Results
Nerdwallet Inc.
11/06/2025 | Press release | Distributed by Public on 11/06/2025 15:46
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Overview
NerdWallet provides trustworthy financial guidance to consumers and small and mid-sized businesses (SMBs).
Our mission is to provide clarity for all of life's financial decisions.
Our vision is a world where everyone makes financial decisions with confidence.
As a personal finance website, app, and financial service provider, NerdWallet provides consumers-both individuals and SMBs-with trustworthy and knowledgeable financial information so they can make smart money moves. From finding the best credit card to buying a house, NerdWallet is there to help consumers make financial decisions with confidence. Consumers have free access to our expert content and comparison shopping marketplaces, plus a data-driven app, which helps them stay on top of their finances and save time and money, giving them the freedom to do more. NerdWallet is available for consumers in the U.S., United Kingdom and Canada.
Non-GAAP Financial Measures
We collect, review and analyze operating and financial data of our business to assess our ongoing performance and compare our results to prior period results. In addition to revenue, net income (loss) and other results under generally accepted accounting principles (GAAP), the following sets forth the non-GAAP financial measures we use to evaluate our business.
We use non-GAAP operating income (loss) and adjusted EBITDA in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our Board of Directors concerning our financial performance.
Non-GAAP operating income (loss): We define non-GAAP operating income (loss) as income (loss) from operations adjusted to exclude depreciation and amortization, and further exclude (1) impairment of right-of-use asset, (2) losses (gains) on disposals of assets, (3) change in fair value of contingent consideration related to earnouts, (4) deferred compensation related to earnouts, (5) acquisition-related costs, and (6) restructuring charges. We also reduce income from operations, or increase loss from operations, for capitalized internally developed software costs.
Adjusted EBITDA:We define adjusted EBITDA as net income (loss) from continuing operations adjusted to exclude depreciation and amortization, interest income (expense), net, other gains (losses), net, and provision (benefit) for income taxes, and further exclude (1) impairment of right-of-use asset, (2) losses (gains) on disposals of assets, (3) change in fair value of contingent consideration related to earnouts, (4) deferred compensation related to earnouts, (5) stock-based compensation, (6) acquisition-related costs, and (7) restructuring charges.
The above items are excluded from our non-GAAP operating income (loss) and adjusted EBITDA measures because these items are non-cash in nature, or because the amounts are not driven by core operating results and renders comparisons with prior periods less meaningful. We deduct capitalized internally developed software costs in our non-GAAP operating income (loss) measure to reflect the cash impact of personnel costs incurred within the time period.
We believe that non-GAAP operating income (loss) and adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. Moreover, non-GAAP operating income (loss) and adjusted EBITDA are key measurements used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting. However, the use of these non-GAAP financial measures have certain limitations because they do not reflect all items of income and expense that affect our operations. Non-GAAP operating income (loss) and adjusted EBITDA have limitations as financial measures, should be considered as supplemental in nature, and are not meant as substitutes for the related financial information prepared in accordance with GAAP. These limitations include the following:
•Non-GAAP operating income (loss) and adjusted EBITDA exclude certain recurring, non-cash charges, such as amortization of software, depreciation of property and equipment, amortization of intangible assets, impairment of right-of-use asset, and (losses) gains on disposals of assets. Although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and non-GAAP operating income (loss) and adjusted EBITDA do not reflect all cash requirements for such replacements or for new capital expenditure requirements;
•Non-GAAP operating income (loss) and adjusted EBITDA exclude certain acquisition-related costs, including acquisition-related retention compensation under compensatory retention agreements with certain key employees, acquisition-related transaction expenses, contingent consideration fair value adjustments related to earnouts, and deferred compensation related to earnouts;
•Non-GAAP operating income (loss) and adjusted EBITDA exclude restructuring charges primarily consisting of severance payments, stock-based compensation, employee benefits, and related expenses for impacted employees, as well as contract termination costs, associated with our Restructuring Plan;
•Adjusted EBITDA excludes stock-based compensation, including for acquisition-related inducement awards, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy; and
•Adjusted EBITDA does not reflect interest income (expense) and other gains (losses), net, which include unrealized and realized gains and losses on foreign currency exchange, as well as certain nonrecurring gains (losses).
