Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 04, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39405 | ||
Entity Registrant Name | MarketWise, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 87-1767914 | ||
Entity Address, Address Line One | 1125 N. Charles Street | ||
Entity Address, City or Town | Baltimore | ||
Entity Address, State or Province | MD | ||
Entity Address, Postal Zip Code | 21201 | ||
City Area Code | (888) | ||
Local Phone Number | 261-2693 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 411.9 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001805651 | ||
Common Stock - Class A | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | ||
Trading Symbol | MKTW | ||
Security Exchange Name | NASDAQ | ||
Entity Common Stock, Shares Outstanding | 28,518,135 | ||
Warrants | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants to purchase Class A common stock | ||
Trading Symbol | MKTWW | ||
Security Exchange Name | NASDAQ | ||
Common Stock - Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 291,092,303 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Firm ID | 34 |
Auditor Name | Deloitte & Touche LLP |
Auditor Location | Baltimore, Maryland |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 139,078 | $ 114,422 |
Accounts receivable | 7,805 | 12,398 |
Prepaid expenses | 13,043 | 8,530 |
Related party receivables | 496 | 874 |
Related party notes receivable, current | 298 | 0 |
Restricted cash | 500 | 505 |
Deferred contract acquisition costs | 82,685 | 42,019 |
Other current assets | 2,484 | 1,889 |
Total current assets | 246,389 | 180,637 |
Property and equipment, net | 1,188 | 1,417 |
Operating lease right-of-use assets | 10,901 | 12,337 |
Intangible assets, net | 8,612 | 5,278 |
Goodwill | 23,288 | 18,101 |
Deferred contract acquisition costs, noncurrent | 120,386 | 65,217 |
Related party notes receivable, noncurrent | 861 | 1,148 |
Deferred tax assets | 8,964 | 0 |
Other assets | 965 | 678 |
Total assets | 421,554 | 284,813 |
Current liabilities: | ||
Trade and other payables | 4,758 | 11,969 |
Related party payables, net | 970 | 2,515 |
Accrued expenses | 46,453 | 32,134 |
Deferred revenue and other contract liabilities | 317,133 | 278,267 |
Operating lease liabilities | 1,274 | 1,077 |
Other current liabilities | 24,905 | 19,576 |
Total current liabilities | 395,493 | 345,538 |
Deferred revenue and other contract liabilities, noncurrent | 393,043 | 254,481 |
Warrant liabilities | 29,332 | 0 |
Operating lease liabilities, noncurrent | 6,933 | 7,826 |
Total liabilities | 826,816 | 1,205,423 |
Commitments and Contingencies | 0 | 0 |
Stockholders’ deficit / members’ deficit: | ||
Preferred stock - par value of $0.0001 per share, 100,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2021 | 0 | |
Additional paid-in capital | 97,548 | |
Class A members’ units, 0 and 547,466 units issued and outstanding at December 31, 2021 and December 31, 2020, respectively | (914,728) | |
Accumulated other comprehensive loss | (9) | (17) |
Accumulated deficit | (146,115) | |
Total stockholders' deficit attributable to MarketWise, Inc. | (48,545) | |
Total members' deficit attributable to MarketWise, Inc. | (914,745) | |
Noncontrolling interest | (356,717) | |
Noncontrolling interest | (5,865) | |
Total stockholders' deficit | (405,262) | |
Total members' deficit | (920,610) | |
Total liabilities, noncontrolling interest, and stockholders’ deficit / members’ deficit | 421,554 | 284,813 |
Common stock - Class A, par value of $0.0001 per share, 950,000,000 shares authorized; 25,152,469 shares issued and outstanding at September 30, 2021 | ||
Stockholders’ deficit / members’ deficit: | ||
Common stock | 2 | |
Common stock - Class B, par value of $0.0001 per share, 300,000,000 shares authorized; 291,092,303 shares issued and outstanding at September 30, 2021 | ||
Stockholders’ deficit / members’ deficit: | ||
Common stock | 29 | |
Class B Units | ||
Current liabilities: | ||
Liabilities, noncurrent | 0 | 593,235 |
Other | ||
Current liabilities: | ||
Liabilities, noncurrent | $ 2,015 | $ 4,343 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Preferred stock, par value (USD per share) | $ 0.0001 | |
Preferred stock, authorized (in shares) | 100,000,000 | |
Preferred stock, issued (in shares) | 0 | |
Preferred stock, outstanding (in shares) | 0 | |
Class A members' units, issued (in shares) | 547,466 | |
Class A members' units, outstanding (in shares) | 547,466 | |
Common Stock - Class A | ||
Common stock, par value (USD per share) | $ 0.0001 | |
Common stock, authorized (in shares) | 950,000,000 | |
Common stock, issued (in shares) | 24,718,402 | |
Common stock, outstanding (in shares) | 24,718,402 | |
Common Stock - Class B | ||
Common stock, par value (USD per share) | $ 0.0001 | |
Common stock, authorized (in shares) | 300,000,000 | |
Common stock, issued (in shares) | 291,092,303 | |
Common stock, outstanding (in shares) | 291,092,303 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Net revenue | $ 547,899 | $ 360,793 | $ 265,398 | |
Related party revenue | 1,284 | 3,386 | 6,825 | |
Total net revenue | 549,183 | 364,179 | 272,223 | |
Operating expenses: | ||||
Cost of revenue | [1],[2] | 239,251 | 154,605 | 42,553 |
Sales and marketing | [1],[2] | 296,934 | 214,257 | 106,094 |
General and administrative expenses | [1],[2] | 960,183 | 526,561 | 91,669 |
Research and development | [2] | 7,487 | 4,770 | 3,672 |
Depreciation and amortization | 2,676 | 2,553 | 2,334 | |
Related party expense | 10,245 | 122 | 331 | |
Total operating expenses | 1,516,776 | 902,868 | 246,653 | |
(Loss) income from operations | (967,593) | (538,689) | 25,570 | |
Other (expense) income, net | 16,178 | (2,879) | 865 | |
Interest (expense) income, net | (110) | 477 | 1,558 | |
(Loss) income before income taxes | (951,525) | (541,091) | 27,993 | |
Income tax expense | 2,358 | 0 | 0 | |
Net (loss) income | (953,883) | (541,091) | 27,993 | |
Net (loss) income attributable to non-controlling interests | 59,426 | (2,718) | 36 | |
Net (loss) income attributable to MarketWise, Inc. | (1,013,309) | (538,373) | 27,957 | |
Earnings per share | ||||
Total stock-based compensation expense | 1,063,351 | 553,600 | 20,439 | |
Cost of revenue | ||||
Earnings per share | ||||
Total stock-based compensation expense | 171,804 | 102,736 | 5,025 | |
Sales and marketing | ||||
Earnings per share | ||||
Total stock-based compensation expense | 48,098 | 10,567 | 0 | |
General and administrative | ||||
Earnings per share | ||||
Total stock-based compensation expense | $ 843,449 | $ 440,297 | $ 15,414 | |
[1] | Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows (see Note 11): Year Ended December 31, 2021 2020 2019 Cost of revenue $ 171,804 $ 102,736 $ 5,025 Sales and marketing 48,098 10,567 — General and administrative 843,449 440,297 15,414 Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 | |||
[2] | Cost of revenue, sales and marketing, general and administrative, and research and development expenses are exclusive of depreciation and amortization shown as a separate line item |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (953,883) | $ (541,091) | $ 27,993 |
Other comprehensive (loss) income: | |||
Cumulative translation adjustment | (101) | (14) | (41) |
Total comprehensive (loss) income | $ (953,984) | $ (541,105) | $ 27,952 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit / Members' Deficit - USD ($) $ in Thousands | Total | Marketwise, LLC | Common Stock - Class B | Class A Members’ units | Common StockCommon Stock - Class A | Common StockCommon Stock - Class B | Preferred Stock | Additional paid-in capital | Accumulated deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Deficit / Members’ Deficit Attributable to MarketWise, Inc. | Noncontrolling Interest |
Class A members' units, beginning balance (in shares) at Dec. 31, 2018 | 611,547 | |||||||||||
Class A members' units, beginning balance at Dec. 31, 2018 | $ (273,271) | $ (267,619) | $ 38 | $ (267,581) | $ (5,690) | |||||||
Members' Deficit | ||||||||||||
Class A units transferred to Class B (in shares) | (25,126) | |||||||||||
Minority interest share exchange - Casey Research (in shares) | 18,931 | |||||||||||
Minority interest share exchange - Casey Research | $ (2,160) | (2,160) | 2,160 | |||||||||
Distributions | (22,302) | (20,471) | (20,471) | (1,831) | ||||||||
Net (loss) income | 27,993 | $ 27,957 | 27,957 | 36 | ||||||||
Class A members' units, ending balance (in shares) at Dec. 31, 2019 | 605,352 | |||||||||||
Class A members' units, ending balance at Dec. 31, 2019 | (268,064) | $ (262,293) | (3) | (262,296) | (5,768) | |||||||
Class A members' units, beginning balance at Dec. 31, 2018 | (273,271) | (267,619) | 38 | (267,581) | (5,690) | |||||||
Stockholders' Deficit | ||||||||||||
Foreign currency translation adjustments | (41) | (41) | (41) | |||||||||
Transaction costs for acquisition of noncontrolling interest - Tradesmith | (443) | (443) | ||||||||||
Minority interest share exchange - Casey Research | (2,160) | (2,160) | 2,160 | |||||||||
Distributions | 22,302 | 20,471 | 20,471 | 1,831 | ||||||||
Net Income | 27,993 | 27,957 | 27,957 | 36 | ||||||||
Class A members' units, ending balance at Dec. 31, 2019 | (268,064) | $ (262,293) | (3) | (262,296) | (5,768) | |||||||
Stockholders' Deficit | ||||||||||||
Income tax provision | 0 | |||||||||||
Controlling interests | 27,957 | |||||||||||
Noncontrolling interests | 36 | |||||||||||
Class A units transferred to Class B (in shares) | (57,886) | |||||||||||
Acquisition of noncontrolling interest - TradeSmith | (9,164) | $ (12,295) | (12,295) | 3,131 | ||||||||
Distributions | (102,277) | (101,767) | (101,767) | (510) | ||||||||
Net (loss) income | $ (541,091) | $ (538,373) | (538,373) | (2,718) | ||||||||
Class A members' units, ending balance (in shares) at Dec. 31, 2020 | 547,466 | 547,466 | ||||||||||
Class A members' units, ending balance at Dec. 31, 2020 | $ (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | |||||||
Class A members' units, beginning balance at Dec. 31, 2019 | (268,064) | (262,293) | (3) | (262,296) | (5,768) | |||||||
Stockholders' Deficit | ||||||||||||
Foreign currency translation adjustments | (14) | (14) | (14) | |||||||||
Distributions | 102,277 | 101,767 | 101,767 | 510 | ||||||||
Net Income | (541,091) | (538,373) | (538,373) | (2,718) | ||||||||
Acquisition of noncontrolling interest - TradeSmith | 9,164 | 12,295 | 12,295 | (3,131) | ||||||||
Class A members' units, ending balance at Dec. 31, 2020 | (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | |||||||
Stockholders' Deficit | ||||||||||||
Income tax provision | 0 | |||||||||||
Controlling interests | (538,373) | |||||||||||
Noncontrolling interests | (2,718) | |||||||||||
Class A units transferred to Class B (in shares) | (18,947) | |||||||||||
Distributions | (15,929) | $ (15,098) | (15,098) | (831) | ||||||||
Net (loss) income | (1,032,611) | $ (1,031,561) | (1,031,561) | (1,050) | ||||||||
Distributions related to the recapitalization (in shares) | (120,353,000) | |||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | |||||||
Stockholders' Deficit | ||||||||||||
Foreign currency translation adjustments | (101) | (101) | (101) | |||||||||
Distributions | 15,929 | 15,098 | 15,098 | 831 | ||||||||
Net Income | (1,032,611) | $ (1,031,561) | (1,031,561) | (1,050) | ||||||||
Acquisition of Chaikin | 810 | 810 | ||||||||||
Distributions related to the recapitalization | (120,353) | (120,353) | ||||||||||
Controlling interests | (1,031,561) | |||||||||||
Noncontrolling interests | $ (1,050) | |||||||||||
Class A members' units, beginning balance (in shares) at Dec. 31, 2020 | 547,466 | 547,466 | ||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | $ (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | |||||||
Members' Deficit | ||||||||||||
Net (loss) income | (953,883) | |||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | |||||||
Stockholders' Deficit | ||||||||||||
Foreign currency translation adjustments | (101) | |||||||||||
Net Income | $ (953,883) | |||||||||||
Equity-based compensation (in shares) | 309,500 | |||||||||||
Repurchase of stock (in shares) | (500,270) | |||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 24,718,402 | 291,092,303 | 0 | |||||||||
Ending balance at Dec. 31, 2021 | $ (405,262) | $ 2 | $ 29 | $ 0 | $ 97,548 | $ (146,115) | (9) | (48,545) | (356,717) | |||
Stockholders' Deficit | ||||||||||||
Income tax provision | 2,358 | |||||||||||
Controlling interests | (1,013,309) | |||||||||||
Noncontrolling interests | 59,426 | |||||||||||
Class A members' units, beginning balance (in shares) at Jul. 20, 2021 | 589,465 | |||||||||||
Members' Deficit | ||||||||||||
Reverse capitalization on July 21, 2021 (in shares) | 291,092,303 | (528,519) | ||||||||||
Reverse capitalization on July 21, 2021 | $ 2,081,740 | (164,367) | 1,917,373 | (1,917,373) | ||||||||
Stockholders' Deficit | ||||||||||||
Net proceeds | 113,641 | 113,641 | 113,641 | |||||||||
Reclassification of Class B Units from liability to equity on July 21, 2021 (date of the Transactions) | 1,528,228 | 1,528,228 | 1,528,228 | |||||||||
Reverse capitalization on July 21, 2021 | $ 2,081,740 | (164,367) | 1,917,373 | (1,917,373) | ||||||||
Issuance of Common Stock - Class A and Class B (in shares) | 24,952,096 | 291,092,303 | ||||||||||
Issuance of Common Stock - Class A and Class B | $ 2 | $ 29 | (31) | |||||||||
Establishment of derivative warrant liabilities | (45,021) | (45,021) | (45,021) | |||||||||
Establishment of deferred taxes | 11,136 | 11,136 | 11,136 | |||||||||
Establishment of noncontrolling interest | (1,511,911) | 109 | (1,511,802) | 1,511,802 | ||||||||
Ownership percentage | 7.90% | |||||||||||
Noncontrolling interest ownership percentage | 92.10% | |||||||||||
Distributions | (4,686) | (4,686) | ||||||||||
Net (loss) income | 78,728 | 18,252 | 18,252 | 60,476 | ||||||||
Distributions | 4,686 | 4,686 | ||||||||||
Net Income | 78,728 | 18,252 | 18,252 | 60,476 | ||||||||
Equity-based compensation (in shares) | 200,373 | |||||||||||
Equity-based compensation | 3,998 | 3,998 | 3,998 | |||||||||
Issuance of stock for derivative settlement (in shares) | 66,203 | |||||||||||
Issuance of stock for derivative settlement | 662 | 662 | 662 | |||||||||
Repurchase of stock (in shares) | (500,270) | |||||||||||
Repurchases of stock | (3,340) | (3,340) | (3,340) | |||||||||
Remeasurement of deferred taxes due to change in ownership interest in MarketWise, LLC | 186 | 186 | 186 | |||||||||
Ending balance (in shares) at Dec. 31, 2021 | 24,718,402 | 291,092,303 | 0 | |||||||||
Ending balance at Dec. 31, 2021 | (405,262) | $ 2 | $ 29 | $ 0 | $ 97,548 | $ (146,115) | $ (9) | $ (48,545) | $ (356,717) | |||
Stockholders' Deficit | ||||||||||||
Gain on derivative warrant liabilities | 15,689 | |||||||||||
Income tax provision | 2,358 | |||||||||||
Controlling interests | 18,252 | |||||||||||
Noncontrolling interests | $ 60,476 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net (loss) income | $ (953,883) | $ (541,091) | $ 27,993 |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 2,676 | 2,553 | 2,334 |
Stock-based compensation | 210,912 | 18,745 | 8,611 |
Change in fair value of derivative liabilities – Class B Units | 728,079 | 456,457 | (3,003) |
Change in fair value of derivative liabilities – other | (18,017) | 3,069 | 478 |
Deferred taxes | 2,358 | 0 | 0 |
Unrealized losses on foreign currency | (38) | 0 | (131) |
Noncash lease expense | 1,894 | 2,577 | 3,102 |
Gain on sale of cryptocurrencies | (105) | 0 | (605) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 4,593 | (5,066) | (6,513) |
Related party receivables and payables, net | (1,167) | (4,670) | (13,777) |
Prepaid expenses | (4,513) | (3,423) | (2,028) |
Other current assets and other assets | (744) | (841) | (335) |
Cryptocurrency intangible assets | 109 | 30 | 928 |
Deferred contract acquisition costs | (95,835) | (64,921) | (6,750) |
Trade and other payables | (7,282) | 6,990 | (5,215) |
Accrued expenses | 14,205 | (1,392) | 10,065 |
Deferred revenue | 175,553 | 178,849 | 36,667 |
Derivative liabilities | 662 | 0 | 0 |
Operating lease liabilities | (1,154) | (2,084) | (2,484) |
Other current and long-term liabilities | 5,329 | 10,093 | 4,864 |
Net cash provided by operating activities | 63,632 | 55,875 | 54,201 |
Cash flows from investing activities: | |||
Cash paid for acquisitions, net of cash acquired | (7,139) | 0 | (1,483) |
Cash deposit for business combination | 0 | 0 | 15,000 |
Acquisition of TradeSmith non-controlling interests, including transaction costs | 0 | (9,164) | (193) |
Purchases of property and equipment | (157) | (290) | (177) |
Purchases of intangible assets | (892) | (195) | 0 |
Capitalized software development costs | (123) | 0 | (752) |
Net cash (used in) provided by investing activities | (8,311) | (9,649) | 12,395 |
Cash flows from financing activities: | |||
Principal payments on long-term debt – related party | 0 | (5,390) | (1,932) |
Net proceeds from the Transactions | 113,641 | 0 | 0 |
Issuance of related party notes receivable | (11) | (1,148) | (3,107) |
Proceeds from related party notes receivable | 0 | 5,446 | 0 |
Repurchases of stock | (3,340) | 0 | 0 |
Distributions to members | (135,451) | (101,767) | (20,471) |
Distributions to noncontrolling interests | (5,517) | (510) | (1,831) |
Net cash used in financing activities | (30,678) | (103,369) | (27,341) |
Effect of exchange rate changes on cash | 8 | (14) | (41) |
Net increase in cash, cash equivalents and restricted cash | 24,651 | (57,157) | 39,214 |
Cash, cash equivalents and restricted cash — beginning of year | 114,927 | 172,084 | 132,870 |
Cash, cash equivalents and restricted cash — end of year | $ 139,578 | $ 114,927 | $ 172,084 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Description of Business and Basis of Presentation MarketWise Inc, and its predecessor for accounting purposes, MarketWise, LLC (formerly Beacon Street Group, LLC) are collectively referred to herein as “MarketWise,” “the Company,” “we,” “us,” or “our”. The Company provides independent investment research for investors around the world. We believe we are a leading content and technology multi-brand platform for self-directed investors. We offer a comprehensive portfolio of high-quality, independent investment research, as well as several software and analytical tools, on a subscription basis. While our headquarters are in Baltimore, Maryland, we operate multiple subsidiaries in the United States. Reverse Recapitalization with Ascendant Digital Acquisition Corp. On July 21, 2021, as contemplated by the Business Combination Agreement, dated as of March 1, 2021, by and among Ascendant Digital Acquisition Corp. (“ADAC”), MarketWise, LLC, all of the members of MarketWise, LLC (the “MarketWise Members”), and Shareholder Representative Services LLC, (as amended, the “Transaction Agreement”), ADAC was domesticated and continues as a Delaware corporation, changing its name to “MarketWise, Inc.” As a result of, and upon the effective time thereof, among other things, (1) each of the then issued and outstanding Class A ordinary shares, par value $0.0001 per share, of ADAC (the “ADAC Class A ordinary shares”) automatically converted, on a one-for-one basis, into a share of Class A common stock, par value $0.0001 per share, of MarketWise, Inc. (the “Class A common stock”); (2) each of the then issued and outstanding redeemable warrants of ADAC automatically converted into a redeemable warrant to acquire one share of Class A common stock (the “warrants”); and (3) each of the then issued and outstanding units of ADAC that had not been previously separated into the underlying ADAC Class A ordinary shares and underlying warrants upon the request of the holder thereof were cancelled and entitled the holder thereof to one share of Class A common stock and one-half of one warrant. No fractional warrants were issued upon such separation. On July 21, 2021, as contemplated by the Transaction Agreement, MarketWise, Inc. and MarketWise, LLC consummated the business combination contemplated by the Transaction Agreement whereby (i) MarketWise, LLC restructured its capitalization, appointed MarketWise, Inc. as its managing member, and issued to MarketWise, Inc. 28,003,096 common units of MarketWise, LLC (the “MarketWise Units”), and 30,979,993 warrants to purchase MarketWise Units and (ii) MarketWise, Inc. issued 291,092,303 shares of Class B common stock, par value $0.0001 per share, of MarketWise, Inc. (the “Class B common stock” and, together with the Class A common stock, the “common stock”) to the MarketWise Members. As previously announced, on March 1, 2021, concurrently with the execution of the Transaction Agreement, ADAC entered into subscription agreements (the “Subscription Agreements”) with certain investors (collectively, the “PIPE Investors”) who subscribed for 15,000,000 shares of Class A common stock at $10.00 per share for an aggregate commitment amount of $150,000 (the “PIPE Investment” and, together with the other transactions described above and all transactions contemplated by or pursuant to the Transaction Agreement, the “Transactions”). The PIPE Investment was consummated on July 21, 2021 substantially concurrently with the closing of the other Transactions. Immediately after giving effect to the Transactions, there were 28,003,096 shares of Class A common stock (including 3,051,000 Sponsor Earn Out Shares (as defined and discussed in our Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on July 28, 2021) the “Original Report”), 291,092,303 shares of Class B common stock, and 30,979,993 warrants outstanding (including 10,280,000 Private Placement Warrants (as defined in the Original Report)). Upon the consummation of the Transactions, ADAC’s ordinary shares, warrants, and units ceased trading on The New York Stock Exchange, and MarketWise, Inc.’s Class A common stock and warrants began trading on the Nasdaq under the symbols “MKTW” and “MKTW W,” respectively. Immediately after giving effect to the Transactions, (1) ADAC’s public shareholders owned approximately 0.1% of the outstanding MarketWise, Inc. common stock, (2) the MarketWise Members owned approximately 91.2% of the outstanding MarketWise, Inc. common stock, (3) Ascendant Sponsor LP, a Cayman Islands exempted limited partnership and related parties (the “Sponsor”) collectively owned approximately 3.2% of the outstanding MarketWise, Inc. common stock (including 3,051,000 Sponsor Earn Out Shares), and (4) the PIPE Investors owned approximately 4.7% of the outstanding MarketWise, Inc. common stock. The Transaction was accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Under the guidance in Accounting Standards Codifications (“ASC”) Topic 805, MarketWise, LLC is treated as the “acquirer” for financial reporting purposes. As such, MarketWise, LLC is deemed the accounting predecessor of the combined business and MarketWise, Inc. the successor registrant for SEC purposes, meaning that MarketWise, LLC’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. The reverse recapitalization was treated as the equivalent of MarketWise, LLC issuing stock for the net assets of ADAC, accompanied by a recapitalization. As part of the recapitalization Transactions, we recorded net cash proceeds from the Transactions of $113.6 million in equity. This cash amount includes: (1) the reclassification of ADAC’s Trust Account of $414.6 million to cash and cash equivalents that became available at the time of the Transactions; (2) proceeds of $150.0 million from the issuance and sale of MarketWise Class A common stock in the PIPE investment; (3) payment of $48.8 million in non-recurring transaction costs; (4) settlement of $14.5 million in deferred underwriters’ discount; and (5) the payment of $387.7 million to redeeming shareholders of ADAC. We also recorded (1) $45.0 million in equity related to the establishment of the initial value of the warrants; and (2) $11.1 million in equity related to the establishment of the initial value of deferred taxes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Consolidation The accompanying consolidated financial statements include the accounts of MarketWise and its wholly owned subsidiaries. