Greetings. Good morning and welcome to the MarketWise Second Quarter 2021 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference line will be open for questions, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Jamie Lillis, Managing Director at Solebury Trout. Please go ahead, sir.

Thank you, operator, and good morning. Thank you for joining us on today’s conference call to discuss MarketWise’s 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 statement. Information concerning 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 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, Jamie, and good morning, everybody. Before I get started, I’d like to take a moment to thank all of those people who helped us through our SPAC process, public offering, which culminated in our first day of trading on the NASDAQ on July 22nd, under the ticker symbol MKTW. The many months of hard work by our fantastic team here at MarketWise, our 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 MarketWise 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 MarketWise 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. We’ll 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 a simple idea over the last few 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 and 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 in content to what we provide because it is actionable, but it is 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. In the 80s and 90s, the independent investment research space was inconsistent, and there were very few credible offerings available to the public that we would characterize as high-quality trusted research. Our founders surveyed this landscape and knew 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 if our roles were reversed. When we do that right, a relationship is formed between the reader and the writer, and goodwill is built-up between the reader and the operating brand. Fast forward two decades to today, we are a leading independent research subscription service, serving millions of self-directed investors, with a diverse portfolio of operating brands. Our research is a trusted source of financial information for our subscribers, and we have a community today of 13 million people, and approximately 1 million of these are 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 and 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. Our compelling content creates 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. 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, leveraging 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 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 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 over time. In our eyes, the market for self-directed investing is ripe for innovation and disruption, changing dramatically in ways that strongly favor our business. First, we have a rapidly increasing retiree population with 10,000 Americans retiring 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 of millennials is a significant future opportunity for our business, given that 72% of this generation identifies themselves as 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 the insights they’re looking for at prices they can afford. Other providers of such diverse content are typically for institutions and inaccessible 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 dry or 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 years and wherever 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 scaled the sizable free-to-paid subscriber origination channel. And by the middle of 2019, many of these new initiatives had 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 2019 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. We want to expand our reach and discover our 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 in number during our 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 interesting to our customer base, or 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. In one recent example, we helped the lead editor scale his business from approximately 6,000 subscribers when he came on board to more than 100,000 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, was losing money, but we saw the potential. Once it was integrated onto our platform, the business made more than $12 million in 2020. Another example is our acquisition of Chaikin Analytics, which we acquired in January of this year. Following the acquisition, we integrated that business onto our platform and formally introduced their products to our existing subscribers in May. The Chaikin 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 50.4% 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 were 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 have been in business for over 20 years, always been profitable, and treated our equity holders well. 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 our investors that things will always go up, like they did in this period. What we can do is promise 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. Now, with that said, I’ll turn the call over to Dale to provide a deeper dive into our numbers.