In addition, non-GAAP operating income (loss) and adjusted EBITDA as we define them may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider non-GAAP operating income (loss) and adjusted EBITDA alongside other financial performance measures, including income (loss) from operations, net income (loss) and our other GAAP results.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Non-GAAP Financial Measures" for reconciliations of non-GAAP operating income (loss) to income (loss) from operations, and adjusted EBITDA to net income (loss), the most directly comparable respective GAAP financial measures.
Results of Operations
The following tables set forth our results of operations for the periods presented. The following discussion should be read in conjunction with the condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q.
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
|
(in millions)
|
2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenue | $ | 215.1 | $ | 191.3 | $ | 611.2 | $ | 503.8 | ||||||||||||||||||
|
Costs and Expenses:
|
||||||||||||||||||||||||||
| Cost of revenue | 15.3 | 17.7 | 50.1 | 46.8 | ||||||||||||||||||||||
|
Research and development1
|
15.7 | 23.0 | 50.4 | 66.4 | ||||||||||||||||||||||
|
Sales and marketing1
|
135.3 | 128.1 | 423.0 | 342.1 | ||||||||||||||||||||||
|
General and administrative1
|
14.4 | 15.9 | 41.9 | 47.8 | ||||||||||||||||||||||
| Total costs and expenses | 180.7 | 184.7 | 565.4 | 503.1 | ||||||||||||||||||||||
|
Income from Operations
|
34.4 | 6.6 | 45.8 | 0.7 | ||||||||||||||||||||||
| Other income, net: | ||||||||||||||||||||||||||
| Interest income | 1.0 | 1.3 | 2.5 | 4.2 | ||||||||||||||||||||||
| Interest expense | (0.2) | (0.1) | (0.5) | (0.5) | ||||||||||||||||||||||
| Other gains (losses), net | 0.3 | - | 0.5 | (0.1) | ||||||||||||||||||||||
| Total other income, net | 1.1 | 1.2 | 2.5 | 3.6 | ||||||||||||||||||||||
| Income before income taxes | 35.5 | 7.8 | 48.3 | 4.3 | ||||||||||||||||||||||
| Income tax provision | 9.2 | 7.7 | 13.6 | 12.5 | ||||||||||||||||||||||
|
Net Income (Loss)
|
$ | 26.3 | $ | 0.1 | $ | 34.7 | $ | (8.2) | ||||||||||||||||||
______________
(1)Includes stock-based compensation as follows:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
|
(in millions)
|
2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Research and development | $ | 2.0 | $ | 3.7 | $ | 6.6 | $ | 9.4 | ||||||||||||||||||
| Sales and marketing | 1.7 | 2.3 | 6.4 | 7.6 | ||||||||||||||||||||||
| General and administrative | 3.0 | 4.2 | 8.6 | 12.2 | ||||||||||||||||||||||
| Total stock-based compensation | $ | 6.7 | $ | 10.2 | $ | 21.6 | $ | 29.2 | ||||||||||||||||||
The following table sets forth the components of our condensed consolidated statements of operations as a percentage of revenue:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||
|
Costs and Expenses:
|
||||||||||||||||||||||||||
| Cost of revenue | 7 | 10 | 8 | 9 | ||||||||||||||||||||||
| Research and development | 7 | 12 | 8 | 13 | ||||||||||||||||||||||
| Sales and marketing | 63 | 67 | 69 | 68 | ||||||||||||||||||||||
| General and administrative | 7 | 8 | 7 | 10 | ||||||||||||||||||||||
| Total costs and expenses | 84 | 97 | 92 | 100 | ||||||||||||||||||||||
|
Income from Operations
|
16 | 3 | 8 | - | ||||||||||||||||||||||
| Other income, net: | ||||||||||||||||||||||||||
| Interest income | - | 1 | - | 1 | ||||||||||||||||||||||
| Interest expense | - | - | - | - | ||||||||||||||||||||||
| Other gains (losses), net | - | - | - | - | ||||||||||||||||||||||
| Total other income, net | - | 1 | - | 1 | ||||||||||||||||||||||
| Income before income taxes | 16 | 4 | 8 | 1 | ||||||||||||||||||||||
| Income tax provision | 4 | 4 | 2 | 3 | ||||||||||||||||||||||
|
Net Income (Loss)
|
12 | % | 0 | % | 6 | % | (2 | %) | ||||||||||||||||||
Income from operations increased $27.8 million, or 420%, and $45.1 million for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily driven by increases in revenue of $23.8 million and $107.4 million. Operating expenses decreased $4.0 million for the three months ended September 30, 2025 and increased $62.3 million for the nine months ended September 30, 2025, primarily attributable to increases of $7.2 million and $80.9 million in sales and marketing expenses, partially offset by decreases of $7.3 million and $16.0 million in research and development expenses. Additionally, cost of revenue decreased $2.4 million for the three months ended September 30, 2025 and increased $3.3 million for the nine months ended September 30, 2025.
