What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-20 compared with 2023-02-23 · 191 added, 277 removed, 792 unchanged (37% of the section changed)

7 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

6 unchanged sentences

We have audited the accompanying consolidated balance sheets of NerdWallet, Inc.

and subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

and subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022 and the results of its operations and cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

39 unchanged sentences

Total current liabilities 37.3 72.4

Contingent consideration—noncurrent — 24.2

Other liabilities—noncurrent 14.4 11.6

7 unchanged sentences

Additional paid-in capital 483.7 427.3

Accumulated other comprehensive income (loss) ( 0.9 ) 0.5

Accumulated other comprehensive loss

( 0.3 ) ( 0.9 )

Accumulated deficit ( 116.5 ) ( 84.7 )

23 unchanged sentences

Income tax provision (benefit) 18.1 ( 9.8 ) 4.8

Net Income (Loss) $ ( 10.2 ) $ ( 42.5 ) $ 5.3

Net Income (Loss) Per Share Attributable to Common Stockholders

$ ( 11.8 ) $ ( 10.2 ) $ ( 42.5 )

Net Loss Per Share Attributable to Common Stockholders

Basic $ ( 0.15 ) $ ( 0.14 ) $ ( 0.82 )

Diluted $ ( 0.15 ) $ ( 0.14 ) $ ( 0.82 )

Weighted-average Shares Used in Computing Net Income (Loss) Per Share Attributable to Common Stockholders

Weighted-average Shares Used in Computing Net Loss Per Share Attributable to Common Stockholders

Basic 76.7 70.6 51.9

3 unchanged sentences

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions)

Year Ended December 31, 2023 2022 2021

Net Income (Loss) $ ( 10.2 ) $ ( 42.5 ) $ 5.3

$ ( 11.8 ) $ ( 10.2 ) $ ( 42.5 )

Other Comprehensive Income (Loss):

Change in foreign currency translation 0.6 ( 1.4 ) ( 0.1 )

Comprehensive Income (Loss) $ ( 11.6 ) $ ( 42.6 ) $ 5.9

Comprehensive Loss

$ ( 11.2 ) $ ( 11.6 ) $ ( 42.6 )

See notes to consolidated financial statements.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Accumulated Deficit Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Stockholders’ Equity

(in millions, except share amounts which are in thousands)

Shares Amount Shares Amount

Balance as of December 31, 2019 42,308 $ — 780 $ ( 1.6 ) $ 29.8 $ — $ ( 20.2 ) $ 8.0

Issuance of Class A common stock in connection with equity offering 3,879 — 54.3 54.3

Issuance of Class A common stock upon exercise of stock options 2,701 — 8.4 8.4

Issuance of Class A common stock pursuant to settlement of restricted stock units 84 — —

Class A common stock surrendered for employees’ tax liability upon settlement of restricted stock units ( 26 ) — ( 0.4 ) ( 0.4 )

Repurchase of stock options ( 0.4 ) ( 0.4 )

Repurchase of Class A common stock ( 93 ) — ( 1.2 ) ( 1.2 )

Constructive retirement of treasury stock ( 780 ) 1.6 ( 1.6 ) —

Stock-based compensation 8.1 8.1

Other comprehensive income 0.6 0.6

Net income 5.3 5.3

Shares Amount

Balance as of December 31, 2020 48,853 $ — $ 99.8 $ 0.6 $ ( 17.7 ) $ 82.7

13 unchanged sentences

Balance as of December 31, 2021 66,722 $ — $ 331.6 $ 0.5 $ ( 74.5 ) $ 257.6

Issuance of Class A common stock upon exercise of stock options 1,346 — 7.7 7.7

Vesting of early exercised stock options — — 0.2 0.2

Issuance of Class A common stock pursuant to settlement of restricted stock units 1,521 — —

Class A common stock withheld related to net share settlement of restricted stock units ( 44 ) — ( 0.6 ) ( 0.6 )

Issuance of Class A common stock under Employee Stock Purchase Plan 640 — 4.5 4.5

Issuance of Class A common stock for business combination 4,935 — 43.2 43.2

Stock-based compensation 40.7 40.7

Other comprehensive loss ( 1.4 ) ( 1.4 )

Net loss ( 10.2 ) ( 10.2 )

Balance as of December 31, 2022 75,120 $ — $ 427.3 $ ( 0.9 ) $ ( 84.7 ) $ 341.7

NERDWALLET, INC.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Stockholders’ Equity

Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Stockholders’ Equity

(in millions, except share amounts which are in thousands)

2 unchanged sentences

Issuance of Class A common stock upon exercise of stock options 1,584 — 10.2 10.2

Vesting of early exercised stock options

Issuance of Class A common stock pursuant to settlement of restricted stock units

1 unchanged sentence

Issuance of Class A common stock under Employee Stock Purchase Plan 346 — 3.0 3.0

Issuance of Class A common stock for business combination 4,935 — 43.2 43.2

Repurchase of Class A common stock ( 2,268 ) — ( 20.0 ) ( 20.0 )

Stock-based compensation 44.3 44.3

Other comprehensive loss ( 1.4 ) ( 1.4 )

Other comprehensive income

Net loss ( 11.8 ) ( 11.8 )

7 unchanged sentences

Operating Activities:

Net income (loss) $ ( 10.2 ) $ ( 42.5 ) $ 5.3

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

$ ( 11.8 ) $ ( 10.2 ) $ ( 42.5 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 48.2 37.0 27.1

4 unchanged sentences

Other, net 2.9 1.3 ( 2.1 )

Changes in operating assets and liabilities, net of business combinations:

Changes in operating assets and liabilities, net of business combination:

Accounts receivable 10.7 ( 18.7 ) ( 20.2 )

9 unchanged sentences

Purchase of property and equipment ( 0.7 ) ( 4.6 ) ( 2.3 )

Business combinations, net of cash acquired ( 68.1 ) — ( 36.7 )

Business combination, net of cash acquired

Net cash used in investing activities ( 29.5 ) ( 100.3 ) ( 23.0 )

3 unchanged sentences

Payments on line of credit ( 7.5 ) ( 70.0 ) —

Payment of debt issuance costs

Principal repayment of subordinated promissory notes — — ( 28.5 )

5 unchanged sentences

Payment of offering costs related to initial public offering — ( 1.0 ) ( 4.0 )

Issuance of Class A common stock — — 54.3

Repurchase of Class A common stock ( 20.0 ) — ( 0.5 )

43 unchanged sentences

Concentrations of Credit Risk— Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The Company deposits cash with high credit quality financial institutions.

All noninterest-bearing accounts are fully insured regardless of the balance of the account.

This coverage is available at all FDIC member institutions.

The Company uses Silicon Valley Bank, which is an FDIC insured institution.

While the Company deposits cash and cash equivalents with high credit quality financial institutions, including First Citizens Bank & Trust Company (through its Silicon Valley Bank division), HSBC and JPMorgan Chase Bank, N.A., to lessen the Company’s exposure, such cash deposits may exceed federally insured limits at these financial institutions.

