MarketWise — Q3 2026 Earnings Summary

Financial Performance:

• Q3 2026 Total Net Revenue was $80.1 million, a 1.5% decrease compared to $81.3 million in Q3 2025.
• Q3 2026 Billings totaled $80.7 million, a 27% year-over-year increase compared to $63.7 million in Q3 2025.
• Q3 2026 Net Income was $15.1 million, compared to $17.9 million in Q3 2025.
• Cash Flow from Operating Activities (CFFO) for Q3 2026 was $7.8 million, a 261.5% increase compared to $2.2 million in Q3 2025.
• Year-to-date CFFO for the nine months ended September 30, 2026, was $28.2 million, a 30% increase compared to $21.7 million for the same period in 2025.
• Free Cash Flow for Q3 2026 was $7.4 million, compared to $1.7 million in Q3 2025.
• Cash and cash equivalents were $27.4 million as of September 30, 2026, with no debt outstanding.
• Earnings per share (basic) for Q3 2026 were $0.55, compared to $0.60 in Q3 2025.
• Earnings per share (diluted) for Q3 2026 were $0.53, compared to $0.58 in Q3 2025.
• CFFO margin for Q3 2026 was 9.8%, compared to 2.7% in Q3 2025.
• Adjusted CFFO margin for Q3 2026 was 9.7%, compared to 3.4% in Q3 2025.
• Total dividends paid to Class A shareholders for Q3 2026 were $0.45 per share.

Guidance and Future Outlook:

• MarketWise affirmed its FY 2026 Billings target of approximately $330 million, representing a 22% increase compared to FY 2025.
• MarketWise affirmed its FY 2026 CFFO target of $50 million.
• The company expects Net Revenue to stabilize in 2026 and return to growth in 2027, as Billings tend to lead Net Revenue by 12-24 months.
• Management expects Billings growth to continue in FY 2027 coupled with meaningfully higher cash flow margins.
• FY 2026 total dividend target for Class A shareholders is $1.80 per share.
• Tax distributions for FY 2026 are projected to decline by $12.1 million compared to FY 2025, with a similar decrease expected for FY 2027.

Business Segments and Product Lines:

• Paid Subscribers were 389 thousand as of September 30, 2026, an increase of 10 thousand (2.8%) compared to 379 thousand in Q3 2025, but a decrease of 11 thousand (2.7%) from 400 thousand in Q2 2026.
• Active Free Subscribers were 2.0 million as of September 30, 2026.
• Average Revenue Per User (ARPU) increased to $860 in Q3 2026, up 52% from $566 in Q3 2025.
• New Marketing Billings for Q3 2026 were $63.3 million, compared to $48.7 million in Q3 2025.
• Net Renewal Billings for Q3 2026 were $16.2 million, compared to $14.1 million in Q3 2025.
• Other Billings (Revenue Share, Advertising, Conferences) for Q3 2026 were $1.2 million, compared to $0.8 million in Q3 2025.
• The company is pivoting strategy to focus on higher-priced products and improved customer retention.

Market and Competitive Landscape:

• MarketWise is a leading multi-brand digital subscription services platform providing premium financial research, software, education, and tools for self-directed investors.
• The company serves a community of millions of free and paid subscribers with over 25 years of operating history.
• The business model allows for toggling between growth and margin strategies on a near real-time basis in response to market conditions.

Risks and Challenges:

• Forward-looking statements are subject to risks including the ability to attract new subscribers, persuade existing subscribers to renew, and develop additional products.
• Risks include failure to maintain reputation, inability to attract and retain key personnel, and adverse conditions in the financial sector or global economy.
• Regulatory risks include compliance with the Investment Advisers Act of 1940 and other laws.
• Macroeconomic factors such as inflation, interest rate rises, and potential recession could impact results.
• The disconnect between GAAP Net Revenue and Billings creates a lag where Net Revenue may decline while Billings increase.

Management Commentary and Tone:

• Dr. David Eifrig, CEO, stated that operational momentum and strong growth continued into Q3, driven by higher customer acquisition in Q1 and Q2, improved retention, and strong conversion of higher-priced products.
• Management noted a strategic shift in Q3 to moderate customer acquisition investment to focus on monetization and cash generation for the remainder of the year.
• The company highlighted the unique advantage of its business model to toggle between growth and margin based on market conditions.
• Management expressed confidence in the FY 2026 targets and the long-term strategic plan to deliver top-line growth and margin expansion.

Other Key Points:

• The company completed a review of its long-term strategic plan with the Board of Directors, focusing on high-quality products, top-line growth, and margin expansion.
• Tax distributions for the nine months ended September 30, 2026, amounted to $37.9 million, down from $50.0 million in FY 2025.
• The company has a dual-class share structure with Class A and Class B shares; dividends are paid to Class A shareholders.
• Beginning in Q3 2026, dividends funded from excess tax distributions have been recharacterized as "regular" dividends, resulting in a total regular quarterly dividend of $0.45.
• Capital expenditures for the nine months ended September 30, 2026, were $2.0 million, a 95.5% increase compared to $1.0 million in the same period in 2025.
• The company repurchased stock for $1.5 million in Q3 2026 and $12.2 million for the nine months ended September 30, 2026, including a reduction in related TRA liability as part of a legal settlement.