Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 31, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value per share | |
Trading Symbol | MKTW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001805651 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock - Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 33,873,502 | |
Common Stock - Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 291,092,303 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 147,216 | $ 139,078 |
Accounts receivable | 4,564 | 7,805 |
Prepaid expenses | 10,672 | 13,043 |
Related party receivables | 927 | 496 |
Related party notes receivable, current | 422 | 298 |
Restricted cash | 0 | 500 |
Deferred contract acquisition costs | 97,292 | 82,685 |
Other current assets | 3,507 | 2,484 |
Total current assets | 264,600 | 246,389 |
Property and equipment, net | 963 | 1,188 |
Operating lease right-of-use assets | 9,979 | 10,901 |
Intangible assets, net | 17,014 | 8,612 |
Goodwill | 31,307 | 23,288 |
Deferred contract acquisition costs, noncurrent | 105,293 | 120,386 |
Related party notes receivable, noncurrent | 0 | 861 |
Deferred tax assets | 5,315 | 8,964 |
Other assets | 716 | 965 |
Total assets | 435,187 | 421,554 |
Current liabilities: | ||
Trade and other payables | 3,151 | 4,758 |
Related party payables, net | 261 | 970 |
Accrued expenses | 39,302 | 46,453 |
Deferred revenue and other contract liabilities | 318,804 | 317,133 |
Operating lease liabilities | 1,452 | 1,274 |
Other current liabilities | 20,749 | 24,905 |
Total current liabilities | 383,719 | 395,493 |
Deferred revenue and other contract liabilities, noncurrent | 371,921 | 393,043 |
Derivative liabilities, noncurrent | 1,320 | 2,015 |
Warrant liabilities | 0 | 29,332 |
Operating lease liabilities, noncurrent | 6,250 | 6,933 |
Total liabilities | 763,210 | 826,816 |
Commitments and Contingencies | 0 | 0 |
Stockholders’ deficit: | ||
Preferred stock - par value of $0.0001 per share, 100,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 0 | 0 |
Additional paid-in capital | 104,833 | 97,548 |
Accumulated other comprehensive loss | (109) | (9) |
Accumulated deficit | (132,421) | (146,115) |
Total stockholders’ deficit attributable to MarketWise, Inc. | (27,665) | (48,545) |
Noncontrolling interest | (300,358) | (356,717) |
Total stockholders’ deficit | (328,023) | (405,262) |
Total liabilities, noncontrolling interest, and stockholders’ deficit | 435,187 | 421,554 |
Common Stock - Class A | ||
Stockholders’ deficit: | ||
Common stock | 3 | 2 |
Common Stock - Class B | ||
Stockholders’ deficit: | ||
Common stock | $ 29 | $ 29 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common Stock - Class A | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 950,000,000 | 950,000,000 |
Common stock, issued (in shares) | 28,822,502 | 24,718,402 |
Common stock, outstanding (in shares) | 28,822,502 | 24,718,402 |
Common Stock - Class B | ||
Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, issued (in shares) | 291,092,303 | 291,092,303 |
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Net revenue | $ 119,297 | $ 140,422 | $ 383,383 | $ 401,647 | |
Related party revenue | 637 | 245 | 1,363 | 864 | |
Total net revenue | 119,934 | 140,667 | 384,746 | 402,511 | |
Operating expenses: | |||||
Cost of revenue | [1],[2] | 14,482 | 62,024 | 48,328 | 221,662 |
Sales and marketing | [1],[2] | 51,635 | 82,558 | 184,922 | 231,269 |
General and administrative | [1],[2] | 28,986 | 356,286 | 79,895 | 928,376 |
Research and development | [2] | 2,173 | 2,137 | 6,740 | 5,842 |
Depreciation and amortization | 836 | 629 | 2,053 | 2,076 | |
Related party expense | 96 | 10,097 | 290 | 10,144 | |
Total operating expenses | 98,208 | 513,731 | 322,228 | 1,399,369 | |
Income (loss) from operations | 21,726 | (373,064) | 62,518 | (996,858) | |
Other (expense) income, net | (3,651) | 9,859 | 15,568 | 10,162 | |
Interest (expense) income, net | (183) | 5 | (572) | 17 | |
Income (loss) before income taxes | 17,892 | (363,200) | 77,514 | (986,679) | |
Income tax expense | 1,383 | 3,085 | 3,945 | 3,085 | |
Net income (loss) | 16,509 | (366,285) | 73,569 | (989,764) | |
Net income attributable to noncontrolling interests | 20,521 | 33,248 | 59,875 | 32,117 | |
Net (loss) income attributable to MarketWise, Inc. | $ (4,012) | (399,533) | $ 13,694 | (1,021,881) | |
Net income per Class A common share - basic (USD per share) | $ (0.17) | $ 0.59 | |||
Net income per Class A common share - diluted (USD per share) | $ (0.17) | $ 0.59 | |||
Weighted average shares outstanding, basic (in shares) | 23,533 | 23,233 | |||
Weighted average shares outstanding, diluted (in shares) | 23,566 | 23,267 | |||
Total stock-based compensation expense | $ 2,153 | 412,565 | $ 7,190 | 1,061,085 | |
Cost of revenue | |||||
Operating expenses: | |||||
Total stock-based compensation expense | 438 | 46,396 | 1,496 | 171,312 | |
Sales and marketing | |||||
Operating expenses: | |||||
Total stock-based compensation expense | 514 | 32,606 | 1,655 | 47,516 | |
General and administrative | |||||
Operating expenses: | |||||
Total stock-based compensation expense | $ 1,201 | $ 333,563 | $ 4,039 | $ 842,257 | |
[1] (1) Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows (see Note 10 – Stock-Based Compensation): (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 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 16,509 | $ (366,285) | $ 73,569 | $ (989,764) |
Other comprehensive income (loss): | ||||
Cumulative translation adjustment | 6 | (40) | (100) | (141) |
Total comprehensive income (loss) | $ 16,515 | $ (366,325) | $ 73,469 | $ (989,905) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Deficit / Members' Deficit (Unaudited) - USD ($) $ in Thousands | Total | Marketwise, LLC | Class A Members’ units | Common Stock Common Stock - Class A | Common Stock Common 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, 2020 | 547,466 | ||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | $ (920,610) | $ (914,728) | $ (17) | $ (914,745) | $ (5,865) | ||||||
Members' Deficit | |||||||||||
Class A units transferred to Class B (in shares) | (18,947) | ||||||||||
Acquisition of Chaikin | 810 | 810 | |||||||||
Foreign currency translation adjustments | (101) | (101) | (101) | ||||||||
Distributions | (15,929) | $ (15,098) | (15,098) | (831) | |||||||
Net income (loss) | (623,479) | $ (622,348) | (622,348) | (1,131) | |||||||
Class A members' units, ending balance (in shares) at Jun. 30, 2021 | 528,519 | ||||||||||
Class A members' units, ending balance at Jun. 30, 2021 | (1,559,309) | $ (1,552,174) | (118) | (1,552,292) | (7,017) | ||||||
Stockholders' Deficit | |||||||||||
Foreign currency translation adjustments | (101) | (101) | (101) | ||||||||
Net income (loss) | (623,479) | $ (622,348) | (622,348) | (1,131) | |||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 0 | 0 | ||||||||
Ending balance at Jun. 30, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||||
Class A members' units, beginning balance (in shares) at Dec. 31, 2020 | 547,466 | ||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | ||||||
Members' Deficit | |||||||||||
Net income (loss) | (1,032,611) | ||||||||||
Stockholders' Deficit | |||||||||||
Net income (loss) | (1,032,611) | ||||||||||
Controlling interests | (1,031,561) | ||||||||||
Noncontrolling interests | (1,050) | ||||||||||
Class A members' units, beginning balance (in shares) at Dec. 31, 2020 | 547,466 | ||||||||||
Class A members' units, beginning balance at Dec. 31, 2020 | (920,610) | $ (914,728) | (17) | (914,745) | (5,865) | ||||||
Members' Deficit | |||||||||||
Foreign currency translation adjustments | (141) | ||||||||||
Net income (loss) | (989,764) | ||||||||||
Class A members' units, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||||||
Class A members' units, ending balance at Sep. 30, 2021 | $ 0 | ||||||||||
Stockholders' Deficit | |||||||||||
Net proceeds | (113,291) | ||||||||||
Foreign currency translation adjustments | (141) | ||||||||||
Net income (loss) | (989,764) | ||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 25,152,469 | 291,092,303 | 0 | ||||||||
Ending balance at Sep. 30, 2021 | (441,927) | $ 2 | $ 29 | $ 0 | 96,344 | (154,687) | (49) | (58,361) | (383,566) | ||
Stockholders' Deficit | |||||||||||
Income tax provision | 3,085 | ||||||||||
Controlling interests | (1,021,881) | ||||||||||
Noncontrolling interests | 32,117 | ||||||||||
Class A members' units, beginning balance (in shares) at Jun. 30, 2021 | 528,519 | ||||||||||
Class A members' units, beginning balance at Jun. 30, 2021 | (1,559,309) | $ (1,552,174) | (118) | (1,552,292) | (7,017) | ||||||
Members' Deficit | |||||||||||
Net income (loss) | (409,132) | (409,213) | (409,213) | 81 | |||||||
Beginning balance (in shares) at Jun. 30, 2021 | 0 | 0 | 0 | ||||||||
Beginning balance at Jun. 30, 2021 | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Stockholders' Deficit | |||||||||||
Net income (loss) | (409,132) | $ (409,213) | (409,213) | 81 | |||||||
Controlling interests | (409,213) | ||||||||||
Noncontrolling interests | 81 | ||||||||||
Class A members' units, beginning balance (in shares) at Jun. 30, 2021 | 528,519 | ||||||||||
Class A members' units, beginning balance at Jun. 30, 2021 | (1,559,309) | $ (1,552,174) | (118) | (1,552,292) | (7,017) | ||||||
Members' Deficit | |||||||||||
Foreign currency translation adjustments | (40) | (40) | (40) | ||||||||
Net income (loss) | (366,285) | ||||||||||
Distributions related to the recapitalization | $ (120,353) | ||||||||||
Reverse capitalization on July 21, 2021 (in shares) | (528,519) | ||||||||||
Reverse capitalization on July 21, 2021 | 0 | $ 2,081,740 | (164,367) | 1,917,373 | (1,917,373) | ||||||
Class A members' units, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||||||
Class A members' units, ending balance at Sep. 30, 2021 | $ 0 | ||||||||||
Beginning balance (in shares) at Jun. 30, 2021 | 0 | 0 | 0 | ||||||||
Beginning balance at Jun. 30, 2021 | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Stockholders' Deficit | |||||||||||
Distributions related to the recapitalization | (120,353) | (120,353) | |||||||||
Net proceeds | 113,291 | 113,291 | 113,291 | ||||||||
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 | 0 | $ 2,081,740 | (164,367) | 1,917,373 | (1,917,373) | ||||||
Proceeds from issuance of common stock (in shares) | 24,952,096 | 291,092,303 | |||||||||
Proceeds from issuance of common stock | 0 | $ 2 | $ 29 | (31) | |||||||
Establishment of warrant liabilities | (45,021) | (45,021) | (45,021) | ||||||||
Establishment of deferred taxes | 10,056 | 10,056 | 10,056 | ||||||||
Establishment of noncontrolling interest | 0 | (1,511,911) | 109 | (1,511,802) | 1,511,802 | ||||||
Equity-based compensation (in shares) | 200,373 | ||||||||||
Equity-based compensation | 1,732 | 1,732 | 1,732 | ||||||||
Distributions | (4,226) | (4,226) | |||||||||
Foreign currency translation adjustments | (40) | (40) | (40) | ||||||||
Net income (loss) | (366,285) | ||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 25,152,469 | 291,092,303 | 0 | ||||||||
Ending balance at Sep. 30, 2021 | (441,927) | $ 2 | $ 29 | $ 0 | 96,344 | (154,687) | (49) | (58,361) | (383,566) | ||
Stockholders' Deficit | |||||||||||
Income tax provision | 3,085 | ||||||||||
Controlling interests | (399,533) | ||||||||||
Noncontrolling interests | 33,248 | ||||||||||
Net income (loss) | 42,847 | 9,680 | 9,680 | 33,167 | |||||||
Class A members' units, ending balance (in shares) at Sep. 30, 2021 | 0 | ||||||||||
Class A members' units, ending balance at Sep. 30, 2021 | $ 0 | ||||||||||
Stockholders' Deficit | |||||||||||
Net income (loss) | 42,847 | 9,680 | 9,680 | 33,167 | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 25,152,469 | 291,092,303 | 0 | ||||||||
Ending balance at Sep. 30, 2021 | (441,927) | $ 2 | $ 29 | $ 0 | 96,344 | (154,687) | (49) | (58,361) | (383,566) | ||
Stockholders' Deficit | |||||||||||
Controlling interests | 9,680 | ||||||||||
Noncontrolling interests | 33,167 | ||||||||||
Foreign currency translation adjustments | (100) | (100) | (100) | ||||||||
Net income (loss) | 73,569 | 13,694 | 13,694 | 59,875 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 24,718,402 | 291,092,303 | 0 | ||||||||
Beginning balance at Dec. 31, 2021 | (405,262) | $ 2 | $ 29 | $ 0 | 97,548 | (146,115) | (9) | (48,545) | (356,717) | ||
Stockholders' Deficit | |||||||||||
Net proceeds | 0 | ||||||||||
Proceeds from issuance of common stock (in shares) | 161,178 | ||||||||||
Proceeds from issuance of common stock | 517 | 517 | 517 | ||||||||
Equity-based compensation | 7,190 | 7,190 | 7,190 | ||||||||
Issuance of common stock - warrant exchanges (in shares) | 5,939,739 | ||||||||||
Issuance of common stock - warrant exchanges | $ 14,401 | $ 1 | 14,400 | 14,401 | |||||||
Repurchase of stock (in shares) | (2,484,717) | (2,484,717) | |||||||||
Repurchases of stock | $ (13,054) | (13,054) | (13,054) | ||||||||
Vesting of restricted stock units (in shares) | 487,900 | ||||||||||
Vesting of restricted stock units | (511) | ||||||||||
Restricted stock units withheld to pay taxes | (511) | (511) | |||||||||
