.2% and the noncontrolling interest was 84.8%. For the year ended December 31, 2025 net income attributable to controlling interests included a $2.6 million tax provision, which is 100% attributable to the controlling interest.
As of December 31, 2024, MarketWise, Inc.'s controlling interest in MarketWise, LLC was 12.4% and the noncontrolling interest was 87.6%. For the year ended December 31, 2024 net income attributable to controlling interests included a $3.3 million tax provision, which is 100% attributable to the controlling interest.
Results of Operations
The following table sets forth our results of operations for the periods presented:
| (In thousands) | Year Ended December 31, | |||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net revenue | $ | 325,708 | $ | 405,357 | $ | 443,245 | ||||||||||||||
| Related party revenue | 2,414 | 3,344 | 4,937 | |||||||||||||||||
| Total net revenue | 328,122 | 408,701 | 448,182 | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
|
Cost of revenue(1)
|
44,335 | 50,663 | 56,802 | |||||||||||||||||
|
Sales and marketing(1)
|
130,954 | 160,707 | 198,592 | |||||||||||||||||
|
General and administrative(1)
|
78,293 | 90,712 | 125,176 | |||||||||||||||||
|
Research and development(1)
|
8,814 | 9,908 | 8,831 | |||||||||||||||||
| Depreciation and amortization | 2,186 | 2,753 | 3,821 | |||||||||||||||||
| Impairment losses | 380 | 4,445 | 2,583 | |||||||||||||||||
| Related party expense | 564 | 525 | 572 | |||||||||||||||||
| Total operating expenses | 265,526 | 319,713 | 396,377 | |||||||||||||||||
| Income from operations | 62,596 | 88,988 | 51,805 | |||||||||||||||||
| Other income (expense), net | 1,040 | 2,085 | (611) | |||||||||||||||||
| Interest income, net | 2,963 | 5,288 | 4,904 | |||||||||||||||||
| Income before income taxes | 66,599 | 96,361 | 56,098 | |||||||||||||||||
| Income tax expense | 2,558 | 3,253 | 1,803 | |||||||||||||||||
| Net income | 64,041 | 93,108 | 54,295 | |||||||||||||||||
| Net income attributable to noncontrolling interests | 58,421 | 86,049 | 52,513 | |||||||||||||||||
| Net income attributable to MarketWise, Inc. | $ | 5,620 | $ | 7,059 | $ | 1,782 | ||||||||||||||
(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 following table sets forth our consolidated statements of operations data expressed as a percentage of net revenue for the periods indicated:
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net revenue | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||
|
Cost of revenue(1)
|
13.5 | % | 12.4 | % | 12.7 | % | ||||||||||||||
|
Sales and marketing(1)
|
39.9 | % | 39.3 | % | 44.3 | % | ||||||||||||||
|
General and administrative(1)
|
23.9 | % | 22.2 | % | 27.9 | % | ||||||||||||||
|
Research and development(1)
|
2.7 | % | 2.4 | % | 2.0 | % | ||||||||||||||
| Depreciation and amortization | 0.7 | % | 0.7 | % | 0.9 | % | ||||||||||||||
| Impairment losses | 0.1 | % | 1.1 | % | 0.6 | % | ||||||||||||||
| Related party expense | 0.2 | % | 0.1 | % | 0.1 | % | ||||||||||||||
| Total operating expenses | 80.9 | % | 78.2 | % | 88.4 | % | ||||||||||||||
| Income from operations | 19.1 | % | 21.8 | % | 11.6 | % | ||||||||||||||
| Other income (expense), net | 0.3 | % | 0.5 | % | (0.1) | % | ||||||||||||||
| Interest income, net | 0.9 | % | 1.3 | % | 1.1 | % | ||||||||||||||
| Income before income taxes | 20.3 | % | 23.6 | % | 12.5 | % | ||||||||||||||
| Income tax expense | 0.8 | % | 0.8 | % | 0.4 | % | ||||||||||||||
| Net income | 19.5 | % | 22.8 | % | 12.1 | % | ||||||||||||||
| Net income attributable to noncontrolling interests | 17.8 | % | 21.1 | % | 11.7 | % | ||||||||||||||
| Net income attributable to MarketWise, Inc. | 1.7 | % | 1.7 | % | 0.4 | % | ||||||||||||||
__________________
(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 Years Ended December 31, 2025 and 2024
Net Revenue
| (In thousands) | Year Ended December 31, | $ Change | % Change | ||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Net revenue | $ | 328,122 | $ | 408,701 | $ | (80,579) | (19.7) | % | |||||||||||||||
The decrease in net revenue was primarily driven by a $62.1 million decrease in term subscription revenue and a $19.5 million decrease in membership subscription revenue, partially offset by a $1.1 million increase in non-subscription revenue.
