Q2 2021 MarketWise Inc Earnings Call

[music].

Yes.

[music].

Greetings good morning, and welcome to the market was second quarter 'twenty 'twenty One earnings conference call during today's presentation all.

All parties will be in a listen only mode. Following the presentation. The conference line will be opened for questions and instructions will follow at that time.

As a reminder, this conference call is being recorded.

Now, let's turn the call over to Mr. Jamie Lewis managing director at Tilbury Child. Please go ahead Sir.

Thank you operator and good morning. Thank you for joining us on today's conference call to discuss market wise as second quarter 2021 financial results.

On the call today, we have Mark Arnold Chief Executive Officer, and Dale Lynch Chief Financial Officer.

During the course of today's call, we may make forward looking statements, including but not limited to statements regarding our guidance and future financial performance market demand growth prospects business strategies, and plans and our ability to attract and retain customers.

These forward looking statements are based on management's current views and assumptions and should not be relied upon as of any subsequent date and we disclaim any obligation to update any forward looking statements.

Actual results may vary materially from today's statements information.

Concerning our risks uncertainties and other factors that could cause results to differ from these forward looking statements are contained in the company's SEC filings earnings press release and supplemental information posted on the investors section of the company's website. Our discussion today will include certain non-GAAP financial measures.

These non-GAAP financial measures should be considered in addition to but not as a substitute for or in isolation from GAAP measures reconciliations to dock to non-GAAP measures can be found in our earnings press release, and our SEC filings now I'll turn the call over to Mark.

Thank you Jeremy and good morning, everybody.

Before I get started I'd like to take a moment and thank all those people, who helped us through our stock process and public offering which culminated in our first day of trading on the NASDAQ on July 22nd.

The ticker symbol N K tw.

The many months of hard work by a fantastic team here at Macquarie.

Our trusted advisors and the loyal support of our subscribers contributed to the success of our offering.

Thanks to all of those folks for all of your hard work and support.

Importantly, our public listing provides market wise with additional flexibility to take full advantage on the growth opportunities.

Lie ahead of us, including investments in technology and our community.

Additional partnerships and of course M&A activity.

I'd like to start today by providing a brief overview of market wise and our mission for those investors who were not able to hear our story during the roadshow.

Then I'll briefly review the highlights of our second quarter performance before I turn the call over to Dale for a more detailed discussion of our results.

Well then open up the call for your questions.

So to understand what we do I think it's important to understand our origin story and you'll see how simple idea over the last few decades, it's really turned into what has proven to be a scalable platform to deliver what I believe is best in class investment research for the self directed investor.

We have a very unique set of products at a full spectrum of price points.

And investment content that offers our audience, an incredible value proposition that cannot be found elsewhere.

Institutional research is the closest and content, we provide because it is actionable.

It's usually hard to digest and very expensive.

What we do is provide actionable content designed for self directed retail investors and deliver it in a way that allows them to form long term relationships with world class experts to help them meet their financial goals.

Yeah.

In the Eighty's Ninety's the independent investment research space was inconsistent and there were very few credible offerings available to the public.

We would characterize as high quality trusted research.

Our founders surveyed this landscape new there was a better way to provide independent research to the self directed investor.

That started with delivering great content and treating the readers how we would want to be treated as if our roles were reversed when we do that right. Our relationship is formed between the reader and the writer and goodwill is built up between the reader and the operating brands.

Fast forward two decades and today, we're a leading independent research subscription service serving millions of self directed investors.

With a diverse portfolio of operating brands, our research as a trusted source of financial information for our subscribers and we have a community today of 13 million people and approximately $1 million abuse your paid subscribers.

President we have 12 primary consumer facing brands that offer more than 160 products and we continually look for new ways to strengthen our portfolio of products and services.

Given our success in the size of our subscriber base I'm often asked what is your secret sauce.

Well there are really four main drivers of our success.

It begins with our powerful content platform or.

Our compelling content create strong relationships between our editors and our customers.

The second driver of our success is our strong customer focus we are very focused on our customer satisfaction and you can see this in our more than 90% annual revenue retention rate.

The third factor is our business model, which is extremely scalable with very little in the way of capex requirements or.

Our digital platform high average revenue per user and high margins contribute to our capital efficiency and we can scale our business very cost effectively.

Finally, we are extremely data driven.

Emerging real time data feedback for campaign efficiency and the use of artificial intelligence and machine learning to improve the efficacy of our operations.

We believe our global addressable market is very large and growing and.

And it includes asset managers financial information services companies and investment research.

We believe the trend is increasingly for investors to manage their own money and we think all three of these industry segments are in play for us in.

In the U S alone there are over 60 million self directed investors.

And on top of this significant opportunity we believe our addressable market is set to grow even faster as the millennial generation ages and their investable assets increase overtime.

And our eyes.

Market for self directed investing is ripe for innovation and disruption and changing dramatically and doing so in ways that strongly favor our business.

First we have a rapidly increasing retiree population with 10000 Americans retired in every day.

This is an age group that has significant investable assets and very much wants investment education.

As a result baby boomers represent the majority of our customers today.

However, the aging millennials as a significant future opportunity for our business given that 72% of this generation identifies themselves and self directed investors.

Every month, we provide actionable investment ideas and this premium researches complemented by our software and easy to use tools.

We are able to keep our subscribers engaged and provide our subscribers with in fact, they were looking for at prices they can afford.

Other providers in such diverse content are typically for institutions.

And in accessible from a price standpoint for most self directed investors.

Other solutions only serve a limited segment of the market, which many investors quickly outgrow.

We believe that investing is a lifelong pursuit. So we are interested in developing a long term relationship with our subscribers.

Yes, we provide investment education and research, but by no means are our products dryer boring. Our editors are tried and true investment experts and they like to write in ways that are personally engaging for their subscribers and when I look across the competitive landscape. This is another area, where we differentiate ourselves.

I'll now turn to the strategic initiatives that have driven our business over the past few years and where we're headed next.

When I stepped into the CEO role in 2017, we had real opportunities to increase the scale of the business and invest in our operating companies and content.

As we built out the platform, we ultimately doubled our number of lead editors more than doubled our number of primary customer facing brands and more than tripled our number of products. We also scale the sizeable free to paid subscribers subscribed to origination channel.

And by the Middle of 2019, and many of these new initiatives have taken hold and the business began to accelerate.

Our billings grew nearly 40% between the first and second quarter of 2019, and this revenue growth trajectory largely has continued over the past few years.

Story is the same in terms of total subscriber relationships as we grew from $3.8 million in the first quarter of 2019.

$13 million by the second quarter of this year.

This acceleration in growth is a direct result of the investments that we've made in the business and the fact that we have built a diverse and critical mass of content people and technology that allows us to drive attractive growth going forward.

And this leads me to our vision for the company we.

We want to be the leading financial wellness platform for self directed investors.

We want to expand our reach and discovered an ability through new channels consumption mediums and branding we want to build deep network effects by increasing social connections and leveraging our rapidly growing community and we want to expand the use of machine learning and data science and expand our SaaS product development and acquisition.

We also have many organic and inorganic growth opportunities in front of us opportunities that have increased the number during the process of going public as we had hoped.

On this front I want to highlight we have a long and very successful track record of highly accretive acquisitions.

Over the past 10 years, we have successfully identified acquired and integrated a number of M&A opportunities.

Typically we look for either one editorial content that we think will be enriching through our customer base for two we look for a business that is not being run as effectively as ours that we think we can bring onto our ecosystem and help to improve.

On the editorial or new content front, we often identify a key area of content that we want to add or key personality that we think will fit well in our model.

We bring them onto our platform provide a turnkey solution for them and then integrate them onto our operations infrastructure. This has been incredibly successful for us in the past and.

In one recent example, we helped the lead editor scale, whose business from approximately 6000 subscribers. When he came on board to more than 100000 subscribers 18 months later.

And the business is very profitable.

On the M&A front, we acquired a business in 2017 that was not performing well and was losing money, but we saw the potential.

Once it was integrated onto our platform in the business made more than $12 million in 2020.

Another example is our acquisition of shaken analytics, which we acquired in January of this year.

Following the acquisition, we integrated that business onto our platform and formally introduce their products to our existing subscribers and met.

The chicken products are quite good and the broader distribution of those products to our subscribers allowed us to quickly recoup our initial investment and we expect to see considerable opportunities for growth with their product suite going forward.

Now I'd like to spend some time walking through briefly the highlights of our second quarter results before handing the call over to Dale to dive deeper into our financials.

During the second quarter, our revenues grew 71, 7% year over year.

And our billings increased 54% year over year.

That helped increase our adjusted cash flow from operations by 59% year over year.

With these numbers, we are very pleased with our results and this quarter was our second highest quarter ever in both billings and adjusted cash flow from operations.

Our business continued to perform well as the subscribers continue to engage with and explore our research products and software solutions.

That resulted in significant growth in our year over year results.

And when you consider that a number of our senior leaders are working on the go public transaction I think that makes our results even more impressive.

While we are very pleased with our financial results I would encourage our shareholders to keep the long view in mind.

He had been in business for over 20 years always been profitable and treated our equity holders well and.

And during that long history, there have been periods like this one where our year over year growth was up significantly.

And we can't promise to our investors that things will always go up like they did in this period.

We can do as promised to do our best to run the business as if it were our own money at risk because it is.

Our leadership team has a tremendous amount of skin in the game. So our economic interests are aligned with our shareholders. This approach has served us very well over time and we have no plans to change that approach now that we are a public company.

And with that said I'll turn the call over to Dale to provide a deeper dive into our numbers.

Yes, hey, thanks Mark.

Turning to our financial results.

Second quarter 2021 revenue was $142.1 million compared to $82.8 million in the second quarter of 2027.

71, 7% year over year growth.

We continue to see the results of our significant investment in the business across our platform our content our people new technologies and our significant free to pay distribution channel.

