Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 27, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40994 | |
Entity Registrant Name | NerdWallet, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-4180440 | |
Entity Address, Address Line One | 55 Hawthorne Street | |
Entity Address, Address Line Two | 11th Floor | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 415 | |
Local Phone Number | 549-8913 | |
Title of 12(b) Security | Class A common stock, $0.0001 par value | |
Trading Symbol | NRDS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001625278 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Common Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 45,038,135 | |
Common Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 31,685,652 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 100.8 | $ 83.9 |
Accounts receivable—net | 97.5 | 87 |
Prepaid expenses and other current assets | 20.5 | 18.3 |
Total current assets | 218.8 | 189.2 |
Property, equipment and software—net | 50.8 | 49.1 |
Goodwill | 111.4 | 111.2 |
Intangibles—net | 59.5 | 64.1 |
Right-of-use assets | 10.6 | 11.3 |
Other assets | 1 | 0.8 |
Total Assets | 452.1 | 425.7 |
Current liabilities: | ||
Accounts payable | 12 | 3.6 |
Accrued expenses and other current liabilities | 37.1 | 37.9 |
Contingent consideration—current | 30.9 | 30.9 |
Total current liabilities | 80 | 72.4 |
Other liabilities—noncurrent | 10.3 | 11.6 |
Total liabilities | 90.3 | 84 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock—$0.0001 par value per share—5,000 shares authorized; zero shares issued and outstanding | 0 | 0 |
Common stock—$0.0001 par value per share—296,686 shares authorized; 76,711 and 75,120 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 445.5 | 427.3 |
Accumulated other comprehensive loss | (0.7) | (0.9) |
Accumulated deficit | (83) | (84.7) |
Total stockholders’ equity | 361.8 | 341.7 |
Total Liabilities and Stockholders’ Equity | $ 452.1 | $ 425.7 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per shares) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per shares) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 296,686,000 | 296,686,000 |
Common stock, issued (in shares) | 76,711,000 | 75,120,000 |
Common stock, outstanding (in shares) | 76,711,000 | 75,120,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 169.6 | $ 129.1 |
Costs and Expenses: | ||
Cost of revenue | 13.8 | 7.7 |
Research and development | 19.5 | 17.4 |
Sales and marketing | 121.7 | 96.1 |
General and administrative | 15.4 | 13.1 |
Change in fair value of contingent consideration related to earnouts | 0 | 3.9 |
Total costs and expenses | 170.4 | 138.2 |
Loss From Operations | (0.8) | (9.1) |
Other income (expense), net: | ||
Interest income | 1 | 0 |
Interest expense | (0.2) | (0.2) |
Other losses, net | (0.1) | 0 |
Total other income (expense), net | 0.7 | (0.2) |
Loss before income taxes | (0.1) | (9.3) |
Income tax provision (benefit) | (1.8) | 1.2 |
Net Income (Loss) | $ 1.7 | $ (10.5) |
Net Income (Loss) Per Share Attributable to Common Stockholders | ||
Basic (in dollars per share) | $ 0.02 | $ (0.16) |
Diluted (in dollars per share) | $ 0.02 | $ (0.16) |
Weighted-Average Shares Used in Computing Net Income (Loss) Per Share Attributable to Common Stockholders | ||
Basic (in shares) | 75.8 | 66.9 |
Diluted (in shares) | 79.7 | 66.9 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income (Loss) | $ 1.7 | $ (10.5) |
Other Comprehensive Income (Loss): | ||
Change in foreign currency translation | 0.2 | (0.3) |
Comprehensive Income (Loss) | $ 1.9 | $ (10.8) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Millions | Total | Common Class A | Common Stock | Common Stock Common Class A | Additional Paid-in Capital | Additional Paid-in Capital Common Class A | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2021 | 66,722 | |||||||
Beginning balance at Dec. 31, 2021 | $ 257.6 | $ 0 | $ 331.6 | $ 0.5 | $ (74.5) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Class A common stock upon exercise of stock options (in shares) | 154 | |||||||
Issuance of Class A common stock upon exercise of stock options | 0.7 | 0.7 | ||||||
Issuance of Class A common stock pursuant to settlement of restricted stock units (in shares) | 262 | |||||||
Issuance of Class A common stock pursuant to settlement of restricted stock units | 0 | |||||||
Stock-based compensation | 7.9 | 7.9 | ||||||
Other comprehensive income (loss) | (0.3) | (0.3) | ||||||
Net Income (Loss) | (10.5) | (10.5) | ||||||
Ending balance (in shares) at Mar. 31, 2022 | 67,138 | |||||||
Ending balance at Mar. 31, 2022 | $ 255.4 | $ 0 | 340.2 | 0.2 | (85) | |||
Beginning balance (in shares) at Dec. 31, 2022 | 75,120 | 75,120 | ||||||
