NERDWALLET, INC. - Quarter Report: 2022 September (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40994

NerdWallet, Inc.

(Exact name of registrant as specified in its charter)


Delaware			45-4180440
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

55 Hawthorne Street, 11th Floor, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

(415) 549-8913

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value	NRDS	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The registrant had outstanding 42,648,265 shares of Class A common stock and 31,685,652 shares of Class B common stock as of October 27, 2022.

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Index to Form 10-Q


			Page
PART I		Financial Information
	Item 1.	Financial Statements	3
		Condensed Consolidated Balance Sheets	3
		Condensed Consolidated Statements of Operations	4
		Condensed Consolidated Statements of Comprehensive Loss	5
		Condensed Consolidated Statements of Stockholders’ Equity	6
		Condensed Consolidated Statements of Cash Flows	8
		Notes to Condensed Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
	Item 4.	Controls and Procedures	29

PART II		Other Information
	Item 1.	Legal Proceedings	29
	Item 1A.	Risk Factors	29
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
	Item 3.	Defaults Upon Senior Securities	29
	Item 4.	Mine Safety Disclosures	29
	Item 5.	Other Information	29
	Item 6.	Exhibits	30

Signatures			31

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Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our ability to navigate macroeconomic challenges such as market volatility, inflation and an increasing interest rate environment;

•our expectations regarding the benefits of our acquisition of On the Barrelhead, including expected accretive contributions to our revenue and adjusted EBITDA;

•our ability to successfully integrate On the Barrelhead and achieve our expected synergies from this acquisition;

•our expectations regarding our future financial performance, including total revenue, cost of revenue, Adjusted EBITDA and Monthly Unique Users;

•our ability to grow traffic and engagement on our platform;

•our expected returns on marketing investments and brand campaigns;

•our expectations about consumer demand for the products on our platform;

•our ability to convert users into Registered Users and improve repeat user rates;

•our ability to convert consumers into matches with financial services partners;

•our ability to grow within existing and new verticals;

•our ability to expand geographically;

•our ability to maintain and expand our relationships with our existing financial services partners and to identify new financial services partners;

•our ability to build efficient and scalable technical capabilities to deliver personalized guidance and nudge users;

•our ability to maintain and enhance our brand awareness and consumer trust;

•our ability to generate high quality, engaging consumer resources;

•our ability to adapt to the evolving financial interests of consumers;

•our ability to compete with existing and new competitors in existing and new market verticals;

•our ability to maintain the security and availability of our platform;

•our ability to maintain, protect and enhance our intellectual property;

•our ability to identify, attract and retain highly skilled, diverse personnel;

•our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business;

•the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs;

•our ability to effectively manage our growth and expand our infrastructure and maintain our corporate culture; and

•our ability to successfully identify, manage, and integrate any existing and potential acquisitions.

You should not rely on forward-looking statements as predictions or guarantees of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. These forward-looking statements are subject to risks, uncertainties and other factors described elsewhere in this Quarterly

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Report on Form 10-Q, in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021, and in our subsequent periodic filings with the U.S. Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited


	September 30, 2022		December 31, 2021
(in millions, except share amounts which are in thousands and per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	138.4	$	167.8
Accounts receivable	87.2		57.6
Prepaid expenses and other current assets	21.0		17.4
Total current assets	246.6		242.8
Property, equipment and software — net	47.1		34.9
Goodwill	110.7		43.8
Intangibles — net	68.3		27.6
Right-of-use assets	11.9		13.9
Other assets	0.7		1.1
Total Assets	$	485.3	$	364.1
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	5.8	$	3.2
Accrued expenses and other current liabilities	48.6		32.1
Contingent consideration — current	30.3		30.5
Total current liabilities	84.7		65.8
Contingent consideration — noncurrent	—		24.2
Debt — noncurrent	70.0		—
Deferred tax liability — noncurrent	1.2		1.8
Other liabilities — noncurrent	10.8		14.7
Total liabilities	166.7		106.5
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock — $0.0001 par value per share — 5,000 shares authorized as of September 30, 2022 and December 31, 2021; zero shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Common stock — $0.0001 par value per share — 296,686 shares authorized as of September 30, 2022 and December 31, 2021; 74,322 and 66,722 shares issued and outstanding as of September 30, 2022 and December 31, 2021	—		—
Additional paid-in capital	414.1		331.6
Accumulated other comprehensive income (loss)	(1.9)		0.5
Accumulated deficit	(93.6)		(74.5)
Total stockholders’ equity	318.6		257.6
Total Liabilities and Stockholders’ Equity	$	485.3	$	364.1

See notes to condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share amounts)	2022		2021		2022		2021
Revenue	$	142.6	$	98.5	$	396.9	$	280.1
Costs and Expenses:
Cost of revenue	11.7		7.5		27.6		21.3
Research and development	20.7		16.6		58.2		43.6
Sales and marketing	103.2		56.6		288.1		207.8
General and administrative	15.4		9.1		43.8		26.9
Change in fair value of contingent consideration related to earnouts	0.4		2.4		6.1		10.1
Total costs and expenses	151.4		92.2		423.8		309.7
Income (Loss) From Operations	(8.8)		6.3		(26.9)		(29.6)
Other expense, net:
Interest income	0.5		—		0.6		—
Interest expense	(0.9)		(0.4)		(1.3)		(1.1)
Other gains (losses), net	—		(0.1)		—		1.1
Total other expense, net	(0.4)		(0.5)		(0.7)		—
Income (loss) before income taxes	(9.2)		5.8		(27.6)		(29.6)
Income tax provision (benefit)	(9.9)		13.6		(8.5)		5.0
Net Income (Loss)	$	0.7	$	(7.8)	$	(19.1)	$	(34.6)
Net Income (Loss) Per Share Attributable to Common Stockholders
Basic	$	0.01	$	(0.16)	$	(0.28)	$	(0.70)
Diluted	$	0.01	$	(0.16)	$	(0.28)	$	(0.70)
Weighted-Average Shares Used in Computing Net Income (Loss) Per Share Attributable to Common Stockholders
Basic	73.4		49.8		69.2		49.2
Diluted	75.0		49.8		69.2		49.2

