NerdWallet(NRDS) - 2025 Q2 - Quarterly Results

Executive Summary & Q2 2025 Highlights NerdWallet reported strong Q2 2025 results, with significant revenue growth and improved operational efficiencies across key verticals Q2 2025 Financial Performance NerdWallet reported strong second quarter 2025 results, with revenue reaching $186.9 million, a 24% increase year-over-year. The company achieved GAAP income from operations of $10.7 million and non-GAAP operating income of $20.7 million, demonstrating improved operational efficiencies and bottom-line outperformance - Revenue of $186.9 million, up 24% Year-Over-Year[1] - CEO Tim Chen highlighted focus on improving operational efficiencies, contributing to bottom-line outperformance[3] Q2 2025 Key Financial Metrics | Metric | Amount | | :--- | :--- | | Revenue | $186.9 million | | GAAP income from operations | $10.7 million | | GAAP net income | $8.2 million | | GAAP net income per diluted share | $0.11 | | Non-GAAP operating income | $20.7 million | | Adjusted EBITDA | $33.6 million | Revenue Performance by Vertical Insurance revenue saw significant growth, increasing 86% year-over-year to $54.7 million, driven by strong performance in auto insurance products. Loans and Emerging verticals also showed robust growth, while Credit Cards and SMB products experienced declines primarily due to persistent headwinds in organic search traffic Q2 2025 Revenue by Product Category (YoY Change) | Product Category | Q2 2025 Revenue (in millions) | YoY Change (%) | | :--- | :--- | :--- | | Insurance | $54.7 | +86 | | Credit cards | $34.8 | -25 | | SMB products | $25.0 | -4 | | Loans | $27.5 | +27 | | Emerging verticals | $44.9 | +64 | - Insurance revenue growth was driven by strong growth in auto insurance products as carriers expanded budgets[7] - Credit cards and SMB products revenue decreased primarily due to continued headwinds in organic search traffic[7] Summary Financial Results This section provides a comprehensive overview of NerdWallet's quarterly financial performance and key revenue category definitions Quarterly Financial Overview The detailed summary financial results table highlights a 24% YoY revenue increase for Q2 2025, reaching $186.9 million, though it saw an 11% QoQ decrease. Non-GAAP operating income and Adjusted EBITDA significantly improved both YoY and QoQ, indicating enhanced profitability and efficiency Summary Financial Results (Q2 2025 vs Q2 2024 vs Q1 2025) | Metric (in millions) | Jun 30, 2025 | Jun 30, 2024 | YoY Change (%) | Mar 31, 2025 | QoQ Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $186.9 | $150.6 | 24 | $209.2 | (11) | | Insurance Revenue | $54.7 | $29.5 | 86 | $74.0 | (26) | | Credit cards Revenue | $34.8 | $46.1 | (25) | $38.0 | (8) | | SMB products Revenue | $25.0 | $26.1 | (4) | $28.9 | (14) | | Loans Revenue | $27.5 | $21.7 | 27 | $24.0 | 15 | | Emerging verticals Revenue | $44.9 | $27.2 | 64 | $44.3 | 1 | | Income (loss) from operations | $10.7 | $(9.6) | NM | $0.7 | NM | | Net income (loss) | $8.2 | $(9.4) | NM | $0.2 | NM | | Non-GAAP operating income (loss) | $20.7 | $(2.7) | NM | $9.3 | 123 | | Adjusted EBITDA | $33.6 | $14.3 | 135 | $21.1 | 60 | | Cash and cash equivalents | $105.3 | $113.8 | (8) | $92.2 | 14 | Revenue Category Definitions This section clarifies the composition of NerdWallet's revenue streams, detailing the types of products and services included within the Insurance, Credit cards, SMB products, Loans, and Emerging verticals categories - Insurance revenue consists of revenue from consumer insurance products, including auto, life, and pet insurance[8] - SMB products revenue includes revenue from loans, credit cards, and other financial products and services intended for small and mid-sized businesses[9] - Emerging verticals revenue includes revenue from other product sources, including banking, investing, and international[9] Investor Communications NerdWallet announced a live webcast for its second quarter 2025 financial results and made a shareholder letter available on its investor relations website, providing additional information and analysis - A conference call to discuss NerdWallet's second quarter 2025 financial results was webcast live on August 7, 2025[11] - A shareholder letter providing additional information and analysis is available on NerdWallet's investor relations website[12] About NerdWallet This section provides an overview of NerdWallet's mission, platform offerings, and global operational presence Company Overview NerdWallet is a personal finance website and app dedicated to providing trustworthy financial guidance to consumers globally. It offers expert content, comparison shopping marketplaces, and a data-driven app to help users make informed financial decisions across various life stages, operating in the U.S., United Kingdom, Canada, and Australia - NerdWallet's mission is to provide clarity for all of life's financial decisions[14] - The platform