Revenue of $161.9 million, Down 5%
Year-Over-Year
FINANCIAL HIGHLIGHTS
- Revenue of $161.9 million
- GAAP income from operations of $3.7 million
- GAAP net income of $1.1 million or $0.01 income per diluted
share
- Non-GAAP operating income of $10.6 million
- Adjusted EBITDA of $25.5 million
NerdWallet, Inc. (Nasdaq: NRDS), which provides trustworthy
financial guidance to consumers and small and mid-sized businesses
(SMBs), today reported financial results for its first quarter
ended March 31, 2024.
“I’m proud of our Q1 results—we exceeded guidance across
adjusted EBITDA and non-GAAP operating income, while hitting
another record quarter for monthly unique users and growing our
registered user base to over 20 million,” said Tim Chen, Co-Founder
and CEO of NerdWallet. “Elevated delinquency rates and high
interest rates are contributing to a tough lending environment,
despite seemingly positive economic indicators. We believe these
are normal cyclical dynamics, so we are focused on the long term to
grow from cycle to cycle.”
“While our Q1 revenue declined 5% year-over-year as we faced a
tight lending environment, the diversification of our business
helped to offset some of these continued headwinds, and we expect a
return to revenue growth in Q2,” said Lauren StClair, CFO of
NerdWallet. “Our growing consumer mind share, with strong traffic
and brand signals, give us confidence that as macroeconomic
conditions recover, our ability to meet consumer needs will
strengthen our long-term positioning.”
FIRST QUARTER 2024 HIGHLIGHTS
As previously announced, effective with the fourth quarter of
2023, we present SMB products (previously included in Other
verticals) as a separate revenue product category. Additionally,
our historical Other verticals product category, exclusive of SMB
products, is renamed Emerging verticals. Comparative amounts have
been reclassified to conform to the presentation for the three
months ended March 31, 2024.
- Credit cards revenue of $50.0 million decreased 19%
year-over-year, primarily due to reduced marketing spending by our
financial services partners amidst a combination of continued
cautious underwriting and heightened balance sheet conservatism
following the 2023 regional banking crisis.
- Loans revenue of $21.4 million was down 3% year-over-year,
primarily due to decreases in mortgages, as a result of higher
interest rates, and in student loans, partially offset by growth in
personal loans.
- SMB products revenue of $30.4 million was up 21%
year-over-year, primarily driven by revenue growth in products such
as business credit cards and banking.
- Emerging verticals revenue, previously named Other verticals,
of $60.1 million was down 2% year-over-year, as a decrease in
banking products was partially offset by growth in investing and
insurance products.
- We had 29 million average Monthly Unique Users (MUUs), which
was up 25% year-over-year. We saw strong engagement in areas such
as investing, travel products, taxes and insurance.
SUMMARY FINANCIAL RESULTS
Quarter Ended
%
Change
Quarter Ended
%
Change
Mar 31,
Mar 31,
Dec 31,
(in millions, except per share
amounts)
2024
2023
YoY
2023
QoQ
Revenue
$
161.9
$
169.6
(5
%)
$
133.7
21
%
Credit cards(1)
50.0
61.3
(19
%)
43.2
15
%
Loans(2)
21.4
22.0
(3
%)
23.6
(9
%)
SMB products(3)
30.4
25.2
21
%
27.6
10
%
Emerging verticals(4)
60.1
61.1
(2
%)
39.3
53
%
Income (loss) from operations
$
3.7
$
(0.8
)
NM
$
4.6
(19
%)
Net income (loss)
$
1.1
$
1.7
(34
%)
$
(2.3
)
NM
Net income (loss) per share
Basic
$
0.01
$
0.02
(50
%)
$
(0.03
)
NM
Diluted
$
0.01
$
0.02
(50
%)
$
(0.03
)
NM
Non-GAAP financial measures(5)
Non-GAAP operating income
$
10.6
$
3.8
176
%
$
12.6
(15
%)
Adjusted EBITDA
$
25.5
$
20.9
22
%
$
29.3
(13
%)
Cash and cash equivalents
$
110.9
$
100.8
10
%
$
100.4
10
%
Average Monthly Unique Users(6)
29
23
25
%
24
21
%
______________
(1)
Credit cards revenue consists of revenue
from consumer credit cards.