Term subscription revenue decreased during the year ended December 31, 2025 primarily due to the wind down of Legacy Research, and a decrease in Billings in prior periods causing reduced revenue recognition in the 2025 which contributed $32.6 million and $53.3 million to the overall term subscription revenue decrease, respectively. This is partially offset by an increase in current year Billings.
Membership revenue decreased during the year ended December 31, 2025, primarily due to Legacy Research, which contributed $24.8 million to the overall membership subscription revenue decrease.
Operating Expenses
| (In thousands) | Year Ended December 31, | $ Change | % Change | ||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenue | $ | 44,335 | $ | 50,663 | $ | (6,328) | (12.5) | % | |||||||||||||||
| Sales and marketing | 130,954 | 160,707 | (29,753) | (18.5) | % | ||||||||||||||||||
| General and administrative | 78,293 | 90,712 | (12,419) | (13.7) | % | ||||||||||||||||||
| Research and development | 8,814 | 9,908 | (1,094) | (11.0) | % | ||||||||||||||||||
| Depreciation and amortization | 2,186 | 2,753 | (567) | (20.6) | % | ||||||||||||||||||
| Impairment losses | 380 | 4,445 | (4,065) | (91.5) | % | ||||||||||||||||||
| Related party expenses | 564 | 525 | 39 | 7.4 | % | ||||||||||||||||||
| Total operating expenses | $ | 265,526 | $ | 319,713 | $ | (54,187) | (16.9) | % | |||||||||||||||
Cost of Revenue
Cost of revenue decreased primarily driven by a $5.5 million decrease in freelance editorial expenses, a $1.1 million decrease in incentive compensation, and a $1.0 million decrease in outside labor. This was partially offset by a $1.0 million increase in stock-based compensation expense.
Sales and Marketing
Sales and marketing expense decreased primarily driven by a $34.0 million decrease in amortization of deferred contract acquisition costs, and $3.7 million decrease in salaries, taxes and benefits primarily due to reductions in workforce in 2024. This is partially offset by a $7.9 million increase in marketing expense.
General and Administrative
General and administrative expense decreased primarily driven by a $8.1 million decrease in professional fees, a $2.9 million decrease in salaries, taxes and benefits due to a reduction in workforce, a $2.6 million decrease due to the change in fair value of contingent consideration related to brands sold during 2024, a $2.3 million decrease in severance expense, a $1.8 million decrease in stock-based compensation expense, a $0.7 million decrease in software expense. This is partially offset by a $5.6 million increase in incentive compensation.
Impairment Losses
Impairment losses expense decreased primarily driven by impairment to Legacy Research brands in the 2024 period. The impairment losses in 2024 were due to the charges related to deferred contract acquisition costs and intangible assets of the Legacy Research brands that we disposed of in the fourth quarter of 2024, and the impairment of the Legacy Research operating lease right-of-use asset.
Comparison of the Years Ended December 31, 2024 and 2023
Net Revenue
| (In thousands) | Year Ended December 31, | $ Change | % Change | ||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Net revenue | $ | 408,701 | $ | 448,182 | $ | (39,481) | (8.8) | % | |||||||||||||||
The decrease in net revenue was primarily driven by a $41.4 million decrease in term subscription revenue and a $1.7 million decrease in non-subscription revenue, partially offset by a $3.6 million increase in membership subscription revenue.
Term subscription revenue decreased during the year ended December 31, 2024 primarily due to lower Billings as compared to the 2023 period which was driven by reduced engagement of prospective and existing subscribers in the 2024 period. Membership subscription revenue, which is initially deferred and recognized over a five-year period, increased during the year ended December 31, 2024 as a result of higher volume of membership subscriptions in the current year.
