Core Viewpoint - The emergence of fintech tools has provided individuals with lower credit scores or limited credit history better access to credit, but these tools face scrutiny from regulatory bodies and some lawmakers who claim they may lead consumers to predatory lending options [1][5]. Group 1: Fintech Tools and Comparison Shopping - Fintech tools, including comparison-shopping platforms like Credit Karma, NerdWallet, WalletHub, and LendingTree, enhance the chances of loan or credit card approval for consumers [2]. - Credit agencies, such as Experian, offer options like "no-ding decline," allowing consumers to apply without affecting their credit score unless approved [4]. Group 2: Regulatory Scrutiny and Consumer Protection - Some lawmakers, including Sen. Dick Durbin and Sen. Elizabeth Warren, argue that fintech platforms use deceptive practices to direct consumers toward predatory lending [5]. - The Consumer Financial Protection Bureau (CFPB) has attempted to regulate these practices, despite fintech platforms disclosing how advertiser compensation may influence product offerings [5]. Group 3: Research Findings on Consumer Access - Research from the Southwest Public Policy Institute (SPPI) indicates that comparison-shopping tools empower consumers to make informed choices, suggesting that government intervention could hinder access to credit for those in need [6]. - The SPPI report highlights the inefficiencies of government tools compared to sophisticated fintech systems, emphasizing the need for a dynamic marketplace that allows consumer choice [10][13]. Group 4: Case Study and User Experience - The SPPI report includes a case study of its founder, Patrick Brenner, who struggled to obtain credit through traditional means but successfully secured a credit card offer through Credit Karma, illustrating the effectiveness of these tools [8]. - The CFPB's tool for searching credit cards lacks the user-friendly features of comparison-shopping tools, requiring consumers to apply directly to banks without guidance on approval chances [9].

NerdWallet, Inc. (NRDS) reported break-even quarterly earnings per share versus the Zacks Consensus Estimate of a loss of $0.10. This compares to earnings of $0.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 100%. A quarter ago, it was expected that this company would post earnings of $0.01 per share when it actually produced earnings of $0.01, delivering no surprise.Over the last four quarters, the company has surpassed c ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ For the transition period from to Commission file number 001-40994 NerdWallet, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorpora ...

NerdWallet (NRDS) Q1 2025 Earnings Call May 06, 2025 04:30 PM ET Speaker0 Good day, and thank you for standing by. Welcome to the NerdWallet, Inc. First Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your quest ...

Revenue Performance - Revenue for Q1 2025 was $209.2 million, representing a 29% increase year-over-year[1] - Insurance revenue reached $74.0 million, up 246% year-over-year, driven by strong growth in auto insurance products[6] - Credit card revenue decreased by 24% year-over-year to $38.0 million, primarily due to ongoing challenges in organic search traffic[6] - SMB products revenue was $28.9 million, down 5% year-over-year, mainly due to a decline in business loan originations[6] - Loans revenue increased by 12% year-over-year to $24.0 million, supported by growth in mortgage loans from the acquisition of Next Door Lending[6] Income and Profitability - Non-GAAP operating income was $9.3 million, a decrease of 12% compared to the previous year[7] - Adjusted EBITDA for the quarter was $21.1 million, down 17% year-over-year[7] - GAAP net income was $0.2 million, an 86% decrease from the previous year[5] - The adjusted EBITDA margin for Q1 2025 was 10%, down from 16% in Q1 2024[26] Cash Flow and Financial Position - Cash and cash equivalents at the end of the quarter were $92.2 million, down 17% from the previous quarter[7] - Adjusted free cash flow for the twelve months ended March 31, 2025, was $57.6 million, compared to $48.5 million for the twelve months ended December 31, 2024[28] - The company reported net cash provided by operating activities of $75.8 million for the twelve months ended March 31, 2025, an increase from $71.8 million for the twelve months ended December 31, 2024[28] Future Outlook - The company expects revenue for Q2 2025 to be in the range of $192-$200 million, representing a 30% year-over-year increase at the midpoint[32] - The forecasted GAAP operating income for the full year 2025 is projected to be between $25-$38 million, with non-GAAP operating income expected to range from $55-$66 million[29] - The company plans to increase its investment in strategic opportunities and stock repurchases, supported by its adjusted free cash flow[23] Strategic Focus and Challenges - The company remains focused on long-term growth through operational efficiency and investments in vertical integration and user engagement[3] - The company anticipates challenges in maintaining user engagement and expanding its market presence due to competitive pressures and macroeconomic factors[37] - The company is unable to provide a quantitative reconciliation of forecasted GAAP net income to forecasted adjusted EBITDA due to uncertainties in certain reconciling items[30]

