NERDWALLET, INC. 10-Q

Item 1. Financial Statements. NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Unaudited September 30, 2024 December 31, 2023 (in millions, except share amounts which are in thousands and per share amounts) Assets Current assets: Cash and cash equivalents $ 71.7 $ 100.4 Accounts receivable—net 102.8 75.5 Prepaid expenses and other current assets 19.2 22.5 Total current assets 193.7 198.4 Property, equipment and software—net 45.3 52.6 Goodwill 111.8 111.5 Intangible assets—net 36.7 46.9 Right-of-use assets 5.4 7.2 Other assets 9.5 2.0 Total Assets $ 402.4 $ 418.6 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 12.4 $ 1.7 Accrued expenses and other current liabilities 54.1 35.6 Total current liabilities 66.5 37.3 Other liabilities—noncurrent 13.5 14.4 Total liabilities 80.0 51.7 Commitments and contingencies (Note 5) Stockholders’ equity: Preferred stock—$ 0.0001 par value per share— 5,000 shares authorized; zero shares issued and outstanding — — Common stock—$ 0.0001 par value per share— 296,686 shares authorized; 74,028 and 76,940 shares issued and outstanding as of September 30, 2024 and December 31, 2023 — — Additional paid-in capital 519.3 483.7 Accumulated other comprehensive loss — ( 0.3 ) Accumulated deficit ( 196.9 ) ( 116.5 ) Total stockholders’ equity 322.4 366.9 Total Liabilities and Stockholders’ Equity $ 402.4 $ 418.6 See notes to condensed consolidated financial statements. 3 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited Table of Contents Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2024 2023 2024 2023 Revenue $ 191.3 $ 152.8 $ 503.8 $ 465.7 Costs and Expenses: Cost of revenue 17.7 13.3 46.8 40.2 Research and development 23.0 20.7 66.4 60.2 Sales and marketing 128.1 100.6 342.1 321.1 General and administrative 15.9 14.2 47.8 45.2 Total costs and expenses 184.7 148.8 503.1 466.7 Income (Loss) From Operations 6.6 4.0 0.7 ( 1.0 ) Other income, net: Interest income 1.3 0.9 4.2 2.7 Interest expense ( 0.1 ) ( 0.2 ) ( 0.5 ) ( 0.6 ) Other losses, net — — ( 0.1 ) ( 0.1 ) Total other income, net 1.2 0.7 3.6 2.0 Income before income taxes 7.8 4.7 4.3 1.0 Income tax provision 7.7 5.2 12.5 10.5 Net Income (Loss) $ 0.1 $ ( 0.5 ) $ ( 8.2 ) $ ( 9.5 ) Net Income (Loss) Per Share Attributable to Common Stockholders Basic $ 0.00 $ ( 0.01 ) $ ( 0.11 ) $ ( 0.12 ) Diluted $ 0.00 $ ( 0.01 ) $ ( 0.11 ) $ ( 0.12 ) Weighted-average Shares Used in Computing Net Income (Loss) Per Share Attributable to Common Stockholders Basic 77.4 77.5 77.5 76.7 Diluted 79.3 77.5 77.5 76.7 See notes to condensed consolidated financial statements. 4 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Unaudited Table of Contents Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Net Income (Loss) $ 0.1 $ ( 0.5 ) $ ( 8.2 ) $ ( 9.5 ) Other Comprehensive Income (Loss): Change in foreign currency translation 0.3 ( 0.2 ) 0.3 0.2 Comprehensive Income (Loss) $ 0.4 $ ( 0.7 ) $ ( 7.9 ) $ ( 9.3 ) See notes to condensed consolidated financial statements. 5 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Unaudited Table of Contents Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Stockholders’ Equity (in millions, except share amounts which are in thousands) Shares Amount Balance as of December 31, 2023 76,940 $ — $ 483.7 $ ( 0.3 ) $ ( 116.5 ) $ 366.9 Issuance of Class A common stock upon exercise of stock options 276 — 1.7 1.7 Issuance of Class A common stock pursuant to settlement of restricted stock units 529 — — Class A common stock withheld related to net share settlement of restricted stock units ( 25 ) — ( 0.5 ) ( 0.5 ) Stock-based compensation 9.6 9.6 Other comprehensive loss ( 0.1 ) ( 0.1 ) Net income 1.1 1.1 Balance as of March 31, 2024 77,720 $ — $ 494.5 $ ( 0.4 ) $ ( 115.4 ) $ 378.7 Issuance of Class A common stock upon exercise of stock options 104 — 0.4 0.4 Issuance of Class A common stock pursuant to settlement of restricted stock units 730 — — Class A common stock withheld related to net share settlement of restricted stock units ( 68 ) — ( 0.9 ) ( 0.9 ) Repurchase of Class A common stock ( 89 ) — ( 1.1 ) ( 1.1 ) Stock-based compensation 11.6 11.6 Other comprehensive income 0.1 0.1 Net loss ( 9.4 ) ( 9.4 ) Balance as of June 30, 2024 78,397 $ — $ 505.6 $ ( 0.3 ) $ ( 125.9 ) $ 379.4 Issuance of Class A