Operating Expenses
| (In thousands) | Year Ended December 31, | $ Change | % Change | ||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenue | $ | 50,663 | $ | 56,802 | $ | (6,139) | (10.8) | % | |||||||||||||||
| Sales and marketing | 160,707 | 198,592 | (37,885) | (19.1) | % | ||||||||||||||||||
| General and administrative | 90,712 | 125,176 | (34,464) | (27.5) | % | ||||||||||||||||||
| Research and development | 9,908 | 8,831 | 1,077 | 12.2 | % | ||||||||||||||||||
| Depreciation and amortization | 2,753 | 3,821 | (1,068) | (28.0) | % | ||||||||||||||||||
| Impairment losses | 4,445 | 2,583 | 1,862 | 72.1 | % | ||||||||||||||||||
| Related party expenses | 525 | 572 | (47) | (8.2) | % | ||||||||||||||||||
| Total operating expenses | $ | 319,713 | $ | 396,377 | $ | (76,664) | (19.3) | % | |||||||||||||||
Cost of Revenue
Cost of revenue decreased primarily driven by a $4.1 million decrease in credit card fees, a $2.7 million decrease in salaries, taxes and benefits, and a $0.8 million decrease in outside labor. This was partially offset by a $1.7 million increase in incentive compensation.
Sales and Marketing
Sales and marketing expense decreased primarily driven by a $14.5 million decrease in amortization of deferred contract acquisition costs, a $14.1 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 an $8.5 million decrease in salaries, taxes and benefits.
General and Administrative
General and administrative expense decreased primarily driven by a $25.0 million decrease in salaries, taxes and benefits resulting from a decrease in headcount in 2024 as compared to 2023, a $10.8 million decrease in stock-based compensation expense, a $1.2 million decrease in insurance expense, and a $0.7 million decrease in software expense. This was partially offset by a $3.7 million increase in professional fees.
Impairment Losses
Impairment losses in 2024 were due to the charges related to deferred contract acquisition costs and intangible assets of the Legacy Research brands that we disposed of in the fourth quarter of 2024, and the impairment of the Legacy Research operating lease right-of-use asset. Impairment losses in 2023 were due to the charges related to deferred contract acquisition costs, intangible assets, and operating lease right of use assets of our Buttonwood Publishing business that we sold in December 2023.
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 operating performance. 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 the first quarter 2025, we introduced an additional non-GAAP financial measure: Free Cash Flow. This new non-GAAP financial measure is intended to provide investors with additional information regarding our liquidity and operating performance, and is commonly used within our industry.
This new non-GAAP measure is provided in addition to, and not as a substitute for or superior to, our existing non-GAAP financial measures, which we will continue to present.
Management uses these non-GAAP measures internally to evaluate performance and make operating decisions, and we believe they provide a meaningful perspective to investors when used in conjunction with our GAAP results.
These non-GAAP measures 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, operating cash flow margin, and net income. Some of the limitations of using these non-GAAP measures are that these metrics may be calculated differently by other companies in our industry.
| (In thousands) | Year Ended December 31, | % change | ||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 vs 2024 | 2024 vs 2023 | ||||||||||||||||||||||||||||
| Adjusted CFFO | $ | 45,958 | $ | (22,150) | $ | 66,368 | (307.5) | % | (133.4) | % | ||||||||||||||||||||||
| Adjusted CFFO Margin | 16.9 | % | (9.3) | % | 17.4 | % | ||||||||||||||||||||||||||
| Free Cash Flow | $ | 44,391 | $ | (22,831) | $ | 60,701 | (294.4) | % | (137.6) | % | ||||||||||||||||||||||
Adjusted CFFO / Adjusted CFFO Margin
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, and for internal planning and forecasting purposes.
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 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.