Acquisition of noncontrolling interest - Chaikin | (297) | (1,257) | (1,257) | 960 | |||||||
Distributions | (4,476) | (4,476) | |||||||||
Foreign currency translation adjustments | (100) | (100) | (100) | ||||||||
Net income (loss) | 73,569 | 13,694 | 13,694 | 59,875 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 28,822,502 | 291,092,303 | 0 | ||||||||
Ending balance at Sep. 30, 2022 | (328,023) | $ 3 | $ 29 | $ 0 | 104,833 | (132,421) | (109) | (27,665) | (300,358) | ||
Stockholders' Deficit | |||||||||||
Gain (Loss) on derivative warrant liabilities | (14,931) | ||||||||||
Income tax provision | 3,945 | ||||||||||
Controlling interests | 13,694 | ||||||||||
Noncontrolling interests | 59,875 | ||||||||||
Foreign currency translation adjustments | 6 | 6 | 6 | ||||||||
Net income (loss) | 16,509 | (4,012) | (4,012) | 20,521 | |||||||
Beginning balance (in shares) at Jun. 30, 2022 | 22,505,103 | 291,092,303 | 0 | ||||||||
Beginning balance at Jun. 30, 2022 | (359,607) | $ 2 | $ 29 | $ 0 | 90,048 | (128,409) | (115) | (38,445) | (321,162) | ||
Stockholders' Deficit | |||||||||||
Equity-based compensation | 2,153 | 2,153 | 2,153 | ||||||||
Issuance of common stock - warrant exchanges (in shares) | 5,939,739 | ||||||||||
Issuance of common stock - warrant exchanges | $ 14,401 | $ 1 | 14,400 | 14,401 | |||||||
Repurchase of stock (in shares) | 0 | ||||||||||
Vesting of restricted stock units (in shares) | 377,660 | ||||||||||
Restricted stock units withheld to pay taxes | $ (511) | (511) | (511) | ||||||||
Acquisition of noncontrolling interest - Chaikin | (297) | (1,257) | (1,257) | 960 | |||||||
Distributions | (677) | (677) | |||||||||
Foreign currency translation adjustments | 6 | 6 | 6 | ||||||||
Net income (loss) | 16,509 | (4,012) | (4,012) | 20,521 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 28,822,502 | 291,092,303 | 0 | ||||||||
Ending balance at Sep. 30, 2022 | (328,023) | $ 3 | $ 29 | $ 0 | $ 104,833 | $ (132,421) | $ (109) | $ (27,665) | $ (300,358) | ||
Stockholders' Deficit | |||||||||||
Gain (Loss) on derivative warrant liabilities | (3,868) | ||||||||||
Income tax provision | 1,383 | ||||||||||
Controlling interests | (4,012) | ||||||||||
Noncontrolling interests | $ 20,521 | ||||||||||
Ownership percentage | 9% | ||||||||||
Noncontrolling interest ownership percentage | 91% |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 73,569 | $ (989,764) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 2,053 | 2,076 |
Impairment of right-of-use assets | 287 | 0 |
Stock-based compensation | 7,190 | 208,646 |
Change in fair value of derivative liabilities – Class B Units | 0 | 728,079 |
Change in fair value of warrant liabilities and other derivative liabilities | (15,626) | (11,543) |
Deferred taxes | 3,649 | 3,085 |
Unrealized gains on foreign currency | (91) | (62) |
Noncash lease expense | 1,616 | 1,375 |
Gain on sale of cryptocurrencies | 0 | (105) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,241 | 5,581 |
Related party receivables and payables, net | (1,140) | (906) |
Prepaid expenses | 2,371 | (4,396) |
Other current assets and other assets | (774) | 26 |
Cryptocurrency intangible assets | 0 | 109 |
Deferred contract acquisition costs | 486 | (82,050) |
Trade and other payables | (1,516) | (7,667) |
Accrued expenses | (7,151) | 31,005 |
Deferred revenue | (24,759) | 170,239 |
Operating lease liabilities | (1,486) | (859) |
Other current and long-term liabilities | (4,156) | 5,751 |
Net cash provided by operating activities | 37,763 | 58,620 |
Cash flows from investing activities: | ||
Cash paid for acquisitions, net of cash acquired | (12,770) | (7,139) |
Acquisition of noncontrolling interests, including transaction costs | (297) | 0 |
Purchases of property and equipment | (35) | (73) |
Purchases of intangible assets | 0 | (890) |
Capitalized software development costs | (136) | (100) |
Net cash used in investing activities | (13,238) | (8,202) |
Cash flows from financing activities: | ||
Net proceeds from the Transactions | 0 | 113,291 |
Issuance of related party notes receivable | 0 | (8) |
Proceeds from related party notes receivable, net | 737 | 0 |
Proceeds from issuance of common stock | 517 | 0 |
Repurchases of stock | (13,054) | 0 |
Restricted stock units withheld to pay taxes | (511) | 0 |
Distributions to members | 0 | (135,451) |
Distributions to noncontrolling interests | (4,476) | (5,057) |
Net cash used in financing activities | (16,787) | (27,225) |
Effect of exchange rate changes on cash | (100) | (32) |
Net increase in cash, cash equivalents and restricted cash | 7,638 | 23,161 |
Cash, cash equivalents and restricted cash — beginning of period | 139,578 | 114,927 |
Cash, cash equivalents and restricted cash — end of period | $ 147,216 | $ 138,088 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Description of Business and Basis of Presentation MarketWise, Inc. (“MarketWise,” “the Company,” “we,” “us,” or “our”) is a holding company that has no material assets other than its ownership in MarketWise, LLC (formerly Beacon Street Group, LLC), and operates and controls all of the businesses and operations of MarketWise, LLC and its subsidiaries. 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 million (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) $10.1 million in equity related to the establishment of the initial value of deferred taxes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Consolidation The accompanying condensed consolidated financial statements include the accounts of MarketWise, Inc. and its subsidiary, MarketWise, LLC, a variable interest entity (“VIE”) for which MarketWise, Inc. is deemed to be the primary beneficiary. MarketWise, Inc. is a holding company that owns a minority economic interest in MarketWise, LLC but, through its role as the managing member of MarketWise, LLC, controls all of the business and operations of MarketWise, LLC. Therefore, MarketWise, LLC and its subsidiaries are included in the Company’s consolidated financial statements. As of September 30, 2022, MarketWise, Inc. had a 9.0% ownership interest in MarketWise, LLC. The Company determined that MarketWise, LLC is the primary beneficiary of a VIE, Stansberry Pacific Research, and therefore, the assets, liabilities, and results of operations of that VIE are included in the Company’s consolidated financial statements. For more information on Stansberry Pacific Research, see Note 14 – Variable Interest Entities . The condensed consolidated financial statements have been prepared in accordance with GAAP. 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 condensed 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 condensed 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. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and the related footnote disclosures have been prepared by us in accordance with GAAP for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2021 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly our financial position as of September 30, 2022, the results of operations, comprehensive income (loss), stockholders’ deficit / members’ deficit, and cash flows for the three and nine months ended September 30, 2022 and 2021. The results of operations for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the full year. The information contained herein should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. Management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. 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, determination of standalone selling prices, estimated life of membership 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 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 unaudited condensed 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. 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 September 30, 2022 and December 31, 2021. 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 condensed 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. As of September 30, 2022, MarketWise has reserved a total of 32,938,082 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. See also Note 10 – Stock-Based Compensation . 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 made to employees 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. 2021 ESPP As a result of the Transactions, we adopted the 2021 Employee Stock Purchase Plan (“ESPP”) effective on January 1, 2022. Under the ESPP, the Company authorizes the grant of the right to purchase shares of Class A common stock by employees who qualify under the ESPP. As of September 30, 2022, The Company has reserved for issuance a total of 6,557,847 shares of Class A common stock for the ESPP. The current offering period began on July 1, 2022 and ends on December 31, 2022. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of the Company’s Class A common stock on specified dates during such offerings. Under the ESPP, the Company has determined the offering period to occur in six month intervals, with the purchase occurring as of the last trading day of each offering period. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. The fair value of the ESPP is determined using the Monte Carlo model as of the beginning of each offering period and is expensed ratably over the six month offering period. 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 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 occurred. 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 condensed 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. 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-Transactions period from January 1, 2021 through July 21, 2021 and to the post-Transactions period from July 22, 2021 through December 31, 2021. Net income (loss) in the pre-Transactions period was attributable to consolidated MarketWise, LLC and its respective noncontrolling interests and in the post-Transactions period was attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. Net income for the three and nine months ended September 30, 2022 was fully in the post-Transactions period and therefore attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. As of September 30, 2022, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 9.0% and the noncontrolling interest was 91.0%. For the three months ended September 30, 2022 net income attributable to controlling interests included a $3,868 loss on warrant liabilities and a $1,383 tax provision, and for the nine months ended September 30, 2022 net income attributable to controlling interests included a $14,931 gain on warrant liabilities and a $3,945 tax provision, both of which are 100% attributable to the controlling interest. Net loss for three and nine months ended September 30, 2021 was attributed to the pre-Transactions period from January 1, 2021 through July 1, 2021 and from July 1, 2021 through July 21, 2021 and to the post-Transactions period from July 22, 2021 through September 30, 2021. 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 during the period. 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. Recently Issued and Adopted Accounting Pronouncements In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08: Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this ASU adds contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations. As a result, acquiring entities are required to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, instead of fair value. We have early adopted and applied this ASU to the Winans Media transaction (as defined herein). See Note 4 – Acquisitions for additional disclosure on the Winans Media transaction. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2022 | |
