MARKETWISE, INC.

Previous wording

The following table presents net cash provided by operating activities, 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. This quarter, we are also introducing two additional non-GAAP financial measures: Free Cash Flow and EBITDA (as defined below). For more information on our non-GAAP measures, see “— Non-GAAP Financial Measures.”

Current wording

The following table presents net cash provided by operating activities, and the related margin as a percentage of net revenue, Adjusted CFFO (as defined below), a non-GAAP measure, and the related margin as a percentage of Billings, Free Cash Flow and EBITDA (as defined below), both non-GAAP measures, for each of the periods presented. For more information on our non-GAAP measures, see “— Non-GAAP Financial Measures.”

Previous wording

As of March 31, 2025, our paid subscriber base was 473 thousand, down 210 thousand, or 30.7% as compared to 683 thousand at March 31, 2024. Our base is comprised of subscribers obtained through both direct-to-paid acquisition and free-to-paid conversions. Since 2022, direct-to-paid acquisition has accounted for approximately 50% of our annual Paid Subscriber acquisition, and is largely driven by display ads and targeted email campaigns.

Current wording

As of June 30, 2025, our paid subscriber base was 394 thousand, down 251 thousand, or 39.0% as compared to 645 thousand at June 30, 2024. Our base is comprised of subscribers obtained through both direct-to-paid acquisition and free-to-paid conversions. Since 2022, direct-to-paid acquisition has accounted for approximately 50% of our annual Paid Subscriber acquisition, and is largely driven by display ads and targeted email campaigns.

Previous wording

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 March 31, 2025, our high-value composition rate and ultra high-value composition rate were 58% and 26%, respectively.

Current wording

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 June 30, 2025, our high-value composition rate and ultra high-value composition rate were 63% and 30%, respectively.

Previous wording

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 Active Free Subscribers exclude 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.

Current wording

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.

Previous wording

Active Free Subscribers decreased by 0.8 million, or 21.2%, to 3.0 million as of March 31, 2025 as compared to 3.8 million as of March 31, 2024. The year over year decline in Active Free Subscribers is a result of a reduced number of free subscriptions available as we rationalized our offerings in general and as a result of the shutdown of our Legacy Research Group in the first half of 2024.

Current wording

Active Free Subscribers decreased by 2.5 million, or 52.9%, to 2.3 million, compared to 4.8 million as of June 30, 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 elevated churn associated with the shutdown of our Legacy Research business.

Previous wording

Active Free Subscribers decreased by 0.3 million, or 10.5% to 3.0 million as of March 31, 2025 as compared to 3.3 million as of December 31, 2024. The sequential reduction was the result of a reduced number of free subscriptions available during the current quarter.

Current wording

As of June 30, 2025, Active Free Subscribers decreased by 0.7 million, or 24.5% to 2.3 million, compared to 3.0 million as of March 31, 2025, as the sequential reduction was the result of an increase in focus on attracting new direct to paid subscribers in the quarter.

Previous wording

Total Paid Subscribers decreased by 210 thousand, or 30.7%, to 473 thousand as of March 31, 2025 as compared to 683 thousand at March 31, 2024, primarily related to lower customer acquisition as well as elevated churn associated with the shutdown of our Legacy Research business. 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 MMP Business in fourth quarter 2024.

Current wording

Total Paid Subscribers decreased by 251 thousand, or 39.0%, to 394 thousand as of June 30, 2025 as compared to 645 thousand at June 30, 2024, primarily related to lower customer acquisition as well as elevated churn associated with the shutdown of our Legacy Research business. 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 the sale of the MMP Business in the fourth quarter of 2024.

Previous wording

Subscriber count churn has ranged from approximately 2.4% to 3.3% per month between 2022 and 2024. Almost all of the subscribers who churned in first quarter 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 has averaged over 55% from 2022 to 2024, is a more meaningful gauge of subscriber satisfaction.

