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NERDWALLET, INC. (NRDS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $183.8 million (+37% YoY), non-GAAP operating income $16.8 million, adjusted EBITDA $30.8 million, and diluted EPS $0.51; revenue materially exceeded the prior Q3-issued Q4 guidance midpoint of $168 million, a clear beat. Insurance revenue surged to $72.0 million (+821% YoY). Bold beat: revenue vs Q4 guidance.
  • Guidance reset emphasizes margin dollars: Q1 2025 revenue $187–$193 million (+17% YoY mid), non-GAAP OI −$3 to $0 million, adjusted EBITDA $10–$13 million; FY2025 GAAP OI $21–$31 million, non-GAAP OI $50–$60 million, adj. EBITDA $106–$116 million; 2026 targets of ≥$60 million GAAP OI, ≥$80 million non-GAAP OI, and ≥$140 million adj. EBITDA.
  • Growth drivers: outsized auto insurance demand (carrier budgets expanding; personalization improvements drove conversion), banking up 5% YoY, while credit cards (−19% YoY) and loans (−26% YoY) remained cyclically pressured; MUUs fell 20% YoY, and management is phasing out MUU disclosures to focus on engaged relationships.
  • Stock-relevant narrative: revenue beat vs guidance, strong insurance momentum, a tax valuation allowance release boosting GAAP net income, and a shift to margin dollar targets signal focus on profitability growth; brand activation (Super Bowl) and new CFO appointment are incremental catalysts.

What Went Well and What Went Wrong

What Went Well

  • Insurance became the largest segment, growing 821% YoY in Q4 on strong auto demand and improved flows/personalization; management highlighted scalability of performance marketing in insurance.
  • Banking returned to growth (+5% YoY), supported by consumers re-shopping as depository rates began to decline and funnel improvements.
  • Profitability drivers: non-GAAP OI $16.8 million above guidance, with adjusted EBITDA $30.8 million; GAAP net income $38.6 million benefited from a $37.9 million tax benefit, including a $27.2 million valuation allowance release on deferred tax assets.

What Went Wrong

  • Credit cards revenue fell 19% YoY amid persistent organic search headwinds and tight issuer underwriting in subcategories; management expects continued pressure in early 2025.
  • Loans revenue declined 26% YoY, with personal loans down 51% YoY; near-term lending remains tight, though management is reallocating focus and expects Q1 YoY growth in personal loans.
  • Average MUUs were 19 million (−20% YoY), reflecting broad organic traffic challenges to “learn” content; management is phasing out MUUs as an operating metric to focus on deeper, vertically integrated relationships.

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$150.6 $191.3 $183.8
Income from Operations ($USD Millions)$(9.6) $6.6 $8.7
Net Income (Loss) ($USD Millions)$(9.4) $0.1 $38.6
Diluted EPS ($USD)$(0.12) $0.00 $0.51
Non-GAAP Operating Income ($USD Millions)$(2.7) $22.9 $16.8
Adjusted EBITDA ($USD Millions)$14.3 $37.3 $30.8
Adjusted EBITDA Margin (%)10% 19% 17%
Non-GAAP OI Margin (%)−2% 12% 9%
Average MUUs (Millions)23 22 19
Q4 2024 vs Prior PeriodsQ4 2023Q3 2024Q4 2024YoY ChangeQoQ Change
Revenue ($USD Millions)$133.7 $191.3 $183.8 +37% −4%
Diluted EPS ($USD)$(0.03) $0.00 $0.51 NM NM
Non-GAAP OI ($USD Millions)$12.6 $22.9 $16.8 +35% −26%
Adjusted EBITDA ($USD Millions)$29.3 $37.3 $30.8 +5% −18%
Segment Revenue ($USD Millions)Q2 2024Q3 2024Q4 2024
Insurance$29.5 $68.7 $72.0
Credit Cards$46.1 $45.3 $35.0
SMB Products$26.1 $27.8 $25.5
Loans$21.7 $23.8 $17.6
Emerging Verticals$27.2 $25.7 $33.7
Total Revenue$150.6 $191.3 $183.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025N/A$187–$193 millionNew
GAAP Operating Income (Loss)Q1 2025N/A$(12)–$(8) millionNew
Non-GAAP Operating Income (Loss)Q1 2025N/A$(3)–$0 millionNew
Adjusted EBITDAQ1 2025N/A$10–$13 millionNew
GAAP Operating IncomeFY 2025N/A$21–$31 millionNew
Non-GAAP Operating IncomeFY 2025N/A$50–$60 millionNew
Adjusted EBITDAFY 2025N/A$106–$116 millionNew
Margin TargetsFY 2026Prior % targets≥$60m GAAP OI; ≥$80m non-GAAP OI; ≥$140m adj. EBITDAMethodology changed to dollar targets
RevenueQ4 2024$164–$172 million (midpoint $168m) Actual $183.8 millionMaintained guidance; actual was a beat