Billings were $185.1 million this quarter compared to $123.1 million a year ago, that's more than a 50% year over year increase.

Approximately 45% of our billings this quarter came from lifetime sales.

54% in term sales and 1% from other billings.

Keep in mind that our billings can vary quarter to quarter due to the nature of us collecting all of our invoice upfront as well as campaign mix in efficacy.

First quarter 2021 was a record well beyond our forecast at $255 million in billings that's nearly.

Nearly $100 million sequential increase.

But our second quarter was also very strong with high conversion rates conversion rates in line with to a bit higher than those we saw in 2020.

Not quite as high as they were in the first quarter of this year.

Our cost of revenue was $26.8 million this quarter compared to $27.5.90, a year ago <unk>.

Included in this cost of revenue of $10.6 million of stock based compensation compared to $15.1 million in the year ago quarter.

If you were to exclude stock based comp from our cost of sales sales margins as a percent of revenue would have been 89% this quarter.

As compared to 85% in the year ago quarter, and generally in line with historical averages slightly above.

One thing I'd like to emphasize that from the time of the combination with ascend it and going forward.

Based compensation attributable to our original class B units will see these.

These units were treated as derivative liabilities rather than equity prior to our merger with attendance.

They had to be re measured each quarter and the change in fair value was included in stock based compensation also any distributions of profit.

Paid to class B unit holders are treated the stock based comp as well.

However on a go forward basis as those original class II units convert straight common unit meeting straight common equity.

We expect to incur significantly lower stock based compensation consistent with that of a traditional stock based comp plan for our employees.

Moving on with the financials sales and marketing costs were $56.9 million.

Order compared to $49.2 million last year.

Included in these amounts were stock based comp of <unk> 8 million this quarter compared to $1 million in the year ago quarter.

Our per unit cost of customer acquisition increase this quarter.

But the aggregate spend decreased to $56.1 million from $77.7 million in the first quarter of this year.

This is a normal near term adjustment for us we are well accustomed to adjust to these sorts of market fluctuations.

General and administrative costs were $64.7 million compared to $84.5 million in the year ago quarter.

This includes $36 million in stock based compensation this period.

As compared to $62.5 million in the year ago quarter.

If you exclude stock based comp our G&A cost increased about $6.7 million year over year.

This was driven by a $3.7 million increase in incentive compensation accruals.

An increase of $1.7 million in payroll and benefit costs due to increased head count primarily within our business units.

One $5 million increase in cloud computing and software fees the increase in transaction volumes.

And telecom costs, partially attributable to Covid as we all work from home.

General and administrative costs. This quarter included $3.2 million in nonrecurring expenses associated with our stack IPO process.

So look we ended the quarter with a net loss of $8.4 million on a GAAP basis compared to net loss of $81 million in the year ago quarter.

The decrease in losses, primarily due to an increase in revenue of $59.3 million as well as at $31 two.

$2 million decrease in stock based compensation expense. This was partially offset by an increase in the amortization of deferred contract acquisition cost of $10.6 million.

And an increase in comp and benefits of $8.6 million as a result of aggregate increased head count.

But we really think cash flow should matter most investors and therefore, our emphasis and our main non-GAAP measure is adjusted cash flow from operations.

To be clear this metric only adjust for stock based compensation expense associated with our old class B profits distributions historically.

Going forward it will only adjust for any unusual or nonrecurring recurring items.

This quarter adjusted cash flow from ops was $59.4 million compared to $37.3 million in the year ago quarter.

Nearly 60%.

Okay.

Adjusted cash flow from operations margin, which has adjusted <unk> as a percent of billings.

Is 32, 1% in the second quarter this year compared to 33% in the year ago quarter.

This brings our year to date total adjusted cash flow from ops to $157.3 million.

That's more than the entire $134.3 million that we registered.

In all of last year.

If youre interested in our reconciliation of adjusted cash flow from ops.

Formations in our press release as well as our 8-K that we filed this morning.

The highlight to our annual rule of 50 concept that we've talked to many of you about on our roadshows over the past nine months.

That's the definition of that is GAAP revenue growth plus our adjusted cash flow from operations margin.

We really think of it on an annual basis, but having said that just as a proxy our GAAP revenue growth. This quarter was 73% and our margin was 32%.

If you do the simple math I think that's more than 50% so.

Keep in mind this is a.

One of our best quarters ever.

Now, let's turn to some of our key metrics are paid subs grew from <unk> 7 million a year ago to $1 million this quarter.

That's a 45, 5% increase we saw our free subs increased from $6.8 million a year ago to $12 million this quarter.

<unk> improved to $823 million, that's actually $803 this quarter from $748 last year, an increase of more than 10%.

Total paid subs have a million this quarter did decrease nominally compared to first quarter 2021.

The slight decline in paid subs. This quarter is due to factors, which we believe are related to the travel and leisure boom associated with the dramatic reopening of the economy.

First we saw advertising cost begin to increase late in the second quarter as the travel and hospitality industry has started to market the products very heavily in digital mediums that tended to increase our per unit acquisition cost a bit.

Additionally towards the end of the quarter, we began to see what some are referring to is the revenge travel boom.

As Americans begin to make up for the inability to travel for the past year and a half.

As a result, we believe it currently costs a little bit more to get the attention of prospective new customers, who are venturing out rather than.

Focusing on their investments.

We focus closely on a breakeven metrics as our per unit subscriber acquisition costs increase will adjust and focus on marketing on existing customers.

For which that cost is close to zero.

We'll continue to evaluate our unit costs and believe that there should be some normalization as we get here into the fall in the back to school season.

Look this was a really good chance to explain an important concept in our business with some of you have heard this before.

This has contributed to our financial success over the last two decades were very disciplined around our marketing spend we closely watch our per unit cost versus the revenue we can bring in.

Our per unit cost decrease overtime will ramp our marketing spend to take advantage of the situation. That's certainly what you saw in the first quarter of this year.

And frankly throughout the second half of 19 and really all of 2020.

Conversely as per unit cost increase for whatever reason will decrease our aggregate marketing spend and we'll evaluate and we'll test and will adjust.

That's what we saw in the second quarter. This year the beauty of our business is that we can adjust quickly redirect dollars to other campaigns and if need be pulled back briefly on the subscriber acquisition.

Until our unit cost decreased marketing ROI increases or market conditions change when.

When we do this subscriber additions may decline, but margins should expand.

On the other hand with customer acquisition cost declined or our marketing ROI increases will increase our direct marketing spend in aggregate, we will drive new subscriber acquisition.

Moving on total free subs increased sequentially by $1.1 million in the second quarter of this year. The momentum is building the free subscriber pool continues to be a valuable source of new paid subs.

Total free subscribers of $12 million at June 30 represents a 75, 6% increase as compared to $6.8 million.

In the year ago period.

And finally, turning to <unk> second quarter, ARPA was $823, an increase of 10% from the $748 in the year ago quarter.

This growth was driven was driven by strong ongoing high value ultra high value conversions indicated by our customers' buying additional high value content at higher price points and with that let's turn it back to mark for some closing comments.

Yes.

Thanks Dale.

So before we take your questions I'd like to emphasize a couple of points first now that we've completed our go public process. We're very excited to turn our attention back to running the business and executing on our growth plans.

The organic opportunities are significant and our eyes.

And we now have a central holding company brand and market wise and we plan on using to pursue some brand awareness.

And the central platform using this new brand.

We will of course build out our customer facing brands, adding more editors and content and more brands over time the way we've always done.

And this is all with the backdrop of.

And addressable market and we think a strong tailwind in our favor.

More and more people are inclined to manage their own investments and especially the younger generations.

In order for younger investors to grow their investment portfolios to say 250 to $500000, they need education research and tools to succeed and.

And we provide those solutions to that group as they will fall squarely in our customer demographic as they age mature and grow their assets.

So we're very excited about all of this we also have opportunities to leverage our data science more and Mark Gearhart Gearhart and his team at <unk> will be very helpful and are being very helpful. In this regard already.

And finally, we had mentioned previously that we've always been active on the M&A front.

Now with the transparency public awareness and currency being a public company, we are better positioned than ever to execute on this strategy.

We're very excited about our future and continuing to serve our readers going forward and with that I'd like to turn it over to the operator for questions.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad calculation Tom will indicate your line is in the question queue you.

You May press star two if you'd like to move your question from the queue.

All participants using speaker equipment, it may be necessary to pick up the handset before pressing the star kids.

One moment. Please go ahead.

Paul for your questions.

Our first question comes from the line of Devin Ryan with JMP Securities. Please proceed with your question.

Okay, Great. Good morning, Mark Dale first of all congratulations on the spec closing and welcome to the public markets.

Thank you.

I guess I wanted to start on customer acquisition cost.

And the outlook. Obviously, you guys gave some good detail around what you're seeing in the market. It seems like maybe some unusual drivers just with the economy reopening so we'll see how long.

This last but but maybe if you can just.

Give us a little more perspective around how youre thinking about.

Where where CAC may settle down is it still reasonable to be thinking about kind of somewhere between 2019 and 2020 I appreciate a little bit of a crystal ball question in there, but then also talk about this transition towards focusing on.

The free subs, which I agree is kind of a nice part of the model that you can go back and forth and just functionally what does that look like.

How you with that nice growing base there how you expect to.

Kind of push harder into that into that area.

Yes, he devin so look I mean.

As you know, we don't disclose cap in specific but you guys can do your own that you have enough data points to calculated you can calculate it kind of what you think it is year to date and probably won't be too far off right.

And if you look at it year to date.

It's actually right in line with sort of what we told you guys and our investors slide previous investor slide deck to reset expected to be the average of 19% and 20, it's almost right on the screen. There. So what we're seeing here is not anomalous from the absolute number.

We saw in the second quarter, particularly later in second quarter was just the acuteness of the immediacy of the impact it was like all of a sudden travel and leisure was gone for 15 months 14 months.

