02/24/2022 | Press release | Archived content
Fourth Quarter 2021 Revenue of $99.5 million, Up 75% Year-Over-Year
FINANCIAL HIGHLIGHTS
SAN FRANCISCO--(BUSINESS WIRE)--Feb. 24, 2022-- NerdWallet, Inc. (NASDAQ: NRDS), a platform that provides financial guidance to consumers and small and mid-sized businesses (SMBs), today reported financial results for its fourth quarter and full year ended December 31, 2021.
"Last year was one of sustained momentum for NerdWallet. Our business saw several positive signs of recovery following a COVID-19 impacted 2020, and we provided trusted financial guidance to consumers across the U.S., UK and Canada who were faced with a variety of financial decisions," said Tim Chen, Co-Founder and CEO of NerdWallet. "We achieved strong growth in annual revenue, monthly unique users (MUUs) and registered users, while investing in our trusted brand. We're looking forward to building on this momentum by finding new ways to engage our users, help more consumers and SMBs, and better serve our financial services partners."
"We're excited about our strong Q4 and full year 2021 results," said Lauren StClair, CFO of NerdWallet. "We delivered 75% year-over-year Q4 revenue growth as we continued to see recovery in both consumer demand and in our partners' marketing spend. For the full year, our trusted financial guidance and effective marketing investments resulted in 23% growth in average MUUs, and we ended the year with over 10 million registered users. We grew across our three product categories and generated $380 million in annual revenue."
FOURTH QUARTER 2021 HIGHLIGHTS
SUMMARY FINANCIAL RESULTS |
|||||||||||
Three Months Ended |
% |
||||||||||
(in millions, except per share amounts) |
Dec 31, 2021 |
Dec 31, 2020 |
|||||||||
Revenue |
$ |
99.5 |
$ |
56.7 |
75 |
% |
|||||
Credit cards(1) |
34.9 |
16.7 |
109 |
% |
|||||||
Loans(2) |
29.6 |
20.2 |
46 |
% |
|||||||
Other verticals(3) |
35.0 |
19.8 |
76 |
% |
|||||||
Loss from operations |
$ |
(9.4 |
) |
$ |
(5.2 |
) |
83 |
% |
|||
Net loss |
$ |
(7.9 |
) |
$ |
(3.4 |
) |
136 |
% |
|||
Net loss per share |
|||||||||||
Basic |
$ |
(0.13 |
) |
$ |
(0.07 |
) |
86 |
% |
|||
Diluted |
$ |
(0.13 |
) |
$ |
(0.07 |
) |
86 |
% |
|||
Non-GAAP financial measure(4) |
|||||||||||
Adjusted EBITDA |
$ |
13.5 |
$ |
2.1 |
528 |
% |
|||||
Cash and cash equivalents |
$ |
167.8 |
$ |
83.4 |
101 |
% |
|||||
Average monthly unique users(5) |
18 |
15 |
22 |
% |
______________ |
|
(1) |
Credit cards revenue consists of revenue from consumer credit cards. |
(2) |
Loans revenue includes revenue from home mortgages, personal loans, student loans and auto loans. |
(3) |
Other verticals revenue includes revenue from other product sources, including insurance, banking, investing, and SMB products. |
(4) |
Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Financial Measure" for more information. |
(5) |
We define a Monthly Unique User (MUU) as a unique user with at least one session in a given month as determined by unique device identifiers. |
QUARTERLY CONFERENCE CALL
A conference call to discuss NerdWallet's fourth quarter 2021 financial results will be webcast live today, February 24, 2022 at 2:00 PM Pacific Time (PT). The live webcast is open to the public and will be available on NerdWallet's investor relations website at https://investors.nerdwallet.com. Following completion of the call, a recorded replay of the webcast will be available on NerdWallet's investor relations website.
SHAREHOLDER LETTER
A shareholder letter providing additional information and analysis can be found at NerdWallet's investor relations website at https://investors.nerdwallet.com.
ABOUT NERDWALLET
NerdWallet (Nasdaq: NRDS) is on a mission to provide clarity for all of life's financial decisions. As a personal finance website and app, NerdWallet provides consumers with trustworthy and knowledgeable financial information so they can make smart money moves. From finding the best credit card to buying a house, NerdWallet is there to help consumers make financial decisions with confidence. Consumers have free access to our expert content and comparison shopping marketplaces, plus a data-driven app, which helps them stay on top of their finances and save time and money, giving them the freedom to do more. NerdWallet is available for consumers in the U.S., UK and Canada.
