Revenue of $169.6 million, Up 31%
Year-Over-Year
FINANCIAL HIGHLIGHTS
- Revenue of $169.6 million
- GAAP net income of $1.7 million and $0.02 income per diluted
share
- Adjusted EBITDA of $20.9 million
- Board of Directors approved a share repurchase plan with $20
million authorization and no expiration date
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 first quarter
ended March 31, 2023.
“We delivered solid financial results in Q1 during a volatile
economic climate,” said Tim Chen, Co-Founder and CEO of NerdWallet.
“We focused on executing against our growth pillars to deliver
value to consumers, expanding our financial guidance across
verticals and acquisition channels, and investing in consumer
experiences to drive continued growth in Registrations and
Engagement. At this time of heightened uncertainty, we plan to
operate with a long-term orientation, investing in areas with both
immediate and future payoffs, while applying additional scrutiny to
increase our near-term flexibility.”
“We’re pleased to announce a strong start to 2023, delivering
revenue of $170 million, up 31% year-over-year,” said Lauren
StClair, CFO of NerdWallet. “As we anticipate macro pressures
ahead, NerdWallet continues to operate with efficiency and
relentless improvement. We strive to operate a sustainable and
profitable business, and our focus remains on delivering long-term
value.”
FIRST QUARTER 2023 HIGHLIGHTS
- Credit cards revenue of $61.3 million grew 36% year-over-year,
reflecting growing brand awareness and increased consumer intent
combined with our deep alignment with partners to deliver quality
matches.
- Loans revenue of $22.0 million was down 36% year-over-year,
primarily due to decreases in mortgages and student loans driven by
increasing interest rates and continuing macroeconomic headwinds,
partially offset by growth in personal loans.
- Other verticals revenue of $86.3 million was up 74%
year-over-year, driven by strong growth in banking, insurance and
SMB products.
- We had 23 million average Monthly Unique Users (MUUs), which
was up 7% year-over-year. We saw strong engagement in areas such as
banking 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
both mortgages and investing.
SUMMARY FINANCIAL RESULTS
Quarter Ended
%
Change
Quarter Ended
%
Change
Mar 31,
Mar 31,
Dec 31,
(in millions, except per share
amounts)
2023
2022
YoY
2022
QoQ
Revenue
$
169.6
$
129.1
31
%
$
142.0
19
%
Credit cards(1)
61.3
45.2
36
%
53.1
15
%
Loans(2)
22.0
34.3
(36
%)
22.4
(2
%)
Other verticals(3)
86.3
49.6
74
%
66.5
30
%
Income (loss) from operations
$
(0.8
)
$
(9.1
)
(91
%)
$
7.9
(110
%)
Net income (loss)
$
1.7
$
(10.5
)
NM
$
8.9
(81
%)
Net income (loss) per share
Basic
$
0.02
$
(0.16
)
NM
$
0.12
(83
%)
Diluted
$
0.02
$
(0.16
)
NM
$
0.12
(83
%)
Non-GAAP financial measure(4)
Adjusted EBITDA
$
20.9
$
8.9
134
%
$
31.0
(32
%)
Cash and cash equivalents
$
100.8
$
161.6
(38
%)
$
83.9
20
%
Average monthly unique users(5)
23
22
7
%
20
19
%
______________
(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 is a non-GAAP measure. See
“Non-GAAP Financial Measure” 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 first quarter 2023
financial results will be webcast live today, May 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.
SHARE REPURCHASE PLAN
NerdWallet’s Board of Directors approved a share repurchase plan
with authorization to purchase up to $20 million of the Company’s
Class A common stock. Subject to market conditions and other
factors, the repurchase plan is intended to make opportunistic
repurchases of NerdWallet’s Class A common stock to reduce its
outstanding share count. Repurchases under the plan may be made in
the open market, in privately negotiated transactions or otherwise
in accordance with applicable securities laws and other
restrictions. The amount and timing of repurchases will be
determined at management's discretion and depend on a variety of
factors, including business, economic and market conditions,
regulatory requirements, prevailing stock prices and other
considerations. The share repurchase plan has no time limit and may
be modified, suspended or terminated at any time, and does not
obligate the Company to acquire any particular amount of Class A
Common Stock. The Company expects to fund repurchases with existing
cash and cash equivalents.