All of a sudden the entire world of travel leisure was bang in Google and Yahoo, and everything else.

In May and June and so it was just the acuteness of the time. This that had an impact that was sort of dramatic in the quarter, but in aggregate year to date, where we're kind of right in line with where we think we would be at year end, it might ebb and flow a bit quarter to quarter rate, but no. We don't we don't see so far we're right on the screws to.

Out of our forecast and we.

We feel good about where we sit on the free subs, yes.

Each community for US is 12 million large now and.

Outlet Mark chime in here too, but just wanted to get my nickel first.

And as I was talking about.

12 million people, that's a massive community we need to figure out how to better take advantage of that right. We are converting them to paid and that's an obvious benefit of the community, but there are other ways to engage that community to help create some synergies and I know mark and his team gearhart have some thoughts on that I know Mark Arnold has certainly have thoughts on that so.

Stay tuned theres, a lot more to do to that that set of relationships and simply convert 2% of them annually to paid.

And what Myron, let mark chime in here more on that.

No that's right.

Okay.

We're happy to have the community, we have and of course, where we work hard to provide content to that group that we think they will find engaging and then ultimately what we hope will happen is we'll intrigued him enough and get them excited too.

Start paying for our either our lower cost or higher cost products and we've had a lot of success doing that overtime.

Can we do better sure I wanted to do better of course, and that's one of the things I'm excited about.

Doing going forward Thats part of why I am excited to turn back towards operating the business and also part of why I'm excited to start working with Mark and his team to see what lessons as they learn to help new some of the tools that they've developed expertise in to try to make that happen.

Okay terrific.

All that color and then just as a follow up.

Not sure how much you can share here, but even if you can give some.

Qualitative color would be very helpful. Just to kind of think about the pipeline.

New brands or editors, our analytic capabilities.

Any flavor for kind.

Kind of at the level of dialogue Youre, having areas that are interesting at the moment and really just how the visibility of the spec and descended relationship.

I also the public currency is maybe helping to drive more conversation than it potentially accelerate some.

Some things that are in the pipeline.

Yeah.

Sure.

I can't comment on specific targets as I'm sure you know.

But but.

I had a couple of times before publicly and I've mentioned it here.

Today that the number of inbound inquiries. We have received has increased dramatically since we announced the merger back on March 2nd.

A lot of our outbound both content and M&A activity.

Prior to the announcement was without that.

We would occasionally have folks knock on our door so to speak.

See if they wanted to strike a content or M&A deal but.

Thus far in a way our activity was outbound.

Since March 2nd we've had a lot more inbound inquiries and a number of those opportunities are interesting I can't comment on the specifics, but I am very excited because what I thought would happen and the level of increased activity on the M&A front has in fact kicked in and so we've got a couple of things that we're looking at actively now.

Try to see if we can.

Plugged back in our M&A activity in our M&A efforts.

And see if we can add brands and people to argue system.

Sure.

Okay great.

I appreciate it I'll leave it there and hop back in the queue, but thank you guys.

Thanks, Kevin Thanks, Kevin.

Thank you. Our next question comes from the line of Jason <unk> with Oppenheimer. Please proceed with your question. Thanks, I guess I'll start with <unk>. So I think RV came in better than we were looking in the quarter.

You guys are not you guys are keeping our full year guidance unchanged. So maybe help us how are you thinking about.

<unk> relative to paid subs for the rest of the year.

And then.

Just any more color you want to give us on some of the <unk>.

Margin initiatives like terminal and whatnot is that something that could be kind of additive to the model next year.

Yes, So hey, Jason Thanks for take the question on <unk>, Yes, you're right I mean, 'twenty three I think it was <unk> 25 in the first quarter. So we're keeping a pretty high.

Two things go into that just the numerator and denominator right look our billings were incredibly strong not not not first quarter numbers, but still.

A record for us other than the first quarter. So it's a combination of those billing numbers being high which showed good conversion rates, but it also has to do with the fact that we didn't grow our subs are.

Subs are essentially flat in the second quarter. So that's the denominator so that kept the <unk> a bit higher rate those two things together kept at higher we've talked about our forecast at length with you guys. We do like to under promise over deliver so there is frankly, some measure of conservatism in our numbers right and we said that.

We feel very confident in meeting our numbers do we think our ARP, who may come in higher than I think at 717 for the full year. That's in our forecast of remember correctly. So I think we'll probably come in here is that yes, it would probably well right, but if you do the exact math and you do the exact billings of 750 in our forecast when you do the exact subscribers of I think it's 108.

For that.

That math work.

Timing of the sub adds matters on the denominator, but basically you will come out with at 717. So it really comes down to do you think we're going to.

We're going to beat our billings number, yes, or no and if so RP will be higher.

And so forth and then how quickly we can get these new subs to buy something additional and keep in mind the more new subs that we add in a given period that is dilutive to ARPA right. The initial revenue for those new subs at maybe $100 or less per person.

Which is far less in late 'twenty three right. So you need those guys to buy their second publication for it to be accretive. So the key for us is to get them in the door engage them with good quality content show them that we're good and market to them intelligently and get them to buy that second publication.

In two to six months and we've been very good at that so to the extent that we are we continue to be successful at that.

That would be another thing that would drive ARPA above that 717, so one would be a billings beat who would be being able to have our new subscribers come in and buy they are accretive second third publications within the calendar year, but bottom line, we feel really good about our forecast.

We feel really good about meeting or beating the forecast pretty much across the board.

And yes that 770, <unk> does look a little conservative to me.

Hope that answers your question or not and then on the business side, Mark why don't I turn it back to you.

Yeah, Jason Thanks for the question.

As I mentioned is a Devon.

We're excited about our M&A pipeline, but we've got some things that are that we're looking at very closely and I can't get into specifics and of course.

We havent closed anything or you all would know that.

Yes.

So I can't promise you that we'll have an announcement or anything like that but I'm very happy with the level of activity that's going on in our M&A.

Process and with our M&A team.

And you also mentioned the terminals specifically the terminals launched it it still.

I will primarily focus on delivering stand very research products.

Two its readers right now although some of our other affiliates are also marketing their products. There we have not yet migrated all of the other.

Pan market wise brands into that terminal infrastructure.

And we're still looking at.

Doing that as soon as we can.

Again, one of the reasons why Im excited about turning my attention back to running the business and being a little bit less distracted with our go public efforts.

But we do want that as Ive always mentioned, so having a a.

Umbrella product across the market wise brands will help us.

With both a new distribution channel in an effort to drive traffic to that site and introduce prospective readers to our products.

And we just haven't had that so far so that's still very much in our plans. We are still actively moving in that direction. We just don't have anything concrete to announce right now.

Okay. Thanks.

Okay.

Okay.

Thank you.

Our next question comes from the line of Jeff Mueller with Baird. Please proceed with your question.

Yes. Thank you so.

So just on the comments about.

Member paid member attrition trending higher following a period of good member growth that makes sense to me given the mix shift I guess my question is does it get more than offset by debt Upselling that occurs over I think typically 18 months is net billings or net revenue.

Retention.

Also usually elevated relative to historical periods.

For 12, or 18 months, when you're coming off of both period of good paid member growth.

Right you got it right and the.

The dashboard that you would look at to confirm what you just hypothesize would be our boots right. You are seeing ARPA growth of 10%. So we're still in that.

We are not disclosing churn specific specifically, but we did say that we are in that range of one 5% to 2% that we published in previous Investor decks. We're just at the higher end of the range right now as opposed to the lower end of that range so but.

But yes, second highest billings quarter ever ARPA growth year over year, and <unk> pretty much flat Q1 to Q2.

So yes.

And the reason why is that.

Those that do churn from us and this fact is consistent year in year out or.

The entry level there are moves when they leave us are right in line with what is the card value for an entry level publication.

And that will range between 60 to $100 and Thats. The <unk> of the guys that leave us. So yes, that's far offset by the guy that.

And the $65 initially and then by the second publication for $1000. So, yes as long as our conversion rate.

At or higher than we have seen yet uzi to offset that modest uptick in subscriber count churn that makes sense.

Got it and then.

On the Upselling of the paid subs it sounds like with per unit marketing costs ticking up there as well.

We're responsive to that and disciplined on that than theirs.

Maybe incrementally more focused on that upselling.

Yes.

What exactly does that mean or can you give more examples of like what you do differently just given that it's so low cost to do that I would think youre always doing a lot of that and that's always a focus area. So.

What do you do differently in one of these periods from Upselling.

Again, its focused our execution perspective.

Newmark units you can take that one or you want me to yeah sure I'm happy to.

Okay.

Youre right Jeff.

If if if we articulated our ideas as an either or we didn't mean to it's not like what we do as a business, especially across our multiple brands as.

As we wake up every morning, and say should we go find more readers or should we.

Advertise our higher priced products, it's not like that of course is as you know.

And as you pick up on what we what we do do that our marketers are very disciplined about is.

As we look for new subscribers and as per unit costs come up.

We have very disciplined metrics around our marketing teams.

They're looking at that and if it becomes a cost efficient and cheap to acquire new readers.

And stay within our operating metrics, we push the accelerator down and try to do more of that on a cost efficient basis and as that price action reverses and it gets expensive to do that we are disciplined in our marketing teams to pull off and back off.

Throughout both of those dynamics. We of course are also putting offers in front of our readers to see if they are interested in other investing strategies, usually at higher price points on both the on both the lower price and meaning less than $200, but also a higher priced product in the seventh several thousand.

Dollar range so.

If we if we articulated our ideas as if it was an either or.

Not at all what it is we do.

And constantly try to put this.

Different investing strategies in front of our readers that we think they will find interesting and engage with we just do less of that.

<unk>.

New customer acquisition when it gets expensive to do so and that's that's what we're starting to see late in the second quarter.

Got it and then.

I feel like I missed something from the way that some of the questions have been asked.

Answered in terms of like what you are actually saying on outlook commentary and I totally hear you on kind of current trends and incorporated that into our thinking but.

