0001805651-26-000016
SEC filingMarketWise, Inc. reported total net revenue of $328.1 million for FY 2025, a decrease of 19.7% from $408.7 million in FY 2024. Net income was $64.0 million, down from $93.1 million in the prior year, with net income attributable to MarketWise, Inc. at $5.6 million. The company generated $46.0 million in net cash from operating activities, a significant improvement from a $(22.2) million use in FY 2024, and reported free cash flow of $44.4 million. Key performance was driven by a 13.4% increase in Billings to $271.2 million, primarily from new software-related product sales, offset by a 26.0% decline in Paid Subscribers to 374 thousand, largely due to the wind-down of the Legacy Research business. The company ended the year with $70.1 million in cash and cash equivalents and no debt.
MarketWise, Inc. reported FY 2025 total net revenue of $328.1 million, a decrease of $80.6 million (19.7%) from $408.7 million in FY 2024. This decline was primarily driven by a $62.1 million decrease in term subscription revenue and a $19.5 million decrease in membership subscription revenue, largely attributable to the wind-down of the Legacy Research business. Net income was $64.0 million, down $29.1 million (31.2%) from $93.1 million in the prior year. Income from operations was $62.6 million, representing a 19.1% operating margin. The company generated $46.0 million in net cash from operating activities, a significant improvement from the $(22.2) million used in FY 2024, and reported free cash flow of $44.4 million. Paid Subscribers declined by 132 thousand (26.0%) to 374 thousand, while Billings increased 13.4% to $271.2 million.
The decrease in net revenue was primarily driven by lower term and membership subscription revenue. Term subscription revenue decreased $62.1 million, with $32.6 million attributable to the Legacy Research wind-down and $53.3 million from reduced revenue recognition due to lower Billings in prior periods, partially offset by increased current year Billings. Membership subscription revenue decreased $19.5 million, with $24.8 million attributable to Legacy Research. Billings, which represents amounts invoiced to customers, increased 13.4% to $271.2 million, driven by a 22.3% increase in New Marketing Billings to $199.1 million from sales of software-related content. Net Renewal Billings decreased 7.0% to $65.4 million due to fewer average Paid Subscribers. The company's software and analytical tool solutions represented 52% of Billings in 2025.
Operating expenses decreased 16.9% to $265.5 million in FY 2025. Cost of revenue decreased 12.5% to $44.3 million, driven by lower freelance editorial expenses and incentive compensation. Sales and marketing expenses decreased 18.5% to $131.0 million, primarily due to a $34.0 million decrease in amortization of deferred contract acquisition costs. General and administrative expenses decreased 13.7% to $78.3 million, driven by lower professional fees and salaries. Income from operations was $62.6 million, resulting in an operating margin of 19.1%, compared to 21.8% in FY 2024. The company's ARPU (Average Revenue Per User) increased 70.1% to $670, driven by a 13% increase in trailing four-quarter Billings while average Paid Subscribers decreased 33%.
Net cash provided by operating activities was $46.0 million in FY 2025, compared to $(22.2) million used in FY 2024. The improvement was primarily due to net income of $64.0 million, adjusted for net non-cash items of $14.3 million, partially offset by net changes in operating assets and liabilities that reduced cash by $32.4 million. Free cash flow was $44.4 million. The company ended the period with $70.1 million in cash and cash equivalents, down from $97.9 million at the end of FY 2024. Total assets were $218.4 million, with current assets of $131.7 million. Total liabilities were $432.0 million, including $234.2 million in current liabilities and $185.8 million in noncurrent deferred revenue. Total stockholders' deficit was $(213.6) million. The company had no debt outstanding.
The company's growth strategy focuses on deepening relationships with existing customers and attracting new subscribers through an omni-channel marketing strategy. Management highlighted the importance of growing the subscriber base with compelling unit economics, noting that Paid Subscribers generated average customer lifetime Billings of approximately $2,031, resulting in an LTV/CAC ratio of approximately 2.0x. The company plans to continue investing in cutting-edge AI and advanced analytics-driven marketing tools to optimize marketing channels. Key risks include dependence on attracting and retaining subscribers, competition from various financial research providers, regulatory compliance requirements, and potential cybersecurity threats. The company believes its existing cash, cash equivalents, and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.