common stock upon exercise of stock options 430 — 3.1 3.1 Issuance of Class A common stock pursuant to settlement of restricted stock units 981 — — Class A common stock withheld related to net share settlement of restricted stock units ( 28 ) — ( 0.3 ) ( 0.3 ) Repurchase of Class A common stock ( 5,752 ) — ( 71.1 ) ( 71.1 ) Stock-based compensation 10.9 10.9 Other comprehensive income 0.3 0.3 Net income 0.1 0.1 Balance as of September 30, 2024 74,028 $ — $ 519.3 $ — $ ( 196.9 ) $ 322.4 6 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY Unaudited Table of Contents Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Stockholders’ Equity (in millions, except share amounts which are in thousands) Shares Amount Balance as of December 31, 2022 75,120 $ — $ 427.3 $ ( 0.9 ) $ ( 84.7 ) $ 341.7 Issuance of Class A common stock upon exercise of stock options 1,226 — 8.4 8.4 Issuance of Class A common stock pursuant to settlement of restricted stock units 380 — — Class A common stock withheld related to net share settlement of restricted stock units ( 15 ) — ( 0.3 ) ( 0.3 ) Stock-based compensation 10.1 10.1 Other comprehensive income 0.2 0.2 Net income 1.7 1.7 Balance as of March 31, 2023 76,711 $ — $ 445.5 $ ( 0.7 ) $ ( 83.0 ) $ 361.8 Issuance of Class A common stock upon exercise of stock options 66 — 0.4 0.4 Issuance of Class A common stock pursuant to settlement of restricted stock units 674 — — Class A common stock withheld related to net share settlement of restricted stock units ( 25 ) — ( 0.2 ) ( 0.2 ) Issuance of Class A common stock under Employee Stock Purchase Plan 240 — 1.9 1.9 Repurchase of Class A common stock ( 141 ) — ( 1.3 ) ( 1.3 ) Stock-based compensation 12.9 12.9 Other comprehensive income 0.2 0.2 Net loss ( 10.7 ) ( 10.7 ) Balance as of June 30, 2023 77,525 $ — $ 460.5 $ ( 0.5 ) $ ( 95.0 ) $ 365.0 Issuance of Class A common stock upon exercise of stock options 51 — 0.3 0.3 Issuance of Class A common stock pursuant to settlement of restricted stock units 657 — — Class A common stock withheld related to net share settlement of restricted stock units ( 30 ) — ( 0.2 ) ( 0.2 ) Repurchase of Class A common stock ( 1,209 ) — ( 10.8 ) ( 10.8 ) Stock-based compensation 10.6 10.6 Other comprehensive loss ( 0.2 ) ( 0.2 ) Net loss ( 0.5 ) ( 0.5 ) Balance as of September 30, 2023 76,994 $ — $ 471.2 $ ( 0.7 ) $ ( 106.3 ) $ 364.2 See notes to condensed consolidated financial statements. 7 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Table of Contents Nine Months Ended September 30, (in millions) 2024 2023 Operating Activities: Net loss $ ( 8.2 ) $ ( 9.5 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 37.0 36.0 Stock-based compensation 29.2 29.3 Deferred taxes ( 0.2 ) ( 0.4 ) Non-cash lease costs 1.7 2.1 Other, net 0.3 1.2 Changes in operating assets and liabilities: Accounts receivable ( 27.3 ) 1.6 Prepaid expenses and other assets 3.5 ( 6.2 ) Accounts payable 10.3 7.6 Accrued expenses and other current liabilities 16.8 ( 5.9 ) Payment of contingent consideration — ( 14.0 ) Operating lease liabilities ( 2.5 ) ( 2.3 ) Other liabilities 1.3 3.0 Net cash provided by operating activities 61.9 42.5 Investing Activities: Purchase of investment ( 8.1 ) — Capitalized software development costs ( 15.9 ) ( 19.6 ) Purchase of property and equipment ( 0.4 ) ( 0.5 ) Net cash used in investing activities ( 24.4 ) ( 20.1 ) Financing Activities: Payment of contingent consideration — ( 16.9 ) Proceeds from line of credit — 7.5 Payments on line of credit — ( 7.5 ) Payment of debt issuance costs — ( 1.1 ) Proceeds from exercise of stock options 5.2 9.1 Issuance of Class A common stock under Employee Stock Purchase Plan — 1.9 Repurchase of Class A common stock ( 69.8 ) ( 12.1 ) Tax payments related to net-share settlements on restricted stock units ( 1.7 ) ( 0.7 ) Net cash used in financing activities ( 66.3 ) ( 19.8 ) Effect of exchange rate changes on cash and cash equivalents 0.1 0.1 Net increase (decrease) in cash and cash equivalents ( 28.7 ) 2.7 Cash and Cash Equivalents: Beginning of period 100.4 83.9 End of period $ 71.7 $ 86.6 Supplemental Disclosures of Non-Cash Investing and Financing Activities: Capitalized software development costs recorded in accounts payable and accrued expenses and other current liabilities $ 0.7 $ 2.6 Repurchases of Class A common stock recorded in accrued expenses and other current liabilities 2.4 — Supplemental Disclosures of Cash Flow Information: Income tax payments $ 10.2 $ 11.7 Cash paid for interest 0.3 0.3 8 NERDWALLET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited Table of Contents Nine Months Ended September 30, (in millions) 2024 2023 Supplemental Cash Flow Disclosure Related to Operating Leases: Cash paid for amounts included in the measurement of lease liabilities $ 2.9 $ 2.7 See notes to condensed consolidated financial statements. 