You went through the destock process, you had various 2021 and 2022.

A key metric in financial.

Outlooks and I guess.

R R.

Are you.

Standing by those are you reiterating those or not or is there any just methodology change because now that you are.

You closed on the destock merger.

Rolling forward into <unk>.

<unk> around if you'd get affordable guidance or not.

Yeah. So good question. So look what we're trying to do is it would be a normal course these back.

<unk>, which is obviously in the go public process in our S. Four there is a lot of metrics that are disclosed in forecast, we put two years a forecast in there.

Once you are public it's typical to pull back a bit on some of those metrics and so obviously the key metrics that we define like kpis and our non-GAAP measure.

We're obviously committed to disclosing those and we will absolutely do that and we will probably also disclose some of the other metrics around the mosaic right.

As well as far as our forecast for 'twenty. One yes, we are thinking about this forecast I think we kind of said that pretty strongly on this call. We don't plan to change them or update them.

But I think I said 20 minutes ago, we feel very comfortable in meeting or beating those forecast. So absolutely. We did remove the 2022 forecasts from our slide deck that youll see on our website, but that's sort of normal course proceed here as I understand it once you are.

Our public company, what we're going to do over the next couple of months has listened and learned from you guys from buy side.

And begin to formulate.

Our guidance policy will be and to the extent of it but I'll.

I will tell you this I mean I know mark.

Feels this way very much we are much in the camp of Warren Buffett around around guidance and things like that on one hand on the other hand, we certainly understand your needs. We want you guys to have enough information to be able to produce intelligent models and intelligent reports so it'll be a balancing act.

We just want to make sure that the guidance, we give fits well within that rule of 50, because that preserves latitude on the business side. The last thing we want to get him into us.

Earnings estimates are $1.22, and you had $1.21, and that's just filling this to us that that.

That restrained our ability to do the pivoting we've talked around about marketing spend.

Or.

Pulling in the Rins are pushing a throttle when a balanced growth and profit so whatever we come up with guidance wise will give us the latitude to not constrained the business in a negative way, but we just don't know exactly what that is going to be yet, but it will certainly be related somehow to the rule of 50 for sure. We think that's a good model for us.

And our plan would be to come out with our guidance.

Framework as we get into year end, so another quarter after the third quarter.

We get into fourth quarter reporting and things like that that's when we'll really begin to formulate our specific guidance, but our plan would hopefully to begin to give you guys.

In all key metrics and enough of the mosaic that will really help you produce good quality research.

Got it appreciate it thanks Paul.

Thank you as a reminder, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad.

Our next question comes from the line of Yigal Iranian with Wedbush Securities. Please proceed with your question.

Hey, guys. Thanks.

Thanks for taking the questions and congrats on closing the deal and going public.

I guess, what with all that's going on around the reopening and the trends there I wanted to dig into the sub.

Thinking a little bit more so.

Can you help us understand maybe some of that.

Some of the ins and outs of what's happening is it.

Of.

Gross that issue, that's really driven by the marketing side is it.

It has.

Its turn changing or are you seeing any of those metrics of your current subs.

<unk> at all or is it really just mostly a gross thing and if it if it is just the gross net add things that.

Marketing related or.

Are you seeing that.

Different than.

People are interested in.

Self directed investing now that the world will be opening a little bit more I think.

During the process you had I think the way you had highlighted was that there wasn't really necessarily up.

A booster of pull forward from from Covid.

But we were people were at home for a while and not really don't matter as much and I think there wasn't sort of boost generally speaking so.

Maybe just walk through some of the puts and takes.

Subscribers decline again next quarter.

If marketing.

If marketing digital advertising rates.

Hi.

Let's start there and then I have a follow up.

Yes, so while theres a lot to unpack there good question.

<unk>.

Let me address the Covid part of that first look.

As we've talked about extensively you can see the graphs are acceleration began well in advance of Covid. So the organic improvement in the business was the result of the investment.

That's for sure the impact we're seeing now.

I think it really has to do with the acuteness of it.

We went from having less than 150000 people go through TSA checkpoints in the middle of Covid.

The last Sunday, I heard $2.5 million and one day went through TSA checkpoint okay.

So it's just the dramatic the acuteness of the snapback in travel that happened within like a four to six week period of time that went from essentially zero, two and a half people that millions of people flying a day right.

The display AD Spike was quick right.

And so I think that's what we saw in the second quarter with the acuteness of that and obviously there is a tension screen attention time.

Everybody I know this traveling and having fun right now so I think people's eyes or away from screens a little bit so.

That's impacting us in the near term right. We certainly do expect that normalized been at this for two decades, we've seen everything from the financial crisis to the telecom boom and bust the September 11th.

Everything along the way so.

So the topic is new but cycles aren't and we're used to adjusting to them.

Question around what's driving what's the primary factor in this is.

It's really it's really a numerator effect, meaning by that growth at.

Turns up nominally but it's in that range that we've told you about before it's not really it what it is it's just the gross adds.

Go down in Q2 sequentially April May and June and June was.

Was the most impact.

Impacted months.

And Thats as we saw our per unit costs go up we are very sensitive to maintaining our profitability and our breakeven. So that's a key part of our thesis for our investors as profit balanced with growth.

And so we did pull back on the spend you saw a $20 million sequential decline in direct marketing spend from Q1 Q2.

That's not a bad thing that's a smart thing right, we're going to listen and learn we're evaluating we're testing.

And we have a lot of good campaigns planned for fourth quarter in terms of the subscriber additions we've been working on these for several months.

We're going to launch a bunch of these campaigns right into the teeth of back to school right when travel should be this huge travel boom might have.

Might start to ameliorate rate normalize and get back to a normal world kind of environment.

Yes, we expect to see some good opportunities for subscriber growth in the fourth quarter again as this ramps its cycle, but it really is just a gross add issue that kept subscribers essentially flat this quarter its not a churn story.

Gross gross adds came down.

And churn kind of just chugged along in our subscriber base was essentially flat.

That's the bottom.

Bottom line that makes sense.

Yeah that makes a ton.

Let's say digital.

I just want to be clear, so, let let's say digital ad rate.

CPM stay elevated through the rest of the year.

Would that mean that you would keep your foot off the gas in terms of marketing throughout all of that or would there be a point where you.

You kind of feel like okay.

You may need to step in and a.

A little bit and don't really have a choice around it.

This.

Youre getting at a really good point here to do it and this is not some macro top down.

Thing from us not like Mark Arnold says you guys need to stop spending.

These guys know their business better than anybody and market isn't telling them their business. So no. It's not going to be we are monolithically not spending what we are doing is designing these new campaigns and we're going to as we launch. These campaigns were going to test a whole host of things around looking field the marketing copy the landing page.

And price points, right and price point so yes.

Yes, we have a ton of campaigns, we're gonna go out with.

In the fourth quarter.

So no we're not just not going to market, we're going to we're.

We're going to launch these campaigns for mental learned we're getting feedback and there's a lot of things that you can you can you can you can ingest pillar one content item to another you can pivot in terms of marketing language you can pivot in terms of price points.

Im not going to sit here and not do anything we're going to be testing all of those things.

And in fact May stay elevated.

Yeah. It feels like it's going to stay elevated here in the summer right.

But again like I mentioned earlier to be clear. It is absolutely in the range that we've talked about with you guys in our previously filed investor slide deck.

It's right on the screws that we in terms of where we gave.

Gave you that outlook in terms of our year to date numbers. So it's just the acuteness in the second quarter, how quickly it kind of snap.

That to that number so.

But it seems to have stabilized.

Terms of the <unk>.

Display AD cost component of it that is not continuing to ratchet higher kind of jumped up and it's kind of bumping along now so.

But yes, we certainly are not going to sit here and do nothing we have a lot of interesting stuff planned for <unk>.

Got it.

Color is really helpful. Given all the uncertainty in the environment and then just a quick follow up for Mark.

Mark you talked about Youre thinking.

Taking advantage of the growth opportunity and investments.

Investments in Tech M&A and partnerships and think about M&A and partnership side is pretty clear.

A little bit more color around what what are the top priorities.

Check.

That can help improve the business thanks guys.

Yeah.

Yes, no. Thank you I appreciate the question.

As I listen to your question is I think that Pops in my mind first is.

We have.

I've been I've talked about this a lot over the past few months, which is.

Starting to leverage that Knowhow, Marc Airhart and his team at Ascendant, who are very very experienced operators in law they've launched.

A number of successful companies, but they're not just the operators there are operators in and around.

The direct to consumer business model, albeit in games, which isn't exactly what we did as you know, but it's but it is consumer facing app and their business in particular.

Was built on significant data science expertise and delivering value in a way that created long term bonds with our customers.

So we have already begun the sort of.

Exchange of ideas and comparing what they did to what we do and seeing if we can learn from those.

Appearances and leverage that Knowhow and so we're fairly far along in our discussions around that and so we're going to try to implement some of their know how and what we do.

What what is already a really efficient business model, even more efficient.

Im excited about doing that on the tech side.

If your question was more directed towards.

Tech M&A or other software and tools as I mentioned earlier on the call I can't get into specifics about specific discussions we're having it's just if you look at our M&A track record you'd see that we have a history of both bring in content that sometimes is.

Software and tools to help people managed portfolios or look at their investment portfolios in different ways.

Without getting into specifics that's generally what we are doing I don't expect that to change we are looking at all of those things.

With through the lens of if it can help people and not just anybody, but our readers and improve their performance and their investing portfolios that is something we were interested in.

So I don't know if that helps you go but.

Hopefully yes.

That's helpful.

Just trying to get at.

What are the pieces in the tech stack that.

The most kind of missing an important I think you did answer that so thank you.

Thank you ladies and gentlemen at this time there are no further questions I would like to turn the floor back to management for closing comments.

Okay.

Yes, I don't really have any further closing comments just.