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) | Year Ended December 31, | % change | ||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 vs 2024 | 2024 vs 2023 | ||||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 45,958 | $ | (22,150) | $ | 62,428 | (307.5) | % | (135.5) | % | ||||||||||||||||||||||
| Non-recurring expenses | - | - | 3,940 | - | % | (100.0) | % | |||||||||||||||||||||||||
| Adjusted CFFO | $ | 45,958 | $ | (22,150) | $ | 66,368 | (307.5) | % | (133.4) | % | ||||||||||||||||||||||
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) | Year Ended December 31, | % change | ||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 vs 2024 | 2024 vs 2023 | ||||||||||||||||||||||||||||
| Net cash provided by operating activities | $ | 45,958 | $ | (22,150) | $ | 62,428 | (307.5) | % | (135.5) | % | ||||||||||||||||||||||
| Total net revenue | 328,122 | 408,701 | 448,182 | (19.7) | % | (8.8) | % | |||||||||||||||||||||||||
| Net cash provided by (used in) operating activities margin | 14.0 | % | (5.4 | %) | 13.9 | % | ||||||||||||||||||||||||||
| Adjusted CFFO | $ | 45,958 | $ | (22,150) | $ | 66,368 | (307.5) | % | (133.4) | % | ||||||||||||||||||||||
| Billings | 271,195 | 239,083 | 382,411 | 13.4 | % | (37.5) | % | |||||||||||||||||||||||||
| Adjusted CFFO Margin | 16.9 | % | (9.3 | %) | 17.4 | % | ||||||||||||||||||||||||||
CFFO and Adjusted CFFO for the year ended December 31, 2025 was primarily due to net income of $64.0 million, adjusted for net non-cash items which increased cash by $14.3 million. This was partially offset by net changes in our operating assets and liabilities which reduced cash by $32.4 million, including incentive compensation payouts.
CFFO and Adjusted CFFO were negative for the year ended December 31, 2024 primarily driven by lower Billings during the period, partially due to the Legacy wind down, incentive compensation payouts during the first quarter, and payments related to renegotiated employment agreements.
The difference between Adjusted CFFO and CFFO in 2023 was $3.9 million, which were one-time costs related to severance payments.
Free Cash Flow
We define Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures. We define capital expenditures as purchases of property and equipment plus capitalized software development costs. Acquisitions are not included in capital expenditures.
We believe Free Cash Flow is a useful indicator that provides information to management and investors about the cash generated by the business that is available for discretionary purposes, such as dividends and strategic investments.
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 Free Cash Flow for each of the periods presented:
| (In thousands) | Year Ended December 31, | % change | ||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | 2025 vs 2024 | 2024 vs 2023 | ||||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 45,958 | $ | (22,150) | $ | 62,428 | (307.5) | % | (135.5) | % | ||||||||||||||||||||||
| Capital expenditures | (1,567) | (681) | (1,727) | 130.1 | % | (60.6) | % | |||||||||||||||||||||||||
| Free Cash Flow | $ | 44,391 | $ | (22,831) | $ | 60,701 | ||||||||||||||||||||||||||
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. The Company estimates that the amount of float was approximately $98.2 million and $119.7 million as of December 31, 2025 and 2024, respectively. As part of the Company's broader capital allocation strategy, our consolidated cash balance may from time to time decline below our estimate of the long term float requirement.
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 years ended December 31, 2025 and 2024, the Company earned interest income of $3.0 million and $5.9 million, respectively, on our cash portfolio which was invested solely in money market funds.
The Company may allocate a portion of our "float" to investments meeting pre-determined guidelines, including U.S.-listed equity securities, with the objective to provide an acceptable rate of return while complying with established risk tolerances and liquidity parameters. The Board is responsible for approving investment decisions. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company's results of operations. Historically, the Company has only invested in money market funds.
As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $70.1 million. Cash and cash equivalents are comprised of bank deposits, money market funds, and certificates of deposit. 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. We expect that our anticipated 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 pay quarterly dividends on shares of our Class A common stock and distributions on our LLC Units. Our continued declaration and payment of dividends and institution of any other distributions of capital to shareholders will nonetheless be at the discretion of our Board and will depend on many factors, including our earnings, financial condition and results of operations, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, ability to obtain cash or other assets from our subsidiaries, restrictions imposed by applicable law, general business conditions and other factors that our Board may deem relevant. There can be no assurance that we will continue to pay dividends in the future. Therefore, the success of an investment in shares of our Class A common stock may in the future depend only upon any future appreciation in their value. There is no guarantee that shares of our Class A common stock will appreciate or even maintain their value.
