• Q4 Revenue: $184 million, up 37% year-over-year.
• Full Year Revenue: $688 million, a 15% increase versus prior year.
• Insurance Revenue: $72 million in Q4, growing 821% year-over-year.
• Credit Card Revenue: $35 million in Q4, declining 19% year-over-year.
• Loans Revenue: $18 million in Q4, declining 26% year-over-year.
• SMB Products Revenue: $26 million in Q4, declining 7% year-over-year.
• Emerging Verticals Revenue: $34 million in Q4, growing 7% year-over-year.
• Non-GAAP Operating Income: $16.8 million in Q4.
• Adjusted EBITDA: $31 million in Q4.
• GAAP Operating Income: $8.7 million in Q4.
• Net Income: $38.6 million in Q4, including a $37.9 million income tax benefit.
• Monthly Unique Users (MUUs): 19 million in Q4, down 20% year-over-year.
• Q1 2025 Revenue Guidance: $187 million to $193 million, a 17% increase at midpoint versus prior year.
• Q1 2025 Non-GAAP Operating Outlook: $3 million loss to breakeven.
• Full Year 2025 Non-GAAP Operating Income Guidance: $50 million to $60 million.

• Warning! GuruFocus has detected 2 Warning Sign with NRDS.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Nerdwallet Inc (NASDAQ:NRDS) reported a 37% year-over-year revenue growth in Q4 2024, reaching $184 million.
• The insurance vertical experienced significant growth, with revenue increasing by 821% year-over-year in Q4.
• The company successfully launched new initiatives, such as NerdWallet Mortgage Experts and NerdWallet+, enhancing user engagement.
• Nerdwallet Inc (NASDAQ:NRDS) achieved a full-year revenue of $688 million, marking a 15% increase compared to the previous year.
• The company is focusing on building direct, engaged relationships with consumers and SMBs, which is expected to drive long-term growth.

Negative Points

• The personal loans business saw a 51% year-over-year decline in Q4 2024.
• Monthly unique users (MUUs) decreased by 20% year-over-year in Q4, reflecting challenges in organic traffic growth.
• Credit card revenue declined by 19% year-over-year in Q4, with continued pressure expected in the near term.
• The company anticipates a challenging lending environment, impacting growth in certain verticals like SMB products.
• Nerdwallet Inc (NASDAQ:NRDS) expects a $3 million loss to breakeven in Q1 2025 due to increased brand expenses and a shift in performance marketing mix.

Q & A Highlights

Q: How has NerdWallet's insurance segment grown so significantly, and what factors are contributing to this growth? A: Tim Chen, CEO, explained that the growth in the insurance segment is due to improved site flows and personalized user experiences, which have enhanced performance marketing. The end market is also expanding, with auto insurance costs rising over 50% in the last five years. Additionally, the direct channel is gaining share from the agent channel, providing structural tailwinds. Despite expecting lower growth rates as they lap the hard market, the positive feedback from partners about the quality of shoppers from NerdWallet is encouraging.

Q: Can you elaborate on the Q1 margin guide and the factors contributing to the expected margin contraction? A: Lauren StClair, CFO, noted that the Q1 guide anticipates a $3 million loss to breakeven, implying a 7-point margin degradation year-over-year. This is primarily due to increased brand spending and a larger mix of performance marketing. While revenue is expected to grow, a larger portion will come from paid marketing, especially in insurance, amidst ongoing organic traffic headwinds.

Q: What prompted the shift in traffic strategy, and how does it affect NerdWallet's long-term growth outlook? A: Lauren StClair highlighted that the shift away from focusing on monthly unique users (MUUs) is due to the inverse correlation between MUUs and revenue growth. The focus is now on quality over quantity through vertical integration. Tim Chen added that the operational focus is on deepening relationships with existing users, which offers higher returns than merely increasing top-of-funnel traffic.

Q: How is NerdWallet navigating the competitive landscape, especially with changes in Google's algorithms and AI advancements? A: Tim Chen stated that while there are more ads and modules on search results, and financial institutions are ranking higher, these changes are expected to stabilize. AI search engines are not significantly taking share from traditional search engines, and AI overviews are mainly affecting non-commercial pages. NerdWallet's monetizing pages, which require more complex interactions, remain less impacted.

Q: What is the outlook for NerdWallet's insurance growth, and how will it affect future financial performance? A: Tim Chen mentioned that while the insurance segment has seen impressive growth, future growth will likely align with GDP plus risk and take rate. Structural tailwinds, such as direct carriers taking share from agents, will continue to support growth. Lauren StClair added that full-year non-GAAP operating income is expected to be between $50 million and $60 million, with lower seasonal brand spend contributing to profitability in the latter quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.