9 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents 1. The Company and Basis of Presentation The Company— NerdWallet, Inc., a Delaware corporation, was formed on December 29, 2011. NerdWallet, Inc. and its subsidiaries (collectively, the Company) provide consumer-driven advice about personal finance through its platform by connecting individuals and small and mid-sized businesses (SMBs) with providers of financial products. Basis of Consolidation and Presentation— The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission regarding interim financial reporting. Accordingly, the accompanying unaudited interim condensed consolidated financial statements do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with GAAP. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company’s financial position and results of operations for the periods presented. The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain comparative amounts for the three and nine months ended September 30, 2023 have been reclassified to conform to the financial statement presentation as of and for the three and nine months ended September 30, 2024. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year or any other future period. Significant Accounting Policies —During the nine months ended September 30, 2024, the Company made a strategic investment of $ 8.1 million in equity securities of a privately-held company over which the Company does not exercise significant influence. See Note 4–Significant Condensed Consolidated Balance Sheet Components for further discussion. During the nine months ended September 30, 2024, there have been no other material changes to the Company’s significant accounting policies as disclosed in Note 1–The Company and its Significant Accounting Policies in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 2. Revenue The following presents a disaggregation of the Company’s revenue based on product category: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Credit cards $ 45.3 $ 54.0 $ 141.4 $ 166.5 Loans 23.8 32.9 66.9 78.0 SMB products 27.8 24.7 84.3 73.6 Emerging verticals 94.4 41.2 211.2 147.6 Total revenue $ 191.3 $ 152.8 $ 503.8 $ 465.7 During the nine months ended September 30, 2024, the Company recognized $ 4.1 million of revenue that was deferred as of December 31, 2023, all of which was recognized during the three months ended March 31, 2024. Revenue recognized during the nine months ended September 30, 2023 which was deferred as of December 31, 2022 was immaterial . The contract asset recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet related to estimated variable consideration was $ 7.6 million and $ 5.5 million as of September 30, 2024 and December 31, 2023, respectively. 10 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents 3. Fair Value Measurements The Company’s assets that are measured at fair value on a recurring basis, by level, within the fair value hierarchy are summarized as follows: (in millions) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Carrying Value As of September 30, 2024 Assets: Cash and cash equivalents—money market funds $ 25.7 $ — $ — $ 25.7 Certificate of deposit — 2.2 — 2.2 $ 25.7 $ 2.2 $ — $ 27.9 (in millions) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Carrying Value As of December 31, 2023 Assets: Cash and cash equivalents—money market funds $ 89.8 $ — $ — $ 89.8 Certificate of deposit — 2.1 — 2.1 $ 89.8 $ 2.1 $ — $ 91.9 4. Significant Condensed Consolidated Balance Sheet Components Property, equipment and software, net includes capitalized software development costs, net of accumulated amortization, of $ 42.7 million and $ 49.0 million as of September 30, 2024 and December 31, 2023, respectively. The