The dividends and distributions declared during the year ended December 31, 2025, on a split adjusted basis, were as follows:
| Dividends | Distributions | ||||||||||||||||||||||||||||
| Type | Date declared | Date paid | per share | Total | per unit | Total | |||||||||||||||||||||||
| Special | January 15, 2025 | February 26, 2025 | $ | 0.60 | $ | 1,249 | N/A | N/A | |||||||||||||||||||||
| Regular | February 27, 2025 | March 31, 2025 | $ | 0.20 | $ | 722 | $ | 0.20 | $ | 2,766 | |||||||||||||||||||
| Regular | May 1, 2025 | June 25, 2025 | $ | 0.20 | $ | 473 | $ | 0.20 | $ | 2,728 | |||||||||||||||||||
| Special | May 1, 2025 | June 25, 2025 | $ | 0.10 | $ | 237 | N/A | N/A | |||||||||||||||||||||
| Regular | July 31, 2025 | September 25, 2025 | $ | 0.20 | $ | 501 | $ | 0.20 | $ | 2,723 | |||||||||||||||||||
| Special | July 31, 2025 | September 25, 2025 | $ | 0.20 | $ | 501 | N/A | N/A | |||||||||||||||||||||
| Regular | October 30, 2025 | December 24, 2025 | $ | 0.20 | $ | 487 | $ | 0.20 | $ | 2,723 | |||||||||||||||||||
| Special | October 30, 2025 | December 24, 2025 | $ | 0.20 | $ | 487 | N/A | N/A | |||||||||||||||||||||
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. 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 expect to incur payment obligations under the Tax Receivable Agreement ("TRA") in the future. These obligations correspond to future cash tax savings that MarketWise, Inc. derives from tax-related benefits created as MarketWise Members exchange their LLC Units for Class A shares of MarketWise, Inc. This obligation is equal to 85% of the estimated future tax benefit for MarketWise, Inc. and is recorded as a TRA liability on the consolidated balance sheet. The TRA liability was $4.3 million as of December 31, 2025. No payments have been made under the TRA, and no significant payments are expected in the next 12 months. However, these obligations may be significant in the future. 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 TRA. 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 TRA, 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 TRA for any reason, the unpaid amounts will be deferred and will accrue interest until paid. For additional information regarding the TRA, see the section entitled " Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity 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 and to MarketWise, Inc. in amounts sufficient for the recipients to pay taxes due on their share of MarketWise income at prevailing individual income tax rates, which for the 2025 tax year the highest federal, state and local tax rate the Company used was 49.75%. In the year ended December 31, 2025, MarketWise, LLC made quarterly tax distributions of $49.8 million proportionately to all MarketWise Members, including MarketWise, Inc. These quarterly tax distributions to MarketWise, Inc. exceeded its corporate tax liability and enabled MarketWise, Inc. to declare and pay the aforementioned special dividend with the excess tax distribution proceeds. We expect MarketWise, Inc. will receive quarterly tax distributions in future quarters such that quarterly special dividends are expected to continue, however the amount is uncertain.
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.
Tax Receivable Agreement
MarketWise, Inc. intends, as MarketWise, LLC's sole manager, to cause MarketWise, LLC to make cash distributions to MarketWise, Inc. in an amount sufficient to cover MarketWise, Inc.'s obligations under the Tax Receivable Agreement. However, MarketWise, LLC's ability to make such distributions to MarketWise, Inc. may be subject to various limitations and restrictions, such as restrictions on distributions under contracts or agreements to which MarketWise, LLC is then a party, including debt agreements, or any applicable law, or that would have the effect of rendering MarketWise, LLC insolvent. 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. MarketWise, Inc.'s failure to make any payment required under the Tax Receivable Agreement (including any accrued and unpaid interest) within 90 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the Tax Receivable Agreement, which will terminate the Tax Receivable Agreement and accelerate future payments thereunder, unless the applicable payment is not made because (i) MarketWise, LLC is prohibited from making such payment under the terms of the Tax Receivable Agreement or the terms governing certain of its indebtedness or (ii) MarketWise, LLC does not have, and despite using commercially reasonable efforts cannot obtain, sufficient funds to make such payment. See "Certain Relationships and Related Party Transactions-Tax Receivable Agreement" and "Certain Relationships and Related Party Transactions-MarketWise Operating Agreement" for additional information. Any payments made by MarketWise, Inc. to the MarketWise Members under the Tax Receivable Agreement will not be available for reinvestment in the business and will generally reduce the amount of cash that might have otherwise been available to MarketWise, Inc. and its subsidiaries.