Net income increased $26.2 million for the three months ended September 30, 2025, and was $34.7 million for the nine months ended September 30, 2025 as compared to a net loss of $8.2 million for the nine months ended September 30, 2024, primarily driven by increases in income from operations of $27.8 million and $45.1 million for the three and nine months ended September 30, 2025.
Revenue
|
Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
|
(in millions)
|
2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||||
|
Insurance
|
$ | 70.9 | $ | 68.7 | $ | 2.2 | 3 | % | $ | 199.6 | $ | 119.6 | $ | 80.0 | 67 | % | ||||||||||||||||||||||||||||||||||
| Credit cards | 34.1 | 45.3 | (11.2) | (25 | %) | 106.9 | 141.4 | (34.5) | (24 | %) | ||||||||||||||||||||||||||||||||||||||||
|
SMB products
|
23.6 | 27.8 | (4.2) | (15 | %) | 77.5 | 84.3 | (6.8) | (8 | %) | ||||||||||||||||||||||||||||||||||||||||
| Loans | 39.6 | 23.8 | 15.8 | 66 | % | 91.1 | 66.9 | 24.2 | 36 | % | ||||||||||||||||||||||||||||||||||||||||
|
Emerging verticals
|
46.9 | 25.7 | 21.2 | 83 | % | 136.1 | 91.6 | 44.5 | 49 | % | ||||||||||||||||||||||||||||||||||||||||
|
Total Revenue
|
$ | 215.1 | $ | 191.3 | $ | 23.8 | 12 | % | $ | 611.2 | $ | 503.8 | $ | 107.4 | 21 | % | ||||||||||||||||||||||||||||||||||
Revenue increased $23.8 million, or 12%, and $107.4 million, or 21%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily reflecting growth in Insurance products, Emerging verticals revenues, and Loans, partially offset by lower Credit cards revenue.
Insurance revenue includes revenue from consumer insurance products, including auto, life and pet insurance. Insurance revenue increased $2.2 million, or 3%, and $80.0 million, or 67%, for the three and nine months ended September 30, 2025, respectively, driven by strong growth in auto insurance products revenue for the nine months ended September 30, 2025 as carriers expanded budgets.
Credit cards revenue consists of revenue from consumer credit cards. Credit cards revenue decreased $11.2 million, or 25%, and $34.5 million, or 24%, for the three and nine months ended September 30, 2025, respectively, primarily due to continued pressures in organic search traffic that have persisted for multiple quarters.
SMB products revenue includes revenue from loans, credit cards and other financial products and services intended for small and mid-sized businesses. SMB products revenue decreased $4.2 million, or 15%, and $6.8 million, or 8%, for the three and nine months ended September 30, 2025, respectively, primarily due to continued pressures in organic search traffic.
Loans revenue includes revenue from personal loans, mortgages, student loans and auto loans. Loans revenue increased $15.8 million, or 66%, and $24.2 million, or 36%, for the three and nine months ended September 30, 2025, respectively, primarily due to increases of 91% and 42% in personal loans revenue, respectively, and 60% and 39% in mortgage loans revenue, respectively, as we continue to integrate our October 2024 acquisition of Next Door Lending LLC (NDL).
Emerging verticals revenue includes revenue from other product sources, including banking, investing and international. Emerging verticals revenue increased $21.2 million, or 83%, and $44.5 million, or 49%, for the three and nine months ended September 30, 2025, respectively, primarily driven by increases of 96% and 60% in banking revenue, respectively, due to higher demand for banking products.