Just I appreciate on behalf of Bill myself. Your time this morning, and your time and attention I. Appreciate all your support and we look forward to.

I'm talking to you all soon in the coming quarters.

Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

[music].

[music].

Greetings good morning, and welcome to the market was second quarter 'twenty 'twenty One earnings conference call. During today's presentation, all parties will be in a listen only mode.

During the presentation. The conference line will be opened for questions and instructions will follow at that time.

This conference call is being recorded.

I'd now like to turn the call over to Mr. Jamie Lewis managing director at Southern Trout. Please go ahead Sir.

Thank you operator and good morning. Thank you for joining us on today's conference call to discuss market wise. Its second quarter 2021 financial results on the call today, we have Mark Arnold Chief Executive Officer, and Dale Lynch Chief Financial Officer.

During the course of today's call, we may make forward looking statements, including but not limited to statements regarding our guidance on future financial performance market demand growth prospects business strategies, and plans and our ability to attract and retain customers. These forward looking statements are based on management's current views and assumptions.

And should not be relied upon as of any subsequent date and we disclaim any obligation to update any forward looking statements.

Actual results may vary materially from today's statements.

Information concerning our risks uncertainties and other factors that could cause results to differ from these forward looking statements are contained in the company's SEC filings earnings press release and supplemental information posted on the investors section of the company's website. Our discussion today will include certain non-GAAP financial measures. These non-GAAP financial.

Measure should be considered in addition to but not as a substitute for or in isolation from GAAP measures.

Reconciliations to non-GAAP measures can be found in our earnings press release, and our SEC filings now I'll turn the call over to Mark.

Thank you Jeremy and good morning, everybody.

Before I get started I'd like to take a moment to thank all those people who helped us through our stock process public offering which culminated in our first day of trading on the NASDAQ on July 22nd under the ticker symbol MK Tw.

The many months of hard work by a fantastic team here at Macquarie.

Trusted advisors and the loyal support of our subscribers contributed to the success of our offering.

So thanks to all of those folks for all of your hard work and support.

Importantly, our public listing provides market wise with additional flexibility to take full advantage of the growth opportunities that lie ahead of us including investments in technology and our community.

Additional partnerships and of course M&A activity.

I'd like to start today by providing a brief overview of market wise and our mission for those investors who were not able to hear our story during the roadshow.

I'll briefly review the highlights of our second quarter performance before I turn the call over to Dale for a more detailed discussion of our results well then open up the call for your questions.

So to understand what we do I think it's important to understand our origin story and you'll see how simple idea over the last two decades has really turned into what has proven to be a scalable platform to deliver what I believe is.

Best in class investment research for the self directed Investor.

We have a very unique set of products at a full spectrum of price points and.

In investment content that offers our audience, an incredible value proposition that cannot be found elsewhere.

Institutional research is the closest and content to what we provide because it is actionable.

It's usually hard to digest and very expensive.

What we do is provide actionable content designed for self directed retail investors and deliver it in a way that allows them to form long term relationships with world class experts to help them meet their financial goals.

Yeah.

In the Eighty's Ninety's, the independent investment research space was inconsistent no or very few credible offerings available to the public.

We would characterize as high quality trusted research.

Our founder survey this landscape and near there was a better way to provide independent research to the self directed investor.

That started with delivering great content and treating the readers how we would want to be treated as if our roles were reversed when we do that right. Our relationship is formed between the reader and the writer and goodwill is built up between the reader and the operating brands.

Fast forward two decades and today, we are a leading independent research subscription service serving millions of self directed investors with a diverse portfolio of operating brands. Our research as a trusted source of financial information for our subscribers and we have a community today of 13 million people and approximately $1 million.

As you paid subscribers.

At present, we have 12 primary consumer facing brands that offer more than 160 products and we continually look for new ways to strengthen our portfolio of products and services.

Given our success in the size of our subscriber base I'm often asked what is your secret sauce.

There are really four main drivers of our success.

With our powerful content platform.

Our compelling contact create strong relationships between our editors and our customers.

The second driver of our success is our strong customer focus we're very focused on our customer satisfaction and you can see this in our more than 90% annual revenue retention rate.

The third factor is our business model.

She is extremely scalable with very little in the way of Capex requirements are.

Our digital platform high average revenue per user and high margins contribute to our capital efficiency and we can scale our business very cost effectively.

Finally, we are extremely data driven.

<unk> real time data feedback for campaign efficiency and the use of artificial intelligence and machine learning to improve the efficacy of our operations.

We believe our global addressable market is very large and growing and.

And it includes asset managers financial information services companies and investment research.

We believe the trend is increasingly for investors to manage their own money and we think all three of these industry segments are in play for us in.

In the U S alone there are over 60 million self directed investors and.

And on top of this significant opportunity we believe our addressable market is set to grow even faster as the millennial generation ages and their investable assets increase overtime.

And our eyes.

Market for self directed investing is ripe for innovation and disruption and changing dramatically and doing so in ways that strongly favor our business.

First we have a rapidly increasing retiree population with 10000 Americans retired in every day this.

This is an age group that has significant investable assets.

And very much wants investment education.

As a result baby boomers represent the majority of our customers today.

However, the aging millennials as a significant future opportunity for our business given that 72% of this generation identify themselves and self directed investors.

Every month, we provide actionable investment ideas and this premium research is complemented by our software and easy to use tools.

We are able to keep our subscribers engaged and provide our subscribers with insights they're looking for at prices they can afford.

Other providers in such diverse content are typically for institutions.

And in accessible from a price standpoint for most self directed investors.

Other solutions only serve a limited segment of the market, which many investors quickly outgrow.

We believe that investing is a lifelong pursuit. So we are interested in developing a long term relationship with our subscribers.

Yes, we provide investment education and research, but by no means are our products dryer boring. Our editors are tried and true investment experts and they like to write in ways that are personally engaging for their subscribers and when I look across the competitive landscape. This is another area, where we differentiate ourselves.

I'll now turn to the strategic initiatives that have driven our business over the past few years and where we're headed next.

When I stepped into the CEO role in 2017, we had real opportunities to increase the scale of the business and invest in our operating companies and content.

As we built out the platform, we ultimately doubled our number of lead editors more than doubled our number of primary customer facing brands and more than tripled our number of products. We also scale the sizeable free to paid subscribers subscribed origination channel and.

By the middle of 2019, and many of these new initiatives have taken hold and the business began to accelerate.

Our billings grew nearly 40% between the first and second quarter of 2019, and this revenue growth trajectory largely has continued over the past few years.

The story is the same in terms of total subscriber relationships as we grew from $3.8 million in the first quarter of $2000.19 million to $13 million by the second quarter of this year.

This acceleration in growth is a direct result of the investments that we've made in the business and the fact that we have built a diverse and critical mass of content people and technology that allows us to drive attractive growth going forward.

And this leads me to our vision for the company.

We want to be the leading financial wellness platform for self directed investors well.

We want to expand our reach and discover ability through new channels consumption mediums and branding we want to build deep network effects by increasing social connections and leveraging our rapidly growing community and we want to expand the use of machine learning and data science and expand our SaaS product development and acquisition.

We also have many organic and inorganic growth opportunities in front of us opportunities that have increased the number during the process of going public as we had hoped.

On this front I want to highlight that we have a long and very successful track record of highly accretive acquisitions.

Over the past 10 years, we have successfully identified acquired and integrated a number of M&A opportunities.

Typically we look for either one editorial content that we think will be enriched through our customer base are too. We look for a business that is not being run as effectively as ours that we think we can bring onto our ecosystem and help to improve.

On the editorial or new content front, we often identify a key area of content that we want to add or key personality that we think will fit well in our model.

We bring them onto our platform provide a turnkey solution for them and then integrate them onto our operations infrastructure. This has been incredibly successful for us in the past.

In one recent example, we helped to lead editor scale, whose business from approximately 6000 subscribers. When he came on board to more than 100000 subscribers 18 months later.

And the business is very profitable.

On the M&A front, we acquired a business in 2017 that was not performing well and was losing money, but we saw the potential.

Once it was integrated onto our platform in the business made more than $12 million in 2020.

Another example is our acquisition of shaken analytics, which we acquired in January of this year.

Following the acquisition, we integrated that business onto our platform and formally introduce their products to our existing subscribers and met.

The chicken products are quite good and the broader distribution of those products to our subscribers allowed us to quickly recoup our initial investment and we expect to see considerable opportunities for growth with their product suite going forward.

Now I'd like to spend some time walking through briefly the highlights of our second quarter results before handing the call over to Dale to dive deeper into our financials.

During the second quarter, our revenues grew 71, 7% year over year.

And our billings increased 54% year over year.

That helped to increase our adjusted cash flow from operations by 59% year over year.

With these numbers, we are very pleased with our results and this quarter was our second highest quarter ever in both billings and adjusted cash flow from operations.

Our business continued to perform well as the subscribers continue to engage with and explore our research products and software solutions.

That resulted in significant growth in our year over year results.

And when you consider that a number of our senior leaders are working on the go public transaction I think that makes our results even more impressive.

While we are very pleased with our financial results I would encourage our shareholders to keep the long view in mind.

We had been in business for over 20 years always been profitable and treated our equity holders well and.

And during that long history, there have been periods like this one where our year over year growth was up significantly.

Now we can't promise to our investors that things will always go up like they did in this period.

We can do as promised to do our best to run the business as if it were our own money at risk because it is.

Our leadership team has a tremendous amount of skin in the game. So our economic interests are aligned with our shareholders. This approach has served us very well over time and we have no plans to change that approach now that we are a public company.

And with that said I'll turn the call over to Dale to provide a deeper dive into our numbers.

Yes, hey, thanks Mark.

Turning to our financial results.

Second quarter 2021 revenue was $142.1 million compared to $82.8 million in the second quarter of 2027.

71, 7% year over year growth.

We continue to see the results of our significant investment in the business across our platform our content our people new technologies and our significant free to paid distribution channel.

