Thank you for standing by, and welcome to the MarketWise Fourth Quarter 2022 Earnings Call. During today’s presentation all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded. I would now like to hand the conference over to Jonathan Shanfield, Vice-President of Investor Relations at MarketWise. Please go ahead sir.

Thank you operator and good morning. Thank you all for joining us on today's conference call to discuss MarketWise's full year and fourth quarter financial results. With me on the call today, we have Amber Mason, our Chief Executive Officer, Stephen Park our Interim Chief Financial Officer and Lee Harris, our Senior Vice President of Financial Planning & Analysis. 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 subscribers. 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 our 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 SEC filings. Now I'll turn the call over to Amber.

Thanks John and good morning everybody. Welcome to our fourth quarter 2022 earnings call. I’ll get to the numbers in a moment, but since this is my first public appearance as CEO, I’d like to take a few minutes to introduce myself, tell you a little bit about my views of MarketWise and show you some of the opportunities that I see ahead for our company and all of our stakeholders. I’ve been in this business for 17 years. I’ve worked at all levels of the organization. I’ve been a proofreader, an editor, an analyst, a copywriter (perhaps not a very good one), a publisher, and Vice President of Business Development. I was then promoted to Chief Operating Officer during Steve Sjuggerud's stint as CEO. My experience in the MarketWise ecosystem gives me a unique and broad perspective that I bring to the role of CEO. Importantly, I bring an operator’s perspective to my role. During my career, I transformed two of MarketWise’s businesses. The largest was Legacy Research Group where I served as co-CEO for more than 5 years. My partners and I built Legacy by merging three separate newsletter businesses. Each business had a different culture, different leadership and different strengths and weaknesses. The first year was a huge challenge. We had to integrate the team, rightsize compensation, determine the appropriate people and product, and exit those businesses that were not a long-term fit, and I’m very proud of our results. We delivered a seven-fold increase in profit in just our first year. And over the next few years, we built Legacy into MarketWise’s largest business. Now, as CEO of MarketWise, I’m not on the frontline, but I know what it means to be in that role and I understand how all of the people that were publishing business fit together, including marketing, copy, editorial, and operations. I have years of experience acquiring, retaining, and motivating key talent with our publishing businesses. And I've worked side by side with all of the remarkable individuals currently running our affiliates. I’ve also been on the inside of our acquisition machine, a key driver of MarketWise’s extraordinary growth. Looking forward, my goal is to position the business for its next phase of growth and unlock the enormous value that exists right now in our shares. I’m currently working with all of our executives to do a deep dive into our centralized operation to understand how we can improve our efficiency. I’m working with the affiliates and our business development team to find opportunities to grow in this more challenging environment and I'm exploring ways to deploy our capital for the benefit of shareholders. Next time we talk, I’ll cover all of that in more detail. For now, let me share what I have found so far, and my priorities for immediate improvement at MarketWise. First, my overall focus is on serving our subscribers by producing great products with quality teams and investing ideas. This is what has made us successful over time and will continue to do so. So I'm revamping our system for tracking the performance of our analyst recommendations on specific investments, which we use to evaluate talent. These results provide the information necessary to promote publications, investing teams, and our star analysts as well as provide a kind of report card that will allow us to quickly pivot or even retire products that are underperforming. Second, we must improve the financial performance of the company. We’ve already reduced our overhead and direct marketing spend. We’ll get into more specifics about what we did last year in a bit. This year, there is more to do. We are aggressively looking for further expense reductions and opportunities to improve our overall efficiency. For example, as we transitioned from a private partnership to a public company, we incurred a huge amount of professional fees. As we move towards the second anniversary of our transaction, we are working to bring much of that expertise in-house which will create significant savings. Third, talent acquisition and retention are incredibly important parts of our business. Our stellar analysts, copywriters, marketers, and operations staff are what make this company successful. We are always on the lookout for new talent with new ideas and energy to add to our team. Fortunately, we have lots of ways to do this. We can hire through acquisitions, through the efforts of our publishers who are always looking for new voices and even from our subscriber list. Some of our most successful employees were readers before they joined us. Fourth, our public shares have not performed the way we'd like. We've got headwinds. The overall stock market conditions since we've gone public have hurt our share price and our billings. And we continue to get lumped into the post-SPAC universe of troubled companies, despite the fact that we're one of the few who have maintained profitability and positive cash flow. Obviously, we need to improve our operating performance, which I already discussed. We can also look to the company's long history of generating cash and rewarding our shareholders. Fifth, I'm directing an effort to find a new permanent Chief Financial Officer, ideally one with public company and capital markets experience who can partner with me and my staff, and guide us as we mature as a public company. This effort is underway and I'm hoping to introduce someone to you very soon. In the meantime, I want to thank Lee Harris here and Steve Park for their incredible work. Steve just joined us in the past month, and he's been a clutch addition to the team. And finally, I also plan on bringing in