Yes. Hey. Thanks, Mark. So, turning to our financial results. Second quarter 2021 revenue was $142.1 million, compared to $82.8 million in the second quarter 2020. That’s a 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% from 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 invoices upfront as well as campaign mix and 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 a high conversion rate in line with or 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 $27.5 million a year ago. Included in this cost of revenue is $10.6 million of stock-based compensation compared to $15.1 million in the year-ago quarter. If you were to exclude stock-based compensation 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 is from the time of the combination with Ascendant and going forward, the stock-based compensation attributable to our original Class B units was steep. These units were treated as derivative liabilities rather than equity prior to our merger with Ascendant. As such, 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 unitholders were treated as stock-based compensation as well. However, on a go-forward basis, as those original Class B units convert to straight common units, meaning straight common equity, we expect to incur significantly lower stock-based compensation, consistent with that of a traditional stock-based compensation plan for our employees. Moving on with the financials. Sales and marketing costs were $56.9 million this quarter compared to $49.2 million last year. Included in these amounts were stock-based compensation of $0.8 million this quarter compared to $1 million in the year-ago quarter. Our per unit cost of customer acquisition increased 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’re 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 in this period as compared to $62.5 million in the year-ago quarter. If you exclude stock-based compensation, our G&A costs increase 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 headcount, primarily within our business units, and a $1.5 million increase in cloud computing and software fees that increased transaction volumes, and telecom costs partially attributable to COVID as we all worked from home. General and administrative costs this quarter included $3.2 million in non-recurring expenses associated with our SPAC IPO process. So, look, we ended the quarter with a net loss of $8.4 million on a GAAP basis compared to a net loss of $81 million in the year-ago quarter. The decrease in loss is primarily due to an increase in revenue of $59.3 million, as well as a $31.2 million decrease in stock-based compensation expense. This was partially offset by an increase in the amortization of deferred contract acquisition costs of $10.6 million and an increase in compensation and benefits of $8.6 million as a result of aggregate increased headcount. But, we really think cash flows 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 adjusts for stock-based compensation expense associated with our old Class B profits distributions historically. And going forward, it will only adjust for any unusual or non-recurring items. This quarter, adjusted cash flow from operations was $59.4 million, compared to $37.3 million in the year-ago quarter, up nearly 60%. Adjusted cash flow from operations margin, which is adjusted cash flow from operations as a percent of billings is 32.1% in the second quarter of this year, compared to 30.3% in the year-ago quarter. This brings our year-to-date total adjusted cash flows from operations to $157.3 million. That’s more than the entire $134.3 million that we registered in all of last year. If you are interested in the reconciliation of adjusted cash flow from operations, that information is in our press release as well as our 8-K that we filed this morning. I’d like to highlight our annual Rule of 50 concept that we talked to many of you about on our roadshows in the past nine months. 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. Our paid subscribers grew from 0.7 million a year ago to 1 million this quarter. That’s a 45.5% increase. We saw our free subscribers increase to 6.8 million a year ago to 12 million this quarter. ARPU improved to $823 this quarter from $748 last year, an increase of more than 10%. Total paid subscribers of 1 million this quarter did decrease nominally, compared to the first quarter of 2021. A slight decline in paid subscribers 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 costs begin to increase late in the second quarter as the travel and hospitality industries started to market their products heavily in the digital medium. That tended to increase our per unit acquisition costs a bit. Additionally, toward the end of the quarter, we began to see what some are referring to as a 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 methods. As our per unit subscriber acquisition costs increase, we’ll adjust and focus our marketing on existing customers, for which that cost is close to zero. We continue to evaluate our unit cost and believe that there should be some normalization as we get here into the fall and the back-to-school season. Look, this is a really good chance to explain an important concept in our business. So, some of you’ve heard this before. This has contributed to our financial success over the last two decades. We’re very disciplined around the marketing spend. We closely watch our per unit cost versus the revenue we can bring in. If per unit costs decreased over time we’ll 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 costs increase for whatever reason, we’ll decrease our aggregate marketing spend and we’ll evaluate and we’ll test and we’ll 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, pull back briefly from new subscriber acquisitions until our unit costs decrease, 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 costs decline or our marketing ROI increases, we’ll increase our direct marketing spend in aggregate, and we’ll drive new subscriber acquisition. Moving on, total free subscribers increased sequentially by 1.1 million in the second quarter of this year. The momentum of building the free subscriber pool continues to be a valuable source of new paid subscribers. 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 ARPU. Second quarter ARPU was $823, an increase of 10% from the $748 in the year-ago quarter. This growth 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 you, 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 in our eyes, and we now have a central holding company brand in MarketWise that 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 tailwinds in our favor. More and more people are inclined to manage their own investments, and especially younger generations. In order for younger investors to grow their investment portfolios to say $250,000 to $500,000, they need education, research, and tools to succeed. 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 Gerhard and his team at Ascendant will be very helpful and are being very helpful in this regard already. And finally, we’ve mentioned previously that we’ve always been active on the M&A front. Now, with the transparency, public awareness, and currency of 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. Our first question comes from Devin Ryan with JMP Securities. Please go ahead with your question.

Great. Good morning, Mark and Dale. First of all, congratulations on the SPAC closing and welcome to the public markets.

Thank you.

I want to start by discussing customer acquisition costs and the outlook. You provided some good insights into what you're seeing in the market, and it appears there might be some unusual influences due to the economy reopening, so we will see how long this continues. Can you elaborate on how you anticipate your customer acquisition costs may settle? Is it still reasonable to consider a range between 2019 and 2020? I realize that’s a bit of a forward-looking question. Additionally, could you discuss the transition towards focusing on free subscriptions, which I think is an interesting part of your model? What does that transition entail, and how do you plan to intensify efforts in that area with a growing user base?