The Tax Receivable Agreement provides that if (i) MarketWise, Inc. materially breaches any of its material obligations under the Tax Receivable Agreement, (ii) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur, or (iii) MarketWise, Inc. elects an early termination of the Tax Receivable Agreement, then MarketWise, Inc.'s future obligations, or its successor's future obligations, under the Tax Receivable Agreement to make payments thereunder would accelerate and become due and payable, based on certain assumptions, including an assumption that MarketWise, Inc. would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement, and an assumption that, as of the effective date of the acceleration, any MarketWise Member that has LLC Units not yet exchanged shall be deemed to have exchanged such LLC Units on such date, even if MarketWise, Inc. does not receive the corresponding tax benefits until a later date when the LLC Units are actually exchanged. As a result of the foregoing, MarketWise, Inc. would be required to make an immediate cash payment equal to the estimated present value of the anticipated future tax benefits that are the subject of the Tax Receivable Agreement, based on certain assumptions, which payment may be made significantly in advance of the actual realization, if any, of those future tax benefits and, therefore, MarketWise, Inc. could be required to make payments under the Tax Receivable Agreement that are greater than the specified percentage of the actual tax benefits it ultimately realizes.
Stock Repurchase Program
On February 28, 2025, the Company announced that the Board authorized a stock repurchase program of up to $50 million of Class A common stock. Repurchases of Class A common stock may be made from time to time, either through open market transactions (including pre-set trading plans) or through other transactions, at the discretion of the management of the Company and in accordance with the limitations set forth in Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, and other applicable securities laws. The timing of the repurchases will depend on market conditions and other requirements. Repurchases under the program have been authorized for a period of one year but the program may be modified, suspended, or terminated at any time. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares. During the year ended December 31, 2025, we repurchased 209,726 shares totaling $3.4 million in the aggregate.
On October 29, 2025, the Company announced that it had received a proposal from Monument & Cathedral Holdings, LLC (collectively with its affiliates, "M&C") to acquire all of the outstanding equity interests of the Company and MarketWise, LLC that are not owned by M&C. In connection with the Proposal, the Company
suspended repurchases under its stock repurchase program effective October 30, 2025. The Company confirmed publicly on February 18, 2026 that M&C had withdrawn its Proposal. The stock repurchase program remains authorized and the Company plans to resume repurchases after filing this annual report.
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.
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) | Year Ended December 31, | |||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 45,958 | $ | (22,150) | $ | 62,428 | ||||||||||||||
| Net cash used in investing activities | (1,567) | (681) | (1,897) | |||||||||||||||||
| Net cash used in financing activities | (72,107) | (34,458) | (63,953) | |||||||||||||||||
Operating Activities
For the year ended December 31, 2025, net cash used in operating activities was $46.0 million, primarily due to net income of $64.0 million, adjusted for net non-cash items which increased cash by $14.3 million, and net changes in our operating assets and liabilities which reduced cash by $32.4 million, largely due to timing differences in the net receipt of cash. The non-cash items include stock-based compensation expense of $11.1 million, noncash lease expense of $3.2 million, and deferred income taxes of $1.0 million. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue, which reduced cash by $56.1 million due to our overall decrease in sales, partially offset by a net increase in deferred contract acquisition costs of $20.5 million, and a decrease in accrued expenses of $9.9 million.
For the year ended December 31, 2024, net cash used in operating activities was $22.2 million, primarily due to net income of $93.1 million, adjusted for net non-cash items which increased cash by $22.8 million, and net changes in our operating assets and liabilities which reduced cash by $138.0 million, largely due to timing differences in the net receipt of cash. The non-cash items include stock-based compensation expense of $12.2 million, impairment losses of $4.4 million, deferred income taxes of $2.9 million, and gain on sale of business of $2.0 million. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue, which reduced cash by $162.1 million due to our overall decrease in sales, partially offset by a net increase in deferred contract acquisition costs of $63.5 million, and a decrease in accrued expenses of $31.8 million.
