MarketWise, Inc.

Greetings and welcome to the MarketWise fourth quarter and full year 2021 earnings results conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, you may press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jonathan Shanfield, Head of Investor Relations at MarketWise. Thank you. Please go ahead.

Thank you. Good morning, and thank you all for joining us on today's conference call to discuss MarketWise's full year and fourth quarter 2021 financial results. On the call today, we have Mark Arnold, our Chief Executive Officer, and Dale Lynch, 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, market demand, growth prospects, business strategies and plans, and our ability to attract and retain customers. 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 we disclaim any obligation to update forward-looking statements. Factual 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, or in isolation from GAAP measures. Reconciliation to non-GAAP measures can be found in our earnings press release and SEC filings. I'll now turn the call over to Mark.

Thanks, Sean. Good morning, everybody. Welcome to our fourth quarter 2021 earnings call. And without a doubt, this was a landmark year for MarketWise. It was both transformational for our company and highly profitable for our shareholders. Our team delivered record results, and I'm excited to share them with you now. Here are the highlights. Compared to 2020, we grew revenues by 51%, increased billings by 33%, and improved our adjusted cash flow from operations by 47%. We also grew our paid subscriber base 13% to almost 1 million subscribers. More importantly, we positioned our business for future success as we now have 12 customer-facing brands, more than 175 products, covering a full spectrum of investment themes. And our team is now almost 800 employees strong, including almost a hundred investment research professionals. Now I would be proud of these results in any normal year, but the fact that we achieved these results in the same year that we took the company public and navigated a once in a century pandemic makes me especially proud. From a financial perspective, 2021 proved to be a record breaking year for Marketwise. Billings for the full year 2021 finished at an all time high $730 million. an increase of 33% over 2020. GAAP revenues climbed to $549 million, or 51% higher than the prior year, and adjusted cash flow from operations rose to $197 million, up from $134 million in the prior year, for an increase of 47%. We also continue to engage and attract self-directed investors to our research products and software solutions, while developing long-term relationships with our growing subscriber community. On a year-over-year basis, we grew our paid subscribers to 972,000, an increase of 13% from the prior year. Combined with our free subscriber base of almost 14 million, our total subscribers grew by 4.3 million people, or 41% to almost 15 million in total. Here are some other notable milestones we achieved last year. First, as we began the year, we experienced tremendous subscriber growth as we capitalized on high levels of customer engagement, moderately priced digital advertising, and highly effective product offerings, which combined to produce record-breaking growth in our subscriber base and financial results. We continued to develop new products and add investment research professionals to our company, and we also purchased Chaiken Analytics. And then we successfully integrated that business into our own, providing investors with an additional software tool for analyzing businesses and enhancing their investing activities. The Chaiken Analytics integration into our business is a representative example of the power of adding a new technology product and marketing it to our existing subscriber base. We added more than $26 million in new billings with the new Chaiken brand in 2021 and are hoping for more going forward. During the spring and summer, we completed our GoPublic transaction with Ascendant and became listed on the NASDAQ in mid-July. This, too, was an extraordinary achievement by our team. We also continued to recruit and expand expertise and capabilities to facilitate, support, and grow our public company operations in areas such as finance, accounting, compliance, and reporting. There was a tremendous amount of work done over the past few years to get us ready to operate as a public company, and that, too, is a big milestone for us. Early in the fourth quarter, we entered into a $150 million revolving credit facility with a syndicate of five banks. the first such facility in our history. We also established a $35 million share repurchase program and began executing market purchases during the fourth quarter. We continue to believe that our current share price does not at all reflect the intrinsic value of our company, and we intend to continue purchasing shares when returns realized from those purchases are accretive to our investors, as we believe they are now. During the quarter and for all of 2021, we repurchased just over half a million shares of our common stock at a total value of approximately $3.3 million, which is slightly less than 10% of our total buyback program. With this list of accomplishments, you can see why I would call 2021 a transformative year for our company. You may have noticed in today's earnings released, we announced that we are not providing forward-looking financial guidance as some companies do. We produce financial research, as you know, And we know better than most that investor sentiment can change quickly and that financial markets can be volatile. We also know that rapid shifts in investor sentiment can impact our business performance in the near term. While those short-term fluctuations can and do occur, we have a long-term perspective and make decisions based on what we think will benefit our owners over time. We know many investors are of like mind, and our goal is to attract investors who share our view, investors who are looking for growth and profitability over the long term. Our communications have been consistent with this message as we consciously seek to avoid the pitfalls of managing for short-term gains or unrealistic expectations rather than working towards long-term growth and, importantly, profitability. For those reasons, we're not going to provide detailed forward-looking guidance. I would also add that we believe that the financial markets have become too focused on the short-term and that earnings guidance is a major driver of this trend and contributes to a shift away from long-term thinking. We've written a lot about this in our content over the years. Companies frequently hold back on spending, hiring, and research and development to meet quarterly earnings forecasts. In this vein, we believe providing earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth, and sustainability. If investors take a multi-year view, we believe they will be very satisfied with the financial results, cash flows, and returns of the company here at MarketLive. However, as we report each quarter, expect us to provide a full analysis of operations, periodic updates to current market trends impacting our business, and other relevant information such as consumer engagement and general investment interest and activity. As we look forward to this year, a number of significant opportunities to grow our business stand in front of us by doing a couple different things, by expanding our product offerings, by adding investment research professionals, developing new distribution channels, and deploying more technology and data science throughout our business. Regarding technology, we're increasingly looking for ways to marry our research content with technology products, like we did with Chaikin Analytics. We believe this is a highly accretive way to expand revenues, create better customer retention, and we continue to look for more technology acquisitions in order to expand these efforts. In addition, we continue to work on the development of our PanMarketWise information, content, and fulfillment platform and look to roll this out over the course of 2022. Regarding data science, we're excited about the work already underway with our partners from Ascendant as we look to employ a higher level of data science throughout our business. We believe that this has the potential to increase conversion rates, improve subscriber retention, and perhaps expand our distribution channels. We continue to strive to be the trusted source of financial information and a leading financial wellness platform for self-directed investors. Our almost 15 million total subscriber community relies on MarketWise to deliver high quality and actionable tools and research for navigating the investing world, and we continue to develop and expand the breadth and depth of our products and brands to fulfill that goal. For over 20 years now, we have been very focused on growth with profitability, and we manage our marketing metrics and financial results to achieve a high return on investment, as any good investor would. We believe and have proven that over our long history of profitable growth, this disciplined approach to operating our business produces exceptional results like the results you saw in 2021. And with that, I'll turn it over to Dale.