Yes, Devin. As you know, we don’t disclose Customer Acquisition Cost specifically, but you can do your own calculations with the data available. If you estimate it based on year-to-date figures, you’ll likely be close. This aligns with what we indicated in our previous investor presentation, where we suggested we would be averaging between 2019 and 2020. The figures we see are consistent with that average. However, in the second quarter, particularly towards the end, we noticed a sudden impact as the travel and leisure sector was effectively inactive for about 14 or 15 months. Suddenly, in May and June, there was a rush back to travel and leisure. The sharpness of this transition was quite significant for the quarter. Overall, year-to-date performance aligns with our expectations for year-end, although there may be some fluctuations on a quarterly basis. So far, we are on track and feeling positive about our position. Regarding free subscribers, we now have a large community of 12 million. I’ll let Mark share more insights, but it’s important to leverage this community effectively. While we are converting some to paid subscriptions, there are additional opportunities to engage this group and create synergies. Mark and his team have ideas, and I know Mark Arnold has thoughts as well. There’s much more we can do with this group beyond just converting a small percentage to paid subscriptions. Now, I’ll let Mark elaborate further.

That’s right. We’re happy to have the community we have. And of course, we work hard to provide content to that group that we think they’ll find engaging. And then, ultimately, what we hope will happen is we’ll intrigue them enough and get them excited to start paying for our, either our lower cost or our higher cost products. And we’ve had a lot of success doing that over time. Can we do better? Sure. I want to do better, of course. And that’s one of the things I’m excited about doing going forward. That’s 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 Gerhard and his team to see what lessons they learned, tell you some of the tools that they’ve developed expertise in, to try to make that happen.

Okay, terrific. I appreciate all that color. And then, just as a follow-up, I’m 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 of new brands or editors or analytic capabilities, any flavor for kind of the level of dialogue or having, areas that are interesting at the moment? And really just how the visibility of the SPAC and Ascendant relationship and also the public currency is maybe helping to drive more conversation and potentially accelerate some things that are in the pipeline?

Yes. I can’t comment on specific targets, as I’m sure you know. But, I’ve said a couple times before publicly and I mentioned that here today that the number of inbound inquiries we’ve 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 outbound. We would occasionally have folks knock on our door, so to speak and see if they wanted to strike a content or M&A deal. But by 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 in 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 to try to see if we can plug back in our M&A activity and our M&A efforts and see if we can add brands and people to our system.

Thank you. Our next question comes from line of Jason Helfstein with Oppenheimer. Please proceed with your question.

I think ARPU performed better than we expected in the quarter. You are maintaining the full year guidance as is. Could you share your thoughts on ARPU in relation to paid subscribers for the remainder of the year? Also, could you provide additional details about some of the emerging initiatives like terminal? Will these be beneficial to the model next year? Thank you.

Yes, thanks for the question, Jason. Regarding ARPUs, you're correct; it was 823, compared to 825 in the first quarter, which is still quite high. This is influenced by our strong billings, which set a record for us outside of the first quarter. Although we had high numbers, we did not grow subscriptions, which remained essentially flat in the second quarter. This contributed to maintaining a higher ARPU. We’ve discussed our forecast extensively and aim to under promise and over deliver, so there's a level of conservatism in our numbers. We’re confident in our projections and believe our ARPU might exceed the forecast of 717 for the full year. If you calculate based on a billings forecast of 750 and approximately 1084 subscribers, that math adds up to 717. The timing of subscriber additions impacts this. Ultimately, it depends on whether we can exceed our billings expectations, which would boost ARPU, and how quickly we can encourage new subscribers to make additional purchases. Keep in mind, adding new subscribers dilutes ARPU initially since their revenue is typically less than 823. We need them to buy a second publication for ARPU to improve. Our focus is on engaging new subscribers with quality content to encourage these purchases within two to six months, and we've been successful at this. If we continue this trend, it could drive ARPU above 717. We’re optimistic about our forecast and feel confident about meeting or exceeding it overall. That 717 ARPU target does seem a bit conservative to me. I hope that addresses your question. Mark, I'll turn it back to you.

Yes, Jason, thank you for your question. As I mentioned to Devin, I'm excited about our M&A pipeline. We are closely examining some opportunities. While I can't share specifics, we haven't finalized anything yet, so I can't guarantee any announcements. However, I'm pleased with the level of activity in our M&A process and our team. Regarding the terminals you mentioned, they have launched and are primarily focused on delivering Stansberry Research products to readers, although some of our other affiliates are also marketing their products there. We have not migrated all the other MarketWise brands into that terminal infrastructure yet, but we are looking to do so as soon as possible. This is one reason I'm eager to refocus on running the business with fewer distractions from our co-public efforts. We aim to create an umbrella product across the MarketWise brands, which will provide a new distribution channel to drive traffic to that site and introduce potential readers to our products. We just haven't achieved this yet, but it remains a priority, and we are actively working towards it. Currently, we don't have any concrete announcements.