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in consolidation. The accompanying statements of operations include expenses for certain functions historically performed by a related party, including general corporate services, such as legal, accounting, treasury, information technology, human resources and administration. These expenses are based primarily on direct usage when identifiable, direct capital expenditures or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying consolidated financial statements, including the assumptions regarding these expenses from this related party, are reasonable. Actual results may differ from these expenses, assumptions and estimates. The amounts recorded in the accompanying consolidated financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to, the fair value of common units, derivatives, warrants, valuation of assets acquired and liabilities assumed in business combinations, useful lives of intangible assets with definite lives, benefit period of deferred contract acquisition costs, grant-date fair value of equity awards, determination of standalone selling prices, estimated life of lifetime customers, recoverability of goodwill and long-lived assets, valuation allowances on deferred tax assets, the incremental borrowing rates to calculate lease liabilities and right-of-use (“ROU”) assets and certain accruals. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors and adjust those estimates and assumptions when facts and circumstances dictate. Actual results could differ from those estimates. Emerging Growth Company We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our audited financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Variable Interest Entity The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests when an entity is insufficiently capitalized, or when an entity is not controlled through its voting interests, which is referred to as a variable interest entity (“VIE”). We evaluate our ownership, contractual and other interests in entities to determine if we have a variable interest in an entity. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. If we hold a contractual or ownership interest in an entity and we determine that the entity is a VIE and that we are determined to be the primary beneficiary, we consolidate such entity in our consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we determine whether any changes in the interest or relationship with the entity impact the determination of whether we are still the primary beneficiary. If we are not deemed to be the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP. We have determined that Stansberry Pacific Research is a VIE and that we are the primary beneficiary of Stansberry Pacific Research since we have the ability to direct the activities of the VIE and have the obligation to absorb the loss or the right to receive the benefit. Refer to Variable Interest Entities note for further information. Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by our chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. Our Chief Executive Officer serves as the CODM. Based on the financial information presented to and reviewed by our CODM in assessing our performance and for the purposes of allocating resources, we have determined our operating subsidiaries represent individual operating segments with similar economic characteristics that meet the criteria for aggregation into a single reporting segment for financial statement purposes. Accordingly, we have a single reportable segment. Long-lived assets outside the United States were immaterial as of December 31, 2021 and 2020. Cash and Cash Equivalents and Restricted Cash We consider all financial instruments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Our cash equivalents are composed of money market funds and certificates of deposit. We hold certain restricted cash with credit card processors as reserves for chargebacks and refunds. As the reserves are based on our credit card receivables which are collected within twelve months of each reporting period, the restricted cash has been included in current assets on the consolidated balance sheets. Accounts Receivable, Net Our accounts receivable primarily consist of receivables from third-party credit card providers which are stated at net realizable value. We did not record an allowance for doubtful accounts for the years ended December 31, 2021 and 2020. Concentration of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash. We maintain deposits in federally insured financial institutions in excess of federally insured limits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash to the extent recorded on the consolidated balance sheets. Management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. No individual customer accounted for more than 10% of revenue for the years ended December 31, 2021, 2020 and 2019. Derivative Financial Instruments From time to time, we utilize instruments which may contain embedded derivative instruments as part of our overall strategy to compensate and retain key employees and independent contractors (see Derivative Financial Instruments note below for additional information). Our derivative instruments are recorded at fair value on the consolidated balance sheets. Our derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included within cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities within the consolidated statements of cash flows. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized using the straight-line method over the shorter of the related asset’s estimated useful life or the remaining term of the lease. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations. Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing assets acquired and liabilities assumed include, but are not limited to, future expected cash flows from acquired customers, trade names, acquired technology and deferred revenue from a market participant perspective, as well as determining useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and as a result, actual results may differ from estimates. During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in earnings. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized but is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate the goodwill may be impaired. Our annual impairment testing date is the first day of the fourth quarter. Events or changes in circumstances which could trigger an impairment review include significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if we conclude otherwise, then we are required to perform the first of a two-step impairment test. The first step involves comparing the estimated fair value of the reporting unit with its respective carrying amount, including goodwill. If the estimated fair value exceeds the carrying amount, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than the carrying amount, then a second step is required that compares the carrying amount of the goodwill with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally generated and unrecognized intangible and tangible net assets. If the carrying amount of goodwill exceeds the implied fair value of the goodwill, then an impairment loss is recognized in an amount equal to the excess. No goodwill impairment charges have been recorded during the years ended December 31, 2021, 2020 and 2019. Intangible Assets, Net Intangible assets, net consists primarily of identifiable intangible assets that are subject to amortization such as developed technology, customer relationships, and trade names resulting from our acquisitions. Intangible assets arising from acquisitions are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis which approximates the pattern in which the economic benefits of the assets will be consumed. Intangible assets are presented net of accumulated amortization in the consolidated balance sheet. Cryptocurrencies We purchased cryptocurrencies during the year ended December 31, 2018 primarily to be redeemed by customers as part of certain marketing campaigns. We recognized our portfolio of cryptocurrencies as intangible assets since cryptocurrencies are not considered cash and cash equivalents and do not have physical substance. We believe that the cryptocurrencies have an indefinite life since there are no significant legal, regulatory, contractual or economic factors that would limit the cryptocurrencies’ useful life. Our indefinite-lived cryptocurrency holdings are not amortized but are evaluated for impairment annually, or more frequently if events or changes in circumstances indicate the carrying amount may not be recoverable. We utilize the quoted market values of the cryptocurrencies in the impairment test on the cryptocurrency holdings. We sold cryptocurrencies on hand after the marketing campaigns ended and recognized gains of $105, $0 and $605 during the years ended December 31, 2021, 2020 and 2019, respectively, in other income, net on the consolidated statement of operations. The cash flows associated with the cryptocurrencies are recognized in the consolidated statement of cash flows as operating activities due to the nature of the transactions. Impairment of Long-Lived Assets Long-lived assets are reviewed for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the future undiscounted cash flows attributable to these assets or asset groups. An impairment loss is recognized to the extent an asset group is not recoverable, and the carrying amount exceeds the projected discounted future cash flows arising from these assets. There were no impairments of long-lived assets for any of the periods presented. Revenue Recognition We recognize revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) and the related amendments (“ASC 606”). We determine revenue recognition through the following steps: • Identify the contract, or contracts, with a customer; • Identify the performance obligations in the contract; • Determine the transaction price; • Allocate the transaction price to the performance obligations in the contract; and • Recognize revenue when, or as, a performance obligation is satisfied Research and software-as-a-service (“SaaS”) subscriptions We primarily earn revenue from services provided in delivering subscription-based financial research, publications and SaaS offerings to individual customers through our online platforms. Revenues are recognized evenly over the duration of the subscriptions, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Customers are typically billed in advance of the subscriptions. We also offer lifetime subscriptions where we receive an upfront payment upon entering into the contract and receive a lower amount annually (a “maintenance fee”) thereafter. The right to discounts on future maintenance fee payments is considered a material right which is recognized as revenue when the customer exercises the option or when the option expires. Certain upfront fees on lifetime subscriptions are paid in installments, generally over a twelve-month period. We recognize revenue related to lifetime subscriptions over the estimated customer lives. We have determined the estimated life of lifetime customers based on historic customer attrition rates. Advertising and other We earn revenue from the sale of advertising placements on our websites. We also earn revenue from the sale of print products and events, such as webinars and conferences. In addition we recognize revenue related to the sharing of our customer lists with other companies, including related parties, where we earn a fee for each successful sale the other company generates from our list (“revenue share”). Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have also offered customers the option to redeem a certain value of cryptocurrencies as part of certain marketing campaigns. These offers are considered to be material rights for our customers and we allocate a portion of the transaction price to the material right performance obligation. Revenue associated with the material rights is recognized when the customer exercises the option or when the option expires. Our performance obligations are satisfied over time as subscriptions are available to customers or at a point-in-time as products are delivered to customers. Accordingly, revenue from subscription services is recognized over the duration of the subscription. Our advertising performance obligations are satisfied at a point-in-time, and revenue is recognized when impressions are delivered. Revenue from products is recognized at a point-in-time when delivered. Revenue from events is recognized over the duration of the event. In addition, we recognize revenue from sharing our customer lists with related parties and other third-party companies. We apply the sales-based or usage-based royalty exception to sales of functional intellectual property. Revenue is recognized at a point-in-time as fees are earned on successful sales from the customer lists. Contracts with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations if subscription services are sold with other subscriptions, products or events within one contract. For such contracts, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers on a standalone basis. Contract Balances A contract asset is defined as an entity's right to consideration for goods or services that the entity has transferred to a customer but customer payment is contingent on a future event. A contract liability is defined to occur if the customer's payment of consideration precedes the entity's performance and represents the entity's obligation to transfer goods or services to a customer for which the entity has received consideration. Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. No other contract assets are recorded on our consolidated balance sheets as of December 31, 2021 and 2020. Deferred revenue is primarily comprised of unearned revenue related to subscription services. Subscribers typically pay all or a portion of the subscription fees by credit card prior to the start of the subscriptions. Contract receivables are presented as accounts receivable due to processing time with credit card providers. Subscribers may be able to cancel certain subscriptions for a full or pro-rated refund for a certain period of time which is generally between 30 and 90 days after the start of their subscriptions. After the refund period, we have no obligation to refund any of the consideration received. Refund obligations are a significant estimate which we recognize as of each reporting period based on historical trends and record a contract liability for this amount in other current liabilities on the consolidated balance sheets. Assets Recognized from Costs to Obtain a Contract with a Customer We capitalize incremental costs that are directly related to the acquisition or renewal of customer contracts, to the extent that the costs are expected to be recovered and if we expect the benefit of these costs to be longer than one year. We have elected to utilize the practical expedient and expense costs to obtain a contract with a customer when the expected benefit period is one year or less. Our capitalizable incremental costs include sales commissions to employees and fees paid to marketing vendors that are generally calculated as a percentage of the customer sale. We also capitalize revenue share fees that are payable to other companies, including related parties, who share their customer lists with us for each successful sale we make to a customer from their list. Capitalized costs are amortized on a straight-line basis over the shorter of the expected customer life or the expected benefit related directly to those costs, which is approximately four years. Leases We follow the provisions of ASU No. 2016-02, Leases (“ASU 2016-02”). We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, and operating lease liabilities, noncurrent in the consolidated balance sheets. We do not have any finance lease agreements. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made and excludes payments received for lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally combined. We have elected, as an accounting policy for leases of real estate, to account for lease and non-lease components in a contract as a single lease component. We elected to use the practical expedient for short-term leases, and therefore do not record right-of-use assets or lease liabilities with lease durations of twelve months or less. Rather, the lease payments for short-term leases are recognized on the consolidated statements of operations on a straight-line basis over the lease term. We have also elected the practical expedient on not separating lease components from nonlease components for our office leases. Variable payments, such as common area charges, maintenance, insurance and taxes, are primarily based on the amount of space we occupy. These payments in our leases are not dependent on an index or a rate and are excluded from the measurement of the lease liabilities and recognized in the consolidated statements of operations in the period in which the obligation for those payments is incurred. We remeasure our lease payments when the contingency underlying such variable payments is resolved such that some or all of the remaining payments become fixed. Cost of Revenue Cost of revenue consists primarily of payroll and payroll-related costs associated with producing and publishing our content, customer service, credit card processing fees, product costs and allocated overhead. Sales and Marketing Sales and marketing expenses consist primarily of payroll and payroll-related costs, amortization of deferred contract acquisition costs, allocated overhead, agency costs, advertising campaigns, and branding initiatives. Conferences, webinars and other event costs are expensed during the period in which the event takes place. Other sales and marketing and advertising costs are expensed as they are incurred. Advertising expense was $144,561, $149,191 and $67,640 for the years ended December 31, 2021, 2020 and 2019, respectively. Research and Development Research and development expenses consist primarily of payroll and related costs, allocated overhead, technical services, software expenses, and hosting expenses. General and Administrative General and administrative expenses consist primarily of payroll and related costs associated with our finance, legal, information technology, human resources, executive and administrative personnel, legal fees, corporate insurance, office expenses, professional fees, and travel and entertainment costs. Stock-Based Compensation Stock-based compensation expenses are included in cost of revenue, sales and marketing, and general and administrative expenses in a manner consistent with the employee’s salary and benefits in the consolidated statements of operations. 2021 Incentive Award Plan On July 21, 2021, the MarketWise, Inc. 2021 Incentive Award Plan (the “2021 Incentive Award Plan”) became effective. We have reserved a total of 32,045,000 shares of MarketWise Class A common stock for issuance pursuant to the 2021 Incentive Award Plan, and the maximum number of shares that may be issued pursuant to the exercise of incentive stock options granted under the 2021 Incentive Award Plan is 32,045,000, in each case, subject to certain adjustments set forth therein. The 2021 Incentive Award Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs; restricted stock; restricted stock units, or RSUs; stock appreciation rights, or SARs; and other stock or cash-based awards. Equity-based compensation with service conditions is measured based on the grant date fair value of the awards and recognized as compensation expense over the period during which the recipient is required to perform services in exchange for the award (the requisite service period). We have elected to use a straight-line attribution method for recognizing compensation costs relating to awards that have service conditions only. Forfeitures are recorded as they occur. Class B Units As more fully described above, we completed our Transactions in July 2021, and all Class B Units fully vested as of the transaction date, and the original operating agreement was terminated and replaced by a new operating agreement consistent with the Company’s Up-C structure. This new operating agreement does not contain the put and call options that existed under the previous operating agreement, and the MarketWise, LLC common units are treated as common equity under the new operating agreement and do not generate stock-based compensation expense. Prior to the Transactions, under the old operating agreement, and as part of our compensation and retention strategy, we granted incentive compensation units (“Class B Units”) to certain key employees, which are profit interests for United States federal income tax purposes. The Class B Units were accounted for as a substantive class of equity and allowed the recipient to realize value only to the extent that the value of the award appreciated. The Class B Units contained service-based vesting conditions and had different vesting terms depending upon the employee which ranged from vesting immediately to eight years; vesting was accelerated upon the completion of the Transactions. Compensation cost was recognized on a straight-line basis over the requisite service period until vesting for the entire award, but at least equaled the number of vested units determined by the underlying vesting schedule. Forfeitures were accounted for in the period in which they occur. The Class B Units were subject to a put and call option whereby we could elect to redeem or be required to redeem these units at a value determined by a predefined formula based on a multiplier of our net income as defined by management. Employees may not exercise the put option until 25 months have elapsed from the issuance date. Since the redemption price is not representative of fair value, the employees are not considered to be subject to the risks and rewards of share ownership, and the Class B Units were classified as liabilities in the accompanying consolidated balance sheet. Prior to the completion of the Transactions, the liability for Class B units was remeasured to fair value at the end of each reporting period. Since Class B Units were classified as liabilities, all cash distributions made to the unitholders of the Class B Units pursuant to our operating agreement were considered to be stock-based compensation expenses. Upon consummation of the Transactions, the old operating agreement was terminated and a new operating agreement was adopted. This new operating agreement does not contain the put and call options that existed under the previous operating agreement, and the common units are treated as common equity under the new operating agreement and do not generate stock-based compensation expense. See also Note 11, Stock-Based Compensation . Capitalized Software Development Costs For internal use software, we capitalize external costs and payroll and payroll-related costs related to employees that developed new or additional software functionality. