Stonegate Capital Partners has initiated coverage on MarketWise (NASDAQGM: MKTW), highlighting the company's improving operating profile and underlying turnaround. According to the announcement, MarketWise exited fiscal year 2025 with stronger fundamentals, as improving demand and execution offset the lagged impact of weaker prior-period billings on reported revenue.
FY25 billings increased to $271.2 million, representing a 13.4% year-over-year growth, while cash flow from operations (CFFO) improved to $46.0 million from a negative $22.2 million in FY24. However, reported revenue declined to $328.1 million (-19.7% y/y), and net income fell to $64.0 million (-31.2% y/y). Management identified the fourth quarter of 2024 as the inflection point after 12 consecutive quarters of decline, with momentum accelerating through FY25. In the fourth quarter of 2025, billings rose to $78.9 million (+42.0% y/y) and CFFO increased to $24.2 million from $6.0 million in the prior-year quarter, while revenue declined to $83.3 million and net income fell to $14.0 million.
The underlying turnaround is real despite lagged GAAP revenue. FY25 billings rose 13.4% to $271.2 million and CFFO improved to $46.0 million from negative $22.2 million, while fourth-quarter 2025 billings jumped 42.0% year-over-year to $78.9 million, showing operating momentum even as reported revenue continued to reflect older cohorts. Customer quality improved meaningfully. Paid subscribers fell 26.1% year-over-year to 374,000, but net revenue retention rebounded to 91% from 53%, average revenue per user (ARPU) rose 70.1% to $670, and higher-spend subscribers became a larger share of the base, pointing to a smaller but stronger customer base.
The balance sheet and capital return story remain attractive. MarketWise ended FY25 with $70.1 million in cash and no debt, paid $15.7 million in dividends, repurchased $3.4 million of stock, raised the regular dividend by 25%, and guided to approximately $300 million in billings and approximately $50 million in CFFO for FY26. For more details, the full announcement is available here.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Its affiliate, Stonegate Capital Markets (member FINRA), provides a full spectrum of investment banking services for public and private companies.
