MarketWise, Inc. (NASDAQ:MKTW) Q4 2022 Earnings Call Transcript

Lee Harris: That was a very high year due to the tremendous growth in the public company situation, going from private to pump public. So I wouldn’t expect it to be as high this year. So if you wanted to think about it that way, Alex, that’s kind of where I’d start.

Alex Kramm: Right. But certainly something that weighs on cash flow in the first quarter, relatively to prior years.

Lee Harris: Absolutely. Yes. Absolutely. So the comparison, if you looked at our fourth quarter in 2021 is a 5% adjusted cash flow from operations margin, there was some noise in there as well. And then this last quarter, we just said it was 18% for fourth quarter. You’d expect you’d expect the cash flow leaving for bonuses to impact that number? Absolutely.

Alex Kramm: And then maybe just, just one last one and, and I think we touched on this already, but like just looking at the paid subscribers again and looking at the different, I guess, types of subscribers that, that you define in between paid high value and ultra high value. I mean, the ultrahigh value continued to go up and that’s, that’s success on up on upselling. But yes, the high value really has come down over the last year, really every quarter. Right? So maybe you’ve talked to this already, but. What can you really do to get better on, on, on upselling here? Because those marketing costs, I think, should be lower, right? Because you are, you’re basically selling into the same customer base that’s already paying. So what, what’s, what’s been missing there and is that a bigger focus maybe going forward?

Stephen Park: Yes, I’ll start and then Lee may want to add in. So the ultrahigh value, of course, those are the folks that have been with us the longest and the folks that spend the most money, so they’re membership subscriptions with higher dollar value. I think we say it’s over 5,000. So, those folks aren’t really, those are more committed to our long-term. They’ve been with us long enough to know that this is a cycle situation and they’re still consuming the product cause they purchased it in the past. It’s moving people from just the one subscription to the second subscription or third subscription, which is how the composition, if you will of paid to high value. And I think some of the dynamics that we’ve talked about, this hesitation that we’ve talked about is, is impacting that number.

We see people, we see subscribers, I should say, and, and in interested parties come to our website. And again, this idea of landing page visits, following trends that start to improve. But the conversion to a paid subscription in is not just the first subscription, it’s the secondary conversions as well. So that is, we’re showing, we’re showing a slowing, if you will of the rate of change between those two parties, if those two subsets, if you will. And I think that’s what we’re seeing in the last couple of quarters at least.