"NerdWallet" is a trademark of NerdWallet, Inc. All rights reserved. Other names and trademarks used herein may be trademarks of their respective owners.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||
Three Months Ended |
% |
Year Ended |
% |
|||||||||||||||||||
(in millions, except per share amounts) |
Dec 31, 2021 |
Dec 31, 2020 |
Dec 31, 2021 |
Dec 31, 2020 |
||||||||||||||||||
Revenue |
$ |
99.5 |
$ |
56.7 |
75 |
% |
$ |
379.6 |
$ |
245.3 |
55 |
% |
||||||||||
Costs and Expenses: |
||||||||||||||||||||||
Cost of revenue |
7.2 |
5.8 |
24 |
% |
28.5 |
21.3 |
34 |
% |
||||||||||||||
Research and development |
18.6 |
13.4 |
38 |
% |
62.2 |
50.9 |
22 |
% |
||||||||||||||
Sales and marketing |
63.5 |
35.6 |
79 |
% |
271.3 |
144.0 |
88 |
% |
||||||||||||||
General and administrative |
11.6 |
7.9 |
48 |
% |
38.5 |
28.0 |
38 |
% |
||||||||||||||
Change in fair value of contingent consideration related to earnouts |
8.0 |
(0.8 |
) |
NM |
18.1 |
(0.8 |
) |
NM |
||||||||||||||
Total costs and expenses |
108.9 |
61.9 |
76 |
% |
418.6 |
243.4 |
72 |
% |
||||||||||||||
Income (Loss) From Operations |
(9.4 |
) |
(5.2 |
) |
83 |
% |
(39.0 |
) |
1.9 |
NM |
||||||||||||
Other income (expense): |
||||||||||||||||||||||
Interest income |
- |
- |
0 |
% |
- |
0.2 |
(92 |
%) |
||||||||||||||
Interest expense |
(0.2 |
) |
(0.3 |
) |
(22 |
%) |
(1.3 |
) |
(1.1 |
) |
14 |
% |
||||||||||
Other gains (losses), net |
1.5 |
(0.1 |
) |
NM |
2.6 |
(0.1 |
) |
NM |
||||||||||||||
Total other income (expense) |
1.3 |
(0.4 |
) |
NM |
1.3 |
(1.0 |
) |
NM |
||||||||||||||
Income (loss) before income taxes |
(8.1 |
) |
(5.6 |
) |
47 |
% |
(37.7 |
) |
0.9 |
NM |
||||||||||||
Income tax provision (benefit) |
(0.2 |
) |
(2.2 |
) |
(91 |
%) |
4.8 |
(4.4 |
) |
NM |
||||||||||||
Net Income (Loss) |
$ |
(7.9 |
) |
$ |
(3.4 |
) |
136 |
% |
$ |
(42.5 |
) |
$ |
5.3 |
NM |
||||||||
Net Income (Loss) Per Share |
||||||||||||||||||||||
Basic |
$ |
(0.13 |
) |
$ |
(0.07 |
) |
86 |
% |
$ |
(0.82 |
) |
$ |
0.12 |
NM |
||||||||
Diluted |
$ |
(0.13 |
) |
$ |
(0.07 |
) |
86 |
% |
$ |
(0.82 |
) |
$ |
0.09 |
NM |
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
Unaudited |
||||||
(in millions) |
||||||
As of December 31, |
2021 |
2020 |
||||
Assets |
||||||
Current assets: |
||||||
Cash and cash equivalents |
$ |
167.8 |
$ |
83.4 |
||
Accounts receivable |
57.6 |
37.3 |
||||
Prepaid expenses and other current assets |
17.4 |
8.7 |
||||
Total current assets |
242.8 |
129.4 |
||||
Property, equipment, and software - net |
34.9 |
27.7 |
||||
Goodwill |
43.8 |
43.8 |
||||
Intangibles - net |
27.6 |
35.6 |
||||
Deferred tax asset - noncurrent |
- |
4.1 |
||||
Right-of-use assets |
13.9 |
14.0 |
||||
Other assets |
1.1 |
0.6 |
||||
Total Assets |
$ |
364.1 |
$ |
255.2 |
||
Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity |
||||||
Current liabilities: |
||||||
Accounts payable |
$ |
3.2 |
$ |
5.4 |
||
Accrued and other current liabilities |
32.1 |
18.6 |
||||
Contingent consideration - current |
30.5 |
- |
||||
Total current liabilities |
65.8 |
24.0 |
||||
Contingent consideration - noncurrent |
24.2 |
36.5 |
||||
Debt - noncurrent |
- |
30.2 |
||||
Deferred tax liability - noncurrent |
1.8 |
