MarketWise (MKTW) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $22.7 million, up from $12.0 million in Q3 2023, despite net revenue falling 8.4% year-over-year to $97.2 million.

• Paid subscribers declined 23.5% to 592,000, reflecting reduced marketing and the wind-down of Legacy Research.

• Cash and cash equivalents stood at $94.1 million as of September 30, 2024, down from $155.2 million at year-end 2023.

• Total billings dropped to $48.9 million in Q3 2024 from $95.5 million in Q3 2023, with a nine-month billings decline of 36.4% year-over-year.

• Dr. David Eifrig was appointed Interim CEO in August 2024.

Financial highlights

• Total net revenue for the nine months ended September 30, 2024 was $311.2 million, a 7.4% decrease year-over-year.

• Net income for the nine months was $66.7 million, up from $52.4 million in the prior year period.

• Adjusted CFFO for Q3 2024 was $(5.8) million, down from $12.1 million in Q3 2023; margin was (11.9)% versus 12.6%.

• Operating expenses fell 20.8% in Q3 2024, driven by lower sales and marketing and general/admin costs.

• ARPU for Q3 2024 was $417, down from $496 in Q3 2023, a 15.9% year-over-year decrease.

Outlook and guidance

• Management expects new brand launches and a strong product pipeline in Q4 to drive a billings inflection point.

• October billings increased to $19 million from a Q3 monthly average of $16 million.

• Management expects operating cash flows and cash on hand to be sufficient for at least the next 12 months.

• Ongoing focus on operational efficiency and cost management as subscriber base and Billings decline.

• Strategic priorities include revenue growth, margin expansion, and inorganic opportunities.