To mitigate the risk associated with deposits exceeding federally insured limits, the Company manages exposure by utilizing deposit accounts which include sweep features to third-party money market funds, with total money market funds of $ 89.8 million and $ 75.4 million as of December 31, 2023 and 2022, respectively.

Based on these facts, collectability of bank balances appears to be adequately assured.

The Company had two customers which accounted for 15 % and 12 % of total accounts receivable as of December 31, 2022, and two customers which each accounted for 11 % of total accounts receivable as of December 31, 2021.

The Company had one customer which accounted for 12 % of revenue in 2022, and no customer which accounted for more than 10% of revenue in 2021 or 2020.

The Company had one customer which accounted for 14 % of total accounts receivable as of December 31, 2023, and two customers which accounted for 15 % and 12 % of total accounts receivable as of December 31, 2022.

The Company had two customers which accounted for 13 % and 11 % of revenue in 2023, one customer which accounted for 12 % of revenue in 2022, and no customer which accounted for more than 10% of revenue in 2021.

Under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606), the Company’s customers are considered to be financial services providers (e.g., banks, credit card issuers, lenders, investment brokers and other entities) that seek to reach and receive leads, matches and referrals to the Company’s substantial audience of consumers (including SMBs) in exchange for agreed-upon fees.

20 unchanged sentences

The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers.

Trade Accounts Receivable — Trade accounts receivable are recorded at the invoiced amount or amounts due from customers via affiliate relationships at the end of each month.

4 unchanged sentences

If the Company becomes aware of changes in circumstances that are indicative of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration in operating results or changes in financial position, estimates of the allowance for credit losses are further adjusted.

The allowance for doubtful accounts was $ 1.4 million and immaterial as of December 31, 2022 and 2021, respectively.

The allowance for doubtful accounts was $ 1.3 million and $ 1.4 million as of December 31, 2023 and 2022, respectively.

The Company does no t have any off-balance-sheet credit exposure related to its customers.

19 unchanged sentences

As of December 31, 2023, the Company has not recorded material measurement period adjustments in connection with its business combinations.

Contingent Consideration — The fair value measurements of contingent consideration liabilities established in connection with business combinations are determined as of the acquisition date based on significant unobservable inputs, including forecasted revenues and costs of the acquired companies, the probability of meeting certain revenue or earnings targets defined in the merger agreements, and the discount rate.

Contingent consideration liabilities are remeasured to fair value at each subsequent reporting date until the related contingency is resolved, with the remeasurement adjustment reported in the consolidated statement of operations.

Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales.

Significant judgment is employed in determining the appropriateness of these inputs.

Changes to the inputs described above could have a material impact on the Company’s financial position and results of operations in any given period.

Contingent Consideration — The fair value measurements of contingent consideration liabilities established in connection with business combinations were determined as of the acquisition date based on significant unobservable inputs, including forecasted revenues and costs of the acquired companies, the probability of meeting certain revenue or earnings targets defined in the merger agreements, and the discount rate.

Contingent consideration liabilities were remeasured to fair value at each subsequent reporting date until the related contingency was resolved, with the remeasurement adjustment reported in the consolidated statement of operations.

Changes to the fair value of the contingent consideration liabilities resulted from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales.

Significant judgment was employed in determining the appropriateness of these inputs.

Goodwill — The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable.

6 unchanged sentences

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Impairment of Long-Lived Assets — The Company reviews long-lived assets, including property and equipment, capitalized software development costs, and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Impairment of Long-Lived Assets — The Company reviews long-lived assets, including property and equipment, capitalized software development costs, intangible assets and right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

Recoverability of assets or asset groups to be held and used is measured first by a comparison of the carrying amount of an asset or asset group to future undiscounted net cash flows expected to be generated by the asset or asset group.

8 unchanged sentences

For revenue generated from revenue per action or revenue per funded loan arrangements in which fees are earned from customers for approved actions such as when credit cards are issued to consumers or when loans to consumers are funded, the Company’s contractual right to fees is not contemporaneous with the satisfaction of the performance obligation to match the consumer with the customer.

As such, the Company records a contract asset at each reporting period-end related to the estimated variable consideration on fees for which the Company has satisfied the related performance obligation but are still pending the financial product approval before the Company has a contractual right to payment.

As such, the Company records a contract asset at the end of each reporting period related to the estimated variable consideration on fees for which the Company has satisfied the related performance obligation but are still pending the financial product approval before the Company has a contractual right to payment.

This estimate is based on the Company’s historical closing rates and historical time between when a consumer request for a financial product is delivered to the customer and when the financial product is approved by the customer.

The time between satisfaction of the Company ’ s performance obligation and when the Company’s right to consideration becomes unconditional is generally less than 90 days and no significant judgment is required in determining whether the estimate of variable consideration should be constrained.

The Company records a deferred revenue liability for fees received related to unsatisfied performance obligations at the end of each reporting period, with the performance obligations expected to be satisfied in the following reporting period.

For revenue generated from revenue per lead or revenue per click in which fees are earned from customers when a consumer clicks on a tagged link to the customer’s website or lead is delivered to the customer, the Company ’ s contractual right to fees is contemporaneous with the satisfaction of the performance obligation to match the consumer with the customer .

2 unchanged sentences

The term between invoicing and when payment is due is generally 30 days or less.

Cost of Revenue —Cost of revenue consists primarily of amortization expense and impairment charges associated with capitalized software development costs and developed technology;

Cost of Revenue —Cost of revenue consists primarily of amortization expense associated with capitalized software development costs and developed technology;

credit scoring fees and account linking fees;

41 unchanged sentences

As a result, the Company’s financial condition and results of operations within its consolidated financial statements may not be comparable to those of other companies that have adopted new or revised accounting standards at an earlier date.

Recently Adopted Accounting Pronouncements — In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, Measurement of Credit Losses on Financial Instruments , establishing ASC Topic 326, and amended the guidance thereafter (ASC 326).

ASC 326 requires the measurement and recognition of expected credit losses for financial assets held at amortized cost;

the Company’s financial assets that are in the scope of ASC 326 includes the Company’s accounts receivable, certain financial instruments and contract assets.

ASC 326 replaces the prior incurred loss impairment model with an expected loss methodology, which results in more timely recognition of credit losses.

The Company adopted the provisions of ASC 326 as of January 1, 2022 (two years after the effective date for public business entities due to the Company’s election under its EGC status), and such adoption did not have an impact on the Company’s financial condition and results of operations within its consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted — In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (ASU 2023-07), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance in ASU 2023-07 will be required to be applied for the year ending December 31, 2024 and for the interim periods within the following year ending December 31, 2025.

Early adoption is permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information.

The guidance in ASU 2023-09 is effective on an annual basis and will be required to be applied for the year ending December 31, 2025 for public business entities, or the year ending December 31, 2026 for EGCs under the JOBS Act accounting election.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The guidance should be applied on a prospective basis, but retrospective application is permitted.

NERDWALLET, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In October 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), to address diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination.