a Chief Operating Officer to backfill the role I had briefly prior to this one. Having a talented and experienced COO is critical to delivering improved operating efficiencies. I look forward to expanding upon our initiatives in our first quarter earnings call. And I'm very excited about what the future holds for MarketWise. Turning to our results, the market dynamics that began in early 2022 continued in the fourth quarter. Investor engagement fell as volatility and economic uncertainty increased. For the full year, we generated $512.4 million in revenue measured on a GAAP basis, a decline of 6.7% compared to the prior year. Billings declined 37% year-over-year to $459.5 million and our adjusted cash flow from operations was $59.3 million down from $197.1 million for all of 2021. One of the strengths of our business, what has made it so resilient over the last 20 years, is our ability to manage costs in response to various market environments. In 2022, we quickly implemented a series of measures aimed at lowering our marketing and overhead costs, and improving overall cash flow and margin through the second half of the year. We achieved our target of approximately $74 million in total savings, $40 million from direct marketing, which was realized over the second half of 2022, and overhead reductions representing $36 million of annualized run rate savings. It's important to note that these savings are on a cash basis, and a portion of them are not immediately reflected in our GAAP results, but will be recognized over time. Because we took action, we have realized significant improvement in our margin since last summer. Specifically, in the first half of 2022, we collected $254 million in billings and recognized $28 million in adjusted cash flow from operations, resulting in an adjusted cash flow from operations margin of 11%. In the second half of the year, even though billings declined to $206 million, we recognized $31.5 million in adjusted cash flow from operations for an adjusted cash flow from operations margin of 15.3%. Additionally, our adjusted cash flow from operations margin for the fourth quarter of 2022 improved to 18.2%. This margin improvement is a direct result of our cost-cutting initiative, and we continue to focus on our margins this year. Beyond our financial results, the team had many notable accomplishments in 2022, including the introduction of 49 new publications to the market, covering a range of relevant investing topics such as healthcare, options trading strategies, and energy. In addition, as we strive to be more efficient, we retired 33 publications that were not as effective or were focused on themes that did not reflect the current market. We also focused on integrating some of our technology products with our research brands to further enhance our product offerings. In 2021, we brought the Chaiken brand to our platform and experienced tremendous success in growth and billing. Similarly, last year, we successfully marketed our Altimetry brand to a much larger audience. As a result, our most recent marketing campaign for Altimetry proved to be their most successful in terms of billings over the last two years. Additionally, we aligned another of our technology brands, TradeSmith, with our Investor Place business. TradeSmith, our leading financial technology and quantitative systems brand, began as a simple way to track portfolios using trailing stops and has evolved into a powerful suite of risk management and portfolio analysis tools. This suite of tools features volatility-based buy and sell alerts, stock screener tools, a robust rating system, and a very successful options trading tool, all of which further empower the self-directed investor. Our experience with these recent combinations has proven that offering technology products to our subscribers along with our content brands leads to higher average revenue per user, or ARPU, and better subscriber retention. As we go forward, we look to offer more quantitative tools and products with our investment research, both through our existing brands as well as in our M&A efforts. We also took a meaningful step to improve our capital structure during 2022. In the third quarter, we completed a tender offer to exchange all outstanding warrants for shares of Class A common stock. Through this exchange, we retired a total of 31 million outstanding public and private warrants. As a result, we issued approximately 6 million Class A common shares, which increased our public shares by approximately 26%. This increase in shares added to our public float and our trading liquidity, with being less than 2% dilutive to our total shareholder base. From a corporate finance perspective, we believe eliminating the warrants simplifies our capital structure, making it easier to execute future corporate financing activities. We know that individuals are the key to the success of our organization, and we can continue to recruit talented analysts and teams to join our organization, including those coming to us from our Winans media transaction, and we look forward to their contribution. The overall market for M&A remains attractive, and we continue to look for ways to enhance and further combine editorial teams, software and technologies, as well as looking to add existing businesses to complement MarketWise. However, we also realize it is important that even in a period of active M&A, we continue to be diligent in terms of evaluating risk, strategic alignment, and determining proper valuation and pricing. While we continue to be active and interested in certain opportunities, we are also committed to sound financial transactions with acceptable levels of risk and return for our shareholders. Looking to the year ahead, we believe we are in an advantageous position to capitalize on opportunities as they unfold. Now, let me turn the call over to Steve to discuss the financial results. Steve came on recently as our Interim Chief Financial Officer. He is an accomplished financial executive with significant experience in the CFO role across many companies, both private and public. He has a history of driving change in accounting and finance organizations, building teams, improving processes and implementing systems and controls throughout various organizations. Earlier in his career, he was an audit partner at Ernst & Young. We welcome Steve to MarketWise and appreciate him lending a hand as we work through our transition period, where we look to bring in a permanent CFO. Thank you, Steve.