(2)
Loans revenue includes revenue from
personal loans, mortgages, student loans and auto loans.
(3)
SMB products revenue includes revenue from
loans, credit cards and other financial products and services
intended for small and mid-sized businesses.
(4)
Emerging verticals revenue includes
revenue from other product sources, including banking, insurance,
investing and international.
(5)
Non-GAAP operating income and adjusted
EBITDA are non-GAAP measures. See “Non-GAAP Financial Measures” for
more information.
(6)
We define a Monthly Unique User as a
unique user with at least one session in a given month as
determined by unique device identifiers.
QUARTERLY CONFERENCE CALL
A conference call to discuss NerdWallet’s first quarter 2024
financial results will be webcast live today, April 25, 2024 at
1:30 PM Pacific Time (PT). The live webcast is open to the public
and will be available on NerdWallet’s investor relations website at
https://investors.nerdwallet.com. Following completion of the call,
a recorded replay of the webcast will be available on NerdWallet’s
investor relations website.
SHAREHOLDER LETTER
A shareholder letter providing additional information and
analysis can be found at NerdWallet’s investor relations website at
https://investors.nerdwallet.com.
ABOUT NERDWALLET
NerdWallet (Nasdaq: NRDS) is on a mission to provide clarity for
all of life’s financial decisions. As a personal finance website
and app, NerdWallet provides consumers with trustworthy and
knowledgeable financial information so they can make smart money
moves. From finding the best credit card to buying a house,
NerdWallet is there to help consumers make financial decisions with
confidence. Consumers have free access to our expert content and
comparison shopping marketplaces, plus a data-driven app, which
helps them stay on top of their finances and save time and money,
giving them the freedom to do more. NerdWallet is available for
consumers in the U.S., United Kingdom, Canada and Australia.
“NerdWallet” is a trademark of NerdWallet, Inc. All rights
reserved. Other names and trademarks used herein may be trademarks
of their respective owners.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
Unaudited
Three Months Ended
March 31,
% Change
(in millions, except per share
amounts)
2024
2023
Revenue
$
161.9
$
169.6
(5
%)
Costs and Expenses:
Cost of revenue
14.2
13.8
3
%
Research and development
20.7
19.5
6
%
Sales and marketing
107.9
121.7
(11
%)
General and administrative
15.4
15.4
(1
%)
Total costs and expenses
158.2
170.4
(7
%)
Income (Loss) From Operations
3.7
(0.8
)
NM
Other income, net:
Interest income
1.4
1.0
33
%
Interest expense
(0.2
)
(0.2
)
(4
%)
Other losses, net
(0.1
)
(0.1
)
(41
%)
Total other income, net
1.1
0.7
56
%
Income (loss) before income taxes
4.8
(0.1
)
NM
Income tax provision (benefit)
3.7
(1.8
)
NM
Net Income
$
1.1
$
1.7
(34
%)
Net Income Per Share Attributable to
Common Stockholders
Basic
$
0.01
$
0.02
(50
%)
Diluted
$
0.01
$
0.02
(50
%)
Weighted-average Shares Used in
Computing Net Income Per Share Attributable to Common
Stockholders
Basic
77.2
75.8
Diluted
80.5
79.7
CONDENSED CONSOLIDATED BALANCE
SHEETS
Unaudited
(in millions)
March 31, 2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
110.9
$
100.4
Accounts receivable—net
93.9
75.5
Prepaid expenses and other current
assets
19.4
22.5
Total current assets
224.2
198.4
Property, equipment and software—net
50.6
52.6
Goodwill
111.5
111.5
Intangible assets—net
43.5
46.9
Right-of-use assets
6.5
7.2
Other assets
9.8
2.0
Total Assets
$
446.1
$
418.6
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
15.3
$
1.7
Accrued expenses and other current
liabilities
38.5
35.6
Total current liabilities
53.8
37.3
Other liabilities—noncurrent
13.6
14.4
Total liabilities
67.4
51.7
Commitments and contingencies
Stockholders’ equity
378.7
366.9
Total Liabilities and Stockholders’
Equity
$
446.1
$
418.6
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
Unaudited
Three Months Ended
March 31,