See notes to condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

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	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Net Income (Loss)	$	0.7	$	(7.8)	$	(19.1)	$	(34.6)
Other Comprehensive Income (Loss):
Change in foreign currency translation	(1.1)		0.1		(2.4)		0.3
Comprehensive Loss	$	(0.4)	$	(7.7)	$	(21.5)	$	(34.3)

See notes to condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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	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
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	154	—		0.7						0.7
Issuance of Class A common stock pursuant to settlement of restricted stock units	262	—								—
Stock-based compensation				7.9						7.9
Other comprehensive loss						(0.3)				(0.3)
Net loss								(10.5)		(10.5)
Balance as of March 31, 2022	67,138	$	—	$	340.2	$	0.2	$	(85.0)	$	255.4
Issuance of Class A common stock upon exercise of stock options	629	—		3.6						3.6
Issuance of Class A common stock pursuant to settlement of restricted stock units	400	—								—
Issuance of Class A common stock under Employee Stock Purchase Plan	470	—		3.2						3.2
Stock-based compensation				11.6						11.6
Other comprehensive loss						(1.0)				(1.0)
Net loss								(9.3)		(9.3)
Balance as of June 30, 2022	68,637	$	—	$	358.6	$	(0.8)	$	(94.3)	$	263.5
Issuance of Class A common stock upon exercise of stock options	343	—		1.9						1.9
Issuance of Class A common stock pursuant to settlement of restricted stock units	424	—								—
Class A common stock withheld related to net share settlement of RSUs	(17)	—		(0.1)						(0.1)
Issuance of Class A common stock for business combination	4,935	—		43.2						43.2
Stock-based compensation				10.5						10.5
Other comprehensive loss						(1.1)				(1.1)
Net income								0.7		0.7
Balance as of September 30, 2022	74,322	$	—	$	414.1	$	(1.9)	$	(93.6)	$	318.6

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

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	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Stockholders’ Equity
(in millions, except share amounts which are in thousands)	Shares	Amount
Balance as of December 31, 2020	48,853	$	—	$	99.8	$	0.6	$	(17.7)	$	82.7
Issuance of Class A common stock upon exercise of stock options	1,076	—		3.1						3.1
Issuance of Class A common stock pursuant to settlement of restricted stock units	50	—								—
Class A common stock surrendered for employees’ tax liability upon settlement of restricted stock units	(14)	—		(0.2)						(0.2)
Repurchase of stock options								(1.4)		(1.4)
Repurchase of Class A common stock	(30)	—						(0.4)		(0.4)
Repurchase of Class F common stock	(883)	—						(12.4)		(12.4)
Stock-based compensation				2.8						2.8
Other comprehensive income						0.2				0.2
Net loss								(12.9)		(12.9)
Balance as of March 31, 2021	49,052	$	—	$	105.5	$	0.8	$	(44.8)	$	61.5
Issuance of Class A common stock upon exercise of stock options	436	—		2.7						2.7
Issuance of Class A common stock pursuant to settlement of restricted stock units	166	—								—
Class A common stock surrendered for employees’ tax liability upon settlement of restricted stock units	(41)	—		(0.8)						(0.8)
Repurchase of Class A common stock	(11)	—						(0.1)		(0.1)
Stock-based compensation				5.1						5.1
Net loss								(13.9)		(13.9)
Balance as of June 30, 2021	49,602	$	—	$	112.5	$	0.8	$	(58.8)	$	54.5
Issuance of Class A common stock upon exercise of stock options	183	—		1.3						1.3
Issuance of Class A common stock pursuant to settlement of restricted stock units	169	—								—
Class A common stock surrendered for employees’ tax liability upon settlement of restricted stock units	(41)	—		(0.9)						(0.9)
Conversion of Series A redeemable convertible preferred stock to Class A common stock	58	—		0.5						0.5
Stock-based compensation				5.1						5.1
Other comprehensive income						0.1				0.1
Net loss								(7.8)		(7.8)
Balance as of September 30, 2021	49,971	$	—	$	118.5	$	0.9	$	(66.6)	$	52.8

See notes to condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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	Nine Months Ended September 30,
(in millions)	2022		2021
Operating Activities:
Net loss	$	(19.1)	$	(34.6)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	25.6		19.9
Stock-based compensation	25.3		10.8
Change in fair value of contingent consideration related to earnouts	6.1		10.1
Deferred taxes	(12.5)		4.6
Non-cash lease costs	2.0		5.8
Other, net	0.9		(0.6)
Changes in operating assets and liabilities, net of business combination:
Accounts receivable	(18.7)		(18.7)
Prepaid expenses and other assets	(2.0)		(4.8)
Accounts payable	(4.0)		(1.7)
Accrued expenses and other current liabilities	15.9		15.2
Payment of contingent consideration	(11.5)		—
Operating lease liabilities	(1.7)		(7.9)
Other liabilities	(1.4)		0.4
Net cash provided by (used in) operating activities	4.9		(1.5)
Investing Activities:
Capitalized software development costs	(20.5)		(15.6)
Purchase of property and equipment	(4.3)		(0.7)
Business combination, net of cash acquired	(69.5)		—
Net cash used in investing activities	(94.3)		(16.3)
Financing Activities:
Payment of contingent consideration	(19.0)		—
Proceeds from line of credit	70.0		—
Proceeds from exercise of stock options	6.2		7.1
Issuance of Class A common stock under Employee Stock Purchase Plan	3.2		—
Repurchase of Class A common stock	—		(0.5)
Repurchase of Class F common stock	—		(12.4)
Repurchase of stock options	—		(1.4)
Repurchase of Series A redeemable convertible preferred stock	—		(2.1)
Tax payments related to net-share settlements on restricted stock units	(0.1)		(1.9)
Payment of offering costs related to initial public offering	—		(3.0)
Net cash provided by (used in) financing activities	60.3		(14.2)
Effect of exchange rate changes on cash and cash equivalents	(0.3)		0.1
Net decrease in cash and cash equivalents	(29.4)		(31.9)
Cash and Cash Equivalents:
Beginning of period	167.8		83.4
End of period	$	138.4	$	51.5

NERDWALLET, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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	Nine Months Ended September 30,
(in millions)	2022		2021
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Capitalized software development costs recorded in accounts payable and accrued expenses and other current liabilities	$	1.1	$	0.3
Purchase of property and equipment recorded in accounts payable and accrued expenses and other current liabilities	—		1.5
Offering costs related to initial public offering not yet paid	—		0.2
Supplemental Disclosures of Cash Flow Information:
Income tax payments	$	3.1	$	0.3
Cash paid for interest	0.8		1.6
Supplemental Cash Flow Disclosure Related to Operating Leases:
Cash paid for amounts included in the measurement of lease liabilities	$	2.2	$	6.8

See notes to condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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1.The Company and Basis of Presentation

The Company — NerdWallet, Inc., a Delaware corporation, was formed on December 29, 2011. NerdWallet, Inc. and its wholly-owned 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 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 (SEC) 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, 2021.