Beginning balance at Dec. 31, 2022 | $ 341.7 | $ 0 | 427.3 | (0.9) | (84.7) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of Class A common stock upon exercise of stock options (in shares) | 1,226 | |||||||
Issuance of Class A common stock upon exercise of stock options | 8.4 | 8.4 | ||||||
Issuance of Class A common stock pursuant to settlement of restricted stock units (in shares) | 380 | |||||||
Issuance of Class A common stock pursuant to settlement of restricted stock units | 0 | |||||||
Class A common stock withheld related to net share settlement of restricted stock units (in shares) | (15) | |||||||
Class A common stock withheld related to net share settlement of restricted stock units | $ (0.3) | $ (0.3) | ||||||
Stock-based compensation | 10.1 | 10.1 | ||||||
Other comprehensive income (loss) | 0.2 | 0.2 | ||||||
Net Income (Loss) | $ 1.7 | 1.7 | ||||||
Ending balance (in shares) at Mar. 31, 2023 | 76,711 | 76,711 | ||||||
Ending balance at Mar. 31, 2023 | $ 361.8 | $ 0 | $ 445.5 | $ (0.7) | $ (83) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Activities: | ||
Net income (loss) | $ 1.7 | $ (10.5) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 11.7 | 7.2 |
Stock-based compensation | 8.6 | 6.5 |
Change in fair value of contingent consideration related to earnouts | 0 | 3.9 |
Deferred taxes | (0.1) | (0.7) |
Non-cash lease costs | 0.7 | 0.7 |
Other, net | 1.4 | 0.2 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11.8) | (15.2) |
Prepaid expenses and other assets | (2.6) | (1.6) |
Accounts payable | 8.6 | 1.3 |
Accrued expenses and other current liabilities | (0.8) | 9.7 |
Operating lease liabilities | (0.7) | (0.3) |
Other liabilities | (0.3) | 0.4 |
Net cash provided by operating activities | 16.4 | 1.6 |
Investing Activities: | ||
Capitalized software development costs | (7.3) | (6.6) |
Purchase of property and equipment | (0.3) | (1.9) |
Net cash used in investing activities | (7.6) | (8.5) |
Financing Activities: | ||
Proceeds from line of credit | 7.5 | 0 |
Payments on line of credit | (7.5) | 0 |
Proceeds from exercise of stock options | 8.4 | 0.7 |
Tax payments related to net-share settlements on restricted stock units | (0.3) | 0 |
Net cash provided by financing activities | 8.1 | 0.7 |
Net increase (decrease) in cash and cash equivalents | 16.9 | (6.2) |
Cash and Cash Equivalents: | ||
Beginning of period | 83.9 | 167.8 |
End of period | 100.8 | 161.6 |
Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||
Capitalized software development costs recorded in accounts payable and accrued expenses and other current liabilities | 0.7 | 0.6 |
Purchase of property and equipment recorded in accounts payable and accrued expenses and other current liabilities | 0.1 | 0.8 |
Supplemental Disclosures of Cash Flow Information: | ||
Income tax payments | 0.3 | 0.2 |
Cash paid for interest | 0 | 0.1 |
Supplemental Cash Flow Disclosure Related to Operating Leases: | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 0.9 | $ 0.4 |
The Company and Basis of Presen
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation The Company— NerdWallet, Inc., a Delaware corporation, was formed on December 29, 2011. NerdWallet, Inc. and its wholly-owned subsidiaries (collectively, the Company) provide consumer-driven advice about personal finance through its platform by connecting individuals and small and mid-sized businesses (SMBs) with providers of financial products. Basis of Presentation— The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, the accompanying unaudited interim condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s financial position and results of operations for the periods presented. The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or any other future period. Concentrations of Credit Risk— Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. While the Company deposits cash and cash equivalents with high credit quality financial institutions, including First Citizens Bank & Trust Company (through its Silicon Valley Bank division), HSBC and JPMorgan Chase Bank, N.A., to lessen the Company’s exposure, such cash deposits may exceed federally insured limits at these financial institutions. To mitigate the risk associated with deposits exceeding federally insured limits, the Company manages exposure by utilizing deposit accounts which include sweep features to third-party money market funds, with total money market funds of $75.0 million and $75.4 million as of March 31, 2023 and December 31, 2022, respectively. Based on these facts, collectability of bank balances appears to be adequately assured. Significant Accounting Policies —During the three months ended March 31, 2023, there