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. Three Months Ended September 30, 2022 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 118,990 $ — $ — $ — $ 118,990 Transferred at a point in time — 169 637 138 944 Total $ 118,990 $ 169 $ 637 $ 138 $ 119,934 Three Months Ended September 30, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 139,831 $ — $ — $ — $ 139,831 Transferred at a point in time — 423 245 168 836 Total $ 139,831 $ 423 $ 245 $ 168 $ 140,667 Nine Months Ended September 30, 2022 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 382,321 $ — $ — $ — $ 382,321 Transferred at a point in time — 606 1,363 456 2,425 Total $ 382,321 $ 606 $ 1,363 $ 456 $ 384,746 Nine Months Ended September 30, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 398,362 $ — $ — $ — $ 398,362 Transferred at a point in time — 1,968 864 1,317 4,149 Total $ 398,362 $ 1,968 $ 864 $ 1,317 $ 402,511 Revenue recognition by subscription type was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Membership subscriptions $ 46,915 $ 50,862 $ 148,219 $ 140,893 Term subscriptions 72,075 88,970 234,102 257,470 Non-subscription revenue 944 835 2,425 4,148 Total $ 119,934 $ 140,667 $ 384,746 $ 402,511 Revenue for the Membership 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 from revenue share arrangements and the sale of print products and events, such as webinars and conferences. Net revenue by principal geographic areas was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 United States $ 119,707 $ 139,998 $ 384,419 $ 400,871 International 227 669 327 1,640 Total $ 119,934 $ 140,667 $ 384,746 $ 402,511 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 condensed 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 September 30, 2022 December 31, 2021 Contract balances Accounts receivable $ 4,564 $ 7,805 Obligations for refunds $ 4,998 $ 5,590 Deferred revenue – current $ 313,806 $ 311,543 Deferred revenue – non-current $ 371,921 $ 393,043 We recognized $72,852 and $63,960 of revenue during the three months ended September 30, 2022 and 2021, and $266,246 and $240,638 during the nine months ended September 30, 2022 and 2021, 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 $4,564 and $7,805 as of September 30, 2022 and December 31, 2021, respectively, related to the timing of cash settlement with our 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, 2022 $ 203,071 Royalties and sales commissions – additions 27,758 Revenue share and cost per acquisition fees – additions 43,326 Amortization of capitalized costs (71,570) Balance at September 30, 2022 $ 202,585 We did not recognize any impairment on capitalized costs associated with contracts with customers for the three and nine months ended September 30, 2022 and 2021. Remaining Performance Obligations As of September 30, 2022, the Company had $690,725 of remaining performance obligations presented as deferred revenue in the condensed consolidated balance sheets. We expect to recognize approximately 46% of that amount as revenues over the next twelve months, with the remainder recognized thereafter. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Winans Media During third quarter 2022, we acquired 100% ownership of certain assets and liabilities from Crowdability, Inc. (“Winans Media transaction”), a provider of financial newsletters, for cash of $12,770. The Winans Media transaction expands our product offerings and our customer base and adds to our talented group of professionals. The Winans Media transaction 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: Right of use asset $ 50 Goodwill 8,019 Tradenames 709 Customer relationships 9,350 Total assets acquired 18,128 Deferred revenue, current (2,648) Operating lease liabilities, current (22) Operating lease liabilities, noncurrent (28) Deferred revenue, noncurrent (2,660) Liabilities assumed (5,358) Net assets acquired $ 12,770 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 expanding our copy and editorial talent base and synergies which we expect to achieve from cross-marketing and providing complementary products to our existing and acquired customers and is fully expected to be deductible for tax purposes. The acquired intangible assets related to the Winans Media transaction are amortized over their estimated useful lives. Accordingly, the tradenames will be amortized over 9.0 years and customer relationships will be amortized over 6.5 years. Amortization for the acquired intangible assets was $217 for the quarter ended September 30, 2022. 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 tradenames will be amortized over 8.5 years and customer relationships will be amortized over 6 years. Amortization for the acquired intangible assets was $174 and $115 for the three months ended September 30, 2022 and 2021, and $515 and $477 for the nine months ended September 30, 2022 and 2021, respectively. During third quarter 2022, we acquired additional noncontrolling interests totaling 3.7% in Chaikin, to obtain 93.7% ownership for $297. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The carrying amounts of goodwill are as follows: Balance at December 31, 2021 $ 23,288 Acquisition – Winans Media transaction 8,019 Balance at September 30, 2022 $ 31,307 Intangible assets, net Intangible assets, net consisted of the following as of the dates indicated: September 30, 2022 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 21,718 $ (9,223) $ 12,495 6.5 Tradenames 4,287 (2,145) 2,142 6.3 Capitalized software development costs 3,002 (1,712) 1,290 2.2 Finite-lived intangible assets, net 29,007 (13,080) 15,927 Indefinite-lived intangible assets: Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 30,094 $ (13,080) $ 17,014 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: 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 We recorded amortization expense related to finite-lived intangible assets of $760 and $513 for the three months ended September 30, 2022 and 2021, and $1,793 and $1,736 for the nine months ended September 30, 2022 and 2021, respectively, within depreciation and amortization in the accompanying condensed consolidated statement of operations. These amounts include amortization of capitalized software development costs of $133 and $103 for the three months ended September 30, 2022 and 2021, and $368 and $306 for the nine months ended September 30, 2022 and 2021, respectively. We recorded additions to capitalized software development costs of $55 and $136 for the three and nine months ended September 30, 2022, respectively. We recorded additions to capitalized software development costs of $347 for the nine months ended September 30, 2021, which includes acquired software of $247. As of September 30, 2022, the total expected future amortization expense for finite-lived intangible assets is as follows: Remainder of 2022 $ 891 2023 3,330 2024 2,843 2025 2,327 2026 2,066 Thereafter 4,470 Finite-lived intangible assets, net $ 15,927 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 38,049 $ — $ — $ 38,049 Total assets 38,049 — — 38,049 Liabilities: Derivative liabilities, noncurrent — — 1,320 1,320 Total liabilities $ — $ — $ 1,320 $ 1,320 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 The level 3 liabilities related to our warrants, our Class B Units, and certain employee and non-employee contracts contain embedded derivatives, see Note 8 – Derivative Financial Instruments and Note 10 – Stock-Based Compensation . The fair value of the Public Warrants was 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 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 condensed 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 September 30, 2022 Volatility 36.80 % Discount rate 21.00 % Credit spread 0.10 % Risk-free rate 3.50 % The following table summarizes the change in fair value of the liabilities during the nine months ended September 30, 2022 and 2021: Balance at January 1, 2022 $ 31,347 Change in fair value of derivative instruments (15,626) Warrants exchanged for Class A common stock (see Note 17 – Warrant Exchange ) (14,401) Balance at September 30, 2022 $ 1,320 Balance at January 1, 2021 $ 597,578 Incremental Class B Units 206,914 Establishment of derivative warrant liabilities on July 21, 2021 (date of the Transactions) 45,021 Change in fair value of derivative instruments (11,543) 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 at September 30, 2021 $ 37,821 The following table summarizes the change in fair value of the Class B Units by income statement line item during the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ — $ 24,028 $ — $ 136,417 Sales and marketing — 2,607 — 10,870 General and administrative — 102,911 — 580,792 Total change in fair value of Class B Units $ — $ 129,546 $ — $ 728,079 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 10 – Stock-Based Compensation. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Balance Sheet Components Capitalized Implementation Costs We capitalized cloud computing implementation costs for customer-relationship management, revenue management, and enterprise resou rce planning systems of $360 and $21 for the three months ended September 30, 2022 and 2021, and $1,392 and $114 for the nine months ended September 30, 2022 and 2021, respectively. The capitalized implementation costs are capita lized within other current assets and other assets on the condensed con solidated balance sheets. Amortization expense related to capitalized cloud computing implementation costs was $133 and $145, for the three and nine months ended September 30, 2022, respectively. Property and Equipment, Net Property and equipment, net consists of the following: As of Estimated Useful Lives September 30, 2022 December 31, 2021 Furniture and fixtures 5 years $ 960 $ 960 Computers, software and equipment 3 years 1,458 1,423 Leasehold improvements Shorter of estimated useful life or remaining term of lease 1,278 1,278 3,696 3,661 Less: Accumulated depreciation and amortization (2,733) (2,473) Total property and equipment, net $ 963 $ 1,188 Depreciation and amortization expense for property and equipment was $76 and $116 for the three months ended September 30, 2022 and 2021, and $260 and $340 for the nine months ended September 30, 2022 and 2021, respectively. Accrued Expenses Accrued expenses consist of the following: As of September 30, 2022 December 31, 2021 Commission and variable compensation $ 19,637 $ 22,155 Payroll and benefits 3,677 5,164 Other accrued expenses 15,988 19,134 Total accrued expenses $ 39,302 $ 46,453 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial InstrumentsPrior 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 condensed consolidated balance sheets. As of September 30, 2022, there are embedded derivative instruments outstanding. The following table presents information on the location and amounts of derivative instruments gains and losses: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives Not Designated as Location of Gain (Loss) Recognized in Income Statement Warrants Other income, net $ (3,868) $ 9,952 $ 14,931 $ 9,952 Phantom Interests in Net Income General and administrative (160) (250) 695 2,138 Option General and administrative — 115 — (547) Total $ (4,028) $ 9,817 $ 15,626 $ 11,543 See Note 6 – Fair Value Measurements for more information regarding the valuation of our derivative instruments. As more fully described in Note 17 – Warrant Exchange |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt On October 29, 2021, MarketWise, LLC, entered into a loan and security agreement (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, and 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. The Credit Facility has a term of three years, maturing on October 29, 2024. 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. Borrowings will bear interest at a floating rate depending on MarketWise, LLC’s Net Leverage Ratio (as defined in the Loan and Security Agreement). As of September 30, 2022, there were no outstanding advances under the Credit Facility. The Loan and Security Agreement contains customary affirmative and negative covenants for transactions of this type, and contains financial maintenance covenants that require MarketWise, LLC to maintain an Interest Coverage Ratio and Net Leverage Ratio (both as defined in the Loan and Security Agreement), and provides for a number of customary events of default, which could result in the acceleration of obligations and the termination of lending commitments under the Loan and Security Agreement. As of September 30, 2022, we were in compliance with these covenants. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based CompensationDuring the three and nine months ended September 30, 2022 we recorded stock-based compensation related to our 2021 Incentive Award Plan and our ESPP, and during the three and nine months ended September 30, 2021, we recorded stock-based compensation related to our Class B Units and our 2021 Incentive Award Plan. 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 total stock-based compensation expenses as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Cost of revenue $ 438 $ 46,396 $ 1,496 $ 171,312 Sales and marketing 514 32,606 1,655 47,516 General and administrative 1,201 333,563 4,039 842,257 Total stock based-compensation expense $ 2,153 $ 412,565 $ 7,190 $ 1,061,085 Total stock-based compensation expense for the three and nine months ended September 30, 2022 includes expenses related to our 2021 Incentive Award Plan and our ESPP, while the total stock-based compensation expense for the three and nine months ended September 30, 2021 includes the vesting of Class B units, the change in fair value of Class B liability awards, profits distributions to Class B unitholders and our 2021 Incentive Award Plan as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 2021 Incentive Award Plan $ 2,086 $ 2,643 $ 6,828 $ 2,643 Employee Stock Purchase Plan 67 — 362 — Vested Class B units and change in fair value of Class B liability awards — 292,580 — 934,993 Profits distributions to Class B unitholders — 117,342 — 123,449 Total stock-based compensation expense $ 2,153 $ 412,565 $ 7,190 $ 1,061,085 2021 Incentive Award Plan On May 16, 2022, we granted a service provider 373,134 restricted stock units (“RSUs”), and on June 2, 2022, we granted our board members 289,555 RSUs in aggregate, both under our 2021 Incentive Award Plan. On September 27, 2021, we granted certain employees and board members RSUs and stock appreciation rights (“SARs”) under our 2021 Incentive Award Plan. For employees and service providers, both RSUs and SARs are primarily time based and typically vest ratably over four years, as specified in the individual grant notices. The RSUs granted in September 2021 entitle the recipients to 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 RSUs 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. The activities of the RSUs and SARs and the related weighted average grant-date fair value of the respective share classes, including granted, exercised and forfeited, from January 1, 2022 to September 30, 2022 are summarized as follows: RSUs SARs Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Outstanding at January 1, 2022 2,334,490 $ 8.30 1,935,131 $ 4.05 Granted 662,689 2.89 — — Exercised or vested (660,363) 8.17 — — Forfeited (102,188) 5.91 (103,120) 4.05 Outstanding at September 30, 2022 2,234,628 $ 6.69 1,832,011 $ 4.05 The stock compensation expense related to the RSU and SAR grants was $2,086 and $6,828 for the three and nine months ended September 30, 2022, respectively. As of September 30, 2022, none of the SARs were exercisable and they have a remaining contractual term of 8.75 years. Employee Stock Purchase Plan As a result of the Transactions, the Company adopted the ESPP. Under the ESPP, the Company authorizes the grant of the right to purchase shares of Class A common stock by employees who qualify under the ESPP. The Company has reserved for issuance a total of 6,557,847 shares of Class A common stock. The ESPP became effective on January 1, 2022, and the current offering period began on July 1, 2022 and ends on December 31, 2022. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of the Company’s Class A common stock on specified dates during such offerings. Under the ESPP, the Company has determined the offering period to occur in six month intervals, with the purchase occurring as of the last trading day of each offering period. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. The fair value of the ESPP is determined using the Monte Carlo model as of the beginning of each offering period and is expensed ratably over the six month offering period. The Company recognized $67 and $362 of stock-based compensation expense related to the ESPP during the three and nine months ended September 30, 2022, respectively. As of September 30, 2022, $224 has been withheld on behalf of employees for the December 31, 2022 purchase date. Class B Units For the three and nine months ended September 30, 2021, we recognized stock-based compensation expenses related to the Class B units of $409,922 and $1,058,442, respectively. These amounts include profits distributions to Class B unitholders of $117,342 and $123,449 for the three and nine months ended September 30, 2021, respectively. The amount of stock-based compensation expense related to the Class B Units included in each of the line items in the accompanying condensed consolidated statement of operations is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ — $ 45,618 $ — $ 170,536 Sales and marketing — 31,507 — 46,417 General and administrative — 332,797 — 841,489 Total stock based-compensation expense $ — $ 409,922 $ — $ 1,058,442 The weighted-average grant-date fair value of Class B Units granted was $2,195.16 per unit during the three and nine months ended September 30, 2021. 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 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 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 condensed 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 | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per ShareOn 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 condensed 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. 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 – Organization – Description of Organization and Reverse Recapitalization with Ascendant Digital Acquisition Corp. for more information regarding the Transactions. The following tables set forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2022 and for the period from July 22, 2021 through September 30, 2021: Three Months Ended Nine Months Ended Period from Basic earnings per share: Numerator: Net income $ 16,509 $ 73,569 $ 42,847 Less: Net income attributable to noncontrolling interests 20,521 59,875 33,167 Net income attributable to Class A common shareholders $ (4,012) $ 13,694 $ 9,680 Denominator: Weighted average shares outstanding (in thousands) 23,533 23,233 24,963 Basic earnings per share $ (0.17) $ 0.59 $ 0.39 Diluted earnings per share: Numerator: Net income $ 16,509 $ 73,569 $ 42,847 Less: Net income attributable to noncontrolling interests 20,521 59,875 33,167 Net income attributable to Class A common shareholders $ (4,012) $ 13,694 $ 9,680 Denominator: Weighted average shares outstanding (in thousands) 23,566 23,267 24,963 Diluted earnings per share $ (0.17) $ 0.59 $ 0.39 The Company’s potentially dilutive securities and their impact on the computation of diluted earnings per share is as follows: ▪ Public and Private Placement Warrants: the public and Private Placement Warrants were "out of the money" for the period from July 21, 2021 through September 30, 2021, therefore, net income per share excludes any impact of the 20,699,993 public warrants and 10,280,000 Private Placement Warrants. The warrants were out of the money during the portion of the three and nine month periods ending September 30, 2022 prior to the warrant exchange transaction in September 2022. There are no warrants outstanding as of September 30, 2022. For more details on the warrant exchange, see Note 17 – Warrant Exchange . ▪ Sponsor and MarketWise Management Member Earnout shares: the 3,051,000 Sponsor Earn Out shares and the 2,000,000 MarketWise Management Member Earn Out shares (as defined and discussed in the Original Report) held in escrow are excluded from the earnings per share computation since the earnout contingency has not been met. ▪ Restricted stock units: The basic earnings per share calculation includes the impact of vested RSUs as of September 30, 2022. The diluted earnings per share calculation includes the impact of dilutive RSUs, excludes the impact of antidilutive RSUs, and excludes certain RSUs with performance conditions, since the performance conditions have not been met as of September 30, 2022. ▪ Stock appreciation rights: The diluted earnings per share calculation excludes the impact of SARs since the effect was antidilutive. ▪ ESPP: The basic earnings per share calculation includes the impact of the shares that were issued under the ESPP as of June 30, 2022. The diluted earnings per share calculation includes the impact of dilutive shares and excludes the impact of antidilutive shares under the ESPP as of September 30, 2022. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
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 stand-alone 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 effective income tax rates for the three and nine months ended September 30, 2022 were 7.7% and 5.1%, respectively The effective income tax rates for the three and nine months ended September 30, 2021 were (0.8)% and (0.3)%, respectively. The main driver of the rates in 2021 was stock compensation expense as a result of the Transactions. The main drivers of the increase in the effective tax rate from the second quarter 2022 are the increase in the Company’s ownership of MarketWise, LLC and the discrete impacts of the shortfall related to stock compensation as well as provision to return entries. Our effective tax rate in 2022 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. As a result of the reverse capitalization in 2021, 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 in the amount of $28,981 for certain deferred tax assets that are not more likely than not to be realized. As part of the Transactions, we entered into Tax Receivable Agreements (“TRAs”) with certain shareholders that 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 September 30, 2022. As of September 30, 2022 , we had no unrecognized tax positions and believe there will be no changes to uncertain tax positions within the next 12 months. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions We have certain revenue share agreements with related parties. Accordingly, we recognized revenue from related parties of $637 and $245 for the three months ended September 30, 2022 and 2021, and $1,363 and $864 for the nine months ended September 30, 2022 and 2021, respectively. We incurred costs related to revenue share agreements with related parties which are capitalized within deferred contract acquisition costs. We capitalized $397 and $1,337 for the three months ended September 30, 2022 and 2021, and $2,167 and $8,921 for the nine months ended September 30, 2022 and 2021, 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 $186 and $347 for the three months ended September 30, 2022 and 2021, and $680 and $960 for the nine months ended September 30, 2022 and 2021, respectively. We recorded fees paid to members of our Board of Directors of $74 and $226 during the three and nine months ended September 30, 2022, respectively, and $76 for the three and nine months ended September 30, 2021 within related party expense in the accompanying condensed consolidated statement of operations. A related party also provided certain corporate functions to MarketWise and the costs of these services are charged to MarketWise. We recorded $21 and $21 for the three months ended September 30, 2022 and 2021, and $64 and $67 for the nine months ended September 30, 2022 and 2021, respectively, within related party expense in the accompanying condensed consolidated statement of operations. We held balances of $425 and $1,037 as of September 30, 2022 and December 31, 2021, respectively, 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 condensed 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 $225 and $93 in other income, net for the three months ended September 30, 2022 and 2021, and $478 and $235 for the nine months ended September 30, 2022 and 2021, respectively. Related party receivables related to these services were $478 and $358 as of September 30, 2022 and December 31, 2021, respectively. We lease offices from related parties. Lease payments made to related parties were $418 and $383 for the three months ended September 30, 2022 and 2021, and $1,337 and $1,150 for the nine months ended September 30, 2022 and 2021, respectively, and rent expense of $588 and $556 were recognized in general and administrative expenses for the three months ended September 30, 2022 and 2021, and $1,729 and $1,668 for the nine months ended September 30, 2022 and 2021, respectively, related to leases with related parties. At September 30, 2022 and December 31, 2021, ROU assets of $9,626 and $10,323 and lease liabilities of $7,295 and $7,545 are associated with leases with related parties. In April 2020 we provided a loan to a related party and recognized a related party note receivable from the unitholder of $1,148. We recognized $6 and $2 in interest income for the three months ended September 30, 2022 and 2021, and $16 and $7 for the nine months ended September 30, 2022 and 2021, respectively. The related party note receivable balance was $421 and $1,158 as of September 30, 2022 and December 31, 2021, respectively. The interest rate on the loan is variable and was 2.93% as of September 30, 2022. During October 2022, the loan was repaid in full. In July 2021, the Company’s board approved and made a discretionary, one-time, lifetime-award, non-employee bonus payment of $10,000 to the Company’s founder, who is a Class B common stockholder, which was recorded within related party expense in the condensed consolidated statement of operations. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2022 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | Variable Interest EntitiesWe 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 September 30, 2022 and December 31, 2021. 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 condensed consolidated balance sheets: As of September 30, 2022 December 31, 2021 Current assets $ 3,497 $ 3,901 Noncurrent assets 230 2 Total assets $ 3,727 $ 3,903 Current liabilities $ — $ 274 Total liabilities $ — $ 274 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow disclosures are as follows: Nine Months Ended September 30, 2022 2021 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 589 $ — Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1,731) (1,317) Operating lease right-of-use assets obtained in exchange for lease obligations (795) — Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions (50) (398) Supplemental Disclosures of Non-Cash Investing and Financing Activities: Capitalized software included in accounts payable 120 — As of September 30, 2022 2021 Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents $ 147,216 $ 137,588 Restricted cash — 500 Total $ 147,216 $ 138,088 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity The Company’s capital stock consists of (i) issued and outstanding Class A common stock with a par value of $0.0001 per share, and (ii) issued and outstanding Class B common stock with a par value of $0.0001 per share. The table set forth below reflects information about the Company’s equity, as of September 30, 2022. 