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. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full year or any other future period.

Acquisition of On the Barrelhead, Inc. — On July 11, 2022, the Company completed the acquisition of On the Barrelhead, Inc. (OTB), a data-driven platform that provides consumers and SMBs with credit-driven product recommendations. See Note 5 — Business Combination for further discussion.

Significant Accounting Policies — During the nine months ended September 30, 2022, there have been no 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, 2021.

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 condensed consolidated financial statements.

In October 2021, the Financial Accounting Standards Board (FASB) issued 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 condensed consolidated financial statements.

NERDWALLET, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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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)	2022		2021		2022		2021
Credit cards	$	57.4	$	36.1	$	157.2	$	88.9
Loans	28.4		32.2		86.7		96.8
Other verticals	56.8		30.2		153.0		94.4
Total revenue	$	142.6	$	98.5	$	396.9	$	280.1

The contract asset recorded within prepaid expenses and other current assets on the condensed consolidated balance sheet related to estimated variable consideration was $5.2 million and $3.0 million as of September 30, 2022 and December 31, 2021, respectively.

3.Fair Value Measurements

The Company’s assets and liabilities 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, 2022
Assets:
Cash and cash equivalents — money market funds	$	130.7	$	—	$	—	$	130.7
Certificate of deposit	—		2.0		—		2.0
	$	130.7	$	2.0	$	—	$	132.7
Liabilities:
Contingent consideration	$	—	$	—	$	30.3	$	30.3


(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, 2021
Assets:
Cash and cash equivalents — money market funds	$	164.9	$	—	$	—	$	164.9
Certificate of deposit	—		2.0		—		2.0
	$	164.9	$	2.0	$	—	$	166.9
Liabilities:
Contingent consideration	$	—	$	—	$	54.7	$	54.7

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Balance as of beginning of period	$	29.9	$	44.2	$	54.7	$	36.5
Payment	—		—		(30.5)		—
Change in fair value, recognized in earnings	0.4		2.4		6.1		10.1
Other	—		0.1		—		0.1
Balance as of end of period	$	30.3	$	46.7	$	30.3	$	46.7

NERDWALLET, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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Contingent consideration liabilities related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The fair values of the estimated contingent considerations are 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 51.0% and the weighted-average discount rate was estimated to be 12.5% as of September 30, 2022. The weighted-average volatility was 45.5% and the weighted-average discount rate was estimated to be 9.0% as of December 31, 2021.

4.Significant Condensed Consolidated Balance Sheet Components

Property, equipment and software, net includes capitalized software development costs, net of accumulated amortization, of $41.9 million and $32.1 million as of September 30, 2022 and December 31, 2021, respectively. The Company capitalized $8.9 million and $25.8 million of software development costs during the three and nine months ended September 30, 2022, respectively, and $5.8 million and $17.7 million during the three and nine months ended September 30, 2021, respectively. The Company recorded amortization expense related to capitalized software development costs of $5.7 million and $16.0 million during the three and nine months ended September 30, 2022, respectively, and $4.4 million and $12.2 million during the three and nine months ended September 30, 2021, respectively.

Accrued expenses and other current liabilities include operating lease liabilities of $3.0 million and $2.4 million, as of September 30, 2022 and December 31, 2021, respectively.

Other liabilities — noncurrent includes operating lease liabilities of $10.4 million and $12.7 million as of September 30, 2022 and December 31, 2021, respectively.

5.Business Combination

Acquisition of On the Barrelhead, Inc.

On July 11, 2022, the Company completed the acquisition of OTB under an Agreement and Plan of Merger and Reorganization.

Preliminary Purchase Consideration

The preliminary purchase consideration consisted of the following:


(in millions)	Total
Cash consideration1	$	75.7
Stock consideration2	43.2
Total consideration	118.9
Less: amounts considered separate from the business combination and attributable to post-combination expense3	(0.7)
Preliminary 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.

(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.

(3) Primarily comprised of the additional fair value of unvested OTB option awards discretionally accelerated by the Company and attributable to post-combination expense.

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. The final purchase consideration will be subject to customary closing adjustments, including for transaction expenses, indebtedness, cash and working capital.

NERDWALLET, INC. AND SUBSIDIARIES

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Retention Agreements and Inducement Awards

Concurrently with the closing of the acquisition, the Company provided employment offer letters to OTB’s employees, including compensatory retention agreements with the co-founders of OTB which could result in up to $15.0 million of cash awards. 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. 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. The $12.8 million of RSU awards to the co-founders of OTB will generally vest in full upon the third anniversary of the closing of the acquisition. The $2.3 million of RSU awards to non-management employees of OTB will vest annually over four years, with 20% of the RSUs subject to vest on each of the first, second and third annual vesting dates and the remaining 40% of the RSUs subject to vest on the fourth annual vesting date. The $2.4 million of RSU awards granted to all employees of OTB will generally vest over four years subject to a one-year cliff and quarterly vesting thereafter. RSU awards under the Inducement Plan are subject to the conditions of the Inducement Plan and the terms and conditions of the grant agreements covering such awards. Compensation expenses under these employment offer letters and vesting of awards under these retention agreements and Inducement Plan are generally subject to the employees’ continued employment with the Company, and the fair value of such compensation and awards are excluded from the Purchase Price and accounted for separately from the business combination. The value of cash awards under these retention agreements are recognized as compensation expense ratably over the three-year period following the close of the acquisition. The value of RSU awards under the Inducement Plan are recognized as stock-based compensation expense ratably over the respective vesting terms of the awards.