have been no material changes to the Company’s significant accounting policies as disclosed in Note 1–The Company and its Significant Accounting Policies in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following presents a disaggregation of the Company’s revenue based on product category: Three Months Ended (in millions) 2023 2022 Credit cards $ 61.3 $ 45.2 Loans 22.0 34.3 Other verticals 86.3 49.6 Total revenue $ 169.6 $ 129.1 The contract asset recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet related to estimated variable consideration was $6.1 million and $5.8 million as of March 31, 2023 and December 31, 2022, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows: (in millions) Quoted Prices Other Significant Total As of March 31, 2023 Assets: Cash and cash equivalents—money market funds $ 75.0 $ — $ — $ 75.0 Certificate of deposit — 2.0 — 2.0 $ 75.0 $ 2.0 $ — $ 77.0 Liabilities: Contingent consideration $ — $ — $ 30.9 $ 30.9 (in millions) Quoted Prices Other Significant Total As of December 31, 2022 Assets: Cash and cash equivalents—money market funds $ 75.4 $ — $ — $ 75.4 Certificate of deposit — 2.0 — 2.0 $ 75.4 $ 2.0 $ — $ 77.4 Liabilities: Contingent consideration $ — $ — $ 30.9 $ 30.9 Level 3 liabilities consist entirely of contingent consideration, and the changes in fair value are as follows: Three Months Ended (in millions) 2023 2022 Balance as of beginning of period $ 30.9 $ 54.7 Change in fair value, recognized in earnings — 3.9 Balance as of end of period $ 30.9 $ 58.6 As of March 31, 2023 and December 31, 2022, Fundera Inc.’s revenue and profitability milestones for 2022 were achieved and the contingent consideration liability was recorded at the full payout amount. See Note 10–Subsequent Events for further discussion. |
Significant Condensed Consolida
Significant Condensed Consolidated Balance Sheet Components | 3 Months Ended |
Mar. 31, 2023 | |
Significant Consolidated Balance Sheet Components [Abstract] | |
Significant Consolidated Balance Sheet Components | Significant Condensed Consolidated Balance Sheet Components Property, equipment and software, net includes capitalized software development costs, net of accumulated amortization, of $45.9 million and $43.9 million as of March 31, 2023 and December 31, 2022, respectively. The Company capitalized $8.6 million and $8.0 million of software development costs during the three months ended March 31, 2023 and 2022, respectively. The Company recorded amortization expense related to capitalized software development costs of $6.6 million and $4.9 million during the three months ended March 31, 2023 and 2022, respectively. Accrued expenses and other current liabilities Other liabilities—noncurrent |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combination | Business Combination On the Barrelhead, Inc. —On July 11, 2022, the Company completed the acquisition of On the Barrelhead, Inc. (OTB), a data-driven platform that provides consumers and SMBs with credit-driven product recommendations. See Note 5–Business Combinations in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for further discussion on the acquisition of OTB. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information is presented as if the OTB acquisition, including the related debt financing, was completed on January 1, 2021. The pro forma financial information includes the historical operating results of the Company and OTB prior to the acquisition, with adjustments directly attributable to the acquisition. Pro forma adjustments have been made to reflect the incremental intangible asset amortization to be incurred based on the fair values and useful lives of each identifiable intangible asset, incremental stock-based compensation related to inducement equity awards, incremental compensation related to cash retention agreements, incremental interest expense related to debt drawn to finance the cash portion of the purchase price, the adjustment of acquisition-related expenses, and the related tax effects of pro forma adjustments for the period. The unaudited pro forma financial information is as follows: (in millions) Three Months Ended Revenue $ 147.7 Net loss (12.9) The unaudited pro forma financial information is not intended to present, or be indicative of, what the results of operations would have been for the combined company for the period presented had the acquisition actually occurred on January 1, 2021, nor is it meant to be indicative of results of operations that may be achieved by the combined company in the future. The unaudited pro forma financial information does not include any cost savings or other synergies that resulted, or may result, from the OTB acquisition or any estimated costs that will be incurred to integrate OTB. Future results may vary significantly from the results reflected in this unaudited pro forma financial information because of future events and transactions, as well as other factors. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments and Other Financial Arrangements —The Company has certain financial commitments and other arrangements including unused letters of credit and commitments under leases. As of March 31, 2023, there were no material changes to the Company’s commitments and other financial arrangements as disclosed in Note 8–Commitments and Contingencies in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Litigation and Other Legal Matters —The Company is involved from time to time in litigation, claims, and proceedings. Periodically, the Company evaluates the status of each legal matter and assesses potential financial exposure. If the potential loss from any legal proceeding or litigation is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimable. The outcome of any proceeding is not determinable in advance. As a result, the assessment of a potential liability and the amount of accruals recorded are based only on the information available at the time. As additional information becomes available, the Company reassesses the potential liability related to the legal proceeding or litigation, and may revise its estimates. Management is not currently aware of any matters that it expects will have a material effect on the financial position, results of operations, or cash flows of the Company. The Company has not accrued any material potential loss as of March 31, 2023 or December 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Equity Incentive Plans —The 2021 Equity Incentive Plan and the predecessor 2012 Equity Incentive Plan, both as amended, along with the 2022 Inducement Equity Incentive Plan (collectively, the Plans) comprise the equity incentive plans of the Company. Under the terms of the 2021 Equity Incentive Plan, the number of shares of Class A common stock reserved for issuance under the plan will automatically increase on January 1 of each calendar year, starting January 1, 2023 and ending on and including January 1, 2031, in an amount equal to 5% of the total number of shares of the Company’s capital stock outstanding on December 31 of the prior calendar year, unless the Company’s Board of Directors determines prior to the date of increase that there will be a lesser increase, or no increase. In accordance with these plan terms, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Equity Incentive Plan increased by 3.8 million shares effective January 1, 2023. Stock Options —A summary of the Company’s stock option activity for its Plans is as follows: Outstanding Weighted-Average Weighted-Average Aggregate Balance as of December 31, 2022 6,112 $ 9.81 6.7 $ 11.9 Exercised (1,226) $ 6.82 Cancelled/forfeited (219) $ 14.53 Balance as of March 31, 2023 4,667 $ 10.37 6.8 $ 29.1 Vested and exercisable as of March 31, 2023 2,852 $ 8.91 5.8 $ 21.6 The aggregate intrinsic value of options exercised was $12.4 million for the three months ended March 31, 2023. There were no options granted for the three months ended March 31, 2023. For the three months ended March 31, 2022, the per-share fair value of each stock option was determined on the date of grant using the following weighted-average assumptions: Three Months Ended Expected volatility 51.9 % Expected term (in years) 6.0 Expected dividend yield 0 % Risk-free interest rate 2.4 % Restricted Stock Units —A summary of the Company’s outstanding nonvested RSUs for its Plans is as follows: Number of Units Weighted-Average Nonvested as of December 31, 2022 7,405 $ 12.27 Granted 1 1,000 $ 16.27 Vested (380) $ 14.89 Forfeited (391) $ 13.36 Nonvested as of March 31, 2023 1 7,634 $ 12.61 ______________ (1) Includes 0.2 million of target award RSUs with both service-based and performance-based conditions. The total fair value of shares that vested under RSUs was $7.8 million during the three months ended March 31, 2023. During the three months ended March 31, 2023, the Company granted 0.2 million of target award RSUs with both service-based and performance-based conditions to certain employees of the Company. Recipients of these performance-based RSUs are eligible to earn between 0% and 200% of their target awards based upon the achievement of (i) an EBITDA-related metric and (ii) a revenue-related metric, both in fiscal year 2023, subject to certification of the attainment of the performance level. These performance-based RSUs are also subject to service-based vesting over a period of three years. Stock-based compensation