What happened
Shares of NerdWallet (NRDS +0.88%) fell 8.1% on Thursday, according to data provided by S&P Global Market Intelligence, after the personal finance company announced a wider-than-expected loss for the second quarter of 2023.
NerdWallet's results were technically mixed relative to expectations: Revenue climbed 14% year over year to $143.3 million, beating estimates calling for $137 million. But the company also posted a net loss of $0.14 per share for the quarter, badly missing most analysts' predictions for a loss of $0.03 per share.
NASDAQ: NRDS
Key Data Points
So what
NerdWallet co-founder and CEO Tim Chen noted that the "brand's resonance with consumers and SMBs helped to mitigate headwinds in lending and insurance."
Indeed, NerdWallet's loans segment saw revenue decline 4% year over year to $23.1 million, while its credit cards business endured a 6% revenue decline to $51.2 million. The "other verticals" segment, on the other hand -- which includes banking, insurance, and SMB (small and medium-sized business) products -- delivered an impressive 48% year-over-year revenue increase to $69 million.
CFO Lauren StClair noted the company technically beat its own revenue guidance and touched on the issue of profitability, stating:
We are making disciplined investments in building our brand awareness and engaging our user base, and we are making progress toward returning to our historical Adjusted EBITDA margin levels. Looking ahead, we are focused on driving incremental efficiencies while optimizing for investment levels that balance both shorter-term profitability considerations with longer-term growth opportunities.
Now what
For the third quarter of 2023, NerdWallet expects revenue ranging from $142 million to $147 million, good for a modest 1% growth at the midpoint and roughly in line with Wall Street's expectations. Nerdwallet also guided for third-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to arrive in the range of $18 million to $20 million.
In the end, even as NerdWallet continues to deliver decent top-line results, it's no surprise to see shares trading down today as investors wait to see some evidence that the company can achieve its goals to drive profitability higher.
