NerdWallet, Inc. (Nasdaq: NRDS), a platform that provides financial guidance to consumers and small and mid-sized businesses (SMBs), today reported financial results for its second quarter ended June 30, 2023.
“In Q2, NerdWallet achieved growth in revenue and Adjusted EBITDA, as our brand’s resonance with consumers and SMBs helped to mitigate headwinds in lending and insurance,” said Tim Chen, Co-Founder and CEO of NerdWallet. “We see evidence that our strategy is effectively enabling us to increase our share within the larger growing market, and we attribute this growth to our track record of providing consumers with trusted, knowledgeable, and actionable financial guidance. Increasing our consumer mindshare fuels our long-term vision of being a trusted financial ecosystem that consumers and SMBs can rely on.”
“We’re pleased to announce another quarter of growth above our guidance, delivering Q2 revenue of $143 million, up 14% year-over-year,” said Lauren StClair, CFO of NerdWallet. "We are making disciplined investments in building our brand awareness and engaging our user base, and we are making progress towards returning to our historical Adjusted EBITDA margin levels. Looking ahead, we are focused on driving incremental efficiencies while optimizing for investment levels that balance both shorter-term profitability considerations with longer-term growth opportunities."
SECOND QUARTER 2023 HIGHLIGHTS
- Credit cards revenue of $51.2 million decreased 6% year-over-year, primarily due to reduced marketing spending by our financial services partners amidst an increasingly cautious underwriting environment. Consumer demand continues to reflect our growing brand awareness and increased consumer intent combined with our deep alignment with partners to deliver quality matches.
- Loans revenue of $23.1 million was down 4% year-over-year, primarily due to decreases in mortgages and student loans reflecting higher interest rates and continuing macroeconomic headwinds, partially offset by re-accelerating growth in personal loans.
- Other verticals revenue of $69.0 million was up 48% year-over-year, driven by strong growth in banking, insurance and SMB products.
- We had 22 million average Monthly Unique Users (MUUs), which was up 9% year-over-year. We saw strong engagement in areas such as banking, insurance and travel products, and are also incorporating our acquisition of OTB in July 2022. Partially offsetting growth were declines from a continued challenging macroeconomic environment in mortgages.
SUMMARY FINANCIAL RESULTS | ||||||||||||||||||
Quarter Ended | %
| Quarter Ended | %
| |||||||||||||||
Jun 30, | Jun 30, | Mar 31, | ||||||||||||||||
(in millions, except per share amounts) | 2023 | 2022 | YoY | 2023 | QoQ | |||||||||||||
Revenue | $ | 143.3 | $ | 125.2 | 14 | % | $ | 169.6 | (15 | %) | ||||||||
Credit cards(1) | 51.2 | 54.6 | (6 | %) | 61.3 | (16 | %) | |||||||||||
Loans(2) | 23.1 | 24.0 | (4 | %) | 22.0 | 5 | % | |||||||||||
Other verticals(3) | 69.0 | 46.6 | 48 | % | 86.3 | (20 | %) | |||||||||||
Loss from operations | $ | (4.2 | ) | $ | (9.0 | ) | (54 | %) | $ | (0.8 | ) | 404 | % | |||||
Net income (loss) | $ | (10.7 | ) | $ | (9.3 | ) | 16 | % | $ | 1.7 | NM | |||||||
Net income (loss) per share | ||||||||||||||||||
Basic | $ | (0.14 | ) | $ | (0.14 | ) | 0 | % | $ | 0.02 | NM | |||||||
Diluted | $ | (0.14 | ) | $ | (0.14 | ) | 0 | % | $ | 0.02 | NM | |||||||
Non-GAAP financial measures(4) | ||||||||||||||||||
Adjusted EBITDA | $ | 20.7 | $ | 12.7 | 63 | % | $ | 20.9 | (1 | %) | ||||||||
Non-GAAP operating income (loss) | $ | 0.5 | $ | (5.8 | ) | NM | $ | 3.8 | (87 | %) | ||||||||
Cash and cash equivalents | $ | 67.1 | $ | 125.8 | (47 | %) | $ | 100.8 | (33 | %) | ||||||||
Average monthly unique users(5) | 22 | 20 | 9 | % | 23 | (7 | %) | |||||||||||
______________ | ||
(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) | Other verticals revenue includes revenue from other product sources, including SMB products, banking, insurance, investing and NerdWallet UK. | |
(4) | Adjusted EBITDA and non-GAAP operating income (loss) are non-GAAP measures. See “Non-GAAP Financial Measures” for more information. | |
(5) | 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 second quarter 2023 financial results will be webcast live today, August 2, 2023 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
| %
| Six Months Ended
| %
| |||||||||||||||||||
(in millions, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||
Revenue | $ | 143.3 | $ | 125.2 | 14 | % | $ | 312.9 | $ | 254.3 | 23 | % | ||||||||||
Costs and Expenses: | ||||||||||||||||||||||
Cost of revenue | 13.1 | 8.2 | 61 | % | 26.9 | 15.9 | 69 | % | ||||||||||||||
Research and development | 20.0 | 20.1 | (0 | %) | 39.5 | 37.5 | 5 | % | ||||||||||||||
Sales and marketing | 98.8 | 88.8 | 11 | % | 220.5 | 184.9 | 19 | % | ||||||||||||||
General and administrative | 15.6 | 15.3 | 1 | % | 31.0 | 28.4 | 10 | % | ||||||||||||||
Change in fair value of contingent consideration related to earnouts | — | 1.8 | (100 | %) | — | 5.7 | (100 | %) | ||||||||||||||
Total costs and expenses | 147.5 | 134.2 | 10 | % | 317.9 | 272.4 | 17 | % | ||||||||||||||
Loss From Operations | (4.2 | ) | (9.0 | ) | (54 | %) | (5.0 | ) | (18.1 | ) | (72 | %) | ||||||||||
Other income (expense), net: | ||||||||||||||||||||||
Interest income | 0.8 | 0.1 | 701 | % | 1.8 | 0.1 | NM | |||||||||||||||
Interest expense | (0.2 | ) | (0.2 | ) | 4 | % | (0.4 | ) | (0.4 | ) | 9 | % | ||||||||||
Other losses, net | — | — | NM | |||||||||||||||||||