Current wording

Subscriber count churn has ranged from approximately 2.4% to 3.3% per month between 2022 and 2024. Almost all of the subscribers who churned in second quarter 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 has averaged over 55% from 2022 to 2024, is a more meaningful gauge of subscriber satisfaction.

Previous wording

Average Revenue Per User (“ARPU”). We calculate ARPU as the trailing four quarters of net Billings divided by the 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.

Current wording

Average Revenue Per User. We calculate ARPU as the trailing four quarters of net Billings divided by the 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.

Previous wording

ARPU decreased by $73, or 14.9%, to $419 as of March 31, 2025 as compared to $492 as of March 31, 2024. The year-over-year decrease was driven by a 36% decrease in trailing four quarter Billings, while trailing four quarter Paid Subscribers only decreased by 25%. The decrease in trailing four quarter Billings was driven by reduced engagement of prospective and existing subscribers, as further discussed in Billings below. The decrease in trailing four quarter Paid Subscribers is also driven by the winding down of our Legacy Research business during 2024.

Current wording

ARPU increased by $18, or 3.9%, to $474 as of June 30, 2025 as compared to $456 as of June 30, 2024. The year-over-year increase was driven by a 31% decrease in trailing four quarter Paid Subscribers, while trailing four quarter Billings only decreased by 28%. The decrease in trailing four quarter Paid Subscribers was driven by the winding down of our Legacy Research business. The decrease in trailing four quarter Billings was driven by reduced engagement and conversion of prospective and existing subscribers, as well as the winding down of our Legacy Research business during 2024.

Previous wording

ARPU increased by $25, or 6.4%, to $419 as of March 31, 2025 as compared to $394 as of December 31, 2024. The sequential increase was driven by a 9% decrease in trailing four-quarter average Paid Subscribers, while trailing four-quarter Billings only decreased 3%.

Current wording

ARPU increased by $55, or 13.1%, to $474 as of June 30, 2025 as compared to $419 as of March 31, 2025. The sequential increase was driven by an 11% decrease in trailing four-quarter average Paid Subscribers, while trailing four-quarter Billings were flat.

Previous wording

While they have declined somewhat recently, 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. These subscriptions have compelling economics that allow us to recoup our initial marketing spend made to acquire these subscribers. Specifically, our payback period was estimated at 1.7 years for the years ended 2024 and 2023 and was 1.6 years in 2022. Our payback period remains elevated primarily due to a combination of increased customer acquisition costs and lower conversion rates on higher value products.

Current wording

While they have declined somewhat recently, 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. These subscriptions have compelling economics that allow us to recoup our initial marketing spend made to acquire these subscribers. Specifically, our payback period was estimated at 1.7 years for the years ended 2024 and 2023 and 1.6 year for the year ended 2022, respectively. Our payback period remains elevated primarily due to a combination of increased customer acquisition costs and lower conversion rates on higher value products.

Previous wording

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.

Current wording

Billings. Billings represent 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.

Previous wording

New Marketing Billings are Billings from all new subscription sales. New Marketing Billings decreased by $3.5 million, or 6.3%, to $51.3 million for first quarter 2025 as compared to $54.8 million for first quarter 2024. 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, somewhat offset by larger campaigns in first quarter 2025.

Current wording

New Marketing Billings are Billings from all new subscription sales. New Marketing Billings increased by $2.9 million, or 7.6%, to $41.6 million for second quarter 2025 as compared to $38.7 million for second quarter 2024. The increase was primarily driven by Billings from software services in second quarter 2025.

Previous wording

New Marketing Billings increased by $14.3 million, or 38.8% to $51.3 million for first quarter 2025 as compared to $37.0 million in fourth quarter 2024. The increase was primarily driven by successful campaigns targeted at existing subscribers in first quarter 2025.

Current wording

New Marketing Billings decreased by $9.7 million, or 18.9% to $41.6 million for second quarter 2025 as compared to $51.3 million in first quarter 2025. The decrease was primarily driven by highly successful campaigns targeted at existing subscribers in first quarter 2025 as compared to moderately successful campaigns in second quarter 2025.