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Insurance momentumQ2: +196% YoY; personalization opened paid channels; share gains; Q3: +916% YoY; carriers back online; strong performance marketing scaling Insurance +821% YoY; strong auto demand; improved routing/personalization; durability expected though growth normalizes as comps toughen Sustained strength; normalization expected H2’25
Organic search & AI OverviewsQ2: headwinds; stabilization and cautious outlook; AI Overviews not materially impacting monetizing pages Continued pressure on “learn” content; MUUs −20% YoY; expectation for stabilization and growth by early 2026; phasing out MUUs Near-term headwind; gradual stabilization
Vertical integrationQ2: Advisors, AI tools; SMB ML routing; early integrations; Q3: acquiring Next Door Lending (NDL) mortgage brokerage Launched NerdWallet Mortgage Experts; integrated NDL into marketplaces; push for “do-it-for-me” experiences Expanding execution
Brand & performance marketingQ2: leaned into performance marketing; disciplined in-quarter payback; brand reduced in Q3 Q1 margin guide reflects higher brand spend (Super Bowl) and larger paid mix; plan to spend less brand in Q2–Q4 YoY Higher Q1 brand; lower rest of year
Lending environmentQ2/Q3: personal loans down YoY; tight underwriting; mortgages/home equity stabilizing; issuer budgets improving Personal loans −51% YoY in Q4; expecting YoY growth in Q1; mortgages aided by NDL; muted near-term given rate backdrop Gradual recovery; muted near term
Registrations & membership (NerdWallet+)Q2: cumulative registered users 22m; positive cohort LTV; membership launched; Q3: >23m registered Cumulative registered users grew to 25m; added insurance assistant and T-bills account; focus on engaged users over MUUs Scaling engaged base
Regulatory (TCPA)Q3: no major commentaryQ4: minimal visible impact given implementation stayed Neutral
International expansionQ2/Q3: Australia marketplaces; Canada mortgage growth Ongoing brand reach via social/podcast platforms Broader brand reach

Management Commentary

  • “We closed 2024 strong, exceeding our expectations and growing revenue to $183.8 million, up 37% year-over-year, driven by continued consumer and partner demand in Insurance and a solid performance in banking.” — Tim Chen, CEO.
  • “Insurance delivered $72 million in revenue, growing 821% year-over-year… Growth also continued to be aided by our ability to improve the product experience by collecting a bit more information upfront to better route customers to relevant products.” — Lauren St. Waugh, CFO.
  • “We are transitioning away from our monthly unique user disclosure… focusing on higher-quality relationships rather than a higher quantity of relationships.” — Tim Chen, CEO.
  • “In the fourth quarter, we earned GAAP operating income of $8.7 million and net income of $38.6 million, which includes a $37.9 million income tax benefit… a $27.2 million… release of a valuation allowance on certain deferred tax assets.” — Lauren St. Waugh, CFO.
  • “In January, we built NerdWallet Mortgage Experts… comparing 60 mortgage lenders on their behalf.” — Tim Chen, CEO.

Q&A Highlights

  • Insurance sustainability and mix: strong auto tailwinds (higher premiums, direct channel share gains), personalization improves conversion; growth to normalize as comps toughen, but demand remains robust.
  • Q1 margin contraction drivers: brand (Super Bowl) spend and larger performance marketing mix; disciplined in-quarter payback approach maintained.
  • Personal loans outlook: −51% YoY in Q4 due to prior focus elsewhere; early improvements and reallocation suggest a return to YoY growth in Q1.
  • Competitive dynamics: partners value LTV/CAC; NerdWallet shoppers well-informed, supporting preferred partner channel positioning.
  • Regulatory: TCPA impacts minimal given implementation stayed.

Estimates Context

  • S&P Global consensus estimates for EPS and revenue were unavailable due to data access limits at the time of this analysis; as a result, beat/miss vs Wall Street consensus cannot be assessed here (S&P Global data unavailable).
  • Company guidance implies Q1 2025 revenue growth of ~17% YoY at midpoint, with near-term margin pressure from brand and paid mix; Street estimates may need to align with insurance outperformance and the guidance trajectory once available.

Key Takeaways for Investors

  • Insurance strength is durable and remains the primary growth engine; expect normalization of growth rates later in 2025 as comps toughen, but auto tailwinds and direct channel share support sustained contribution.
  • Bold revenue beat vs prior Q4 guidance underscores execution in insurance and banking; near-term profitability will be shaped by deliberate brand spend in Q1 and greater paid mix, followed by lower brand spend in Q2–Q4.
  • Vertical integration is accelerating (NDL integration; Mortgage Experts), improving control of user experiences and reengagement pathways—supportive of higher lifetime value cohorts and future monetization.
  • MUUs are being de-emphasized; the operating focus shifts to engaged users, registrations, and reengagement—expect disclosures and performance narratives to pivot accordingly.
  • Tax valuation allowance release boosts Q4 GAAP net income; underlying non-GAAP profitability trends remain the more relevant indicator for operating performance.
  • FY2025 and FY2026 margin dollar targets provide clearer profitability ambitions; monitor delivery vs non-GAAP OI and adjusted EBITDA targets amid paid mix evolution.
  • Tactical trading: revenue/guidance beats and insurance momentum are supportive; watch Q1 margin optics (brand spend) and any updates on organic search stabilization, as these can drive near-term sentiment.