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NERDWALLET, INC. (NRDS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered a clear beat: revenue $215.1m (+12% YoY, +15% QoQ) and diluted EPS $0.34, with non-GAAP operating income $41.3m and adjusted EBITDA $53.6m; management attributed outperformance to banking and personal loans strength and efficiency gains, partially aided by an $8m underspend in brand marketing this quarter .
  • Full-year guidance was raised materially: FY25 GAAP operating income to $59–$63m (from $38–$48m), non-GAAP operating income to $91–$95m (from $71–$79m), and adjusted EBITDA to $141–$145m (from $120–$128m) .
  • Q4 guide implies continued momentum: revenue $207–$215m (+15% YoY at the midpoint), NGOI $20–$24m, adj. EBITDA $33–$37m; brand spend expected to return to typical levels in Q4 after Q3 reevaluation .
  • Catalysts: strong banking demand, personal loans recovery (including Next Door Lending integration), rising LLM-driven traffic quality, and capital allocation discipline including ~$19m share repurchases in Q3 .

What Went Well and What Went Wrong

  • What Went Well
    • Banking and personal loans drove revenue outperformance; banking up 96% YoY and personal loans up 91% YoY (call detail), contributing to total revenue beat and margin expansion .
    • Operational efficiency and performance marketing improvements expanded margins; non-GAAP OI reached $41.3m (19% margin) and adj. EBITDA $53.6m (25% margin) .
    • Strategic reach expanding: “our trusted brand has made us the most cited source in our competitive set” within LLM referrals, with higher conversion rates than traditional organic traffic (“we will continue to invest in growing this channel”) .
  • What Went Wrong
    • Ongoing organic search headwinds pressured credit cards and SMB; credit cards revenue down 25% YoY to $34.1m and SMB down 15% YoY to $23.6m in Q3 .
    • One-time brand spend benefit flattered Q3 profitability; management underspent ~$8m on brand and expects a return to typical spend in Q4, implying less margin expansion ahead .
    • Management warns of slower margin expansion YoY going forward due to search headwinds, lapping prior cost reductions, and planned investments .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$209.2 $186.9 $215.1
Revenue YoY %29% 24% 12%
Revenue QoQ %+14% vs Q4’24 -11% vs Q1’25 +15% vs Q2’25
GAAP Operating Income ($m)$0.7 $10.7 $34.4
Non-GAAP Operating Income ($m)$9.3 $20.7 $41.3
Adjusted EBITDA ($m)$21.1 $33.6 $53.6
Net Income ($m)$0.2 $8.2 $26.3
Diluted EPS ($)$0.00 $0.11 $0.34
Operating Margin %0% 6% 16%
Non-GAAP Operating Margin %4% 11% 19%
Adjusted EBITDA Margin %10% 18% 25%
Net Income Margin %0% 4% 12%

Segment revenue breakdown:

Segment ($m)Q1 2025Q2 2025Q3 2025
Insurance$74.0 $54.7 $70.9
Credit Cards$38.0 $34.8 $34.1
SMB Products$28.9 $25.0 $23.6
Loans$24.0 $27.5 $39.6
Emerging Verticals$44.3 $44.9 $46.9

KPIs and balance sheet highlights:

KPIQ1 2025Q2 2025Q3 2025
Cash & Cash Equivalents ($m)$92.2 $105.3 $120.6
TTM Adjusted Free Cash Flow ($m)$57.6 $70.6 $85.5
Share Repurchases ($m, period)— (not disclosed)$0.3 $19.5 / “$19m completed”

Estimate comparison (S&P Global consensus):

MetricQ3 2025 ActualQ3 2025 ConsensusSurprise
Revenue ($m)$215.1 $193.0*+$22.1m / +11.4%*
Diluted EPS ($)$0.34 $0.212*+$0.128*
EBITDA ($m)Company Adj. EBITDA $53.6 Street EBITDA $38.0*Note: Definitions differ; company reports adjusted EBITDA