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred and included in research and development in the consolidated statements of operations. These capitalized costs are amortized using the straight-line method over the software’s expected useful life, which is generally three years. Capitalized Implementation Costs Effective January 1, 2018, we adopted ASU 2018-15, Intangibles— Goodwill and Othe |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of revenues The following table depicts the disaggregation of revenue according to customer type and is consistent with how we evaluate our financial performance. We believe this depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Year Ended December 31, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 543,881 $ — $ — $ — $ 543,881 Transferred at a point in time — 2,479 1,284 1,539 5,302 Total $ 543,881 $ 2,479 $ 1,284 $ 1,539 $ 549,183 Year Ended December 31, 2020 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 356,265 $ — $ — $ — $ 356,265 Transferred at a point in time — 1,965 3,386 2,563 7,914 Total $ 356,265 $ 1,965 $ 3,386 $ 2,563 $ 364,179 Year Ended December 31, 2019 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 260,640 $ — $ — $ — $ 260,640 Transferred at a point in time — 2,669 6,825 2,089 11,583 Total $ 260,640 $ 2,669 $ 6,825 $ 2,089 $ 272,223 Revenue recognition by subscription type was as follows: Year Ended December 31, 2021 2020 2019 Lifetime subscriptions $ 192,273 $ 134,525 $ 98,578 Term subscriptions 351,608 221,740 162,062 Non-subscription revenue 5,302 7,914 11,583 Total $ 549,183 $ 364,179 $ 272,223 Revenue for the Lifetime and Term subscription types are determined based on the terms of the subscription agreements. Non-subscription revenue consists of revenue from advertising and other revenue. Net revenue by principal geographic areas was as follows: Year Ended December 31, 2021 2020 2019 United States $ 547,026 $ 361,547 $ 265,647 International 2,157 2,632 6,576 Total $ 549,183 $ 364,179 $ 272,223 Revenue by location is determined by the billing entity for the customer. Contract Balances The timing of revenue recognition, billings, cash collections and refunds affects the recognition of accounts receivable, contract assets and deferred revenue. Our current deferred revenue balance in the consolidated balance sheets includes an obligation for refunds for contracts where the provision for refund has not lapsed. Accounts receivable, deferred revenue and obligation for refunds are as follows: As of December 31, 2021 2020 2019 Contract balances Accounts receivable $ 7,805 $ 12,398 $ 7,332 Obligations for refunds 5,590 3,448 2,214 Deferred revenue – current 311,543 274,819 190,778 Deferred revenue – non-current 393,043 254,481 160,907 We recognized $289,728 and $190,778 of revenue during the years ended December 31, 2021 and 2020, respectively, that was included within the beginning contract liability balance of the respective periods. The Company has collected all amounts included in deferred revenue other than $7,805 and $12,398 as of December 31, 2021 and 2020, respectively, related to the timing of cash settlement with credit card processors. Assets Recognized from Costs to Obtain a Contract with a Customer The following table presents the opening and closing balances of our capitalized costs associated with contracts with customers: Balance at January 1, 2019 $ 35,565 Royalties and sales commissions – additions 18,984 Revenue share and cost per acquisition fees – additions 6,284 Amortization of capitalized costs (18,519) Balance at December 31, 2019 $ 42,314 Royalties and sales commissions – additions 43,273 Revenue share and cost per acquisition fees – additions 52,193 Amortization of capitalized costs (30,544) Balance at December 31, 2020 $ 107,236 Royalties and sales commissions – additions 68,938 Revenue share and cost per acquisition fees – additions 98,747 Amortization of capitalized costs (71,850) Balance at December 31, 2021 $ 203,071 We did not recognize any impairment on capitalized costs associated with contracts with customers for the years ended December 31, 2021, 2020 and 2019. Remaining Performance Obligations As of December 31, 2021, the Company had $710,176 of remaining performance obligations presented as deferred revenue in the consolidated balance sheets. We expect to recognize approximately 45% of that amount as revenues over the next twelve months, with the remainder recognized thereafter. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Chaikin On January 21, 2021, we acquired 90% ownership of Chaikin Holdings LLC (“Chaikin”) a provider of analytical tools and software for investors, for cash of $7,139, net of cash acquired. We acquired Chaikin to expand our product offerings and our customer base. The Chaikin acquisition was accounted for using the acquisition method of accounting for business combinations. The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date: Cash $ 151 Other current assets 138 Customer relationships 3,664 Tradenames 657 Software 247 Goodwill 5,187 Other noncurrent assets 443 Total assets acquired 10,487 Liabilities assumed (2,387) Net assets acquired $ 8,100 Cash consideration $ 7,290 Noncontrolling interest 810 Total consideration $ 8,100 The excess purchase consideration over the fair values of assets acquired and liabilities assumed was recorded as goodwill. The goodwill arising from the acquisition is largely attributable to synergies which we expect to achieve from cross-marketing and providing complementary products to our existing and acquired customers, and is expected to be fully deductible for tax purposes. The acquired intangible assets of Chaikin are amortized over their estimated useful lives. Accordingly, the trade name will be amortized over 8.5 years and customer relationships will be amortized over 6 years. Amortization for the acquired intangible assets was $648 for the year ended December 31, 2021. Revenue from Chaikin was $7,514 for the year ended December 31, 2021. TradeSmith On January 5, 2020, we acquired the noncontrolling interest of 25% in a subsidiary, TradeSmith, to obtain 100% ownership for $9,164, including transaction costs. We incurred transaction costs of $164 during the year ended December 31, 2020 and elected to record these costs as a reduction in equity. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The changes in the carrying amounts of goodwill are as follows: Balance at January 1, 2020 $ 18,101 Balance at December 31, 2020 18,101 Acquisition of Chaikin 5,187 Balance at December 31, 2021 $ 23,288 Intangible assets, net Intangible assets, net consisted of the following as of the dates indicated: December 31, 2021 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 12,368 $ (8,105) $ 4,263 4.4 Tradenames 3,578 (1,838) $ 1,740 5.3 Capitalized software development costs 2,866 (1,344) 1,522 3.1 Finite-lived intangible assets, net 18,812 (11,287) 7,525 Indefinite-lived intangible assets: Cryptocurrencies — — — Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 19,899 $ (11,287) $ 8,612 December 31, 2020 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 8,705 $ (6,675) $ 2,030 2.7 Tradenames 2,921 (1,433) 1,488 4.9 Capitalized software development costs 2,495 (934) 1,561 3.8 Finite-lived intangible assets, net 14,121 (9,042) 5,079 Indefinite-lived intangible assets: Cryptocurrencies 4 — 4 Internet domain names 195 — 195 Indefinite-lived intangible assets, net 199 — 199 Intangible assets, net $ 14,320 $ (9,042) $ 5,278 We recorded amortization expense related to finite-lived intangible assets of $2,245, $2,102 and $1,710 for the years ended December 31, 2021, 2020 and 2019, respectively, within depreciation and amortization in the accompanying consolid ated statement of operations. These amounts include amortization of capitalized software development costs of $410, $415 and $130 for the years ended December 31, 2021, 2020 and 2019, respectively. We recorded additions to capitalized software development costs o f $370, $0 and $752 f or the years ended December 31, 2021, 2020 and 2019, respectivel y. This amount includes acquired software of $247, $0 and $0 for the years e nded December 31, 2021, 2020 and 2019, respectively. As of December 31, 2021, the total expected future amortization expense for finite-lived intangible assets is as follows: 2022 $ 2,120 2023 1,961 2024 1,470 2025 1,013 2026 711 Thereafter 250 Finite-lived intangible assets, net $ 7,525 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated: December 31, 2021 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 25,001 $ — $ — $ 25,001 Total assets 25,001 — — 25,001 Liabilities: Derivative liabilities, noncurrent — — 2,015 2,015 Warrant liabilities - Public Warrants 19,599 — — 19,599 Warrant liabilities - Private Placement Warrants — — 9,733 9,733 Total liabilities $ 19,599 $ — $ 11,748 $ 31,347 December 31, 2020 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 25,016 $ — $ — $ 25,016 Total assets 25,016 — — 25,016 Liabilities: Derivative liabilities, noncurrent — — 4,343 4,343 Class B Units - related party — — 593,235 593,235 Total liabilities $ — $ — $ 597,578 $ 597,578 The level 3 liabilities that related to our Class B Units and certain employee and non-employee contracts with embedded derivatives, see Note 8, Derivative Financial Instruments and Note 11, Stock-Based Compensation . On the date of the Transactions, the fair value of the Public Warrants and the Private Placement Warrants was estimated using a Monte Carlo simulation model. The fair value of the Public Warrants was subsequently measured based on the listed market price of such warrants at the end of the reporting period. The fair value of the Private Placement Warrants was subsequently estimated using a Monte Carlo simulation model at the end of the reporting period. The Company estimates the fair value of the warrants at each reporting period, with changes in fair value recognized in the consolidated statements of operations. The estimated fair value of the warrant liabilities – Public Warrants is determined using Level 1 inputs. The estimated fair value of the warrant liabilities – Private Placement Warrants is determined using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions related to expected stock-price volatility, expected life and risk-free interest rate. The Company estimates the volatility of its ordinary shares based on historical volatility of select peer companies that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: As of December 31, 2021 Stock price $ 7.54 Exercise Price $ 11.50 Expected life of the warrants to convert (years) 4.56 Volatility 29.70 % Risk-free rate 1.19 % The following table summarizes the change in fair value of the derivative liabilities during the years ended December 31, 2019, 2020, and 2021: Balance – January 1, 2019 $ 113,221 Change in fair value of derivative instruments 478 Incremental Class B Units 8,611 Change in fair value of Class B Units (3,003) Balance – December 31, 2019 119,307 Change in fair value of derivative instruments 3,069 Incremental Class B Units 18,745 Change in fair value of Class B Units 456,457 Balance – December 31, 2020 597,578 Incremental Class B Units 206,914 Establishment of warrant liabilities on July 21, 2021 (date of the Transactions) 45,021 Change in fair value of derivative instruments (18,017) Change in fair value of Class B Units 728,079 Reclassification of Class B Units from liability to equity on July 21, 2021 (date of the Transactions) (1,528,228) Balance – December 31, 2021 $ 31,347 The following table summarizes the change in fair value of the Class B Units by income statement line item during the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Cost of revenue $ 136,417 $ 86,907 $ (548) Sales and marketing 10,870 6,545 — General and administrative 580,792 363,005 (2,455) Total change in fair value of Class B Units $ 728,079 $ 456,457 $ (3,003) To derive the fair value of the Class B Units, we estimated the fair value of Class B Units using a valuation technique. For more information regarding the valuation of the Class B Units, see Note 11, Stock-Based Compensation. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Property and Equipment, Net Property and equipment, net consists of the following: As of Estimated Useful Lives December 31, 2021 December 31, 2020 Furniture and fixtures 5 years $ 960 $ 960 Computers, software and equipment 3 years 1,423 1,220 Leasehold improvements Shorter of estimated useful life or remaining term of lease 1,278 1,278 3,661 3,458 Less: Accumulated depreciation and amortization (2,473) (2,041) Total property and equipment, net $ 1,188 $ 1,417 Depreciation and amortization expense for property and equipment was $431, $451 and $624 for the years ended December 31, 2021, 2020 and 2019, respectively. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2021 December 31, 2020 Commission and variable compensation $ 22,155 $ 17,271 Payroll and benefits 5,164 3,645 Other accrued expenses 19,134 11,218 Total accrued expenses $ 46,453 $ 32,134 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Prior to the closing of the Transactions, as part of our compensation and employee retention strategy, we entered into contracts with key employees and independent contractors which contain embedded derivatives. These contracts are intended to compensate the employees or independent contractors for services provided and retain their future services. These embedded derivative instruments are issued in the form of phantom interests in Net Income, as defined by our board of directors, that grant the holder value equal to a percentage of Net Income multiplied by a price multiple, or contain an option that granted appreciation rights upon exercise, and which become exercisable upon occurrence of an initial public offering. All derivative instruments are recorded at fair value as derivative liabilities on our consolidated balance sheets. As of December 31, 2021, there are both Private Placement Warrants and public warrants outstanding; each of which is exercisable for one share of Class A common stock of MarketWise, Inc. Additionally, there are embedded derivative instruments outstanding. The following table presents information on the location and amounts of derivative instruments gains and losses: Year Ended December 31, Derivatives Not Designated as Location of Gain (Loss) Recognized in Income Statement 2021 2020 2019 Warrants Other income, net $ 15,689 $ — $ — Phantom Interests in Net Income Other income, net — (3,069) (478) Phantom Interests in Net Income General and administrative 2,328 — — Option General and administrative (662) — — Total $ 17,355 $ (3,069) $ (478) See Fair Value Measurements note for more information regarding the valuation of our derivative instruments. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt On October 29, 2021, MarketWise, LLC, entered into a loan and security agreement, with the Guarantors (as defined below), the lenders from time to time party thereto, HSBC Bank USA, N.A., as administrative agent, collateral agent, joint lead arranger, and joint bookrunner, and BMO Capital Markets Corp, as joint lead arranger and joint bookrunner (the “Loan and Security Agreement”), providing for up to $150 million of commitments under a revolving credit facility (the “Credit Facility”), including a $5 million letter of credit sublimit. HSBC Bank USA, N.A. and BMO Capital Markets Corp. acted as joint lead arrangers and joint bookrunners, and HSBC Bank USA, N.A., BMO Harris Bank N.A., Silicon Valley Bank, Wells Fargo Bank, N.A., and PNC Bank National Association are lenders. The Credit Facility is guaranteed by MarketWise, LLC’s direct and indirect material U.S. subsidiaries, subject to customary exceptions (the “Guarantors”), pursuant to a guaranty by the Guarantors in favor of HSBC Bank USA, National Association, as agent (the “Guaranty”). Borrowings under the Credit Facility are secured by a first-priority lien on substantially all of the assets of MarketWise, LLC and the Guarantors, subject to customary exceptions. The Credit Facility has a term of three years, maturing on October 29, 2024. Subject to certain conditions and the receipt of commitments, the Loan and Security Agreement allows for revolving commitments under the Credit Facility to be increased or new term commitments to be established by up to $65 million. The existing lenders under the Credit Facility are entitled, but not obligated, to provide such incremental commitments. Borrowings will bear interest at a floating rate which can be, at our option, either (a) an alternate base rate plus an applicable rate ranging from 0.50% to 1.25% or (b) a LIBOR or EURIBOR rate (with a floor of 0.00%) for the specified interest period plus an applicable rate ranging from 1.50% to 2.25%, in each case, depending on MarketWise, LLC’s Net Leverage Ratio (as defined in the Loan and Security Agreement). We will pay an unused commitment fee ranging from 0.25% to 0.35% based on unused capacity under the Credit Facility and MarketWise, LLC’s Net Leverage Ratio. The Company may use the proceeds of borrowings under the Credit Facility to finance permitted acquisitions and for working capital and other general corporate purposes. The Loan and Security Agreement contains customary affirmative covenants for transactions of this type, including, among others, the provision of financial and other information to the administrative agent, notice to the administrative agent upon the occurrence of certain material events, preservation of existence, maintenance of properties and insurance, compliance with laws, including environmental laws, the provision of additional guarantees, and an affiliate transactions covenant, subject to certain exceptions. The Loan and Security Agreement contains customary negative covenants, including, among others, restrictions on the ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make investments, acquisitions, loans, or advances, pay dividends, and sell or otherwise transfer assets. The Loan and Security Agreement contains financial maintenance covenants that require MarketWise, LLC to maintain an Interest Coverage Ratio (as defined in the Loan and Security Agreement) of not less than 3.00 to 1.00 and a Net Leverage Ratio (as defined in the Loan and Security Agreement) of not more than 2.00 to 1.00 (which ratio may be increased to 2.50 to 1.00 for a period of time following a permitted acquisition for which the aggregate cash consideration exceeds $50 million), in each case, tested at the end of each fiscal quarter. The Loan and Security Agreement also provides for a number of customary events of default, including, among others: payment defaults to the lenders; voluntary and involuntary bankruptcy proceedings; covenant defaults; material inaccuracies of representations and warranties; cross-acceleration to other material indebtedness; certain change of control events; material money judgments; and other customary events of default. The occurrence of an event of default could result in the acceleration of obligations and the termination of lending commitments under the Loan and Security Agreement. The Company may use the proceeds of the Credit Facility to finance permitted acquisitions and for working capital and other general corporate purposes. The advances under Credit Facility are subject to conditions customary for facilities of this nature. As of December 31, 2021, there were no outstanding advances under the Credit Facility. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Leases We lease office facilities under operating lease agreements in the United States which have an initial term of twelve months or longer as of December 31, 2021. As of December 31, 2021, remaining lease terms vary from 2 to 7 years. For one lease we have the option to extend the lease term for a period of two years and for another lease we have the option to extend the lease term for a period of three years. The renewal option is not considered in the remaining lease term as we are not reasonably certain that we will exercise such option. The components of lease expense were as follows: Year Ended December 31, 2021 2020 2019 Operating lease cost $ 2,435 $ 3,267 $ 3,723 Variable lease costs 97 49 176 Total lease costs $ 2,532 $ 3,316 $ 3,899 Other information related to leases was as follows: As of December 31, 2021 2020 2019 Lease Term and Discount Rate Weighted average remaining lease term (in years) 5.7 6.6 7.0 Weighted average discount rate 7.0 % 7.1 % 7.2 % When recording the present value of lease liabilities, a discount rate is required. We have concluded that the rates implicit in the various operating lease agreements are not readily determinable. As a result, we instead used our incremental borrowing rate, which is calculated based on hypothetical borrowings to fund each respective lease over the lease term, as of the lease commencement date, assuming that borrowings are secured by the various leased properties. The incremental borrowing rates are determined based on an assessment of our implied credit rating, using ratings scales from reputable rating agencies that consider a number of qualitative and quantitative factors. Market rates are derived as of the lease commencement dates with reference to companies with the same debt rating that operate in a similar industry. As of December 31, 2021, maturities of lease liabilities were as follows: Year Ending December 31: Operating Leases 2022 $ 1,806 2023 1,842 2024 1,733 2025 1,678 2026 1,597 Thereafter 1,386 Total lease payments $ 10,042 Less: Imputed interest (1,835) Total lease liabilities $ 8,207 As of December 31, 2021, we have one lease that will commence in 2022. Supplemental cash flow information related to leases is included in Note 16, Supplemental Cash Flow Information. Contingencies From time to time, we may be involved in disputes or regulatory inquiries, which arise in the ordinary course of business. When we determine that a loss is both probable and reasonably estimable, a liability is recorded and disclosed if the amount is material to us in aggregate. When a material loss contingency is reasonably possible, we do not record a liability, but instead disclose the nature and the amount of the claim and an estimate of the loss or range of loss, if such an estimate can reasonably be made. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of its current legal proceedings will have a material adverse effect on its financial position or results of operations and no corresponding liability has been recorded for any periods presented. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based CompensationDuring the year ended December 31, 2021, we recorded stock-based compensation related to our 2021 Incentive Award Plan and our Class B Units. As more fully described in Note 1, we completed our Transactions in July 2021, and all Class B Units fully vested as of the transaction date, and the original operating agreement was terminated and replaced by a new operating agreement consistent with the Company’s Up-C structure. This new operating agreement does not contain the put and call options that existed under the previous operating agreement, and the Common Units are treated as common equity under the new operating agreement and do not generate stock-based compensation expense. Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows: Year Ended December 31, 2021 2020 2019 Cost of revenue $ 171,804 $ 102,736 $ 5,025 Sales and marketing 48,098 10,567 — General and administrative 843,449 440,297 15,414 Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 Total stock-based compensation expense includes: the vesting of Class B units, the change in fair value of Class B liability awards, profits distributions to Class B unitholders, and expense related to our new 2021 Incentive Award Plan as follows: Year Ended December 31, 2021 2020 2019 Vested Class B units and change in fair value of Class B liability awards $ 934,993 $ 475,202 $ 5,608 Profits distributions to Class B unitholders 123,449 78,398 14,831 Class B stock compensation expense 1,058,442 553,600 20,439 2021 Incentive Award Plan stock-based compensation expense $ 4,909 $ — $ — Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 2021 Incentive Award Plan On September 27, 2021, as a result of Board approval and the successful filing of a registration statement on Form S-8, we granted 500 Class A common stock of MarketWise, Inc. to all employees who were actively employed as of both March 2, 2021 and September 27, 2021. Total shares granted were 309,500 and we issued 200,373 shares after withholding for taxes. All shares immediately vested at the time of grant, resulting in compensation expense of $2,569. On September 27, 2021, we granted certain employees restricted stock units (“RSUs”) and stock appreciation rights (“SARs”) under our 2021 Incentive Award Plan. Both RSUs and SARs are time based and vest ratably over four years, as specified in the individual grant notices. The RSUs granted in September 2021 entitle the recipients dividend equivalents which are subject to the same vesting terms and accumulate during the vesting period. Upon vesting, the RSU holder will be issued the Company’s Class A common stock. The SARs will be settled in the Company’s Class A common stock upon exercise. The shares to be issued upon exercise will have a total market value equal to the SAR value calculated as (x) number of shares underlying SAR, multiplied by (y) any excess of the Company’s share value on the date of exercise over the exercise price set in each individual grant notice. The fair value of RSU is the same as the Company’s share price on the date of grant. The fair value of the SARs was determined using a Black-Scholes model using the following assumptions: Volatility 50.0 % Stock price $ 8.30 Strike price $ 8.30 Expected life of the options to convert (years) 6.25 Risk-free rate 1.20 % Dividend yield 0.0 % The activities of the RSUs and SARs are summarized as follows, including granted, exercised and forfeited from September 27, 2021, the date of the initial establishment of the new incentive plan and grants to December 31, 2021. Fully Vested Shares RSUs SARs Outstanding at January 1, 2021 — — — Granted 309,500 2,334,490 1,935,131 Exercised or vested (309,500) — — Forfeited — — — Expired — — — Outstanding at December 31, 2021 — 2,334,490 1,935,131 The stock compensation expense related to the new RSU and SAR grants was $2,340 for the year ending December 31, 2021. The weighted average grant-date fair value of the respective share classes are as follows: As of December 31, 2021 Fully vested shares $ 8.30 RSUs $ 8.30 SARs $ 4.05 As of December 31, 2021, none of the SARs were exercisable and they have a remaining contractual term of 9.7 years. Class B Units We recognized stock-based compensation expenses of $1,058,442, $553,600 and $20,439 for the years ended December 31, 2021, 2020 and 2019, respectively. These amounts include profits distributions to Class B unitholders of $123,449, $78,398 and $14,831 for the years ended December 31, 2021, 2020 and 2019, respectively. The amount of stock-based compensation expense related to the Class B Units included in each of the line items in the accompanying consolidated statements of operations is as follows: Year Ended December 31, 2021 2020 2019 Cost of revenue $ 170,536 $ 102,736 $ 5,025 Sales and marketing 46,417 10,567 — General and administrative 841,489 440,297 15,414 Total stock based-compensation expense $ 1,058,442 $ 553,600 $ 20,439 The following is a rollforward of Class B Units activity for the twelve months ended December 31, 2021: Unvested at January 1, 2020 77,981 Granted 62,676 Vested (65,613) Unvested at December 31, 2020 75,044 Granted 17,690 Vested (92,734) Unvested at December 31, 2021 — Immediately prior to the closing of the Transactions, there were 589,465 Class B units of MarketWise, LLC outstanding. All Class B units were converted into 152,822,842 Common Units of MarketWise, LLC and became immediately vested, resulting in an incremental stock-based compensation expense of $292,580. The weighted-average grant-date fair value of Class B Units granted was $2,195.16 and $178.69 per unit during the years ending December 31, 2021 and 2020, respectively. Because the Class B Units were not publicly traded, we estimated the fair value of its Class B Units in each reporting period. The fair values of Class B Units were estimated by the board of managers based on our equity value. The board of managers considered, among other things, contemporaneous valuations of our equity value prepared by an unrelated third-party valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. For the year ended December 31, 2020, the fair value of the Class B Units was estimated using an option pricing model to allocate the equity value of the Company to the Class B Units based on their distribution rights. To derive the fair value of the Class B Unit liability, a two-step valuation approach was used. First the equity value of the Company was estimated. The Company considered asset, market, and income-based approaches. The Company determined that an income-based approach presented the best indication of value. As such, the Company relied upon a discounted cash flow approach using a five-year discrete projection period, discounting expected future cash flows back to that date. This calculated equity value was then allocated to the common units held by various stockholders using an option pricing model. At the date of the Transactions on July 21, 2021, the $10 market value per share was used. For the three and six months ended June 30, 2021, the fair value of the Class B Units was estimated using a probability-weighted expected return method. This method considered two scenarios: one based on a market approach according to a proposed acquisition of the Company and allocated through a liquidation waterfall, and the other based on the Company continuing as a private entity according to a discounted cash flow analysis, and allocated using an option pricing model. The results of these two methods were weighted to derive the fair value of the Class B Units as of March 31, 2021 and June 30, 2021. The discounted cash flow method estimates the equity value of the Company by projecting the Company’s net cash flows into the future and discounting these net cash flows to present value by applying a discount rate. Key inputs for this valuation include the Company’s projected cash flows and discount rate. Changes to these inputs could have a material impact on the accompanying consolidated financial statements. The option pricing model allocates the equity value to each class of common units by preparing a breakpoint analysis to determine which securities would receive value at each threshold of a hypothetical liquidation. Then applying a Black-Scholes option pricing analysis to determine the incremental value of each respective breakpoint and allocating that value to each participating security based on its pro-rata ownership in the breakpoint. Key inputs for this valuation include the equity value of the Company, risk-free rate, allocation thresholds, and stock volatility. The Company considered several objective and subjective factors to determine the best estimate of the fair value of the Class B Units, including: ▪ the Company’s historical and expected operating and financial performance; ▪ current business conditions; ▪ indications of value from external investors and their proposed value for the business; ▪ the Company’s stage of development and business strategy; ▪ macroeconomic conditions; ▪ the Company’s weighted average cost of capital; ▪ risk-free rates of return; ▪ the volatility of comparable publicly traded peer companies; and ▪ the lack of an active public market for the Company’s equity units. See also Note 2, Summary of Significant Accounting Policies — Stock-Based Compensation. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share On July 21, 2021, we completed the Transactions pursuant to the Transaction Agreement which materially impacted the number of shares outstanding. We analyzed the calculation of earnings per share for periods prior to the Transactions, and determined that it resulted in values that would not be meaningful to the users of the consolidated financial statements, as our capital structure completely changed as a result of the Transactions. Therefore, earnings per share information has not been presented for periods prior to the Transactions. Net income (loss) for the year ended December 31, 2021 was attributed to the pre-Transaction period from January 1, 2021 through July 21, 2021 and to the post-Transaction period from July 22, 2021 through December 31, 2021. During the pre-Transaction period, net income (loss) was attributable to consolidated MarketWise, LLC and its respective noncontrolling interests. During the post-Transaction period, net income was attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. Immediately following the Transactions, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 7.9% and its noncontrolling interest was 92.1%. For the post-Transaction period, net income attributable to controlling interests included a $15,689 gain on warrant liabilities and a $2,358 tax provision, both of which are 100% attributable to the controlling interest. Weighted average shares outstanding in the table below have not been retroactively restated to give effect to the reverse recapitalization for periods prior to the date of the Transactions. See Note 1 – Description of Organization and Reverse Recapitalization with Ascendant Digital Acquisition Corp. for more information regarding the Transactions. Class B Common Stock is not a participating security, therefore it is not included in the earnings per share calculation. The following table sets forth the computation of basic and diluted earnings per share for the period from July 22, 2021 through December 31, 2021: Numerator: Net income for the period from July 22, 2021 through December 31, 2021 $ 78,728 Less: Net income attributable to noncontrolling interests for the period from July 22, 2021 through December 31, 2021 60,476 Net income for the period from July 22, 2021 through December 31, 2021 attributable to common shareholders, basic and dilutive $ 18,252 Denominator: Weighted average shares outstanding, basic and diluted (in thousands) 25,035 Net income per share attributable to common shares, basic and diluted $ 0.73 The Company’s potentially dilutive securities and their impact on the computation of earnings per share is as follows: • Public and Private Placement Warrants: the public and Private Placement Warrants are "out of the money" for the period from July 22, 2021 through December 31, 2021, therefore, net income per share excludes any impact of the 20,699,993 public warrants and 10,280,000 Private Placement Warrants. • Sponsor and MarketWise Management Member Earnout shares: the 3,051,000 Sponsor Earn Out shares held in escrow are excluded from the earnings per share computation since the earnout contingency has not been met. The 2,000,000 MarketWise Management Member Earn Out shares (as defined and discussed in the Original Report) are excluded from the earnings per share computation since the earnout contingency has not been met. • Restricted stock units and stock appreciation rights: The earnings per share calculation excludes the impact of RSUs and SARs since the impact would be antidilutive. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are subject to U.S. federal and state taxes with respect to our allocable share of any taxable income or loss of MarketWise, LLC, as well as any standalone income or loss we generate. MarketWise, LLC is treated as a partnership for U.S. income tax purposes and for most applicable state and local income tax purposes and generally does not pay income taxes in most jurisdictions. Instead, MarketWise, LLC’s taxable income or loss is passed through to its members, including us. The components of income tax expense consisted of the following: Year Ended December 31, 2021 Current income tax expense (benefit): Federal $ — State — Deferred income tax expense (benefit): Federal 1,942 State 416 Total income tax expense (benefit) $ 2,358 A reconciliation of the U.S. statutory income tax rate to the Company's effective income tax rate is as follows: Year Ended December 31, 2021 Statutory federal tax rate 21.00 % State income taxes, net of federal benefit 4.50 % Permanent items (0.55) % Income attributable to noncontrolling interests (25.20) % Effective income tax rate (0.25) % The Company’s effective tax rate was (0.25)% in 2021, in comparison to the U.S. statutory rate of 21.00%. Our effective tax rate in 2021 differs from the U.S. federal statutory rate primarily because we generally do not record income taxes for the noncontrolling portion of pre-tax income. Details of the Company’s deferred tax assets and liabilities are as follows: Year Ended December 31, 2021 Deferred tax assets: Reserves $ 216 Accrued expenses 127 Deferred revenue 9,899 Derivatives 40 Stock-based compensation 102 Investment in MarketWise, LLC 28,981 Net operating loss carryforwards 1,260 Investment in flow-through partnerships 296 Lease liabilities 158 Fixed asset 9 Charitable contributions 25 Intangibles 1,057 Total deferred tax assets $ 42,170 Deferred tax liabilities Deferred expense $ (3,959) Related party interest (53) Right of use asset (213) Total deferred tax liabilities $ (4,225) Valuation allowance (28,981) Net deferred tax assets (liabilities) $ 8,964 As of December 31, 2021, we had a federal net operating loss carryforward (“NOL”) of $4,942, which can be carried forward indefinitely. We also had state net operating losses of $272 with varying carryforward periods. As of December 31, 2021, it is more likely than not that future operations will generate sufficient taxable income to realize the NOL and therefore, no valuation allowance was recorded on the NOL. As a result of the Transactions, we recorded a deferred tax asset resulting from the outside basis difference in our interest in MarketWise, LLC. The Company considers both positive and negative evidence when measuring the need for a valuation allowance. A valuation allowance is not required to the extent that, in management’s judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more likely than not (a likelihood of more than 50%) that the Company’s deferred tax assets will be realized. In evaluating the need for a valuation allowance on the deferred tax asset, the company considered positive evidence related to its historic earnings, forecasted income and reversal of temporary differences. Therefore, the Company recorded a valuation allowance of $28,981 for certain deferred tax assets that are not more likely than not to be realized. The deferred tax asset is remeasured at the end of the reporting period to reflect the change in relative ownership of MarketWise, LLC held by the Company. The impact of the remeasurement of the noncontrolling interest is reflected in the consolidated statements of stockholders’ deficit / members’ deficit. The Company did not record any penalties or interest related to uncertain tax positions, as management has concluded that no such positions exist, on the consolidated balance sheets as of December 31, 2021 and 2020. The Company does not expect any changes to uncertain tax positions within the next 12 months. The Company is subject to examination for tax years beginning with the year ended December 31, 2018. The Company is not currently subject to income tax audits in any U.S. or state jurisdictions for any tax year. Tax Receivable Agreement As part of the Transactions, we entered into Tax Receivable Agreements (“TRAs”) with certain shareholders. We expect to increase our share of the tax basis in the net assets of MarketWise, LLC when MarketWise, Inc. units are redeemed or exchanged by the Founding members of MarketWise, LLC. We intend to treat any redemptions and exchanges of MarketWise, Inc. units as direct purchases of MarketWise, Inc. units for United States federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The TRA will represent approximately 85% of the calculated tax savings based on the portion of basis adjustments on future exchanges of MarketWise, LLC units and other carryforward attributes assumed that we anticipate to be able to utilize in future years. There was no exchange of MarketWise, LLC units as part of the Transactions and there has been no exchange since the closing; therefore, we have not recorded a liability under the TRAs as of December 31, 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In July 2021, the Company’s board approved and made a discretionary, one-time, lifetime-award, non-employee bonus payment of $10.0 million to the Company’s founder, who is a Class B common stockholder, which was recorded within related party expense in the consolidated statement of operations. We have certain revenue share agreements with related parties. Accordingly, we recognized revenue from related parties of $1,284, $3,386 and $6,825 for the years ended December 31, 2021, 2020 and 2019, respectively. We also incurred revenue share expenses paid to related parties of $10,326, $5,891 and $3,063, which were capitalized as contract origination costs for the years ended December 31, 2021, 2020 and 2019, respectively. Additionally, a related party provided call center support and other services to the Company for which we recorded an expense within cost of revenue of $1,260, $1,005 and $1,647 for the years ended December 31, 2021, 2020 and 2019, respectively. A related party also provided certain corporate functions to MarketWise and the costs of these services are charged to MarketWise and recorded within related party expense in the accompanying consolidated statement of operations. We held balances of $1,037 and $3,288 as of December 31, 2021 and December 31, 2020 of related party payables related to revenue share expenses, call center support, and the services noted above. The balances with our related party are presented net and are included in related party payables, net in the consolidated balance sheet. We earned fees and provided certain accounting and marketing services to companies owned by certain of MarketWise’s Class B unitholders. As a result, we recognized $358, $348 and $338 in other income, net for the years ended December 31, 2021, 2020 and 2019, respectively. Related party receivables related to these services were $358 and $689 as of December 31, 2021 and 2020, respectively. We lease offices from related parties. Lease payments made to related parties were $1,536, $1,505 and $1,477 for the years ended December 31, 2021, 2020 and 2019, respectively, and rent expense of $2,224, $2,224 and $2,224 were recognized in general and administrative expenses for the years ended December 31, 2021, 2020 and 2019, respectively, related to leases with related parties. At December 31, 2021 and 2020, respectively, ROU assets of $10,323 and $11,957 and lease liabilities of $7,545 and $8,490 are associated with leases with related parties. We incurred costs related to lead generation marketing from a related party vendor which was partially owned by a shareholder through November 2020. We purchased lead generation marketing totaling $15,326 for the year ended December 31, 2020, which was recorded in sales and marketing expenses. In August 2019, we provided an additional loan to a Class B unitholder and recognized a related party note receivable from the unitholder of $3,000. We recognized $25 and $24 in interest income for the years ended December 31, 2020 and 2019, respectively. This loan was repaid in June 2020. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2021 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest Entities We consolidated a VIE based on our ability to exercise power and being the primary beneficiary of the entity including directing the operations and marketing campaigns and sharing customer lists and publications, as of December 31, 2021 and 2020. There have been no reconsideration events during these periods. The assets of consolidated variable interest entities may only be used to settle obligations of these entities. In addition, there is no recourse to MarketWise for the consolidated VIE’s liabilities. The following represents financial information for the consolidated VIE included in the consolidated balance sheets: As of December 31, 2021 2020 Current assets $ 3,901 $ 3,787 Noncurrent assets 2 22 Total assets $ 3,903 $ 3,809 Current liabilities $ 274 $ 3,265 Total liabilities $ 274 $ 3,265 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow disclosures are as follows: Year Ended December 31, 2021 2020 2019 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 67 $ 339 $ 366 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1,761) (2,767) (3,106) Operating lease right-of-use assets obtained in exchange for lease obligations — (409) (5,051) Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions 398 — — Supplemental Disclosures of Non-Cash Investing and Financing Activities: Property and equipment included in accounts payable $ — $ — $ 1,010 Capitalized software included in accounts payable 12 — — Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents $ 139,078 $ 114,422 $ 170,520 Restricted cash 500 505 1,564 Total $ 139,578 $ 114,927 $ 172,084 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Upon closing of the Transactions on July 21, 2021, as discussed in Note 1, Description of Organization and Merger Transaction , the Company’s capital stock consists of (i) issued and outstanding Class A Common Stock of the Company, par value $0.0001 per share, as a result of the automatic conversion of ADAC Class A ordinary shares on a one-for-one basis, (ii) issued and outstanding 15,000,000 shares of Class A Common Stock of the Company at $10.00 per share to PIPE investors, pursuant to the Transaction Agreement, and (iii) issued and outstanding Class B Common Stock, par value $0.0001 per share, issued to the MarketWise Members. In connection with the 2021 Incentive Award Plan, we issued 309,500 shares net of 109,127 shares withheld to pay taxes. The table set forth below reflects information about the Company’s equity, as of December 31, 2021. The 3,051,000 Sponsor Earn Out shares held in escrow and the 2,000,000 Management Earn Out shares are considered contingently issuable shares and therefore excluded from the number of Class A Common Stock issued and outstanding in the table below. Authorized Issued Outstanding Common Stock - Class A 950,000,000 24,718,402 24,718,402 Common Stock - Class B 300,000,000 291,092,303 291,092,303 Preferred Stock 100,000,000 — — Total 1,350,000,000 315,810,705 315,810,705 Each share of Class A and Class B Common stock entitles the holder one vote per share. Only holders of Class A Common Stock have the right to receive dividend distributions. In the event of liquidation, dissolution or winding up of the affairs of the Company, only holders of Class A Common Stock have the right to receive liquidation proceeds, while the holders of Class B Common Stock are entitled to only the par value of their shares. Class B Common Stock can be issued only to MarketWise Members, their respective successors and permitted transferees. Our board of directors has discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. On November 4, 2021, our Board of Directors authorized the repurchase of up to $35.0 million in aggregate of shares of the Company’s Class A common stock, with the authorization to expire on November 3, 2023. During the year ended December 31, 2021, we repurchased 500,270 shares totaling $3,335 in the aggregate. Stock repurchases under this program will be made from time to time, on the open market, in privately negotiated transactions, or by other methods, 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 legal requirements. The timing of the repurchases will depend on market conditions and other requirements. The Company currently anticipates the share repurchase program will extend over a two-year period, or such shorter period if $35.0 million in aggregate of shares have been repurchased. The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares, and the program may be extended, modified, suspended, or discontinued at any time. 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. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrants | Warrants In connection with the closing of the Transaction, outstanding public redeemable warrants and Sponsor held private warrants of ADAC were converted into warrants to purchase Class A common stock of MarketWise, Inc., with substantively identical terms. Immediately after giving effect to the Transaction, there were 20,699,993 public warrants and 10,280,000 private warrants held by the Sponsor, each exercisable for one share of Class A common stock of MarketWise, Inc. at $11.50 per share. As of December 31, 2021, the number of warrants outstanding remained unchanged. The warrants may be exercised only during the period commencing on August 20, 2021 (30 days after the closing of the Transaction) through August 20, 2026 (five years thereafter). The private warrants are identical to the public warrants, except that the private warrants will be non-redeemable (except as set forth below under “ —Redemption of warrants when the price per share equals or exceeds $10.00” ) so long as they are held by the Sponsor or their permitted transferees. Redemption of warrants when the price per share equals or exceeds $10.00 Once the warrants become exercisable, the Company may redeem the outstanding warrants for Class A common stock: • in whole and not in part; • at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of Class A common stock to be determined by reference to an agreed table based on the redemption date and the “fair market value” of the Class A common stock; • if, and only if, the last reported sale price (the “closing price”) of the Class A common stock equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within the 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders; and • if the closing price of the Class A common stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the private warrants must also be concurrently called for redemption on the same terms as the outstanding public warrants, as described above. The “fair market value” of the Class A common stock shall mean the volume weighted average price of the Class A common stock during the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of warrants. The Company will provide warrant holders with the final fair market value no later than one business day after the 10-trading day period described above ends. In no event will the warrants be exercisable in connection with this redemption feature for more than 0.361 Class A common stock per warrant (subject to adjustment). Redemption of warrants when the price per share equals or exceeds $18.00 Once the warrants become exercisable, the Company may redeem the outstanding warrants for cash (except the private warrants): • in whole and not in part; • at a price of $0.01 per warrant; • upon a minimum of 30 days’ prior written notice of redemption; and • if, and only if, the closing price of the Class A common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. The Company has reviewed the terms of warrants to purchase its Class A common stock to determine whether warrants should be classified as liabilities or equity in its consolidated balance sheet. In order for a warrant to be classified in stockholders’ equity, the warrant must be (a) indexed to the Company’s equity and (b) meet the conditions for equity classification in ASC 815-40, Derivatives and Hedging - Contracts in an Entity’s Own Equity . If a warrant does not meet the conditions for equity classification, it is carried on the consolidated balance sheet as a warrant liability measured at fair value, with subsequent changes in the fair value of the warrant recorded in the consolidated statement of operations as change in fair value of warrants in Other income (expense), net. The Company determined that all warrants are required to be classified as liability in the consolidated balance sheet at fair value, with changes in fair value recorded in the consolidated statement of operations. At the closing of the Transaction on July 21, 2021, the warrants had an initial fair value of $45,021, which was recorded as liability and a reduction to additional paid-in capital in the consolidated balance sheet. As of December 31, 2021, the fair value of the warrants was $29,332. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent events have been evaluated through March 10, 2022, which is the date that the financial statements were issued. In 2022, we repurchased 1,251,267 shares totaling $7,114 in the aggregate. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The accompanying consolidated financial statements include the accounts of MarketWise and its wholly owned subsidiaries. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All intercompany balances and transactions have been eliminated in consolidation. The accompanying statements of operations include expenses for certain functions historically performed by a related party, including general corporate services, such as legal, accounting, treasury, information technology, human resources and administration. These expenses are based primarily on direct usage when identifiable, direct capital expenditures or other relevant allocations during the respective periods. We believe the assumptions underlying the accompanying consolidated financial statements, including the assumptions regarding these expenses from this related party, are reasonable. Actual results may differ from these expenses, assumptions and estimates. The amounts recorded in the accompanying consolidated financial statements are not necessarily indicative of the actual amount of such indirect expenses that would have been recorded had we been a separate independent entity. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions made in the accompanying financial statements include, but are not limited to, the fair value of common units, derivatives, warrants, valuation of assets acquired and liabilities assumed in business combinations, useful lives of intangible assets with definite lives, benefit period of deferred contract acquisition costs, grant-date fair value of equity awards, determination of standalone selling prices, estimated life of lifetime customers, recoverability of goodwill and long-lived assets, valuation allowances on deferred tax assets, the incremental borrowing rates to calculate lease liabilities and right-of-use (“ROU”) assets and certain accruals. We evaluate our estimates and assumptions on an ongoing basis using historical experience and |
Variable Interest Entity | Variable Interest Entity The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity. However, a controlling financial interest may also exist through arrangements that do not involve controlling voting interests when an entity is insufficiently capitalized, or when an entity is not controlled through its voting interests, which is referred to as a variable interest entity (“VIE”). We evaluate our ownership, contractual and other interests in entities to determine if we have a variable interest in an entity. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available historical information, among other factors. If we hold a contractual or ownership interest in an entity and we determine that the entity is a VIE and that we are determined to be the primary beneficiary, we consolidate such entity in our consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (1) has the power to make decisions that most significantly affect the economic performance of the VIE; and (2) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, we determine whether any changes in the interest or relationship with the entity impact the determination of whether we are still the primary beneficiary. If we are not deemed to be the primary beneficiary in a VIE, we account for the investment or other variable interests in a VIE in accordance with applicable GAAP. We have determined that Stansberry Pacific Research is a VIE and that we are the primary beneficiary of Stansberry Pacific Research since we have the ability to direct the activities of the VIE and have the obligation to absorb the loss or the right to receive the benefit. Refer to Variable Interest Entities note for further information. |
Segment Information | Segment Information Operating segments are components of an enterprise for which separate financial information is available and is evaluated regularly by our chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. Our Chief Executive Officer serves as the CODM. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash We consider all financial instruments purchased with an original maturity of three months or less at the time of purchase to be cash equivalents. Our cash equivalents are composed of money market funds and certificates of deposit. We hold certain restricted cash with credit card processors as reserves for chargebacks and refunds. As the reserves are based on our credit card receivables which are collected within twelve months of each reporting period, the restricted cash has been included in current assets on the consolidated balance sheets. |
Accounts Receivable, Net | Accounts Receivable, Net Our accounts receivable primarily consist of receivables from third-party credit card providers which are stated at net realizable value. We did not record an allowance for doubtful accounts for the years ended December 31, 2021 and 2020. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and UncertaintiesFinancial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash. We maintain deposits in federally insured financial institutions in excess of federally insured limits. We are exposed to credit risk in the event of a default by the financial institutions holding our cash to the extent recorded on the consolidated balance sheets. Management believes we are not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. |
Derivative Financial Instruments | Derivative Financial Instruments From time to time, we utilize instruments which may contain embedded derivative instruments as part of our overall strategy to compensate and retain key employees and independent contractors (see Derivative Financial Instruments note below for additional information). Our derivative instruments are recorded at fair value on the consolidated balance sheets. Our derivative instruments have not been designated as hedges; therefore, both realized and unrealized gains and losses are recognized in earnings. For the purposes of cash flow presentation, realized and unrealized gains or losses are included within cash flows from operating activities. Upfront cash payments received upon the issuance of derivative instruments are included within cash flows from financing activities within the consolidated statements of cash flows. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized using the straight-line method over the shorter of the related asset’s estimated useful life or the remaining term of the lease. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations. |
Business Combinations | Business CombinationsWe allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values as of the acquisition date. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing assets acquired and liabilities assumed include, but are not limited to, future expected cash flows from acquired customers, trade names, acquired technology and deferred revenue from a market participant perspective, as well as determining useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and as a result, actual results may differ from estimates. During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in earnings. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired, net of liabilities assumed. Goodwill is not amortized but is evaluated for impairment annually, or more frequently if events or changes in circumstances indicate the goodwill may be impaired. Our annual impairment testing date is the first day of the fourth quarter. Events or changes in circumstances which could trigger an impairment review include significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, significant underperformance relative to historical or projected future results of operations, a significant adverse change in the business climate, an adverse action or assessment by a regulator, unanticipated competition or a loss of key personnel. We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if we conclude otherwise, then we are required to perform the first of a two-step impairment test. The first step involves comparing the estimated fair value of the reporting unit with its respective carrying amount, including goodwill. If the estimated fair value exceeds the carrying amount, goodwill is considered not to be impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than the carrying amount, then a second step is required that compares the carrying amount of the goodwill with its implied fair value. The estimate of implied fair value of goodwill may require valuations of certain internally generated and unrecognized intangible and tangible net assets. If the carrying amount of goodwill exceeds the implied fair value of the goodwill, then an impairment loss is recognized in an amount equal to the excess. No goodwill impairment charges have been recorded during the years ended December 31, 2021, 2020 and 2019. |
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net consists primarily of identifiable intangible assets that are subject to amortization such as developed technology, customer relationships, and trade names resulting from our acquisitions. Intangible assets arising from acquisitions are recorded at fair value on the date of acquisition and amortized over their estimated economic lives on a straight-line basis which approximates the pattern in which the economic benefits of the assets will be consumed. Intangible assets are presented net of accumulated amortization in the consolidated balance sheet. |
Cryptocurrencies | Cryptocurrencies We purchased cryptocurrencies during the year ended December 31, 2018 primarily to be redeemed by customers as part of certain marketing campaigns. We recognized our portfolio of cryptocurrencies as intangible assets since cryptocurrencies are not considered cash and cash equivalents and do not have physical substance. We believe that the cryptocurrencies have an indefinite life since there are no significant legal, regulatory, contractual or economic factors that would limit the cryptocurrencies’ useful life. Our indefinite-lived cryptocurrency holdings are not amortized but are evaluated for impairment annually, or more frequently if events or changes in circumstances indicate the carrying amount may not be recoverable. We utilize the quoted market values of the cryptocurrencies in the impairment test on the cryptocurrency holdings. We sold cryptocurrencies on hand after the marketing campaigns ended and recognized gains of $105, $0 and $605 during the years ended December 31, 2021, 2020 and 2019, respectively, in other income, net on the consolidated statement of operations. The cash flows associated with the cryptocurrencies are recognized in the consolidated statement of cash flows as operating activities due to the nature of the transactions. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets are reviewed for indications of possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability is measured by comparison of the carrying amounts to the future undiscounted cash flows attributable to these assets or asset groups. An impairment loss is recognized to the extent an asset group is not recoverable, and the carrying amount exceeds the projected discounted future cash flows arising from these assets. There were no impairments of long-lived assets for any of the periods presented. |
Revenue | Revenue Recognition We recognize revenue in accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) and the related amendments (“ASC 606”). We determine revenue recognition through the following steps: • Identify the contract, or contracts, with a customer; • Identify the performance obligations in the contract; • Determine the transaction price; • Allocate the transaction price to the performance obligations in the contract; and • Recognize revenue when, or as, a performance obligation is satisfied Research and software-as-a-service (“SaaS”) subscriptions We primarily earn revenue from services provided in delivering subscription-based financial research, publications and SaaS offerings to individual customers through our online platforms. Revenues are recognized evenly over the duration of the subscriptions, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Customers are typically billed in advance of the subscriptions. We also offer lifetime subscriptions where we receive an upfront payment upon entering into the contract and receive a lower amount annually (a “maintenance fee”) thereafter. The right to discounts on future maintenance fee payments is considered a material right which is recognized as revenue when the customer exercises the option or when the option expires. Certain upfront fees on lifetime subscriptions are paid in installments, generally over a twelve-month period. We recognize revenue related to lifetime subscriptions over the estimated customer lives. We have determined the estimated life of lifetime customers based on historic customer attrition rates. Advertising and other We earn revenue from the sale of advertising placements on our websites. We also earn revenue from the sale of print products and events, such as webinars and conferences. In addition we recognize revenue related to the sharing of our customer lists with other companies, including related parties, where we earn a fee for each successful sale the other company generates from our list (“revenue share”). Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We have also offered customers the option to redeem a certain value of cryptocurrencies as part of certain marketing campaigns. These offers are considered to be material rights for our customers and we allocate a portion of the transaction price to the material right performance obligation. Revenue associated with the material rights is recognized when the customer exercises the option or when the option expires. Our performance obligations are satisfied over time as subscriptions are available to customers or at a point-in-time as products are delivered to customers. Accordingly, revenue from subscription services is recognized over the duration of the subscription. Our advertising performance obligations are satisfied at a point-in-time, and revenue is recognized when impressions are delivered. Revenue from products is recognized at a point-in-time when delivered. Revenue from events is recognized over the duration of the event. In addition, we recognize revenue from sharing our customer lists with related parties and other third-party companies. We apply the sales-based or usage-based royalty exception to sales of functional intellectual property. Revenue is recognized at a point-in-time as fees are earned on successful sales from the customer lists. Contracts with Multiple Performance Obligations Our contracts with customers may include multiple performance obligations if subscription services are sold with other subscriptions, products or events within one contract. For such contracts, we allocate the transaction price to each performance obligation based on its relative standalone selling price. We generally determine standalone selling prices based on the prices charged to customers on a standalone basis. Contract Balances A contract asset is defined as an entity's right to consideration for goods or services that the entity has transferred to a customer but customer payment is contingent on a future event. A contract liability is defined to occur if the customer's payment of consideration precedes the entity's performance and represents the entity's obligation to transfer goods or services to a customer for which the entity has received consideration. Timing of revenue recognition may differ from the timing of invoicing to customers. We record a receivable when revenue is recognized prior to invoicing, or deferred revenue when revenue is recognized subsequent to invoicing. No other contract assets are recorded on our consolidated balance sheets as of December 31, 2021 and 2020. Deferred revenue is primarily comprised of unearned revenue related to subscription services. Subscribers typically pay all or a portion of the subscription fees by credit card prior to the start of the subscriptions. Contract receivables are presented as accounts receivable due to processing time with credit card providers. Subscribers may be able to cancel certain subscriptions for a full or pro-rated refund for a certain period of time which is generally between 30 and 90 days after the start of their subscriptions. After the refund period, we have no obligation to refund any of the consideration received. Refund obligations are a significant estimate which we recognize as of each reporting period based on historical trends and record a contract liability for this amount in other current liabilities on the consolidated balance sheets. Assets Recognized from Costs to Obtain a Contract with a Customer We capitalize incremental costs that are directly related to the acquisition or renewal of customer contracts, to the extent that the costs are expected to be recovered and if we expect the benefit of these costs to be longer than one year. We have elected to utilize the practical expedient and expense costs to obtain a contract with a customer when the expected benefit period is one year or less. Our capitalizable incremental costs include sales commissions to |
Leases | Leases We follow the provisions of ASU No. 2016-02, Leases (“ASU 2016-02”). We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, and operating lease liabilities, noncurrent in the consolidated balance sheets. We do not have any finance lease agreements. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease ROU asset includes any lease payments made and excludes payments received for lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are generally combined. We have elected, as an accounting policy for leases of real estate, to account for lease and non-lease components in a contract as a single lease component. We elected to use the practical expedient for short-term leases, and therefore do not record right-of-use assets or lease liabilities with lease durations of twelve months or less. Rather, the lease payments for short-term leases are recognized on the consolidated statements of operations on a straight-line basis over the lease term. We have also elected the practical expedient on not separating lease components from nonlease components for our office leases. Variable payments, such as common area charges, maintenance, insurance and taxes, are primarily based on the amount of space we occupy. These payments in our leases are not dependent on an index or a rate and are excluded from the measurement of the lease liabilities and recognized in the consolidated statements of operations in the period in which the obligation for those payments is incurred. We remeasure our lease payments when the contingency underlying such variable payments is resolved such that some or all of the remaining payments become fixed. |
Cost of Revenue | Cost of Revenue Cost of revenue consists primarily of payroll and payroll-related costs associated with producing and publishing our content, customer service, credit card processing fees, product costs and allocated overhead. |
Sales and Marketing | Sales and Marketing Sales and marketing expenses consist primarily of payroll and payroll-related costs, amortization of deferred contract acquisition costs, allocated overhead, agency costs, advertising campaigns, and branding initiatives. Conferences, webinars and other event costs are expensed during the period in which the event takes place. Other sales and marketing and advertising costs are expensed as they are incurred. |
Research and Development | Research and Development Research and development expenses consist primarily of payroll and related costs, allocated overhead, technical services, software expenses, and hosting expenses. |
