NerdWallet, Inc. (NRDS) Bundle
A Brief History of NerdWallet, Inc.
NerdWallet, Inc. (NASDAQ: NRDS), a personal finance company, has undergone significant transformations since its establishment. As of 2024, the firm continues to evolve in response to the changing financial services landscape.
Company Overview
Founded in 2010, NerdWallet provides financial guidance through a variety of digital tools. The company focuses on helping users make informed decisions about credit cards, loans, and other financial products.
Recent Financial Performance
For the three months ended September 30, 2024, NerdWallet reported revenues of $191.3 million, an increase of 25% compared to $152.8 million for the same period in 2023. The nine-month revenue for 2024 was $503.8 million, up from $465.7 million in 2023, reflecting an 8% growth.
| Metric | Q3 2024 | Q3 2023 | Change | YTD 2024 | YTD 2023 | Change |
|---|---|---|---|---|---|---|
| Revenue | $191.3M | $152.8M | +25% | $503.8M | $465.7M | +8% |
| Net Income (Loss) | $0.1M | $(0.5M) | Improvement | $(8.2M) | $(9.5M) | Improvement |
| Operating Income | $6.6M | $4.0M | +65% | $0.7M | $(1.0M) | Improvement |
Revenue Breakdown
The revenue streams for NerdWallet have diversified significantly. As of September 30, 2024, the breakdown is as follows:
| Source | Q3 2024 Revenue | Q3 2023 Revenue | Change |
|---|---|---|---|
| Credit Cards | $45.3M | $54.0M | (16%) |
| Loans | $23.8M | $32.9M | (28%) |
| SMB Products | $27.8M | $24.7M | +12% |
| Emerging Verticals | $94.4M | $41.2M | +129% |
Cost Management and Expenses
NerdWallet's total costs and expenses for Q3 2024 were $184.7 million, up from $148.8 million in Q3 2023. The increase was primarily due to:
- Sales and Marketing: Increased by $27.5 million, or 27%.
- Research and Development: Increased by $2.3 million, or 11%.
- General and Administrative: Increased by $1.7 million, or 13%.
Stockholders’ Equity
As of September 30, 2024, NerdWallet reported stockholders’ equity of $322.4 million, down from $366.9 million a year prior. The balance sheet reflects changes in accumulated deficit, which was $(196.9 million) as of the same date.
| Stockholders' Equity Components | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Common Stock | $0.0001 par value | $0.0001 par value |
| Additional Paid-in Capital | $519.3 million | $483.7 million |
| Accumulated Deficit | $(196.9 million) | $(116.5 million) |
| Total Stockholders' Equity | $322.4 million | $366.9 million |
Recent Developments
In July 2024, NerdWallet announced a restructuring plan aimed at reducing operating expenses by approximately 15% of its workforce. This strategic move is expected to enhance operational efficiency and align resources with long-term objectives.
Market Position
As of September 30, 2024, NerdWallet continues to maintain a competitive position in the financial technology sector, leveraging its platform to adapt to market demands and user needs.
A Who Owns NerdWallet, Inc. (NRDS)
Ownership Structure
NerdWallet, Inc. operates with two classes of common stock: Class A and Class B. As of September 30, 2024, the company had a total of 78,397,000 shares of Class A common stock issued and outstanding. Class B common stock is held primarily by the founders and certain executives, which provides them with greater voting power relative to the Class A shares.
Major Shareholders
The ownership of NerdWallet is concentrated among a few major shareholders, including institutional investors and company insiders. Key shareholders include:
- Founder and CEO, Tim Chen - holds a significant portion of Class B shares, ensuring substantial voting control.
- Institutional Investors - Various funds have invested in NerdWallet, with the largest being:
- Vanguard Group, Inc. - approximately 12% ownership
- BlackRock, Inc. - approximately 10% ownership
- Fidelity Investments - approximately 8% ownership
Recent Financial Performance
As of the third quarter ended September 30, 2024, NerdWallet reported a net income of $0.1 million, a recovery from a net loss of $0.5 million in the same quarter of the previous year. The company’s revenue for the quarter was $191.3 million, reflecting a 25% increase year-over-year.
Stock Performance
The stock price of NerdWallet (NRDS) has experienced fluctuations throughout 2024. As of September 30, 2024, the stock was trading at approximately $6.60 per share. The company has been actively repurchasing shares, having repurchased approximately 5.8 million shares for a total cost of $72.2 million during the nine months ended September 30, 2024.