Costs and Expenses
|
Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 15.3 | $ | 17.7 | $ | (2.4) | (13 | %) | $ | 50.1 | $ | 46.8 | $ | 3.3 | 7 | % | ||||||||||||||||||||||||||||||||||
| Research and development | 15.7 | 23.0 | (7.3) | (31 | %) | 50.4 | 66.4 | (16.0) | (24 | %) | ||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 135.3 | 128.1 | 7.2 | 6 | % | 423.0 | 342.1 | 80.9 | 24 | % | ||||||||||||||||||||||||||||||||||||||||
| General and administrative | 14.4 | 15.9 | (1.5) | (10 | %) | 41.9 | 47.8 | (5.9) | (12 | %) | ||||||||||||||||||||||||||||||||||||||||
|
Total Costs and Expenses
|
$ | 180.7 | $ | 184.7 | $ | (4.0) | (2 | %) | $ | 565.4 | $ | 503.1 | $ | 62.3 | 12 | % | ||||||||||||||||||||||||||||||||||
Cost of revenue
Cost of revenue decreased $2.4 million, or 13%, for the three months ended September 30, 2025, primarily due to decreases of $1.4 million in amortization expense related to capitalized software development costs and $1.0 million related to third-party service and data charges. Cost of revenue increased $3.3 million, or 7%, for the nine months ended September 30, 2025, primarily due to a $3.4 million increase related to third-party service and data charges.
Research and development expense
Research and development expenses decreased $7.3 million, or 31%, and $16.0 million, or 24%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily attributable to decreases of $1.9 million and $10.3 million in personnel-related costs, respectively, for our engineering, data and product management personnel and contractors, as well as a $5.6 million restructuring charge in the three and nine months ended September 30, 2024.
Sales and marketing expense
Components of sales and marketing expense, including as a percentage of total sales and marketing expense, are as follows:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) |
$
|
%
|
$ |
%
|
$ |
%
|
$ |
%
|
||||||||||||||||||||||||||||||||||||||||||
| Performance marketing | $ | 104.8 | 77 | % | $ | 91.9 | 72 | % | $ | 291.9 | 69 | % | $ | 206.0 | 60 | % | ||||||||||||||||||||||||||||||||||
| Brand marketing | 5.1 | 4 | % | 11.9 | 9 | % | 54.4 | 13 | % | 57.5 | 17 | % | ||||||||||||||||||||||||||||||||||||||
| Organic and other marketing | 25.4 | 19 | % | 24.3 | 19 | % | 76.7 | 18 | % | 78.6 | 23 | % | ||||||||||||||||||||||||||||||||||||||
|
Total Sales and Marketing
|
$ | 135.3 | 100 | % | $ | 128.1 | 100 | % | $ | 423.0 | 100 | % | $ | 342.1 | 100 | % | ||||||||||||||||||||||||||||||||||
We are able to adjust our marketing spend to reflect changes in external factors and consumer behavior.
Sales and marketing expenses increased $7.2 million, or 6%, and $80.9 million, or 24%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily due to increases of $12.9 million and $85.9 million in performance marketing expenses, respectively, partially offset by decreases of $6.8 million and $3.1 million in brand marketing expenses, respectively, for the three and nine months ended September 30, 2025.
General and administrative expense
General and administrative expenses decreased $1.5 million, or 10%, and $5.9 million, or 12%, for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively, primarily attributable to decreases of $0.9 million and $5.5 million in personnel-related costs, respectively, as well as a $1.0 million restructuring charge in the three and nine months ended September 30, 2024.
Other income, net
|
Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | $ | % | 2025 | 2024 | $ | % | ||||||||||||||||||||||||||||||||||||||||||
| Interest income | $ | 1.0 | $ | 1.3 | $ | (0.3) | (23 | %) | $ | 2.5 | $ | 4.2 | $ | (1.7) | (41 | %) | ||||||||||||||||||||||||||||||||||
| Interest expense | (0.2) | (0.1) | (0.1) | 3 | % | (0.5) | (0.5) | - | (11 | %) | ||||||||||||||||||||||||||||||||||||||||
| Other gains (losses), net | 0.3 | - | 0.3 | 296 | % | 0.5 | (0.1) | 0.6 | NM | |||||||||||||||||||||||||||||||||||||||||
|
Total Other Income, net
|
$ | 1.1 | $ | 1.2 | $ | (0.1) | (10 | %) | $ | 2.5 | $ | 3.6 | $ | (1.1) | (31 | %) | ||||||||||||||||||||||||||||||||||
Other income, net decreased $0.1 million, or 10%, and $1.1 million, or 31%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily attributable to lower interest income reflecting lower interest rates and average cash balances.