Previous wording

Net Renewal Billings are Billings from renewals and maintenance fee payments. Net Renewal Billings decreased by $3.1 million, or 14.5%, to $18.3 million for first quarter 2025 as compared to $21.4 million for first quarter 2024. This is primarily a function of a significant decrease (approximately 180 thousand) in average Paid Subscribers for the trailing twelve months ended March 31, 2025 versus the trailing twelve months ended March 31, 2024.

Current wording

Net Renewal Billings are Billings from renewals and maintenance fee payments. Net Renewal Billings decreased by $1.7 million, or 10.0%, to $15.4 million for second quarter 2025 as compared to $17.1 million for second quarter 2024. This is primarily a function of a significant decrease (approximately 220 thousand) in average Paid Subscribers for the trailing twelve months ended June 30, 2025 versus the trailing twelve months ended June 30, 2024.

Previous wording

Other Billings are Billings from revenue share, advertising and conferences. Other Billings decreased by $0.2 million, or 19.0% to $0.8 million for first quarter 2025 as compared to $1.0 million for first quarter 2024.

Current wording

Other Billings are Billings from revenue share, advertising and conferences. Other Billings decreased by $0.6 million, or 34.0% to $1.2 million for second quarter 2025 as compared to $1.8 million for second quarter 2024 as a result of reduced revenue share income and advertising.

Previous wording

Other Billings decreased by $1.6 million or 65.8% to $0.8 million for first quarter 2025 as compared to $2.4 million for fourth quarter 2024 as a result of decreasing revenue share activity with external parties as well as well as lack of conference revenue compared to fourth quarter 2024.

Current wording

Other Billings increased by $0.4 million or 45.8% to $1.2 million for second quarter 2025 as compared to $0.8 million for first quarter 2025, as a result of increasing revenue share activity with related parties.

Previous wording

Total Billings decreased by $6.8 million, or 8.8%, to $70.5 million for the first quarter 2025 as compared to $77.2 million for first quarter 2024. The decrease was primarily driven by the lack of billings from our Legacy Research Group brands, which began winding down operations in mid-February 2024.

Current wording

Total Billings increased by $0.6 million, or 1.1%, to $58.2 million for the second quarter 2025 as compared to $57.6 million for second quarter 2024. Excluding Billings from our Legacy Research Group brands, which wound down operations in 2024, Billings increased by $5.5 million or 10.4%.

Previous wording

Total Billings increased by $15.1 million, or 27.3%, to $70.5 million for first quarter 2025 as compared to $55.4 million for fourth quarter 2024. The increase was primarily driven by successful campaigns targeted at existing subscribers in first quarter 2025.

Current wording

Total Billings decreased by $12.3 million, or 17.4%, to $58.2 million for second quarter 2025 as compared to $70.5 million for first quarter 2025. The decrease was primarily driven by highly successful campaigns targeted at existing subscribers in first quarter 2025 as compared to moderately successful campaigns in second quarter 2025. In addition, there was a smaller population of renewal dollars available in second quarter versus first quarter.

Previous wording

As of March 31, 2025, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 14.5% and the noncontrolling interest was 85.5%. For the three months ended March 31, 2025 net income attributable to controlling interests included a $1.0 million tax provision, which is 100% attributable to the controlling interest.

Current wording

As of June 30, 2025, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 14.8% and the noncontrolling interest was 85.2%. For the three and six months ended June 30, 2025 net income attributable to controlling interests included a $0.6 million tax provision and a $1.7 million tax provision, respectively, which is 100% attributable to the controlling interest.

Previous wording

As of March 31, 2024, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 11.7% and the noncontrolling interest was 88.3%. For the three months ended March 31, 2024 net income attributable to controlling interests included a $0.7 million tax provision, which is 100% attributable to the controlling interest.

Current wording

As of June 30, 2024, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 12.1% and the noncontrolling interest was 87.9%. For the three and six months ended June 30, 2024, net income attributable to controlling interests included a $0.8 million tax provision and a $1.5 million tax provision, respectively, both of which were solely attributable to the controlling interest.