Core Viewpoint - NerdWallet (NASDAQ: NRDS) was previously rated as a "Buy" due to its founder-led structure and growth in monthly unique users (MUUs) [1] Company Summary - The company is experiencing growth in its monthly unique users, indicating a positive trend in user engagement and potential revenue generation [1]

Group 1 - The stock markets are experiencing a skittish mood, prompting a strategy to rotate portfolios into undervalued small-cap rebound stocks [1] - Gary Alexander has extensive experience in covering technology companies and advising seed-round startups, contributing to insights on industry trends [1] Group 2 - The article emphasizes the importance of focusing on small-cap stocks as a potential investment strategy during market downturns [1]

Financial Data and Key Metrics Changes - In Q4 2024, NerdWallet reported revenue of $184 million, a 37% year-over-year increase, and delivered $17 million in non-GAAP operating income [7][24] - Full year revenue reached $688 million, reflecting a 15% increase compared to the previous year [24] - Non-GAAP operating income margin remained similar to Q4 of the prior year despite increased brand investment [36] Business Line Data and Key Metrics Changes - Insurance revenue grew to $72 million in Q4, an increase of 821% year-over-year, driven by strong consumer and partner demand [33] - Banking products saw a 5% year-over-year growth, while credit card revenue declined by 19% year-over-year to $35 million [25][26] - Personal loans revenue decreased by 51% year-over-year, while mortgage revenue grew primarily due to the acquisition of Next Door Lending [9][27] Market Data and Key Metrics Changes - The SMB products segment generated $26 million in Q4, down 7% year-over-year, reflecting pressure from elevated rates and tight underwriting [30] - Emerging verticals, which include banking and investing, delivered $34 million in revenue for Q4, growing 7% year-over-year [34] - The overall lending environment remains cyclically depressed, impacting growth expectations across various segments [24][30] Company Strategy and Development Direction - The company is shifting focus from Monthly Unique Users (MUUs) to driving engaged relationships with consumers and SMBs, emphasizing quality over quantity [11][12] - Vertical Integration and Registrations & Data-Driven Reengagement are identified as key growth pillars for the company [70][72] - The company plans to continue investing in brand awareness, including a national campaign launched during the Super Bowl [15][47] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to year-over-year growth in personal loans and expects revenue growth to be maintained throughout 2025 despite tough comparisons [44][46] - The company anticipates a challenging lending environment but remains committed to disciplined spending and strategic investments [48][49] - Management highlighted the importance of adapting to changes in the competitive landscape, particularly with the rise of AI and digital marketing [81][82] Other Important Information - Lauren StClair, the CFO, will be stepping down in March and will be succeeded by John Lee [21][22] - The company has grown its cumulative registered user base to 25 million in 2024 [20] Q&A Session Summary Question: Growth in Insurance Segment - Management noted that the growth in the insurance segment is driven by improved traffic flows and a growing market, with confidence in sustainable demand [56][58] Question: Q1 Margin Guidance - The Q1 guidance indicates a potential loss to breakeven, primarily due to increased brand spending and a larger mix of performance marketing [62][63] Question: Shift in Traffic Strategy - The decision to focus on quality relationships over MUUs was driven by a correlation between MUUs and revenue, leading to a strategic shift in internal goals [68][72] Question: Competitive Market Share - Management emphasized that partners evaluate based on customer lifetime value, and deeper engagement is becoming more valued than just top-of-funnel share [92][93] Question: Personal Loans Performance - Management acknowledged a focus on personal loans has been reestablished, with expectations for improvement in Q1 following a significant decline in Q4 [100] Question: Vertical Integration Opportunities - Management indicated that vertical integration opportunities exist in areas where financial guidance is beneficial, suggesting a broad approach to integration [104] Question: Brand Spend Efficiency - Management is focused on improving brand spend efficiency, particularly in sports marketing, while striving for better returns on investment [106]

Core Viewpoint - NerdWallet, Inc. reported quarterly earnings of $0.01 per share, matching the Zacks Consensus Estimate, and showing improvement from a loss of $0.03 per share a year ago [1] - The company posted revenues of $183.8 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 8.70% and up from $133.7 million year-over-year [2] Financial Performance - The company has surpassed consensus revenue estimates four times over the last four quarters [2] - NerdWallet's shares have increased approximately 5.1% since the beginning of the year, outperforming the S&P 500's gain of 4.2% [3] Future Outlook - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3] - Current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $189.52 million, and for the current fiscal year, it is $0.36 on revenues of $756.88 million [7] Industry Context - The Financial - Miscellaneous Services industry, to which NerdWallet belongs, is currently ranked in the top 21% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact NerdWallet's stock performance [5][6]