Billings were $185.1 million this quarter compared to $123.1 million a year ago, that's more than a 50% year over year increase.

Approximately 45% of our billings this quarter came from lifetime sales.

54% in term sales and 1% from other buildings.

Keep in mind that our billings can vary quarter to quarter due to the nature of us collecting all of our invoices upfront as well as campaign mix in efficacy.

First quarter 2021 was a record well beyond our forecast at $255 million in billings, that's nearly $100 million sequential increase.

But our second quarter was also very strong with high conversion rates conversion rates in line with a bit higher than those we saw in 2020.

Just not quite as high as they were in the first quarter of this year.

Our cost of revenue was $26.8 million this quarter compared to 20.759, a year ago.

Included in this cost of revenue was $10.6 million of stock based compensation compared to $15.1 million in the year ago quarter.

If you were to exclude stock based comp from our cost of sales sales margins as a percent of revenue would have been 89% this quarter.

As compared to 85% in the year ago quarter, and generally in line with historical averages to slightly above.

One thing I'd like to emphasize that from the time of the combination with ascend it and going forward.

Based compensation attributable to our original class B units will see these.

These units were treated as derivative liabilities rather than equity prior to our merger with attendance.

They had to be re measured each quarter and the change in fair value was included in stock based compensation also any distributions of profit.

Paid to class B unit holders, who are treated the stock based comp as well.

However on a go forward basis as those original class II units convert straight common unit meeting straight common equity.

We expect to incur significantly lower stock based compensation consistent with that of a traditional stock based comp plan for our employees.

Moving on with the financials sales and marketing costs were $56.9 million.

Order compared to $49.2 million last year.

Included in these amounts were stock based comp of <unk> 8 million this quarter compared to $1 million in the year ago quarter.

Our per unit cost of customer acquisition increase this quarter.

But the aggregate spend decreased to $56.1 million from $77.7 million in the first quarter of this year.

This is a normal near term adjustment for us we are well accustomed to adjusting to these sorts of market fluctuations.

General and administrative costs were $64.7 million compared to $84.5 million in the year ago quarter.

This includes $36 million in stock based compensation this period.

As compared to $62.5 million in the year ago quarter.

If you exclude stock based comp our G&A cost increased about $6.7 million year over year.

This was driven by a $3.7 million increase in incentive compensation accruals.

An increase of $1.7 million in payroll and benefit costs due to increased head count primarily within our business units.

One and a half million dollar increase in cloud computing and software fees the increase in transaction volumes.

And telecom costs, partially attributable to Covid as we all work from home.

General and administrative costs. This quarter included $3.2 million in nonrecurring expenses associated with our stack IPO process.

So look we ended the quarter with a net loss of $8.4 million on a GAAP basis compared to net loss of $81 million in the year ago quarter.

The decrease in losses, primarily due to an increase in revenue and $59.3 million as well as at $31 two.

$2 million decrease in stock based compensation expense. This was partially offset by an increase in the amortization of deferred contract acquisition cost of $10.6 million.

And an increase in comp and benefits of $8.6 million as a result of aggregate increased head count.

But we really think cashless that matter most to investors and therefore, our emphasis and our main non-GAAP measure is adjusted cash flow from operations.

To be clear this metric only adjust for stock based compensation expense associated with our old class B profits distributions historically.

Going forward it will only adjust for any unusual or nonrecurring recurring items.

This quarter adjusted cash flow from ops was $59.4 million compared to $37.3 million in the year ago quarter.

Nearly 60%.

Yeah.

Adjusted cash flow from operations margin, which has adjusted <unk> as a percent of billings.

Is 32, 1% in the second quarter this year compared to 33% in the year ago quarter.

This brings our year to date total adjusted cash flow from ops that $157.3 million.

That's more than the entire $134.3 million that we registered.

In all of last year.

If youre interested in our reconciliation of adjusted cash flow from ops that that information in our press release as well as our 8-K that we filed this morning.

Like to highlight two our annual rule of 50 concept that we talked to many of you about on our roadshows over the past nine months.

That's the definition of that is GAAP revenue growth plus our adjusted cash flow from operations margin.

We really think of it on an annual basis, but having said that just as a proxy our GAAP revenue growth. This quarter was 73% and our margin was 32%.

If you do the simple math I think that's more than 50%. So keep in mind. This was one of our best quarters ever.

Now, let's turn to some of our key metrics are paid subs grew from 0.7 million a year ago to $1 million this quarter.

That's a 45, 5% increase we saw our free subs increase was $6.8 million a year ago.

<unk> million dollars this quarter.

<unk> improved to $823 million, that's actually $823 this quarter from $748 last year, an increase of more than 10%.

Total paid subs have a million this quarter did decrease nominally compared to first quarter 2021.

The slight decline in paid subs. This quarter is due to factors, which we believe are related to the travel and leisure boom associated with the dramatic reopening of the economy.

First we saw advertising cost begin to increase late in the second quarter as the travel and hospitality industries started the market there with products very heavily in digital mediums.

That tended to increase our per unit acquisition cost a bit.

Additionally towards the end of the quarter, we began to see what some are referring to is the revenge travel boom as Americans begin to make up for the inability to travel for the past year and a half.

As a result, we believe it currently costs a little bit more to get the attention of prospective new customers, who are venturing out rather than.

Focusing on their investments.

We focus closely on our breakeven matters as our per unit subscriber acquisition costs increase will adjust and focus on marketing on existing customers.

For which that cost is close to zero.

We'll continue to evaluate our unit cost and believe that there should be some normalization as we get here into the fall in the back to school season.

Look this was a really good chance to explain an important concept in our business with some of you have heard this before.

This has contributed to our financial success over the last two decades were very disciplined around our marketing spend we closely watch our per unit costs versus the revenue we can bring in.

Our per unit cost decrease over time, we will ramp our marketing spend to take advantage of the situation. That's certainly what you saw in the first quarter of this year.

And frankly throughout the second half of 19 and really all of 2020.

Conversely as per unit cost increase for whatever reason will decrease our aggregate marketing spend and we'll evaluate and we'll test and will adjust.

That's what we saw in the second quarter of this year. The beauty of our business is that we can adjust quickly redirect dollars to other campaigns and if need be pulled back briefly on new subscriber acquisition.

Until our unit cost decreased marketing ROI increases or market conditions change.

When we do this subscriber additions may decline, but margins should expand.

On the other hand, when customer acquisition cost decline or a marketing ROI increases will increase our direct marketing spend in aggregate, we will drive new subscriber acquisition.

Moving on total free subs increased sequentially by $1.1 million in the second quarter. This year. The momentum is building the free subscriber pull continues to be a valuable source of new paid subs.

Total free subscribers of $12 million at June 30th represents a 75, 6% increase as compared to $6.8 million.

In the year ago period.

And finally, turning to our second quarter ARPA was $823, an increase of 10% from the $748 in the year ago quarter.

This growth was driven was driven by strong ongoing high value ultra high value conversion as indicated by our customers' buying additional high value content at higher price points and with that let's turn it back to mark for some closing comments.

Thanks Dale.

So before we take your questions I'd like to emphasize a couple of points first now that we've completed our go public process. We're very excited to turn our attention back to running the business and executing on our growth plans.

Organic opportunities are significant and our eyes, and we now have a central holding company brand and market wise and we plan on using to pursue some brand awareness and the central platform using this new brand.

We will of course build out our customer facing brands, adding more editors and content and more brands over time the way we've always done.

And this is all with the backdrop.

Of an addressable market that we think has strong tailwind in our favor.

More and more people are inclined to manage their own investments and especially the younger generations.

In order for younger investors to grow their investment portfolios to say 250 to $500000, they need education research and tools to succeed and.

And we provide those solutions to that group as they will fall squarely in our customer demographic as they age mature and grow their assets.

So we're very excited about all of this we also have opportunities to leverage our data science more and Marc Airhart Gearhart and his team at <unk> will be very helpful and are being very helpful. In this regard already.

And finally, we had mentioned previously that we've always been active on the M&A front.

Now with the transparency public awareness and currency being a public company, we are better positioned than ever to execute on this strategy.

We're very excited about our future and continuing to serve our readers going forward and with that I'd like to turn it over to the operator for questions.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue you.

You May press star two if you'd like to remove your question from the queue.

All participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys.

One moment. Please go ahead.

Paul for your questions.

Our first question comes from the line of Devin Ryan with JMP Securities. Please proceed with your question.

Okay, Great. Good morning, Mark Dale first of all congratulations on the spec closing and welcome to the public markets.

Thank you.

I guess I wanted to start on customer acquisition cost.

And the outlook. Obviously, you guys gave some good detail around what you're seeing in the market seems like maybe some unusual drivers just with the economy reopening so we'll see how long.

This last but but maybe if you can just.

Give us a little more perspective around how youre thinking about.

Where where CAC may settle down is it still reasonable to be thinking about kind of somewhere between 2019 and 2020 I appreciate a little bit of a crystal ball question in there, but then also talk about this transition towards focusing on.

The free subs, which I agree is kind of a nice part of the model that you can go back and forth and just functionally what does that look like and how you with that nice growing base. There how you expect to kind of.

Push harder into that into that area.

Yeah, Hey, Devin so look I mean.

As you know, we don't disclose cap in specific but you guys can do your own that you have enough data points to calculated you can calculate it kind of what you think it is year to date and probably won't be too far off right.

And if you look at it year to date.

Actually right in line with sort of what we told you guys and our investors slide previous investor slide deck to reset expected to be the average of 19 and 20, it's almost right on the screen. There. So what we're seeing here is not anomalous from the absolute number what we saw in the second quarter, particularly later in second quarter was just the.

Cuteness of the immediacy of the impact it was like all of a sudden travel and leisure was gone for 15 months 14 months.

All of a sudden the entire world of travel leisure was bang in Google and Yahoo, and everything else.

