NRDS - Earnings call transcript Q1 2024

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Operator

Good day, and thank you for standing by. Welcome to the NerdWallet Inc. Q1 2024 Earnings Conference Call. [Operator Instruction]. Please be advised today's conference is being recorded. to MacNamee. conference like speaker to now Caitlin today, would hand over the your I go please Ma'am, ahead.

Caitlin MacNamee

operator. QX XXXX you, Earnings Thank Welcome Call. to the NerdWallet

Tim Officer, today and us are and Executive Joining Co-Founder Chief St. Lauren Officer, Financial Clair. Chief Chen;

disclosing our are a of Our on material Relations obligations intend today's certain of update call. our replay means available be use available will press We time. a shareholder FD also complying and Investor following and Investor as with and SEC this release under of Relations from letter website website, to the time information to conclusion disclosure Regulation

As today's reminder, and webcast live recorded. a is call being

Before as performance may remind by as to statements. may begin would relate these and remarks certain such, I the in Actual events statements results this session, like circumstances. risk you obligation factors risks expectations and the or constitute you call the we future you on update to these expressed and consider implied result forward-looking forward-looking and and statements today's differ question-and-answer that made those from a be to provided or we subsequent call undertake to reflect that SEC. this We factors information with reports risk uncertainties, and or of filed to to filed urge various including events no discussed remind during

it to Tim? of will both we of to is present and Co-Founder be guarantee reconciliation of a non-GAAP will except measures considered reasonable and confidence. future Tim measures. calculate items aware not Chen, where during reconciling be today's should we should over Furthermore, release, our turn this are efforts statements included to You call, these that I in non-GAAP With GAAP now performance. that, without earnings A GAAP financial certain press CEO. unable

Tim Chen

on the outsized Thanks, decisions. today can high You we've a our brand to remain we the Similar reinforcing trusted committed year-over-year financial efficiency, year-over-year, last product have You, cycle. with reinvest achieved for an resonance our to those they offering. being fruit. campaign great our resilient efficiency, to been despite marketing In to campaign, late relative QX, of bear In And income record Future of make they we'll more make decisions awareness to continuing harder we our orientation work so operating as improving spend orientation. spend long-term NerdWallet more for see brand future guidance year. XXXX, us can it's capital they our We that Make XX% seen to have well-being. down that reached to their bolster long-term consumers, Hate seeing a new course, doubled our throughout by QX, consumers results turn NerdWallet Caitlin. effect to launched aided brand brand guidance We're non-GAAP Don't national as reminding the great than more the In operate and

off years, of that a end with to in has faced despite I've to we improving our paid This work invest fully results something great for These inflationary is said example of marketplaces. in insurance record but few an category past the Our are before. yet continue recover. market has most headwinds revenue QX

time, we headwinds cyclical. will each is business offset tailwinds other. over Our And know that and

cycle growing from priority our to is cycle. So

but factors, blood speak financial EBITDA guidance in users and and revenue, monthly income also by in year-over-year. only a a results our to U.S. results. adjusted of XXXX the of addressable in enable proud across and future. our revenue large our of market, exceeded are us services, also market, expanding unique We XX% continue These also we to macroeconomic XX% X-year approximately self-improvement digital share X-year relentless NerdWallet's with while advertising not is specifically, primary QX In market a operating growing has increased XX%. this CAGR independent invest non-GAAP take of with share We growing CAGR to

Our platform consumers and learn, their money. we're can saw our I or make SMBs single for vision decisions the consumers about where build that TriState shop, will result progress our business. connect a growth a and QX, financial and today is value confident ecosystem durable their feel across making pillars, In our and we data to decisions in

and key other to from able are extensive versus estate nascent security and Medicare, building with shopping like still new in over we efforts and cycle. increased presence scratch across and drive international consumer and quarter, integration our and combination remains while markets within our Internationally, QX trusted years. our expand improved ability MUU trusted U.K., increased continue time. This weeks time, growth expansion with focus to planning. growth a land significantly look in are categories. for the Meanwhile, velocity. By launch in Canada reach home best-in-class brand we efforts grow we playbook services brand coming us to markets skilled experiences, these Australia. to Collectively, a from to leverage development U.S. to efficiently assets we existing year-over-year, NerdWallet,'s monetization categories efforts cycle at vertical Vertical investing conviction over the as our new should in repurposing giving XX% outpaced grow and social categories These monetize that our

