Sign in

You're signed outSign in or to get full access.

MI

MARKETWISE, INC. (MKTW)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered stabilization and sequential improvement: Billings rose 10% QoQ to $55.4M, Net Revenue was $97.5M, and the company returned to quarterly profitability with Net Income of $26.4M .
  • Management highlighted early Q1 2025 momentum, with Billings through the first two months more than 10% higher than the comparable period in Q4, driven by compelling content, customer acquisition, and pricing strategy .
  • Capital allocation actions are notable: board authorized a stock repurchase program of up to $50M, a $0.01 quarterly dividend, and a $0.03 special dividend funded by excess tax distributions; a planned 1-for-20 reverse split aims to regain Nasdaq compliance and broaden institutional appeal .
  • Wall Street consensus estimates (S&P Global) were unavailable at time of analysis; therefore, formal beat/miss vs estimates cannot be assessed (attempted retrieval, S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well

  • Sequential top-line improvement: “Billings of over $55 million, or a 10% sequential increase compared to the third quarter… return to profitability in the quarter” .
  • Early Q1 2025 traction: “Through the first two months of the first quarter, our Billings are over 10% higher than the comparable period of the fourth quarter” .
  • Strengthened capital return and signaling: Board approved $0.01 quarterly dividend and authorized up to $50M share repurchases; reverse split expected to enhance investor appeal and maintain Nasdaq listing .

What Went Wrong

  • Ongoing demand pressure: Paid Subscribers fell to 506K from 737K YoY; ARPU declined to $394 from $503 YoY, reflecting mix/pricing and engagement challenges .
  • YoY contraction: Q4 Net Revenue decreased to $97.5M from $112.2M and Billings to $55.4M from $93.6M, highlighting lingering headwinds despite sequential stabilization .
  • Cash generation remains fragile: Q4 CFFO was $6.0M vs $17.5M YoY; full-year 2024 CFFO was -$22.2M vs +$62.4M prior year, underscoring working capital and deferred revenue dynamics .

Financial Results

Quarterly Performance (oldest → newest)

MetricQ4 2023Q1 2024Q2 2024Q3 2024Q4 2024
Total Net Revenue ($USD Millions)$112.2 $109.0 $105.0 $97.2 $97.5
Total Billings ($USD Millions)$93.6 $77.2 $57.6 $48.9 $55.4
Net Income ($USD Millions)$1.9 $22.7 $21.2 $22.7 $26.4
CFFO ($USD Millions)$17.5 ($18.5) ($3.8) ($5.8) $6.0
Paid Subscribers (000s)737 683 645 592 506
ARPU ($USD)$503 $492 $456 $417 $394
Net Income Margin %1.7% (1.9/112.2) 20.8% (22.7/109.0) 20.2% (21.2/105.0) 23.4% (22.7/97.2) 27.1% (26.4/97.5)

Notes: Net Revenue and Net Income are GAAP; CFFO = Cash from Operating Activities.

Q4 2024 vs Prior Year and Prior Quarter

MetricQ4 2023Q3 2024Q4 2024YoY ChangeQoQ Change
Total Net Revenue ($USD Millions)$112.2 $97.2 $97.5 -13.1% +0.3%
Total Billings ($USD Millions)$93.6 $48.9 $55.4 -40.8% +13.2%
Net Income ($USD Millions)$1.9 $22.7 $26.4 +1,289% +16.1%
CFFO ($USD Millions)$17.5 ($5.8) $6.0 -65.9% Return to positive
Paid Subscribers (000s)737 592 506 -31.4% -14.5%
Net Income Margin %1.7% 23.4% 27.1% +2,540 bps +370 bps

Segment/Revenue Drivers (Billings)

Billings Component ($USD Millions)Q4 2023Q1 2024Q2 2024Q3 2024Q4 2024
New “Marketing” Billings$67.7 $54.8 $38.7 $32.3 $37.0
Net “Renewal” Billings$21.6 $21.4 $17.1 $15.7 $16.0
Other Billings$4.2 $1.0 $1.8 $0.9 $2.4
Total Billings$93.6 $77.2 $57.6 $48.9 $55.4