For the year ended December 31, 2023, net cash provided by operating activities was $62.4 million, primarily due to net income of $54.3 million adjusted for net non-cash items which increased cash by $37.1 million, and net changes in our operating assets and liabilities which reduced cash by $29.0 million, largely due to timing differences in the net receipt of cash. The non-cash items include stock-based compensation expense of $23.4 million, impairment losses of $2.6 million, deferred income taxes of $1.8 million, and loss on sale of business of $1.6 million. The changes in operating assets and liabilities were primarily driven by a decrease in deferred revenue, which reduced cash by $67.1 million due to our overall decrease in sales, partially offset by a net decrease in deferred contract acquisition costs of $31.3 million, and an increase in accrued expenses of $9.1 million.
Investing Activities
For the year ended December 31, 2025, net cash used in investing activities was $1.6 million, primarily driven by the payment of $1.2 million related to capitalized software development costs.
For the year ended December 31, 2024, net cash used in investing activities was $0.7 million, primarily driven by the payment of $0.5 million related to capitalized software development costs.
For the year ended December 31, 2023, net cash used in investing activities was $1.9 million, primarily driven by the payment of $1.7 million related to capitalized software development costs.
Financing Activities
For the year ended December 31, 2025, net cash used in financing activities was $72.1 million, primarily due to $62.0 million in distributions to noncontrolling interests and $4.8 million in dividends paid to Class A common stockholders.
For the year ended December 31, 2024, net cash used in financing activities was $34.5 million, primarily due to $21.1 million in distributions to noncontrolling interests and $1.5 million in dividends paid to Class A common stockholders.
For the year ended December 31, 2023, net cash used in financing activities was $64.0 million, primarily due to $52.9 million in distributions to noncontrolling interests and $5.7 million in dividends paid. We initiated paying dividends to Class A common stockholders and distributions to holders of LLC Units in 2023. In addition, we paid a special dividend and special distribution in 2023.
Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with GAAP. The preparation of these 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, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies management believes are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
Revenue Recognition
We primarily earn revenue from services provided in delivering subscription-based financial research, publications, and SaaS offerings to individual subscribers through our online platforms using the five-step method described in Note 2 to our consolidated financial statements.
Subscription revenues are recognized evenly over the duration of the subscriptions, in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Subscribers are typically billed in advance of the subscriptions. The key estimates related to our revenue recognition are related to our estimated customer lives for our membership subscriptions, determination of standalone selling prices, and the amortization period for our capitalized contract costs.
We also offer membership subscriptions where we receive an upfront payment upon entering into the contract and receive a lower amount annually thereafter. Certain upfront fees on membership subscriptions are paid in installments over a 12-month period and, from time to time, over multiple years. We recognize revenue related to membership subscriptions over the estimated customer lives, which is five years. Management has determined the estimated life of membership customers based on historic customer attrition rates. The estimated life of membership customers was five years for each of the years ended December 31, 2025, 2024 and 2023.
Our contracts with subscribers may include multiple performance obligations if subscription services are sold with other subscriptions, products, or events within one contract. For such contracts, we allocate net revenues to
each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to subscribers on a standalone basis.
We capitalize incremental costs that are directly related to the acquisition or renewal of customer contracts, to the extent that the costs are expected to be recovered and if we expect the benefit of these costs to be longer than one year. We have elected to utilize the practical expedient and expense costs to obtain a contract with a subscriber when the expected benefit period is one year or less. Our capitalizable incremental costs include sales commissions to employees and fees paid to marketing vendors that are generally calculated as a percentage of the customer sale. We also capitalize revenue share fees that are payable to other companies, including related parties, who share their customer lists with us for each successful sale we make to a customer from their list. Capitalized costs are amortized on a straight-line basis over the expected benefit period related directly to those costs, which is approximately four years. The amortization period for contract costs was approximately four years for each of the years ended December 31, 2025, 2024 and 2023.
Transactions and Valuation of Goodwill and Other Acquired Intangible Assets
When we acquire a business, we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing assets acquired and liabilities assumed include, but are not limited to, future expected cash flows from acquired customers, trade names, acquired technology from a market participant perspective, and determining useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. While management believes the assumptions and estimates it has made in the past have been appropriate, they are inherently uncertain and subject to refinement. During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. We did not have significant measurement period adjustments during the years ended December 31, 2025, 2024 and 2023.
Recently Issued Accounting Pronouncements
See the section titled "Recently Issued and Adopted Accounting Pronouncements" in Note 2 of the notes to our consolidated financial statements included in this Report for more information.
MarketWise Inc. published this content on March 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 06, 2026 at 11:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]