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 28,822,502 28,822,502 Common stock - Class B 300,000,000 291,092,303 291,092,303 Preferred stock 100,000,000 — — Total 1,350,000,000 319,914,805 319,914,805 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. Under the terms of the MarketWise Operating Agreement, and subject to certain restrictions set forth therein, the MarketWise Members are entitled to have their MarketWise Units redeemed or exchanged for shares of our Class A common stock, at our option. If redeemed for cash at the Company’s option, such cash would have to be generated through an offering of shares to the market such that there would not be any situation where there would be a net cash obligation to the Company for such redemption. Shares of our Class B common stock held by any such redeeming or exchanging MarketWise Member will be canceled for no additional consideration on a one-for-one basis with the redeemed or exchanged MarketWise Units whenever the MarketWise Members’ MarketWise Units are so redeemed or exchanged. The MarketWise Members may exercise such redemption rights for as long as their MarketWise Units remain outstanding. For more information, see also Item 13: Certain Relationships and Related Transactions, and Director Independence — MarketWise Unit Redemption Right included in our Annual Report. 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. We did not repurchase any shares during the three months ended September 30, 2022 and we repurchased 2,484,717 shares totaling $13,054 in aggregate, including fees and commissions of $25 for the nine months ended September 30, 2022. Since the inception of the program we have repurchased 2,984,987 total shares. The maximum dollar value of shares that may yet to be purchased under the plan was $18.6 million as of September 30, 2022 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. As more fully described in Note 17 – Warrant Exchange below, during September 2022 we issued Class A common stock totaling 5,939,739 in connection with our warrant exchange transaction. |
Warrant Exchange
Warrant Exchange | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Warrant Exchange | Warrant Exchange On August 17, 2022, we commenced an exchange offer (the “Offer”) and consent solicitation (the “Consent Solicitation”) relating to our outstanding Public Warrants and Private Placement Warrants to purchase shares of Class A common stock at $11.50 per share. Each holder was offered the opportunity to receive 0.1925 shares of Class A common stock in exchange for each outstanding warrant tendered by the holder and exchanged pursuant to the Offer. Concurrently with the Offer, we solicited consents from holders of the warrants to amend the warrant agreement that governs all of the warrants (the “Warrant Agreement”) to permit us to require that each warrant outstanding upon the closing of the Offer be exchanged for 0.17325 shares of Class A common stock, which is a ratio 10% less than the exchange ratio applicable to the Offer (such amendment, the “Warrant Amendment”). On September 14, 2022, we concluded the Offer and Consent Solicitation with approximately 96% of the outstanding warrants validly tendered and not withdrawn prior to the expiration of the Offer and Consent Solicitation. Accordingly, on September 19, 2022, we issued 5,725,681 shares of Class A common stock in exchange for the 29,743,932 warrants tendered in the Offer. Additionally, we received the requisite approval of warrant holders to enter into the Warrant Amendment. Accordingly, we and Continental Stock Transfer & Trust Company entered into the Warrant Amendment, dated September 15, 2022, and we exercised our right, in accordance with the terms of the Warrant Amendment, to exchange each warrant that was outstanding upon the closing of the Offer for 0.17325 shares of Class A common stock per warrant. On September 30, 2022, we issued 214,058 shares of Class A common stock in exchange for the 1,236,061 outstanding warrants after closing of the Offering. As a result, there are no outstanding warrants as of September 30, 2022, and the warrants were delisted from trading on the Nasdaq. In connection with the warrant exchange, we paid out a de minimis amount of cash in lieu of fractional shares. We incurred $2.1 million of costs directly related to the warrant exchange, consisting primarily of dealer manager fees and professional, legal, printing, filing, regulatory, and other costs. These costs were recorded in general and administrative expenses on the condensed consolidated statements of operations as the transactions did not generate any proceeds to us and therefore the costs did not qualify to be deferred or charged to additional paid-in-capital under ASC 340-10-S99-1. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent events have been evaluated through November 3, 2022, which is the date that the financial statements were issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The accompanying condensed consolidated financial statements include the accounts of MarketWise, Inc. and its subsidiary, MarketWise, LLC, a variable interest entity (“VIE”) for which MarketWise, Inc. is deemed to be the primary beneficiary. MarketWise, Inc. is a holding company that owns a minority economic interest in MarketWise, LLC but, through its role as the managing member of MarketWise, LLC, controls all of the business and operations of MarketWise, LLC. Therefore, MarketWise, LLC and its subsidiaries are included in the Company’s consolidated financial statements. As of September 30, 2022, MarketWise, Inc. had a 9.0% ownership interest in MarketWise, LLC. The Company determined that MarketWise, LLC is the primary beneficiary of a VIE, Stansberry Pacific Research, and therefore, the assets, liabilities, and results of operations of that VIE are included in the Company’s consolidated financial statements. For more information on Stansberry Pacific Research, see Note 14 – Variable Interest Entities . The condensed consolidated financial statements have been prepared in accordance with GAAP. 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 condensed 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 condensed consolidated financial statements are not |
Unaudited Interim Financial Information | Unaudited Interim Financial InformationThe accompanying unaudited condensed consolidated financial statements and the related footnote disclosures have been prepared by us in accordance with GAAP for interim financial reporting and as required by Rule 10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements may not include all of the information and notes required by GAAP for audited financial statements. The year-end December 31, 2021 condensed consolidated balance sheet data included herein was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of items of a normal and recurring nature, necessary to present fairly our financial position as of September 30, 2022, the results of operations, comprehensive income (loss), stockholders’ deficit / members’ deficit, and cash flows for the three and nine months ended September 30, 2022 and 2021. The results of operations for the three and nine months ended September 30, 2022 and 2021 are not necessarily indicative of the results to be expected for the full year. The information contained herein should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC. Management considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through the date of issuance of these financial statements. |
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, determination of standalone selling prices, estimated life of membership 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. |
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. 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 September 30, 2022 and December 31, 2021. |
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 condensed 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. As of September 30, 2022, MarketWise has reserved a total of 32,938,082 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. See also Note 10 – Stock-Based Compensation . 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 made to employees 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. 2021 ESPP As a result of the Transactions, we adopted the 2021 Employee Stock Purchase Plan (“ESPP”) effective on January 1, 2022. Under the ESPP, the Company authorizes the grant of the right to purchase shares of Class A common stock by employees who qualify under the ESPP. As of September 30, 2022, The Company has reserved for issuance a total of 6,557,847 shares of Class A common stock for the ESPP. The current offering period began on July 1, 2022 and ends on December 31, 2022. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of the Company’s Class A common stock on specified dates during such offerings. Under the ESPP, the Company has determined the offering period to occur in six month intervals, with the purchase occurring as of the last trading day of each offering period. On each purchase date, eligible employees will purchase the shares at a price per share equal to 85% of the lesser of (1) the fair market value of the Company’s Class A common stock on the first trading day of the offering period, or (2) the fair market value of the Company’s Class A common stock on the purchase date, as defined in the ESPP. The fair value of the ESPP is determined using the Monte Carlo model as of the beginning of each offering period and is expensed ratably over the six month offering period. 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 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 occurred. 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 condensed 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. |
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-Transactions period from January 1, 2021 through July 21, 2021 and to the post-Transactions period from July 22, 2021 through December 31, 2021. Net income (loss) in the pre-Transactions period was attributable to consolidated MarketWise, LLC and its respective noncontrolling interests and in the post-Transactions period was attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. Net income for the three and nine months ended September 30, 2022 was fully in the post-Transactions period and therefore attributable to consolidated MarketWise, Inc. and its respective noncontrolling interests. As of September 30, 2022, MarketWise, Inc.’s controlling interest in MarketWise, LLC was 9.0% and the noncontrolling interest was 91.0%. For the three months ended September 30, 2022 net income attributable to controlling interests included a $3,868 loss on warrant liabilities and a $1,383 tax provision, and for the nine months ended September 30, 2022 net income attributable to controlling interests included a $14,931 gain on warrant liabilities and a $3,945 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 during the period. 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. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements In October 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-08: Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this ASU adds contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations. As a result, acquiring entities are required to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, instead of fair value. We have early adopted and applied this ASU to the Winans Media transaction (as defined herein). See Note 4 – Acquisitions for additional disclosure on the Winans Media transaction. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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. Three Months Ended September 30, 2022 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 118,990 $ — $ — $ — $ 118,990 Transferred at a point in time — 169 637 138 944 Total $ 118,990 $ 169 $ 637 $ 138 $ 119,934 Three Months Ended September 30, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 139,831 $ — $ — $ — $ 139,831 Transferred at a point in time — 423 245 168 836 Total $ 139,831 $ 423 $ 245 $ 168 $ 140,667 Nine Months Ended September 30, 2022 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 382,321 $ — $ — $ — $ 382,321 Transferred at a point in time — 606 1,363 456 2,425 Total $ 382,321 $ 606 $ 1,363 $ 456 $ 384,746 Nine Months Ended September 30, 2021 Subscriptions Advertising Revenue Share (Related Party) Revenue Share (Third-party) Total Timing of transfer: Transferred over time $ 398,362 $ — $ — $ — $ 398,362 Transferred at a point in time — 1,968 864 1,317 4,149 Total $ 398,362 $ 1,968 $ 864 $ 1,317 $ 402,511 Revenue recognition by subscription type was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Membership subscriptions $ 46,915 $ 50,862 $ 148,219 $ 140,893 Term subscriptions 72,075 88,970 234,102 257,470 Non-subscription revenue 944 835 2,425 4,148 Total $ 119,934 $ 140,667 $ 384,746 $ 402,511 Net revenue by principal geographic areas was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 United States $ 119,707 $ 139,998 $ 384,419 $ 400,871 International 227 669 327 1,640 Total $ 119,934 $ 140,667 $ 384,746 $ 402,511 |