for performance-based RSUs is recognized over the requisite service period using the accelerated attribution method based on an assessment of the probability of achieving the requisite performance metrics. The Company recognizes forfeitures as they occur for grantees who do not fulfill the service-based conditions. Employee Stock Purchase Plan —The terms of the Employee Stock Purchase Plan (ESPP) provide for automatic increases in the number of shares reserved for issuance on January 1 of each calendar year, beginning in 2023 and through 2031, subject to terms of the ESPP. In accordance with these plan terms, the aggregate number of Class A common stock authorized for issuance under the ESPP increased by 0.8 million effective January 1, 2023. Prior to capitalizing amounts related to software development costs, the Company recognized stock-based compensation related to the ESPP of $1.0 million and $1.3 million during the three months ended March 31, 2023 and 2022, respectively. Stock-Based Compensation —The Company recognized stock-based compensation under the Plans and ESPP as follows: Three Months Ended (in millions) 2023 2022 Research and development $ 2.4 $ 2.6 Sales and marketing 3.3 2.1 General and administrative 2.9 1.8 Total stock-based compensation $ 8.6 $ 6.5 In addition, stock-based compensation of $1.5 million and $1.4 million was capitalized related to software development costs during the three months ended March 31, 2023 and 2022, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s tax provision for interim periods is determined using an estimated annual effective tax rate which is adjusted for discrete items occurring during the periods presented. The primary difference between the Company’s effective tax rate and the statutory federal income tax rate is the full valuation allowance established on the Company’s federal, state and foreign deferred tax attributes. As of March 31, 2023 and December 31, 2022, the Company recorded a full valuation allowance against these net deferred tax assets as the Company believes that it is more likely than not that the Company will not be able to fully realize such net deferred tax assets. The Company’s judgment regarding the likelihood of realization of these deferred tax assets could change in future periods, which could result in a material impact in the Company’s income tax provision in the period of change. |
Net Income (Loss) Per Basic and
Net Income (Loss) Per Basic and Diluted Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Basic and Diluted Share | Net Income (Loss) Per Basic and Diluted Share The following table provides the basic and diluted per share computations for net income (loss) attributable to common stockholders: Three Months Ended (in millions, except per share amounts) 2023 2022 Numerator: Net income (loss) attributable to common stockholders—basic and diluted $ 1.7 $ (10.5) Denominator: Weighted-average shares of common stock—basic 75.8 66.9 Effect of dilutive stock options and restricted stock units 3.9 — Weighted-average shares of common stock—diluted 79.7 66.9 Net income (loss) per share attributable to common stockholders: Basic $ 0.02 $ (0.16) Diluted $ 0.02 $ (0.16) The following common stock equivalents were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive: Three Months Ended (in millions) 2023 2022 Shares subject to outstanding stock options and restricted stock units 3.7 7.5 ESPP 0.3 1.5 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 2, 2023, the Company announced that its Board of Directors has authorized a plan (the Repurchase Plan) under which the Company may repurchase up to $20 million of the Company’s Class A common stock. Under the Repurchase Plan, shares of Class A common stock may be repurchased in the open market through privately negotiated transactions or otherwise. The Repurchase Plan does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares. The timing and terms of any repurchases under the Repurchase Plan will be at management’s discretion and depend on a variety of factors, including business, economic and market conditions, regulatory requirements, prevailing stock prices and other considerations. As of April 28, 2023, the Company has paid $28.2 million of the contingent consideration related to the acquisition of Fundera, Inc. of $30.9 million as of March 31, 2023, with the remainder expected to be paid in May 2023. |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation— The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, the accompanying unaudited interim condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. |
Consolidation | The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or any other future period. |