Thanks Amber and good morning everyone. As Amber described, market factors that impacted our business in the first half of the year continue to persist throughout the third and fourth quarters. The U.S. economy continues to experience higher inflation, the uncertainty of an upcoming recession, and the impact of increasing interest rates on equity markets as they remained in bear territory during the quarter. Not surprisingly, we continue to see retail and self-directed investors hesitate to engage in purchasing new investment research, as market volatility remains elevated. As a result, we experienced lower engagement levels during the quarter and reduced certain direct marketing expenses consistent with our cost savings initiative that we began in the second quarter of 2022. In the fourth quarter of 2022, our landing page visits were approximately 26 million, down 5% from third quarter 2022 levels. Similar to prior quarters, this resulting decline in landing page visits had an impact on both billings and new subscriber acquisitions this quarter. However, our overall conversion rate is exactly the same as in the prior quarter. In contrast to full year 2021, our 2022 landing page visits were down approximately 30% and our overall conversion rate declined by approximately five basis points. Our current subscribers have also slowed the pace of buying additional subscriptions as a result of these macroeconomic conditions, as it is taking somewhat longer for our customers to move through their subscriber journey with us than in the past. However, even in this slower-paced environment, our high-value and ultra-high-value subscribers continued to purchase additional subscriptions, leading to an all-time high in active cumulative spend by all subscribers. We believe this is another indication of customer satisfaction, and that these subscribers find value in our products, which is why they remain with us for the long term. Turning to the financials, GAAP revenue was $127.7 million this quarter, compared to $146.7 million for the fourth quarter of 2021, a decrease of $19.0 million or 13%. The decrease in revenue was driven by a $14.7 million decrease in term subscription revenue. Billings were $100.9 million compared to $151.4 million for the year ago quarter, a decline of $50.5 million. We believe the decrease is due in large part to reduced engagement of our new and existing subscribers. The challenges that emerged in the first half of 2022 continued throughout the remainder of the year, which we believe further contributed to prospective and existing subscribers delaying their purchases. Sequentially, our $100.9 million in fourth quarter billings decreased $4.2 million, or 4%, from third quarter 2022. This decrease was primarily driven by a 5% decrease in landing page visits, as we maintained the same conversion rate through the prior quarter. Approximately 35% of our billings came from membership subscriptions, 63% from term subscriptions, and 2% from other billings in the fourth quarter of 2022. This compares to 45% of our billings from membership subscriptions, 54% from term subscriptions, and 1% from other billings in fourth quarter 2021. As we disclosed in the middle of 2022, and as Amber touched on earlier, we have been actively working to reduce expenses and executed on a cost reduction initiative throughout the second half of the year targeting $74 million in total expense savings. This came in two parts. First, we anticipated reducing overhead by an annualized amount equal to approximately $37 million, or 15% of budgeted overhead. As a result, and through the fourth quarter, we achieved approximately $30 million of annualized overhead reduction as compared to the run rate in first quarter 2022. Additionally, we identified and realized $6 million in savings related to 2022 eliminated budgeted overhead spend for the year, bringing our total annualized overhead savings to $36 million. Second, we targeted an approximately $37 million reduction to direct marketing expenditures in the second half of the year, as compared to the first half of 2022. During the second half of 2022, we reduced our total