Previous wording

The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of net revenue for the periods indicated:

Current wording

The following table sets forth our consolidated statements of operations data expressed as a percentage of net revenue for the periods indicated:

Previous wording

The decrease in net revenue was primarily driven by a $17.7 million decrease in term subscription revenue and a $7.7 million decrease in membership subscription revenue.

Current wording

The decrease in net revenue was primarily driven by a $17.8 million decrease in term subscription revenue and a $6.7 million decrease in membership subscription revenue.

Previous wording

Cost of revenue decreased primarily driven by a $1.8 million decrease in outsourced labor, and a $0.4 million decrease in credit card fees. This was partially offset by a $0.7 million increase in stock-based compensation expense.

Current wording

Cost of revenue decreased primarily driven by a $1.6 million decrease in freelance editorial expenses and a $0.9 million decrease in incentive compensation. This was partially offset by a $0.4 million increase in stock-based compensation expense and a $0.3 million increase in salaries, taxes and benefits.

Previous wording

Term subscription revenue decreased during the three months ended March 31, 2025 primarily due to the wind down of Legacy Research, which contributed $11.6 million to the decrease in term subscription revenue and $7.3 million to the decrease in membership subscription revenue. Term subscription revenue also decreased during the three months ended March 31, 2025 due to lower billings as compared to the 2024 period which was driven by reduced engagement of prospective and existing subscribers in the 2025 period.

Current wording

Term subscription revenue decreased during the six months ended June 30, 2025 primarily due to the wind down of Legacy Research, which contributed $23.1 million to the overall term subscription revenue decrease. Term subscription revenue also decreased during the six months ended June 30, 2025 due to lower billings as compared to the 2024 period which was driven by reduced engagement of prospective and existing subscribers in the 2025 period.

Previous wording

Sales and marketing expense decreased primarily driven by a $10.2 million decrease in amortization of deferred contract acquisition costs, a $2.0 million decrease in salaries, taxes and benefits, and a $1.3 million decrease in marketing expense.

Current wording

Sales and marketing expense decreased primarily driven by a $20.7 million decrease in amortization of deferred contract acquisition costs, and $2.8 million decrease in salaries, taxes and benefits primarily due to reductions in workforce in 2024.

Previous wording

General and administrative expense decreased primarily driven by a $1.6 million gain on lease termination, a $1.2 million gain on contingent consideration receivable, a $1.4 million decrease in stock-based compensation expense, a $1.2 million decrease in legal expense, a $0.5 million decrease in outsourced labor, and a $0.5 million decrease in salaries, taxes and benefits.

Current wording

General and administrative expense decreased driven by a $1.6 million decrease due to the Legacy lease termination, $1.5 million decrease in salaries, taxes, and benefits, $1.4 million decrease due to the change in fair value of contingent consideration related to brands sold during 2024, and a $0.7 million decrease in severance expense, both due to reductions in workforce in 2024, and a $0.7 decrease in stock-based compensation expense, a $0.6 million decrease in software expense, a $0.5 million decrease in outside labor, and a $0.5 million decrease in incentive compensation.

Previous wording

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.

Current wording

In addition to our results determined in accordance with GAAP, we believe that the below non-GAAP financial measures are useful in evaluating our 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

Previous wording

This quarter, we are introducing two additional non-GAAP financial measures: Free Cash Flow and EBITDA. These new non-GAAP financial measures are intended to provide investors with additional information regarding our liquidity and operating performance, and they are commonly used within our industry.

Current wording

In the first quarter, we introduced two additional non-GAAP financial measures: Free Cash Flow and EBITDA. These new non-GAAP financial measures are intended to provide investors with additional information regarding our liquidity and operating performance, and they are commonly used within our industry.