Company capitalized $ 5.7 million and $ 19.0 million of software development costs during the three and nine months ended September 30, 2024, respectively, and $ 7.9 million and $ 25.7 million during the three and nine months ended September 30, 2023, respectively. The Company recorded amortization expense related to capitalized software development costs of $ 9.0 million and $ 25.3 million during the three and nine months ended September 30, 2024 and $ 7.3 million and $ 20.9 million during the three and nine months ended September 30, 2023, respectively. During the nine months ended September 30, 2024, the Company made a strategic investment of $ 8.1 million in equity securities of a privately-held company over which the Company does not exercise significant influence. These equity securities do not have a readily determinable fair value and are accounted for under the measurement alternative. Under the measurement alternative, the carrying value of the security is measured at cost less any impairment, and adjusted for changes resulting from observable price changes in orderly transactions for identical or similar securities of the same issuer. An equity security without a readily determinable fair value is considered impaired when the fair value of the Company’s interest is less than the carrying value. Equity investments without readily determinable fair values are included in other assets on the Company’s condensed consolidated balance sheet, and any related gains or losses would be included in other gains (losses), net on the Company’s condensed consolidated statements of operations. Equity investments without readily determinable fair values were $ 8.1 million as of September 30, 2024, and there were no related changes in carrying amount or impairment during the nine months ended September 30, 2024. Accrued expenses and other current liabilities include unbilled accounts payable of $ 42.0 million and $ 21.2 million, and operating lease liabilities of $ 2.8 million and $ 3.4 million, as of September 30, 2024 and December 31, 2023, respectively. Accrued expenses and other current liabilities as of September 30, 2024 also includes a liability for repurchases of Class A common stock of $ 2.4 million. Other liabilities—noncurrent includes operating lease liabilities of $ 4.1 million and $ 6.2 million as of September 30, 2024 and December 31, 2023, respectively. 11 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents 5. Commitments and Contingencies Commitments and Other Financial Arrangements —The Company has certain financial commitments and other arrangements including unused letters of credit and commitments under leases. During the nine months ended September 30, 2024, the Company entered into an amendment, that has not yet commenced, of an operating lease for office space, with total future lease payments of approximately $ 5 million that are not yet recorded on the Company’s condensed consolidated balance sheet. This lease amendment is expected to commence in 2025 (upon availability of the office space) with an expected lease term of approximately five years . As of September 30, 2024, there were no other material changes to the Company’s commitments and other financial arrangements as disclosed in Note 8–Commitments and Contingencies in the notes to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Litigation and Other Legal Matters —The Company is involved from time to time in litigation, claims, and proceedings. Periodically, the Company evaluates the status of each legal matter and assesses potential financial exposure. If the potential loss from any legal proceeding or litigation is considered probable and the amount can be reasonably estimated, the Company accrues a liability for the estimated loss. Significant judgment is required to determine the probability of a loss and whether the amount of the loss is reasonably estimable. The outcome of any proceeding is not determinable in advance. As a result, the assessment of a potential liability and the amount of accruals recorded are based only on the information available at the time. As additional information becomes available, the Company reassesses the potential liability related to the legal proceeding or litigation, and may revise its estimates. Management is not currently aware of any matters that it expects will have a material effect on the financial position, results of operations, or cash flows of the Company. The Company has not accrued any material potential loss as of September 30, 2024 or December 31, 2023. 