1.5 |
||||
Other liabilities - noncurrent |
14.7 |
11.5 |
||||
Total liabilities |
106.5 |
103.7 |
||||
Commitments and contingencies |
||||||
Series A redeemable convertible preferred stock |
- |
68.8 |
||||
Stockholders' equity |
257.6 |
82.7 |
||||
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Equity |
$ |
364.1 |
$ |
255.2 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
Unaudited |
||||||||
(in millions) |
||||||||
Year Ended December 31, |
2021 |
2020 |
||||||
Operating Activities: |
||||||||
Net income (loss) |
$ |
(42.5 |
) |
$ |
5.3 |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
27.1 |
15.1 |
||||||
Impairment of capitalized website and software development costs |
0.8 |
0.2 |
||||||
Non-cash amortization of debt premium |
(0.3 |
) |
(0.4 |
) |
||||
Other (gains) losses, net |
(2.6 |
) |
0.1 |
|||||
Stock-based compensation |
17.9 |
6.4 |
||||||
Change in fair value of contingent consideration related to earnouts |
18.1 |
(0.8 |
) |
|||||
Deferred taxes |
4.4 |
(4.6 |
) |
|||||
Non-cash lease costs |
7.9 |
6.8 |
||||||
Changes in operating assets and liabilities, net of business combinations: |
||||||||
Accounts receivable |
(20.2 |
) |
1.0 |
|||||
Prepaid expenses and other assets |
(9.6 |
) |
(4.8 |
) |
||||
Accounts payable |
(2.2 |
) |
3.6 |
|||||
Accrued and other current liabilities |
16.6 |
(5.3 |
) |
|||||
Operating lease liabilities |
(7.3 |
) |
(7.1 |
) |
||||
Other liabilities |
(0.9 |
) |
(0.1 |
) |
||||
Net cash provided by operating activities |
7.2 |
15.4 |
||||||
Investing Activities: |
||||||||
Capitalized website and software development costs |
(20.7 |
) |
(17.4 |
) |
||||
Purchase of property and equipment |
(2.3 |
) |
(1.3 |
) |
||||
Business combinations, net of cash acquired |
- |
(36.7 |
) |
|||||
Net cash used in investing activities |
(23.0 |
) |
(55.4 |
) |
||||
Financing Activities: |
||||||||
Proceeds from issuance of common stock upon initial public offering, net of underwriting discounts and commissions |
140.0 |
- |
||||||
Issuance of Class A common stock |
- |
54.3 |
||||||
Repurchase of Class A common stock |
(0.5 |
) |
(1.2 |
) |
||||
Repurchase of Class F common stock |
(12.4 |
) |
- |
|||||
Repurchase of stock options |
(1.4 |
) |
(0.4 |
) |
||||
Repurchase of Series A redeemable convertible preferred stock |
(2.1 |
) |
- |
|||||
Tax payments related to net-share settlements on restricted stock units |
(1.9 |
) |
(0.4 |
) |
||||
Proceeds from exercise of stock options |
11.0 |
8.4 |
||||||
Principal repayment of subordinated promissory notes |
(28.5 |
) |
- |
|||||
Proceeds from line of credit |
- |
5.0 |
||||||
Payments on line of credit |
- |
(10.0 |
) |
|||||
Payment of offering costs related to initial public offering |
(4.0 |
) |
- |
|||||
Net cash provided by financing activities |
100.2 |
55.7 |
||||||
Effect of exchange rate changes on cash and cash equivalents |
- |
0.1 |
||||||
Net increase in cash and cash equivalents |
84.4 |
15.8 |
||||||
Cash and Cash Equivalents: |
||||||||
Beginning of year |
83.4 |
67.6 |
||||||
End of year |
$ |
167.8 |
$ |
83.4 |
NON-GAAP FINANCIAL MEASURE
Adjusted EBITDA
We use Adjusted EBITDA in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance.