financial focused more want SMB, operates learning In options a efficiency in their we and circumstances. the Over QX, level only bring their seen to route improving who to human support for machine effectively bottle, our making help support when time, to to leveraging quarter, tiered hybrid smarter more decisions. services accurately shopping seek hybrid to including areas the we'll make digital cater which work model this experiences. furthered of right on team to decisions. consumers people consumers guidance We've by both more This human-assisted financial to

needs. and and time with financial data-driven on engagement that efforts. QX, times part user NerdWallet registered us as a X Already, directly reengage over signaling potential a it registration and engage turn As shopping such we've insurance active our to us our cross-sell MAU growth opportunities, funnel. can attribute we registered areas we over consumers doubled personalized we users, registration average, to In which loyalty our the achieved to base. seen record that drove a month on past users By them registered product quarters, their peaked no-brainer several we've of increase larger increasing making we thoughtful, work more for for their our in optimizing registering of more as value easily and the users, than down prompts significant in

to Elevated pass from tough our high grow to normal it provide Lauren the we lending We campaigns dynamics, our in users despite match [indiscernible] vision over for SMB interest Much environment right on our and CRM In how works like believe them, proud and improve to in are tailored financial registered over that QX update. a toward term economic to made our these delinquency seemingly results time. contributing their indicators. the are to work the consumers. I'll vertical reengage and with on rates integration cycle of a content relentlessly positive meantime, to continue increasingly also profiles. to rates to am We consumers cycle. long the are users focused offers for we progress cyclical I is focused personalized so experience we've

Lauren St. Waugh

cards. quarter range, our loans QX year-over-year. cyclically the remain the Tim. We million, of areas down of revenue environment credit delivering in depressed as above We interest balance rate $XXX transfer ended high and a sensitive lending guidance Thanks, X% end affecting such

verticals. showcase signs results quarter and SMB being first Our by early led growth of in sight, both insurance recovery

deeper category. revenue $XX Let's take of Credit delivered look performance during a quarter million, within the QX at the year-over-year. XX% cards revenue declining each

on increased sheet them. last constraints We are QX and We a spoken QX. crisis still saw banking structural, our QX results. our these cadence year-over-year but temporal drove they we've quarter-over-quarter rather As believe increase issuer services balance regional to seasonal previously, continue than from to of dynamics about year's and weigh

transfer areas issuer an in we remain This as of for eventual balance returns. consumer gives sheet-intensive products $XX us remains see X% demand such will QX conservative appetite revenue generated declining year-over-year. as that recovery balance million, cards, issuers Loans confidence While high.

have versus quarter we we and recovered consumer vertical demand of that last of scaling a while with the a personal for loans pullback new in consumers audiences card and is partners. during We loan as personal backlog fully began still as that from rates growing to Our credit believe debt. high some the the year-over-year loans through deceleration grew QX, there worked incentive XX% refinance yet not teams QX reduced have

environment. levels While in to this term, expect of to we an return last will improving in anticipation vertical in from do to lending invest continue near not revenue we the year

take effectively more leveraging that expect improving a with macro advantage We as in providers align position surfaces. demand prime financial it us will of our to combined ability to demand consumer services changes, put with

improvements will our we've to We mortgage meaningful housing capture are also made that optimistic marketplaces recovers. help and share market the us structural

loans, reminder products a for a SMB this as by run. delivered credit $XX our separate of products that midsized consisting tighter tailwinds such cards, growth SMB small we disclosure. providing businesses and and runway substantial we the growing offerings SMB with and changed and from and small quarter, million, We can businesses, additional provide of elevated As cards loans QX underwriting, outside over revenue drive product category further a financial remained midsized believe SMB and but long revenue diversified intended that revenue of point recently serves subcategories other as areas credit proof we a product last are now year-over-year. to products our and continue rates for software. presentation banking XX% of as pressured in have services loans

revenue verticals of other finished our revenue formerly product category our declining verticals million, Finally, QX named emerging $XX X% year-over-year. with

it Despite versus consist in reminder, a such in declined investing insurance, optimistic to new banking XXXX, in tough primarily Banking with attribute than combined of that QX. products comparison to SMB demand cadence. partially will market insurance demand, end remain the in which X QX, higher international. verticals grew year-over-year emerging stock we decline to interest a but we after reach vertical. in eventually our assuming our the strength, remains toughest vertical resurgence The the we market the seasonal comps moderation growth as was our X% recent revenue, banking stable. continue year-over-year prior a revenue and wrap of environment. to areas inflation was as of improve, recent by normal We in Despite consumer remains investing insurance regrouping period our the banking, year, expect grew in As rate X% in as due offset

to and on profitability. Moving investments

optimize to of year, increase versus and earned quarters investment by point which margin, X the income of marketing we QX, as we prior operating nearly continue non-GAAP leverage million the a driven XXXX. X During our $XX X% latter a at primarily levels, during began brand