Concentrations of Credit Risk | Concentrations of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. While the Company deposits cash and cash equivalents with high credit quality financial institutions, including First Citizens Bank & Trust Company (through its Silicon Valley Bank division), HSBC and JPMorgan Chase Bank, N.A., to lessen the Company’s exposure, such cash deposits may exceed federally insured limits at these financial institutions. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following presents a disaggregation of the Company’s revenue based on product category: Three Months Ended (in millions) 2023 2022 Credit cards $ 61.3 $ 45.2 Loans 22.0 34.3 Other verticals 86.3 49.6 Total revenue $ 169.6 $ 129.1 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows: (in millions) Quoted Prices Other Significant Total As of March 31, 2023 Assets: Cash and cash equivalents—money market funds $ 75.0 $ — $ — $ 75.0 Certificate of deposit — 2.0 — 2.0 $ 75.0 $ 2.0 $ — $ 77.0 Liabilities: Contingent consideration $ — $ — $ 30.9 $ 30.9 (in millions) Quoted Prices Other Significant Total As of December 31, 2022 Assets: Cash and cash equivalents—money market funds $ 75.4 $ — $ — $ 75.4 Certificate of deposit — 2.0 — 2.0 $ 75.4 $ 2.0 $ — $ 77.4 Liabilities: Contingent consideration $ — $ — $ 30.9 $ 30.9 |
Schedule of Level 3 Liabilities | Level 3 liabilities consist entirely of contingent consideration, and the changes in fair value are as follows: Three Months Ended (in millions) 2023 2022 Balance as of beginning of period $ 30.9 $ 54.7 Change in fair value, recognized in earnings — 3.9 Balance as of end of period $ 30.9 $ 58.6 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Combination Pro Forma Information | The unaudited pro forma financial information is as follows: (in millions) Three Months Ended Revenue $ 147.7 Net loss (12.9) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Stock Options | A summary of the Company’s stock option activity for its Plans is as follows: Outstanding Weighted-Average Weighted-Average Aggregate Balance as of December 31, 2022 6,112 $ 9.81 6.7 $ 11.9 Exercised (1,226) $ 6.82 Cancelled/forfeited (219) $ 14.53 Balance as of March 31, 2023 4,667 $ 10.37 6.8 $ 29.1 Vested and exercisable as of March 31, 2023 2,852 $ 8.91 5.8 $ 21.6 |
Schedule of Weighted-Average Assumptions and Ranges of Fair Value of Common Stock | For the three months ended March 31, 2022, the per-share fair value of each stock option was determined on the date of grant using the following weighted-average assumptions: Three Months Ended Expected volatility 51.9 % Expected term (in years) 6.0 Expected dividend yield 0 % Risk-free interest rate 2.4 % |
Schedule of Outstanding Nonvested RSUs | A summary of the Company’s outstanding nonvested RSUs for its Plans is as follows: Number of Units Weighted-Average Nonvested as of December 31, 2022 7,405 $ 12.27 Granted 1 1,000 $ 16.27 Vested (380) $ 14.89 Forfeited (391) $ 13.36 Nonvested as of March 31, 2023 1 7,634 $ 12.61 ______________ (1) Includes 0.2 million of target award RSUs with both service-based and performance-based conditions. |
Schedule of Stock-based Compensation Expense | The Company recognized stock-based compensation under the Plans and ESPP as follows: Three Months Ended (in millions) 2023 2022 Research and development $ 2.4 $ 2.6 Sales and marketing 3.3 2.1 General and administrative 2.9 1.8 Total stock-based compensation $ 8.6 $ 6.5 |
Net Income (Loss) Per Basic a_2
Net Income (Loss) Per Basic and Diluted Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Income (Loss) Per Share, Basic and Diluted | The following table provides the basic and diluted per share computations for net income (loss) attributable to common stockholders: Three Months Ended (in millions, except per share amounts) 2023 2022 Numerator: Net income (loss) attributable to common stockholders—basic and diluted $ 1.7 $ (10.5) Denominator: Weighted-average shares of common stock—basic 75.8 66.9 Effect of dilutive stock options and restricted stock units 3.9 — Weighted-average shares of common stock—diluted 79.7 66.9 Net income (loss) per share attributable to common stockholders: Basic $ 0.02 $ (0.16) Diluted $ 0.02 $ (0.16) |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Earnings Net Income (Loss) Per Share | The following common stock equivalents were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive: Three Months Ended (in millions) 2023 2022 Shares subject to outstanding stock options and restricted stock units 3.7 7.5 ESPP 0.3 1.5 |
The Company and Basis of Pres_3
The Company and Basis of Presentation (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents—money market funds | $ 75 | $ 75.4 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 169.6 | $ 129.1 | |
