NerdWallet 2025 Q1 Earnings Revenue Soars 29%, Net Income Plummets 82%

NerdWallet (NRDS) reported its fiscal 2025 Q1 earnings on May 6, 2025, showcasing a substantial 29.2% increase in total revenue, reaching $209.20 million compared to $161.90 million in 2024 Q1. Despite this growth, the company's net income saw a significant decline, dropping 81.8% to $200,000 from $1.10 million in the previous year. Revenue exceeded expectations, but guidance for Q2 suggests a potential revenue range of $192 million to $200 million, reflecting a promising 30% year-over-year increase at the midpoint.

Revenue
NerdWallet's revenue growth was driven by strong performances across various segments. The Insurance sector, with a remarkable 246% year-over-year growth, contributed $74 million. Credit cards faced challenges, declining 24% to $38 million. Loans saw a 12% rise to $24 million, boosted by the acquisition of Next Door Lending. Other verticals generated $73.20 million, while SMB products and Emerging verticals contributed $28.90 million and $44.30 million, respectively, culminating in a total revenue of $209.20 million.

Earnings/Net Income
The earnings per share (EPS) remained stable at $0.00 in 2025 Q1 compared to 2024 Q1, reflecting a consistent performance. However, net income experienced a significant drop to $200,000, an 81.8% decrease from the $1.10 million reported in 2024 Q1, highlighting challenges in maintaining profitability.

Price Action
The stock price of NerdWallet edged up by 1.32% during the latest trading day, despite experiencing a 6.93% drop over the most recent full trading week and a 1.51% decrease month-to-date.

Post-Earnings Price Action Review
Over the past five years, investing in NerdWallet shares following a revenue beat and holding for 30 days has resulted in a -2.95% strategy return, significantly underperforming the benchmark return of 35.24%. The strategy's excess return was -38.19%, with a Sharpe ratio of -0.05, indicating a poor risk-adjusted performance. The maximum drawdown of -23.32% reflects substantial potential losses, while the compound annual growth rate (CAGR) of -1.13% and volatility of 21.75% highlight the strategy's riskiness and underperformance relative to broader market benchmarks.

CEO Commentary
Tim Chen, Co-Founder & Chief Executive Officer, highlighted NerdWallet's impressive 29% year-over-year revenue growth, largely driven by robust performances in the Insurance sector and a recovery in the personal loans and mortgages segments. Chen emphasized the company's strategic focus on quality relationships over sheer user numbers, noting that "MUU growth has been inversely correlated with revenue for some time now." He expressed optimism about NerdWallet's continued investments in vertical integration and improved user experiences, aiming for long-term growth despite economic uncertainties.

Guidance
For Q2 2025, NerdWallet projects revenue between $192 million and $200 million, indicating a 30% year-over-year increase at the midpoint. The company expects non-GAAP operating income to range from $14 million to $18 million. For the full year 2025, non-GAAP operating income is forecasted to be approximately $55 million to $66 million, reflecting potential indirect impacts from economic uncertainties yet benefiting from stronger than expected Q1 results.

Additional News
NerdWallet has recently made strategic advancements, including the acquisition of Next Door Lending, which is expected to bolster its mortgage offerings. Additionally, the company announced a new $50 million share repurchase program, succeeding its previous $30 million program. This move aims to optimize capital structure and enhance shareholder value. In executive news, NerdWallet appointed Nicholas Tatum as Chief Accounting Officer and Principal Accounting Officer, effective February 22, 2025, bringing extensive financial expertise to the leadership team.