We million had also quarters, earned insurance. million in of quarter, GAAP release income a over the Similar unique a earnings travel, was XX% GAAP the today's we've income in XX to full average and future. of a million provided such income nurse $XX XX% expect be to result a up EBITDA turn QX, previous their and what users $X.X at taxpayer for Growth We operating guidance areas we for investing, margin. net year-over-year. of our $X.X cash measures. trust refer many across Please as to to non-GAAP provision. million, of to the Consumers includes which for mentioned we monthly press taxes tax NerdWallet $X.X first a the In adjusted strength to money for in questions. continue to reconciliation million foreseeable of

by us demand and pressure content in higher our drive consistently has a growth seeing both learn consumer consumers consumer stock well larger MUU. for and more learn areas shop content, the learn content are look our Bitcoin as more for them. bolstered as demand value we the for sight more stream, recognition our On concentrated, revenue such some our outlook. we to engaging and coming in pressures, line of that to of with MUUs during Similar our QX. and near-term build term. and quarter, brand options to specific investing causing insurance We has on saw portion though returning financial market our of have growth franchise these discussed per as been to to last what believe with in macro was events, the premiums over compounds Growth Despite monetization recently rising we interest trust where MUU best strong

and will providing guidance with We a quarterly full of for year continue along mix qualitative quantitative expectations. commentary

would continues driver to million roughly of than to the in normal decline on seasonal from the our expect X% second increase give which, you We To QX midpoint, revenue at moderate. somewhat than sequentially demand QX $XXX the is deliver the but primary color more decreased larger of $XXX versus to quarter million, year, range larger QX expectations, that X%, to normal cadence. our seasonal banking prior

and addition, we credit facing lending cards still loans. are In across both tight conditions

Given get we a the revenue, easier. increase expect insurance material comps we've to experienced growth much return higher recently in as to in QX year-over-year see

We in products. SMB are also seeing momentum continued

recovery to rest we the in we rates return second ultimately how growth revenue the inversely be. with interest correlated of insurance. areas As transfer in products cards, year, in how SMB timing will remains confident ability will growth in and influence impact in the and half remain loans will such at double-digit demand to as balance and point look those combined to high movements recovery given the double-digit recent banking some our potential But rate the uncertain of

profitability. to Moving

We million. not year-over-year million of margin this previous pull brand on began operating to in to level during see non-GAAP investment expecting same XXXX negative $X.X QX our the accretion quarters. of back to expect range as year the income and QX during are of We QX $X.X

still such such to start And insurance facing monetizing services cards. in headwinds we tailwinds areas portions as our balance more traffic SMB, providers financial in credit paid areas organic transfer including in of result are normalizing We acquisition. traffic, and from should demand as see as

marketing to past, to due in end, to we aim the OI by As in will larger spent. a within we've lower to seasonal be manner we mentioned spend offset means revenue, an brand disciplined continue paid sequentially QX, a quarter a we'll the the and back paid to than partially with in view in decline which as be non-GAAP spend. lower Compared

will increases roughly in biannual X-point have engagement a will have impact quarter. also including planned which in costs, the employee margin a We employee event,

for We are expectations. margin reiterating our XXXX guidance full year

the to of and X.X% remain XX% continued in indicates we've of Given future. believe range recent margin we pace OI non-GAAP EBITDA of the margin XX.X% of to where in on data, economic environment. with depend fall far proud Aligned year revenue. full lending ranges results and optimistic approximately guidance, expect the we which these X% delivered adjusted the of in the this revenue so inflationary previous year improvement pressures, will our we of We're about

solved that which consumer as traffic share, confidence signals for With recover, our mind to positioning. conditions questions. ready that, us long-term and consumer growing brand Our needs macroeconomic ability strong we're give Operator? meet will strengthen our

Operator

is [Operator first Instructions]. come to Patterson with Justin from our KeyBanc. of And question going the line

Justin Patterson

last the had you just think the I of the going you recovering? those should about we you within And out some tanshin talk issues mitigate growing transfer near the about taking balance called consumers. some prime Lauren, know quarter, efforts challenge how that to you're and product. Could had

