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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Included within cost of revenue, sales and marketing, and general and administrative expenses are total stock-based compensation expenses as follows:
Three months ended September 30,Nine months ended September 30,
2024202320242023
Cost of revenue$889 $688 $2,031 $2,379 
Sales and marketing880 711 1,999 2,519 
General and administrative1,435 2,176 4,638 6,058 
Total stock based-compensation expense$3,204 $3,575 $8,668 $10,956 
Total stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 includes expenses related to our MarketWise, Inc. 2021 Incentive Award Plan (the “2021 Incentive Award Plan”) our 2021 Employee Stock Purchase Plan (“ESPP”), and profits interests as follows:
Three months ended September 30,Nine months ended September 30,
2024202320242023
2021 Incentive Award Plan$3,124 $2,848 $6,897 $10,037 
Employee Stock Purchase Plan36 84 204 276 
Profits interests44 643 1,567 643 
Total stock-based compensation expense$3,204 $3,575 $8,668 $10,956 
2021 Incentive Award Plan
During the nine months ended September 30, 2024, we granted 19,485,767 restricted stock units (“RSUs”) to certain employees and service providers in aggregate under our 2021 Incentive Award Plan.
For employees and service providers, both RSUs and stock appreciation rights (“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 a corresponding number of 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 of a SAR will have a total market value equal to the SAR value calculated as (x) number of shares underlying such 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 the RSU 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, exercised and forfeited, from January 1, 2024 to September 30, 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 
Granted19,485,767 1.18 — — 
Exercised or vested(2,486,652)2.83 — — 
Forfeited(1,737,118)2.02 (293,923)4.05 
Outstanding at September 30, 2024
23,002,258 $1.42 1,292,261 $4.05 
Exercisable at September 30, 2024
— $— 990,181 $4.05 
The stock compensation expense related to the RSU and SAR grants was $3,124 and $2,848 for the three months ended September 30, 2024 and 2023, respectively, and $6,897 and $8,893 for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, 990,181 of the SARs were exercisable and they have a remaining contractual term of 6.6 years.
On July 1, 2024, we granted approximately 18.1 million RSUs to employees, which vest ratably over 4 years.
Employee Stock Purchase Plan
The Company recognized $36 and $84 of stock-based compensation expense related to the ESPP during the three months ended September 30, 2024 and 2023, respectively, and $204 and $276 for the nine months ended September 30, 2024 and 2023, respectively. The Company issued 216,517 shares of Class A common stock for $213 related to employee purchases under the ESPP during the nine months ended September 30, 2024.
Profits Interests
The stock-based compensation expense related to the profits interests, which are liability classified, was $44 and $643 for the three months ended September 30, 2024 and 2023, respectively, and $1,567 and $643 for the nine months ended September 30, 2024 and 2023, respectively.