direct marketing spend by $40 million, or approximately $6.6 million per month, which exceeded our targets by approximately $3 million. I should remind everyone that marketing is our most significant variable cost, and our use of direct marketing and the related cost is dependent on market factors. If per unit acquisition costs improve and the market dictates, we may decide not to cut marketing spend to the same degree going forward and instead focus on subscriber acquisition. In total, through the end of the year, we successfully achieved our identified cost savings targets for both overhead and direct marketing. While we are pleased to have realized these savings, we continue to look for additional savings where appropriate and improve efficiencies as we work to protect both margins and cash flow. Cost of revenue was $14.4 million this quarter, compared to $17.6 million for the year ago quarter, a decline of $3.2 million. This decline was driven primarily by a decrease of $1.2 million in credit card fees, a $1.3 million decrease in outsource contracting customer service fees, and a $0.4 million reduction in salaries and related benefits expense. Sales and marketing costs were $50.4 million this quarter compared to $65.7 million in the year ago quarter, a decrease of $15.3 million. This decrease was primarily driven by a $20.2 million decrease in direct marketing expense related to our cost reduction initiative, partially offset by a $5.3 million increase in the amortization of deferred contract acquisition costs. General and Administrative costs this quarter were $34.9 million, as compared to $31.8 million in the year ago quarter, an increase of $3.1 million. The increase was primarily driven by a $7.7 million increase in severance related to executive compensation contract expense, and a $1.3 million increase in professional fees. This was partially offset by a $3.3 million decrease in employee compensation, a $1.3 million reduction in donations, and a $0.6 million reduction in travel expense. Net income in the fourth quarter of 2022 was $4.3 million compared to $8.6 million in fourth quarter 2021. We recognized stock-based compensation expenses of $1.9 million in fourth quarter 2022 as compared to $2.3 million in fourth quarter 2021. Adjusted cash flow from operations was $18.4 million in the fourth quarter of 2022, compared to $5 million in the year ago quarter, with the increase primarily due to moving 2022 annual bonus payments into the first quarter of 2023 and the reduction of both overhead and direct marketing expense, offset by a reduction in billings. Adjusted cash flow from operations margin was 18.2% in the fourth quarter of 2022 as compared to 3.3% last year. However, adjusted cash flow from operations margin improved from 11% for the first half of 2022 to 15.3% for the second half of the year as a direct result of our cost-cutting initiative. We continue to focus on margin improvement in 2023. Our paid subscriber base declined from 972,000 at the end of fourth quarter 2021 to 841,000 this quarter, a decline of 13.4% driven by a decrease in overall consumer engagement. However, we increased our free subscriber base by 2 million during the course of 2022, a 14.6% increase. Average revenue per user declined to $519 this quarter, from $742 in the fourth quarter of 2021 driven by a 37% decrease in average trailing four quarter billings, combined with a 10% decrease in average trailing four quarter paid subscribers. We believe the billings decline is primarily due to the volatile economy that has persisted since the first quarter of 2022, leaving subscribers and potential subscribers hesitant to purchase or upgrade as they assess the latest economic data and the impact from the Federal Reserve's recent and future interest rate decisions. Before I turn it back to Amber, I want to emphasize that we are pleased with the results of our cost reduction initiatives and improved margins. We continue to look for further opportunities to create efficiencies, both in operating and overhead reduction, where we feel we can find meaningful improvements while maintaining the strength of our core businesses.