Lauren St. Waugh

more about a actually bit little I'm Tim to loans. that personal over to hand talk question to going

Tim Chen

Yes, Great. Thank you Yes. very much.

we're working in and we're mentioned subprime issues near the as the So last we quarter market. scaling through still

discussed, matching, a previously to the we're consumer lenders few this with when market, sometimes of into some routing So scaling rebuild the some up in we get cycles takes right? I experiences back you these did as of a So and and space. go it

the on consumers want feel right for create win-win to get that and right we we're we So here. and lenders this to path

Justin Patterson

Got it.

out like and category get to efforts velocity as assets. running. scale and Security, Medicare with an you some more just love example to hear just to Now bit home new about little and Social up Would called reporting product respect then services, a that ones that of the

Tim Chen

Yes.

lead there. the a then consumers quality these with in So creating in expand, it matching out playbook really land products and tends and with content best categories we've to our got

at So over a nothing too over over after time. and new this efficiently different. again, We're -- efficient we're do we more bit verticals getting more launching

what that's So out. calling we're

Operator

William of Ralph Schackart And it is question the Blair. line looks like our to from with come next going

Ralph Schackart

Just double double-digit quarter it follow-up, that? commentary half. on the would the more you around comments basis, of little I color, Would first, growth bit then have grow digit? second And in Is maybe Just sort any consolidated each a a accelerate? on on that if could, a like please.

Lauren St. Waugh

that piece. I'll Sure. take

the to expectations $XXX million to for are reiterate, midpoint. guide that revenue, the growing million, for we our just first QX at So X% said $XXX year-over-year

that expect in said by and insurance. also growth SMB we're that the double-digit to we We return rates to of second this point in half. strength seeing at products led the And some is

will confident when we're X those particular, exactly not those expect growth the know in, double-digit in in strength have rates we we we that that clarified verticals, So get to we given kick but there.

to did any interest in rates to recovery areas of transfer be. as changes demand the double-digit also well timing that cards influence those such want We and is growth as in high loans call how going balance rate-driven out banking as will

Ralph Schackart

Great. That's you've forward? on sort really your spend a good campaign, sort spending going helpful. reshaped just think in was down Has thought the how temporary that I the brand phenomenon and XXXX? brand of process on think that And letter. XX% seen just from kind about really you Was Just about spending results, that of curious of campaign? on

Tim Chen

Yes.

and the of where So in monetize, we driven proud it's an tougher adjustments. there. those efficiency and of environment to Yes. we'll we're at look really make Naturally, return learnings hurdles, some we've some

But very that's also past data-driven. we're So the couple relatively We're what to yes, still of new over of some you quarters. this. saw

better list we XXXX ran brand created at campaigns, So and channels. getting full year is we're given the like first things

we'll very And or and there. make there, adjustments we're up down ROI-driven so

last slightly rate lower to a up to on of the that but variety amount does of factors. that full of for say depending we down flex the a now, 'XX, the going and versus spend we're assume year, guidance As reserve year

Operator

the comes Morgan of question Faucette James next from Our Stanley. with line

Michael Infante

It's know majority a card like Michael seems pace year-over-year it's James. slowing of that contributing Tim, rates of the i.e. elevated deterioration Infante the you and I if at look for tougher called it lending those out issuers better. track, across I the we to getting across But environment. delinquencies delinquency in banks issuers, slightly

I'm curious acquire customers. start you're at which about issuers to aggressively the thinking want how more to time So may new

Tim Chen

start The the just Yes. beyond of of constrained sheet question. are the a getting think risk the delinquencies are right, balance that more also It's in indicator, issuers aggressive. a the ultimately and credit We terms good for players question. Thanks should a delinquencies bit leading bigger it. transfer when part

we've like cycles a so And been few through in this past. the

tells that this to historically So for revert over past experience pretty abnormal to us time. is It persist. this tends

reengaging the only timing that So share investing like to single-digit opportunity still overall it's the by and call them and in see originations on it's ample exact hard cycle, increasing more yes, happens. card really users, we're rates. conversion And about doing grow to when our through registering things that market

So we're line on on. the focusing

Michael Infante

I the this is more helpful. that. journey, obviously the obviously And but maybe to product on important broadly. very we're then just early Appreciate acquisition customer That's NerdWallet in an know card,

curious a traction just in you bit little of us could give if thus I'm far. So how of terms color trended has just