The guidance in ASU 2021-08 states that an acquirer should recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC Topic 606, Revenue from Contracts with Customers .

The amendments in ASU 2021-08 will be applied prospectively to any business combinations that occur during or after the fiscal year of adoption.

The Company adopted the provisions of ASU 2021-08 as of January 1, 2022, and such adoption did not have an impact on the Company’s financial condition and results of operations within its consolidated financial statements.

Recently Issued Accounting Pronouncement Not Yet Adopted — In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) , establishing ASC Topic 848, and amended the guidance thereafter (ASC 848).

ASC 848 provides optional expedients and exceptions for a limited period of time for accounting for contracts, hedging relationships and other transactions affected by the London Interbank Offered Rate (LIBOR) or another reference rate expected to be discontinued.

Optional expedients can be applied through December 31, 2024.

Reference rate reform has not had a material impact with respect to any of the Company’s existing contracts, therefore, the Company has not been required to elect to apply any of the optional practical expedients and exceptions under ASC 848 as of the date of the financial statements.

The Company will assess future changes in its contracts, including modifications, and the potential impact of electing to apply the optional practical expedients and exceptions under ASC 848 as they occur, but does not expect their application will have a material effect on its financial position or results of operations in its consolidated financial statements.

Given the disclosure focus of both ASU 2023-07 and ASU 2023-09, the applications of these new standards will not have an effect on the Company’s financial position and results of operations in its consolidated financial statements.

The following presents a disaggregation of the Company’s revenue based on product category:

3 unchanged sentences

Loans 101.6 109.1 126.4

Other verticals 219.5 129.4 85.8

101.2 91.4 39.8

Emerging verticals

186.9 128.1 89.6

Total revenue $ 599.4 $ 538.9 $ 379.6

The contract asset recorded within prepaid expenses and other current assets on the consolidated balance sheet related to estimated variable consideration was $ 5.5 million and $ 5.8 million as of December 31, 2023 and 2022, respectively.

Credit cards revenue is primarily generated through revenue per action arrangements, Loans revenue is primarily generated through revenue per funded loan and revenue per lead arrangements, and Other verticals revenue is primarily generated through revenue per action, revenue per click and revenue per funded loan arrangements.

Credit cards revenue is primarily generated through revenue per action arrangements.

Loans revenue is primarily generated through revenue per funded loan and revenue per lead arrangements.

SMB products revenue is primarily generated through revenue per funded loan, revenue per action and revenue per lead arrangements.

Emerging verticals revenue is primarily generated through revenue per click, revenue per action and revenue per lead arrangements.

Fair Value Measurements

8 unchanged sentences

$ 89.8 $ 2.1 $ — $ 91.9

Contingent consideration $ — $ — $ 30.9 $ 30.9

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in millions) Quoted Prices

7 unchanged sentences

Contingent consideration $ — $ — $ 30.9 $ 30.9

The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers.

Level 3 liabilities consist entirely of contingent consideration, and the changes in fair values are as follows:

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Level 3 liabilities previously consisted entirely of contingent consideration, and the changes in fair values were as follows:

(in millions)

4 unchanged sentences

Balance as of end of year $ — $ 30.9

Contingent consideration liabilities related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs.

The contingent consideration liability is the estimated fair value of the earnout payments for the Fundera, Inc.

(Fundera) and Know Your Money (KYM) business combinations.

See Note 5–Business Combinations for additional information on the contingent consideration for each of the acquisitions.

As of December 31, 2022, Fundera’s revenue and profitability milestones for 2022 have been achieved and the contingent consideration liability was recorded at the full payout amount.

The fair values of the estimated contingent considerations were previously determined based on the Company’s evaluation of the probability and amount of earnout that will be achieved based on expected future performance by the acquired entity.

The Monte Carlo simulation models simulated the applicable figures over the earnout periods to calculate the estimated earnout payments.

These payments were then discounted to present value based on the expected payment dates of the contingent considerations.

The weighted average volatility was 45.5 % and the weighted average discount rate was estimated to be 9.0 % as of December 31, 2021.

Contingent consideration liabilities related to acquisitions were measured at fair value each reporting period using Level 3 unobservable inputs.

The contingent consideration liability was the estimated fair value of the earnout payments for the Fundera, Inc.

(Fundera) and Know Your Money (KYM) business combinations in 2020.

As of December 31, 2022, Fundera’s revenue and profitability milestones for 2022 were achieved and the contingent consideration liability was recorded at the full payout amount, with the contingent consideration liability paid in full during 2023.

The fair values of the estimated contingent considerations were previously determined based on the Company’s evaluation of the probability and amount of earnout that would be achieved based on expected future performance by the acquired entity.

Significant Consolidated Balance Sheet Components

7 unchanged sentences

Total prepaid expenses and other current assets $ 22.5 $ 18.3

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, equipment and software, net consisted of the following:

9 unchanged sentences

The Company capitalized $ 34.0 million, $ 34.1 million and $ 24.2 million of software development costs, and recorded amortization expense of $ 28.9 million, $ 22.1 million and $ 16.7 million, during 2023, 2022 and 2021, respectively.

Losses on disposal related to software development costs were $ 0.8 million and $ 0.2 million for 2021 and 2020, with no losses in 2022.

Depreciation and amortization expense, exclusive of amortization of capitalized software development costs and intangible assets, was $ 1.9 million, $ 2.4 million and $ 1.0 million in 2022, 2021 and 2020, respectively.

Losses on disposal related to software development costs were $ 0.8 million for 2021, with no losses in 2023 or 2022.

Depreciation and amortization, exclusive of amortization of capitalized software development costs and intangible assets, was $ 2.3 million, $ 1.9 million and $ 2.4 million in 2023, 2022 and 2021, respectively.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued expenses and other current liabilities consisted of the following:

3 unchanged sentences

Accrued compensation 4.5 5.6

Deferred revenue

Operating lease liabilities 3.4 3.1

5 unchanged sentences

As of December 31, 2023 2022

Unrecognized tax benefit liability

Operating lease liabilities 6.2 9.6

2 unchanged sentences

Total other liabilities—noncurrent $ 14.4 $ 11.6

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

Business Combination

On the Barrelhead, Inc.

10 unchanged sentences

Purchase Consideration $ 118.2

(1) Includes $ 12.2 million of cash which is held in escrow for the settlement of breaches, if any, of certain representations, warranties, agreements and covenants.

(1) Includes $ 12.2 million of cash which was deposited in escrow for the settlement of breaches, if any, of certain representations, warranties, agreements and covenants.

(2) Represents the aggregate fair value of 4.9 million shares issued of the Company’s Class A common stock based on the closing price of the stock on the acquisition date of July 11, 2022, which was $ 8.75 per share.

1 unchanged sentence

Half of the stock consideration is subject to a lockup arrangement whereby such shares may not be sold or otherwise transferred prior to expiration of the 24 -month period following the acquisition date.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Retention Agreements and Inducement Awards

1 unchanged sentence

Cash awards under these retention agreements are payable in equal installments on the first, second and third anniversary dates of the closing of the acquisition.