Summary of Contract Balances | Accounts receivable, deferred revenue and obligation for refunds are as follows: As of September 30, 2022 December 31, 2021 Contract balances Accounts receivable $ 4,564 $ 7,805 Obligations for refunds $ 4,998 $ 5,590 Deferred revenue – current $ 313,806 $ 311,543 Deferred revenue – non-current $ 371,921 $ 393,043 |
Capitalized Costs Associated with Contracts With Customers | The following table presents the opening and closing balances of our capitalized costs associated with contracts with customers: Balance at January 1, 2022 $ 203,071 Royalties and sales commissions – additions 27,758 Revenue share and cost per acquisition fees – additions 43,326 Amortization of capitalized costs (71,570) Balance at September 30, 2022 $ 202,585 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [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: Right of use asset $ 50 Goodwill 8,019 Tradenames 709 Customer relationships 9,350 Total assets acquired 18,128 Deferred revenue, current (2,648) Operating lease liabilities, current (22) Operating lease liabilities, noncurrent (28) Deferred revenue, noncurrent (2,660) Liabilities assumed (5,358) Net assets acquired $ 12,770 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) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of goodwill are as follows: Balance at December 31, 2021 $ 23,288 Acquisition – Winans Media transaction 8,019 Balance at September 30, 2022 $ 31,307 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following as of the dates indicated: September 30, 2022 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 21,718 $ (9,223) $ 12,495 6.5 Tradenames 4,287 (2,145) 2,142 6.3 Capitalized software development costs 3,002 (1,712) 1,290 2.2 Finite-lived intangible assets, net 29,007 (13,080) 15,927 Indefinite-lived intangible assets: Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 30,094 $ (13,080) $ 17,014 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: 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 |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following as of the dates indicated: September 30, 2022 Cost Accumulated Amortization Net Book Value Weighted-Average Remaining Useful Life (in years) Finite-lived intangible assets: Customer relationships $ 21,718 $ (9,223) $ 12,495 6.5 Tradenames 4,287 (2,145) 2,142 6.3 Capitalized software development costs 3,002 (1,712) 1,290 2.2 Finite-lived intangible assets, net 29,007 (13,080) 15,927 Indefinite-lived intangible assets: Internet domain names 1,087 — 1,087 Indefinite-lived intangible assets, net 1,087 — 1,087 Intangible assets, net $ 30,094 $ (13,080) $ 17,014 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: 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 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of September 30, 2022, the total expected future amortization expense for finite-lived intangible assets is as follows: Remainder of 2022 $ 891 2023 3,330 2024 2,843 2025 2,327 2026 2,066 Thereafter 4,470 Finite-lived intangible assets, net $ 15,927 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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: September 30, 2022 Level 1 Level 2 Level 3 Aggregate Fair Value Assets: Money market funds $ 38,049 $ — $ — $ 38,049 Total assets 38,049 — — 38,049 Liabilities: Derivative liabilities, noncurrent — — 1,320 1,320 Total liabilities $ — $ — $ 1,320 $ 1,320 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 |
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 September 30, 2022 Volatility 36.80 % Discount rate 21.00 % Credit spread 0.10 % Risk-free rate 3.50 % |
Schedule of Changes in Fair Value of Liabilities | The following table summarizes the change in fair value of the liabilities during the nine months ended September 30, 2022 and 2021: Balance at January 1, 2022 $ 31,347 Change in fair value of derivative instruments (15,626) Warrants exchanged for Class A common stock (see Note 17 – Warrant Exchange ) (14,401) Balance at September 30, 2022 $ 1,320 Balance at January 1, 2021 $ 597,578 Incremental Class B Units 206,914 Establishment of derivative warrant liabilities on July 21, 2021 (date of the Transactions) 45,021 Change in fair value of derivative instruments (11,543) 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 at September 30, 2021 $ 37,821 |
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 three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ — $ 24,028 $ — $ 136,417 Sales and marketing — 2,607 — 10,870 General and administrative — 102,911 — 580,792 Total change in fair value of Class B Units $ — $ 129,546 $ — $ 728,079 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 December 31, 2021 Furniture and fixtures 5 years $ 960 $ 960 Computers, software and equipment 3 years 1,458 1,423 Leasehold improvements Shorter of estimated useful life or remaining term of lease 1,278 1,278 3,696 3,661 Less: Accumulated depreciation and amortization (2,733) (2,473) Total property and equipment, net $ 963 $ 1,188 |
Schedule of Accrued Expenses | Accrued expenses consist of the following: As of September 30, 2022 December 31, 2021 Commission and variable compensation $ 19,637 $ 22,155 Payroll and benefits 3,677 5,164 Other accrued expenses 15,988 19,134 Total accrued expenses $ 39,302 $ 46,453 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gains (Losses) | The following table presents information on the location and amounts of derivative instruments gains and losses: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Derivatives Not Designated as Location of Gain (Loss) Recognized in Income Statement Warrants Other income, net $ (3,868) $ 9,952 $ 14,931 $ 9,952 Phantom Interests in Net Income General and administrative (160) (250) 695 2,138 Option General and administrative — 115 — (547) Total $ (4,028) $ 9,817 $ 15,626 $ 11,543 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 total stock-based compensation expenses as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Cost of revenue $ 438 $ 46,396 $ 1,496 $ 171,312 Sales and marketing 514 32,606 1,655 47,516 General and administrative 1,201 333,563 4,039 842,257 Total stock based-compensation expense $ 2,153 $ 412,565 $ 7,190 $ 1,061,085 Total stock-based compensation expense for the three and nine months ended September 30, 2022 includes expenses related to our 2021 Incentive Award Plan and our ESPP, while the total stock-based compensation expense for the three and nine months ended September 30, 2021 includes the vesting of Class B units, the change in fair value of Class B liability awards, profits distributions to Class B unitholders and our 2021 Incentive Award Plan as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 2021 Incentive Award Plan $ 2,086 $ 2,643 $ 6,828 $ 2,643 Employee Stock Purchase Plan 67 — 362 — Vested Class B units and change in fair value of Class B liability awards — 292,580 — 934,993 Profits distributions to Class B unitholders — 117,342 — 123,449 Total stock-based compensation expense $ 2,153 $ 412,565 $ 7,190 $ 1,061,085 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of revenue $ — $ 45,618 $ — $ 170,536 Sales and marketing — 31,507 — 46,417 General and administrative — 332,797 — 841,489 Total stock based-compensation expense $ — $ 409,922 $ — $ 1,058,442 |
Summary of Activities of RSUs | The activities of the RSUs and SARs and the related weighted average grant-date fair value of the respective share classes, including granted, exercised and forfeited, from January 1, 2022 to September 30, 2022 are summarized as follows: RSUs SARs Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Outstanding at January 1, 2022 2,334,490 $ 8.30 1,935,131 $ 4.05 Granted 662,689 2.89 — — Exercised or vested (660,363) 8.17 — — Forfeited (102,188) 5.91 (103,120) 4.05 Outstanding at September 30, 2022 2,234,628 $ 6.69 1,832,011 $ 4.05 |
Summary of Activities of SARs | The activities of the RSUs and SARs and the related weighted average grant-date fair value of the respective share classes, including granted, exercised and forfeited, from January 1, 2022 to September 30, 2022 are summarized as follows: RSUs SARs Units Weighted-Average Grant Date Fair Value Units Weighted-Average Grant Date Fair Value Outstanding at January 1, 2022 2,334,490 $ 8.30 1,935,131 $ 4.05 Granted 662,689 2.89 — — Exercised or vested (660,363) 8.17 — — Forfeited (102,188) 5.91 (103,120) 4.05 Outstanding at September 30, 2022 2,234,628 $ 6.69 1,832,011 $ 4.05 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following tables set forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2022 and for the period from July 22, 2021 through September 30, 2021: Three Months Ended Nine Months Ended Period from Basic earnings per share: Numerator: Net income $ 16,509 $ 73,569 $ 42,847 Less: Net income attributable to noncontrolling interests 20,521 59,875 33,167 Net income attributable to Class A common shareholders $ (4,012) $ 13,694 $ 9,680 Denominator: Weighted average shares outstanding (in thousands) 23,533 23,233 24,963 Basic earnings per share $ (0.17) $ 0.59 $ 0.39 Diluted earnings per share: Numerator: Net income $ 16,509 $ 73,569 $ 42,847 Less: Net income attributable to noncontrolling interests 20,521 59,875 33,167 Net income attributable to Class A common shareholders $ (4,012) $ 13,694 $ 9,680 Denominator: Weighted average shares outstanding (in thousands) 23,566 23,267 24,963 Diluted earnings per share $ (0.17) $ 0.59 $ 0.39 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The following represents financial information for the consolidated VIE included in the condensed consolidated balance sheets: As of September 30, 2022 December 31, 2021 Current assets $ 3,497 $ 3,901 Noncurrent assets 230 2 Total assets $ 3,727 $ 3,903 Current liabilities $ — $ 274 Total liabilities $ — $ 274 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Cash Flow Disclosures | Supplemental cash flow disclosures are as follows: Nine Months Ended September 30, 2022 2021 Supplemental Disclosures of Cash Flow Information: Cash paid for interest $ 589 $ — Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases (1,731) (1,317) Operating lease right-of-use assets obtained in exchange for lease obligations (795) — Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions (50) (398) Supplemental Disclosures of Non-Cash Investing and Financing Activities: Capitalized software included in accounts payable 120 — As of September 30, 2022 2021 Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents $ 147,216 $ 137,588 Restricted cash — 500 Total $ 147,216 $ 138,088 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Stock by Class | The table set forth below reflects information about the Company’s equity, as of September 30, 2022. 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 28,822,502 28,822,502 Common stock - Class B 300,000,000 291,092,303 291,092,303 Preferred stock 100,000,000 — — Total 1,350,000,000 319,914,805 319,914,805 |
Organization (Details)
Organization (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Jul. 21, 2021 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 $ / shares shares | Dec. 31, 2021 $ / shares shares | |
Subsidiary, Sale of Stock [Line Items] | ||||
Recapitalization exchange ratio | 1 | |||
Number of shares called by each warrant (in shares) | 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 (USD per share) | $ / shares | $ 10 | |||
Consideration received | $ | $ 150,000 | |||
Warrants outstanding (in shares) | 30,979,993 | 0 | ||
Reverse Recapitalization cash proceeds | $ | $ 113,600 | |||
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 warrant liabilities | $ | 45,000 | |||
Establishment of deferred taxes | $ | $ 10,100 | $ 10,056 | ||
Private Warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Warrants outstanding (in shares) | 10,280,000 | |||
Sponsor | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Sponsor Earn Out Shares (in shares) | 3,051,000 | |||
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 | $ 0.0001 | |
Common stock, outstanding (in shares) | 28,003,096 | 28,822,502 | 24,718,402 | |
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 | $ 0.0001 | |
Stock issued during reverse recapitalization (in shares) | 291,092,303 | |||
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 | 291,092,303 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jan. 01, 2022 shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment shares | Sep. 30, 2021 USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Gain on derivative warrant liabilities | $ | $ 3,868 | $ 14,931 | |||
Income tax expense | $ | $ 1,383 | $ 3,085 | $ 3,945 | $ 3,085 | |
Common Stock - Class B | |||||
Significant Accounting Policies [Line Items] | |||||
Offering period | 6 months | ||||
Vesting period | 8 years | ||||
Exercise of put option, period from issuance date | 25 months | ||||
Employee Stock Purchase Plan | |||||
Significant Accounting Policies [Line Items] | |||||
Common stock reserved for issuance (in shares) | 6,557,847 | 6,557,847 | 6,557,847 | ||
Purchase price of common stock, percent of fair market value | 85% | ||||
