Unique Model
The San Francisco-based company provides guidance and recommendations on an array of financial services including loans, banking, mortgage, insurance, mutual fund investment, and credit card, with focus on retail customers and small and medium enterprises.
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It was founded in 2009 by Jacob Gibson and Tim Chen, who has served as the CEO since then. One of the key offerings of the specialty financial services company is experts’ rankings on credit card services, which enabls customers to choose the most suitable and cost-effective services that meet their specific requirements. The unique model has allowed the company to stand out in that segment.
Meanwhile, NerdWallet’s financial performance has been impacted by the pandemic to some extent, causing a decline in partner activity. The partner base includes big names like American Express Company (NYSE: AXP) and Citigroup, Inc. (NYSE: C). Being an emerging area, the regulatory environment in the online financial services market keeps evolving, causing uncertainty.
Growth Plan
The growth initiatives, especially international expansion, can put pressure on the company’s liquidity and would demand a healthy cash flow. As a prelude to its stock market debut, the company broadened its portfolio through a couple of acquisitions last year – UK-based online financial consultancy Know Your Money and New York-based micro-lending company Fundera.
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Earlier this year cryptocurrency exchange Coinbase Global Inc. (NASDAQ: COIN), e-commerce brokerage Robinhood Markets Inc. (NASDAQ: HOOD) and mobile commerce platform Affirm Holdings Inc. (NASDAQ: AFRM) went public through successful IPOs.
Mixed FY20
NerdWallet expanded its user base constantly in recent years. In fiscal 2020, it generated revenues of $245.3 million, which is up 7% from the prior-year period. However, net profit declined to $5.09 million or $0.05 per share from $24.2 million or $0.22 per share in 2019, reflecting a 22% increase in operating costs.