Preliminary Purchase Accounting

The acquisition has been accounted for as a business combination. The preliminary allocation of purchase consideration to the assets acquired and liabilities assumed is as follows:


(in millions)	Fair Value
Preliminary Purchase Consideration	$	118.2
Fair Value of Assets Acquired
Cash and cash equivalents	6.9
Accounts receivable	12.2
Intangible assets	50.1
Total assets	69.2
Fair Value of Liabilities Assumed
Accounts payable	6.4
Accrued expenses and other current liabilities	0.6
Deferred tax liability	12.1
Total liabilities	19.1
Less: Net Assets Acquired	50.1
Goodwill	$	68.1

The preliminary fair value estimates of the net assets acquired are based on preliminary calculations and valuations, including preliminary work performed by third party valuation specialists, which are subject to finalization over the one-year measurement period from the acquisition date.

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The acquired intangible assets consist of definite-lived assets with preliminary estimated fair values and useful lives as follows:


(dollars in millions)	Fair Value		Weighted-Average Useful Life (Years)
Developed technology	$	48.9	5.0
Customer relationships	1.2		1.0
Total intangible assets	$	50.1	4.9

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.

The deferred tax liability of $12.1 million primarily relates to identified intangible assets.

The Company recorded goodwill of $68.1 million, which represents the excess of the preliminary purchase consideration over the estimated fair value of the assets acquired, net of the liabilities assumed. The goodwill is primarily attributable to synergies from combining the operations of the Company and OTB, as well as the value ascribed to the knowledge and experience of the OTB co-founders and employees. For income tax purposes, the acquisition is a stock purchase and goodwill is not tax deductible.

Acquisition-related costs of $1.2 million and $3.4 million were incurred during the three and nine months ended September 30, 2022, respectively, and are included in general and administrative expense on the condensed consolidated statements of operations.

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 the three and nine months ended September 30, 2022, as the ability to objectively quantify such amounts would require a significant level of estimation.

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 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. Pro forma adjustments have been made to reflect the incremental intangible asset amortization to be incurred based on the preliminary fair values and useful lives of each identifiable intangible asset, incremental stock-based compensation related to inducement equity awards, incremental compensation related to cash retention agreements, incremental interest expense related to debt drawn to finance the cash portion of the purchase price, the adjustment of acquisition-related expenses, and the related tax effects of pro forma adjustments for the respective periods.

The unaudited pro forma financial information is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Revenue	$	144.8	$	109.5	$	441.9	$	305.5
Net loss	(10.1)		(13.1)		(34.4)		(40.1)

The unaudited pro forma financial information is not intended to present, or be indicative of, what the results of operations would have been for the combined company for the periods presented had the acquisition actually occurred on January 1, 2021, nor is it meant to be indicative of results of operations that may be achieved by the combined company in the future. The unaudited pro forma financial information does not include any cost savings or other synergies that resulted, or may result, from the OTB acquisition or any estimated costs that will be incurred to integrate OTB. 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.

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6.Goodwill and Intangible Assets

The balance of goodwill, net is as follows:


(in millions)	Nine Months Ended September 30, 2022
Balance at beginning of period	$	43.8
Acquisition of OTB	68.1
Foreign currency translation adjustment	(1.2)
Balance at end of period	$	110.7

No impairment charges have been recorded for goodwill in the nine months ended September 30, 2022 or the year ended December 31, 2021.

Intangible assets with definite lives related to the following:


(dollars in millions)	Weighted-Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
As of September 30, 2022
Technology	4.6	$	55.3	$	(6.7)	$	48.6
User base	5.1	19.4		(5.3)		14.1
Customer relationships	2.0	12.2		(5.9)		6.3
Trade names		0.4		(0.4)		—
Foreign currency translation adjustment						(0.7)
Total		$	87.3	$	(18.3)	$	68.3


(dollars in millions)	Weighted-Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
As of December 31, 2021
Technology	1.8	$	6.4	$	(2.8)	$	3.6
User base	5.8	19.4		(3.2)		16.2
Customer relationships	2.8	11.0		(3.5)		7.5
Trade names		0.4		(0.4)		—
Foreign currency translation adjustment						0.3
Total		$	37.2	$	(9.9)	$	27.6

Amortization expense related to definite-lived intangible assets was $4.6 million and $8.4 million during the three and nine months ended September 30, 2022, respectively, and $1.9 million and $6.0 million during the three and nine months ended September 30, 2021, respectively. No impairment charges have been recorded for intangible assets in the nine months ended September 30, 2022 or the year ended December 31, 2021.

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Estimated future amortization expense related to definite-lived intangible assets as of September 30, 2022 is as follows:


(in millions)
Years Ending December 31,	Amortization
Remainder of 2022	$	4.7
2023	17.4
2024	13.8
2025	13.5
2026	12.5
Thereafter	7.1
Foreign currency translation adjustment	(0.7)
Total	$	68.3

7.Debt

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). 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. 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 under the Credit Agreement to finance the cash portion of the purchase consideration for the acquisition of OTB. This outstanding balance under the Credit Agreement of $70.0 million, which is a Eurodollar Loan with an interest rate of 5.43% as of September 30, 2022, represented the entirety of the Company’s outstanding debt as of September 30, 2022. The Company had no outstanding debt as of December 31, 2021. The available amount to borrow under the Credit Agreement was $28.3 million and $94.7 million as of September 30, 2022 and December 31, 2021, respectively, which is equal to the available amount under the Credit Agreement of $30.0 million and $100.0 million, respectively, 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 September 30, 2022 and December 31, 2021.

8.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. On July 7, 2022, the Company borrowed $70.0 million under the Company’s Credit Agreement to finance the cash portion of the purchase consideration for the acquisition of OTB. See Note 5 — Business Combination and Note 7 — Debt for further discussion. As of September 30, 2022, 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, 2021.

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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 potential loss as of September 30, 2022 or December 31, 2021.

9.Stockholders’ Equity

Equity Incentive Plans — The 2021 Equity Incentive Plan and the predecessor 2012 Equity Incentive Plan, both as amended, provide for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock units and restricted stock awards to employees, non-employee directors and consultants of the Company. At the Company’s 2022 annual meeting of stockholders on May 25, 2022, the stockholders approved an amendment to the 2021 Equity Incentive Plan to increase the aggregate number of shares of Class A common stock reserved for issuance thereunder by 8.0 million shares. Additionally, concurrent with the closing of the acquisition of OTB on July 11, 2022, the Compensation Committee of the Company’s Board of Directors granted RSU awards under the Inducement Plan to employees of OTB who were offered employment with the Company. See Note 5 — Business Combination for further discussion. The 2021 Equity Incentive Plan and the predecessor 2012 Equity Incentive Plan, both as amended, along with the Inducement Plan (collectively, the Plans) comprise the equity incentive plans of the Company.

