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Share Name | Share Symbol | Market | Type |
---|---|---|---|
NerdWallet Inc | NASDAQ:NRDS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.55 | -3.96% | 13.34 | 13.30 | 13.40 | 13.80 | 13.34 | 13.80 | 327,006 | 21:00:10 |
Revenue of $143.3 million, Up 14% Year-Over-Year
FINANCIAL HIGHLIGHTS
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
SUMMARY FINANCIAL RESULTS
Quarter Ended
% Change
Quarter Ended
% Change
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 June 30,
% Change
Six Months Ended June 30,
% Change
(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
(0.1
)
—
352
%
Total other income (expense), net
0.6
(0.1
)
NM
1.3
(0.3
)
NM
Loss before income taxes
(3.6
)
(9.1
)
(61
%)
(3.7
)
(18.4
)
(80
%)
Income tax provision
7.1
0.2
NM
5.3
1.4
275
%
Net Loss
$
(10.7
)
$
(9.3
)
16
%
$
(9.0
)
$
(19.8
)
(55
%)
Net Loss Per Share Attributable to Common Stockholders
Basic
$
(0.14
)
$
(0.14
)
0
%
$
(0.12
)
$
(0.29
)
(59
%)
Diluted
$
(0.14
)
$
(0.14
)
0
%
$
(0.12
)
$
(0.29
)
(59
%)
Weighted-Average Shares Used in Computing Net Loss Per Share Attributable to Common Stockholders
Basic
76.8
67.4
76.3
67.2
Diluted
76.8
67.4
76.3
67.2
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited
(in millions)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
67.1
$
83.9
Accounts receivable—net
92.4
87.0
Prepaid expenses and other current assets
21.7
18.3
Total current assets
181.2
189.2
Property, equipment and software—net
52.5
49.1
Goodwill
111.5
111.2
Intangible assets—net
54.9
64.1
Right-of-use assets
9.9
11.3
Other assets
0.6
0.8
Total Assets
$
410.6
$
425.7
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
1.6
$
3.6
Accrued expenses and other current liabilities
33.4
37.9
Contingent consideration—current
—
30.9
Total current liabilities
35.0
72.4
Other liabilities—noncurrent
10.6
11.6
Total liabilities
45.6
84.0
Commitments and contingencies
Stockholders’ equity
365.0
341.7
Total Liabilities and Stockholders’ Equity
$
410.6
$
425.7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Six Months Ended June 30,
(in millions)
2023
2022
Operating Activities:
Net loss
$
(9.0
)
$
(19.8
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
23.9
14.8
Stock-based compensation
19.9
16.2
Change in fair value of contingent consideration related to earnouts
—
5.7
Deferred taxes
(0.3
)
(1.3
)
Non-cash lease costs
1.4
1.3
Other, net
1.2
0.5
Changes in operating assets and liabilities:
Accounts receivable
(6.4
)
(19.3
)
Prepaid expenses and other assets
(3.2
)
(3.1
)
Accounts payable
(1.9
)
2.0
Accrued expenses and other current liabilities
(4.6
)
2.4
Payment of contingent consideration
(14.0
)
(11.5
)
Operating lease liabilities
(1.5
)
(0.9
)
Other liabilities
0.9
(1.4
)
Net cash provided by (used in) operating activities
6.4
(14.4
)
Investing Activities:
Capitalized software development costs
(14.9
)
(13.0
)
Purchase of property and equipment
(0.4
)
(2.9
)
Net cash used in investing activities
(15.3
)
(15.9
)
Financing Activities:
Payment of contingent consideration
(16.9
)
(19.0
)
Proceeds from line of credit
7.5
—
Payments on line of credit
(7.5
)
—
Proceeds from exercise of stock options
8.8
4.3
Issuance of Class A common stock under Employee Stock Purchase Plan
1.9
3.2
Repurchase of Class A common stock
(1.3
)
—
Tax payments related to net-share settlements on restricted stock units
(0.5
)
—
Net cash used in financing activities
(8.0
)
(11.5
)
Effect of exchange rate changes on cash and cash equivalents
0.1
(0.2
)
Net decrease in cash and cash equivalents
(16.8
)
(42.0
)
Cash and Cash Equivalents:
Beginning of period
83.9
167.8
End of period
$
67.1
$
125.8
NON-GAAP FINANCIAL MEASURES
We use Adjusted EBITDA and non-GAAP operating income (loss) 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.
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) losses (gains) on disposals of assets, (2) change in fair value of contingent consideration related to earnouts, (3) deferred compensation related to earnouts, (4) stock-based compensation, and (5) acquisition-related costs.