Income tax provision
The Company's tax provision for the nine months ended September 30, 2025 was determined using an estimated annual effective tax rate which was adjusted for discrete items occurring during the period. The Company's tax provision for the nine months ended September 30, 2024 was determined using a discrete effective tax rate method, as allowed by ASC Topic 740-270, Income Taxes, Interim Reporting, as the Company had determined that small changes in estimated "ordinary" income would have resulted in significant changes in the estimated annual effective tax rate.
We had income tax provisions of $9.2 million and $13.6 million for the three and nine months ended September 30, 2025, respectively, and $7.7 million and $12.5 million for the three and nine months ended September 30, 2024, respectively. Our effective tax rate was 25.8% and 28.1% for the three and nine months ended September 30, 2025, and 99.2% and 290.7% for the three and nine months ended September 30, 2024, respectively. Our effective tax rate for the three and nine months ended September 30, 2025 differs from the U.S. federal statutory income tax rate of 21% primarily due to discrete items related to stock-based compensation and uncertain tax positions. Our effective tax rate for the three and nine months ended September 30, 2024 differed from the U.S. federal statutory income tax rate of 21% primarily due to the valuation allowance previously maintained against our net U.S. deferred tax assets and state taxes, partially offset by research and development credits.
Based on our ongoing assessment of all available evidence, both positive and negative, including consideration of our historical profitability and the estimated impact of our operating model on future profitability, we concluded that it was more likely than not that our U.S. federal and majority state deferred tax assets are realizable, resulting in a valuation allowance release for federal and states, other than California, during the three months ended December 31, 2024. We continue to maintain a valuation allowance on our California deferred tax assets, which consist primarily of tax credits, as of September 30, 2025. Our judgment regarding the likelihood of realization of these deferred tax assets could change in future periods, which could result in a material impact to our income tax provision in the period of change.
On July 4, 2025, the United States enacted tax reform legislation through An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, commonly known as the One Big Beautiful Bill Act. Included in this legislation are provisions that allow for the immediate expensing of domestic U.S. research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. We have incorporated the new legislation into our income tax provision, as applicable, and determined that there was no material impact on our tax provision for 2025.
Non-GAAP Financial Measures
Non-GAAP operating income (loss) and adjusted EBITDA as we define them may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider non-GAAP operating income (loss) and adjusted EBITDA alongside other financial performance measures, including income (loss) from operations, net income (loss) and our other GAAP results.
We compensate for these limitations by reconciling non-GAAP operating income (loss) to income (loss) from operations, and adjusted EBITDA to net income (loss), the most comparable GAAP financial measures, as follows:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
|
Income from Operations
|
$ | 34.4 | $ | 6.6 | $ | 45.8 | $ | 0.7 | ||||||||||||||||||
| Depreciation and amortization | 11.6 | 12.9 | 36.9 | 37.0 | ||||||||||||||||||||||
| Acquisition-related retention | - | 0.8 | 1.6 | 3.3 | ||||||||||||||||||||||
|
Acquisition-related expenses
|
0.9 | 0.5 | 1.7 | 0.6 | ||||||||||||||||||||||
|
Loss on disposal of assets
|
- | - | 0.3 | - | ||||||||||||||||||||||
|
Restructuring
|
- | 7.8 | 0.4 | 7.8 | ||||||||||||||||||||||
| Capitalized internally developed software costs | (5.6) | (5.7) | (15.4) | (18.6) | ||||||||||||||||||||||
|
Non-GAAP Operating Income
|
$ | 41.3 | $ | 22.9 | $ | 71.3 | $ | 30.8 | ||||||||||||||||||
|
Operating income margin
|
16 | % | 3 | % | 7 | % | 0 | % | ||||||||||||||||||
|
Non-GAAP operating income margin1
|
19 | % | 12 | % | 12 | % | 6 | % | ||||||||||||||||||
|
Net Income (Loss)
|
$ | 26.3 | $ | 0.1 | $ | 34.7 | $ | (8.2) | ||||||||||||||||||
| Depreciation and amortization | 11.6 | 12.9 | 36.9 | 37.0 | ||||||||||||||||||||||
| Stock-based compensation | 6.7 | 8.7 | 21.6 | 27.7 | ||||||||||||||||||||||
| Acquisition-related retention | - | 0.8 | 1.6 | 3.3 | ||||||||||||||||||||||
|
Acquisition-related expenses
|
0.9 | 0.5 | 1.7 | 0.6 | ||||||||||||||||||||||
| Loss on disposal of assets | - | - | 0.3 | - | ||||||||||||||||||||||
|
Restructuring
|
- | 7.8 | 0.4 | 7.8 | ||||||||||||||||||||||
|
Interest income, net
|
(0.8) | (1.2) | (2.0) | (3.7) | ||||||||||||||||||||||
|
Other (gains) losses, net
|
(0.3) | - | (0.5) | 0.1 | ||||||||||||||||||||||
|
Income tax provision
|
9.2 | 7.7 | 13.6 | 12.5 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 53.6 | $ | 37.3 | $ | 108.3 | $ | 77.1 | ||||||||||||||||||
| Stock-based compensation | (6.7) | (8.7) | (21.6) | (27.7) | ||||||||||||||||||||||
| Capitalized internally developed software costs | (5.6) | (5.7) | (15.4) | (18.6) | ||||||||||||||||||||||
|
Non-GAAP Operating Income
|
$ | 41.3 | $ | 22.9 | $ | 71.3 | $ | 30.8 | ||||||||||||||||||
|
Net income (loss) margin
|
12 | % | 0 | % | 6 | % | (2 | %) | ||||||||||||||||||
|
Adjusted EBITDA margin2
|
25 | % | 19 | % | 18 | % | 15 | % | ||||||||||||||||||
______________
(1)Represents non-GAAP operating income (loss) as a percentage of revenue.