May and June and so it was just the acuteness of the time that that had an impact that was sort of dramatic in the quarter, but in aggregate year to date, where we're kind of right in line with where we think we would be at year end, it might ebb and flow a bit quarter to quarter rate, but no. We don't we don't see so far we're right on the screws.

<unk> ahead of our forecast and.

We feel good about where we sit.

On the free subs, yes look that's a huge community for US was 12 million large now.

And outlet Mark chime in here too, but just wanted to get my nickel first.

As I was talking but.

12 million people, that's massive community, we need to figure out how to better take advantage of that right. We are converting them to paid and that's an obvious benefit of the community, but there are other ways to engage that community to help create some synergies and I know mark and his team gearhart have some thoughts on that I know Mark Arnold has certainly had thoughts on that so.

Stay tuned theres, a lot more to do to that that set of relationships and simply convert 2% of them annually to paid.

And Myron, let mark chime in here more on that.

No that's right.

We're happy to have the community we have and of course, we're we work hard to provide content to that group that we think they will find engaging and then ultimately what we hope will happen is we'll intrigued him enough and get them excited too.

Dark paying for our either our lower cost or higher cost products and we've had a lot of success doing that overtime.

Can we do better sure I wanted to do better of course, and that's one of the things I'm excited about.

Doing going forward Thats part of why I'm excited to turn back towards operating the business and also part of why I'm excited to start working with Mark and his team to see what lessons learned to help us some of the tools that they developed expertise in <unk>.

Try to make that happen.

Okay terrific.

All that color and then just as a follow up.

Not sure how much you can share here, but even if you can give some.

Qualitative color would be very helpful. Just to kind of think about the pipeline.

New brands or editors are analytic capabilities.

Flavor for kind.

Kind of at the level of dialogue Youre, having areas that are interesting at the moment and really just how the visibility of the spec and descended relationship and also the public currency is maybe helping to drive more conversation.

To accelerate some.

Some things that are in the pipeline.

Yeah.

Sure.

I can't comment on specific targets as I'm sure you know.

But but.

I just had a couple of times before publicly and I've mentioned it here.

Today that the number of inbound inquiries. We have received has increased dramatically since we announced the merger back on March 2nd.

A lot of our outbound both content and M&A activity.

Prior to the announcement was without that.

We would occasionally have folks knock on our door so to speak.

See if they wanted to strike a content or M&A deal but.

But far and away our activity was outbound.

Since March 2nd we've had a lot more inbound inquiries and a number of those opportunities are interesting I can't comment on the specifics, but I'm very excited because what I thought would happen and the level of increased activity on the M&A front has in fact kicked in and so we've got a couple of things that we're looking at actively now.

Try to see if we can.

Plug back in our M&A activity in our M&A efforts.

And see if we can add brands and people to argue system.

Sure.

Yeah.

Okay great.

Really appreciate it I'll leave it there and hop back in the queue, but thank you guys.

Thanks, Kevin Thanks, Kevin.

Thank you. Our next question comes from the line of Jason <unk> with Oppenheimer. Please proceed with your question. Thanks, I guess I'll start with two so I think RV came in better than we were looking in the quarter.

You guys are not you guys are.

Keeping our full year guidance unchanged. So maybe help us how are you thinking about kind of <unk> relative to paid subs for the rest of the year.

And then.

Just any more color you want to give us on some of the emerging initiatives like terminal and whatnot is that something that could be kind of additive to the model next year. Thanks.

Yes, So hey, Jason Thanks for take the question on <unk>, Yes, you're right I mean, 'twenty three I think it was <unk> 25 in the first quarter. So we're keeping a pretty high.

Few things go into that just the numerator and denominator right look our billings were incredibly strong not not not first quarter numbers, but still.

A record for us other than the first quarter. So it's a combination of those billing numbers being high which showed good conversion rates, but it also has to do with the fact that we didn't grow our subs are.

Were essentially flat in the second quarter. So that's the denominator so that kept the <unk> a bit higher rate those two things together kept at higher because we've talked about our forecast at length with you guys. We do like to under promise over deliver so there is frankly, some measure of conservatism in our numbers right and we said that we.

We feel very confident in meeting our numbers do we think our ARP, who may come in higher than that I think at $7.17 for the full year. That's in our forecast if remember correctly. So I think it will probably come in here is that yes. It was probably well right, but if you do the exact math when you do the exact billings of 750 in our forecast when you do the exact subscribers of I think it's 108.

Sure.

That math work.

Timing of the sub adds matters on the denominator, but basically youll come out with test 717. So it really comes down to do you think we're going to.

We're going to beat our billings number, yes, or no and if so RP will be higher.

And so forth and then how quickly we can get these new subs to buy something additional and keep in mind the more new subs that we added to get in the period that is dilutive to ARPA right. The initial revenue for those new subs, there, maybe $100 or less per person.

As far less than 823, right. So you need those guys to buy their second publication for it to be accretive. So the key for us is to get them in the door engage them with good quality content show them that we're good and market to them intelligently and get them to buy that second publication.

In two to six months and we've been very good at that so to the extent that we are we continue to be successful at that.

That would be another thing that would drive ARPA above that 717, so one would be a billings beat who would be being able to have our new subscribers come in and buy their accretive second third publications within the calendar year, but bottom line, we feel really good about our forecast.

We feel really good about meeting or beating the forecast pretty much across the board.

And yes that 770, <unk> does look a little conservative to me.

Don't know if that answers your question or not.

Then on the business side, Mark why don't I turn it back to you.

Okay.

Yes, Jason Thanks for the question.

As I mentioned to Devin I'm excited about our M&A pipeline, but we've got some things that are that we're looking at very closely and I can't get into specifics and of course.

We havent closed anything or you all would know that.

So I can't promise you that we'll have an announcement or anything like that but I'm very happy with the level of activity that's going on in our M&A.

Process and whether M&A team.

And you also mentioned the terminals specifically the terminals launched it.

Still primarily focused on delivering stands very research products to it.

Readers right now although some of our other affiliates are also marketing their products. There we have not yet migrated all of the other <unk>.

Market wise brands into that terminal infrastructure.

And we're still looking at.

That as soon as we can.

Again, one of the reasons why I'm excited about turning my attention back to running the business and being a little bit less distracted with our go public efforts.

But we do want that as Ive always mentioned, so having a a.

Umbrella product across the market wise brands will help us.

With both a new distribution channel in an effort to drive traffic to that site and introduce prospective readers to our products.

And we just haven't had that so far so that's still very much in our plans, we're still actively moving in that direction, but we just don't have anything concrete to announce right now.

Okay. Thanks.

Okay.

Okay.

Thank you.

Our next question comes from the line of Jeff Mueller with Baird. Please proceed with your question.

Yes. Thank you so.

So just on the comments about.

Member paid member attrition trending higher following a period of good member growth that makes sense to me given the mix shift I guess my question is does it get more than offset by debt upselling that occurs over I think typically 18 months. So it's.

Billings are net revenue retention.

And also usually elevated relative to historical periods.

For 12, or 18 months, when you're coming off of both period of good paid member growth.

Right, you got it right and and and and the Dash.

The dashboard that you would look at to confirm what you have just hypothesize would be our boots right. You are seeing ARPA growth of 10%. So we're still in that.

We are not disclosing churn specific specifically, but we did say that we are in that range of one 5% to 2% that we published in previous Investor decks. We're just at the higher end of the range right now as opposed to the lower end of that range. So.

But yes, second highest billings quarter ever ARPA growth year over year, and <unk> pretty much flat Q1 to Q2.

So yes.

And the reason why is that.

Those that do churn from us and this fact is consistent year in year out or.

The entry level guys. There are moves when they leave us are right in line with what is the card value for an entry level publication, you know, let's say.

And that will range between 60 to $100 and that's the <unk> of the guys that leave us. So yes, that's far offset by the guy that.

Ben the $65 initially and then buy it for a second publication for $1000. So, yes as long as our conversion rate.

At or higher than we have seen yet easy to offset that modest uptick in subscriber count churn if that makes sense.

Got it and then.

On the Upselling of the paid subs it sounds like with per unit marketing costs ticking up there.

Youre responsive to that and disciplined on that than theirs.

Maybe incrementally more focus on that Upselling.

Yes.

What exactly does that mean or can you give more examples of like what you do differently just given that it's so low cost to do that I would think youre always doing a lot of that and that's always a focus area. So.

What do you do differently in one of these periods from Upselling.

Again, its focused our execution perspective.

No Mark units you wouldn't take that one or you want me to yeah sure I'm happy to.

Okay.

Youre right Jeff.

If if if we articulated our ideas as an either or we didn't mean to it's not like what we do as a business, especially across our multiple brands as we wake up every morning, and say should we go find more readers or should we.

Advertise our higher priced products, it's not like that of course as you as you know.

And as you pick up on.

What we do do that our market there is a very disciplined about is.

As we look for new subscribers and as per unit costs come up.

We have very disciplined metrics around our marketing teams.

They're looking at that and if it becomes cost efficient and cheap to acquire new readers.

And stay within our operating metrics, we push the accelerator down and try to do more of that on a cost efficient basis and as that price action reverses and it gets expensive to do that we are disciplined in our marketing teams to pull off and.

And back off.

Both of those dynamics. We of course are also putting offers in front of our readers to see if they are interested in other investing strategies, usually at higher price points on both.

Both the lower price and meaning less than $200, but also a higher priced product in the seventh several thousand dollar range. So.

If we if we articulated our ideas as if it was an either or.

Not at all what it is we do.

We constantly try to put.

Investing strategies in front of our readers that we think they will find interesting and engage with we just do less of that.

New customer acquisition when it gets expensive to do so and that's that's what we started to see late in the second quarter.

Got it and then.

I feel like I missed something from the way that some of the questions have been asked.

Answered in terms of like what you are actually saying on outlook commentary and I totally hear you on kind of current trends and incorporated that into our thinking but.

