Executive Summary

Q1 2025 net revenue was $83.5M and diluted EPS was $0.41; Billings rose 27% sequentially to $70.5M while net income was $16.8M, reflecting improving operational execution despite lower revenue year over year .
Management introduced FY 2025 targets: Billings ~$250M (+20% vs annualized 2H 2024), and Cash from Operating Activities and Free Cash Flow of ~$30M; dividends to Class A shareholders targeted at $1.60–$1.80 per share for the year .
Capital allocation intensified: $0.80 per Class A share paid in Q1 and share repurchases commenced (20,306 shares, $0.2M), under a $50M authorization; cash ended Q1 at $79.2M with no debt .
Key catalysts emphasized by management are dividends/buybacks, visible FY targets, and sequential Billings momentum; macro uncertainty and Legacy Research churn were flagged as potential headwinds to self-directed investor spending .

What Went Well and What Went Wrong

What Went Well

Sequential Billings growth: Q1 Billings increased to $70.5M from $55.4M in Q4 (+27%), driven by stronger new marketing Billings and improved execution .
Cash generation improved: Cash from Operating Activities was $1.7M vs $(18.5)M in Q1 2024; management expects FY 2025 CFFO and FCF ~$30M, citing cost structure actions supporting strong CFFO margins .
Capital returns and balance sheet: $0.80 per share paid in Q1; buybacks initiated; ending cash $79.2M, no debt, enabling shareholder rewards and operational flexibility; regained Nasdaq compliance on April 25, 2025 .
- Quote: “The steps we have taken to improve our cost structure and improve overall efficiency should enable us to deliver strong CFFO margins.” – Dr. David “Doc” Eifrig .

What Went Wrong

Year-over-year revenue decline: Net revenue fell to $83.5M from $109.0M in Q1 2024; net income was $16.8M vs $22.7M in Q1 2024, reflecting lower reported revenue and subscriber churn .
Paid subscribers declined: 473K at 3/31/25 vs 683K at 3/31/24, primarily due to lower acquisition and elevated churn related to the shutdown of Legacy Research; further churn expected in Q2 from low-ARPU Legacy subscribers .
Macro caution: Management noted “current uncertainty in the market” may impact self-directed investor spending patterns; ARPU ticked up to $419 but revenue recognition lag (vs Billings) and churn can temper near-term reported metrics .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Total Net Revenue ($USD Millions)	$97.2	$97.5	$83.5
Diluted EPS ($USD, Class A)	$0.81	$1.08	$0.41
Net Income ($USD Millions)	$22.7	$26.4	$16.8
Billings ($USD Millions)	$48.9	$55.4	$70.5
Cash from Operating Activities (CFFO, $USD Millions)	$(5.8)	$6.0	$1.7
Free Cash Flow ($USD Millions)	$(5.9)	$6.1	$1.5
EBITDA ($USD Millions)	$23.2	$26.8	$17.5

KPI	Q3 2024	Q4 2024	Q1 2025
Paid Subscribers (000s)	592	506	473
ARPU ($)	$417	$394	$419
Cash and Cash Equivalents ($USD Millions)	$94.1	$97.9	$79.2
Dividends per Class A share (quarter)	$0.20	$0.20	$0.80
Shares repurchased (count/$)	N/A	Authorized $50M	20,306 / $0.2M

Billings Mix ($USD Millions)	Q3 2024	Q4 2024	Q1 2025
New “Marketing” Billings	$32.3	$37.0	$51.3
Net “Renewal” Billings	$15.7	$16.0	$18.3
Other Billings	$0.9	$2.4	$0.8
Total Billings	$48.9	$55.4	$70.5

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Billings	FY 2025	None disclosed	~$250M; +20% vs annualized 2H 2024 ($208.6M annualized baseline)	Introduced
Cash from Operating Activities	FY 2025	None disclosed	~$30M	Introduced
Free Cash Flow	FY 2025	None disclosed	~$30M	Introduced
Dividends to Class A shareholders	FY 2025	None disclosed	~$1.60–$1.80 per share (incl. recurring $0.20/qtr and additional dividends from excess tax distributions)	Introduced
Tax distributions to noncontrolling interests	FY 2025	N/A	~$30–$40M (incl. $14.5M paid in Q1)	Introduced
Share repurchase program	12 months from 2/28/25	N/A	Authorized up to $50M; active repurchases began in April	Introduced

Earnings Call Themes & Trends

Note: A Q1 2025 earnings call transcript was not available in our document set; themes reflect management’s prepared remarks and press releases.

