MARKETWISE, INC.MKTW

MARKETWISE, INC. Stock Compensation Disclosure

10-KFiled Mar 6, 20253 min read
Stock-Based Compensation
During the years ended December 31, 2024, 2023 and 2022 we recorded stock-based compensation related to our 2021 Incentive Award Plan, profits interests, and our ESPP.
Included within cost of revenue, sales and marketing, and general and administrative expenses are stock-based compensation expenses as follows:
Year Ended December 31,
202420232022
Cost of revenue$2,877 $2,922 $1,972 
Sales and marketing2,814 3,185 2,209 
General and administrative6,511 17,277 4,864 
Total stock-based compensation expense$12,202 $23,384 $9,045 
Total stock-based compensation expense includes: expense related to our new 2021 Incentive Award Plan, our ESPP, and profits interests, as follows:
Year Ended December 31,
202420232022
2021 Incentive Award Plan$9,897 $22,297 $8,608 
Employee Stock Purchase Plan240 341 437 
Profits interests2,065 746 — 
Total stock-based compensation expense$12,202 $23,384 $9,045 
2021 Incentive Award Plan
During the year ended December 31, 2024, we granted 23,330,718 restricted stock units to certain employees, service providers and members of our Board in aggregate under our 2021 Incentive Award Plan.
For employees and service providers, both RSUs and SARs are primarily time-based and typically vest ratably over four years, as specified in the individual grant notices. The RSUs may entitle the recipients to dividend equivalents if approved by the Plan Administrator, which are subject to the same vesting terms and accumulate during the vesting period. Upon vesting, the RSU holder will be issued the Company’s Class A common stock. The SARs will be settled in the Company’s Class A common stock upon exercise. The shares to be issued upon exercise will have a total market value equal to the SAR value calculated as (x) number of shares underlying SAR, multiplied by (y) any excess of the Company’s share value on the date of exercise over the exercise price set in each individual grant notice.
The fair value of RSUs is the same as the Company’s share price on the date of grant. The fair value of the SARs was determined using a Black-Scholes model.
The activities of the RSUs and SARs and the related weighted average grant-date fair value of the respective share classes, including granted, vested or exercised and forfeited, from January 1, 2024 to December 31, 2024 are
summarized as follows:
RSUsSARs
UnitsWeighted-Average Grant Date Fair ValueUnitsWeighted-Average Grant Date Fair Value
Outstanding at January 1, 2024
7,740,261 $2.57 1,586,184 $4.05 
Granted23,330,718 1.07 — — 
Vested (RSUs) or Exercised (SARs)(2,486,652)2.83 — — 
Forfeited(3,180,883)1.69 (365,869)4.05 
Outstanding at December 31, 2024
25,403,444 $1.28 1,220,315 $4.05 
Exercisable at December 31, 2024
— $— 929,652 $4.05 
As of December 31, 2024, 929,652 of the SARs were exercisable and have a remaining contractual term of 6.5 years. During the years ended December 31, 2024, 2023 and 2022 the weighted-average grant-date fair value of the RSUs granted was $1.07, $1.83 and $1.92, respectively, and the total fair value of RSUs vested was $7,027, $7,419 and $5,393, respectively.
Employee Stock Purchase Plan
The Company recognized $240 and $341 of stock-based compensation expense related to the ESPP during the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, we issued 397,934 and 435,519 shares under the ESPP for cash proceeds of $301 and $680, respectively. As of December 31, 2024 and 2023, $63 and $12 has been withheld on behalf of employees for a future purchase period, respectively.
Profits Interests
The Company recognized $2,065 and 746 of stock-based compensation expense related to the profits interests during the years ended December 31, 2024 and 2023, respectively.

About Stock Compensation Disclosures

Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.

Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.

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