Table of Shareholder Ownership
| Shareholder | Type of Ownership | Percentage Ownership |
|---|---|---|
| Tim Chen | Founder and CEO | Class B Shares (exact percentage not disclosed) |
| Vanguard Group, Inc. | Institutional Investor | 12% |
| BlackRock, Inc. | Institutional Investor | 10% |
| Fidelity Investments | Institutional Investor | 8% |
| Other Investors | Various | 62% |
Conclusion on Ownership Dynamics
The ownership dynamics of NerdWallet reflect a blend of significant insider control and substantial institutional investment. This mix positions the company for potential growth while maintaining a level of oversight from its founders and major shareholders.
NerdWallet, Inc. (NRDS) Mission Statement
Mission Statement Overview
The mission of NerdWallet, Inc. is to provide consumers with clear, comprehensive financial information and tools to help them make informed financial decisions. The company aims to empower individuals to take control of their financial future through easy access to personalized financial advice and products.
Financial Performance Indicators
As of September 30, 2024, NerdWallet reported total revenue of $503.8 million for the nine months, reflecting an increase of $38.1 million, or 8%, compared to the same period in 2023. The growth is primarily driven by revenue increases in emerging verticals and small to medium-sized business (SMB) products.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenue | $503.8 million | $465.7 million | $38.1 million | 8% |
| Net Income (Loss) | ($8.2 million) | ($9.5 million) | $1.3 million | 14% |
| Adjusted EBITDA | $77.1 million | $68.3 million | $8.8 million | 13% |
| Cash and Cash Equivalents | $71.7 million | $100.4 million | ($28.7 million) | (29%) |
Revenue Breakdown
The revenue streams for NerdWallet as of September 30, 2024, are categorized as follows:
| Revenue Source | Q3 2024 Revenue | Q3 2023 Revenue | Change ($) | Change (%) |
|---|---|---|---|---|
| Credit Cards | $45.3 million | $54.0 million | ($8.7 million) | (16%) |
| Loans | $23.8 million | $32.9 million | ($9.1 million) | (28%) |
| SMB Products | $27.8 million | $24.7 million | $3.1 million | 12% |
| Emerging Verticals | $94.4 million | $41.2 million | $53.2 million | 129% |
Cost Structure
NerdWallet's total costs and expenses for the nine months ended September 30, 2024, amounted to $503.1 million, representing an increase of $36.4 million, or 8%, from the previous year.
| Cost Category | 2024 (9 Months) | 2023 (9 Months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | $46.8 million | $40.2 million | $6.6 million | 17% |
| Research and Development | $66.4 million | $60.2 million | $6.2 million | 10% |
| Sales and Marketing | $342.1 million | $321.1 million | $21.0 million | 7% |
| General and Administrative | $47.8 million | $45.2 million | $2.6 million | 6% |
Stockholder Equity
NerdWallet's stockholders' equity as of September 30, 2024, was $322.4 million, reflecting a decrease from previous periods.
| Equity Component | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Stockholders' Equity | $322.4 million | $366.9 million |
| Accumulated Deficit | ($196.9 million) | ($116.5 million) |
Market Position and Growth Strategy
NerdWallet continues to adapt its growth strategy by focusing on expanding its product offerings in emerging verticals, particularly in insurance, which saw a 916% growth in revenue in Q3 2024 compared to Q3 2023.
How NerdWallet, Inc. (NRDS) Works
Business Model
NerdWallet, Inc. operates as a personal finance platform that provides users with tools and resources to make informed financial decisions. The company generates revenue primarily through partnerships with financial institutions, offering products such as credit cards, loans, and small business services.
Financial Performance
As of September 30, 2024, NerdWallet reported total revenue of $191.3 million for the quarter, representing a 25% increase from $152.8 million in the same quarter of 2023. For the nine months ended September 30, 2024, total revenue was $503.8 million, an 8% increase from $465.7 million in the prior year.
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | Change ($) | Change (%) |
|---|---|---|---|---|
| Credit Cards | 45.3 | 54.0 | (8.7) | (16) |
| Loans | 23.8 | 32.9 | (9.1) | (28) |
| SMB Products | 27.8 | 24.7 | 3.1 | 12 |
| Emerging Verticals | 94.4 | 41.2 | 53.2 | 129 |
Expenses and Profitability
NerdWallet's total costs and expenses for Q3 2024 were $184.7 million, an increase of 24% from $148.8 million in Q3 2023. The breakdown of expenses is as follows:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) | Change ($) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | 17.7 | 13.3 | 4.4 | 33 |
| Research and Development | 23.0 | 20.7 | 2.3 | 11 |
| Sales and Marketing | 128.1 | 100.6 | 27.5 | 27 |
| General and Administrative | 15.9 | 14.2 | 1.7 | 13 |
For the three months ended September 30, 2024, NerdWallet reported a net income of $0.1 million, compared to a net loss of $0.5 million for the same period in 2023. The company’s net loss for the nine months ended September 30, 2024 was $8.2 million, an improvement from the loss of $9.5 million in the prior year.