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., UK, 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)
2023
2022
Revenue
$
169.6
$
129.1
31
%
Costs and Expenses:
Cost of revenue
13.8
7.7
78
%
Research and development
19.5
17.4
12
%
Sales and marketing
121.7
96.1
27
%
General and administrative
15.4
13.1
19
%
Change in fair value of contingent
consideration related to earnouts
—
3.9
(100
%)
Total costs and expenses
170.4
138.2
23
%
Loss From Operations
(0.8
)
(9.1
)
(91
%)
Other income (expense), net:
Interest income
1.0
—
NM
Interest expense
(0.2
)
(0.2
)
15
%
Other losses, net
(0.1
)
—
NM
Total other income (expense), net
0.7
(0.2
)
NM
Loss before income taxes
(0.1
)
(9.3
)
(99
%)
Income tax provision (benefit)
(1.8
)
1.2
NM
Net Income (Loss)
$
1.7
$
(10.5
)
NM
Net Income (Loss) Per Share
Attributable to Common Stockholders
Basic
$
0.02
$
(0.16
)
NM
Diluted
$
0.02
$
(0.16
)
NM
Weighted-Average Shares Used in
Computing Net Income (Loss) Per Share Attributable to Common
Stockholders
Basic
75.8
66.9
Diluted
79.7
66.9
CONDENSED CONSOLIDATED BALANCE
SHEETS
Unaudited
(in millions)
March 31, 2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
100.8
$
83.9
Accounts receivable—net
97.5
87.0
Prepaid expenses and other current
assets
20.5
18.3
Total current assets
218.8
189.2
Property, equipment and software—net
50.8
49.1
Goodwill
111.4
111.2
Intangible assets—net
59.5
64.1
Right-of-use assets
10.6
11.3
Other assets
1.0
0.8
Total Assets
$
452.1
$
425.7
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
12.0
$
3.6
Accrued expenses and other current
liabilities
37.1
37.9
Contingent consideration—current
30.9
30.9
Total current liabilities
80.0
72.4
Other liabilities—noncurrent
10.3
11.6
Total liabilities
90.3
84.0
Commitments and contingencies
Stockholders’ equity
361.8
341.7
Total Liabilities and Stockholders’
Equity
$
452.1
$
425.7
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
Unaudited
Three Months Ended
March 31,
(in millions)
2023
2022
Operating Activities:
Net income (loss)
$
1.7
$
(10.5
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
11.7
7.2
Stock-based compensation
8.6
6.5
Change in fair value of contingent
consideration related to earnouts
—
3.9
Deferred taxes
(0.1
)
(0.7
)
Non-cash lease costs
0.7
0.7
Other, net
1.4
0.2
Changes in operating assets and
liabilities:
Accounts receivable
(11.8
)
(15.2
)
Prepaid expenses and other assets
(2.6
)
(1.6
)
Accounts payable
8.6
1.3
Accrued expenses and other current
liabilities
(0.8
)
9.7
Operating lease liabilities
(0.7
)
(0.3
)
Other liabilities
(0.3
)
0.4
Net cash provided by operating
activities
16.4
1.6
Investing Activities:
Capitalized software development costs
(7.3
)
(6.6
)
Purchase of property and equipment
(0.3
)
(1.9
)
Net cash used in investing activities
(7.6
)
(8.5
)
Financing Activities:
Proceeds from line of credit
7.5
—
Payments on line of credit
(7.5
)
—
Proceeds from exercise of stock
options
8.4
0.7
Tax payments related to net-share
settlements on restricted stock units
(0.3
)
—
Net cash provided by financing
activities
8.1
0.7
Net increase (decrease) in cash and
cash equivalents
16.9
(6.2
)
Cash and Cash Equivalents:
Beginning of period
83.9
167.8
End of period
$
100.8
$
161.6
NON-GAAP FINANCIAL MEASURE
Adjusted EBITDA
We use 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.
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.
The above items are excluded from our Adjusted EBITDA measure
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 believe that Adjusted EBITDA provides useful information to
investors and others in understanding and evaluating our operating
results and in comparing operating results across periods.
Moreover, Adjusted EBITDA is a key measurement 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 this non-GAAP measure has certain limitations because it
does not reflect all items of income and expense that affect our
operations. Adjusted EBITDA has limitations as a financial measure,
should be considered as supplemental in nature, and is not meant as
a substitute for the related financial information prepared in
accordance with GAAP. These limitations include the following:
- 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);
- Adjusted EBITDA excludes certain recurring, non-cash charges,
such as depreciation of property and equipment, amortization of
intangible assets, 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 Adjusted
EBITDA does not reflect all cash requirements for such replacements
or for new capital expenditure requirements;
- 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 excludes 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.
In addition, Adjusted EBITDA as we define it may not be
comparable to similarly titled measures used by other companies.
Because of these limitations, you should consider Adjusted EBITDA
alongside other financial performance measures, including net
income (loss) and our other GAAP results.
We compensate for these limitations by reconciling Adjusted
EBITDA to net income (loss), the most comparable GAAP financial
measure, as follows:
Three Months Ended
March 31,
% Change
(in millions)
2023
2022
Net income (loss)
$
1.7
$
(10.5
)
NM
Depreciation and amortization
11.7
7.2
64
%
Stock-based compensation
8.6
6.5
32
%
Acquisition-related retention
1.4
—
NM
Deferred compensation related to
earnouts
—
0.4
(100
%)
Change in fair value of contingent
consideration related to earnouts
—
3.9
(100
%)
Interest (income) expense, net
(0.8
)
0.2
NM
Other losses, net
0.1
—
NM
Income tax provision (benefit)
(1.8
)
1.2
NM
Adjusted EBITDA
$
20.9
$
8.9
134
%
Net income (loss) margin
1
%
(8
%)
Adjusted EBITDA margin1
12
%
7
%
______________
(1)
Represents Adjusted EBITDA as a percentage
of revenue.
FINANCIAL OUTLOOK
We are providing guidance for the second quarter of 2023:
- Revenue is expected in the range of $134 - $141 million, 10%
year-over-year growth rate at midpoint
- Adjusted EBITDA is expected in the range of $17 - $19
million
Despite what we believe to be near-term macro headwinds in areas
such as credit cards and insurance, which may pressure our revenue
growth compared to Q1 2023 levels, we are focused on delivering
profitability to ensure investment flexibility and drive
sustainable growth across credit cycles. There will be variability
in our quarterly margins, but we expect year-over-year increase in
our 2023 annual Adjusted EBITDA margin.
NerdWallet has not provided a quantitative reconciliation of
forecasted GAAP net income (loss) to forecasted total 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; depreciation and amortization expense from
acquisitions; impairments of assets; gains or losses on
extinguishment of debt and acquisition-related costs. 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.
For more information regarding the non-GAAP financial measure
discussed in this communication, please see “Non-GAAP Financial
Measure” 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, 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;
- our ability to achieve expected synergies, accretive value and
other benefits from completed acquisitions; and
- our share repurchase plan, including expectations regarding the
amount, timing and manner of repurchases made under the plan.
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/20230502006108/en/
Investor Relations: Caitlin MacNamee ir@nerdwallet.com Media
Relations: Maitri Jani press@nerdwallet.com
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