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 Contractual Life (Years)	Aggregate Intrinsic Value (in millions)
Balance as of December 31, 2021	6,443	$	8.84	6.5	$	45.3
Granted	1,324	$	10.70
Exercised	(1,126)	$	5.66
Cancelled/forfeited	(273)	$	10.30
Balance as of September 30, 2022	6,368	$	9.73	6.9	$	10.2
Vested and exercisable as of September 30, 2022	3,787	$	7.60	5.6	$	9.9

The weighted-average grant-date fair value of options granted was $5.54 per share during the nine months ended September 30, 2022. The aggregate intrinsic value of options exercised was $5.5 million during the nine months ended September 30, 2022.

The per-share fair value of each stock option was determined on the date of grant using the following weighted-average assumptions and ranges of fair value of common stock:


	Nine Months Ended September 30,
	2022		2021
Expected volatility	52.5	%	54.5	%
Expected term (in years)	6.0		6.0
Expected dividend yield	0	%	0	%
Risk-free interest rate	2.6	%	1.1	%

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Restricted Stock Units — 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
Nonvested as of December 31, 2021	3,818	$	18.07
Granted	5,992	$	10.43
Vested	(1,086)	$	16.40
Forfeited	(1,075)	$	15.88
Nonvested as of September 30, 2022	7,649	$	12.59

The total fair value of shares that vested under RSUs was $12.0 million during the nine months ended September 30, 2022.

Employee Stock Purchase Plan — The Company recognized stock-based compensation related to the Employee Stock Purchase Plan (ESPP) of $1.4 million and $5.3 million during the three and nine months ended September 30, 2022, 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)	2022		2021		2022		2021
Research and development	$	2.8	$	1.5	$	9.0	$	3.9
Sales and marketing	3.4		1.3		9.1		3.6
General and administrative	2.9		1.5		7.2		3.3
Total stock-based compensation	$	9.1	$	4.3	$	25.3	$	10.8

In addition, stock-based compensation capitalized related to software development costs was $1.4 million and $0.8 million during the three months ended September 30, 2022 and 2021, respectively, and $4.7 million and $2.2 million during the nine months ended September 30, 2022 and 2021, respectively.

10.Income Taxes

The Company’s tax provision for interim periods is determined using an estimated annual effective tax rate which is adjusted for discrete items occurring during the periods presented. As part of the acquisition of OTB on July 11, 2022, the Company recorded identified intangible assets of $50.1 million. As these identified intangible assets are not deductible for U.S. tax purposes, a related deferred tax liability of $12.1 million was recognized, which provided an additional source of taxable income to support the realization of a portion of the Company’s pre-existing U.S. deferred tax assets. As the Company had previously established a full valuation allowance against its net U.S. 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 condensed consolidated statements of operations for the three and nine months ended September 30, 2022. As of September 30, 2022, the Company has established a full valuation allowance against its net U.S. 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.

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11.Net Income (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. We consider early exercised share options to be participating securities. There were no early exercised share options for the three and nine months ended September 30, 2022, and the impact of early exercised share options on basic and diluted EPS was immaterial for the three and nine months ended September 30, 2021.

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)	2022		2021		2022		2021
Numerator:
Net income (loss) attributable to common stockholders — basic and diluted	$	0.7	$	(7.8)	$	(19.1)	$	(34.6)
Denominator:
Weighted-average shares of common stock — basic	73.4		49.8		69.2		49.2
Effect of dilutive stock options and restricted stock units	1.6		—		—		—
Weighted-average shares of common stock — diluted	75.0		49.8		69.2		49.2
Net income (loss) per share attributable to common stockholders:
Basic	$	0.01	$	(0.16)	$	(0.28)	$	(0.70)
Diluted	$	0.01	$	(0.16)	$	(0.28)	$	(0.70)

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:


	Three Months Ended September 30,		Nine Months Ended September 30,
(in millions)	2022	2021	2022	2021
Shares subject to outstanding stock options and restricted stock units	8.9	5.6	9.6	5.6
ESPP	1.2	—	1.6	—
Series A redeemable convertible preferred stock	—	7.5	—	7.5

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Item 2. 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, 2021.

Overview

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 and app, NerdWallet provides consumers 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 (UK) and Canada.

Acquisition of On the Barrelhead, Inc.

On July 11, 2022, we completed the acquisition of On the Barrelhead, Inc. (OTB), a data-driven platform that provides consumers and small and mid-sized businesses (SMBs) with credit-driven product recommendations. See Note 1 — The Company and Basis of Presentation and Note 5 — Business Combination in the notes to our condensed consolidated financial statements for further discussion.

Key Operating Metric and Non-GAAP Financial Measure

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 and other results under generally accepted accounting principles (GAAP), the following sets forth the key operating metric we use to evaluate our business.

Monthly Unique Users

We define a Monthly Unique User (MUU) as a unique user with at least one session in a given month as determined by a unique device identifier. We measure MUUs during a time period longer than one month by averaging the MUUs of each month within that period. We track MUUs to frame the number of users who may transact with our financial services partners on our platform during a given period. We had 19 million and 20 million average MUUs for the three and nine months ended September 30, 2022, which was up 11% and 2% compared to the three and nine months ended September 30, 2021, respectively. We saw strong engagement in areas such as banking, travel and SMB products, and are also now incorporating our recent acquisition of OTB. Partially offsetting growth were declines from a continued challenging macroeconomic environment in both mortgages and investing. While we expect MUUs to grow over time, the metric may fluctuate from period to period based on macroeconomic conditions, trends in consumer behavior, and our strategic marketing decisions.

Adjusted EBITDA

We use 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.

We define Adjusted EBITDA as net income (loss) from continuing operations adjusted to exclude depreciation and amortization, interest expense, net, provision (benefit) for income taxes, and further exclude (1) loss (gain) on impairment and on disposal of assets, (2) remeasurement of the embedded derivative in our previously outstanding long-term debt, (3) change in fair value of contingent consideration related to earnouts, (4) deferred compensation related to earnouts, (5) stock-based compensation, and (6) acquisition-related costs.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount is not driven by core operating results and renders comparisons with prior periods less meaningful.