As you went through the destock process, you had various 2021 and 2022.

Key metric and financial.

Outlooks and I guess.

R.

Are you.

Standing by those are you reiterating those or not or is there any just methodology change because now that you are.

You closed on the <unk> merger.

Rolling forward into <unk>.

<unk> around it.

Horrible guidance or not.

Yeah. So good question. So look what we're trying to do is it would be a normal course these back.

Process, which is obviously in the public process in our S. Four there is a lot of metrics that are disclosed in forecast, we put two years a forecast in there.

Once you are public it's typical to pull back a bit on some of those metrics and so obviously the key metrics that we have defined kpis and our non-GAAP measure.

We're obviously committed to disclosing those and we will absolutely do that and we will probably also disclose some of the other metrics around the mosaic right.

As well as far as our forecast for 'twenty. One yes, we are thinking about this forecast I think we kind of said that pretty strongly on this call. We don't plan to change them or update them.

But I think I said 20 minutes ago, we feel very comfortable in meeting or beating those forecasts. So absolutely. We did remove the 2022 forecast from our slide deck that you'll see on our website, but that's sort of normal course proceed here as I understand it once you are.

A public company, what we're going to do over the next couple of months has listened and learned from you guys from buy side.

And begin to formulate.

Our guidance policy will be.

To the extent it but look I'll tell you. This I mean I know Marc.

Feels this way very much we are much in the camp of Warren Buffett around around guidance and things like that on one hand on the other hand.

We certainly understand your needs. We want you guys to have enough information to be able to produce intelligent models and intelligent reports so it'll be a balancing act.

We just want to make sure that the guidance, we give fits well within that rule of 50, because that preserves latitude on the business side. The last thing we want to get him into us.

Earnings estimates are $1.22, and you had $1.21, and that's just filling this to us that that that.

That restrains, our ability to do the pivoting we've talked around about marketing spend.

Or.

Pulling in the Rins are pushing the throttle we want a balanced growth and profit so whatever we come up with guidance wise will give us the latitude to not constrained the business in a negative way, but we just don't know exactly what that's going to be yet, but it will certainly be related somehow to the rule of 50 for sure. We think that's a good model for us.

And our plan would be to come out with our sort of guidance.

Framework as we get into year end, so another quarter after the third quarter.

We get into fourth quarter reporting and things like that that's when we'll really begin to formulate our specific guidance, but our plan would hopefully to give you guys.

And other key metrics and enough of the mosaic that will really help them produce good quality research.

Got it appreciate it thanks Paul.

Thank you as a reminder, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad.

Our next question comes from the line of Hugo <unk> with Wedbush Securities. Please proceed with your question.

Hey, guys. Thanks.

Thanks for taking the questions and congrats on closing the deal and going public.

I guess, what with all that's going on around the reopening and the trends there I wanted to dig into the sub.

Taking a little bit more so.

If you help us understand maybe some of that.

Some of the ins and outs of what's happening is it.

Gross that issue, that's really driven by the marketing side is it.

It has.

Sure.

Its turn changing or are you seeing any of those metrics of your current subs.

Changing at all or is it really just mostly a gross thing and if it if it is just the gross net add things that marketing related or are you seeing that.

Different than <unk>.

How people are interested in.

Self directed investing now that the world to be opening a little bit more I think.

During the process you had I think the way you would highlighted what that that wasn't really necessarily up.

A booster of pull forward from from Covid.

But we were people were at home for a while and not really going out as much and I think there wasn't sort of boost generally speaking so.

Maybe just walk through some of the puts and takes can subscribers decline again next quarter.

If marketing.

If marketing digital advertising rates.

Hi.

Let's start there and then I have a follow up.

Yes, so while theres lots of unpack there good question.

Sure.

Let me address the Covid part of that first look.

As we've talked about extensively you can see the graphs are acceleration began well in advance of Covid. So the organic improvement in the business was the result of the investment.

That's for sure the impact we're seeing now.

I think really has to do with the acuteness of it.

We went from having less than 150000 people go through TSA checkpoints in the middle of Covid.

The last Sunday I heard two and a half million in one day went through TSA checkpoint okay.

So it's just the dramatic the acuteness of the snapback in travel that happened within like a four to six week period of time that went from essentially zero, two and a half people that millions of people flying a day right. So it was just the display AD Spike was quick right.

And so I think that's what we saw in the second quarter with the acuteness of that and obviously there is a tension screen attention time.

Everybody I know this traveling and having fun right now so I think people's eyes or away from screens a little bit so.

That's important.

<unk> has been in the near term right. We certainly do expect that normalized been at this for two decades, we've seen everything from the financial crisis to the telecom boom and bust the September 11th.

Everything along the way so.

So the topic is new but cycles aren't and we're used to adjusting to them.

Question around what's driving what's the primary factor in this is.

It's really it's really a numerator effect, meaning by that growth at <unk>.

Turns up nominally but it's in that range that we've told you about before it's not really yet what it is it's just the gross adds.

Good down in Q2 sequentially in April May and June and June was.

Was the most impacted.

Impacted months.

And Thats as we saw our per unit costs go up we are very sensitive to maintaining our profitability and our breakeven. So that's a key part of our thesis for our investors as profit balanced with growth.

And so we did pull back on the spend you saw $20 million sequential decline in direct marketing spend from Q1 Q2.

That's not a bad thing that's a smart thing right, we're going to listen and learn we're evaluating we're testing.

And we have a lot of good campaigns planned for fourth quarter in terms of the subscriber additions we've been working on these for several months.

Lance a bunch of these campaigns right into the teeth of back to school right when travel should be this huge travel boom might have.

Might start to ameliorate rate normalizing back to a normal world kind of environment.

So yes, we expect to see some good opportunities for subscriber growth in the fourth quarter again.

This rapid cycle, but it really is just a gross add issue that kept subscribers essentially flat this quarter. Its not a churn story. It's just gross gross adds came down and churn kind of just chugged along in our subscriber base was essentially flat.

That's the bottom bottom line that makes sense.

Yeah.

Makes a ton of sense, let's say digital.

I just wanted to clear so, let let's say digital ad rates.

CPM stay elevated through the rest of the year.

Would that mean that you would keep your foot off the gas in terms of marketing throughout all of that or would there be a point, where you kind of feel like okay.

You may need to step in and a.

A little bit and don't really have a choice around it like this.

Okay.

You are getting at a really good point here to do it and this is not some macro top down.

Mark Arnold says you guys need to stop spending.

These guys know their business better than anybody and market isn't telling them their business. So no it's not going to be where monolithically not spending what we are doing is designing these new campaigns and we're going to as we launch. These campaigns were going to test a whole host of things around looking field, the marketing copy the landing page and price points.

Right and price point, so yes.

Yes, we have a ton of campaigns, we're gonna go out with.

In the fourth quarter.

So no we're not just not going to market, we're going to we're.

We're going to launch this campaign for mental learned we're getting feedback and there's a lot of things that you can you can you can you can ingest pillar one content item to another you can pivot in terms of marketing language, we can pivot in terms of price points.

I'm not going to sit here and not do anything we're going to be testing all of those things.

And in fact May stay elevated.

Yeah. It feels like it's going to stay elevated here in the summer right.

But again like I mentioned earlier to be clear. It is absolutely in the range that we've talked about with you guys in our previously filed investor slide deck.

It's ray on the screws that we in terms of where we gain.

Gave you that outlook in terms of our year to date numbers. So it's just the acuteness in the second quarter, how quickly it kind of snap.

So that number so.

But it seems to have stabilized in terms of the display AD cost component of it that is not continuing to ratchet higher it kind of jumped up and it's kind of bumping along now so.

But yes, we certainly are not going to sit here and do nothing we have a lot of interesting stuff planned for <unk>.

Got it.

Color is really helpful. Given all the uncertainty in the environment and then just a quick follow up for Mark.

It started mark you talked about Youre thinking.

Taking advantage of the growth opportunity and investments.

Investments in Tech M&A and partnerships and think about M&A and partnership side is pretty clear.

A little bit more color around what what are the top priorities.

Check.

That can help improve the business thanks guys.

Yes. Thank you I appreciate the question.

As I listen to your question is the thing that Pops in my mind first is.

We have.

I've been I've talked about this a lot over the past few months, which is.

Starting to leverage that Knowhow, Marc Airhart and his team at Ascendant, who are very very experienced operators in law they've launched.

A number of successful companies, but they're not just operators there are operators.

And around.

The direct to consumer business model, albeit in games, which isn't exactly what we do as you know, but it's but it is consumer facing Anna and their business in particular.

Was built on significant data science expertise and delivering value in a way that created long term bonds with their customers.

So we have already begun the sort of.

Exchange of ideas and comparing what they did to what we do and seeing if we can learn from those.

Appearances and leverage that Knowhow and so we're fairly far along in our discussions around that and so we're going to try to implement some of their know how and what we do.

Make what what is already a really efficient business model, even more efficient.

I'm excited about doing that on the tech side.

If your question was more directed towards.

Tech M&A or other software and tools as I mentioned earlier on the call I can't get into specifics about specific discussions we're having it's just if you look at our M&A track record you'd see that we have a history of both premium content that sometimes is.

Software and tools to help people managed portfolios or look at their investment portfolios in different ways and without getting into specifics. That's generally what we are doing I don't expect that to change we are looking at all of those things.

With through the lens of if it can help people not just anybody, but our readers and improve their performance and their investing portfolios that is something we are interested in.

So I don't know if that helps you go but.

Hopefully yes.

That's helpful.

Just trying to get at.

What are the pieces in the tech stack that.

The most kind of missing an important I think you did answer that okay. Thank you.

Okay.

Yes, I don't really have any further closing comments just just I appreciate on behalf of Bill and myself. Your time this morning, and your time and attention and I. Appreciate all your support and we look forward to.

I was talking to you all soon in the coming quarters.

Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.