Contract assets | 6.1 | $ 5.8 | |
Credit cards | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 61.3 | 45.2 | |
Loans | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 22 | 34.3 | |
Other verticals | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 86.3 | $ 49.6 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Recurring Basis | ||
Assets: | ||
Assets | $ 77 | $ 77.4 |
Liabilities: | ||
Contingent consideration | 30.9 | 30.9 |
Recurring Basis | Certificate of deposit | ||
Assets: | ||
Certificate of deposit | 2 | 2 |
Quoted Prices in Active Markets (Level 1) | Recurring Basis | ||
Assets: | ||
Assets | 75 | 75.4 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Recurring Basis | Certificate of deposit | ||
Assets: | ||
Certificate of deposit | 0 | 0 |
Other Observable Inputs (Level 2) | Recurring Basis | ||
Assets: | ||
Assets | 2 | 2 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Other Observable Inputs (Level 2) | Recurring Basis | Certificate of deposit | ||
Assets: | ||
Certificate of deposit | 2 | 2 |
Significant Unobservable Inputs (Level 3) | Recurring Basis | ||
Assets: | ||
Assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 30.9 | 30.9 |
Significant Unobservable Inputs (Level 3) | Recurring Basis | Certificate of deposit | ||
Assets: | ||
Certificate of deposit | 0 | 0 |
Money Market Funds | ||
Assets: | ||
Cash and cash equivalents—money market funds | 75 | 75.4 |
Money Market Funds | Recurring Basis | ||
Assets: | ||
Cash and cash equivalents—money market funds | 75 | 75.4 |
Money Market Funds | Quoted Prices in Active Markets (Level 1) | Recurring Basis | ||
Assets: | ||
Cash and cash equivalents—money market funds | 75 | 75.4 |
Money Market Funds | Other Observable Inputs (Level 2) | Recurring Basis | ||
Assets: | ||
Cash and cash equivalents—money market funds | 0 | 0 |
Money Market Funds | Significant Unobservable Inputs (Level 3) | Recurring Basis | ||
Assets: | ||
Cash and cash equivalents—money market funds | $ 0 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 Liabilities (Details) - Contingent Consideration - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance as of beginning of period | $ 30.9 | $ 58.6 | $ 30.9 | $ 54.7 |
Change in fair value, recognized in earnings | 0 | 3.9 | ||
Balance as of end of period | $ 30.9 | $ 58.6 |
Significant Condensed Consoli_2
Significant Condensed Consolidated Balance Sheet Components (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Significant Consolidated Balance Sheet Components [Abstract] | |||
Capitalized software development costs, net of accumulated amortization | $ 45.9 | $ 43.9 | |
Capitalized software development costs | 8.6 | $ 8 | |
Amortization of capitalized software | $ 6.6 | $ 4.9 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |
Accrued expenses and other current liabilities including operating lease liabilities | $ 3.2 | $ 3.1 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other liabilities—noncurrent | Other liabilities—noncurrent | |
Other liabilities noncurrent including operating lease liabilities | $ 8.8 | $ 9.6 |
Business Combination (Details)
Business Combination (Details) - On the Barrelhead, Inc. $ in Millions | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Revenue | $ 147.7 |
Net loss | $ (12.9) |
Stockholders' Equity - Equity I
Stockholders' Equity - Equity Incentive Plan Narrative (Details) - 2021 Equity Incentive Plan - Common Class A - shares shares in Millions | Jan. 01, 2023 | Mar. 31, 2023 |
Class of Stock [Line Items] | ||
Increase in shares reserved for issuance (in shares) | 3.8 | |
Stock Options | ||
Class of Stock [Line Items] | ||
Annual increase in shares authorized, percentage | 5% |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Outstanding Stock Options (in thousands) | ||
Beginning of period (in shares) | 6,112 | |
Exercised (in shares) | (1,226) | |
Cancelled/forfeited (in shares) | (219) | |
End of period (in shares) | 4,667 | 6,112 |
Vested and exercisable at end of period (in shares) | 2,852 | |
Weighted-Average Exercise Price | ||
Beginning of period (in dollars per share) | $ 9.81 | |
Exercised (in dollars per share) | 6.82 | |
Cancelled/forfeited (in dollars per share) | 14.53 | |
End of period (in dollars per share) | 10.37 | $ 9.81 |
Vested and exercisable at end of period, weighted average exercise price (in dollars per share) | $ 8.91 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average contractual life, outstanding | 6 years 9 months 18 days | 6 years 8 months 12 days |
Weighted average contractual life, shares vested and exercisable | 5 years 9 months 18 days | |