Also concurrently with the closing of the acquisition, the Compensation Committee of the Company’s Board of Directors granted restricted stock unit (RSU) awards under the NerdWallet, Inc.

Also concurrently with the closing of the acquisition, the Compensation Committee of the Company’s Board of Directors granted RSU awards under the NerdWallet, Inc.

2022 Inducement Equity Incentive Plan (the Inducement Plan) to employees of OTB who were offered employment with the Company, which RSU awards had an aggregate grant date fair value on the acquisition date of $ 17.5 million, including $ 12.8 million of RSU awards to the co-founders of OTB, $ 2.3 million of RSU awards to six non-management employees of OTB and $ 2.4 million of RSU awards to all fourteen employees of OTB.

6 unchanged sentences

The value of RSU awards under the Inducement Plan are recognized as stock-based compensation ratably over the respective vesting terms of the awards.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Purchase Accounting

20 unchanged sentences

Total intangible assets $ 50.1 4.9

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The estimated fair value of acquired intangible assets was determined using the multi-period excess earnings method of the income approach for developed technology, and the replacement cost method for customer relationships.

5 unchanged sentences

Due to the extensive level of integration of OTB’s technology and operations into the Company’s operations following the closing of the acquisition, the Company is not able to quantify the acquisition’s contribution following the closing of the acquisition to the Company’s revenue and operating loss for 2022, as the ability to objectively quantify such amounts would require a significant level of estimation.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information is presented as if the OTB acquisition, including the related debt financing, was completed on January 1, 2021.

The following unaudited pro forma financial information for the years ended December 31, 2022 and 2021 is presented as if the OTB acquisition, including the related debt financing, was completed on January 1, 2021.

The pro forma financial information includes the historical operating results of the Company and OTB prior to the acquisition, with adjustments directly attributable to the acquisition.

8 unchanged sentences

Future results may vary significantly from the results reflected in this unaudited pro forma financial information because of future events and transactions, as well as other factors.

Fundera —In October 2020, the Company executed a merger agreement to acquire all outstanding shares of Fundera.

Fundera is a company that provides an application that connects small businesses to lenders and covers everything from loans to legal services, free financial content and one-on-one access to experienced lending.

Fundera was founded in 2013 and maintains an office in New York, NY.

The acquisition date aggregate purchase price was $ 65.1 million, which consisted of the following:

(in millions) Fair Value

Fair value of contingent consideration 35.9

Total purchase price $ 65.1

The total closing consideration for the Fundera acquisition was $ 29.2 million in cash, of which $ 4.6 million in cash was held in escrow for the settlement of general representation and warranty provisions.

Further the Company could make up to two additional earnout payments based on achievement of Fundera’s future revenue and profitability milestones for 2021 and 2022.

These additional payments, to the extent earned, will be payable in cash.

See Note 3–Fair Value Measurements for further information on contingent consideration and additional payments made.

The fair value of earnouts, which are subject to the recipients continued employment services was $ 2.7 million and was excluded from the aggregate purchase price and accounted for separately from the business combination.

The amounts were recognized as compensation expense as earned through 2022, classified as research and development and sales and marketing expenses based on the recipients’ job functions, in the consolidated statement of operations.

The Company has recorded a deferred compensation liability related to earnouts of $ 1.7 million as of December 31, 2022, which is included within accrued expenses and other current liabilities on the consolidated balance sheet.

As of December 31, 2022, Fundera’s revenue and profitability milestones for 2022 have been achieved and the contingent consideration liability was recorded at the full payout amount of $ 30.9 million.

The estimated fair value of the contingent consideration was previously determined using a Monte Carlo simulation model, based upon available information and certain assumptions, known at the time the estimate was made, which management believes were reasonable.

At the time of acquisition, certain stock options held by Fundera employees were replaced with RSUs by the Company with a total fair value of $ 1.9 million.

The vesting of these RSUs is contingent on continued employment, and was excluded from the aggregate purchase price.

These awards are recognized as stock-based compensation ratably over the remaining vesting term through 2024.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The acquisition has been accounted for as a business combination.

The allocation of purchase price to the assets acquired and liabilities assumed is as follows:

(in millions) Fair Value

Net tangible assets $ 1.0

Fixed assets 0.2

Intangible assets 29.4

Deferred tax liability ( 2.8 )

Goodwill 37.3

Total purchase price $ 65.1

The acquired intangible assets are definite-lived assets consisting of user base, customer relationships, developed technology and trade name.

The estimated fair value was determined using the excess earnings method for user base, with-and-without method for acquired customer relationships, and relief-from-royalty method for the acquired technology and trade name.

The fair value of the intangible assets with definite lives is as follows:

(dollars in millions) Fair Value Weighted Average Useful Life (Years)

User base $ 19.4 7.0

Customer relationships 5.0 3.0

Technology 4.6 3.0

Trade name 0.4 0.5

Total intangible assets $ 29.4 5.6

The Company recorded goodwill of $ 37.3 million, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed.

The goodwill is primarily attributable to Fundera as a going concern, which represents the ability of the Company to earn a higher return on the collection of assets and business of Fundera than if those assets and business were to be acquired and managed separately.

The benefit of access to the workforce is an additional element of goodwill.

For income tax purposes, the acquisition was a stock purchase and goodwill is not tax deductible.

Acquisition-related costs of $ 1.0 million were incurred in 2020 and are included in general and administrative expense on the consolidated statement of operations.

During the period from the acquisition date through December 31, 2020, the Company recognized revenue and loss before income tax for Fundera of $ 2.0 million and $ 0.3 million, respectively.

Pro Forma Results (Unaudited)

The following pro forma combined results of operations are provided for the years ended December 31, 2020 and 2019, as though the Fundera acquisition had been completed as of January 1, 2019.

These supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future.

The pro forma results of operations do not include any cost savings or other synergies that resulted, or may result, from the Fundera acquisition or any estimated costs that will be incurred to integrate Fundera.

Future results may vary significantly from the results reflected in this pro forma financial information because of future events and transactions, as well as other factors.

The Company’s historical financial information was adjusted based on currently available information and certain assumptions that the Company believes are reasonable under the circumstances.

The unaudited supplemental pro forma information includes adjustments to amortization and depreciation for acquired intangible assets and property and equipment, adjustments to stock-based compensation, the purchase accounting effect on interest expense, and transaction costs:

(in millions)

Year Ended December 31, 2020

Revenue $ 262.6

Net income $ 3.6

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Know Your Money —On September 30, 2020, the Company acquired all the outstanding shares of Notice Media Ltd., doing business as Know Your Money, an online provider of financial guidance and tools based in the United Kingdom.

The aggregate purchase price transferred for KYM was $ 13.7 million, which consisted of the following:

(in millions) Fair Value

Fair value of contingent consideration 1.4

Total purchase price $ 13.7

The Company paid $ 12.3 million in initial cash consideration and could have made up to two additional earnout payments based on certain defined operating metrics during the earnout periods January 1, 2021 through December 31, 2021 and January 1, 2022 through December 31, 2022.