(in millions)
2024
2023
Operating Activities:
Net income
$
1.1
$
1.7
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
11.9
11.7
Stock-based compensation
8.7
8.6
Deferred taxes
(0.1
)
(0.1
)
Non-cash lease costs
0.5
0.7
Other, net
0.2
1.4
Changes in operating assets and
liabilities:
Accounts receivable
(18.5
)
(11.8
)
Prepaid expenses and other assets
3.0
(2.6
)
Accounts payable
13.4
8.6
Accrued expenses and other current
liabilities
3.0
(0.8
)
Operating lease liabilities
(0.8
)
(0.7
)
Other liabilities
0.3
(0.3
)
Net cash provided by operating
activities
22.7
16.4
Investing Activities:
Purchase of investment
(8.1
)
—
Capitalized software development costs
(5.4
)
(7.3
)
Purchase of property and equipment
—
(0.3
)
Net cash used in investing activities
(13.5
)
(7.6
)
Financing Activities:
Proceeds from line of credit
—
7.5
Payments on line of credit
—
(7.5
)
Proceeds from exercise of stock
options
1.7
8.4
Tax payments related to net-share
settlements on restricted stock units
(0.4
)
(0.3
)
Net cash provided by financing
activities
1.3
8.1
Net increase in cash and cash
equivalents
10.5
16.9
Cash and Cash Equivalents:
Beginning of period
100.4
83.9
End of period
$
110.9
$
100.8
NON-GAAP FINANCIAL MEASURES
We use non-GAAP operating income (loss) and adjusted EBITDA in
conjunction with GAAP measures as part of our overall assessment of
our performance, including the preparation of our annual operating
budget and quarterly forecasts, to evaluate the effectiveness of
our business strategies, and to communicate with our Board of
Directors concerning our financial performance.
Non-GAAP operating income (loss): We define non-GAAP
operating income (loss) as income (loss) from operations adjusted
to exclude depreciation and amortization, and further exclude (1)
impairment of right-of-use asset, (2) losses (gains) on disposals
of assets, (3) change in fair value of contingent consideration
related to earnouts, (4) deferred compensation related to earnouts,
and (5) acquisition-related costs. We also reduce income from
operations, or increase loss from operations, for capitalized
internally developed software costs.
Adjusted EBITDA: We define adjusted EBITDA as net income
(loss) from continuing operations adjusted to exclude depreciation
and amortization, interest income (expense), net, provision
(benefit) for income taxes, and further exclude (1) impairment of
right-of-use asset, (2) losses (gains) on disposals of assets, (3)
change in fair value of contingent consideration related to
earnouts, (4) deferred compensation related to earnouts, (5)
stock-based compensation, and (6) acquisition-related costs.
The above items are excluded from our non-GAAP operating income
(loss) and adjusted EBITDA measures because these items are
non-cash in nature, or because the amounts are not driven by core
operating results and renders comparisons with prior periods less
meaningful. We deduct capitalized internally developed software
costs in our non-GAAP operating income (loss) measure to reflect
the cash impact of personnel costs incurred within the time
period.
We believe that non-GAAP operating income (loss) and adjusted
EBITDA provide useful information to investors and others in
understanding and evaluating our operating results and in comparing
operating results across periods. Moreover, non-GAAP operating
income (loss) and adjusted EBITDA are key measurements used by our
management internally to make operating decisions, including those
related to analyzing operating expenses, evaluating performance,
and performing strategic planning and annual budgeting. However,
the use of these non-GAAP measures have certain limitations because
they do not reflect all items of income and expense that affect our
operations. Non-GAAP operating income (loss) and adjusted EBITDA
have limitations as financial measures, should be considered as
supplemental in nature, and are not meant as substitutes for the
related financial information prepared in accordance with GAAP.