2021 Incentive Award Plan | |||||
Significant Accounting Policies [Line Items] | |||||
Common stock reserved for issuance (in shares) | 32,938,082 | 32,938,082 | |||
Maximum number of shares that may be issued (in shares) | 32,045,000 | 32,045,000 | |||
Marketwise, LLC | |||||
Significant Accounting Policies [Line Items] | |||||
Ownership interest, controlling | 9% | 9% | |||
Ownership interest, noncontrolling | 91% | 91% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 119,297 | $ 140,422 | $ 383,383 | $ 401,647 |
Related party revenue | 637 | 245 | 1,363 | 864 |
Total net revenue | 119,934 | 140,667 | 384,746 | 402,511 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 119,707 | 139,998 | 384,419 | 400,871 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 227 | 669 | 327 | 1,640 |
Membership subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 46,915 | 50,862 | 148,219 | 140,893 |
Term subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 72,075 | 88,970 | 234,102 | 257,470 |
Non-subscription revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenue | 944 | 835 | 2,425 | 4,148 |
Transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Related party revenue | 0 | 0 | 0 | 0 |
Total net revenue | 118,990 | 139,831 | 382,321 | 398,362 |
Transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Related party revenue | 637 | 245 | 1,363 | 864 |
Total net revenue | 944 | 836 | 2,425 | 4,149 |
Subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 118,990 | 139,831 | 382,321 | 398,362 |
Subscriptions | Transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 118,990 | 139,831 | 382,321 | 398,362 |
Subscriptions | Transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Advertising | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 169 | 423 | 606 | 1,968 |
Advertising | Transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Advertising | Transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 169 | 423 | 606 | 1,968 |
Revenue Share (Third-party) | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 138 | 168 | 456 | 1,317 |
Revenue Share (Third-party) | Transferred over time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 0 | 0 | 0 | 0 |
Revenue Share (Third-party) | Transferred at a point in time | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 138 | $ 168 | $ 456 | $ 1,317 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Contract Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 4,564 | $ 7,805 |
Obligations for refunds | 4,998 | 5,590 |
Deferred revenue – current | 313,806 | 311,543 |
Deferred revenue – non-current | $ 371,921 | $ 393,043 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |||||
Contract liability, revenue recognized | $ 72,852,000 | $ 63,960,000 | $ 266,246,000 | $ 240,638,000 | |
Accounts receivable | 4,564,000 | 4,564,000 | $ 7,805,000 | ||
Impairment on capitalized costs | 0 | $ 0 | 0 | $ 0 | |
Remaining performance obligation | $ 690,725,000 | $ 690,725,000 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | |||||
Revenue from Contract with Customer [Abstract] | |||||
Remaining performance obligation, percentage | 46% | 46% | |||
Disaggregation of Revenue [Line Items] | |||||
Remaining performance obligation, timing of satisfaction | 12 months | 12 months |
Revenue Recognition - Capitaliz
Revenue Recognition - Capitalized Service Contract Costs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Capitalized Contract Cost [Roll Forward] | |
Capitalized costs, beginning balance | $ 203,071 |
Royalties and sales commissions – additions | 27,758 |
Revenue share and cost per acquisition fees – additions | 43,326 |
Amortization of capitalized costs | (71,570) |
Capitalized costs, ending balance | $ 202,585 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jan. 21, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Cash paid for acquisitions, net of cash acquired | $ 12,770 | $ 7,139 | |||
Amortization of intangible assets | $ 760 | $ 513 | $ 1,793 | 1,736 | |
Winans Media Holdings LLC | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 100% | 100% | |||
Cash paid for acquisitions, net of cash acquired | $ 12,770 | ||||
Amortization of intangible assets | $ 217 | ||||
Winans Media Holdings LLC | Tradenames | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life (years) | 9 years | ||||
Winans Media Holdings LLC | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Acquired finite-lived intangible assets, weighted average useful life (years) | 6 years 6 months | ||||
Chaikin Holdings LLC. | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests acquired | 90% | 3.70% | 3.70% | ||
Cash paid for acquisitions, net of cash acquired | $ 7,139 | ||||
Amortization of intangible assets | $ 174 | $ 115 | $ 515 | $ 477 | |
Business combination, step acquisition, equity interest in acquiree, including subsequent acquisition, percentage | 93.70% | 93.70% | |||
Business combination, consideration transferred | $ 8,100 | $ 297 | |||
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 |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed - Winans Media Holdings LLC (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | ||
Goodwill | $ 31,307 | $ 23,288 |
Winans Media Holdings LLC | ||
Business Acquisition [Line Items] | ||
Right of use asset | 50 | |
Goodwill | 8,019 | |
Total assets acquired | 18,128 | |
Deferred revenue, current | (2,648) | |
Operating lease liabilities, current | (22) | |
Operating lease liabilities, noncurrent | (28) | |
Deferred revenue, noncurrent | (2,660) | |
Liabilities assumed | (5,358) | |
Net assets acquired | 12,770 | |
Winans Media Holdings LLC | Tradenames | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles | 709 | |
Winans Media Holdings LLC | Customer relationships | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles | $ 9,350 |
Acquisitions - Fair Value of _2
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed - Chaikin Holdings LLC (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 21, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 31,307 | $ 23,288 | |
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 | 8,100 | $ 297 | |
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. | Software | |||
Business Acquisition [Line Items] | |||
Finite-lived intangibles | $ 247 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 23,288 |
Acquisition – Winans Media transaction | 8,019 |
Goodwill, ending balance | $ 31,307 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-lived intangible assets: | ||
Cost | $ 29,007 | $ 18,812 |
Accumulated Amortization | (13,080) | (11,287) |
Net Book Value | 15,927 | 7,525 |
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 1,087 | 1,087 |
Cost | 30,094 | 19,899 |
Intangible assets, net | 17,014 | 8,612 |
Internet domain names | ||
Indefinite-lived intangible assets: | ||
Indefinite-lived intangible assets | 1,087 | 1,087 |
Customer relationships | ||
Finite-lived intangible assets: | ||
Cost | 21,718 | 12,368 |
Accumulated Amortization | (9,223) | (8,105) |
Net Book Value | $ 12,495 | $ 4,263 |
Weighted-Average Remaining Useful Life (in years) | 6 years 6 months | 4 years 4 months 24 days |
Tradenames | ||
Finite-lived intangible assets: | ||
Cost | $ 4,287 | $ 3,578 |
Accumulated Amortization | (2,145) | (1,838) |
Net Book Value | $ 2,142 | $ 1,740 |
Weighted-Average Remaining Useful Life (in years) | 6 years 3 months 18 days | 5 years 3 months 18 days |
Capitalized software development costs | ||
Finite-lived intangible assets: | ||
Cost | $ 3,002 | $ 2,866 |
Accumulated Amortization | (1,712) | (1,344) |
Net Book Value | $ 1,290 | $ 1,522 |
Weighted-Average Remaining Useful Life (in years) | 2 years 2 months 12 days | 3 years 1 month 6 days |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 760 | $ 513 | $ 1,793 | $ 1,736 |
Amortization of capitalized software development costs | 133 | $ 103 | 368 | 306 |
Additions to capitalized software development costs | $ 55 | $ 136 | 347 | |
Acquired software development costs | $ 247 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2022 | $ 891 | |
2023 | 3,330 | |
2024 | 2,843 | |
2025 | 2,327 | |
2026 | 2,066 | |
Thereafter | 4,470 | |
Net Book Value | $ 15,927 | $ 7,525 |
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 | Sep. 30, 2022 | Dec. 31, 2021 |
Liabilities: | ||
Derivative liabilities, noncurrent | $ 1,320 | $ 2,015 |
Warrant liabilities | 0 | 29,332 |
Recurring | ||
Assets: | ||
Total assets | 38,049 | 25,001 |
Liabilities: | ||
Total liabilities | 1,320 | 31,347 |
Recurring | Public Warrants | ||
Liabilities: | ||
Warrant liabilities | 19,599 | |
Recurring | Private Warrants | ||
Liabilities: | ||
Warrant liabilities | 9,733 | |
Recurring | Other | ||
Liabilities: | ||
Derivative liabilities, noncurrent | 1,320 | 2,015 |
Recurring | Money market funds | ||
Assets: | ||
Money market funds | 38,049 | 25,001 |
Level 1 | Recurring | ||
Assets: | ||
Total assets | 38,049 | 25,001 |
Liabilities: | ||
Total liabilities | 0 | 19,599 |
Level 1 | Recurring | Public Warrants | ||
Liabilities: | ||
Warrant liabilities | 19,599 | |
Level 1 | Recurring | Private Warrants | ||
Liabilities: | ||
Warrant liabilities | 0 | |
Level 1 | Recurring | Other | ||
Liabilities: | ||
Derivative liabilities, noncurrent | 0 | 0 |
Level 1 | Recurring | Money market funds | ||
Assets: | ||
Money market funds | 38,049 | 25,001 |
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: | ||
Derivative liabilities, noncurrent | 0 | 0 |
Level 2 | Recurring | Money market funds | ||
Assets: | ||
Money market funds | 0 | 0 |
Level 3 | Recurring | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Total liabilities | 1,320 | 11,748 |
Level 3 | Recurring | Public Warrants | ||
Liabilities: | ||
Warrant liabilities | 0 | |
Level 3 | Recurring | Private Warrants | ||
Liabilities: | ||
Warrant liabilities | 9,733 | |
Level 3 | Recurring | Other | ||
Liabilities: | ||
Derivative liabilities, noncurrent | 1,320 | 2,015 |
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) | Sep. 30, 2022 |
Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.3680 |
Discount rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.2100 |
Credit spread | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.0010 |
Risk-free rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants, measurement input | 0.0350 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Changes in Fair Value of Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 31,347 | $ 597,578 |
Warrants exchanged for Class A common stock (see Note 17 – Warrant Exchange) | (14,401) | |
Incremental Class B Units | 206,914 | |
Establishment of derivative 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 | 1,320 | 37,821 |
Other | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Change in fair value | $ (15,626) | (11,543) |
Class B Units | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Change in fair value | $ 728,079 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Fair Value Changes by Income Statement Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Total change in fair value of Class B Units | $ 0 | $ (728,079) | ||
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 | $ 0 | $ 129,546 | 0 | 728,079 |
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 | 0 | 24,028 | 0 | 136,417 |
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 | 0 | 2,607 | 0 | 10,870 |
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 | $ 0 | $ 102,911 | $ 0 | $ 580,792 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cloud computing implementation costs capitalized during the period | $ 360 | $ 21 | $ 1,392 | $ 114 |
Capitalized cloud computing implementation costs amortization expense | 133 | 145 | ||
Depreciation expense | $ 76 | $ 116 | $ 260 | $ 340 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,696 | $ 3,661 |
Less: Accumulated depreciation and amortization | (2,733) | (2,473) |
Total property and equipment, net | $ 963 | 1,188 |
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 | $ 1,458 | 1,423 |
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 | Sep. 30, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Commission and variable compensation | $ 19,637 | $ 22,155 |
Payroll and benefits | 3,677 | 5,164 |
Other accrued expenses | 15,988 | 19,134 |
Total accrued expenses | $ 39,302 | $ 46,453 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Schedule of Location and Amounts and Derivative Instruments Gains and Losses (Details) - Derivatives Not Designated as Hedging Instruments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative [Line Items] | ||||
Derivative gains (losses) | $ (4,028) | $ 9,817 | $ 15,626 | $ 11,543 |
Warrants | ||||
Derivative [Line Items] | ||||
Derivative gains (losses) | (3,868) | 9,952 | 14,931 | 9,952 |
Phantom Interests in Net Income | ||||
Derivative [Line Items] | ||||
Derivative gains (losses) | (160) | (250) | 695 | 2,138 |
Option | ||||
Derivative [Line Items] | ||||
Derivative gains (losses) | $ 0 | $ 115 | $ 0 | $ (547) |
Debt (Details)
Debt (Details) | Oct. 29, 2021 USD ($) |
Line of Credit | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 150,000,000 |
Additional potential increase (up to) | $ 65,000,000 |