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) losses (gains) on disposals of assets, (2) change in fair value of contingent consideration related to earnouts, (3) deferred compensation related to earnouts, and (4) acquisition-related costs. We also reduce income (loss) from operations for capitalized internally developed software costs.
The above items are excluded from our Adjusted EBITDA and non-GAAP operating income (loss) measures because these items are non-cash in nature, or because the amount is 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 Adjusted EBITDA and non-GAAP operating income (loss) provide useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. Moreover, Adjusted EBITDA and non-GAAP operating income (loss) 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. Adjusted EBITDA and non-GAAP operating income (loss) 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:
In addition, Adjusted EBITDA and non-GAAP operating income (loss) as we define them may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider Adjusted EBITDA and non-GAAP operating income (loss) alongside other financial performance measures, including net income (loss), income (loss) from operations, and our other GAAP results.
We compensate for these limitations by reconciling Adjusted EBITDA to net income (loss), and non-GAAP operating income (loss) to income (loss) from operations, the most comparable respective GAAP financial measures, as follows:
Three Months Ended June 30,
% Change
Six Months Ended June 30,
% Change
(in millions)
2023
2022
2023
2022
Net loss
$
(10.7
)
$
(9.3
)
16
%
$
(9.0
)
$
(19.8
)
(55
%)
Depreciation and amortization
12.2
7.6
59
%
23.9
14.8
61
%
Stock-based compensation
11.3
9.7
17
%
19.9
16.2
23
%
Acquisition-related retention
1.4
—
NM
2.8
—
NM
Deferred compensation related to earnouts
—
0.4
(100
%)
—
0.8
(100
%)
Change in fair value of contingent consideration related to earnouts...
—
1.8
(100
%)
—
5.7
(100
%)
Acquisition-related expenses
—
2.2
(100
%)
—
2.2
(100
%)
Interest (income) expense, net
(0.6
)
0.1
NM
(1.4
)
0.3
NM
Other losses, net
—
—
NM
0.1
—
352
%
Income tax provision
7.1
0.2
NM
5.3
1.4
275
%
Adjusted EBITDA
$
20.7
$
12.7
63
%
$
41.6
$
21.6
93
%
Stock-based compensation
(11.3
)
(9.7
)
17
%
(19.9
)
(16.2
)
23
%
Capitalized internally developed software costs
(8.9
)
(8.8
)
0
%
(17.4
)
(16.7
)
4
%
Non-GAAP operating income (loss)
$
0.5
$
(5.8
)
NM
$
4.3
$
(11.3
)
NM
Net loss margin
(7
%)
(7
%)
(3
%)
(8
%)
Adjusted EBITDA margin1
14
%
10
%
13
%
8
%
Loss from operations
$
(4.2
)
$
(9.0
)
(54
%)
$
(5.0
)
$
(18.1
)
(72
%)
Depreciation and amortization
12.2
7.6
59
%
23.9
14.8
61
%
Acquisition-related retention
1.4
—
NM
2.8
—
NM
Deferred compensation related to earnouts
—
0.4
(100
%)
—
0.8
(100
%)
Change in fair value of contingent consideration related to earnouts...
—
1.8
(100
%)
—
5.7
(100
%)
Acquisition-related expenses
—
2.2
(100
%)
—
2.2
(100
%)
Capitalized internally developed software costs
(8.9
)
(8.8
)
0
%
(17.4
)
(16.7
)
4
%
Non-GAAP operating income (loss)
$
0.5
$
(5.8
)
NM
$
4.3
$
(11.3
)
NM
Operating loss margin
(3
%)
(7
%)
(2
%)
(7
%)
Non-GAAP operating income (loss) margin2
0
%
(5
%)
1
%
(4
%)
______________
(1)
Represents Adjusted EBITDA as a percentage of revenue.
(2)
Represents non-GAAP operating income (loss) as a percentage of revenue.