Aggregate intrinsic value, outstanding | $ 29.1 | $ 11.9 |
Aggregate intrinsic value, shares vested and exercisable | $ 21.6 |
Stockholders' Equity - Stock _2
Stockholders' Equity - Stock Option Activity - Narrative (Details) - Stock Options $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregate intrinsic value, options exercised in period | $ | $ 12.4 |
Granted (in shares) | shares | 0 |
Stockholders' Equity - Stock _3
Stockholders' Equity - Stock Option Valuation Assumptions (Details) - Stock Options | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 51.90% |
Expected term (in years) | 6 years |
Expected dividend yield | 0% |
Risk-free interest rate | 2.40% |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Unit Activity (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Restricted Stock Units (RSUs) | |
Number of Units (in thousands) | |
Beginning of period, nonvested (in shares) | 7,405 |
Granted (in shares) | 1,000 |
Vested (in shares) | (380) |
Forfeited (in shares) | (391) |
End of period, nonvested (in shares) | 7,634 |
Weighted-Average Grant-Date Fair Value | |
Beginning of period, nonvested weighted average grant date fair value (in dollars per share) | $ / shares | $ 12.27 |
Granted (in dollars per share) | $ / shares | 16.27 |
Vested (in dollars per share) | $ / shares | 14.89 |
Forfeited (in dollars per share) | $ / shares | 13.36 |
End of period, nonvested weighted average grant date fair value (in dollars per share) | $ / shares | $ 12.61 |
Restricted Stock Units, Service-Based And Performance-Based | |
Number of Units (in thousands) | |
Granted (in shares) | 200 |
Stockholders' Equity - Restri_2
Stockholders' Equity - Restricted Stock Unit Activity Narrative (Details) shares in Thousands, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) shares | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of shares vested under RSUs during period | $ | $ 7.8 |
Grants in period (in shares) | 1,000 |
Restricted Stock Units, Service-Based And Performance-Based | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | 200 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period (in years) | 3 years |
Performance Shares | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting rights percentage | 0% |
Performance Shares | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting rights percentage | 200% |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Jan. 01, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 8.6 | $ 6.5 | |
ESPP | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of additional shares authorized (in shares) | 0.8 | ||
Share-based compensation expense | $ 1 | $ 1.3 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 8.6 | $ 6.5 |
Share-based compensation capitalized | 1.5 | 1.4 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 2.4 | 2.6 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 3.3 | 2.1 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 2.9 | $ 1.8 |
Net Income (Loss) Per Basic a_3
Net Income (Loss) Per Basic and Diluted Share - Basic and Diluted Per Share Computations for Net Income (Loss) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income (loss) attributable to common stockholders – basic | $ 1.7 | $ (10.5) |
Net income (loss) attributable to common stockholders – diluted | $ 1.7 | $ (10.5) |
Denominator: | ||
Weighted-average shares of common stock – basic (in shares) | 75.8 | 66.9 |
Effect of dilutive stock options and restricted stock units (in shares) | 3.9 | 0 |
Weighted-average shares of common stock - diluted (in shares) | 79.7 | 66.9 |
Net income (loss) per share attributable to common stockholders: Basic (in dollars per share) | $ 0.02 | $ (0.16) |
Net income (loss) per share attributable to common stockholders: Diluted (in dollars per share) | $ 0.02 | $ (0.16) |
Net Income (Loss) Per Basic a_4
Net Income (Loss) Per Basic and Diluted Share - Schedule of Antidilutive Securities Excluded from Computation (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Shares subject to outstanding stock options and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 3.7 | 7.5 |
ESPP | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0.3 | 1.5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 28, 2023 | May 02, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | ||||
Contingent consideration—current | $ 30.9 | $ 30.9 | ||
Fundera Acquisition | ||||
Subsequent Event [Line Items] | ||||
Contingent consideration—current | $ 30.9 | |||
Subsequent Event | Fundera Acquisition | ||||
Subsequent Event [Line Items] | ||||
Contingent consideration payment | $ 28.2 | |||
Common Class A | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Stock repurchase program, authorized amount | $ 20 |