Thanks, Steve. To conclude, I see great opportunity ahead for MarketWise and most importantly, improving our operations and performance is largely within our control. We will focus on increasing our marketing efficiency, recruiting extremely talented individuals, and delivering high-quality research to our subscribers. We are committed to operating the business in a clean and efficient manner to ensure we have the right people in the right role, and to make sure that our marketing spend is maximally effective. Finally, we're also looking to hire a CFO with deep public company experience to partner with me on a corporate level, and a COO to ensure we attain operational excellence, where I see much opportunity. Since our start in 1999, our success has been achieved by focusing on three core principles which are at the foundation of our business. We delivered great investing ideas to the retail investor, we deliver these ideas written in a way that is easy to understand and execute, and we treat our subscribers the way we would want to be treated if the roles were reversed. Central to this operating philosophy is that we consider all subscribers to be potential lifelong partners. And it is this long-term relationship that provides immense value and a stable base of recurring revenue. These principles have informed our growth and leadership over the past 20 years and will continue to do so in the future. The actions we have taken throughout the year remain in line with that simple operating philosophy as we continue to manage the business for the long-term benefit of our shareholders, subscribers, and employees. I will now turn it over to the operator for your questions.

Thank you. Our first question comes from Jason Helfstein with Oppenheimer. Please go ahead with your question.

Thanks and congratulations on the new role as CEO title. So three questions; the first, just can you help bridge your comments around the first quarter outlook it's not consistent with the Schwab trading data, which is showing kind of a rebound in trading activity. I think it was like minus five in the fourth quarter and I think it's trending plus 10 in the first quarter. So, if there's a disconnect there, why do you think that? And then, if that's not a good indicative indicator of your business how should investors think about that? The second question, marketing efficiency was flat in the quarter sequentially as a percent of bookings? Do you expect this ratio to improve over the next few quarters? Or is this more of something we should think about for 2024? And then last question, guys CFO question. You said there was $7.7 million of severance, which is obviously a one time expense, $1.3 million of professional fees, not a one-time expense, but something you expect to improve. Can you give us those numbers for the full year both severance and professional fees? Thank you.

Hey, hey, Jason. It's Lee Harris. I'll pick the first two of those. As far as the DAT’s question. So we see DAT’s trending at plus nine, I think you saw you said maybe plus 10. Our landing page visits are very much tracking in line with those DAT’s through the first three months of the first quarter. Really, what's hurting us is our conversion rates are a bit subdued, they have deteriorated since the fourth quarter. And you compound that with the issues that have surfaced in the banking industry of late, those rates are just down. Right? And they have modestly improved in the last couple of weeks. I wouldn't call it a trend just yet. But obviously, we're keeping our eyes on that. So, as you know, conversion rates are critical in terms of us achieving the level of billings that we want to see. So that is, that is why there's a little bit of a disconnect between perhaps some good news on the landing page visits versus what we're seeing in terms of conversion. In terms of the marketing efficiency, you are, you're correct. Our rates are fairly flat, from the third quarter to the fourth quarter. As we've talked about at length, we've cut our marketing spend back significantly and those numbers on a cash basis were fairly flat between 3Q and 4Q and that pace continues right into the first quarter. So if you're looking at the sales and marketing spend on the GAAP, P&L compared to billings, really what we need to improve that is our billing to pick up. The marketing spend, we will continue to obviously keep an eye on that, and we're not going to we’re not going to spend money if we’re not getting a good payback. So until we start seeing some trends that we have in our favor in terms of the conversion and the overall economy, we will continue to spend kind of at the rate we are today.

With regards to your question on the $7.7 million worth of severance, you’re correct that that is a one-time charge. And we don't expect that to recur. Obviously, that was the contractual portion of our responsibility to our former CEO. With regards to the professional fees of $1.3 million. Again, something that we have an opportunity on those to manage and control as we move forward. But that's not something that we typically comment on a future basis.