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Billings trajectory	Q3: optimization; October Billings ~$19M vs ~$16M monthly avg; inflection expected in Q4 . Q4: Billings +10% q/q to $55.4M .	Q1: Billings $70.5M, +27% q/q; New marketing Billings strong .	Improving sequential momentum
Subscribers/churn	Paid subscribers down YoY; pipeline and brand launches to support growth .	473K paid subs; churn tied to Legacy Research shutdown; further low-ARPU churn expected in Q2 .	Subscriber count declining; churn normalization expected
ARPU monetization	ARPU trended down to $394 in Q4 .	ARPU up to $419; reflects installed base monetization .	Recovering ARPU
Capital allocation	Q4: $50M buyback authorized; dividend continuity .	Q1: $0.80 dividend paid; buybacks initiated; strong cash, no debt .	Increased returns, active buybacks
Efficiency/CFFO	Q4: return to profitability; margin improvement underway .	Efficiency actions to deliver strong CFFO margins; CFFO improved by $20M vs prior-year quarter .	Efficiency gains progressing
Macro commentary	N/A	Market uncertainty may impact self-directed investor spending .	Cautious tone
Corporate actions/listing	Q4: reverse split anticipated to meet Nasdaq requirements .	1-for-20 reverse split effected Apr 2; Nasdaq compliance regained Apr 25 .	Listing compliance resolved

Management Commentary

“Billings for the first quarter increased more than 27% compared to 4Q 2024 and Cash from Operating Activities improved by $20 million compared to the same quarter last year.” – Dr. David “Doc” Eifrig, Interim CEO .
“The steps we have taken to improve our cost structure and improve overall efficiency should enable us to deliver strong CFFO margins.” – Dr. David “Doc” Eifrig .
“During the first quarter we paid dividends of $0.80 per Class A share… we recently commenced buying back shares… we will continue to be an active repurchaser when we believe our stock is undervalued.” – Dr. David “Doc” Eifrig .
FY 2025 targets: Billings ~$250M; CFFO and FCF ~ $30M; dividends $1.60–$1.80 per Class A share .

Q&A Highlights

A Q1 2025 earnings call transcript was not found in our document set; no Q&A details available based on the filings and press releases reviewed [ListDocuments returned 0 earnings-call-transcript for 2025-01-01 to 2025-11-20].

Estimates Context

Consensus appeared unavailable via S&P Global for Q1 2025.

Metric	Consensus (Q1 2025)	Actual (Q1 2025)	Surprise
Revenue ($USD Millions)	N/A*	$83.5	N/A*
Diluted EPS ($USD)	N/A*	$0.41	N/A*
EBITDA ($USD Millions)	N/A*	$17.5	N/A*

Values retrieved from S&P Global.*

Where estimates may need to adjust: With sequential Billings strength (+27% q/q) and management’s FY 2025 targets for ~$250M Billings and ~$30M CFFO/FCF, models may need to reflect higher second-half cash conversion and ARPU resilience, while incorporating subscriber churn normalization and macro sensitivity to self-directed investor spend .

Key Takeaways for Investors

Sequential acceleration in Billings (+27% q/q) signals demand recovery and effective marketing; watch Q2 Billings and ARPU to validate trend durability .
Cash generation inflecting: CFFO improved by $20M vs prior-year quarter; management targets ~$30M CFFO and FCF in FY 2025, implying stronger operating leverage as efficiency actions flow through .
Capital return story strengthening: $0.80 paid in Q1; ongoing quarterly and special dividends plus active buybacks under a $50M authorization support total shareholder yield; monitor payout cadence and tax distributions .
Subscriber base rebalancing: Legacy Research shutdown drives near-term churn, but ARPU recovery to $419 indicates installed-base monetization; acquisition and retention initiatives are key to stabilizing paid subs .
FY 2025 visibility: Newly introduced targets for Billings and cash outcomes provide clearer line-of-sight; achievement depends on macro conditions and sustained execution in new marketing Billings .
Listing and liquidity: Reverse split completed; Nasdaq compliance regained, potentially broadening investor access; balance sheet remains debt-free with $79.2M cash at quarter-end .
Near-term trading setup: Catalysts include dividend declarations, incremental buybacks, and sequential Billings updates; risks center on macro uncertainty impacting self-directed investor purchases and residual churn from low-ARPU cohorts .

Additional Relevant Press Releases in Q1 2025

Preliminary Q1 update (April 11, 2025): Billings ~$70M (+26% sequential), paid subs 473K; noted 16% cash dividend yield over LTM and initiation of buybacks .
Dividend declaration (May 2, 2025): Quarterly $0.20 and special $0.10 per Class A share, payable June 25; record date May 15 .

Cross-Period Trend Reference (Prior Two Quarters)

Q4 2024: Net revenue $97.5M; Billings $55.4M; net income $26.4M; CFFO $6.0M; announced $50M buyback authorization .
Q3 2024: Net revenue $97.2M; Billings $48.9M; net income $22.7M; CFFO $(5.8)M; early signs of Billings inflection and brand/pipeline setup .

Appendix: Income Statement and Balance Sheet (Q1 2025)

Income statement detail: net revenue $83.507M; operating expenses $66.727M; income from operations $16.780M; net income $16.841M; diluted EPS $0.41; weighted avg diluted shares 2.160M .
Balance sheet: cash $79.178M; accounts receivable $8.789M; deferred revenue current $213.004M; total liabilities $457.291M; total stockholders’ deficit $(217.731)M .

MARKETWISE, INC. (MKTW)·Q1 2025 Earnings Summary