We define Adjusted EBITDA as net income (loss) from continuing operations adjusted to exclude depreciation and amortization, interest expense, net, provision (benefit) for income taxes, and further exclude (1) loss (gain) on impairment and on disposal of assets, (2) remeasurement of the embedded derivative in long-term debt, (3) change in fair value of contingent consideration related to earnouts, (4) deferred compensation related to earnouts, (5) stock-based compensation, and (6) acquisition-related costs.
The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount is not driven by core operating results and renders comparisons with prior periods less meaningful.
We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. However, the use of this non-GAAP measure has certain limitations because it does not reflect all items of income and expense that affect our operations. Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:
In addition, Adjusted EBITDA as we define it may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.
We compensate for these limitations by reconciling Adjusted EBITDA to net loss, the most comparable GAAP financial measure. The following table presents a reconciliation of Adjusted EBITDA:
Three Months Ended |
% |
Year Ended |
% |
|||||||||||||||||||
(in millions) |
Dec 31, 2021 |
Dec 31, 2020 |
Dec 31, 2021 |
Dec 31, 2020 |
||||||||||||||||||
Net income (loss) |
$ |
(7.9 |
) |
$ |
(3.4 |
) |
136 |
% |
$ |
(42.5 |
) |
$ |
5.3 |
NM |
||||||||
Depreciation and amortization |
7.2 |
5.4 |
35 |
% |
27.1 |
15.1 |
80 |
% |
||||||||||||||
Interest expense, net |
0.2 |
0.3 |
(22 |
%) |
1.3 |
0.9 |
42 |
% |
||||||||||||||
Income tax provision (benefit) |
(0.2 |
) |
(2.2 |
) |
(91 |
%) |
4.8 |
(4.4 |
) |
NM |
||||||||||||
Other losses (gains), net |
(1.5 |
) |
0.1 |
NM |
(2.6 |
) |
0.1 |
NM |
||||||||||||||
Loss on impairment and on disposal of assets |
- |
- |
0 |
% |
0.8 |
0.2 |
207 |
% |
||||||||||||||
Change in fair value of contingent consideration related to earnouts |
8.0 |
(0.8 |
) |
NM |
18.1 |
(0.8 |
) |
NM |
||||||||||||||
Deferred compensation related to earnouts |
0.6 |
- |
NM |
2.1 |
- |
NM |
||||||||||||||||
Stock-based compensation |
7.1 |
2.1 |
235 |
% |
17.9 |
6.4 |
181 |
% |
||||||||||||||
Acquisition expense |
- |
0.6 |
(99 |
%) |
0.1 |
1.6 |
(91 |
%) |
||||||||||||||
Adjusted EBITDA |
$ |
13.5 |
$ |
2.1 |
528 |
% |
$ |
27.1 |
$ |
24.4 |
11 |
% |
||||||||||
Net income (loss) margin |
(8 |
%) |
(6 |
%) |
(11 |
%) |
2 |
% |
||||||||||||||
Adjusted EBITDA margin1 |
14 |
% |
4 |
% |
7 |
% |
10 |
% |
______________ |
|
(1) |
Represents adjusted EBITDA as a percentage of revenue. |
FINANCIAL OUTLOOK
We are providing guidance for the first quarter 2022:
Brand investments will create variability in our quarterly margins, but we expect year-over-year accretion in our 2022 annual Adjusted EBITDA margin.
NerdWallet has not provided a quantitative reconciliation of forecasted GAAP net income (loss) to forecasted total Adjusted EBITDA within this communication because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to: income taxes which are directly impacted by unpredictable fluctuations in the market price of the company's capital stock; depreciation and amortization expense from new acquisitions; impairments of assets; gains or losses on extinguishment of debt and acquisition-related costs. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, many of which are outside of NerdWallet's control. For more information regarding the non-GAAP financial measures discussed in this communication, please see "Non-GAAP Financial Measure" above.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including, but not limited to, the statements in the section titled "Financial Outlook." In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will" or "would" or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
You should not rely on forward-looking statements as predictions or guarantees of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors that may cause actual results or outcomes to be materially different from any future results expressed or implied by these forward-looking statements, including those factors described in the Company's final prospectus dated November 3, 2021 and filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933 and in other filings we make with the SEC from time to time.
The forward-looking statements made in this press release speak only as of the date hereof. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220224005477/en/
Investor Relations:
Jack Nichols
[email protected]
Media Relations:
Keely Spillane
[email protected]
Source: NerdWallet, Inc.