These additional payments, to the extent earned, would be payable in cash.

As part of the transaction, the Company entered into additional earnouts which were subject to the recipients’ continued service.

The fair value of such earnouts was $ 5.9 million, which was excluded from the aggregate purchase price and accounted for separately from the business combination.

The amounts were recognized as compensation expense as earned over the earnout periods.

The estimated fair value of the contingent consideration related to KYM was immaterial as of December 31, 2022, and is included in contingent consideration in the consolidated balance sheet.

The acquisition has been accounted for as a business combination.

The allocation of purchase price to the assets acquired and liabilities assumed is as follows:

(in millions) Fair Value

Net tangible assets $ 1.5

Fixed assets 0.2

Intangible assets 7.4

Deferred tax liability ( 1.4 )

Total purchase price $ 13.7

The acquired intangible assets are definite-lived assets consisting of customer relationships and developed technology.

The estimated fair values of the customer relationships were determined using the excess earning method and the developed technology was determined using the relief from royalty method.

The fair value of the intangible assets with definite lives is as follows:

(dollars in millions) Fair Value Weighted Average Useful Life (Years)

Customer relationships $ 6.0 5.0

Technology 1.4 3.0

Total intangible assets $ 7.4 4.6

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded goodwill of $ 6.0 million, which represents the excess of the purchase price over the estimated fair value of tangible and intangible assets acquired, net of the liabilities assumed.

The goodwill is primarily attributable to KYM as a going concern, which represents the ability of the Company to earn a higher return on the collection of assets and business of KYM than if those assets and business were to be acquired and managed separately.

The benefit of access to the workforce is an additional element of goodwill.

For income tax purposes, the acquisition was a stock purchase and goodwill is not tax deductible.

Acquisition-related costs of $ 0.5 million were incurred in 2020 and are included in general and administrative expense on the consolidated statement of operations.

During the period from the acquisition date through December 31, 2020 the Company recognized revenue and loss before income tax for KYM of $ 1.5 million and $ 0.1 million, respectively.

Pro forma results of operations have not been provided to reflect the KYM acquisition as such results would not have been materially different from the Company’s reported results.

Goodwill and Intangible Assets

7 unchanged sentences

No impairment charges have been recorded for goodwill in 2023, 2022 or 2021.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets with definite lives related to the following:

(dollars in millions) Weighted-Average

(Years) Gross

(dollars in millions) Weighted-Average Remaining

Carrying Amount Accumulated

6 unchanged sentences

Trade names 0.4 ( 0.4 ) —

Foreign currency translation adjustment ( 0.2 )

Total $ 87.3 $ ( 40.4 ) $ 46.9

(dollars in millions) Weighted-Average

(Years) Gross

(dollars in millions) Weighted-Average Remaining

Carrying Amount Accumulated

9 unchanged sentences

Amortization expense related to definite-lived intangible assets was $ 17.3 million, $ 13.0 million and $ 8.0 million in 2023, 2022 and 2021, respectively.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Estimated future amortization expense as of December 31, 2023 is as follows:

1 unchanged sentence

Years Ending December 31, Amortization

Foreign currency translation adjustment ( 0.2 )

No impairment charges have been recorded for intangible assets for 2022, 2021 or 2020.

Credit Facility —The Company maintains a Senior Secured Credit Facilities Credit Agreement with Silicon Valley Bank, which over time has been amended and restated (as amended and restated from time to time, the Credit Agreement).

It is secured by certain qualifying accounts receivable of the Company.

The Credit Agreement provides for a revolving line of credit of up to $ 100.0 million with the option to increase up to an additional $ 25.0 million, including a letter of credit sub-facility in the aggregate amount of $ 10.0 million, and a swingline sub-facility in the aggregate amount of $ 10.0 million.

In September 2022, the Company amended and restated the Credit Agreement to extend the termination date from September 2, 2023 to December 2, 2023, and to replace the Eurodollar Loan option (which was LIBOR based) with a Secured Overnight Financing Rate (SOFR) Loan option, with any outstanding Eurodollar Loans to convert to SOFR Loans at the next interest period.

Under the terms of the Credit Agreement, revolving loans may be either SOFR Loans or ABR Loans.

Outstanding SOFR Loans incur interest at the Adjusted SOFR Rate (which is defined in the Credit Agreement as Term SOFR plus a Term SOFR Adjustment equal to 0.10 % for 1-month interest periods, 0.15 % for 3-month interest periods, and 0.25 % for 6-month interest periods, and, in each case, subject to a 1.00 % floor), plus a margin of either 3.00 % or 2.75 % depending on usage.

Outstanding ABR Loans will incur interest at the highest of the Prime Rate, as published by the Wall Street Journal, the federal funds rate in effect for such day plus 0.50 %, and 3.25 %, in each case a margin of either 1.75 % or 2.00 % will be applicable, depending on usage.

The Company is charged a commitment fee of 0.30 % per year for committed but unused amounts.

On July 7, 2022, the Company borrowed $ 70.0 million as a Eurodollar Loan under the Credit Agreement to finance the cash portion of the purchase consideration for the acquisition of OTB.

No impairment charges have been recorded for intangible assets in 2023, 2022 or 2021.

Credit Facility —On September 26, 2023, NerdWallet, Inc.

and three of its wholly-owned subsidiaries entered into a credit agreement which over time has been amended (as amended, the Credit Agreement) with JPMorgan Chase Bank, National Association.

as Administrative Agent, and a syndicate of lenders.

The Credit Agreement provides for a $ 125.0 million senior secured revolving credit facility (the Credit Facility), with the option to increase up to an additional $ 75.0 million, and is available to be used by the Company and certain of its domestic subsidiaries for general corporate purposes, including acquisitions.

The Credit Agreement includes a letter of credit sub-facility in the aggregate amount of $ 10.0 million and a swingline sub-facility in the aggregate amount of $ 10.0 million.

The Credit Facility is secured by substantially all of the Company’s assets.

The Company and each of its material domestic subsidiaries is a guarantor of all of the obligations under the Credit Facility.

The Credit Facility matures on September 26, 2028.

The Credit Facility replaced the Company’s prior credit facility under the Amended and Restated Senior Secured Credit Facilities Credit Agreement dated February 19, 2021 between the Company and Silicon Valley Bank, as administrative agent (the Prior Credit Agreement), which was terminated substantially concurrently with the Company’s entering into the Credit Agreement.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company is charged a commitment fee of between 0.25 % and 0.35 % of the total facility commitments, depending on the Company’s total net leverage ratio.

Borrowings under the Credit Facility bear interest at a floating rate and may be maintained as alternate base rate loans (tied to the prime rate, the federal funds rate plus 0.50 %, the overnight bank funding rate plus 0.50 %, or the adjusted term secured overnight financing rate (SOFR) for a one-month period plus 1.00 %) or as term benchmark loans tied to adjusted term SOFR plus 0.10 %, in each case plus a margin of 2.25 % to 2.75 % depending on the Company’s total net leverage ratio.