12 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents 6. Stockholders’ Equity Share Repurchase Program —On May 2, 2023, the Company announced that its Board of Directors authorized a plan under which the Company may repurchase up to $ 20 million of the Company’s Class A common stock and, following the Company’s utilization of such share repurchase authorization, the Company announced on October 26, 2023 and September 9, 2024 that its Board of Directors approved additional share repurchase authorizations under which the Company may repurchase up to an additional $ 30 million and $ 50 million, respectively, of the Company’s Class A common stock (collectively, the Repurchase Program). The Company repurchased 5.7 million and 5.8 million shares, respectively, of Class A common stock for $ 71.1 million and $ 72.2 million, respectively, including costs associated with the repurchases, during the three and nine months ended September 30, 2024, and 1.2 million and 1.3 million shares, respectively, for $ 10.8 million and $ 12.1 million, respectively, during the three and nine months ended September 30, 2023. The remaining share repurchase authorization under the Repurchase Program is $ 8.2 million as of September 30, 2024. Equity Incentive Plans —The 2021 Equity Incentive Plan and the predecessor 2012 Equity Incentive Plan, both as amended, along with the 2022 Inducement Equity Incentive Plan (collectively, the Plans) comprise the equity incentive plans of the Company. Under the terms of the 2021 Equity Incentive Plan, the number of shares of Class A common stock reserved for issuance under the plan will automatically increase on January 1 of each calendar year, starting January 1, 2023 and ending on and including January 1, 2031, in an amount equal to 5 % of the total number of shares of the Company’s capital stock outstanding on December 31 of the prior calendar year, unless the Company’s Board of Directors determines prior to the date of increase that there will be a lesser increase, or no increase. In accordance with these plan terms, the aggregate number of shares of Class A common stock reserved for issuance under the 2021 Equity Incentive Plan increased by 3.8 million shares effective January 1, 2024. Stock Options — A summary of the Company’s stock option activity for its Plans is as follows: Outstanding Stock Options (in thousands) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in millions) Balance as of December 31, 2023 4,112 $ 10.84 6.3 $ 18.7 Granted 1 220 $ 15.73 Exercised ( 810 ) $ 6.46 Cancelled/forfeited ( 77 ) $ 12.03 Balance as of September 30, 2024 1 3,445 $ 12.16 6.3 $ 6.8 Vested and exercisable as of September 30, 2024 2,619 $ 11.93 5.8 $ 5.6 ______________ (1) Represents 0.2 million of target award stock options with both service-based and performance-based conditions. The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2024 was $ 9.08 per share. The aggregate intrinsic value of options exercised was $ 7.0 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company granted 0.2 million of target award stock options with both service-based and performance-based conditions to certain employees of the Company. Recipients of these performance-based stock options are eligible to earn between 0 % and 200 % of their target awards based upon the achievement of (i) a revenue-related growth metric and (ii) a non-GAAP operating income-related metric, both in fiscal year 2024, subject to certification of the attainment of the performance levels. These performance-based stock options are also subject to service-based vesting over a period of three years . 