NerdWallet Reports 25% Revenue Growth, Mixed Performance Across Product Lines

NerdWallet, Inc. reported its financial results for the three and nine months ended September 30, 2024, showing significant revenue growth but continued challenges in profitability. For the third quarter of 2024, the company generated revenue of $191.3 million, a 25% increase from $152.8 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue reached $503.8 million, up 8% from $465.7 million year-over-year.

Despite the revenue growth, total costs and expenses also rose, amounting to $184.7 million for the third quarter, compared to $148.8 million in 2023. For the nine-month period, expenses increased to $503.1 million from $466.7 million. The company reported income from operations of $6.6 million for the third quarter, up from $4.0 million in 2023, and a slight operational profit of $0.7 million for the nine months, reversing a loss of $1.0 million in the prior year.

NerdWallet's net income for the third quarter was $0.1 million, compared to a net loss of $0.5 million in the same quarter of 2023. However, the net loss for the nine months decreased to $8.2 million from $9.5 million in the previous year, indicating improved operational performance.

The company experienced varied performance across its product lines. Revenue from credit cards and loans declined significantly, with credit card revenue down 16% to $45.3 million and loans down 28% to $23.8 million for the third quarter. In contrast, revenue from emerging verticals surged by 129% to $94.4 million, contributing to the overall revenue growth.

NerdWallet's financial position showed a decrease in cash and cash equivalents, which fell to $71.7 million from $100.4 million at the end of 2023. The company also reported an increase in accounts receivable, which rose to $102.8 million, up from $75.5 million.

Strategically, NerdWallet announced a restructuring plan effective August 1, 2024, aimed at reducing operating expenses through a workforce reduction of approximately 15%. This restructuring incurred pre-tax charges of $7.8 million. Additionally, the company made a strategic investment of $8.1 million in equity securities and completed the acquisition of Next Door Lending LLC for approximately $1 million, with potential performance-based earnouts.

NerdWallet's share repurchase program remains active, with $72.2 million spent to repurchase 5.8 million shares during the nine months ended September 30, 2024. The company has authorized a total of $100 million for share repurchases, reflecting its commitment to returning value to shareholders.

Overall, while NerdWallet has shown revenue growth and improved operational income, it continues to navigate challenges in profitability and market conditions.