There was no outstanding balance under the Credit Agreement at December 31, 2023.

The available amount to borrow under the Credit Facility was $ 123.7 million at December 31, 2023, which was equal to the available amount under the agreement of $ 125.0 million net of letters of credit of $ 1.3 million.

The Credit Agreement requires the Company to comply with maximum total net leverage and minimum fixed charge coverage ratios.

In addition, the Credit Agreement contains other standard affirmative and negative covenants such as those which (subject to certain thresholds) limit the ability of the Company and its subsidiaries to, among other things, incur debt, incur liens, engage in mergers, consolidations, liquidations or acquisitions, enter into new lines of business not related to the Company’s current lines of business, make certain investments, make distributions on or repurchase its equity securities, engage in transactions with affiliates, or enter into certain hedging obligations.

Events of default under the Credit Agreement include, among other things, payment defaults, breaches of representations, warranties or covenants, defaults under material indebtedness, certain events of bankruptcy or insolvency, judgment defaults, certain defaults or events relating to employee benefit plans or a change in control of the Company.

The events of default would permit the lenders to terminate commitments and accelerate the maturity of borrowings under the Credit Facility if not cured within applicable grace periods.

The Company was in compliance with all covenants as of December 31, 2023.

The Company’s Prior Credit Agreement with Silicon Valley Bank, which over time had been amended and restated was secured by certain qualifying accounts receivable of the Company.

The Prior Credit Agreement provided for a revolving line of credit of up to $ 100.0 million with the option to increase up to an additional $ 25.0 million, including a letter of credit sub-facility in the aggregate amount of $ 10.0 million, and a swingline sub-facility in the aggregate amount of $ 10.0 million, and had a scheduled termination date of December 2, 2023.

Under the terms of the Prior Credit Agreement, revolving loans could be either SOFR Loans or Alternative Base Rate (ABR) Loans.

Outstanding SOFR Loans incurred interest at the Adjusted SOFR Rate (which is defined in the Prior Credit Agreement as Term SOFR plus a Term SOFR Adjustment equal to 0.10 % for 1-month interest periods, 0.15 % for 3-month interest periods, and 0.25 % for 6-month interest periods, and, in each case, subject to a 1.00 % floor), plus a margin of either 3.00 % or 2.75 % depending on usage.

Outstanding ABR Loans would incur interest at the highest of the Prime Rate, as published by the Wall Street Journal, the federal funds rate in effect for such day plus 0.50 %, and 3.25 %, in each case a margin of either 1.75 % or 2.00 % will be applicable, depending on usage.

The Company was charged a commitment fee of 0.30 % per year for committed but unused amounts.

On July 7, 2022, the Company borrowed $ 70.0 million under the Prior Credit Agreement to finance the cash portion of the purchase consideration for the acquisition of OTB.

This borrowing was fully repaid by the Company in December 2022.

There were no outstanding balances under the Credit Agreement at December 31, 2022 or 2021.

The available amount to borrow under the Credit Agreement was $ 98.3 million and $ 94.7 million as of December 31, 2022 and 2021, respectively, which is equal to the available amount under the Credit Agreement of $ 100.0 million net of letters of credit with Silicon Valley Bank of $ 1.7 million and $ 5.3 million, respectively.

The Credit Agreement contains covenants limiting the Company’s ability to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock, and make investments, in each case subject to certain exceptions.

The Credit Agreement also contains financial covenants requiring the Company to maintain a minimum adjusted quick ratio and a minimum consolidated adjusted EBITDA if the adjusted quick ratio falls below a specified level, measured in each case at the end of each fiscal quarter.

The Company is required to furnish audited financial statements within 90 days after the end of the fiscal year.

The Company was in compliance with all financial covenants as of December 31, 2022 and 2021.

There was no outstanding balance under the Prior Credit Agreement at December 31, 2022.

The available amount to borrow under the Prior Credit Agreement was $ 98.3 million as of December 31, 2022, which was equal to the available amount under the Prior Credit Agreement of $ 100.0 million net of letters of credit of $ 1.7 million.

The Prior Credit Agreement contained covenants which limited the Company’s ability to, among other things, dispose of assets, undergo a change in control, merge or consolidate, make acquisitions, incur debt, incur liens, pay dividends, repurchase stock, and make investments, in each case subject to certain exceptions.

The Prior Credit Agreement also contained financial covenants which required the Company to maintain a minimum adjusted quick ratio and a minimum consolidated adjusted EBITDA if the adjusted quick ratio fell below a specified level, measured in each case at the end of each fiscal quarter.

The Company was required to furnish audited financial statements within 90 days after the end of the fiscal year.

The Company was in compliance with all covenants as of December 31, 2022.

NERDWALLET, INC.

4 unchanged sentences

The Notes bore interest on the outstanding principal amount at the rate of 4.2922 % per year and were scheduled to mature in January 2026.

In November 2021, in connection with the Company’s IPO, the Company repaid in full the outstanding principal amount of $ 28.5 million and accrued interest on the Notes.

In November 2021, in connection with the Company’s initial public offering (IPO), the Company repaid in full the outstanding principal amount of $ 28.5 million and accrued interest on the Notes.

Upon repayment of the Notes in November 2021, the Company recognized the remaining unamortized debt premium of $ 1.5 million as a gain on extinguishment of debt recorded to other gains (losses), net in the consolidated statement of operations.

21 unchanged sentences

Weighted-average discount rate 5.3 % 5.3 %

In December 2023, the Company entered into a sublease agreement for a portion of the Company’s office space in San Francisco.

The sublease expires concurrently with the corresponding head lease, but does not relieve the Company of its obligations under the head lease.

The Company determined that the sublease arrangement was an operating lease at inception, and is recognizing sublease income on a straight-line basis over the sublease term as a reduction of rent expense.

As a result of the sublease, the Company evaluated the associated head lease ROU asset and sublease-related furniture and fixtures and leasehold improvements for impairment, as the change in circumstances indicated that the carrying amount of such assets may not be recoverable.

The Company estimated the fair value of these assets as of the effective date of the sublease agreement using an income approach based on expected future cash flows from the subleased property.

The Company recognized impairment charges of $ 1.6 million related to the sublease which are included in general and administrative expense on the consolidated statements of operations, including a $ 1.4 million impairment of ROU asset and $ 0.2 million of loss on disposal of sublease-related furniture and fixtures and leasehold improvements.

Right-of-use assets were $ 7.2 million and $ 11.3 million as of December 31, 2023 and 2022, respectively.

15 unchanged sentences

(in millions, except share amounts which are in thousands) 2021

Year Ended December 31, Shares Amount Shares Amount

Year Ended December 31, Shares Amount

Balance as of beginning of year 7,687 $ 68.8

27 unchanged sentences

Additionally, the Company incurred offering costs of $ 5.2 million related to the IPO.

In November 2020, the Company entered into a Class A Common Stock Purchase Agreement to sell shares of Class A common stock at $ 14.00 per share.