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We believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results and in comparing operating results across periods. Moreover, we have included Adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measurement 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 this non-GAAP measure has certain limitations because it does not reflect all items of income and expense that affect our operations. Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

•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 and the embedded derivative in our previously outstanding long-term debt, as well as certain nonrecurring gains (losses);

•Adjusted EBITDA excludes certain recurring, non-cash charges, such as depreciation of property and equipment, amortization of intangible assets, and losses/gains on disposal of assets. Although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect all cash requirements for such replacements or for new capital expenditure requirements;

•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 excludes 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.

In addition, Adjusted EBITDA as we define it may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including 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 Measure” for a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP.

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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)	2022		2021		2022		2021
Revenue	$	142.6	$	98.5	$	396.9	$	280.1
Costs and expenses:
Cost of revenue	11.7		7.5		27.6		21.3
Research and development(1)	20.7		16.6		58.2		43.6
Sales and marketing(1)	103.2		56.6		288.1		207.8
General and administrative(1)	15.4		9.1		43.8		26.9
Change in fair value of contingent consideration related to earnouts	0.4		2.4		6.1		10.1
Total costs and expenses	151.4		92.2		423.8		309.7
Income (loss) from operations	(8.8)		6.3		(26.9)		(29.6)
Other expense, net:
Interest income	0.5		—		0.6		—
Interest expense	(0.9)		(0.4)		(1.3)		(1.1)
Other gains (losses), net	—		(0.1)		—		1.1
Total other expense, net	(0.4)		(0.5)		(0.7)		—
Income (loss) before income taxes	(9.2)		5.8		(27.6)		(29.6)
Income tax provision (benefit)	(9.9)		13.6		(8.5)		5.0
Net income (loss)	$	0.7	$	(7.8)	$	(19.1)	$	(34.6)

______________

(1)Includes stock-based compensation as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Research and development	$	2.8	$	1.5	$	9.0	$	3.9
Sales and marketing	3.4		1.3		9.1		3.6
General and administrative	2.9		1.5		7.2		3.3
Total stock-based compensation	$	9.1	$	4.3	$	25.3	$	10.8

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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,
	2022		2021		2022		2021
Revenue	100	%	100	%	100	%	100	%
Costs and expenses:
Cost of revenue	8		8		7		8
Research and development	15		17		15		16
Sales and marketing	72		57		73		74
General and administrative	11		9		11		9
Change in fair value of contingent consideration related to earnouts	—		3		1		4
Total costs and expenses	106		94		107		111
Income (loss) from operations	(6)		6		(7)		(11)
Other expense, net:
Interest income	—		—		—		—
Interest expense	—		—		—		—
Other gains (losses), net	—		—		—		—
Total other expense, net	—		—		—		—
Income (loss) before income taxes	(6)		6		(7)		(11)
Income tax provision (benefit)	(7)		14		(2)		1
Net income (loss)	1	%	(8	%)	(5	%)	(12	%)

Net loss decreased $8.5 million for the three months ended September 30, 2022, and decreased $15.5 million or 45% for the nine months ended September 30, 2022, compared to the three and nine months ended September 30, 2021, respectively. The decreases were attributable to increases of $44.1 million and $116.8 million in revenue, partially offset by increases of $59.2 million and $114.1 million in expenses, primarily driven by increases of $46.6 million and $80.3 million in sales and marketing expense, $6.3 million and $16.9 million in general and administrative expense, and $4.1 million and $14.6 million in research and development expense, as we continued to invest in our business. Additionally, we had income tax benefits of $9.9 million and $8.5 million for the three and nine months ended September 30, 2022, as compared to income tax provisions of $13.6 million and $5.0 million for the three and nine months ended September 30, 2021.

Revenue


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(in millions)	2022		2021		$		%		2022		2021		$		%
Credit cards	$	57.4	$	36.1	$	21.3	59	%	$	157.2	$	88.9	$	68.3	77	%
Loans	28.4		32.2		(3.8)		(12	%)	86.7		96.8		(10.1)		(10	%)
Other verticals	56.8		30.2		26.6		87	%	153.0		94.4		58.6		62	%
Total revenue	$	142.6	$	98.5	$	44.1	45	%	$	396.9	$	280.1	$	116.8	42	%

Revenue increased $44.1 million, or 45% and $116.8 million, or 42%, for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively, driven by strong growth in credit cards and other verticals revenues, partially offset by lower loans revenue.

Credit cards revenue increased $21.3 million, or 59%, and $68.3 million, or 77%, for the three and nine months ended September 30, 2022, respectively, reflecting our ability to capitalize on higher consumer intent through improved user experiences combined with our deep alignment with our financial services partners to deliver quality matches.

Loans revenue decreased $3.8 million, or 12%, and $10.1 million, or 10%, for the three and nine months ended September 30, 2022, respectively, primarily due to decreases of 50% and 40%, respectively, in mortgages revenue driven by higher interest rates and continuing macroeconomic headwinds, partially offset by increases of 74% and 76%, respectively, in personal loans revenue driven by both organic growth as well as incorporating our recent acquisition of OTB.

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Other verticals revenue increased $26.6 million, or 87%, and $58.6 million, or 62%, for the three and nine months ended September 30, 2022, respectively, driven by increases of 126% and 148%, respectively, in SMB products revenue, and 255% and 140%, respectively, in banking revenue primarily due to the rising interest rate environment. The increase for the nine month period was partially offset by an 18% decrease in insurance revenue reflecting inflation-driven profitability pressure on carriers.

Costs and Expenses


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(in millions)	2022		2021		$		%		2022		2021		$		%
Cost of revenue	$	11.7	$	7.5	$	4.2	56	%	$	27.6	$	21.3	$	6.3	30	%
Research and development	20.7		16.6		4.1		24	%	58.2		43.6		14.6		33	%
Sales and marketing	103.2		56.6		46.6		82	%	288.1		207.8		80.3		39	%
General and administrative	15.4		9.1		6.3		70	%	43.8		26.9		16.9		63	%
Change in fair value of contingent consideration related to earnouts	0.4		2.4		(2.0)		(87	%)	6.1		10.1		(4.0)		(40	%)
Total costs and expenses	$	151.4	$	92.2	$	59.2	64	%	$	423.8	$	309.7	$	114.1	37	%

Cost of revenue

Cost of revenue increased $4.2 million, or 56%, and $6.3 million, or 30%, for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively, attributable to increases of $3.8 million and $6.2 million, respectively, in amortization expense related to capitalized software development costs and intangible assets related to our recent acquisition of OTB.