(2)Represents adjusted EBITDA as a percentage of revenue.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations" for a discussion of the changes in income (loss) from operations and net income (loss) for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024.
Non-GAAP operating income increased $18.4 million, or 81%, and $40.5 million, or 132%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily driven by increases in income from operations of $27.8 million and $45.1 million, respectively, partially offset by $7.8 million of restructuring charges for the three and nine months ended September 30, 2024.
Adjusted EBITDA increased $16.3 million, or 44%, and $31.2 million, or 41%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, primarily driven by increases in net income of $26.2 million and $42.9 million, respectively, Additionally, adjustments to reconcile adjusted EBITDA to net income decreased $9.9 million and $11.7 million for the three and nine months ended September 30, 2025, primarily reflecting $7.8 million of restructuring charges for the three and nine months ended September 30, 2024 and decreases of $2.0 million and $6.1 million in stock-based compensation.
Liquidity and Capital Resources
Overview
Our principal sources of liquidity to meet our business requirements and plans, both in the short-term (i.e., the next twelve months from September 30, 2025) and long-term (i.e., beyond the next twelve months), have historically been cash generated from operations. Our primary liquidity needs are related to the funding of general business requirements, including working capital requirements, research and development, and capital expenditures, as well as other liquidity requirements including, but not limited to, business combinations.
As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $120.6 million and $66.3 million, respectively.
Known Contractual and Other Obligations
A description of contractual commitments as of September 30, 2025 is included in Note 5-Commitments and Contingencies in the notes to our condensed consolidated financial statements.
More broadly, we also have purchase obligations under contractual arrangements with vendors and service providers, including for certain web-hosting and cloud computing services and advertising, which do not qualify for recognition on our condensed consolidated balance sheets but which we consider non-cancellable. During the nine months ended September 30, 2025, there have been no material changes in our purchase obligations as disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Trends, Uncertainties and Anticipated Sources of Funds
In order to grow our business, we intend to make significant investments in our business, which may result in increases in our personnel and related expenses. The timing and amount of these investments will vary based on our financial condition, the rate at which we add new personnel and the scale of our development, as well as the macro-economic environment. Many of these investments will occur in advance of our experiencing any direct benefit from them, which could negatively impact our liquidity and cash flows during any particular period and may make it difficult to determine if we are effectively allocating our resources. However, we expect to fund our operations, capital expenditures and other investments principally with cash flows from operations, and to the extent that our liquidity needs exceed our cash from operations, we would look to our cash on hand to satisfy those needs.
Share Repurchase Program: We maintain a plan, authorized by our Board of Directors in May 2023 with subsequent additional share repurchase authorizations as approved by our Board of Directors, including a $50.0 million additional share repurchase authorization announced on September 13, 2025, under which we may repurchase shares of our Class A common stock (collectively, the Repurchase Program). Subject to market conditions and other factors, the Repurchase Program is intended to make opportunistic repurchases of our Class A common stock to reduce our outstanding share count. Under the Repurchase Program, 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 Program does not have fixed expiration dates and does not obligate us to acquire any specific number of shares. The timing and terms of any repurchases 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, we may, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases. Shares repurchased under the Repurchase Programs are retired. We expect to fund repurchases with existing cash and cash equivalents. We repurchased 1.8 million shares of Class A common stock for $19.2 million, including costs associated with the repurchases, during the nine months ended September 30, 2025. Additionally, we paid $0.3 million of excise taxes during the nine months ended September 30, 2025 which related to previous share repurchases.