Yes, Jason, if you review our previous announcements, particularly from the third quarter when we started the cost reduction plan, we mentioned some severance that was a one-time expense associated with the program. I can't recall the exact figure, but I believe it's detailed in our prior release.

Okay, so you know it’s...

Yes.

And do you want to give what the professional fees were for all of 2022?

It's something we haven't provided that way in the past. It's something that I know Amber can talk to, but she's looking at diligently because there's a lot of fees that came about and kind of were layered on along with our public transaction. And as she mentioned in her comments, and I don't mean to speak for you Amber. But that's something we're focusing on now whether it's to bring in-house or to kind of do away with in order to kind of right-size those costs.

Yes, it's a ripe opportunity.

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

Hi, this is actually Michael Falco standing in for Devin. Good morning. And I'll just reiterate Amber, congratulations on the new role. Wanting to start on customer engagement and the relationship between paid subscribers. As you noted in the prepared remarks, paid subscribers have declined over the last year, but free subscribers are continuing to grow. Obviously, macro volatility has weighed on engagement. But how are you thinking maybe broadly about the strategy and any potential new content or products to both reach new audiences and also convert a greater number of free subscribers into paying customers?

So I think our free subscribers are responding the same way as folks who aren't on our lists at all; there’s reduced engagement from them. And when we're looking at our conversions from our active free subscribers, we're seeing lower rates than normal. So we're doing just what we've been doing all along, I think that what we need to do is find the pulse of the market, the pulse of our readers, and figure out what messages inspire them to take out their wallet. And we're testing all kinds of different ideas every day among our affiliates. And when we find that we'll see higher conversion rates from our free list as well as increased engagement across the board.

Mike, I want to highlight that there are two key areas we can influence. First, we have control over our content and the themes we choose to write about. However, we cannot control the broader economic conditions around us, which have not been favorable for retail investing. While we are seeing improvements in trading statistics and an increase in landing page visits, as Lee mentioned, the challenge remains in encouraging people to make that final purchase, which has seen some delays. Given the recent developments in the financial markets, we recognize that this has not been helpful. Nonetheless, we are starting to see some positive momentum, although it remains influenced by market conditions. Our focus is to optimize what we can control to the best of our abilities while also hoping for a more favorable market sentiment that encourages investors.

Sure that makes sense. And then just wanted to double click on inorganic growth opportunities as well. Obviously, it did a small acquisition in the fall. And you noted the overall market for M&A remains attractive. I guess what does that pipeline look like? What kinds of opportunities are you seeing? And how should we be thinking about the appetite for possible strategic transactions in the near term?

So I can't get into specifics on our pipeline. But we do have opportunities that we're interested in, that we've been looking at since last year that could be maturing toward a transaction. And we're looking for ways to deploy our capital to reward shareholders. And that will mean bringing in accretive transactions and also possibly looking at other strategies like buybacks and dividends.

Right, I'll hop back in the queue. Thanks.

Our next question comes from the line of Alex Kramm with UBS. Please proceed with your question.

Yes. Hey, good morning, everyone. Just coming back to some of the comments you made for the first quarter. Obviously, helpful, thank you. But in the interest of transparency with one day left in the quarter, just wondering if there's a little bit more, I guess, numbers or ranges you can give how we're tracking in billings, or maybe on the cash flow generation of the business. Again, one day left, I feel like the quarter should be fairly bait. So any help you can give us will be helpful.

I’ll start off and see if anyone wants to add on. You’re right, there's one day left in the quarter. From our comments, it seems we've seen visitors, but they aren't converting at the same rates. So, assuming we will maintain the same level is probably not accurate. We are experiencing some decline in conversions, which affects billings. We've been active in pursuing cost efficiency and are focused on maintaining cash flows and profitability, and we feel confident about that. Without getting too detailed, the general themes that I just mentioned are still influencing our business. There's not been a surge of paid subscribers, nor has there been a significant shift in market sentiment. Like everyone on this call, we are dealing with uncertain news and various themes from the Fed, markets, and banking, and we are responding to those conditions. I hope that gives you some insight.