13 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents For the nine months ended September 30, 2024, the per-share fair value of each stock option granted was determined on the date of grant using the following weighted-average assumptions: Nine Months Ended September 30, 2024 Expected volatility 58.1 % Expected term (in years) 5.9 Expected dividend yield 0 % Risk-free interest rate 4.2 % There were no stock options granted for the nine months ended September 30, 2023. Restricted Stock Units — A summary of the Company’s outstanding nonvested restricted stock units (RSUs) for its Plans is as follows: Number of Units (in thousands) Weighted-Average Grant-Date Fair Value Nonvested as of December 31, 2023 1 6,788 $ 12.42 Granted 2 2,112 $ 14.65 Vested ( 2,240 ) $ 12.67 Forfeited 1 ( 1,504 ) $ 14.20 Nonvested as of September 30, 2024 2 5,156 $ 12.71 ______________ (1) Includes 0.2 million of target award RSUs with both service-based and performance-based conditions. (2) Includes less than 0.1 million of target award RSUs with both service-based and performance-based conditions. The total fair value of shares that vested under RSUs was $ 30.5 million during the nine months ended September 30, 2024. During the nine months ended September 30, 2024, the Company granted 0.1 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) a revenue-related growth metric and (ii) a non-GAAP operating income-related metric, both in fiscal year 2024, subject to certification of the attainment of the performance levels. These performance-based RSUs are also subject to service-based vesting over a period of three years . Employee Stock Purchase Plan —The terms of the Employee Stock Purchase Plan (ESPP) provide for automatic increases in the number of shares reserved for issuance on January 1 of each calendar year, beginning in 2023 and through 2031, subject to terms of the ESPP. In accordance with these plan terms, the aggregate number of Class A common stock authorized for issuance under the ESPP increased by 0.8 million effective January 1, 2024. Prior to capitalizing amounts related to software development costs, the Company recognized stock-based compensation related to the ESPP of $ 0.2 million and $ 0.4 million during the three and nine months ended September 30, 2024, respectively, which relates to the ESPP purchase period which began on May 1, 2024. Prior to capitalizing amounts related to software development costs, the Company recognized stock-based compensation related to the ESPP of $ 0.8 million and $ 2.8 million during the three and nine months ended September 30, 2023, respectively. Stock-Based Compensation — The Company recognized stock-based compensation under the Plans and ESPP as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Research and development $ 3.7 $ 2.9 $ 9.4 $ 8.4 Sales and marketing 2.3 3.5 7.6 10.7 General and administrative 4.2 3.0 12.2 10.2 Total stock-based compensation $ 10.2 $ 9.4 $ 29.2 $ 29.3 14 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents In addition, stock-based compensation capitalized related to software development costs was $ 0.7 million and $ 1.2 million during the three months ended September 30, 2024 and 2023, respectively, and $ 2.9 million and $ 4.3 million during the nine months ended September 30, 2024 and 2023, respectively. 7. Income Taxes Beginning with the three months ended June 30, 2023, the Company’s tax provision for interim periods was determined using a discrete effective tax rate method, as allowed by ASC Topic 740-270, Income Taxes, Interim Reporting . The Company’s tax provision for interim periods was previously determined using an estimated annual effective tax rate which was adjusted for discrete items occurring during the periods presented. The Company determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three and nine months ended September 30, 2024. The primary difference between the Company’s effective tax rate and the statutory federal income tax rate is the full valuation allowance established on the Company’s federal, state and foreign deferred tax attributes. As of September 30, 2024 and December 31, 2023, the Company recorded a full valuation allowance against these net deferred tax assets as the Company believes that it is more likely than not that the Company will not be able to fully realize such net deferred tax assets. 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 in the Company’s income tax provision in the period of change. 