MarketWise, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the MarketWise Third Quarter 2021 Earnings Call. During today's presentation, all parties will be in a listen-only mode. If anyone should require operator assistance during the call, please press star zero. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to hand the conference over to Jonathan Chanfield, head of investor relations at MarketWise. Please go ahead.

Thank you. Good morning. Thanks for joining us on today's conference call to discuss MarketWise's third quarter 2021 financial results. On the call today, we have Mark Arnold, our chief executive officer, and Dale Lynch, our chief financial officer. During the course of today's call, we may make forward-looking statements, including but not limited to statements regarding our guidance and future financial performance, Mark Reyes, Market demand growth prospects business strategies and plans and our ability to attract and retain customers. Mark Reyes, These forward looking statements are based on management's current views and assumptions and should not be relied upon as of any subsequent date and will disclaim any obligation to update any forward looking statements. Actual results may vary materially from today's statements. Information concerning our risks, uncertainties, and other factors that could cause results to differ from these forward-looking statements are contained in the company's SEC filings, earnings press release, and supplemental information posted on the investor section of the company's website. Our discussion today will include certain non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, an isolation from GAAP measures. Reconciliations to non-GAAP measures can be found in our earnings press release and SEC filings. I will now turn the call over to Mark.

Thanks, John. Good morning, everybody. Welcome to our third quarter 2021 earnings conference call. As you all know, we successfully closed our transactions with Ascendant and began trading publicly in late July. We're pleased to have completed the transactions and the transition to operating as a public company. There was a lot of hard work by our team and all of our advisors to get to our current state, and we have a lot to be proud of. And with that said, we're excited about the opportunities that we see in front of us as a newly public company. We're going to discuss the highlights of our third quarter results and some of the trends we're seeing in our marketplace. But first, I would like to touch on a couple of recent developments. As you saw in our press release yesterday and over the past two weeks, we have made a number of significant announcements. First, a couple weeks ago, we announced that we successfully entered into a credit facility with a syndicate of five banks that will provide a revolving line of credit for up to $150 million. This is a significant milestone for MarketWise, as it is the first committed credit facility in our history. Now, we did not draw any funding at closing and do not have any immediate plans to borrow, but this facility will provide important backup liquidity for the company, as well as capacity for acquisition financings. One thing I'd like to note, while the headline number of $150 million provides meaningful capacity to the company, it is still small relative to our adjusted cash flows from operations, representing less than one turn of leverage. And while we may use this debt facility as part of our acquisition strategy, one thing you should not expect is for us to become a highly levered company. Additionally, given the amount of cash we generate, we would expect to be able to pay down any borrowings relatively quickly over time. We're very pleased with the participation of all our new lenders, and I want to thank each of them publicly now for their support. It's an important step forward for the company that we achieved this quarter. Additionally, we announced yesterday that our board of directors authorized the repurchase of up to $35 million in shares of Class A common stock. The purchases under this program will be made from time to time and at the discretion of the management of the company. The timing of the repurchases will depend on market conditions and other requirements. We anticipate that the share repurchase program will extend over a two-year period or earlier if $35 million in aggregate of shares have been repurchased. This program does not obligate us to repurchase any certain dollar amount or certain number of shares, and the program may be extended, modified, suspended, or discontinued at any time. Philosophically, we believe repurchasing shares when it is highly accretive to do so is a proper deployment of capital and provides support for our investors when we view the stock as significantly undervalued. We believe our share price recently by most any measure is undervalued and we intend to repurchase shares when the returns realized from those repurchases are highly accretive to our investors. We are reaffirming the strength of the business and with the adoption of this plan, the tremendous value we believe exists at these prices. Our business is CapEx Lite, and we have sufficient excess cash on our balance sheet today, which could be put to work for a buyback without impacting our company's ability to grow. Turning to third quarter 2021 results, our business continued to perform well as our subscribers continued to engage with and explore our research products and software solutions. During the third quarter, our revenues grew 43%. and our total subscribers, free and paid, grew 54%. Our year-to-date billings totaled $578 million and have already exceeded last year's total billings of $549 million. Our year-to-date adjusted cash flow from operations grew to $192 million as compared to $134 million for all of 2020. So we continue to have a very good year with our third quarter results. We are very happy with the performance of the company, and now that the GoPublic transaction is complete, we are focused on executing on our strategy going forward. As I had mentioned in the past, I would encourage our shareholders to keep the long view in mind. We have been in business for over 20 years, always been profitable, and always treated our equity holders well. And during that long history, there have been periods, like this one, where year-over-year growth has been up significantly. And we can't promise our investors that our results will always go up. What we can do is promise to do our best to run the business with the best interests of our shareholders in mind. Our leadership team has a tremendous amount of skin in the game, owning nearly 29% of the new company post-closing. So our economic interests are very aligned with yours. More on the long-term nature of our business in a minute. But first, I want to briefly touch on some quarterly trends that we highlighted in our second quarter calls. Throughout this quarter, we saw a continuation of market dynamics from late spring and summer related to the travel and leisure boom that we have discussed previously. As COVID statistics improved, people began to reengage in activities outside of the home, and we saw a movement of eyes off screens as travel and leisure activities increased and online engagement leveled off. As you may recall, on our second quarter earnings call, we described this pattern of behavior and shared that what we had seen at the end of the second quarter was continuing through the summer and possibly into September. It was our thought that as the summer ended and as the school year began in the fall, people would begin reengaging in a more normalized fashion. And while this took a bit longer than we would have liked, we had begun to see some early signs of this normalization throughout the month of October. Specifically, we had 11.4 million total landing page visits in October. which was a 17 and a half percent increase over the June to September four month average. We've also seen early signs of an uptick in the rate of new paid subscriber additions in the month of October and a modest decrease in our per unit subscriber acquisition costs. And while it may be too early to extend this trend throughout the balance of the year, what I can say is that we have a very busy schedule plan for the fourth quarter and I expect us to finish the year strong. As I have said throughout the year, our goal is to be the trusted, resource of financial information and a leading financial wellness platform for self-directed investors. To that end, we continue to deliver high-quality research, and our community continues to grow with almost 14 total subscribers now. 14 million, excuse me. We continue to expand the breadth and depth of our products and brands and continue to look for ways to expand our reach, engage our readers, and provide best-in-class actionable research for the self-directed investing community. our business has been profitable for 20 years we have never had an unprofitable year and i can tell you with certainty that our business does not always move in a straight line there are times when subscriber growth is rapid and other times when it pauses over the long term we've been very successful maintaining a balance between growth and profitability but always with an eye towards profitability we make decisions with the long term in mind which we know could adversely impact our short-term metrics But the beauty of our business is our ability to capture trends real time and pivot to maintain that balance. Specifically, as we saw digital ad costs begin to escalate this year on a per subscriber basis, we were able to reduce the spend very quickly. The key value driver of our business is the relationship between our subscribers and our analysts and editors. And as our metrics show, the value of our subscribers increases over time as they move through the life cycle of a paid subscriber to high value to ultimately ultra high value customers over time. Again, I can't stress this enough. This is a relationship business, and we believe and have proven over time that the quality of our research and content is highly valuable to our customer base. I'll now turn it over to Dale to discuss more of the specific financial results.