And just, and just to reinforce what I said earlier, we continue to keep our marketing spend limited, which helps us stay profitable. It helps us generate cash flow and, we're continuing to look for further expense reductions in ways we can continue to just add on to that while we weather the storm, so to speak.

Yes, and honestly, at the, at the as we hit the end of the quarter, it's starting to feel there may be some sentiment, but I don't want to get way ahead of ourselves. We're hoping that there's some, capitulations to a team, so.

All right. Understood. Figured I, I need to at least ask thinking then maybe a little bit more. For the, for the full year very much hear the message of controlling what you can control. So again, I don't know, I know you don't provide guidance, but as you think about the full year in particular, on the cash flow and margin line, I guess depending on how the environment shakes out, is there, is there a certain minimum margin or a certain minimum cash flow that you think you can deliver no matter what? I know again, it's a fluid environment, but obviously you're taking all the necessary steps, so you hopefully have something in your mind where you think you can get to, no matter what. So just, just wondering how you think about the full year from that perspective.

So I don't think we can commit to a number, but I can tell you that we weren't pleased with last year's results and that we are absolutely working to do everything we can to improve over last year. And even in the worst of times, this business is cash flow positive. So I expect that we'll be working to have that cash at the end of the year too.

Yes, and Alex, part of our business, and we've talked about it before, is that there's a significant amount of recurring revenue, right? And so people have been with us for a long time are members subscriptions. They, they buy and buy. And even though we've seen some decrease in the rapidity or the velocity of their buying this year, we're still seeing that recurring. So if you look at like our chart that's in our investor deck, it kind of shows what you think about is almost a minimum level. And then of course there's more that we get every year on new subscriptions and memberships that on. I don't, we don't want to commit to a number obviously, but we feel comfortable there's a certain level of recurring revenue, which is a key portion of our business that is still going to be there. And in margins as, as I would just say, as Amber said, we've improved the margin. Again, this is the cash flow margin, the adjusted cash flow margin. And we still don't think it's really where it should be. So we're getting there. We continue to focus on the expense side of it. The revenue side, of course, we're focused on as well. We're trying to control, we control and then trying to make that even better than where it is today. There's always puts and takes. We know that.

Then maybe just, just one last one on the same topic, because you just highlighted, I think you were referring to the chart of all the different cohorts. I mean, when I looked at that one just optically, I mean the 2020, 2021 cohorts obviously were huge and you kind of working against that churn. I guess. Again when I, when I compare the that cohort, it just still looks like that could be more, more churn to come maybe out of normal. So when you look at those last two years of new customers, paid customers that you gained, do you feel like that has stabilized now? Or is, is that still the biggest worry you have in terms of maybe incremental churn that you need to work through before you can actually start growing again?

Hey, Alex we think that we have already processed through the churn from those largest cohorts. In fact, we studied the churn and those cohorts are now behaving exactly like every other cohort before them. And since them, in terms of what percentage of them is still left on our list. So I don't expect there to be an outsized churn coming from those cohorts, right? We'll always have some seasonality to our churn because we have certain campaigns that are, say a one year term or a two-year term. And when they renew, you could have some surges in churn. But generally speaking, our churn's been pretty stable. We saw heavy churn in the first quarter of this year, which was the one, the one year anniversary of our largest cohort. But since then, we've really been right in the average historical range.

Yes. And Alex, I think that that's the most important chart in the investor deck. You can see that over time, every new cohort that we bring in, sort of deposits a layer of sediment in that mountain and that that base of recurring revenues, which we talked a little bit about in the comments, is really the core strength of this business.

Yes. You know this, there's two parts to this. Hey, it's two parts to subscribers, right? The new ads and the churn, the churn's behaving as we believe it should be. It's the new ads that have kind of lagged and, and we've talked about that now for a couple quarters and questions. And so we think that the churn is pretty much in line. We, those giant cohorts that came in, I think we found that there were people who subscribed that weren't our typical customer and have exited appropriately, I guess. But I think right now we're kind of thinking that we're in a steady state on the churn side.

Excellent. I’ll jump back in queue. Thank you.

Thanks Alex.