Values marked with * are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025—$207–$215m New
GAAP Operating IncomeQ4 2025—$13–$17m New
Non-GAAP Operating IncomeQ4 2025—$20–$24m New
Adjusted EBITDAQ4 2025—$33–$37m New
GAAP Operating IncomeFY 2025$38–$48m $59–$63m Raised
Non-GAAP Operating IncomeFY 2025$71–$79m $91–$95m Raised
Adjusted EBITDAFY 2025$120–$128m $141–$145m Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
AI/LLM traffic and AI overviewsQ1: Stability emerging in AI-enhanced search; MUUs retired, focus on quality of relationships .CEO: LLM referrals cite NerdWallet most in its set; higher conversion; Google AI overviews, ChatGPT/Gemini drive high-intent users .Improving quality and conversion; building momentum.
Performance marketing & efficiencyQ2: Efficiency focus driving bottom-line outperformance .Efficiency and funnel improvements drove NGOI/EBITDA; one-time brand underspend aided margins .Sustained focus; margin tailwind tempered as brand spend returns.
Product performance (banking, loans, insurance)Q1: Insurance +246% YoY; banking strong; loans up 12% YoY; NDL integration . Q2: Insurance +86% YoY; emerging/banking +64% YoY; loans +27% YoY .Q3: Loans +66% YoY (personal + mortgages/NDL); banking strength; insurance +3% YoY; credit cards/SMB down on search headwinds .Banking/personal loans accelerating; insurance normalizing; cards/SMB pressured.
Brand strategy & spendQ1: Brand down YOY; optimizing creative/ROI (NBA playoffs exposure) .Q3: Reevaluated strategy; underspent ~$8m; return to typical levels in Q4 .Near-term margin headwind in Q4 as spend normalizes.
Vertical integration (mortgage brokering)Q1: NDL integration; concierge mortgage expert experience; better unit economics .Q3: Mortgage growth aided by NDL integration; continued integration highlighted .Execution progressing; supports loans revenue and future refi optionality.
Macro/regulatory (tariffs/macro)Q1: Minimal direct tariff impact; watch indirect risks (inflation/unemployment/confidence) .Q3: No new tariff commentary; focus on diversified growth and efficiency .Macro watch continues; limited direct exposure.

Management Commentary

  • “This quarter, we exceeded our guidance for revenue and non-GAAP operating income… extending our reach with consumers and improving operational efficiency” .
  • “Momentum with referrals from large language models… our trusted brand has made us the most cited source… convert at a much higher rate than traditional organic traffic” .
  • “We underspent on brand marketing versus our target by $8 million… In Q4, we expect to return to more typical levels of brand spend” .
  • “Revenue outperformance was primarily driven by banking, up 96% year-over-year, and personal loans, up 91% year-over-year” .
  • “Completed $19 million of share repurchases… attractive use of capital” .

Q&A Highlights

  • LLM traffic and conversion: Management emphasized high-intent inbound from AI overviews/LLMs and NerdWallet’s strong citation share; investments will continue to grow this channel .
  • Banking drivers: Strength from both consumer and partner demand, with improved matching funnels; resilience despite rate moderation .
  • Brand creative reevaluation: ~$8m underspend in Q3; new creative expected in Q4; returning to typical spend levels (Q4’24 as proxy) .
  • Below-prime expansion: Broader marketplace and lender panel to serve below-prime consumers, improving competitiveness in performance marketing .
  • Margin cadence: Expect less YoY margin expansion ahead due to search headwinds, lapping prior RIF, and increased investments .

Estimates Context

  • Q3 revenue and EPS beat Street: $215.1m vs $193.0m* and $0.34 vs $0.212*, respectively; the magnitude of revenue outperformance (+11.4%) and EPS surprise (+$0.13) suggests upward revisions to forward estimates, particularly in banking and personal loans where demand and funnels are improving .
  • Note: Company reports adjusted EBITDA $53.6m, while S&P Global’s “EBITDA consensus” may reflect a different definition (Street EBITDA ~$38.0m*), so comparisons require caution .
    Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

  • Beat-and-raise quarter: Broad-based top-line strength and margin expansion, with FY25 profit guidance raised materially across GAAP OI, NGOI, and adj. EBITDA—an explicit positive for sentiment and estimate trajectories .
  • Mix shift tailwinds: Banking and personal loans are accelerating; mortgage brokering integration (NDL) improves unit economics and offers future refi optionality .
  • Quality of traffic improving: LLM/AI overview channels are small but high-conversion and likely to scale; NerdWallet’s brand/citation advantage positions it well as search evolves .
  • Near-term margin watch: Expect margins to moderate as brand spend normalizes in Q4; management flagged less YoY margin expansion given headwinds and investment cycle .
  • Search headwinds remain: Credit cards and SMB are under pressure; sustained improvement hinges on organic search normalization and continued funnel innovation .
  • Cash generation supports flexibility: TTM adjusted FCF rose to $85.5m, enabling opportunistic buybacks and bolt-on acquisitions to advance vertical integration .
  • Trading implications: Near-term, the raise plus Q4 guide and brand creative refresh are likely stock catalysts; medium-term thesis centers on durable conversion/monetization improvements from performance marketing, LLM channels, and vertical integration offsetting search cyclicality .