offers expert content, comparison shopping marketplaces, and a data-driven app to help consumers manage finances and save time/money[14] - NerdWallet is available for consumers in the U.S., United Kingdom, Canada, and Australia[14] Condensed Consolidated Financial Statements This section presents NerdWallet's condensed consolidated statements of operations, balance sheets, and cash flows Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, NerdWallet reported revenue of $186.9 million, a 24% increase YoY, and a net income of $8.2 million, a significant improvement from a net loss of $9.4 million in the prior year period. Total costs and expenses increased by 10% YoY, while for the six months, revenue grew 27% YoY to $396.1 million Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $186.9 | $150.6 | 24 | | Total costs and expenses | $176.2 | $160.2 | 10 | | Income (Loss) From Operations | $10.7 | $(9.6) | NM | | Net Income (Loss) | $8.2 | $(9.4) | NM | | Diluted Net Income (Loss) Per Share | $0.11 | $(0.12) | NM | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $396.1 | $312.5 | 27 | | Total costs and expenses | $384.7 | $318.4 | 21 | | Income (Loss) From Operations | $11.4 | $(5.9) | NM | | Net Income (Loss) | $8.4 | $(8.3) | NM | | Diluted Net Income (Loss) Per Share | $0.11 | $(0.11) | NM | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $476.0 million from $437.6 million at December 31, 2024. This increase was primarily driven by a rise in cash and cash equivalents to $105.3 million from $66.3 million, alongside growth in total current assets and stockholders' equity Condensed Consolidated Balance Sheets (Selected Items) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $105.3 | $66.3 | | Total current assets | $238.7 | $196.7 | | Total Assets | $476.0 | $437.6 | | Total current liabilities | $69.3 | $60.1 | | Total liabilities | $86.0 | $73.4 | | Stockholders' equity | $390.0 | $364.2 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities increased to $44.2 million from $32.9 million in the prior year. Net cash used in investing activities decreased, while financing activities provided cash, leading to a net increase in cash and cash equivalents of $39.0 million Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | | :--- | :--- | | Net cash provided by operating activities | $44.2 | $32.9 | | Net cash used in investing activities | $(14.0) | $(19.2) | | Net cash provided by (used in) financing activities | $8.9 | $(0.4) | | Net increase in cash and cash equivalents | $39.0 | $13.4 | | Cash and Cash Equivalents, End of period | $105.3 | $113.8 | Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures used by NerdWallet to assess its operational performance Definitions and Rationale NerdWallet utilizes non-GAAP operating income (loss), adjusted EBITDA, and adjusted free cash flow to assess performance, evaluate strategies, and communicate financial results. These measures exclude non-cash items and amounts not driven by core operating results to provide a clearer view of underlying business performance, though they have limitations and should be considered alongside GAAP measures - Non-GAAP operating income (loss) excludes depreciation and amortization, impairment, acquisition-related costs, restructuring charges, and capitalizes internally developed software costs[20][22] - Adjusted EBITDA excludes depreciation and amortization, interest, taxes, stock-based compensation, acquisition-related costs, and restructuring charges[21][23] - Adjusted free cash flow is defined as net cash provided by operating activities less capitalized software development costs and purchases of property and equipment, further adjusted for net borrowing or repayment on warehouse lines of credit[24] - These non-GAAP measures are used for internal decision-making, budgeting, and evaluating performance, but have limitations and are not substitutes for GAAP results[23][25] Reconciliation to GAAP The company provides detailed reconciliations of non-GAAP operating income (loss) to GAAP income (loss) from operations, and Adjusted EBITDA to net income (loss) for both the three and six months ended June 30, 2025 and 2024, demonstrating the specific adjustments made from GAAP figures Non-GAAP Operating Income (Loss) Reconciliation (Three Months Ended June 30) | Metric (in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Income (loss) from operations (GAAP) | $10.7 | $(9.6) | NM | | Depreciation and amortization | $12.7 | $12.2 | 4 | | Capitalized internally developed software costs | $(4.7) | $(6.7) | (30) | | Non-GAAP operating income (loss) | $20.7 | $(2.7) | NM | | Non-GAAP operating income (loss) margin | 11% | (2%) | | Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric (in millions) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Net income (loss) (GAAP) | $8.2 | $(9.4) | NM | | Depreciation and amortization | $12.7 | $12.2 | 4 | | Stock-based compensation | $8.2 | $10.3 | (21) | | Income tax provision | $3.3 | $1.1 | 196 | | Adjusted EBITDA | $33.6 | $14.3 | 135 | | Adjusted EBITDA margin | 18% | 10% | | Adjusted Free Cash Flow Adjusted free cash flow for the twelve months ended June 30, 2025, was $70.6 million, compared to $73.3 million in the prior year period. This metric includes adjustments for net borrowing/repayment on warehouse lines of credit, reflecting the company's liquidity and cash available for investment Adjusted Free Cash Flow (Twelve Months Ended) | Metric (in millions) | Jun 30, 2025 | Jun 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $83.1 | $98.6 | | Capitalized software development costs | $(18.0) | $(24.7) | | Purchase of property and equipment | $(1.2) | $(0.6) | | Net borrowing (repayment) on warehouse line of credit | $6.7 | $0.0 | | Adjusted free cash flow | $70.6 | $73.3 | Financial Outlook This section provides NerdWallet's financial guidance for Q3 and the full year 2025, including revenue and profitability projections Q3 2025 Guidance For the third quarter of 2025, NerdWallet expects revenue between $189-$197 million, representing a 1% year-over-year increase at the midpoint. GAAP operating income is projected to be $17-$21 million, non-GAAP operating income $23-$27 million, and Adjusted EBITDA $36-$40 million Forecasted Q3 2025 Financial Guidance | Metric | Range (in millions) | | :--- | :--- | | Revenue | $189 - $197 | | GAAP operating income | $17 - $21 | | Non-GAAP operating income | $23 - $27 | | Adjusted EBITDA | $36 - $40 | - Revenue is expected to be up 1% year-over-year at the midpoint for Q3 2025[33] Full Year 2025 Guidance NerdWallet has increased its full-year 2025 guidance, forecasting GAAP operating income in the range of $38-$48 million, non-GAAP operating income $71-$79 million, and Adjusted EBITDA $120-$128 million. The company notes it cannot provide a quantitative reconciliation for forecasted GAAP net income to Adjusted EBITDA due to unpredictable fluctuations Forecasted Full Year 2025 Financial Guidance | Metric | Range (in millions) | | :--- | :--- | | GAAP operating income | $38 - $48 | | Non-GAAP operating income | $71 - $79 | | Adjusted EBITDA | $120 - $128 | - The company is increasing its forecasted 2025 annual GAAP operating income, non-GAAP operating income, and adjusted EBITDA[30] - A quantitative reconciliation of forecasted GAAP net income (loss) to forecasted adjusted EBITDA is not provided due to the inability to confidently calculate certain reconciling items, such as income taxes, which are impacted by unpredictable market fluctuations[31] Forward-Looking Statements This section outlines the nature and inherent risks of forward-looking statements, emphasizing potential material differences from actual results Nature and Risks This section clarifies that the press release contains forward-looking statements based on current expectations, estimates, and projections, which are subject to significant risks, uncertainties, and assumptions. Actual results may differ materially due to industry competitiveness, rapid evolution, and unforeseen risks, and these statements should not be relied upon as predictions or guarantees - The press release contains forward-looking statements, including those in the 'Financial Outlook' section, which are not guarantees of future events[34][35] - These statements are based on current expectations and projections but are subject to various risks, uncertainties, and assumptions, including those described in SEC filings[35] - The industry is highly competitive and rapidly evolving, meaning actual results, events, or circumstances may differ materially from forward-looking statements[36] Specific Risk Factors Key risk factors include the impact of macroeconomic developments, the company's ability to grow traffic and user engagement, consumer demand, expansion into new verticals, maintaining partner relationships, developing efficient technological capabilities, enhancing brand awareness, and complying with evolving regulations - Risks include the impact of macroeconomic developments, such as inflation, interest rates, and overall economic uncertainty, on the business and stock price[38] - The ability to grow traffic and user engagement on the platform, and convert consumers into matches with financial services partners, is a significant factor[38] - Challenges include expanding within existing and new verticals, maintaining and expanding relationships with financial services partners, developing efficient and scalable technical capabilities, and complying with evolving laws and regulations[38] Contact Information This section provides contact details for NerdWallet's investor and media relations departments Investor and Media Relations Contact details for NerdWallet's Investor Relations and Media Relations are provided for inquiries - Investor Relations contact: Sara Colvin, ir@nerdwallet.com[39] - Media Relations contact: Maitri Jani, press@nerdwallet.com[39]