Balance Sheet Snapshot

  • Cash & cash equivalents at 12/31/24: $97.9M .
  • No amounts outstanding on $150M credit facility at maturity on 10/29/24 .
  • Deferred revenue current: $217.97M; noncurrent: $209.01M at 12/31/24 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q1 2025None providedNo formal guidance; mgmt commentary: Billings in first two months of Q1 >10% higher vs comparable Q4 period N/A
BillingsQ1 2025None providedIndicated >10% increase vs comparable Q4 period Informational
DividendOngoing$0.01 quarterly (declared Nov 1, 2024) $0.01 quarterly maintained; special dividend $0.03 paid Feb 26, 2025 Maintained; special paid
Share RepurchaseNext 12 monthsNoneAuthorized up to $50M Class A buyback (12-month authorization) Introduced
Capital Structure2025N/APlanned 1-for-20 reverse split; reduced authorized shares; aims for Nasdaq compliance Structural

Earnings Call Themes & Trends

Note: No earnings call transcript was found for Q4 2024.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Demand/Top-line trajectoryQ3: signaled inflection with Oct Billings ~$19M vs ~$16M monthly avg in Q3 Sequential Billings +10% QoQ; early Q1 Billings >10% above comparable Q4 period Improving sequentially
Subscriber base & ARPUPaid subs decline to 592K; ARPU $417 in Q3 Paid subs 506K; ARPU $394; continued YoY pressure Under pressure
Operational efficiencyQ3: optimization efforts to improve revenue/margins Return to quarterly profitability; positive CFFO in Q4 Benefiting margins
Capital allocationQ3: cash $94.1M; began tax distributions $50M buyback, $0.01 quarterly dividend, $0.03 special dividend More shareholder-friendly
Balance sheet/liquidityQ3: no debt; credit facility matured Cash $97.9M; facility matured with no borrowings Stable liquidity
Corporate actionsN/AReverse split proposal to improve compliance/market perception Strategic reset

Management Commentary

  • “We generated Billings of over $55 million, or a 10% sequential increase… return to profitability… making progress on our strategic pillars of growth, efficiency, and new business.” – Dr. David “Doc” Eifrig, Interim CEO .
  • “Through the first two months of the first quarter, our Billings are over 10% higher than the comparable period of the fourth quarter.” – Dr. Eifrig .
  • “We expect the Company will complete a reverse stock split… more attractive to certain institutional investors… enable us to meet the Nasdaq exchange requirements… increase overall market perception.” – Dr. Eifrig .
  • “Board approved another $0.01 quarterly dividend… board authorized a share repurchase program of up to $50 million.” – Dr. Eifrig .

Q&A Highlights

No Q4 2024 earnings call transcript was identified; therefore, Q&A details and any guidance clarifications are not available.

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, and EBITDA was unavailable due to data access limitations at the time of request. As a result, formal beat/miss vs consensus cannot be determined.
  • Given sequential improvement and return to quarterly profitability, analysts may reassess near-term Billings trajectory and margin expectations; however, without published consensus, explicit revisions cannot be quantified.

Key Takeaways for Investors

  • Sequential inflection: Q4 Billings rose 10% QoQ to $55.4M and Net Income improved to $26.4M, with early Q1 momentum (Billings >10% above comparable Q4 period) suggesting near-term stabilization .
  • Demand headwinds persist: Paid subscribers fell to 506K and ARPU to $394, indicating continued pressure on renewal cohorts and monetization per user despite sequential progress .
  • Cash generation turning: Q4 CFFO positive at $6.0M after three negative quarters; monitor sustainability as deferred revenue trends and acquisition cost amortization drive working capital .
  • Capital return and signaling: $50M buyback authorization, ongoing $0.01 quarterly dividend, and a $0.03 special dividend underscore balance sheet flexibility (cash $97.9M; no debt outstanding at facility maturity) .
  • Reverse split as catalyst: Planned 1-for-20 split seeks Nasdaq compliance and potential institutional inclusion; could affect liquidity and investor perception near term .
  • Focus areas: Track New “Marketing” Billings recovery (Q4: $37.0M) and Renewal Billings stabilization (Q4: $16.0M) as leading indicators for future Billings and cash flow .
  • Execution watchlist: Content pipeline, acquisition efficiency, and price strategy cited as drivers; continued improvement should support margin expansion and cash generation .