NERDWALLET, INC. Q4 FY2024 earnings call

• Q4 2024 saw revenue grow 37% YOY to $184 million and non-GAAP operating income of $17 million. • Shift away from Monthly Unique User disclosure, focusing on engaged users instead of quantity. • Vertical Integration efforts, including acquisition of Next Door Lending and development of NerdWallet Mortgage Experts. • Registrations & Data-Driven Re-engagement work, such as launch of NerdWallet+ subscription product and growth of registered user base to 25 million in 2024. • Lauren StClair to step down in March, succeeded by John Lee from Divvy Homes.

In Q4 2024, NerdWallet's revenue was $184 million, up 37% YOY. Insurance products were a key growth driver, with Q4 revenue of $72 million, a stunning 821% YOY increase. For the full year, Insurance delivered $192 million in revenue, a 326% YOY growth. Banking products saw a 5% YOY increase in Q4, but full year revenue for emerging verticals (including banking) was $125 million, down 12% YOY. Loans generated Q4 revenue of $18 million, a 26% YOY decline, with full year loans revenue at $84 million, down 17% YOY. SMB products had Q4 revenue of $26 million, a 7% YOY decline, but full year SMB revenue was $110 million, up 9% YOY. Credit Cards had Q4 revenue of $35 million, a 19% YOY decline, with full year Credit Cards revenue at $176 million, down 16% YOY.

• Q1 2025 revenue expected in range of $187M to $193M, midpoint up 17% YOY. • Q1 non-GAAP operating results expected to be a $3 million loss to breakeven. • Full year 2025 non-GAAP operating income expected to be $50M to $60M. • Target of at least $80 million non-GAAP operating income in 2026.

• Macroeconomic factors like interest rate changes impacting lending segments. • Organic traffic challenges affecting non-monetizing pages. • Competitive landscape changes, including search engine algorithm shifts and AI impacts on traffic and revenue.

Q: How much of Insurance growth is from traffic flow changes vs. performance marketing?

A: Tim Chen mentioned improved site flows, personalization aiding performance marketing, and end market expansion (auto insurance costs up over 50% in 5 years) as drivers. Lauren StClair noted disciplined spending on performance marketing where returns are good.

Q: What's the reasoning behind shifting from Monthly Unique Users?

A: Lauren StClair said MUUs were inversely correlated with revenue growth, not a good proxy for quality relationships. Tim Chen emphasized Vertical Integration and re-engagement initiatives are more impactful long-term than focusing on MUUs.

Q: Thoughts on sustainability of Insurance growth?

A: Tim Chen cited factors like GDP, risk, take rate, and direct carriers taking share from agents as long-term drivers, expecting slightly above GDP growth in the long run.