Previous wording

The following table provides the calculation of net cash provided by operating activities margin 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:

Current wording

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:

Previous wording

CFFO and Adjusted CFFO for the three months ended March 31, 2025 was primarily due to net income of $16.8 million, adjusted for net non-cash items which increased cash by $4.4 million. This was partially offset by net changes in our operating assets and liabilities which reduced cash by $19.5 million, including incentive compensation payouts and payments related to renegotiated employment agreements.

Current wording

CFFO and Adjusted CFFO for the six months ended June 30, 2025 was primarily due to net income of $32.2 million, adjusted for net non-cash items which increased cash by $8.0 million. This was partially offset by net changes in our operating assets and liabilities which reduced cash by $20.5 million, including incentive compensation payouts.

Previous wording

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. We expect that as we grow our business, the amount of our float will increase. The Company estimates that the amount of float was approximately $107.7 million and $119.7 million as of March 31, 2025 and December 31, 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.

Current wording

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. We expect that as we grow our business, the amount of our float will increase. The Company estimates that the amount of float was approximately $87.8 million and $119.7 million as of June 30, 2025 and December 31, 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.

Previous wording

For the three months ended March 31, 2025 and 2024, the Company earned interest income of $0.9 million and $1.8 million, respectively, on our cash portfolio which was invested solely in money market funds.

Current wording

For the three and six months ended June 30, 2025, the Company earned interest income of $0.8 million and $1.7 million, respectively, on our cash portfolio which was invested solely in money market funds.

Previous wording

As of March 31, 2025, our principal sources of liquidity were cash, cash equivalents, and restricted cash of $79.2 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.

Current wording

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents, and restricted cash of $69.1 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.

Previous wording

We expect to incur payment obligations under the Tax Receivable Agreement 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 condensed consolidated balance sheet. The TRA liability was $3.7 million as of March 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 Tax Receivable Agreement. 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. For additional information regarding the Tax Receivable Agreement, 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.

Current wording

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 condensed consolidated balance sheet. The TRA liability was $4.3 million as of June 30, 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.

Previous wording

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 2024 tax year the highest federal, state and local tax rate the Company used was 49.75%. In January 2025, MarketWise, LLC made a quarterly tax distribution of $15.1 million proportionately to all MarketWise Members, including MarketWise, Inc. This quarterly tax distribution 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 however the amount is uncertain.

Current wording

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 2024 tax year the highest federal, state and local tax rate the Company used was 49.75%. In second quarter 2025, MarketWise, LLC made quarterly tax distributions of $22.8 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 however the amount is uncertain.

Previous wording

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 the next 12 months 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.

Current wording

On February 28, 2025, the Company announced that the Board authorized a stock repurchase program of up to $50 million shares 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 the 12 months following the announcement 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 three and six months ended June 30, 2025, we repurchased 117,673 shares totaling $1.9 million in the aggregate, including fees and commissions of $4 thousand.

Previous wording

For each share of Class A common stock the Company repurchases under the share repurchase program, MarketWise, LLC, the Company’s direct subsidiary, will redeem one common unit of MarketWise, LLC held by the Company, decreasing the percentage ownership of MarketWise, LLC by the Company and relatively increasing the ownership by the other unitholders of MarketWise, LLC.

Current wording

For each share of Class A common stock the Company repurchases under the share repurchase program, MarketWise, LLC, the Company’s direct subsidiary, will redeem one common unit of MarketWise, LLC held by the Company, decreasing the percentage ownership of MarketWise, LLC by the Company and relatively increasing the ownership by the other unit holders of MarketWise, LLC.

Previous wording

In October 2024, we completed our reorganization and operational transition plans with respect to substantially all of the Legacy Research brands. The Company expects to dissolve the Legacy Research legal entities during second quarter 2025. For further background, see Note 4 – Acquisitions and Disposals in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

In October 2024, we completed our reorganization and operational transition plans with respect to substantially all of the Legacy Research brands. The Company dissolved substantially all of the Legacy Research legal entities during second quarter 2025. For further background, see Note 4 – Acquisitions and Disposals in our Annual Report on Form 10-K for the year ended December 31, 2024.