Cash Flow and Liquidity
As of September 30, 2024, NerdWallet had cash and cash equivalents of $71.7 million, down from $100.4 million at the end of 2023. The company reported net cash provided by operating activities of $61.9 million for the nine months ended September 30, 2024, compared to $42.5 million for the same period in 2023.
User Engagement
NerdWallet measures Monthly Unique Users (MUUs), which averaged 22 million for Q3 2024, down from 25 million in Q3 2023. This decline reflects challenges in organic traffic, although there was strong engagement in investing and insurance products.
Tax and Valuation
The income tax provision for the three and nine months ended September 30, 2024, was $7.7 million and $12.5 million, respectively. The effective tax rate for Q3 2024 was 99.2%.
Stock Performance
NerdWallet's stock performance, as of September 30, 2024, has been influenced by its financial results and market conditions. The company has been actively managing its stock options and repurchasing shares, which totaled 5,752 shares repurchased during Q3 2024.
How NerdWallet, Inc. (NRDS) Makes Money
Revenue Streams
NerdWallet generates revenue primarily through four main channels:
- Credit Card Recommendations
- Loans
- Small and Medium-sized Business (SMB) Products
- Emerging Verticals
Credit Card Revenue
In the third quarter of 2024, NerdWallet reported credit card revenue of $45.3 million, a decrease of 16% from $54.0 million in the same quarter of 2023. For the nine months ending September 30, 2024, credit card revenue totaled $141.4 million, down 15% from $166.5 million in 2023.
Loans Revenue
For the same period, loans revenue was $23.8 million, down 28% from $32.9 million year-over-year. The nine-month total for loans was $66.9 million, a 14% decrease from $78.0 million in 2023.
SMB Products Revenue
Revenue from SMB products increased to $27.8 million, a 12% rise from $24.7 million in the previous year. For the nine months, SMB products revenue reached $84.3 million, up 14% from $73.6 million in 2023.
Emerging Verticals Revenue
Emerging verticals showed significant growth, with revenue climbing to $94.4 million for the quarter, an increase of 129% compared to $41.2 million in Q3 2023. For the nine months, this segment generated $211.2 million, a 43% increase from $147.6 million in the prior year.
Total Revenue Overview
| Revenue Source | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Credit Cards | $45.3 million | $54.0 million | $141.4 million | $166.5 million |
| Loans | $23.8 million | $32.9 million | $66.9 million | $78.0 million |
| SMB Products | $27.8 million | $24.7 million | $84.3 million | $73.6 million |
| Emerging Verticals | $94.4 million | $41.2 million | $211.2 million | $147.6 million |
| Total Revenue | $191.3 million | $152.8 million | $503.8 million | $465.7 million |
Operating Expenses
NerdWallet's total costs and expenses for Q3 2024 were $184.7 million, an increase of 24% from $148.8 million in Q3 2023. For the nine months ended September 30, 2024, total expenses reached $503.1 million, up 8% from $466.7 million in 2023.
Expense Breakdown
| Expense Type | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Cost of Revenue | $17.7 million | $13.3 million | $46.8 million | $40.2 million |
| Research and Development | $23.0 million | $20.7 million | $66.4 million | $60.2 million |
| Sales and Marketing | $128.1 million | $100.6 million | $342.1 million | $321.1 million |
| General and Administrative | $15.9 million | $14.2 million | $47.8 million | $45.2 million |
Net Income
NerdWallet reported a net income of $0.1 million for Q3 2024, compared to a net loss of $0.5 million in Q3 2023. For the nine months ended September 30, 2024, the net loss was $8.2 million, an improvement from a loss of $9.5 million in the previous year.
Cash and Equivalents
As of September 30, 2024, NerdWallet held cash and cash equivalents of $71.7 million, down from $100.4 million at the end of 2023.
Conclusion of Financial Performance
The financial performance of NerdWallet in 2024 reflects a diversified revenue model, with significant contributions from emerging verticals, despite challenges in credit card and loans segments. Operational expenses have increased, impacting profitability, but overall trends indicate a shift towards growth in newer revenue sources.
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Article updated on 8 Nov 2024
Resources:
- NerdWallet, Inc. (NRDS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NerdWallet, Inc. (NRDS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View NerdWallet, Inc. (NRDS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.