General and Administrative | General and Administrative General and administrative expenses consist primarily of payroll and related costs associated with our finance, legal, information technology, human resources, executive and administrative personnel, legal fees, corporate insurance, office expenses, professional fees, and travel and entertainment costs. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expenses are included in cost of revenue, sales and marketing, and general and administrative expenses in a manner consistent with the employee’s salary and benefits in the consolidated statements of operations. 2021 Incentive Award Plan On July 21, 2021, the MarketWise, Inc. 2021 Incentive Award Plan (the “2021 Incentive Award Plan”) became effective. We have reserved a total of 32,045,000 shares of MarketWise Class A common stock for issuance pursuant to the 2021 Incentive Award Plan, and the maximum number of shares that may be issued pursuant to the exercise of incentive stock options granted under the 2021 Incentive Award Plan is 32,045,000, in each case, subject to certain adjustments set forth therein. The 2021 Incentive Award Plan provides for the grant of stock options, including incentive stock options, or ISOs, and nonqualified stock options, or NSOs; restricted stock; restricted stock units, or RSUs; stock appreciation rights, or SARs; and other stock or cash-based awards. Equity-based compensation with service conditions is measured based on the grant date fair value of the awards and recognized as compensation expense over the period during which the recipient is required to perform services in exchange for the award (the requisite service period). We have elected to use a straight-line attribution method for recognizing compensation costs relating to awards that have service conditions only. Forfeitures are recorded as they occur. Class B Units As more fully described above, we completed our Transactions in July 2021, and all Class B Units fully vested as of the transaction date, and the original operating agreement was terminated and replaced by a new operating agreement consistent with the Company’s Up-C structure. This new operating agreement does not contain the put and call options that existed under the previous operating agreement, and the MarketWise, LLC common units are treated as common equity under the new operating agreement and do not generate stock-based compensation expense. Prior to the Transactions, under the old operating agreement, and as part of our compensation and retention strategy, we granted incentive compensation units (“Class B Units”) to certain key employees, which are profit interests for United States federal income tax purposes. The Class B Units were accounted for as a substantive class of equity and allowed the recipient to realize value only to the extent that the value of the award appreciated. The Class B Units contained service-based vesting conditions and had different vesting terms depending upon the employee which ranged from vesting immediately to eight years; vesting was accelerated upon the completion of the Transactions. Compensation cost was recognized on a straight-line basis over the requisite service period until vesting for the entire award, but at least equaled the number of vested units determined by the underlying vesting schedule. Forfeitures were accounted for in the period in which they occur. The Class B Units were subject to a put and call option whereby we could elect to redeem or be required to redeem these units at a value determined by a predefined formula based on a multiplier of our net income as defined by management. Employees may not exercise the put option until 25 months have elapsed from the issuance date. Since the redemption price is not representative of fair value, the employees are not considered to be subject to the risks and rewards of share ownership, and the Class B Units were classified as liabilities in the accompanying consolidated balance sheet. Prior to the completion of the Transactions, the liability for Class B units was remeasured to fair value at the end of each reporting period. Since Class B Units were classified as liabilities, all cash distributions made to the unitholders of the Class B Units pursuant to our operating agreement were considered to be stock-based compensation expenses. Upon consummation of the Transactions, the old operating agreement was terminated and a new operating agreement was adopted. This new operating agreement does not contain the put and call options that existed under the previous operating agreement, and the common units are treated as common equity under the new operating agreement and do not generate stock-based compensation expense. See also Note 11, Stock-Based Compensation |
Capitalized Software Development Costs | Capitalized Software Development Costs For internal use software, we capitalize external costs and payroll and payroll-related costs related to employees that developed new or additional software functionality. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred and included in research and development in the consolidated statements of operations. These capitalized costs are amortized using the straight-line method over the software’s expected useful life, which is generally three years. |
Capitalized Implementation Costs | Capitalized Implementation Costs Effective January 1, 2018, we adopted ASU 2018-15, Intangibles— Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract and applied the guidance prospectively to eligible costs. Implementation costs incurred in cloud computing hosting arrangements that are service contracts are capitalized and amortized using the straight-line method over the term of the related hosting arrangement and any expected renewal periods. These costs include external direct costs for materials and services and payroll and payroll-related costs of employees devoting time to the project. Software maintenance and training costs are expensed in the period in which they are incurred. The capitalized implementation costs are capitalized within other current assets and other assets on the consolidated balance sheets. We capitalized cloud computing implementation costs for customer-relationship management, revenue management, and enterprise resource planning systems of $287, $356 and $257 for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization expense related to capitalized cloud computing implementation costs was $210, $17 and $64 for the years ended December 31, 2021, 2020 and 2019, respectively. |
Fair Value Measurement | Fair Value Measurement Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; Level 3— Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of our financial instruments, including accounts receivable, trade and other payables, accrued expenses and related party receivables and payables, approximate their respective fair values because of their short maturities. The fair value of stock-based compensation liabilities for Class B Units, the derivatives liabilities associated with our deferred compensation arrangements, and the warrant liabilities were determined using unobservable Level 3 inputs. We have not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted. |
Warrant Liability | Warrant Liability Warrants are accounted for as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. As of December 31, 2021, all of our warrants are classified as liabilities. |
Foreign Currency Translation | Foreign Currency Translation Our VIE is an entity in Singapore, and its functional currency is the local currency. Gains and losses on transactions denominated in currencies other than the functional currency are included in determining net income (loss) for the period. Assets and liabilities of our foreign subsidiary are translated using the exchange rates in effect at the balance sheet date. Results of operations are translated using weighted average exchange rates. Adjustments arising from the translation of our foreign subsidiary’s functional currency into U.S. dollars are reported as foreign currency translation adjustments in accumulated other comprehensive loss in the consolidated statements of members’ deficit. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in other income, net in the accompanying consolidated statement of operations when realized. Foreign currency transaction activity was immaterial for the years ended December 31, 2021, 2020 and 2019. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is currently comprised of changes in foreign currency translation adjustments. |
Income Taxes | Income Taxes Prior to the Transactions, we were a pass-through entity for income tax purposes. Subsequent to the Transactions, the portion of earnings allocable to MarketWise, Inc. is subject to corporate level tax rates at the federal, state and local levels. Therefore, the amount of income taxes recorded prior to the Transaction are not representative of the expenses expected in the future. The computation of the effective tax rate and provision at each interim period requires the use of certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income that is subject to tax, permanent differences between our GAAP earnings and taxable income, and the likelihood of recovering deferred tax assets existing as of the balance sheet date. The estimates used to compute the provision for income taxes may change throughout the year as new events occur, additional information is obtained or as tax laws and regulations change. Accordingly, the effective tax rate for future interim periods may vary materially. We account for income taxes pursuant to the asset and liability method which requires us to recognize current tax liabilities or receivables for the amount of taxes we estimate are payable or refundable for the current year, deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. The benefit of tax positions taken or expected to be taken in our income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents a potential future obligation to the taxing authority for a tax position that was not recognized. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable and are recognized as general and administrative expenses. |
Tax Receivable Agreement Obligation | Tax Receivable Agreement Obligation In connection with the Transactions, concurrently with the Closing, we have entered into Tax Receivable Agreements (“TRA”) with owners of MarketWise, LLC prior to the Transactions (the “TRA Parties”). The TRAs generally provide for the payment by us to the TRA Parties of 85% of the cash tax benefits, if any, that we are deemed to realize as a result of tax basis adjustments as a result of sales and exchanges of units of MarketWise, LLC in connection with, or following the Transactions, and certain distributions with respect to units. These tax basis adjustments generated over time may increase (for tax purposes) the depreciation and amortization deductions available to us and, therefore, may reduce the amount of U.S. federal, state and local tax that we would otherwise be required to pay in the future, although the IRS may challenge all or part of the validity of that tax basis, and a court could sustain such challenge. The tax basis adjustments upon sales or exchanges of units for shares of Class A Common Stock and certain distributions with respect to Class A LLC Units may also decrease gains (or increase losses) on future dispositions of certain assets to the extent tax basis is allocated to those assets. Actual tax benefits realized by us may differ from tax benefits calculated under the Tax Receivable Agreements as a result of the use of certain assumptions in the TRAs, including the use of an assumed weighted average state and local income tax rate to calculate tax benefits. The payments that we may make under the TRAs are expected to be substantial. We account for the effects of these increases in tax basis and associated payments under the TRAs if and when exchanges occur as follows: a. recognizes a contingent liability for the TRA obligation when it is deemed probable and estimable, with a corresponding adjustment to additional paid-in-capital, based on the estimate of the aggregate amount that MarketWise, Inc. will pay; b. records an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the exchange; c. to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we reduce the deferred tax asset with a valuation allowance; and, d. The effects of changes in any of the estimates and subsequent changes in the enacted tax rates after the initial recognition will be included in our net income. As of December 31, 2021, there has been no exchange of MarketWise, LLC units and therefore no TRA liability has been recognized. |
Earnout Shares | Earnout Shares Pursuant to the Transaction Agreement, at the closing of the Transactions, we placed 3,051,000 shares of MarketWise, Inc. Class A Common Stock into escrow to be released to the Sponsor if certain conditions are met. In addition, certain management members of the Company have been allocated 2,000,000 shares of Class A Common Stock in aggregate, with shares to be placed in escrow, and released at any time during a four-year period following closing of the Transaction, if certain conditions are met. The sponsor and management earnout shares will be released as follows: 1) 50% when the volume weighted average price (the “VWAP) of Class A Common Stock is greater than or equal to $12.00 for a period of at least 20 trading days within a consecutive 30-trading-day period, or based on the per share equity value in a transaction in which our shareholders sell their shares; and 2) 50% when the volume weighted average price (the “VWAP) of Class A Common Stock is greater than or equal to $14.00 for a period of at least 20 trading days within a consecutive 30-trading-day period, or based on the per share equity value in a transaction in which our shareholders sell their shares. The sponsor and management earnout shares are classified as equity transactions at initial issuance and at settlement when the release conditions are met. Until the shares are issued and released, the earnout shares are not included in shares outstanding. The earnout shares are not considered stock-based compensation. As of the date of the Transactions, the sponsor and management earnout shares had a fair value o f $26.0 million for 5,051,000 shares of Class A Common Stock. |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest represents the Company’s noncontrolling interest in consolidated subsidiaries which are not attributable, directly or indirectly, to the controlling Class A Common Stock ownership of the Company. The Transactions occurred on July 21, 2021. As a result, net income (loss) for the year ended December 31, 2021 was attributed to the pre-Transaction period from January 1, 2021 through July 21, 2021 and to the post-Transaction period from July 22, 2021 through December 31, 2021. During the pre-Transaction period, net income (loss) was attributable to consolidated MarketWise, LLC and its respective noncontrolling interests. During the post-Transaction period, net income was attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. Immediately following the Transactions, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 7.9% and its noncontrolling interest was 92.1%. For the post-Transaction period, net income attributable to controlling interests included a $15.7 million gain on warrant liabilities and a $2.4 million tax provision, both of which are 100% attributable to the controlling interest. |
Earnings Per Share | Earnings Per Share Basic net income per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding after the closing of the Transactions. Diluted net income per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share based compensation awards outstanding during the period after the closing of the Transactions. Class B Common Stock is not a participating security, therefore it is not included in the earnings per share calculation. |
Adjustments Related to Prior Period Financial Statements | Adjustments Related to Prior Period Financial Statements During the year ended December 31, 2021, the Company determined that there were immaterial misstatements of revenue and general and administrative expenses in our previously issued annual financial statements. The Company corrected these misstatements by recognizing out-of-period adjustments during the year ended December 31, 2021, which increased our revenue by $5.7 million and decreased our general and administrative expenses by $2.8 million for the period. For the year ended December 31, 2021, the out-of-period adjustments were a cumulative $8.5 million decrease in net loss. Management determined that the correction of these misstatements were not material to our previously issued financial statements on both a quantitative and qualitative basis nor our 2021 financial statements on both a quantitative and qualitative basis. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table depicts the disaggregation of revenue according to customer type and is consistent with how we evaluate our financial performance. We believe this depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Year Ended December 31, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 543,881 $ — $ — $ — $ 543,881 Transferred at a point in time — 2,479 1,284 1,539 5,302 Total $ 543,881 $ 2,479 $ 1,284 $ 1,539 $ 549,183 Year Ended December 31, 2020 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 356,265 $ — $ — $ — $ 356,265 Transferred at a point in time — 1,965 3,386 2,563 7,914 Total $ 356,265 $ 1,965 $ 3,386 $ 2,563 $ 364,179 Year Ended December 31, 2019 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 260,640 $ — $ — $ — $ 260,640 Transferred at a point in time — 2,669 6,825 2,089 11,583 Total $ 260,640 $ 2,669 $ 6,825 $ 2,089 $ 272,223 Revenue recognition by subscription type was as follows: Year Ended December 31, 2021 2020 2019 Lifetime subscriptions $ 192,273 $ 134,525 $ 98,578 Term subscriptions 351,608 221,740 162,062 Non-subscription revenue 5,302 7,914 11,583 Total $ 549,183 $ 364,179 $ 272,223 Revenue for the Lifetime and Term subscription types are determined based on the terms of the subscription agreements. Non-subscription revenue consists of revenue from advertising and other revenue. Net revenue by principal geographic areas was as follows: Year Ended December 31, 2021 2020 2019 United States $ 547,026 $ 361,547 $ 265,647 International 2,157 2,632 6,576 Total $ 549,183 $ 364,179 $ 272,223 |
Summary of Contract Balances | Accounts receivable, deferred revenue and obligation for refunds are as follows: As of December 31, 2021 2020 2019 Contract balances Accounts receivable $ 7,805 $ 12,398 $ 7,332 Obligations for refunds 5,590 3,448 2,214 Deferred revenue – current 311,543 274,819 190,778 Deferred revenue – non-current 393,043 254,481 160,907 |
Capitalized Contract Cost | The following table presents the opening and closing balances of our capitalized costs associated with contracts with customers: Balance at January 1, 2019 $ 35,565 Royalties and sales commissions – additions 18,984 Revenue share and cost per acquisition fees – additions 6,284 Amortization of capitalized costs (18,519) Balance at December 31, 2019 $ 42,314 Royalties and sales commissions – additions 43,273 Revenue share and cost per acquisition fees – additions 52,193 Amortization of capitalized costs (30,544) Balance at December 31, 2020 $ 107,236 Royalties and sales commissions – additions 68,938 Revenue share and cost per acquisition fees – additions 98,747 Amortization of capitalized costs (71,850) Balance at December 31, 2021 $ 203,071 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed as of the acquisition date: Cash $ 151 Other current assets 138 Customer relationships 3,664 Tradenames 657 Software 247 Goodwill 5,187 Other noncurrent assets 443 Total assets acquired 10,487 Liabilities assumed (2,387) Net assets acquired $ 8,100 Cash consideration $ 7,290 Noncontrolling interest 810 Total consideration $ 8,100 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amounts of goodwill are as follows: Balance at January 1, 2020 $ 18,101 Balance at December 31, 2020 18,101 Acquisition of Chaikin 5,187 Balance at December 31, 2021 $ 23,288 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following as of the dates indicated: December 31, 2021 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 12,368 $ (8,105) $ 4,263 4.4 Tradenames 3,578 (1,838) $ 1,740 5.3 Capitalized software development costs 2,866 (1,344) 1,522 3.1 Finite-lived intangible assets, net 18,812 (11,287) 7,525 Indefinite-lived intangible assets: Cryptocurrencies — — — Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 19,899 $ (11,287) $ 8,612 December 31, 2020 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 8,705 $ (6,675) $ 2,030 2.7 Tradenames 2,921 (1,433) 1,488 4.9 Capitalized software development costs 2,495 (934) 1,561 3.8 Finite-lived intangible assets, net 14,121 (9,042) 5,079 Indefinite-lived intangible assets: Cryptocurrencies 4 — 4 Internet domain names 195 — 195 Indefinite-lived intangible assets, net 199 — 199 Intangible assets, net $ 14,320 $ (9,042) $ 5,278 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following as of the dates indicated: December 31, 2021 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 12,368 $ (8,105) $ 4,263 4.4 Tradenames 3,578 (1,838) $ 1,740 5.3 Capitalized software development costs 2,866 (1,344) 1,522 3.1 Finite-lived intangible assets, net 18,812 (11,287) 7,525 Indefinite-lived intangible assets: Cryptocurrencies — — — Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 19,899 $ (11,287) $ 8,612 December 31, 2020 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 8,705 $ (6,675) $ 2,030 2.7 Tradenames 2,921 (1,433) 1,488 4.9 Capitalized software development costs 2,495 (934) 1,561 3.8 Finite-lived intangible assets, net 14,121 (9,042) 5,079 Indefinite-lived intangible assets: Cryptocurrencies 4 — 4 Internet domain names 195 — 195 Indefinite-lived intangible assets, net 199 — 199 Intangible assets, net $ 14,320 $ (9,042) $ 5,278 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of December 31, 2021, the total expected future amortization expense for finite-lived intangible assets is as follows: 2022 $ 2,120 2023 1,961 2024 1,470 2025 1,013 2026 711 Thereafter 250 Finite-lived intangible assets, net $ 7,525 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated: December 31, 2021 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 25,001 $ — $ — $ 25,001 Total assets 25,001 — — 25,001 Liabilities: Derivative liabilities, noncurrent — — 2,015 2,015 Warrant liabilities - Public Warrants 19,599 — — 19,599 Warrant liabilities - Private Placement Warrants — — 9,733 9,733 Total liabilities $ 19,599 $ — $ 11,748 $ 31,347 December 31, 2020 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 25,016 $ — $ — $ 25,016 Total assets 25,016 — — 25,016 Liabilities: Derivative liabilities, noncurrent — — 4,343 4,343 Class B Units - related party — — 593,235 593,235 Total liabilities $ — $ — $ 597,578 $ 597,578 |
Schedule of Fair Value Measurements Inputs | The following table provides quantitative information regarding Level 3 fair value measurements inputs at their measurement dates: As of December 31, 2021 Stock price $ 7.54 Exercise Price $ 11.50 Expected life of the warrants to convert (years) 4.56 Volatility 29.70 % Risk-free rate 1.19 % |
Schedule of Changes in Fair Value of Liabilities | The following table summarizes the change in fair value of the derivative liabilities during the years ended December 31, 2019, 2020, and 2021: Balance – January 1, 2019 $ 113,221 Change in fair value of derivative instruments 478 Incremental Class B Units 8,611 Change in fair value of Class B Units (3,003) Balance – December 31, 2019 119,307 Change in fair value of derivative instruments 3,069 Incremental Class B Units 18,745 Change in fair value of Class B Units 456,457 Balance – December 31, 2020 597,578 Incremental Class B Units 206,914 Establishment of warrant liabilities on July 21, 2021 (date of the Transactions) 45,021 Change in fair value of derivative instruments (18,017) Change in fair value of Class B Units 728,079 Reclassification of Class B Units from liability to equity on July 21, 2021 (date of the Transactions) (1,528,228) Balance – December 31, 2021 $ 31,347 |
Schedule of Changes in Fair Value by Income Statement Location | The following table summarizes the change in fair value of the Class B Units by income statement line item during the years ended December 31, 2021, 2020 and 2019: Year Ended December 31, 2021 2020 2019 Cost of revenue $ 136,417 $ 86,907 $ (548) Sales and marketing 10,870 6,545 — General and administrative 580,792 363,005 (2,455) Total change in fair value of Class B Units $ 728,079 $ 456,457 $ (3,003) |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment, net consists of the following: As of Estimated Useful Lives December 31, 2021 December 31, 2020 Furniture and fixtures 5 years $ 960 $ 960 Computers, software and equipment 3 years 1,423 1,220 Leasehold improvements Shorter of estimated useful life or remaining term of lease 1,278 1,278 3,661 3,458 Less: Accumulated depreciation and amortization (2,473) (2,041) Total property and equipment, net $ 1,188 $ 1,417 |
