MarketWise (MKTW) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 was $105.0 million, up 1.4% year-over-year, driven by higher membership subscription revenue offset by lower term subscriptions.

• Net income for Q2 2024 was $21.2 million, more than double the $9.7 million in Q2 2023.

• The company is winding down its Legacy Research Group business due to discovered misconduct, with most transition actions completed by August 2024.

• Paid subscribers declined 14% year-over-year to 645,000, while ARPU fell 6.8% to $456.

Financial highlights

• Q2 2024 operating income rose to $21.3 million from $8.9 million in Q2 2023.

• Total operating expenses decreased 11.6% year-over-year, reflecting cost reductions in marketing, compensation, and stock-based expenses.

• Adjusted CFFO for Q2 2024 was $(3.8) million, down from $29.0 million in Q2 2023, with margin dropping to (6.6)% from 30.1%.

• Cash and equivalents at June 30, 2024 were $109.3 million, down from $155.2 million at year-end 2023.

• Total billings for Q2 2024 were $57.6 million, down 40.1% year-over-year, mainly due to the Legacy Research wind-down.

Outlook and guidance

• The company expects to complete the Legacy Research transition in Q3 2024, with related asset transfers and operational changes.

• Management anticipates continued investment in operational efficiency and product development, with sufficient liquidity for at least the next 12 months.