NerdWallet(NRDS) - 2024 Q2 - Quarterly Report

Revenue Performance - Revenue for the three months ended June 30, 2024, was $150.6 million, an increase of 5.4% compared to$ 143.3 million for the same period in 2023[64]. - Total revenue for the three months ended June 30, 2024, increased by $7.3 million, or 5%, to$ 150.6 million compared to the same period in 2023, while revenue for the six months remained relatively flat with a decrease of $0.4 million[69]. User Metrics - Monthly Unique Users (MUUs) averaged 23 million and 26 million for the three and six months ended June 30, 2024, representing growth of 7% and 16% year-over-year, respectively[56]. Expenses and Losses - Loss from operations increased by$ 5.4 million, or 129%, for the three months ended June 30, 2024, primarily due to a $12.7 million increase in operating expenses[67]. - Total costs and expenses for the three months ended June 30, 2024, were$ 160.2 million, up from $147.5 million in the same period of 2023[64]. - Research and development expenses for the three months ended June 30, 2024, were$ 22.7 million, compared to $20.0 million for the same period in 2023[64]. - Sales and marketing expenses increased to$ 106.1 million for the three months ended June 30, 2024, from $98.8 million in the same period of 2023[64]. - Total costs and expenses increased by$ 12.7 million, or 9%, for the three months ended June 30, 2024, and remained flat for the six months with a slight increase of $0.5 million[73]. - Research and development expenses increased by$ 2.7 million, or 13%, for the three months and by $3.9 million, or 10%, reflecting higher personnel-related costs[75]. - Sales and marketing expenses increased by$ 7.3 million, or 7%, for the three months but decreased by $6.5 million, or 3%, for the six months, influenced by changes in brand and performance marketing[77]. Net Loss and Income Tax - Net loss decreased by$ 1.3 million, or 12%, for the three months ended June 30, 2024, compared to the same period in 2023, driven by a decrease in income tax provision[68]. - The company recorded income tax provisions of $1.1 million and$ 4.8 million for the three and six months ended June 30, 2024, respectively, with an effective tax rate of (13.7%) for the three months[80]. Restructuring and Cost Savings - The company expects to incur a pre-tax restructuring charge of approximately $8 million to$ 10 million in 2024, with anticipated annualized cost savings of about $30 million[53]. - The restructuring plan will reduce the workforce by approximately 15% compared to the headcount as of December 31, 2023[53]. Revenue by Segment - Credit card revenue decreased by$ 5.1 million, or 10%, for the three months ended June 30, 2024, and by $16.4 million, or 15%, for the six months, primarily due to reduced marketing spending[70]. - Loans revenue decreased by$ 1.4 million, or 6%, for the three months and by $2.0 million, or 5%, for the six months, with a notable 17% decrease in personal loans revenue[71]. - SMB products revenue increased by$ 2.4 million, or 10%, for the three months and by $7.6 million, or 16%, for the six months, driven by growth in business credit cards and loan renewals[72]. - Emerging verticals revenue rose by$ 11.4 million, or 25%, for the three months and by $10.4 million, or 10%, primarily due to a 196% increase in insurance products revenue[72]. Cash Flow and Financial Position - Cash and cash equivalents increased to$ 113.8 million as of June 30, 2024, up from $100.4 million at December 31, 2023[86]. - Net cash provided by operating activities increased by$ 26.5 million in the first half of 2024 compared to the same period in 2023, driven by a decrease in net cash outflow from changes in operating assets and liabilities[94]. - The company had no outstanding balance on its $125 million credit facility as of June 30, 2024, with$ 123.7 million available to borrow[91]. - The company repurchased 0.1 million shares of Class A common stock for $1.1 million during the first half of 2024 as part of its share repurchase plans[89]. - Non-GAAP operating income increased by$ 3.6 million, or 82%, for the first half of 2024 compared to the same period in 2023, despite a $0.9 million increase in loss from operations[84]. - Net cash used in investing activities increased by$ 3.9 million in the first half of 2024, primarily due to an $8.1 million investment purchase[95]. - The company expects to fund operations and capital expenditures primarily with cash flows from operations, supplemented by cash on hand if needed[88]. - The company remains in compliance with all covenants under its credit agreement as of June 30, 2024[91]. Market Risks - The company is exposed to market risks primarily due to fluctuations in interest rates and foreign currency exchange rates[100]. - There were no material changes in market risk disclosures compared to the Annual Report for the year ended December 31, 2023[100]. Adjusted Metrics - Non-GAAP operating loss for Q2 2024 was$ 2.7 million, compared to an operating income of $0.5 million in Q2 2023, primarily due to a$ 5.4 million increase in loss from operations[84]. - Adjusted EBITDA decreased by $6.4 million, or 31%, for Q2 2024 compared to Q2 2023, mainly due to a$ 6.0 million decrease in income tax provision and a $1.0 million decrease in stock-based compensation[85]. - Other income, net increased by$ 0.7 million, or 112%, for the three months and by $1.1 million, or 82%, primarily due to higher interest income[78].