Thank you. Our next question comes from the line of Jeff Meuler with Baird. Please proceed with your question.

Thank you. Regarding the comments on paid member attrition increasing after a period of strong member growth, that seems understandable to me given the change in dynamics. My question is whether this is balanced out by the upselling that typically happens over about 18 months. Is net billings or net revenue retention also generally higher compared to historical periods during the 12 to 18 months following a significant increase in paid memberships?

You are correct. To confirm your hypothesis, you would look at ARPUs. We are experiencing a 10% growth in ARPU. While we don't disclose specific churn rates, we are currently in the range of 1.5% to 2% that we previously shared in our investor presentations, leaning towards the higher end of that range. This quarter marks our second highest billings ever, with year-over-year ARPU growth and ARPU remaining relatively flat from Q1 to Q2. Those who do churn are typically entry-level customers, and their ARPUs upon leaving are aligned with the typical cart value for entry-level publications, which falls between $60 to $100. This is significantly offset by customers who initially spend $65 and then go on to purchase a second publication for $1,000. As long as our conversion rates stay at or above current levels, we can easily manage any slight increase in subscriber churn.

Understood. Regarding the upselling of paid subscriptions, it seems your marketing expenses are increasing. You appear to be responsive and disciplined in managing those costs, and you may be placing a greater emphasis on upselling. Could you clarify what this entails? Additionally, can you provide examples of how your approach differs during these periods? Given the low cost of upselling, I would expect it to be a constant focus for you. What specifically changes in your upselling strategy or execution during these times?

Mark, you want to take that one or let me do it?

Sure. I'm glad to clarify. You're correct, Jeff. If we suggested our ideas were mutually exclusive, that wasn't our intention. Our business approach, spanning our various brands, isn't about choosing between finding more readers or promoting higher-priced products. Rather, every day, we focus on acquiring new subscribers while closely monitoring our marketing metrics. If it's cost-effective to gain new readers while staying within our operational guidelines, we increase our efforts. Conversely, if the costs rise, we scale back. Throughout this process, we consistently present various investment strategies to our readers, targeting both lower-priced options under $200 and higher-priced offerings in the thousands. If our messages seemed like an either/or scenario, that's not the case. We actively strive to introduce diverse investment strategies to our readers that we believe will engage them, but we reduce new customer acquisition efforts when costs become prohibitive. This shift began to be evident late in the second quarter.

I understand. However, I feel like I might have missed something regarding the way some questions have been asked and answered about your outlook commentary. I completely acknowledge your thoughts on the current trends and how that's influencing our perspective. As you went through the de-SPAC process, you shared various key metrics and financial outlooks for 2021 and 2022. Are you still supporting those metrics? Are you reaffirming them or not? Is there a change in methodology, considering you have now completed the de-SPAC merger and are moving into a new approach regarding whether you will provide formal guidance? Thank you.

Yes, that's a good question. We're currently focusing on the standard procedures associated with the de-SPAC process and going public. We have disclosed a lot of metrics and provided two years of forecasts. After going public, it is common to slightly scale back on some of those metrics. However, we are committed to sharing our key performance indicators and non-GAAP measures. We also plan to provide additional metrics related to our overall performance. Regarding our forecast for 2021, we are maintaining those projections and have confirmed our confidence in meeting or exceeding them. While we have removed the 2022 forecast from our presentation for standard procedures, our approach will involve gathering feedback from investors over the next few months to develop our guidance policy. We aim to strike a balance between the need for guidance and the flexibility to manage the business, avoiding constraints that would limit our strategic options. We believe our guidance will align with the principles of the rule of 50, allowing for growth without negative impact on the business. We intend to share our guidance framework as we approach year-end and will provide sufficient metrics to support your analysis and reporting.

Our next question comes from Yugal Aronian with Wedbush Securities.