The following table provides our historical Adjusted EBITDA and non-GAAP operating income (loss), along with reconciliations to net income (loss) and income (loss) from operations, the most comparable respective GAAP financial measures:
Three Months Ended
(in millions)
Jun 30, 2023
Mar 31, 2023
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Sep 30, 2021
Jun 30, 2021
Mar 31, 2021
Net income (loss)
$
(10.7
)
$
1.7
$
8.9
$
0.7
$
(9.3
)
$
(10.5
)
$
(7.9
)
$
(7.8
)
$
(13.9
)
$
(12.9
)
Depreciation and amortization
12.2
11.7
11.4
10.8
7.6
7.2
7.2
7.1
6.6
6.2
Stock-based compensation
11.3
8.6
9.1
9.1
9.7
6.5
7.1
4.3
4.2
2.3
Acquisition-related retention
1.4
1.4
1.4
1.4
—
—
—
—
—
—
Deferred compensation related to earnouts
—
—
0.5
0.4
0.4
0.4
0.6
0.6
0.4
0.5
Loss on disposal of assets
—
—
—
—
—
—
—
0.5
—
0.3
Change in fair value of contingent consideration related to earnouts
—
—
0.6
0.4
1.8
3.9
8.0
2.4
0.7
7.0
Acquisition-related expenses
—
—
0.1
1.2
2.2
—
—
—
—
0.1
Interest (income) expense, net
(0.6
)
(0.8
)
0.3
0.4
0.1
0.2
0.2
0.4
0.4
0.3
Other losses (gains), net
—
0.1
—
—
—
—
(1.5
)
0.1
(1.3
)
0.1
Income tax provision (benefit)
7.1
(1.8
)
(1.3
)
(9.9
)
0.2
1.2
(0.2
)
13.6
(7.9
)
(0.7
)
Adjusted EBITDA
$
20.7
$
20.9
$
31.0
$
14.5
$
12.7
$
8.9
$
13.5
$
21.2
$
(10.8
)
$
3.2
Stock-based compensation
(11.3
)
(8.6
)
(9.1
)
(9.1
)
(9.7
)
(6.5
)
(7.1
)
(4.3
)
(4.2
)
(2.3
)
Capitalized internally developed software costs
(8.9
)
(8.5
)
(8.2
)
(8.8
)
(8.8
)
(7.9
)
(6.4
)
(5.8
)
(6.1
)
(5.7
)
Non-GAAP operating income (loss)
$
0.5
$
3.8
$
13.7
$
(3.4
)
$
(5.8
)
$
(5.5
)
$
—
$
11.1
$
(21.1
)
$
(4.8
)
Net income (loss) margin
(7
%)
1
%
6
%
0
%
(7
%)
(8
%)
(8
%)
(8
%)
(15
%)
(14
%)
Adjusted EBITDA margin1
14
%
12
%
22
%
10
%
10
%
7
%
14
%
21
%
(12
%)
4
%
Income (loss) from operations
$
(4.2
)
$
(0.8
)
$
7.9
$
(8.8
)
$
(9.0
)
$
(9.1
)
$
(9.4
)
$
6.3
$
(22.7
)
$
(13.2
)
Depreciation and amortization
12.2
11.7
11.4
10.8
7.6
7.2
7.2
7.1
6.6
6.2
Acquisition-related retention
1.4
1.4
1.4
1.4
—
—
—
—
—
—
Deferred compensation related to earnouts
—
—
0.5
0.4
0.4
0.4
0.6
0.6
0.4
0.5
Loss on disposal of assets
—
—
—
—
—
—
—
0.5
—
0.3
Change in fair value of contingent consideration related to earnouts
—
—
0.6
0.4
1.8
3.9
8.0
2.4
0.7
7.0
Acquisition-related expenses
—
—
0.1
1.2
2.2
—
—
—
—
0.1
Capitalized internally developed software costs
(8.9
)
(8.5
)
(8.2
)
(8.8
)
(8.8
)
(7.9
)
(6.4
)
(5.8
)
(6.1
)
(5.7
)
Non-GAAP operating income (loss)
$
0.5
$
3.8
$
13.7
$
(3.4
)
$
(5.8
)
$
(5.5
)
$
—
$
11.1
$
(21.1
)
$
(4.8
)
Operating income (loss) margin
(3
%)
0
%
6
%
(6
%)
(7
%)
(7
%)
(9
%)
6
%
(25
%)
(15
%)
Non-GAAP operating income (loss) margin2
0
%
2
%
10
%
(2
%)
(5
%)
(4
%)
0
%
11
%
(23
%)
(5
%)
______________
(1)
Represents Adjusted EBITDA as a percentage of revenue.
(2)
Represents non-GAAP operating income (loss) as a percentage of revenue.
FINANCIAL OUTLOOK
We are providing guidance for the third quarter of 2023:
We also provide guidance for full year 2023:
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 loss margin to forecasted non-GAAP operating income margin is as follows:
Forecasted Full Year 2023
Operating loss margin1
(1
%)
Impact on margin of:
Depreciation and amortization
8
%
Acquisition-related retention
1
%
Capitalized internally developed software costs
(6
%)
Non-GAAP operating income margin2
2
%
______________
(1)
Represents forecasted operating loss as a percentage of forecasted revenue.
(2)
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:
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/20230802223190/en/
Investor Relations: Caitlin MacNamee ir@nerdwallet.com
Media Relations: Kate Bondurant press@nerdwallet.com
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