These limitations include the following:
- Non-GAAP operating income (loss) and adjusted EBITDA exclude
certain recurring, non-cash charges, such as amortization of
software, depreciation of property and equipment, amortization of
intangible assets, impairment of right-of-use asset, and (losses)
gains on disposals of assets. Although these are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and non-GAAP operating income (loss) and adjusted
EBITDA do not reflect all cash requirements for such replacements
or for new capital expenditure requirements;
- Non-GAAP operating income (loss) and adjusted EBITDA exclude
acquisition-related costs, including acquisition-related retention
compensation under compensatory retention agreements with certain
key employees, acquisition-related transaction expenses, contingent
consideration fair value adjustments related to earnouts, and
deferred compensation related to earnouts;
- Adjusted EBITDA excludes stock-based compensation, including
for acquisition-related inducement awards, which has been, and will
continue to be for the foreseeable future, a significant recurring
expense in our business and an important part of our compensation
strategy; and
- Adjusted EBITDA does not reflect interest income (expense) and
other gains (losses), net, which include unrealized and realized
gains and losses on foreign currency exchange, as well as certain
nonrecurring gains (losses).
In addition, non-GAAP operating income (loss) and adjusted
EBITDA as we define them may not be comparable to similarly titled
measures used by other companies. Because of these limitations, you
should consider non-GAAP operating income (loss) and adjusted
EBITDA alongside other financial performance measures, including
income (loss) from operations, net income (loss) and our other GAAP
results.
We compensate for these limitations by reconciling non-GAAP
operating income (loss) to income (loss) from operations, and
adjusted EBITDA to net income (loss), the most directly comparable
respective GAAP financial measures, as follows:
Three Months Ended
March 31,
% Change
(in millions)
2024
2023
Income (loss) from operations
$
3.7
$
(0.8
)
NM
Depreciation and amortization
11.9
11.7
1
%
Acquisition-related retention
1.2
1.4
(11
%)
Capitalized internally developed software
costs
(6.2
)
(8.5
)
(27
%)
Non-GAAP operating income
$
10.6
$
3.8
176
%
Operating income (loss) margin
2
%
(0
%)
Non-GAAP operating income margin1
7
%
2
%
Net income
$
1.1
$
1.7
(34
%)
Depreciation and amortization
11.9
11.7
1
%
Stock-based compensation
8.7
8.6
1
%
Acquisition-related retention
1.2
1.4
(11
%)
Interest income, net
(1.2
)
(0.8
)
42
%
Other losses, net
0.1
0.1
(41
%)
Income tax provision (benefit)
3.7
(1.8
)
NM
Adjusted EBITDA
$
25.5
$
20.9
22
%
Stock-based compensation
(8.7
)
(8.6
)
1
%
Capitalized internally developed software
costs
(6.2
)
(8.5
)
(27
%)
Non-GAAP operating income
$
10.6
$
3.8
176
%
Net income margin
1
%
1
%
Adjusted EBITDA margin2
16
%
12
%
______________
(1)
Represents non-GAAP operating income
(loss) as a percentage of revenue.
(2)
Represents adjusted EBITDA as a percentage
of revenue.
FINANCIAL OUTLOOK
We are providing guidance for the second quarter of 2024:
- Revenue is expected in the range of $147-$152 million, up 4%
year-over-year at the midpoint
- GAAP operating loss is expected in the range of $(7)-$(4)
million
- Non-GAAP operating income (loss) is expected in the range of
$(1.5)-$1.5 million
- Adjusted EBITDA is expected in the range of $16.5-$19.5
million
We expect a 2024 annual GAAP operating income margin in the
range of 3-4.5% and non-GAAP operating income margin in the range
of 6.5-8%. We also expect a 2024 annual adjusted EBITDA margin in
the range of 18-19.5%.
NerdWallet has not provided a quantitative reconciliation of
forecasted GAAP net income (loss) to forecasted adjusted EBITDA
within this communication because the Company is unable, without
making unreasonable efforts, to calculate certain reconciling items
with confidence. These items include, but are not limited to,
income taxes which are directly impacted by unpredictable
fluctuations in the market price of the Company’s capital stock.
These items, which could materially affect the computation of
forward-looking GAAP net income (loss), are inherently uncertain
and depend on various factors, many of which are outside of
NerdWallet’s control.