Investment and Product Development - The company is actively investing in new product offerings and technologies, with plans to increase these investments in the future, despite inherent risks and no guarantee of realizing anticipated benefits [91]. - The launch of the NerdUp credit card in 2023 aims to help consumers build credit, although it is not expected to generate significant direct profitability from interchange fees [109]. - The anticipated launch of NerdWallet+ in 2024 is designed to reward consumers for making healthy financial decisions, but it is also not expected to generate significant profits [109]. - The company is investing significant resources in developing new tools and services, including mortgage and other financial products, but faces risks related to demand prediction and potential defects in technology [117]. Competition and Market Risks - The company faces significant competition from online marketplaces and traditional financial institutions, which may have more capital and resources [111]. - The company is exposed to macroeconomic uncertainties, such as inflation, which may adversely affect its business and results of operations [91]. - Changes in the loan markets, including increased interest rates and economic slowdowns, may negatively impact the company's business and financial condition [132]. - The company anticipates that future interest rate increases will reduce demand for loan products and the supply of credit available, affecting its loans and SMB product verticals [132]. Operational Dependencies and Challenges - The company relies heavily on relationships with financial services partners, and any adverse changes in their financial strength or marketing strategies could negatively impact the business [93]. - The company's financial performance is dependent on successfully referring users to financial services partners, who are not restricted from offering products outside the platform [91]. - The company’s operations are primarily dependent on the U.S. market, making it vulnerable to economic downturns affecting the U.S. economy [123]. - The company tracks operational metrics that may be subject to inaccuracies, which could harm its reputation and financial condition [128]. Regulatory and Compliance Risks - The company is subject to various financial regulations across multiple countries, which may lead to increased operational costs and potential liabilities [133]. - Compliance with evolving data privacy laws, such as the CCPA and UK GDPR, may impose significant costs and operational challenges on the company [140][142]. - The recent acquisition of NDL in October 2024 introduces additional risks related to compliance with federal and state regulations governing mortgage brokerage operations [112]. - The integration of NDL's operations into the broader platform presents execution challenges, particularly in maintaining compliance with evolving regulations [112]. Financial Performance and Condition - Revenue for the year ended December 31, 2024, was $687.6 million, representing a 14.7% increase from $599.4 million in 2023 [345]. - Net income for 2024 was $30.4 million, a significant recovery from a net loss of $11.8 million in 2023 [347]. - Total liabilities increased from $51.7 million in 2023 to $73.4 million in 2024, a rise of about 42% [342]. - The accumulated deficit widened from $116.5 million in 2023 to $166.5 million in 2024, an increase of about 43% [342]. Employee and Management Risks - The company faces intense competition for qualified personnel, which may hinder its ability to attract and retain skilled employees necessary for growth [149]. - The loss of key executives or inability to attract new management could disrupt the company's operations and growth objectives [147][148]. - The transition to a remote-first company may lead to reduced employee morale and increased cybersecurity risks, potentially adversely affecting business operations [151]. Stockholder and Market Considerations - The dual class structure of the company's common stock concentrates voting control with its Co-Founder and CEO, limiting other stockholders' influence on corporate matters [180]. - The company does not expect to pay any cash dividends for the foreseeable future, as it intends to retain future earnings to fund business development and growth [191]. - The company's stock price may decline if existing stockholders sell substantial amounts of Class A common stock in the public market [201]. - Provisions in the company’s corporate charter may make acquisitions more difficult, potentially limiting stockholder benefits [205]. Cash Flow and Liquidity - Cash and cash equivalents decreased from $100.4 million in 2023 to $66.3 million in 2024, a decline of approximately 34% [342]. - Cash provided by operating activities was $71.8 million in 2024, slightly down from $72.1 million in 2023 [352]. - The company reported a net cash decrease of $34.1 million in 2024, contrasting with a net increase of $16.5 million in 2023 [352]. - The company expects future borrowings on its line of credit to be subject to changes in interest rates, which could impact financial condition and results of operations [331]. Marketing and Revenue Generation - The company generates revenue primarily through fees from financial services partners, with revenue recognized upon matching consumers with partners [380]. - The company's total sales and marketing expenses for the year ended December 31, 2024, amounted to $470.6 million, an increase of 17.2% from $401.5 million in 2023 [386]. - Performance marketing expenses rose to $297.4 million in 2024, up 43.9% from $206.5 million in 2023 [386]. - Advertising expenses totaled $370.3 million in 2024, compared to $294.7 million in 2023, reflecting a year-over-year increase of 25.6% [386].