Thank you for your questions, and congratulations on completing the deal and going public. With everything happening around the reopening and the associated trends, I wanted to explore the subscriber metrics further. Can you provide insights into the underlying factors affecting subscribers? Is the gross subscriber number primarily influenced by marketing, or is there a change in churn rates? Are there any shifts in the metrics related to your current subscribers, or is it solely about gross numbers? If it is the latter, is that related to marketing efforts, or are people showing more interest in self-directed investing as the world reopens? During the process, you mentioned that there wasn’t a significant boost from COVID, as people were largely at home and less active, which may have led to a general increase. Could you walk us through the various aspects? Is there a possibility of subscriber decline next quarter if digital advertising rates remain elevated? Let’s start with that, and I have a follow-up question.

Yes, there’s a lot to discuss, and those are good questions. First, let me talk about the COVID aspect. As we've noted before, our acceleration started well before COVID. The improvements in our business resulted from our investments. The changes we're witnessing now are related to the sharp increase in travel. We went from under 150,000 people passing through TSA checkpoints during the peak of COVID to 2.5 million in one day recently. The rapid rebound in travel happened within a four to six-week window, going from almost zero to 2.5 million people flying daily. This swift recovery was evident in the second quarter. Additionally, people seem to be spending less time on screens because they are traveling and enjoying themselves. This shift is affecting us in the short term, but we anticipate it will normalize. Over the last two decades, we’ve navigated various challenges, so while the current topic might be new, we’re accustomed to adapting to cycles. As for what’s driving our numbers, it’s primarily a situation with gross subscribers. We did see a nominal increase, but it was within the previously mentioned range. The gross subscriber growth slowed down sequentially in Q2, particularly in June, which was the most affected month. With rising per-unit costs, we are focused on maintaining profitability and breakeven, which is essential for our investors. Therefore, we reduced our spending, with a notable $20 million decrease in direct marketing from Q1 to Q2. This isn’t a negative; it’s a strategic decision. We are evaluating and testing new ideas, and we have plans for several promising campaigns targeting new subscriber additions this fourth quarter. We've been preparing these campaigns for months, launching them coinciding with back-to-school season and the travel boom. We expect good opportunities for subscriber growth in the fourth quarter as things return to a more normal pace. Ultimately, the flat subscriber base this quarter was due to a decrease in gross subscribers, not because of high churn rates. In summary, while churn remained stable, the decline in gross subscribers led to flat overall numbers. Does that clarify things?

Yes, that makes sense. If digital ad rates remain high for the rest of the year, will you pause your marketing efforts, or will there come a time when you feel compelled to increase your marketing efforts?

Yes, you're pointing out a really important detail. This is not a directive from Mark Arnold telling us to cut expenses; these individuals understand their business better than anyone else. We are not completely halting our spending. Instead, we are focused on developing new campaigns, and as we roll them out, we will experiment with various factors such as appearance, marketing language, landing pages, and pricing. We have many campaigns ready for the fourth quarter, so we will not simply pause our marketing efforts. We will launch these initiatives, gather feedback, and make adjustments. There are many aspects we can modify, from content to marketing language and pricing. We plan to test all these factors actively. It is important to note that while display ad costs have stabilized, we are certainly not going to be inactive. We have a comprehensive strategy in place for the fourth quarter.

Got it. That color is really helpful, given all the uncertainties in environment. And then just real quick follow for Mark. Mark you talked about seeing the advantages of the growth opportunity and investments in tech M&A, and partnerships and I think that M&A and partnership side is pretty clear. A little bit more color around what are the top priorities in tech that can help improve the business? Thanks guys.

Thank you for the question. The first thing that comes to mind is that we've been discussing leveraging the expertise of Mark Gerhard and his team at Ascendant. They are experienced operators who have launched several successful companies, particularly in the direct-to-consumer business model in the gaming sector. This approach focuses on understanding consumer needs and relies heavily on data science to build lasting customer relationships. We have already started exchanging ideas and comparing their experiences with ours to see what we can apply. We are making progress in these discussions and aim to implement some of their insights to enhance our already efficient business model further. If your question leans more towards technology M&A or other software and tools, as I mentioned earlier, I can’t share specific details about ongoing discussions. However, our M&A history shows that we often acquire content, software, and tools aimed at helping users manage their investment portfolios effectively. Generally, we focus on initiatives that benefit our readers and improve their investment performance. I hope that clarifies things.

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

Yes. I don't really have any further closing comments. Just that, I appreciate on behalf of Dale and myself, your time this morning, your time and attention, and appreciate all your support. And we look forward to 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.