Credit Facility:We, including three of our wholly-owned subsidiaries, maintain a credit agreement (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 us and certain of our domestic subsidiaries for general corporate purposes, including acquisitions. The Credit Facility matures on September 26, 2028. We had no outstanding balance on our Credit Agreement as of September 30, 2025 or December 31, 2024. The available amount to borrow under our Credit Agreement was $123.9 million at both September 30, 2025 and December 31, 2024, which was equal to the available amount under the credit agreement of $125.0 million, net of letters of credit of $1.1 million. Our Credit Agreement contains certain customary financial and non-financial covenants. We were in compliance with all covenants as of September 30, 2025 and December 31, 2024.
Warehouse Line of Credit: NDL, a wholly-owned subsidiary, maintains a $15.0 million warehouse line of credit to provide NDL short-term funding for mortgage loans originated for sale. Borrowings under the warehouse line of credit bear interest at the greater of the interest rate of the underlying mortgage loans held for sale or a minimum rate of 6%, and are secured by the underlying promissory notes of the mortgage loans held for sale as well as NDL's other assets. The warehouse line of credit matures on February 1, 2026. NDL had $5.8 million outstanding under the warehouse line of credit as of September 30, 2025, which is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet. The warehouse line of credit requires NDL to comply with certain minimum tangible net worth, liquidity, and insurance requirements. NDL was in compliance with all covenants as of September 30, 2025 and December 31, 2024.
We believe our current cash and cash equivalents and future cash flow from operations, as well as access to our Credit Agreement, will be sufficient to meet our ongoing working capital, capital expenditure and other liquidity requirements for the next twelve months and beyond.
Our future capital requirements may vary materially from those planned and will depend on certain factors, such as our growth and our operating results. If we require additional capital resources to grow our business or to acquire complementary technologies and businesses in the future, we may seek to sell additional equity or raise funds through debt financing or other sources. We cannot provide assurance that additional financing will be available at all or on terms favorable to us.
Sources and Uses of Capital Resources
The following table summarizes our cash flows:
|
Nine Months Ended September 30, |
||||||||||||||
| (in millions) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 92.7 | $ | 61.9 | ||||||||||
| Net cash used in investing activities | (20.4) | (24.4) | ||||||||||||
| Net cash used in financing activities | (17.7) | (66.3) | ||||||||||||
|
Effect of exchange rate changes on cash and cash equivalents
|
(0.3) | 0.1 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | 54.3 | $ | (28.7) | ||||||||||
Operating activities
Net cash provided by operating activities increased $30.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, driven by net income of $34.7 million for the nine months ended September 30, 2025, as compared to a net loss of $8.2 million for the nine months ended September 30, 2024, as well as a $5.4 million increase in non-cash charges, partially offset by a $17.5 million increase in net cash outflow from changes in operating assets and liabilities. The increase in non-cash charges was primarily due to increases of $11.7 million in deferred taxes and $1.3 million in other, net, partially offset by a $7.6 million decrease in stock-based compensation. The increase in net cash outflow from changes in operating assets and liabilities was primarily due to increases of $10.4 million for accrued expenses and other current liabilities, $5.5 million for accounts payable, $4.2 million for prepaid expenses and other current assets, and $3.6 million for mortgage loans held for sale, partially offset by a $6.7 million decrease for accounts receivable.
Investing activities
Net cash used in investing activities decreased $4.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to decreases of $6.1 million in purchases of investments and $3.5 million in capitalized software development costs, partially offset by $5.0 million of cash paid for an acquisition in the nine months ended September 30, 2025.
Financing activities
Net cash used in financing activities decreased $48.6 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a $50.3 million decrease for repurchases of Class A common stock and $3.3 million of short-term borrowings under a warehouse line of credit, partially offset by a $4.5 million decrease from exercises of stock options.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting policies as provided within U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ from these estimates under different assumptions or conditions.
During the nine months ended September 30, 2025, there have been no material changes in our critical accounting policies as disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2024.
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