Schedule of Accrued Expenses | Accrued expenses consist of the following: As of December 31, 2021 December 31, 2020 Commission and variable compensation $ 22,155 $ 17,271 Payroll and benefits 5,164 3,645 Other accrued expenses 19,134 11,218 Total accrued expenses $ 46,453 $ 32,134 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) | The following table presents information on the location and amounts of derivative instruments gains and losses: Year Ended December 31, Derivatives Not Designated as Location of Gain (Loss) Recognized in Income Statement 2021 2020 2019 Warrants Other income, net $ 15,689 $ — $ — Phantom Interests in Net Income Other income, net — (3,069) (478) Phantom Interests in Net Income General and administrative 2,328 — — Option General and administrative (662) — — Total $ 17,355 $ (3,069) $ (478) |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, Cost | The components of lease expense were as follows: Year Ended December 31, 2021 2020 2019 Operating lease cost $ 2,435 $ 3,267 $ 3,723 Variable lease costs 97 49 176 Total lease costs $ 2,532 $ 3,316 $ 3,899 Other information related to leases was as follows: As of December 31, 2021 2020 2019 Lease Term and Discount Rate Weighted average remaining lease term (in years) 5.7 6.6 7.0 Weighted average discount rate 7.0 % 7.1 % 7.2 % |
Lessee, Operating Lease, Liability, Maturity | As of December 31, 2021, maturities of lease liabilities were as follows: Year Ending December 31: Operating Leases 2022 $ 1,806 2023 1,842 2024 1,733 2025 1,678 2026 1,597 Thereafter 1,386 Total lease payments $ 10,042 Less: Imputed interest (1,835) Total lease liabilities $ 8,207 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Expense | Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows: Year Ended December 31, 2021 2020 2019 Cost of revenue $ 171,804 $ 102,736 $ 5,025 Sales and marketing 48,098 10,567 — General and administrative 843,449 440,297 15,414 Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 Total stock-based compensation expense includes: the vesting of Class B units, the change in fair value of Class B liability awards, profits distributions to Class B unitholders, and expense related to our new 2021 Incentive Award Plan as follows: Year Ended December 31, 2021 2020 2019 Vested Class B units and change in fair value of Class B liability awards $ 934,993 $ 475,202 $ 5,608 Profits distributions to Class B unitholders 123,449 78,398 14,831 Class B stock compensation expense 1,058,442 553,600 20,439 2021 Incentive Award Plan stock-based compensation expense $ 4,909 $ — $ — Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 Year Ended December 31, 2021 2020 2019 Cost of revenue $ 170,536 $ 102,736 $ 5,025 Sales and marketing 46,417 10,567 — General and administrative 841,489 440,297 15,414 Total stock based-compensation expense $ 1,058,442 $ 553,600 $ 20,439 |
Schedule of Fair Value Measurements Inputs | The fair value of RSU is the same as the Company’s share price on the date of grant. The fair value of the SARs was determined using a Black-Scholes model using the following assumptions: Volatility 50.0 % Stock price $ 8.30 Strike price $ 8.30 Expected life of the options to convert (years) 6.25 Risk-free rate 1.20 % Dividend yield 0.0 % |
Summary of Activities of RSUs | The activities of the RSUs and SARs are summarized as follows, including granted, exercised and forfeited from September 27, 2021, the date of the initial establishment of the new incentive plan and grants to December 31, 2021. Fully Vested Shares RSUs SARs Outstanding at January 1, 2021 — — — Granted 309,500 2,334,490 1,935,131 Exercised or vested (309,500) — — Forfeited — — — Expired — — — Outstanding at December 31, 2021 — 2,334,490 1,935,131 The stock compensation expense related to the new RSU and SAR grants was $2,340 for the year ending December 31, 2021. The weighted average grant-date fair value of the respective share classes are as follows: As of December 31, 2021 Fully vested shares $ 8.30 RSUs $ 8.30 SARs $ 4.05 |
Summary of Activities of SARs | The activities of the RSUs and SARs are summarized as follows, including granted, exercised and forfeited from September 27, 2021, the date of the initial establishment of the new incentive plan and grants to December 31, 2021. Fully Vested Shares RSUs SARs Outstanding at January 1, 2021 — — — Granted 309,500 2,334,490 1,935,131 Exercised or vested (309,500) — — Forfeited — — — Expired — — — Outstanding at December 31, 2021 — 2,334,490 1,935,131 The stock compensation expense related to the new RSU and SAR grants was $2,340 for the year ending December 31, 2021. The weighted average grant-date fair value of the respective share classes are as follows: As of December 31, 2021 Fully vested shares $ 8.30 RSUs $ 8.30 SARs $ 4.05 |
Schedule of Unvested Share Activity | The following is a rollforward of Class B Units activity for the twelve months ended December 31, 2021: Unvested at January 1, 2020 77,981 Granted 62,676 Vested (65,613) Unvested at December 31, 2020 75,044 Granted 17,690 Vested (92,734) Unvested at December 31, 2021 — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the period from July 22, 2021 through December 31, 2021: Numerator: Net income for the period from July 22, 2021 through December 31, 2021 $ 78,728 Less: Net income attributable to noncontrolling interests for the period from July 22, 2021 through December 31, 2021 60,476 Net income for the period from July 22, 2021 through December 31, 2021 attributable to common shareholders, basic and dilutive $ 18,252 Denominator: Weighted average shares outstanding, basic and diluted (in thousands) 25,035 Net income per share attributable to common shares, basic and diluted $ 0.73 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense consisted of the following: Year Ended December 31, 2021 Current income tax expense (benefit): Federal $ — State — Deferred income tax expense (benefit): Federal 1,942 State 416 Total income tax expense (benefit) $ 2,358 |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. statutory income tax rate to the Company's effective income tax rate is as follows: Year Ended December 31, 2021 Statutory federal tax rate 21.00 % State income taxes, net of federal benefit 4.50 % Permanent items (0.55) % Income attributable to noncontrolling interests (25.20) % Effective income tax rate (0.25) % |
Schedule of Deferred Tax Assets and Liabilities | Details of the Company’s deferred tax assets and liabilities are as follows: Year Ended December 31, 2021 Deferred tax assets: Reserves $ 216 Accrued expenses 127 Deferred revenue 9,899 Derivatives 40 Stock-based compensation 102 Investment in MarketWise, LLC 28,981 Net operating loss carryforwards 1,260 Investment in flow-through partnerships 296 Lease liabilities 158 Fixed asset 9 Charitable contributions 25 Intangibles 1,057 Total deferred tax assets $ 42,170 Deferred tax liabilities Deferred expense $ (3,959) Related party interest (53) Right of use asset (213) Total deferred tax liabilities $ (4,225) Valuation allowance (28,981) Net deferred tax assets (liabilities) $ 8,964 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The following represents financial information for the consolidated VIE included in the consolidated balance sheets: As of December 31, 2021 2020 Current assets $ 3,901 $ 3,787 Noncurrent assets 2 22 Total assets $ 3,903 $ 3,809 Current liabilities $ 274 $ 3,265 Total liabilities $ 274 $ 3,265 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Supplemental cash flow disclosures are as follows: Year Ended December 31, 2021 2020 2019 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 67 $ 339 $ 366 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1,761) (2,767) (3,106) Operating lease right-of-use assets obtained in exchange for lease obligations — (409) (5,051) Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions 398 — — Supplemental Disclosures of Non-Cash Investing and Financing Activities: Property and equipment included in accounts payable $ — $ — $ 1,010 Capitalized software included in accounts payable 12 — — Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents $ 139,078 $ 114,422 $ 170,520 Restricted cash 500 505 1,564 Total $ 139,578 $ 114,927 $ 172,084 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Stock by Class | The table set forth below reflects information about the Company’s equity, as of December 31, 2021. The 3,051,000 Sponsor Earn Out shares held in escrow and the 2,000,000 Management Earn Out shares are considered contingently issuable shares and therefore excluded from the number of Class A Common Stock issued and outstanding in the table below. Authorized Issued Outstanding Common Stock - Class A 950,000,000 24,718,402 24,718,402 Common Stock - Class B 300,000,000 291,092,303 291,092,303 Preferred Stock 100,000,000 — — Total 1,350,000,000 315,810,705 315,810,705 |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands | Jul. 21, 2021USD ($)$ / sharesshares | Dec. 31, 2021$ / sharesshares | Jul. 22, 2021shares |
Subsidiary, Sale of Stock [Line Items] | |||
Recapitalization exchange ratio | 1 | ||
Number of shares called by each warrant | 1 | ||
Recapitalization units exchange ratio, shares (in shares) | 1 | ||
Recapitalization units exchange ratio, warrants (in shares) | 0.5 | ||
Reverse recapitalization, common units issued (in shares) | 28,003,096 | ||
Warrants issued (in shares) | 30,979,993 | ||
PIPE Investors shares subscribed (in shares) | 15,000,000 | ||
Sale of stock price per share (in USD per share) | $ / shares | $ 10 | ||
Consideration received | $ | $ 150,000 | ||
Sponsor Earn Out Shares (in shares) | 5,051,000 | ||
Warrants outstanding (in shares) | 30,979,993 | ||
Reverse Recapitalization cash proceeds | $ | $ (113,641) | ||
Proceeds from recapitalization, reclassification of Trust Account | $ | 414,600 | ||
Proceeds from PIPE investment | $ | 150,000 | ||
Payment of non-recurring transaction costs | $ | 48,800 | ||
Settlement of deferred underwriters' discount | $ | 14,500 | ||
Payments to redeeming shareholders | $ | 387,700 | ||
Establishment of derivative warrant liabilities | $ | 45,021 | ||
Establishment of deferred taxes | $ | 11,136 | ||
Additional paid-in capital | |||
Subsidiary, Sale of Stock [Line Items] | |||
Reverse Recapitalization cash proceeds | $ | (113,641) | ||
Establishment of derivative warrant liabilities | $ | 45,021 | ||
Establishment of deferred taxes | $ | $ 11,136 | ||
Sponsor | |||
Subsidiary, Sale of Stock [Line Items] | |||
Sponsor Earn Out Shares (in shares) | 3,051,000 | ||
Private Warrants | |||
Subsidiary, Sale of Stock [Line Items] | |||
Warrants outstanding (in shares) | 10,280,000 | ||
Ascendant Digital Acquisition Corp Public Shareholders | MarketWise, Inc. | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage | 0.10% | ||
MarketWise Members | MarketWise, Inc. | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage | 91.20% | ||
Ascendant Sponsor LP | MarketWise, Inc. | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage | 3.20% | ||
PIPE Investors | MarketWise, Inc. | |||
Subsidiary, Sale of Stock [Line Items] | |||
Ownership percentage | 4.70% | ||
Common Stock - Class A | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Common stock, outstanding (in shares) | 15,000,000 | 24,718,402 | 28,003,096 |
Common Stock - Class A | Ascendant Digital Acquisition Corp. | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | ||
Common Stock - Class B | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Stock issued during reverse recapitalization (in shares) | 291,092,303 | ||
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Jul. 21, 2021USD ($)tradingDay$ / sharesshares | Dec. 31, 2021USD ($) | Jul. 21, 2021USD ($)shares | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Significant Accounting Policies [Line Items] | |||||||
Number of reportable segments | segment | 1 | ||||||
Goodwill impairment charges | $ 0 | $ 0 | $ 0 | ||||
Gain (loss) from sale of cryptocurrency | $ 105 | 0 | 605 | ||||
Capitalized contract cost, amortization period | 4 years | 4 years | |||||
Advertising expense | $ 144,561 | 149,191 | 67,640 | ||||
Common stock reserved for issuance (in shares) | shares | 32,045,000 | 32,045,000 | |||||
Maximum number of shares that may be issued (in shares) | shares | 32,045,000 | 32,045,000 | |||||
Capitalized computer software, amortization period | 3 years | ||||||
Cloud computing implementation costs capitalized | $ 287 | $ 287 | 356 | 257 | |||
Capitalized cloud computing implementation costs amortization expense | 210 | 17 | 64 | ||||
Sponsor Earn Out Shares (in shares) | shares | 5,051,000 | 5,051,000 | |||||
Earnout period | 4 years | ||||||
Earnout fair value | $ 26,000 | $ 26,000 | |||||
Gain on derivative warrant liabilities | 15,689 | ||||||
Income tax provision | 2,358 | 2,358 | 0 | 0 | |||
Revenue | 547,899 | 360,793 | 265,398 | ||||
General and administrative expenses | [1],[2] | (960,183) | (526,561) | (91,669) | |||
Net (loss) income | $ 78,728 | $ (1,032,611) | (953,883) | $ (541,091) | $ 27,993 | ||
Revision of Prior Period, Adjustment | |||||||
Significant Accounting Policies [Line Items] | |||||||
Revenue | 5,700 | ||||||
General and administrative expenses | 2,800 | ||||||
Net (loss) income | $ 8,500 | ||||||
Marketwise, LLC | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership percentage | 7.90% | 7.90% | |||||
Noncontrolling interest ownership percentage | 92.10% | 92.10% | |||||
Earnout period one | |||||||
Significant Accounting Policies [Line Items] | |||||||
Earnout shares percentage released | 50.00% | ||||||
VWAP threshold (in USD per share) | $ / shares | $ 12 | ||||||
VWAP trading days threshold | tradingDay | 20 | ||||||
VWAP consecutive trading days threshold | tradingDay | 30 | ||||||
Earnout period two | |||||||
Significant Accounting Policies [Line Items] | |||||||
Earnout shares percentage released | 50.00% | ||||||
VWAP threshold (in USD per share) | $ / shares | $ 14 | ||||||
VWAP trading days threshold | tradingDay | 20 | ||||||
VWAP consecutive trading days threshold | tradingDay | 30 | ||||||
Sponsor | |||||||
Significant Accounting Policies [Line Items] | |||||||
Sponsor Earn Out Shares (in shares) | shares | 3,051,000 | 3,051,000 | |||||
Management members | |||||||
Significant Accounting Policies [Line Items] | |||||||
Sponsor Earn Out Shares (in shares) | shares | 2,000,000 | 2,000,000 | |||||
Common Stock - Class B | |||||||
Significant Accounting Policies [Line Items] | |||||||
Vesting period | 8 years | ||||||
Exercise of put option, period from issuance date | 25 months | ||||||
[1] | Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows (see Note 11): Year Ended December 31, 2021 2020 2019 Cost of revenue $ 171,804 $ 102,736 $ 5,025 Sales and marketing 48,098 10,567 — General and administrative 843,449 440,297 15,414 Total stock-based compensation expense $ 1,063,351 $ 553,600 $ 20,439 | ||||||
[2] | Cost of revenue, sales and marketing, general and administrative, and research and development expenses are exclusive of depreciation and amortization shown as a separate line item |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Net revenue | $ 547,899 | $ 360,793 | $ 265,398 |
Related party revenue | 1,284 | 3,386 | 6,825 |
Total net revenue | 549,183 | 364,179 | 272,223 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 547,026 | 361,547 | 265,647 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 2,157 | 2,632 | 6,576 |
Lifetime subscriptions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 192,273 | 134,525 | 98,578 |
Term subscriptions | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 351,608 | 221,740 | 162,062 |
Non-subscription revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total net revenue | 5,302 | 7,914 | 11,583 |
Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Related party revenue | 0 | 0 | 0 |
Total net revenue | 543,881 | 356,265 | 260,640 |
Transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Related party revenue | 1,284 | 3,386 | 6,825 |
Total net revenue | 5,302 | 7,914 | 11,583 |
Subscriptions | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 543,881 | 356,265 | 260,640 |
Subscriptions | Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 543,881 | 356,265 | 260,640 |
Subscriptions | Transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 0 | 0 | 0 |
Advertising | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 2,479 | 1,965 | 2,669 |
Advertising | Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 0 | 0 | 0 |
Advertising | Transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 2,479 | 1,965 | 2,669 |
Revenue Share (Third-party) | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 1,539 | 2,563 | 2,089 |
Revenue Share (Third-party) | Transferred over time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | 0 | 0 | 0 |
Revenue Share (Third-party) | Transferred at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Net revenue | $ 1,539 | $ 2,563 | $ 2,089 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable | $ 7,805 | $ 12,398 | $ 7,332 |
Obligations for refunds | 5,590 | 3,448 | 2,214 |
Deferred revenue – current | 311,543 | 274,819 | 190,778 |
Deferred revenue – non-current | $ 393,043 | $ 254,481 | $ 160,907 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Contract liability, revenue recognized | $ 289,728 | $ 190,778 | |
Deferred revenue and other contract liabilities | 311,543 | 274,819 | $ 190,778 |
Accounts receivable | 7,805 | 12,398 | 7,332 |
Impairment on capitalized costs | 0 | $ 0 | $ 0 |
Remaining performance obligation | $ 710,176 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |||
Revenue from Contract with Customer [Abstract] | |||
Remaining performance obligation, percentage | 45.00% | ||
Disaggregation of Revenue [Line Items] | |||
Remaining performance obligation, timing of satisfaction | 12 months |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Service Contract Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Capitalized Contract Cost [Roll Forward] | |||
Capitalized costs, beginning balance | $ 107,236 | $ 42,314 | $ 35,565 |
Royalties and sales commissions – additions | 68,938 | 43,273 | 18,984 |
Revenue share and cost per acquisition fees – additions | 98,747 | 52,193 | 6,284 |
Amortization of capitalized costs | (71,850) | (30,544) | (18,519) |
Capitalized costs, ending balance | $ 203,071 | $ 107,236 | $ 42,314 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | Jan. 21, 2021 | Jan. 05, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Cash paid for acquisitions, net of cash acquired | $ 7,139 | $ 0 | $ 1,483 | ||
Amortization of intangible assets | 2,245 | 2,102 | 1,710 | ||
Revenue | 549,183 | 364,179 | $ 272,223 | ||
Chaikin Holdings LLC. | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 90.00% | ||||
Cash paid for acquisitions, net of cash acquired | $ 7,139 | ||||
Amortization of intangible assets | 648 | ||||
Revenue | $ 7,514 | ||||
Total consideration, up to | $ 8,100 | ||||
Chaikin Holdings LLC. | Tradenames | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life (years) | 8 years 6 months | ||||
Chaikin Holdings LLC. | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life (years) | 6 years | ||||
TradeSmith | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 25.00% | ||||
Business combination, step acquisition, equity interest in acquiree, including subsequent acquisition, percentage | 100.00% | ||||
Total consideration, up to | $ 9,164 | ||||
Business acquisition, transaction costs | $ 164 |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jan. 21, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 23,288 | $ 18,101 | $ 18,101 | |
Chaikin Holdings LLC. | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 151 | |||
Other current assets | 138 | |||
Goodwill | 5,187 | |||
Other noncurrent assets | 443 | |||
Total assets acquired | 10,487 | |||
Liabilities assumed | (2,387) | |||
Net assets acquired | 8,100 | |||
Cash consideration | 7,290 | |||
Noncontrolling interest | 810 | |||
Total consideration, up to | 8,100 | |||
Chaikin Holdings LLC. | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 3,664 | |||
Chaikin Holdings LLC. | Tradenames | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 657 | |||
Chaikin Holdings LLC. | Capitalized software development costs | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $ 247 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 18,101 |
Acquisition of Chaikin | 5,187 |
Goodwill, ending balance | $ 23,288 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 18,812 | $ 14,121 |
Accumulated Amortization | (11,287) | (9,042) |
Net Book Value | 7,525 | 5,079 |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible assets | 1,087 | 199 |
Cost | 19,899 | 14,320 |
Intangible assets, net | 8,612 | 5,278 |
Cryptocurrencies | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible assets | 0 | 4 |
Internet domain names | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible assets | 1,087 | 195 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 12,368 | 8,705 |
Accumulated Amortization | (8,105) | (6,675) |
Net Book Value | $ 4,263 | $ 2,030 |
Weighted-Average Remaining Useful Life (in years) | 4 years 4 months 24 days | 2 years 8 months 12 days |
Tradenames | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 3,578 | $ 2,921 |
Accumulated Amortization | (1,838) | (1,433) |
Net Book Value | $ 1,740 | $ 1,488 |
Weighted-Average Remaining Useful Life (in years) | 5 years 3 months 18 days | 4 years 10 months 24 days |
Capitalized software development costs | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 2,866 | $ 2,495 |
Accumulated Amortization | (1,344) | (934) |
Net Book Value | $ 1,522 | $ 1,561 |
Weighted-Average Remaining Useful Life (in years) | 3 years 1 month 6 days | 3 years 9 months 18 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 2,245 | $ 2,102 | $ 1,710 |
Amortization of capitalized software development costs | 410 | 415 | 130 |
Additions to capitalized software development costs | 370 | 0 | 752 |
Acquired software development costs | $ 247 | $ 0 | $ 0 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 2,120 | |
2023 | 1,961 | |
2024 | 1,470 | |
2025 | 1,013 | |
2026 | 711 | |
Thereafter | 250 | |
Net Book Value | $ 7,525 | $ 5,079 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Jul. 21, 2021 | Dec. 31, 2020 |
Liabilities: | |||
Warrant liabilities | $ 29,332 | $ 0 | |
Other | |||
Liabilities: | |||
Liabilities, noncurrent | 2,015 | 4,343 | |
Class B Units | |||
Liabilities: | |||
Liabilities, noncurrent | 0 | 593,235 | |
Recurring | |||
Assets: | |||
Total assets | 25,001 | 25,016 | |
Liabilities: | |||
Total liabilities | 31,347 | 597,578 | |
Recurring | Public Warrants | |||
Liabilities: | |||
Warrant liabilities | 19,599 | ||
Recurring | Private Warrants | |||
Liabilities: | |||
Warrant liabilities | 9,733 | ||
Recurring | Other | |||
Liabilities: | |||
Liabilities, noncurrent | 2,015 | 4,343 | |
Recurring | Class B Units | |||
Liabilities: | |||
Liabilities, noncurrent | 593,235 | ||
Recurring | Money market funds | |||
Assets: | |||
Money market funds | 25,001 | 25,016 | |
Level 1 | Recurring | |||
Assets: | |||
Total assets | 25,001 | 25,016 | |
Liabilities: | |||
Total liabilities | 19,599 | 0 | |
Level 1 | Recurring | Public Warrants | |||
Liabilities: | |||
Warrant liabilities | 19,599 | ||
Level 1 | Recurring | Private Warrants | |||
Liabilities: | |||
Warrant liabilities | 0 | ||
Level 1 | Recurring | Other | |||
Liabilities: | |||
Liabilities, noncurrent | 0 | 0 | |
Level 1 | Recurring | Class B Units | |||
Liabilities: | |||
Liabilities, noncurrent | 0 | ||
Level 1 | Recurring | Money market funds | |||
Assets: | |||
Money market funds | 25,001 | 25,016 | |
Level 2 | Recurring | |||
Assets: | |||
Total assets | 0 | 0 | |
Liabilities: | |||
Total liabilities | 0 | 0 | |
Level 2 | Recurring | Public Warrants | |||
Liabilities: | |||
Warrant liabilities | 0 | ||
Level 2 | Recurring | Private Warrants | |||
Liabilities: | |||
Warrant liabilities | 0 | ||
Level 2 | Recurring | Other | |||
Liabilities: | |||
Liabilities, noncurrent | 0 | 0 | |
Level 2 | Recurring | Class B Units | |||
Liabilities: | |||
Liabilities, noncurrent | 0 | ||
Level 2 | Recurring | Money market funds | |||
Assets: | |||
Money market funds | 0 | 0 | |
Level 3 | Recurring | |||
Assets: | |||
Total assets | 0 | 0 | |
Liabilities: | |||
Total liabilities | 11,748 | 597,578 | |
Level 3 | Recurring | Public Warrants | |||
Liabilities: | |||
Warrant liabilities | 0 | ||
Level 3 | Recurring | Private Warrants | |||
Liabilities: | |||