8. Net Income (Loss) Per Basic and Diluted Share The following table provides the basic and diluted per share computations for net income (loss) attributable to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share amounts) 2024 2023 2024 2023 Numerator: Net income (loss) attributable to common stockholders—basic and diluted $ 0.1 $ ( 0.5 ) $ ( 8.2 ) $ ( 9.5 ) Denominator: Weighted-average shares of common stock—basic 77.4 77.5 77.5 76.7 Effect of dilutive stock options and restricted stock units 1.9 — — — Weighted-average shares of common stock—diluted 79.3 77.5 77.5 76.7 Net income (loss) per share attributable to common stockholders: Basic $ 0.00 $ ( 0.01 ) $ ( 0.11 ) $ ( 0.12 ) Diluted $ 0.00 $ ( 0.01 ) $ ( 0.11 ) $ ( 0.12 ) The following common stock equivalents were excluded from the computation of diluted net income (loss) per share because including them would have been antidilutive: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Shares subject to outstanding stock options and restricted stock units 4.6 9.7 6.7 9.0 ESPP 0.1 0.3 0.1 0.4 15 NERDWALLET, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Table of Contents 9. Restructuring Plan On July 30, 2024, the Company committed to a restructuring plan, effective August 1, 2024, intended to reduce the Company’s operating expenses and better position the Company to execute its long-term strategic initiatives (the Restructuring Plan). The Restructuring Plan was substantially completed during the three months ended September 30, 2024, and reduced the size of the Company’s workforce by approximately 15 % of its full-time employees, as compared to its headcount as of December 31, 2023. The Company incurred a pre-tax restructuring charge of $ 7.8 million for the three and nine months ended September 30, 2024 in connection with the Restructuring Plan, which primarily consisted of severance payments, employee benefits and related expenses for impacted employees, and is presented in the condensed consolidated statement of operations as $ 5.6 million of research and development expenses, $ 1.2 million of sales and marketing expenses and $ 1.0 million of general and administrative expenses. The changes in the restructuring reserve, which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheet, are as follows: (in millions) Three and Nine Months Ended September 30, 2024 Amount Balance as of beginning of period $ — Charge 7.8 Cash payments ( 6.0 ) Stock-based compensation ( 1.5 ) Balance as of September 30, 2024 $ 0.3 10. Subsequent Events Acquisition of Next Door Lending LLC —On October 1, 2024, the Company acquired all outstanding equity interests of Next Door Lending LLC (NDL), a mortgage brokerage, for a preliminary purchase consideration of approximately $ 1 million in cash. The acquisition of NDL is intended to allow the Company to provide mortgage shoppers with more hands-on guidance. Given the recent timing of the closing of this acquisition, the Company is in the process of evaluating the purchase price allocation for this acquisition. Additionally, under the purchase agreement, certain employees of NDL could earn up to an aggregate of $ 3.5 million of performance-based cash earnout awards, with the value of such earnout awards to be recognized as compensation expense following the close of the acquisition through 2028, generally subject to the employees’ continued employment with the Company. The value of these cash earnout awards are excluded from the purchase consideration and accounted for separately from the business combination. Repurchase Program —Following the Company’s utilization of the share repurchase authorization announced by the Company on September 9, 2024, the Company announced on October 29, 2024 that its Board of Directors approved a new share repurchase authorization under which the Company may repurchase up to $ 25 million of the Company’s Class A common stock (the October 2024 Repurchase Plan). Under the October 2024 Repurchase Plan, shares of Class A common stock may be repurchased from time to time in the open market, through privately negotiated transactions or otherwise, in accordance with applicable securities laws and other restrictions. The October 2024 Repurchase Plan does not have a fixed expiration date and does not obligate the Company to acquire any specific dollar amount or number of shares. The amount and timing of repurchases under the October 2024 Repurchase Plan will be determined 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. 16 Table of Contents