Our next question comes from the line of Kyle Peterson with Needham & Company. Please proceed with your questions.

Hey, hey guys. This is actually Sam Salvas on for Kyle today. Thanks for taking the questions. Just had a couple quick ones. You guys mentioned last year when you were working on and rolling out some of the newer content. Given this, more recent market environment we're kind of in today. Can you talk about how this content has been received by your consumers and maybe how it's performed relevant relative to your expectations?

So I think that, I'd like to speak to our technology offerings. I talked a little bit about that in our comments that we've seen really good results, particularly in Check-in and Altimetry, and we're really excited to see what comes of the combination of our TradeSmith business with investor place. Those products tend to have lower churns. They're stickier and folks are responding to those messages. So as far as us rolling out those products last year, I think they were successful. You can see from the engagement that we haven't quite found the message that we want, using the products that we've rolled out, but our publishers spend every day thinking about the quality of the research that they're producing, whether it's something that our readers want to consume and how they can better position what they're doing for the market.

Great. That's helpful. Thanks. And then just a quick one on the prior M&A question. It sounds like you guys are still actively looking and the appetite there is pretty healthy. But given you guys are still currently searching for a permanent CFO, would you guys be open to pulling the trigger on an M&A deal prior to having that CFO role filled, or is that something we should expect to kind of be put on the back burner until then?

No, we have no problem pulling the trigger without a CFO on hand. Marco Ferri, who's our Chief Corporate Development Officer, is an experienced M&A lawyer, and we're comfortable with his work and with the valuation work that our FP&A team is doing.

Got it. All right, great. Thanks.

The next question is a follow-up question from the line of Alex Kramm. Please proceed with your questions.

Yes. Hey. Hello again. I just wanted to squeeze in here. You mentioned that you moved the bonus from the fourth quarter to the first quarter. Can you just give us a sense of how big that was and what led to that decision?

I think the decision was kind of act like every other public company, most of whom aligned their bonuses after year-end results are formed. So that's kind of where we ended up moving. I don't know if we fully provide the full bonus number. I think if you looked at the changes in cash flow, quarter-over-quarter from the third to fourth and prior years, you get an indication of some level and that was a very high year is what I would say. Is that correct?

Yes.

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

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

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

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

Yes, I'll start and then Lee may want to add in. So the ultra-high value, of course, those are the folks that have been with us the longest and the folks that spend the most money, so they're membership subscriptions with higher dollar value. I think we say it's over 5,000. So, those folks aren't really, those are more committed to our long-term. They've been with us long enough to know that this is a cycle situation and they're still consuming the product cause they purchased it in the past. It's moving people from just the one subscription to the second subscription or third subscription, which is how the composition, if you will, of paid to high value. And I think some of the dynamics that we've talked about, this hesitation that we've talked about is impacting that number. We see people, we see subscribers, I should say, and, and interested parties come to our website. And again, this idea of landing page visits following trends that start to improve. But the conversion to a paid subscription in is not just the first subscription, it's the secondary conversions as well. So that is, we're showing, we're showing a slowing, if you will of the rate of change between those two parties, if those two subsets, if you will. And I think that's what we're seeing in the last couple of quarters at least.

Yes. Just to add a little more color to that. If you look at, if you break our subscribers into certain pieces, right? We have a segment of membership subscribers. We have more membership subscribers right now than we've ever had, and the amount of money that those people spend is as high as it's ever been. So those loyal subscribers keep spending. It is really, to echo what Jon said, it's how do you get the new subscribers from the first subscription, which generally is going to be a hundred bucks for a year to the next subscription, which there, there could be a wide range there, but in many cases you're talking about $2,000, right? So in this kind of time where people are not like super excited about pulling out the wallet and charging $2000, naturally, it's going to take longer. So I think we believe that once we get a little bit of positive momentum with the economy, we're going to get right back to that pattern and, and our sales firm will work just as it always has in the past.

All right. I appreciate the color. That's it from me. Thanks.

Thanks.

Thank you everyone for being here. It was a pleasure to be here with all of you, and I look forward to next time. Have a great day.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.