Debt instrument, term | 3 years |
Letter of Credit | |
Line of Credit Facility [Line Items] | |
Maximum borrowing capacity | $ 5,000,000 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense by Statement of Operations Line Item (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,153 | $ 412,565 | $ 7,190 | $ 1,061,085 |
Class B Share Based Compensation Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0 | 409,922 | 0 | 1,058,442 |
Cost of revenue | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 438 | 46,396 | 1,496 | 171,312 |
Cost of revenue | Class B Share Based Compensation Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0 | 45,618 | 0 | 170,536 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 514 | 32,606 | 1,655 | 47,516 |
Sales and marketing | Class B Share Based Compensation Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0 | 31,507 | 0 | 46,417 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,201 | 333,563 | 4,039 | 842,257 |
General and administrative | Class B Share Based Compensation Expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 332,797 | $ 0 | $ 841,489 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock Based Compensation Expense by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,153 | $ 412,565 | $ 7,190 | $ 1,061,085 |
2021 Incentive Award Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,086 | 2,643 | 6,828 | 2,643 |
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 67 | 0 | 362 | 0 |
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 | 0 | 292,580 | 0 | 934,993 |
Profits distributions to Class B unitholders | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 0 | $ 117,342 | $ 0 | $ 123,449 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jun. 02, 2022 | May 16, 2022 | Jan. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ 2,153 | $ 412,565 | $ 7,190 | $ 1,061,085 | |||
Class B Share Based Compensation Expense | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | 0 | 409,922 | $ 0 | 1,058,442 | |||
Common Stock - Class B | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 8 years | ||||||
Total stock-based compensation expense | $ 117,342 | $ 123,449 | |||||
Offering period | 6 months | ||||||
Weighted-average grant-date fair value of awards granted (in USD per share) | $ 2,195.16 | $ 2,195.16 | |||||
RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted stock (in shares) | 662,689 | ||||||
Weighted-average grant-date fair value of awards granted (in USD per share) | $ 2.89 | ||||||
RSU and SAR | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Total stock-based compensation expense | 2,086 | $ 6,828 | |||||
SARs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted stock (in shares) | 0 | ||||||
Remaining contractual term | 8 years 9 months | ||||||
Weighted-average grant-date fair value of awards granted (in USD per share) | $ 0 | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total stock-based compensation expense | $ 67 | $ 362 | |||||
Common stock reserved for issuance (in shares) | 6,557,847 | 6,557,847 | 6,557,847 | ||||
Purchase price of common stock, percent of fair market value | 85% | ||||||
Amount withheld on behalf of employees | $ (224) | $ (224) | |||||
2021 Incentive Award Plan | RSUs | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted stock (in shares) | 289,555 | 373,134 |
Stock-Based Compensation - Acti
Stock-Based Compensation - Activities of RSUs and SARs (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
RSUs | |
Shares | |
Outstanding (in shares) | shares | 2,334,490 |
Granted (in shares) | shares | 662,689 |
Exercised or vested (in shares) | shares | (660,363) |
Forfeited (in shares) | shares | (102,188) |
Outstanding (in shares) | shares | 2,234,628 |
Weighted-Average Grant Date Fair Value | |
Outstanding (in USD per share) | $ / shares | $ 8.30 |
Granted (in USD per share) | $ / shares | 2.89 |
Exercised or vested (in USD per share) | $ / shares | 8.17 |
Forfeited (in USD per share) | $ / shares | 5.91 |
Outstanding (in USD per share) | $ / shares | $ 6.69 |
SARs | |
Shares | |
Outstanding (in shares) | shares | 1,935,131 |
Granted (in shares) | shares | 0 |
Exercised or vested (in shares) | shares | 0 |
Forfeited (in shares) | shares | (103,120) |
Outstanding (in shares) | shares | 1,832,011 |
Weighted-Average Grant Date Fair Value | |
Outstanding (in USD per share) | $ / shares | $ 4.05 |
Granted (in USD per share) | $ / shares | 0 |
Exercised or vested (in USD per share) | $ / shares | 0 |
Forfeited (in USD per share) | $ / shares | 4.05 |
Outstanding (in USD per share) | $ / shares | $ 4.05 |
Earnings Per Share - Computatio
Earnings Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | 9 Months Ended | ||
Jul. 21, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Jul. 21, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||||||
Net income | $ (409,132) | $ 42,847 | $ 16,509 | $ (366,285) | $ (623,479) | $ (1,032,611) | $ 73,569 | $ (989,764) |
Less: Net income attributable to noncontrolling interests | $ 81 | 33,167 | 20,521 | $ 33,248 | $ (1,050) | 59,875 | $ 32,117 | |
Net income attributable to Class A common shareholders | 9,680 | (4,012) | 13,694 | |||||
Net income attributable to Class A common shareholders | $ 9,680 | $ (4,012) | $ 13,694 | |||||
Denominator: | ||||||||
Weighted average shares outstanding (in shares) | 24,963 | 23,533 | 23,233 | |||||
Basic earnings per share (USD per share) | $ 0.39 | $ (0.17) | $ 0.59 | |||||
Weighted average shares outstanding (in shares) | 24,963 | 23,566 | 23,267 | |||||
Diluted earnings per share (USD per share) | $ 0.39 | $ (0.17) | $ 0.59 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 2 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2022 | Jul. 21, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Warrants outstanding (in shares) | 0 | 30,979,993 | |
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 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 7.70% | (0.80%) | 5.10% | (0.30%) |
Valuation allowance | $ 28,981,000 | $ 28,981,000 | ||
Unrecognized tax positions | 0 | 0 | ||
Change to uncertain tax positions within the next 12 months | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Apr. 30, 2020 | |
Related Party Transaction [Line Items] | |||||||
Related party revenue | $ 637 | $ 245 | $ 1,363 | $ 864 | |||
Related party payables, net | 261 | 261 | $ 970 | ||||
Related party receivables | 927 | 927 | 496 | ||||
Operating cash flows from operating leases | 1,731 | 1,317 | |||||
Operating lease right-of-use assets | 9,979 | 9,979 | 10,901 | ||||
Related Party Owner | |||||||
Related Party Transaction [Line Items] | |||||||
Operating cash flows from operating leases | 418 | 383 | 1,337 | 1,150 | |||
Operating lease, expense | 588 | 556 | 1,729 | 1,668 | |||
Operating lease right-of-use assets | 9,626 | 9,626 | 10,323 | ||||
Total lease liabilities | 7,295 | 7,295 | 7,545 | ||||
Revenue Share Expenses | Related Party Owner And Affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 397 | 1,337 | 2,167 | 8,921 | |||
Call Center Support And Other Services Expense | Related Party Owner And Affiliates | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 186 | 347 | 680 | 960 | |||
Fees For Board Of Directors | Board of Directors | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 74 | 76 | 226 | 76 | |||
Corporate Functions | Related Party Owner | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | 21 | 21 | 64 | 67 | |||
Related party payables, net | 425 | 425 | 1,037 | ||||
Fees And Accounting And Marketing Services Revenue | Class B Unitholders | |||||||
Related Party Transaction [Line Items] | |||||||
Related party revenue | 225 | 93 | 478 | 235 | |||
Related party receivables | 478 | 478 | 358 | ||||
Class A Unitholder Note Issued April 2020 | Class A Unitholders | |||||||
Related Party Transaction [Line Items] | |||||||
Notes receivable | 421 | 421 | $ 1,158 | $ 1,148 | |||
Interest income | $ 6 | $ 2 | $ 16 | $ 7 | |||
Interest rate | 2.93% | ||||||
One-Time Bonus Payment | Founder | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses from transactions with related party | $ 10,000 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Current assets | $ 264,600 | $ 246,389 |
Total assets | 435,187 | 421,554 |
Current liabilities | 383,719 | 395,493 |
Total liabilities | 763,210 | 826,816 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Current assets | 3,497 | 3,901 |
Noncurrent assets | 230 | 2 |
Total assets | 3,727 | 3,903 |
Current liabilities | 0 | 274 |
Total liabilities | $ 0 | $ 274 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for interest | $ 589 | $ 0 | ||
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Operating cash flows from operating leases | (1,731) | (1,317) | ||
Operating lease right-of-use assets obtained in exchange for lease obligations | (795) | 0 | ||
Operating lease right-of-use assets obtained in exchange for lease obligations from acquisitions | (50) | (398) | ||
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||||
Capitalized software included in accounts payable | 120 | 0 | ||
Reconciliation of Cash and Cash Equivalents and Restricted Cash: | ||||
Cash and cash equivalents | 147,216 | 137,588 | $ 139,078 | |
Restricted cash | 0 | 500 | ||
Total | $ 147,216 | $ 138,088 | $ 139,578 | $ 114,927 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) | 3 Months Ended | 9 Months Ended | 11 Months Ended | ||||
Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2022 USD ($) vote $ / shares shares | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | Nov. 04, 2021 USD ($) | Jul. 21, 2021 $ / shares | |
Class of Stock [Line Items] | |||||||
Common stock, number of votes per share | vote | 1 | ||||||
Number of shares of Class B common stock canceled per common unit redeemed Or exchanged (in shares) | 1 | 1 | 1 | ||||
Share repurchase program, amount authorized | $ | $ 35,000,000 | ||||||
Shares repurchased (in shares) | 0 | 2,484,717 | 2,984,987 | ||||
Repurchases of stock | $ | $ 13,054,000 | $ 0 | |||||
Fees and commissions | $ | 25,000 | ||||||
Aggregate value of shares to be repurchased | $ | $ 18,600,000 | $ 18,600,000 | $ 18,600,000 | ||||
Number of common units redeemed for each share of Class A common stock repurchased (in shares) | 1 | 1 | 1 | ||||
Sponsor Earn Out Shares | |||||||
Class of Stock [Line Items] | |||||||
Earn Out shares (in shares) | 3,051,000 | 3,051,000 | 3,051,000 | ||||
Management Earn Out Shares | |||||||
Class of Stock [Line Items] | |||||||
Earn Out shares (in shares) | 2,000,000 | 2,000,000 | 2,000,000 | ||||
Common Stock - Class A | |||||||
Class of Stock [Line Items] | |||||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common Stock - Class A | Warrant Exchange Offer, Total | |||||||
Class of Stock [Line Items] | |||||||
Warrants exercised (in shares) | 5,939,739 | 5,939,739 | 5,939,739 | ||||
Common Stock - Class B | |||||||
Class of Stock [Line Items] | |||||||
Common stock, par value (USD per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Shareholders' Equity - Stock by
Shareholders' Equity - Stock by Class (Details) - shares | Sep. 30, 2022 | Dec. 31, 2021 | Jul. 21, 2021 |
Class of Stock [Line Items] | |||
Preferred stock, authorized (in shares) | 100,000,000 | 100,000,000 | |
Stock, authorized (in shares) | 1,350,000,000 | ||
Preferred stock, issued (in shares) | 0 | 0 | |
Stock, issued (in shares) | 319,914,805 | ||
Preferred stock, outstanding (in shares) | 0 | 0 | |
Stock, outstanding (in shares) | 319,914,805 | ||
Common Stock - Class A | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 950,000,000 | 950,000,000 | |
Common stock, issued (in shares) | 28,822,502 | 24,718,402 | |
Common stock, outstanding (in shares) | 28,822,502 | 24,718,402 | 28,003,096 |
Common Stock - Class B | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 300,000,000 | 300,000,000 | |
Common stock, issued (in shares) | 291,092,303 | 291,092,303 | |
Common stock, outstanding (in shares) | 291,092,303 | 291,092,303 | 291,092,303 |
Warrant Exchange (Details)
Warrant Exchange (Details) $ / shares in Units, $ in Millions | Sep. 30, 2022 USD ($) shares | Sep. 19, 2022 shares | Sep. 15, 2022 shares | Sep. 14, 2022 | Aug. 17, 2022 $ / shares shares | Jul. 21, 2021 shares |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Number of shares called by each warrant (in shares) | 1 | |||||
Warrants outstanding (in shares) | 0 | 30,979,993 | ||||
Percentage of outstanding warrants | 0.96 | |||||
Warrant Exchange Offer | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Warrants outstanding (in shares) | 0 | |||||
Class of warrant or right, expense recognized | $ | $ 2.1 | |||||
Warrant Exchange Offer | Common Stock - Class A | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Warrants redemption price per share (USD per share) | $ / shares | $ 11.50 | |||||
Number of shares called by each warrant (in shares) | 0.1925 | |||||
Warrants outstanding (in shares) | 1,236,061 | 0.17325 | 0.17325 | |||
Percentage of warrants outstanding exchange ratio | 0.10 | |||||
Warrants exercised (in shares) | 214,058 | 5,725,681 | ||||
Class of warrants or right, number of warrants exchanged (in shares) | 29,743,932 |