Research and development expense

Research and development expenses increased $4.1 million, or 24%, and $14.6 million, or 33%, for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively, primarily attributable to increases of $4.0 million and $13.8 million, respectively, in personnel-related costs for our engineering, data, and product management personnel and contractors to support our continued growth.

Sales and marketing expense

For the three and nine months ended September 30, 2022, our total sales and marketing expense was comprised of approximately 27% and 33% for brand marketing, respectively, and 46% and 41% for performance marketing, respectively, with the remainder for organic & other marketing expenses. For the three and nine months ended September 30, 2021, our total sales and marketing expense was comprised of approximately 22% and 37% for brand marketing, respectively, and 44% and 36% for performance marketing, respectively, with the remainder for organic & other marketing expenses. We are able to adjust our marketing spend to reflect changes in external factors and consumer behavior.

Sales and marketing expenses increased $46.6 million, or 82%, and $80.3 million, or 39%, for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively. The increases were primarily attributable to increases of $23.1 million and $43.9 million in performance marketing expenses, $7.8 million and $18.7 million in organic & other marketing expenses primarily due to higher personnel-related costs due to our efforts to grow and increase our user base, and $15.7 million and $17.7 million in brand marketing expenses for the three and nine months ended September 30, 2022, respectively.

General and administrative expense

General and administrative expenses increased $6.3 million, or 70%, and $16.9 million, or 63%, for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively, primarily attributable to increases of $3.0 million and $8.1 million, respectively, in personnel-related costs mainly due to higher stock-based compensation and increased headcount, $1.1 million and $3.3 million, respectively, in director and officer liability insurance costs, and $1.2 million and $3.3 million, respectively, in acquisition-related costs primarily due to costs related to our acquisition of OTB.

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Change in fair value of contingent consideration related to earnouts

The change in fair value of contingent consideration relates to our acquisitions of Fundera, Inc. (Fundera) and Know Your Money (KYM) in 2020. The fair value of the estimated contingent considerations is subject to remeasurement at each reporting date until the payments are made. See Note 3 – Fair Value Measurements in the notes to our condensed consolidated financial statements for further discussion regarding how we estimated the fair value of these contingent considerations.

Other expense, net


	Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change
(in millions)	2022		2021		$		%		2022		2021		$		%
Interest income	$	0.5	$	—	$	0.5	NM		$	0.6	$	—	$	0.6	NM
Interest expense	(0.9)		(0.4)		(0.5)		155	%	(1.3)		(1.1)		(0.2)		24	%
Other gains (losses), net	—		(0.1)		0.1		NM		—		1.1		(1.1)		NM
Total other expense, net	$	(0.4)	$	(0.5)	$	0.1	15	%	$	(0.7)	$	—	$	(0.7)	NM

Other expense, net decreased $0.1 million, or 15%, and increased $0.7 million for the three and nine months ended September 30, 2022 as compared to the three and nine months ended September 30, 2021, respectively. The increase for the nine month period was primarily due to a $1.3 million nonrecurring gain in the nine months ended September 30, 2021 which was partially offset by higher interest income.

Income tax provision (benefit)

We had income tax benefits of $9.9 million and $8.5 million for the three and nine months ended September 30, 2022, respectively, as compared to income tax provisions of $13.6 million and $5.0 million for the three and nine months ended September 30, 2021, respectively. Our effective tax rate was 107.5% and 30.9% for the three and nine months ended September 30, 2022, and 232.2% and (17.0%) for the three and nine months ended September 30, 2021, respectively, as compared to the U.S federal statutory income tax rate of 21%. During the three and nine months ended September 30, 2022, we recognized a tax benefit of $12.1 million related to the change in the Company’s existing full valuation allowance on deferred tax assets resulting from the recent acquisition of OTB, partially offset by higher capitalization of research and development expenses under new tax regulations effective in 2022. Our effective tax rates for the three and nine months ended September 30, 2021 reflect the impact of the valuation allowance recorded against our U.S. deferred tax assets of $13.2 million.

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Non-GAAP Financial Measure

Adjusted EBITDA as we define it may not be comparable to similarly titled measures used by other companies. Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other GAAP results.

We compensate for these limitations by reconciling Adjusted EBITDA to net income (loss), the most comparable GAAP financial measure, as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2022			2021			2022			2021
Net income (loss)	$	0.7		$	(7.8)		$	(19.1)		$	(34.6)
Depreciation and amortization	10.8			7.1			25.6			19.9
Stock-based compensation	9.1			4.3			25.3			10.8
Acquisition-related retention	1.4			—			1.4			—
Deferred compensation related to earnouts	0.4			0.6			1.2			1.5
Loss on disposal of assets	—			0.5			—			0.8
Change in fair value of contingent consideration related to earnouts	0.4			2.4			6.1			10.1
Acquisition-related expenses	1.2			—			3.4			0.1
Interest expense, net	0.4			0.4			0.7			1.1
Other (gains) losses, net	—			0.1			—			(1.1)
Income tax provision (benefit)	(9.9)			13.6			(8.5)			5.0
Adjusted EBITDA	$	14.5		$	21.2		$	36.1		$	13.6

Net income (loss) margin	0		%	(8		%)	(5		%)	(12		%)
Adjusted EBITDA margin1	10		%	21		%	9		%	5		%

______________

(1)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 decrease in net loss for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021.

Adjusted EBITDA decreased $6.7 million and increased $22.5 million for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively. The changes were primarily attributable to decreases of $8.5 million and $15.5 million in net loss and increases in adjustments to reconcile Adjusted EBITDA to net income (loss), including $4.8 million and $14.5 million for stock-based compensation, and $3.7 million and $5.7 million for depreciation and amortization, offset by decreases of $23.5 million and $13.5 million for income taxes.

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, 2022) and long-term (i.e., beyond the next twelve months), have historically been cash generated from operations and, more recently, sales of our common stock, and borrowings under our credit facilities. Our primary liquidity needs are related to the funding of general corporate requirements, including working capital, research and development, and capital expenditures, as well as other liquidity requirements including, but not limited to, business combinations.