Tim Chen

Yes.

reiterate build now, as It's say credit them engage So here is, into on get unsecured track. and consumers just want to the I'd right days. the right for I help graduated products. them mentioned, you history, early goal it's

engagement. seeing like things scores, in good we're improvements seeing we're yes, So credit

we're far. so And so happy pretty

Operator

Kelly Oppenheimer is Co. with question next our of line and to come the going Jed And from

Jed Kelly

reading back to about you're we talk just paid some of the users marketing think of non-monetizable content performance type traffic, going having what how not the the about about can and in are are monetizing, think all and cadence you the on there's of should good what type and or the this And you year? content of awareness articles that that then you're reading? products engagement that brand of sort marketing like education as terms comments, they Just given having

Lauren St. Waugh

paid of first the marketing. around take I'll Sure. piece that

We as more and of we XX% be to And paid disciplined organic because through reinvest operate brand our like acquisition and to channels and performance. way, channels traffic off, a able aiming both organic, brand or performance engagement non-GAAP do means we've And marketing one in in comes all think our as profitable, incremental while, a we also this adding we first OI complement in our dial registration down quarter end a been we of So really And another. as marketing think dollars. a of but for to up will that variable expense view depending initiatives. an and returns. performance part we've on said this

increased We take to performance flexible opportunity to get we'll prudent, dollars. non-GAAP continue it more a to incremental share. continue add as to the a see we be OI lever folks So marketing as us positive to is but register and helps spend

Tim Chen

you Yes. a And bit MUU on the we're categories non-monetizing piece, then definitely where have newer. just

we sometimes mentioned a earlier, haven't that we of content necessarily commercial Some doesn't taxes, up lot where areas the markets monetize. There's travel relationships. of we really new have and like set informational

well. So off, it cycle. monetize investing of take news kind of crypto varies I and especially content or like through as things that doesn't also when that there's mean, the parts

Jed Kelly

And then just one follow-up.

your can insurance As any give gets of customer having your gets sort bigger, products? segment feedback other the bigger, revenue is to us experience insurance relative on you your

Tim Chen

right you if trying customer that phone more brokers, feedback don't up We're numbers minimize of mean have provider. some great experiences really to questions to the them a to may to hard score really that. what I I multiple match Yes. ask the be because the we being people sometimes in referring insurance working to think is sold industry, front,

a it's investing improving that to keep journey, very quarter so keep it's that important after for and in us And quarter. but on on

Operator

Our Citi. next of the Christiansen Peter going is line come from with question to

Peter Christiansen

match spend your they follow? really they at own different. I in do to pace was to when still do do credit I Thanks question. every organic you're traffic levels each Or back, growing thoughts come is But currently? guess to go levels traffic, coming partners their come cycles, while and start it for back previous that the I back your recognize on cycles criticize back

Tim Chen

card to of tend on historically, lending one, give you them. that all say have qualified I'd demand credit the partners can you side, the Yes.

you that So [indiscernible]. go people appetite yes, one crunches, because loan quality volume how much on sometimes that or high volume And you have. they into revenue, how so balances there much see back credit these are When historically, pull right? -- of

been And some so seeing we've that. of

point think return more dynamic We'd that's we so there. a historically And to kind normal to some expect abnormal. at of

Peter Christiansen

And That's there's on some diversified side guys I helpful. been then side. legally. M&A very partner the on very, are partner you your know

about typically kind your that through So I'm just really go -- can you with process? that not asking rewin But there. Or what on the any issues that be through with established you walk to other partner? Do you are of new have we looking. there contract should dynamics

Tim Chen

something prime we across hard don't say, the portfolios to much their can be typically, like different, this. It's Yes. quite especially for precedent products have too quite yes, complementary. But again,

think we need issuer. a so And rewin wouldn't a be to that really major there

tend large also to We work with players. all the

So we have pretty good coverage.

pretty our think products the is that compelling. in consumers value of terms proposition understand qualified highly I

to So people. with work most we tend

Operator

further hand no time. conference at this to would closing management showing to I'm back And I the like remarks. questions And for

Tim Chen

the vision consumers Thank who to our right. the results. all to for you nerds questions also commitment All and you thank our today, delivers of and all our

next So we'll with quarter. see that, everyone

Operator

for conference participating. This today's call. concludes Thank you

disconnect. now may You

NerdWallet (NRDS) 25 Apr 242024 Q1 Earnings call transcript