NerdWallet(NRDS) - 2025 Q1 - Quarterly Report

Part I: Financial Information The company's unaudited Q1 2025 financial statements and management's corresponding analysis are presented Financial Statements Unaudited Q1 2025 financial statements show increased assets and liabilities but decreased year-over-year net income Condensed Consolidated Balance Sheets Total assets grew to $475.0 million and total liabilities rose to $103.4 million as of March 31, 2025 Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $92.2 | $66.3 | | Accounts receivable—net | $120.3 | $102.2 | | Total current assets | $241.9 | $196.7 | | Total Assets | $475.0 | $437.6 | | Liabilities & Equity | | | | Total current liabilities | $90.4 | $60.1 | | Total liabilities | $103.4 | $73.4 | | Total stockholders' equity | $371.6 | $364.2 | | Total Liabilities and Stockholders' Equity | $475.0 | $437.6 | Condensed Consolidated Statements of Operations Q1 2025 revenue grew to $209.2 million, but higher expenses reduced net income to $0.2 million Q1 2025 vs. Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $209.2 | $161.9 | | Total costs and expenses | $208.5 | $158.2 | | Income From Operations | $0.7 | $3.7 | | Net Income | $0.2 | $1.1 | | Diluted EPS | $0.00 | $0.01 | Condensed Consolidated Statements of Cash Flows Net cash from operations increased to $26.7 million, resulting in a period-end cash balance of $92.2 million Q1 2025 vs. Q1 2024 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $26.7 | $22.7 | | Net cash used in investing activities | $(4.6) | $(13.5) | | Net cash provided by financing activities | $3.8 | $1.3 | | Net increase in cash and cash equivalents | $25.9 | $10.5 | | Cash and Cash Equivalents, End of period | $92.2 | $110.9 | Notes to Condensed Consolidated Financial Statements Disclosures highlight significant Insurance revenue growth, stock compensation details, and income tax positions Revenue by Product Category (in millions) | Product Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Insurance | $74.0 | $21.4 | | Credit cards | $38.0 | $50.0 | | SMB products | $28.9 | $30.4 | | Loans | $24.0 | $21.4 | | Emerging verticals | $44.3 | $38.7 | | Total revenue | $209.2 | $161.9 | - The company maintains a share repurchase program with a remaining authorization of $25.0 million as of March 31, 2025, with no shares repurchased in Q1 2025 or Q1 2024[35][36] - Total stock-based compensation expense was $6.7 million in Q1 2025, down from $8.7 million in Q1 2024[43] - The company continues to maintain a valuation allowance on its California deferred tax assets as of March 31, 2025[45] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Revenue grew 29% YoY to $209.2 million, but higher marketing costs reduced operating income and Adjusted EBITDA Results of Operations Q1 2025 revenue growth was driven by Insurance, but offset by lower Credit cards revenue and higher operating costs Revenue by Product Category - YoY Change (in millions) | Category | Q1 2025 | Q1 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Insurance | $74.0 | $21.4 | $52.6 | 246% | | Credit cards | $38.0 | $50.0 | $(12.0) | (24%) | | SMB products | $28.9 | $30.4 | $(1.5) | (5%) | | Loans | $24.0 | $21.4 | $2.6 | 12% | | Emerging verticals | $44.3 | $38.7 | $5.6 | 15% | | Total revenue | $209.2 | $161.9 | $47.3 | 29% | - Sales and marketing expenses increased by $51.8 million (48%) YoY, driven by a $43.0 million increase in performance marketing and a $10.4 million increase in brand marketing[77] - Research and development expenses decreased by $3.9 million (19%) YoY due to lower personnel-related costs[75] Non-GAAP Financial Measures Non-GAAP operating income and Adjusted EBITDA decreased to $9.3 million and $21.1 million, respectively, in Q1 2025 Reconciliation of GAAP to Non-GAAP Measures (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Income from operations (GAAP) | $0.7 | $3.7 | | Non-GAAP operating income | $9.3 | $10.6 | | Net income (GAAP) | $0.2 | $1.1 | | Adjusted EBITDA | $21.1 | $25.5 | | Adjusted EBITDA margin | 10% | 16% | Liquidity and Capital Resources The company maintains strong liquidity with $92.2 million in cash and access to a $125.0 million credit facility - Cash and cash equivalents were $92.2 million as of March 31, 2025[90] - The company has a $125.0 million senior secured revolving credit facility, with no outstanding balance as of March 31, 2025[95] - A subsidiary maintains a $15.0 million warehouse line of credit for mortgage funding, with $6.8 million outstanding as of March 31, 2025[96] Quantitative and Qualitative Disclosures About Market Risk Market risk exposures related to interest and currency rates remain materially unchanged from year-end 2024 - There were no material changes from the market risk disclosures in the Annual Report on Form 10-K for the year ended December 31, 2024[106] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in Q1 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[107] - There were no material changes in the company's internal control over financial reporting during the quarter[108] Part II: Other Information Key disclosures on legal matters, risk factors, securities sales, and other corporate information are provided Legal Proceedings The company is not currently party to any litigation expected to have a material adverse effect - The company is not presently a party to any litigation expected to have a material adverse effect on its business[109] Risk Factors Investors are referred to the risk factors detailed in the company's 2024 Annual Report on Form 10-K - Investors are directed to consider the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2024[110] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales or company purchases of equity securities occurred during the first quarter of 2025 - There were no unregistered sales of equity securities or purchases of equity securities by the issuer in Q1 2025[111][112] Other Information No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement in Q1 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading plan during the three months ended March 31, 2025[115] Exhibits This section lists all exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL data - Exhibits filed include the Form of 2025 Executive Bonus Program, CEO/CFO certifications (Sections 302 and 906), and Inline XBRL documents[119]