The Company sold and issued approximately 3.9 million shares for gross proceeds of $ 54.3 million.

Share Repurchase Plans —The Company announced on May 2, 2023 that its Board of Directors authorized a plan under which the Company may repurchase up to $ 20 million of its Class A common stock and, following the Company’s utilization of that share repurchase authorization, the Company announced on October 26, 2023 that its Board of Directors approved a new share repurchase authorization under which the Company may repurchase up to an additional $ 30 million of its Class A common stock (collectively, the Repurchase Plans).

Subject to market conditions and other factors, the Repurchase Plans are intended to make opportunistic repurchases of the Company’s Class A common stock to reduce the Company’s outstanding share count.

Under the Repurchase Plans, shares of Class A common stock may be repurchased in the open market through privately negotiated transactions or otherwise, in accordance with applicable securities laws and other restrictions.

The Repurchase Plans do not have fixed expiration dates and do not obligate the Company to acquire any specific number of shares.

The timing and terms of any repurchases under the Repurchase Plans are at management’s discretion and depend on a variety of factors, including business, economic and market conditions, regulatory requirements, prevailing stock prices and other considerations.

Additionally, the Company may, from time to time, enter into Rule 10b-5 trading plans to facilitate repurchases.

Shares repurchased under the Repurchase Plans are retired.

During 2023, the Company repurchased 2.3 million shares of Class A common stock for $ 20.0 million, including costs associated with the repurchases.

Common Stock Transfers and Repurchase —In February 2021, the Company waived its right of first refusal and the CEO entered into a stock transfer agreement to sell approximately 0.1 million shares of Class A common stock to an existing investor at $ 14.00 per share for an aggregate purchase price of $ 2.1 million.

4 unchanged sentences

Also in January 2021, the Company entered into a repurchase agreement with the CEO to repurchase approximately 0.9 million shares of Class F common stock at $ 14.00 per share for an aggregate purchase price of $ 12.4 million.

In December 2020, the Company waived its right of first refusal and the CEO entered into a stock transfer agreement to sell approximately 0.5 million shares of Class F common stock to a third party at $ 14.00 per share for an aggregate purchase price of $ 7.7 million.

Upon consummation of the sale to the third party, the 0.5 million shares of Class F common stock were automatically converted into shares of Class A common stock on a 1 :1 basis in accordance with the rights and preferences of the Class F common stock.

No compensation expense was recorded on this transaction as management concluded that it was not a mechanism to provide compensation to employees, but rather an arms-length transaction between willing buyers and willing sellers, at a price per share determined by a third party.

NERDWALLET, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In February 2020, four new investors led an offer to purchase approximately 1.7 million shares of Class A common stock from existing employees and service providers that hold common stock and vested options at a price of $ 14.00 per share for an aggregate purchase price of $ 23.8 million.

The transaction was initiated by, and the purchase price was set by, the new investors.

No compensation expense was recorded on the transaction as management concluded that it was not a mechanism to provide compensation to employees, but rather an arms-length transaction between willing buyers and willing sellers, at a price per share determined by a third party.

Common Shares Reserved for Future Issuance

23 unchanged sentences

A summary of the Company’s stock option activity for its Plans is as follows:

(in thousands) Weighted

Price Weighted

(Years) Aggregate Intrinsic Value

(in thousands)

Intrinsic Value

(in millions)

1 unchanged sentence

6,112 $ 9.81 6.7 $ 11.9

Granted 1,324 $ 10.70

Exercised ( 1,584 ) $ 6.44

4 unchanged sentences

2,986 $ 10.21 5.7 $ 15.2

There were no options granted during 2023.

The weighted-average grant-date fair value of options granted during 2022 and 2021 was $ 5.54 and $ 9.60 per share, respectively.

21 unchanged sentences

The total consideration paid for the option cancellation was $ 2.4 million, of which $ 1.0 million was recognized as compensation expense for the excess amount paid over the purchase-date fair market value of the options.

In August 2019, the Company entered into an Option Cancellation Agreement with a former member of its Board of Directors and his affiliated entity, pursuant to which the Company cancelled an option to purchase 0.1 million shares of Class A common stock held by Camelot Financial Capital Management LLC for consideration equal to $ 10.20 per share, minus the exercise price for the shares underlying such option.

The total consideration paid to Camelot Financial Capital Management LLC was $ 0.8 million.

NERDWALLET, INC.

6 unchanged sentences

A summary of the Company’s outstanding nonvested RSUs for its Plans is as follows:

Number of Units

(in thousands) Weighted-Average

Grant Date Fair Value

(in thousands)

Weighted-Average

Nonvested as of December 31, 2022

7,405 $ 12.27

Granted 6,416 $ 10.47

2,719 $ 14.58

Vested ( 2,253 ) $ 13.73

2 unchanged sentences

6,788 $ 12.42

______________

(1) Includes 0.2 million of target award RSUs with both service-based and performance-based conditions.

During 2023, the Company granted 0.2 million of target award RSUs with both service-based and performance-based conditions to certain employees of the Company.

Recipients of these performance-based RSUs are eligible to earn between 0 % and 200 % of their target awards based upon the achievement of (i) an EBITDA-related metric and (ii) a revenue-related metric, both in fiscal year 2023, subject to certification of the attainment of the performance level.

These performance-based RSUs are also subject to service-based vesting over a period of three years .

Stock-based compensation for performance-based RSUs is recognized over the requisite service period using the accelerated attribution method based on an assessment of the probability of achieving the requisite performance metrics.

The Company recognizes forfeitures as they occur for grantees who do not fulfill the service-based conditions.

The total fair value of shares that vested under RSUs was $ 27.0 million and $ 17.7 million during 2023 and 2022, respectively.

5 unchanged sentences

Prior to capitalizing amounts related to software development costs, the Company recognized stock-based compensation related to the ESPP of $ 3.6 million and $ 6.3 million during 2023 and 2022, respectively.

Unrecognized compensation cost related to the ESPP was $ 4.0 million as of December 31, 2022, with these costs expected to be recognized over a period of 1.0 year through the end of the initial offering period.

There was no unrecognized compensation cost related to the ESPP as of December 31, 2023.

The impact of forfeitures under the ESPP are recognized as forfeitures occur.

5 unchanged sentences

Risk-free interest rate 4.9 % 2.8 %

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Stock-Based Compensation — The Company recognized stock-based compensation under the Plans and ESPP as follows:

6 unchanged sentences

In addition, stock-based compensation of $ 5.5 million, $ 6.3 million and $ 3.3 million was capitalized related to software development costs in 2023, 2022 and 2021, respectively.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company did no t recognize any tax benefit for stock-based compensation arrangements in 2022 or 2021 due to the establishment of a valuation allowance.

The Company recognized a tax benefit for stock-based compensation arrangements of $ 4.7 million in 2020, including an excess tax benefit of $ 3.7 million.

The Company did not recognize any tax benefit for stock-based compensation arrangements in 2023, 2022 or 2021 due to the valuation allowance maintained against our net U.S.

deferred tax assets.

