NerdWallet, Inc.

Good day and thank you for standing by. Welcome to NerdWallet Inc. Q4 2022 earnings call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Caitlin McNamee, head of IR. Please go ahead.

Thank you, Operator, and welcome to the NerdWallet Q4 2022 earnings call. Joining us today are co-founder and chief executive officer Tim Chen and chief financial officer Lauren St. Clair. Our press release and shareholder letter are available on our investor relations website, and a replay of this update will also be available following the conclusion of today's call. We intend to use our investor relations website as a means of disclosing certain material information and complying with disclosure obligations under SEC Regulation FD from time to time. As a reminder, today's call is being webcast live and recorded. Before we begin today's remarks and question and answer session, I would like to remind you that certain statements made during this call may relate to future events and expectations and as such constitute forward-looking statements. Actual results and performance may differ from those expressed or implied by these forward-looking statements as a result of various risks and uncertainties, including the risk factors discussed in reports filed or to be filed with the SEC. We urge you to consider these risk factors and remind you that we undertake no obligation to update the information provided on this call to reflect subsequent events or circumstances. You should be aware that these statements should not be considered a guarantee of future performance. Furthermore, during this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. With that, I will now turn it over to Tim Chen, our co-founder and CEO of NerdWallet. Tim?

Thanks, Caitlin. Here at NerdWallet, our 2023 plans are well underway. We started the year on the right foot, ready to capitalize on new opportunities, grow our business, and help more people in more ways. And this is thanks to the hard work NERDS put in throughout the last year. In that spirit, today I am proud to share our strong finish to 2022 as we exceeded our revenue and adjusted EBITDA guidance in Q4. We achieved this in the face of continued tightening and underwriting across lower credit bands during the quarter. Some of our resilience is driven by the fact that our revenue skews towards consumers with prime credit. but it is also a testament to our investment in building a brand that is trusted across a diverse set of consumer and SMB verticals. Our brand's appeal across multiple verticals has an important follow-on benefit. It becomes easy for us to land and expand into more verticals, and many of those verticals are inversely correlated to each other, allowing us to grow even during challenging environments. For example, the rising rate environment has created a tailwind in our banking vertical, offsetting headwinds in mortgage refinancing. Whereas during the COVID-19 pandemic, we saw a massive increase in unemployment over a very short timeframe, creating headwinds in credit cards, but driving tailwinds in verticals that benefited from fiscal and monetary stimulus. These results are great in and of themselves, But I also value them because they reflect a concerted effort across NerdWallet to execute on our strategy. With progress every quarter in our land and expand, vertical integration, and registration and engagement growth pillars, we ended 2022 several steps further in our journey towards building a trusted financial ecosystem, or a single platform where consumers and SMBs can learn, shop, and manage their money. In Q4, we continued to benefit from our diversified business, as well as our investments in building a trusted brand. We now reach consumers not only in the US, but also the UK, Canada, and as of early Q4, Australia. While we are still early in our land and expand efforts in Australia, we have confidence in our playbook. Our sustained investments in established verticals have also continued to pay off. After years of a low interest rate environment, our banking vertical has surged with the rate hikes in Q3 and Q4, delivering another quarter of triple-digit year-over-year growth in Q4 as we helped consumers shop for high-yield savings accounts and more. While the insurance vertical has faced uncertain industry-specific headwinds over the past several quarters, the team has been hard at work preparing for a return to a more normalized environment. building and optimizing a new in-house auto insurance marketplace. This gives NerdWallet more control over these consumer experiences. As a result of this work and the normalizing environment, insurance drove 43% year-over-year growth in Q4. The team plans to extend this success to our life and home insurance marketplaces. Similarly, we feel confident in our ongoing vertical integration initiatives. Our SMB vertical continued to outperform with 94% year-over-year growth as the team invested in growing their organic and paid reach while continuing to help our installed base of SMBs meet their financial needs. We have primarily integrated on the barrelhead or OTB with our loans verticals. We are facing headwinds across loans verticals including our organic and acquired business broadly in line with the industry as interest rates rise and lenders continue to tighten underwriting in anticipation of a slowdown. As with our insurance vertical, the loans team remains committed to investing in customer experiences in advance of a macro recovery. In Q4, we saw positive signals from the continued vertical integration of OTB's loan matching technology, and the improvements have helped us double our match rate when users are directed through the updated personal loans flow. These improvements position us well for an eventual macro recovery, and we look forward to the continued enhancements that further integration will bring in 2023. We also continue to make strides in our registration and engagement efforts that will help power our trusted financial ecosystem by enabling us to drive repeat visits, collect data, and nudge our users with relevant, personalized insights. Through content and personalization optimizations, we drove improvements in click-through rates for NerdWallet email campaigns. Within our registered user dashboard, we also launched courses, which provide registered users with curated content on financial topics they're interested in. These have also seen strong engagement, and the team plans to expand the catalog of courses to provide our registered users with relevant trusted guidance. Our consumer trust competitive advantage underpins all of our achievements this past quarter. Consumers and SMBs increasingly know, trust, and prefer NerdWallet. We have invested thoughtfully in building this trust, particularly through our brand marketing. Our prior brand campaigns continue to deliver durable results. In Q4, a quarter where we typically pull back on brand campaigns, we achieved our highest ever brand awareness measures, and we are building on this with our newest national brand campaign, which launched in late December, as well as new tactics, including sports sponsorships. As discussed last quarter, we plan to continue with our recent cadence of running large-scale brand campaigns during the first three quarters of the year. And while we will increase our investment in brand, given the results we've seen so far, you should expect the growth in that investment will be less than in 2022. Financial institutions also continue to recognize the value we provide consumers, and they make decisions accordingly. In Q4, our content team revised our star rating for a financial institution when they changed their deposit account offering. Knowing the weight our ratings have with consumers, the institution ultimately reversed course and will continue to offer a competitive product for all consumers. These results speak not only to the tremendous value we provide consumers and SMBs, but also to the strength of the business we've built, and I look forward to sharing more in the months to come. In the meantime, I'll pass it to Lauren St. Clair, NerdWatt CFO, to share more about our financial performance in Q4.