A reconciliation of forecasted operating income margin to
forecasted non-GAAP operating income margin for forecasted full
year 2024, and forecasted operating loss to forecasted non-GAAP
operating income (loss) for forecasted second quarter 2024 is as
follows:
Forecasted Full
Year 2024
Forecasted Second
Quarter 2024
(in millions)
Operating Income
Margin1
Operating Income
(Loss)
GAAP
3-4.5%
$(7)-$(4)
Estimated adjustments for:
Depreciation and amortization
7-7.5%
11.5
Acquisition-related retention
0.75%
1
Capitalized internally developed software
costs
(4.25)-(4.75%)
(7)
Non-GAAP
6.5-8%
$(1.5)-$1.5
______________
(1)
Operating income margin represents
forecasted operating income as a percentage of forecasted revenue.
Non-GAAP operating income margin represents forecasted non-GAAP
operating income as a percentage of forecasted revenue.
For more information regarding the non-GAAP financial measures
discussed in this communication, please see “Non-GAAP Financial
Measures” above.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements about us
and our industry that involve substantial risks and uncertainties.
All statements other than statements of historical facts contained
in this press release are forward-looking statements, including,
but not limited to, the statements in the section titled “Financial
Outlook.” In some cases, you can identify forward-looking
statements because they contain words such as “anticipate,”
“believe,” “contemplate,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “will” or “would” or the negative of
these words or other similar terms or expressions. These
forward-looking statements include, but are not limited to,
statements concerning the following:
- the effect of macroeconomic developments, including but not
limited to, inflation, rising interest rates, tightening credit
markets and general macroeconomic uncertainty on our business
results of operations, financial condition and stock price;
- our expectations regarding our future financial and operating
performance, including total revenue, cost of revenue, non-GAAP
operating income (loss), adjusted EBITDA, and MUUs;
- our ability to grow traffic and engagement on our
platform;
- our expected returns on marketing investments and brand
campaigns;
- our expectations about consumer demand for the products on our
platform;
- our ability to convert users into registered users and improve
repeat user rates;
- our ability to convert consumers into matches with financial
services partners;
- our ability to grow within existing and new verticals;
- our ability to expand geographically;
- our ability to maintain and expand our relationships with our
existing financial services partners and to identify new financial
services partners;
- our ability to build efficient and scalable technical
capabilities to deliver personalized guidance and nudge users;
- our ability to maintain and enhance our brand awareness and
consumer trust;
- our ability to generate high quality, engaging consumer
resources;
- our ability to adapt to the evolving financial interests of
consumers;
- our ability to compete with existing and new competitors in
existing and new market verticals;
- our ability to maintain the security and availability of our
platform;
- our ability to maintain, protect and enhance our intellectual
property;
- our ability to identify, attract and retain highly skilled,
diverse personnel;
- our ability to stay in compliance with laws and regulations
that currently apply or become applicable to our business;
- the sufficiency of our cash, cash equivalents, and investments
to meet our liquidity needs;
- our ability to effectively manage our growth and expand our
infrastructure and maintain our corporate culture;
- our ability to successfully identify, manage, and integrate any
existing and potential acquisitions; and
- our ability to achieve expected synergies, accretive value and
other benefits from completed acquisitions.
You should not rely on forward-looking statements as predictions
or guarantees of future events. We have based the forward-looking
statements contained in this press release primarily on our current
expectations and projections about future events and trends that we
believe may affect our business, financial condition and operating
results. These forward-looking statements are subject to risks,
uncertainties and other factors that may cause actual results or
outcomes to be materially different from any future results
expressed or implied by these forward-looking statements, including
those factors described in filings we make with the SEC from time
to time.
The forward-looking statements made in this press release speak
only as of the date hereof. We undertake no obligation to update
any forward-looking statements made in this press release to
reflect events or circumstances after the date of this press
release or to reflect new information or the occurrence of
unanticipated events, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240425771110/en/
Investor Relations: Caitlin MacNamee ir@nerdwallet.com
Media Relations: Kate Bondurant press@nerdwallet.com
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