As of September 30, 2022 and December 31, 2021, we had cash and cash equivalents of $138.4 million and $167.8 million, respectively.

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Known Contractual and Other Obligations

A description of contractual commitments as of September 30, 2022 is included in Note 8 – 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, 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, 2022, 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, 2021.

In addition, as part of the acquisitions of KYM and Fundera, both in 2020, we committed to pay additional amounts of up to $11 million and $66 million, respectively, related to contingent earnout consideration over the succeeding years based, in part, on the achievement of certain financial metrics related to 2021 and 2022 performance. During the nine months ended September 30, 2022, we paid $32.5 million for the 2021 performance period, consisting of $30.5 million of contingent consideration and the remainder for deferred compensation related to earnouts. The remaining commitment for the 2022 performance period is expected to be settled over the next twelve months. Based on fair value measurements for contingent consideration liabilities (see Note 3 – Fair Value Measurements in the notes to our condensed consolidated financial statements), $30.3 million was recorded for contingent consideration as of September 30, 2022.

Trends, Uncertainties and Anticipated Sources of Funds

In order to grow our business, we expect to increase our personnel and related expenses and to make significant investments in our business. 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 growth, as well as the extent and duration of various forces impacting the macroeconomic environment, including market volatility, inflation, and rising interest rates. 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 or access to our credit facility to satisfy those needs.

We believe our current cash and cash equivalents, future cash flow from operations, and access to our credit facility with Silicon Valley Bank and certain other lenders, subject to customary borrowing conditions, will be sufficient to meet our ongoing working capital, capital expenditure and other liquidity requirements for at least twelve months from the date of this filing. On July 7, 2022, we borrowed $70.0 million under our credit facility to finance the cash portion of the purchase consideration for the acquisition of OTB. See Note 5 — Business Combination in the notes to our condensed consolidated financial statements for further discussion. In September 2022, we amended the credit facility to, among other things, extend the termination date to December 2, 2023 from September 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. The outstanding balance on our credit facility was $70.0 million as of September 30, 2022, and there was no outstanding balance as of December 31, 2021. The available amount to borrow under our credit facility was $28.3 million and $94.7 million as of September 30, 2022 and December 31, 2021, respectively, which is equal to the available amount under the credit agreement of $30.0 million and $100.0 million, respectively, net of letters of credit with Silicon Valley Bank of $1.7 million and $5.3 million, respectively. Our credit facility contains certain customary financial and non-financial covenants. We were in compliance with all covenants as of September 30, 2022 and December 31, 2021. See Note 7 — Debt in the notes to our condensed consolidated financial statements for further discussion on the credit facility.

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.

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Sources and Uses of Capital Resources

The following table summarizes our cash flows:


	Nine Months Ended September 30,
(in millions)	2022		2021
Net cash provided by (used in) operating activities	$	4.9	$	(1.5)
Net cash used in investing activities	(94.3)		(16.3)
Net cash provided by (used in) financing activities	60.3		(14.2)
Effect of exchange rate changes on cash and cash equivalents	(0.3)		0.1
Net decrease in cash and cash equivalents	$	(29.4)	$	(31.9)

Operating activities

Net cash provided by operating activities increased $6.4 million in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, due to a $15.5 million decrease in net loss, a $5.9 million increase in net cash outflow from changes in operating assets and liabilities, and a $3.2 million decrease in non-cash charges. The increase in net cash outflow from changes in operating assets and liabilities was primarily due to a $11.5 million payment of contingent consideration, partially offset by a $6.2 million decrease related to operating lease liabilities. The decrease in non-cash charges was primarily due to a $17.1 million decrease in deferred taxes, partially offset by a $14.5 million increase in stock-based compensation.

Investing activities

Net cash used in investing activities increased $78.0 million in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, due to $69.5 million of cash paid, net of cash acquired, for our acquisition of OTB, as well as increases of $4.9 million in capitalized software development costs and $3.6 million in purchases of property and equipment.

Financing activities

Net cash provided by financing activities increased $74.5 million in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily due to $70.0 million of proceeds from our line of credit to finance the cash portion of the purchase consideration for our acquisition of OTB, and cash outflows in the prior-year period for repurchases of $12.4 million for Class F common stock, partially offset by a $19.0 million payment of contingent consideration.

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, 2022, 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, 2021.

Recently Issued and Adopted Accounting Pronouncements

For information on recent accounting pronouncements, see Note 1 – The Company and Basis of Presentation in the notes to our condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

During the nine months ended September 30, 2022, there were no material changes from the market risk disclosures in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of September 30, 2022. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective as of September 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with any certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. See further discussion under “Litigation and Other Legal Matters” in Note 8 – Commitments and Contingencies in the notes to condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and the Company could have a material and adverse impact on our business, financial condition, results of operations and cash flows. You should carefully consider the risk factors set forth in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 and in our subsequent periodic filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

(a) Exhibits.

Exhibit

Number

Description of Exhibit

Location

10.1+

NerdWallet, Inc. 2022 Inducement Equity Incentive Plan.

Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (No. 333-266087) filed July 11, 2022

10.2+

Form of RSU Inducement Award Agreement for OTB Founders under the NerdWallet, Inc. 2022 Inducement Equity Incentive Plan.

Exhibit 99.2 to the Registrant’s Registration Statement on Form S-8 (No. 333-266087) filed July 11, 2022

10.3+

Form of RSU Inducement Award Agreement for Other Employees under the NerdWallet, Inc. 2022 Inducement Equity Incentive Plan.

Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 (No. 333-266087) filed July 11, 2022

10.4*

Amended and Restated Senior Secured Credit Facilities Credit Agreement between Silicon Valley Bank and the Registrant, dated February 19, 2021, as amended by the Third Amendment thereto, dated September 15, 2022.

Filed herewith

31.1

Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

31.2

Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith

32.1**

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

32.2**

Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Furnished herewith

101.INS

Inline XBRL Instance Document.(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

***

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

***

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

***

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

***

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

***

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

***

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101).

***

_____________

+ Indicates a management contract or compensatory plan.

* Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule or exhibit upon request.

** The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

*** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NERDWALLET, INC.

Date:

November 2, 2022

By:

/s/ Lauren StClair

Lauren StClair

Chief Financial Officer