Income (loss) before the provision for (benefit from) income taxes consisted of the following:

16 unchanged sentences

Provision for (benefit from) income taxes $ 18.1 $ ( 9.8 ) $ 4.8

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

12 unchanged sentences

Tax at effective tax rate $ 18.1 $ ( 9.8 ) $ 4.8

The valuation allowance decreased by $ 3.7 million in 2022, mainly attributable to a corresponding reduction in the valuation allowance for a deferred tax liability related to the acquisition of OTB (see further discussion below), and corresponding changes in deferred tax assets, primarily net operating loss carryforwards and federal and state tax credits, partially offset by capitalization of research and development expenses under new tax regulations effective in 2022.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

9 unchanged sentences

Lease liabilities 2.4 3.1

Other 0.1 1.2

Total gross deferred tax assets 66.7 49.5

13 unchanged sentences

deferred tax assets, the Company reduced its deferred tax asset valuation allowance by a corresponding $ 12.1 million, with the reduction in allowance recognized as an income tax benefit in the consolidated statement of operations for the year ended December 31, 2022.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023, the Company has federal net operating loss carryforwards of $ 1.9 million, of which $ 0.2 million, if not utilized, will begin to expire in 2034, and the remaining $ 1.7 million can be carried forward indefinitely.

1 unchanged sentence

The majority of state net operating loss carryforwards, if not utilized, will begin to expire on various dates beginning in 2032.

In addition, as of December 31, 2022, the Company has $ 16.0 million and $ 9.6 million of California and federal research and development credit carryforwards, respectively.

The California credits can be carried forward indefinitely.

The federal credits will begin to expire on various dates beginning in 2040 and continuing through 2042.

In addition, as of December 31, 2023, the Company has $ 18.7 million of California research and development credit carryforwards, which can be carried forward indefinitely.

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income during the periods in which those temporary differences become deductible.

Management considers projected future taxable income and tax-planning strategies in making this assessment.

Based on the Company’s ongoing assessment of all available evidence, both positive and negative, including consideration of the Company’s historical profitability and the estimated impact of its operating model on future profitability, the Company concluded that it was more likely than not that its U.S.

deferred tax assets in excess of deferred tax liabilities would not be realized.

Accordingly, the Company recorded a valuation allowance against these net U.S.

deferred tax assets as of December 31, 2022.

Utilization of the Company’s federal and state net operating loss carryforwards (NOLs) and tax credit carryforwards, as well as of other temporary differences, is dependent upon the generation of sufficient taxable income in future periods.

In the Company’s ongoing assessment of all available evidence, both positive and negative, the Company considers the scheduled reversal of deferred tax liabilities, the Company’s future operating model and the expected impacts on future profitability, and prudent and feasible tax-planning strategies.

Accordingly, the Company has established a valuation allowance against these net U.S.

deferred tax assets as of December 31, 2023 as the Company concluded that it was more likely than not that the Company will not be able to fully realize such net deferred tax assets.

The valuation allowance for deferred tax assets was $ 40.1 million and $ 19.3 million as of December 31, 2023 and 2022, respectively, with the increase in 2023 primarily due to higher capitalization of R&D expenses under tax regulations effective in 2022.

The Company’s judgment regarding the likelihood of realization of these deferred tax assets could change in future periods, which could result in a material impact to the Company’s income tax provision in the period of change.

NERDWALLET, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A reconciliation of unrecognized tax benefits, excluding accrued interest and penalties, are as follows:

8 unchanged sentences

Interest and penalties were not material for 2023, 2022 and 2021.

The Company accrued $ 0.1 million for interest and penalties on its uncertain tax positions for 2020.

Unrecognized tax benefits of $ 0.4 million, as well as accrued interest and penalties, would affect the Company’s provision for income taxes if recognized.

As of December 31, 2023, unrecognized tax benefits of $ 7.2 million, as well as accrued interest and penalties, would affect the Company’s provision for income taxes if recognized.

The Company does not anticipate that its total unrecognized tax benefits will significantly change due to settlement of examination or the expiration of statute of limitations during the next 12 months.

3 unchanged sentences

and various state tax authorities due to certain acquired attribute carryforwards.

Net Income (Loss) Per Basic and Diluted Share

Net Loss Per Basic and Diluted Share

The Company computes earnings per share (EPS) in conformity with the two-class method required for participating securities.

The two-class method is an earnings allocation method that determines net income (loss) per share for each class of common stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings or losses.

The two-class method is an earnings allocation method that determines net loss per share for each class of common stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings or losses.

We consider early exercised share options to be participating securities.

The impact of early exercised share options on basic and diluted EPS was immaterial for 2023, 2022 and 2021.

Basic EPS is computed by dividing net income (loss) available to common stockholders by the weighted average number of common stock outstanding during the period.

Diluted EPS is computed by dividing income (loss) attributable to common stockholders by the number of diluted shares outstanding.

Basic EPS is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding during the period.

Diluted EPS is computed by dividing net loss attributable to common stockholders by the number of diluted shares outstanding.

Diluted shares equal the total of the basic shares outstanding and all potentially issuable shares, other than antidilutive shares, if any, weighted for the average days outstanding for the period.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides a reconciliation of the numerators and denominators of the basic and diluted per share computations for net income (loss) attributable to common stockholders:

The following table provides a reconciliation of the numerators and denominators of the basic and diluted per share computations for net loss attributable to common stockholders:

(in millions, except per share amounts)

Year Ended December 31, 2023 2022 2021

Net income (loss) attributable to common stockholders – basic and diluted $ ( 10.2 ) $ ( 42.5 ) $ 5.3

Weighted-average shares of common stock – basic 70.6 51.9 44.3

Effect of dilutive stock options and restricted stock units — — 4.3

Effect of potentially dilutive Series A redeemable convertible preferred stock — — 7.7

Weighted-average shares of common stock – diluted 70.6 51.9 56.3

Net income (loss) per share attributable to common stockholders:

Net loss attributable to common stockholders–basic and diluted

$ ( 11.8 ) $ ( 10.2 ) $ ( 42.5 )

Weighted-average shares of common stock–basic and diluted

76.7 70.6 51.9

Net loss per share attributable to common stockholders:

Basic $ ( 0.15 ) $ ( 0.14 ) $ ( 0.82 )

2 unchanged sentences

See Note 11–Stockholders’ Equity for further discussion.

As the liquidation and dividend rights are identical for Class A, Class B and predecessor Class F common stock, the undistributed earnings are allocated on a proportional basis and the resulting net income (loss) attributable to common stockholders will be the same for Class A, Class B and the predecessor Class F common stock on an individual or combined basis.

The following common stock equivalents were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have been antidilutive:

As the liquidation and dividend rights are identical for Class A, Class B and predecessor Class F common stock, the undistributed earnings are allocated on a proportional basis and the resulting net loss attributable to common stockholders will be the same for Class A, Class B and the predecessor Class F common stock on an individual or combined basis.

The following common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:

(in millions)

18 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data