Warrant liabilities | 9,733 | ||
Level 3 | Recurring | Other | |||
Liabilities: | |||
Liabilities, noncurrent | 2,015 | 4,343 | |
Level 3 | Recurring | Class B Units | |||
Liabilities: | |||
Liabilities, noncurrent | $ 45,021 | 593,235 | |
Level 3 | Recurring | Money market funds | |||
Assets: | |||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Measurements Inputs (Details) | Dec. 31, 2021 |
Stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 7.54 |
Exercise Price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 11.50 |
Expected life of warrants to convert | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 4.56 |
Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.2970 |
Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.0119 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Changes in Fair Value of Derivative Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance | $ 597,578 | $ 119,307 | $ 113,221 |
Incremental Class B Units | 206,914 | 18,745 | 8,611 |
Establishment of warrant liabilities on July 21, 2021 (date of the Transactions) | 45,021 | ||
Reclassification of Class B Units from liability to equity on July 21, 2021 (date of the Transactions) | (1,528,228) | ||
Ending balance | 31,347 | 597,578 | 119,307 |
Other | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value | (18,017) | 3,069 | 478 |
Class B Units | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Change in fair value | $ 728,079 | $ 456,457 | $ (3,003) |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Fair Value Changes by Income Statement Location (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total change in fair value of Class B Units | $ (728,079) | $ (456,457) | $ 3,003 |
Common Stock - Class B | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total change in fair value of Class B Units | 728,079 | 456,457 | (3,003) |
Cost of revenue | Common Stock - Class B | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total change in fair value of Class B Units | 136,417 | 86,907 | (548) |
Sales and marketing | Common Stock - Class B | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total change in fair value of Class B Units | 10,870 | 6,545 | 0 |
General and administrative | Common Stock - Class B | |||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Total change in fair value of Class B Units | $ 580,792 | $ 363,005 | $ (2,455) |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,661 | $ 3,458 | |
Less: Accumulated depreciation and amortization | (2,473) | (2,041) | |
Property and equipment, net | 1,188 | 1,417 | |
Depreciation expense | $ 431 | 451 | $ 624 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 5 years | ||
Property and equipment, gross | $ 960 | 960 | |
Computers, software and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Lives | 3 years | ||
Property and equipment, gross | $ 1,423 | 1,220 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,278 | $ 1,278 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Commission and bonus | $ 22,155 | $ 17,271 |
Payroll and benefits | 5,164 | 3,645 |
Other accrued expenses | 19,134 | 11,218 |
Accrued expenses | $ 46,453 | $ 32,134 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Schedule of Location and Amounts and Derivative Instruments Gains and Losses (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | |||
Derivative gains (losses) | $ 17,355 | $ (3,069) | $ (478) |
Other income, net | Warrants | |||
Derivative [Line Items] | |||
Derivative gains (losses) | 15,689 | 0 | 0 |
Other income, net | Phantom Interests in Net Income | |||
Derivative [Line Items] | |||
Derivative gains (losses) | 0 | (3,069) | (478) |
General and administrative | Phantom Interests in Net Income | |||
Derivative [Line Items] | |||
Derivative gains (losses) | 2,328 | 0 | 0 |
General and administrative | Option | |||
Derivative [Line Items] | |||
Derivative gains (losses) | $ (662) | $ 0 | $ 0 |
Debt (Details)
Debt (Details) | Oct. 29, 2021USD ($) |
Line of Credit Facility [Line Items] | |
Interest coverage ratio | 3 |
Net leverage ratio | 2 |
Increase of net leverage ratio based on acquisition terms | 2.50 |
Net leverage ratio, maximum cash consideration | $ 50,000,000 |
Line of Credit | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | 150,000,000 |
Additional potential increase | $ 65,000,000 |
Debt instrument, term | 3 years |
Line of Credit | Minimum | |
Line of Credit Facility [Line Items] | |
Unused commitment fee percentage | 0.25% |
Line of Credit | Maximum | |
Line of Credit Facility [Line Items] | |
Unused commitment fee percentage | 0.35% |
Line of Credit | Base Rate | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.50% |
Line of Credit | Base Rate | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.25% |
Line of Credit | LIBOR or EURIBOR | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate, floor | 0.00% |
Line of Credit | LIBOR or EURIBOR | Minimum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.50% |
Line of Credit | LIBOR or EURIBOR | Maximum | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 2.25% |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 5,000,000 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) | Dec. 31, 2021 |
Lease One | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term | 2 years |
Lease Two | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, renewal term | 3 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 2 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Lessee, operating lease, term of contract | 7 years |
Commitment and Contingencies _2
Commitment and Contingencies - Components of Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease cost | $ 2,435 | $ 3,267 | $ 3,723 |
Variable lease costs | 97 | 49 | 176 |
Total lease costs | $ 2,532 | $ 3,316 | $ 3,899 |
Commitment and Contingencies _3
Commitment and Contingencies - Other Information Related to Leases (Details) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | |||
Weighted average remaining lease term (in years) | 5 years 8 months 12 days | 6 years 7 months 6 days | 7 years |
Weighted average discount rate (percent) | 7.00% | 7.10% | 7.20% |
Commitment and Contingencies _4
Commitment and Contingencies - Maturity of Operating Leases (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 1,806 |
2023 | 1,842 |
2024 | 1,733 |
2025 | 1,678 |
2026 | 1,597 |
Thereafter | 1,386 |
Total lease payments | 10,042 |
Less: Imputed interest | (1,835) |
Total lease liabilities | $ 8,207 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 27, 2021 | Jul. 20, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 21, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Grants, net of withholding taxes (in shares) | 200,373 | |||||
Compensation expense | $ 1,063,351 | $ 553,600 | $ 20,439 | |||
Common unit, outstanding (in shares) | 547,466 | |||||
Stock price (USD per share) | $ 10 | |||||
Total Class B stock-based compensation expense | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | 1,058,442 | $ 553,600 | 20,439 | |||
RSU and SAR | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Compensation expense | $ 2,340 | |||||
Vesting period | 4 years | |||||
SARs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted stock (in shares) | 1,935,131 | |||||
Remaining contractual term | 9 years 8 months 12 days | |||||
Stock price (USD per share) | $ 8.30 | |||||
Common Stock - Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Grants in period to each employee (in shares) | 500 | |||||
Granted stock (in shares) | 309,500 | |||||
Compensation expense | $ 2,569 | |||||
Stock price (USD per share) | $ 10 | |||||
Common Stock - Class B | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted stock (in shares) | 17,690,000 | 62,676,000 | ||||
Compensation expense | $ 123,449 | $ 78,398 | $ 14,831 | |||
Vesting period | 8 years | |||||
Common unit, outstanding (in shares) | 589,465 | |||||
Conversion of Common Units (in shares) | 152,822,842 | |||||
Incremental compensation expense | $ 292,580 | |||||
Weighted-average grant date fair value (in dollars per share) | $ 2,195.16 | $ 178.69 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 1,063,351 | $ 553,600 | $ 20,439 |
Total Class B stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,058,442 | 553,600 | 20,439 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 171,804 | 102,736 | 5,025 |
Cost of revenue | Total Class B stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 170,536 | 102,736 | 5,025 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 48,098 | 10,567 | 0 |
Sales and marketing | Total Class B stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 46,417 | 10,567 | 0 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 843,449 | 440,297 | 15,414 |
General and administrative | Total Class B stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 841,489 | $ 440,297 | $ 15,414 |
Stock-Based Compensation - Tota
Stock-Based Compensation - Total Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 1,063,351 | $ 553,600 | $ 20,439 |
Vested Class B units and change in fair value of Class B liability awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 934,993 | 475,202 | 5,608 |
Profits distributions to Class B unitholders | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 123,449 | 78,398 | 14,831 |
Total Class B stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | 1,058,442 | 553,600 | 20,439 |
2021 Incentive Award Plan stock-based compensation expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 4,909 | $ 0 | $ 0 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Jul. 21, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price (USD per share) | $ 10 | |
SARs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 50.00% | |
Stock price (USD per share) | $ 8.30 | |
Strike Price (USD per share) | $ 8.30 | |
Expected life of the warrants to convert (years) | 6 years 3 months | |
Risk-free rate | 1.20% | |
Dividend yield | 0.00% |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activities of RSUs and SARs (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Fully Vested Shares | |
Shares | |
Fully Vested Shares Outstanding (in shares) | 0 |
Granted (in shares) | 309,500 |
Exercised or vested (in shares) | (309,500) |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Fully Vested Shares Outstanding (in shares) | 0 |
Weighted-Average Grant Date Fair Value | |
Fully vested shares (in USD per share) | $ / shares | $ 8.30 |
RSUs | |
Shares | |
Outstanding (in shares) | 0 |
Granted (in shares) | 2,334,490 |
Exercised or vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Outstanding (in shares) | 2,334,490 |
Weighted-Average Grant Date Fair Value | |
Nonvested shares (in USD per share) | $ / shares | $ 8.30 |
SARs | |
Shares | |
Outstanding (in shares) | 0 |
Granted (in shares) | 1,935,131 |
Exercised or vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Expired (in shares) | 0 |
Outstanding (in shares) | 1,935,131 |
Weighted-Average Grant Date Fair Value | |
Nonvested shares (in USD per share) | $ / shares | $ 4.05 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) - Common Stock - Class B - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | ||
Outstanding (in shares) | 75,044,000 | 77,981,000 |
Granted stock (in shares) | 17,690,000 | 62,676,000 |
Vested (in shares) | (92,734,000) | (65,613,000) |
Outstanding (in shares) | 0 | 75,044,000 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ in Thousands | 5 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 21, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Gain on derivative warrant liabilities | $ 15,689 | ||||
Income tax expense | $ 2,358 | $ 2,358 | $ 0 | $ 0 | |
Public Warrants | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (in shares) | 20,699,993 | ||||
Private Warrants | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (in shares) | 10,280,000 | ||||
Sponsor Earn Out Shares | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (in shares) | 3,051,000 | ||||
Member Earn Out Shares | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities (in shares) | 2,000,000 | ||||
Marketwise, LLC | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Ownership percentage | 7.90% | ||||
Ownership percentage | 92.10% |
Earnings Per Share - Computatio
Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 5 Months Ended | 7 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Jul. 21, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | |||||
Net (loss) income | $ 78,728 | $ (1,032,611) | $ (953,883) | $ (541,091) | $ 27,993 |
Net (loss) income attributable to non-controlling interests | 60,476 | $ (1,050) | $ 59,426 | $ (2,718) | $ 36 |
Net income attributable to common shareholders, basic | 18,252 | ||||
Net income attributable to common shareholders, dilutive | $ 18,252 | ||||
Denominator | |||||
Weighted average shares outstanding, basic (in shares) | 25,035 | ||||
Weighted average shares outstanding, diluted (in shares) | 25,035 | ||||
Earnings per share | |||||
Net income per share attributable to common shares, basic (in usd per share) | $ 0.73 | ||||
Net income per share attributable to common shares, diluted (in usd per share) | $ 0.73 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 5 Months Ended | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current income tax expense (benefit): | ||||
Federal | $ 0 | |||
State | 0 | |||
Deferred income tax expense (benefit): | ||||
Federal | 1,942 | |||
State | 416 | |||
Income tax expense | $ 2,358 | $ 2,358 | $ 0 | $ 0 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Statutory federal tax rate | 21.00% |
State income taxes, net of federal benefit | 4.50% |
Permanent items | (0.55%) |
Income attributable to noncontrolling interests and nontaxable income | (25.20%) |
Effective income tax rate | (0.25%) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Effective income tax rate | (0.25%) |
Valuation allowance | $ 28,981 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | 4,942 |
State | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards | $ 272 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Deferred tax assets: | |
Reserves | $ 216 |
Accrued expenses | 127 |
Deferred revenue | 9,899 |
Derivatives | 40 |
Stock-based compensation | 102 |
Investment in MarketWise, LLC | 28,981 |
Net operating loss carryforwards | 1,260 |
Investment in flow-through partnerships | 296 |
Lease liabilities | 158 |
Fixed asset | 9 |
Charitable contributions | 25 |
Intangibles | 1,057 |
Total deferred tax assets | 42,170 |
Deferred tax liabilities | |
Deferred expense | (3,959) |
Related party interest | (53) |
Right of use asset | (213) |
Total deferred tax liabilities | (4,225) |
Valuation allowance | (28,981) |
Net deferred tax assets (liabilities) | $ 8,964 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 30, 2020 | Aug. 31, 2019 | |
Related Party Transaction [Line Items] | ||||||
Related party revenue | $ 1,284 | $ 3,386 | $ 6,825 | |||
Related party payables, net | 970 | 2,515 | ||||
Related party receivables | 496 | 874 | ||||
Operating cash flows from operating leases | 1,761 | 2,767 | 3,106 | |||
Operating lease right-of-use assets | 10,901 | 12,337 | ||||
Total lease liabilities | 8,207 | |||||
Related Party Owner | ||||||
Related Party Transaction [Line Items] | ||||||
Operating cash flows from operating leases | 1,536 | 1,505 | 1,477 | |||
Operating lease, expense | 2,224 | 2,224 | 2,224 | |||
Operating lease right-of-use assets | 10,323 | 11,957 | ||||
Total lease liabilities | 7,545 | 8,490 | ||||
One-Time Bonus Payment | Founder | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | $ 10,000 | |||||
Revenue Share Expenses | Related Party Owner And Affiliates | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 10,326 | 5,891 | 3,063 | |||
Call Center Support And Other Services Expense | Related Party Owner And Affiliates | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 1,260 | 1,005 | 1,647 | |||
Corporate Functions | Related Party Owner | ||||||
Related Party Transaction [Line Items] | ||||||
Related party payables, net | 1,037 | 3,288 | ||||
Fees And Accounting And Marketing Services Revenue | Class B Unitholders | ||||||
Related Party Transaction [Line Items] | ||||||
Related party revenue | 358 | 348 | 338 | |||
Related party receivables | $ 358 | 689 | ||||
Lead Generation Marketing Expense | Related Party Vendor | ||||||
Related Party Transaction [Line Items] | ||||||
Expenses from transactions with related party | 15,326 | |||||
Class B Unitholder Note, Issued August 2019 | Class B Unitholders | ||||||
Related Party Transaction [Line Items] | ||||||
Interest income | 25 | $ 24 | ||||
Notes receivable | $ 3,000 | |||||
Class A Unitholder Note Issued April 2020 | Class A Unitholders | ||||||
Related Party Transaction [Line Items] | ||||||
Interest rate | 126.00% | |||||
Interest income | $ 10 | 4 | ||||
Notes receivable | $ 1,158 | $ 1,148 | $ 1,148 | |||
Repayment period following IPO | 30 days |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 246,389 | $ 180,637 |
Total assets | 421,554 | 284,813 |
Current liabilities | 395,493 | 345,538 |
Total liabilities | 826,816 | 1,205,423 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Current assets | 3,901 | 3,787 |
Noncurrent assets | 2 | 22 |
Total assets | 3,903 | 3,809 |
Current liabilities | 274 | 3,265 |
Total liabilities | $ 274 | $ 3,265 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for interest | $ 67 | $ 339 | $ 366 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | (1,761) | (2,767) | (3,106) | |
Operating lease right-of-use assets obtained in exchange for lease obligations | 0 | (409) | (5,051) | |
Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions | 398 | 0 | 0 | |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||||
Capitalized software included in accounts payable | 0 | 0 | 1,010 | |
Capitalized software included in accounts payable | 12 | 0 | 0 | |
Reconciliation of Cash and Cash Equivalents and Restricted Cash: | ||||
Cash and cash equivalents | 139,078 | 114,422 | 170,520 | |
Restricted cash | 500 | 505 | 1,564 | |
Total | $ 139,578 | $ 114,927 | $ 172,084 | $ 132,870 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Detail) $ / shares in Units, $ in Thousands | Jul. 21, 2021vote$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Nov. 04, 2021USD ($) | Jul. 22, 2021shares |
Class of Stock [Line Items] | ||||
Stock price (USD per share) | $ / shares | $ 10 | |||
Equity-based compensation (in shares) | 309,500 | |||
Shares withheld to pay taxes (in shares) | 109,127 | |||
Sponsor Earn Out Shares (in shares) | 5,051,000 | |||
Common stock, number of votes per share | vote | 1 | |||
Share repurchase program, amount authorized | $ | $ 35,000 | |||
Stock repurchased (in shares) | 500,270 | |||
Aggregate repurchase of stock | $ | $ 3,335 | |||
Repurchase program period | 2 years | |||
Sponsor Earn Out Shares | ||||
Class of Stock [Line Items] | ||||
Sponsor Earn Out Shares (in shares) | 3,051,000 | |||
Management Earn Out Shares | ||||
Class of Stock [Line Items] | ||||
Sponsor Earn Out Shares (in shares) | 2,000,000 | |||
Common Stock - Class A | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (in shares) | 15,000,000 | 24,718,402 | ||
Common stock, outstanding (in shares) | 15,000,000 | 24,718,402 | 28,003,096 | |
Stock price (USD per share) | $ / shares | $ 10 | |||
Common Stock - Class B | ||||
Class of Stock [Line Items] | ||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Common stock, issued (in shares) | 291,092,303 | |||
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 |
Shareholders' Equity - Stock by
Shareholders' Equity - Stock by Class (Details) - shares | Dec. 31, 2021 | Jul. 22, 2021 | Jul. 21, 2021 |
Class of Stock [Line Items] | |||
Preferred stock, authorized (in shares) | 100,000,000 | ||
Stock, authorized (in shares) | 1,350,000,000 | ||
Preferred stock, issued (in shares) | 0 | ||
Stock, issued (in shares) | 315,810,705 | ||
Preferred stock, outstanding (in shares) | 0 | ||
Stock, outstanding (in shares) | 315,810,705 | ||
Common Stock - Class A | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 950,000,000 | ||
Common stock, issued (in shares) | 24,718,402 | 15,000,000 | |
Common stock, outstanding (in shares) | 24,718,402 | 28,003,096 | 15,000,000 |
Common Stock - Class B | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 300,000,000 | ||
Common stock, issued (in shares) | 291,092,303 | ||
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 20, 2021 | Dec. 31, 2021 | Jul. 21, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants outstanding (in shares) | 30,979,993 | |||
Warrant liabilities | $ 29,332 | $ 0 | ||
Class B Units | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Initial fair value of warrants | 0 | 593,235 | ||
Class B Units | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Initial fair value of warrants | 593,235 | |||
Class B Units | Level 3 | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Initial fair value of warrants | $ 45,021 | $ 593,235 | ||
Private Warrants | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants outstanding (in shares) | 10,280,000 | |||
Warrants redemption price per share (USD per share) | $ 10 | |||
Minimum notice period for warrants redemption | 30 days | |||
Private Warrants | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrant liabilities | 9,733 | |||
Private Warrants | Level 3 | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrant liabilities | 9,733 | |||
Public Warrants | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Term of warrants | 5 years | |||
Public Warrants | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrant liabilities | 19,599 | |||
Public Warrants | Level 3 | Recurring | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrant liabilities | $ 0 | |||
Public Warrants | Minimum | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 11.50 | |||
Share Trigger Price One | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants exercisable, ordinary share per warrant (in shares) | $ 0.361 | |||
Share Trigger Price One | Maximum | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redeemable, threshold consecutive trading days | 10 days | |||
Share Trigger Price One | Private Warrants | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 10 | $ 0.10 | ||
Warrants redeemable, threshold consecutive trading days | 20 days | |||
Warrants redeemable, threshold trading days | 30 days | |||
Share Trigger Price One | Private Warrants | Minimum | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redeemable, threshold consecutive trading days | 20 days | |||
Share Trigger Price One | Private Warrants | Minimum | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 10 | |||
Share Trigger Price One | Private Warrants | Maximum | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redeemable, threshold consecutive trading days | 30 days | |||
Share Trigger Price One | Private Warrants | Maximum | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 18 | |||
Share Trigger Price Two | Private Warrants | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 0.01 | |||
Warrants redeemable, threshold consecutive trading days | 20 days | |||
Warrants redeemable, threshold trading days | 30 days | |||
Share Trigger Price Two | Private Warrants | Common Stock - Class A | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redemption price per share (USD per share) | $ 18 | |||
Share Trigger Price Two | Private Warrants | Maximum | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants redeemable, threshold trading days | 30 days | |||
IPO | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants outstanding (in shares) | 20,699,993 | |||
Private Placement | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Warrants outstanding (in shares) | 10,280,000 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 2 Months Ended | 5 Months Ended | 12 Months Ended |
Mar. 10, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | |
Subsequent Event [Line Items] | |||
Share repurchase program, amount authorized (in shares) | 500,270 | ||
Aggregate value of shares repurchased | $ 3,340 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Share repurchase program, amount authorized (in shares) | 1,251,267 | ||
Aggregate value of shares repurchased | $ 7,114 |