NerdWallet (NASDAQ:NRDS) reported fourth-quarter and full-year 2025 results that topped management’s guidance for revenue and non-GAAP operating income, as the company leaned more heavily on performance marketing and other non-search channels to counter steep declines in organic search traffic.
Q4 results topped guidance as performance marketing momentum continued
Co-founder and CEO Tim Chen said the company exceeded its outlook for both revenue and non-GAAP operating income in the quarter. NerdWallet posted fourth-quarter revenue of $225 million, up 23% year-over-year, and non-GAAP operating income of $25 million, up 47% year-over-year. CFO John Li attributed the outperformance to “continued momentum in performance marketing.”
Organic search headwinds persisted amid AI shifts, but non-search channels offset
Management repeatedly pointed to industry changes in how consumers find financial information. Chen said 2025 brought headwinds “as consumers increasingly turned to AI Overviews and LLMs over traditional search, resulting in steep organic search declines.” Despite that pressure, NerdWallet delivered 22% revenue growth for the full year and 23% growth in the fourth quarter as performance marketing, direct, and non-search referral channels more than offset organic declines.
During Q&A, Morgan Stanley’s Michael Piranian asked whether LLM-based referral traffic was incremental or cannibalizing traditional organic traffic. Chen said NerdWallet believes it is incremental, adding that industry data suggests people are searching more across both traditional search engines and LLMs. He also noted that conversion rates on LLM referral traffic are “much higher” and “growing rapidly.”
Piranian also asked how persistent SEO headwinds factor into the 2026 profitability outlook and whether performance marketing intensity could pressure margins. Li responded that the company is “not solving for a margin percentage” and is instead focused on growing non-GAAP operating income dollars. He said focusing on margin percentage targets could limit flexibility given the changing mix between performance marketing and organic revenue, and suggested investors look at performance marketing spend trends over the past couple of years for context on how the company is thinking about performance marketing-driven growth over time.
Vertical performance: lending and banking gains offset weaker credit cards and SMB
Li broke out fourth-quarter results across the company’s current reporting structure, noting that total revenue growth was driven by 28% growth in the consumer verticals, partially offset by a 12% decline in SMB.
- Insurance revenue increased 13% year-over-year, which Li said was driven by robust auto carrier demand.
- Lending revenue increased 141% year-over-year, driven by 264% growth in personal loans, plus double-digit growth in mortgages and other loans.
- Emerging verticals revenue grew 57%, driven by banking. Li said NerdWallet leveraged conversion data provided by partners to gain share in a healthy demand environment.
- Credit card revenue declined 24% year-over-year, and SMB revenue declined 12%, which management attributed to organic search headwinds.
While management described momentum in banking, Li said the company is cautious on the outlook for that business, warning that lower interest rates could reduce demand for high-yield savings accounts as the year progresses.
For the full year, NerdWallet reported revenue of $837 million, up 22% versus 2024. Consumer vertical revenue grew 27% to $737 million, while SMB revenue decreased 9% to $100 million, which Li again tied primarily to organic search headwinds.
Profitability, cash flow, and capital allocation updates
Li said non-GAAP operating income in the fourth quarter was $25 million, above the company’s guidance range. He attributed the beat primarily to revenue outperformance, partially offset by margin pressure from declining organic search revenue. NerdWallet’s fourth-quarter GAAP operating income was $19 million. Brand marketing expense was $11 million in Q4, which Li said was consistent with prior-year levels.
For full-year 2025, NerdWallet reported non-GAAP operating income of $96 million at an 11% margin, compared with $48 million at a 7% margin in 2024. Li said the margin expansion was driven by expense discipline, partially offset by a 40% increase in performance marketing investments compared to 2024. Full-year GAAP operating income was $65 million.
Li also noted that the company ended the year with a cash balance of $98 million and reiterated the company’s plan to continue disciplined capital allocation, including opportunistic share repurchases and bolt-on acquisitions meant to accelerate strategic initiatives.
2026 guidance and reporting changes
Looking ahead, NerdWallet guided to first-quarter revenue of $224 million to $232 million, representing 9% year-over-year growth at the midpoint. The company expects first-quarter non-GAAP operating income of $28 million to $32 million. Li said the guidance assumes similar trends to the fourth quarter, with performance marketing-driven revenue growth outweighing organic headwinds. He also said margin compression tied to mix shift is expected to be offset by year-over-year declines in brand marketing spend, noting that the first quarter of 2025 included a Super Bowl ad that was not repeated in 2026.
For the full year, NerdWallet expects non-GAAP operating income of $95 million to $110 million. Li said the company anticipates the first and third quarters will be its strongest periods, consistent with prior years, and modeled “somewhat softer results” for the rest of the year due to continued organic search headwinds and expectations that a recent surge in banking will cool as short-term interest rates fall further.
Li also announced a change in revenue reporting beginning in the first quarter of 2026. The company will simplify revenue reporting from five categories to two: consumer and SMB. The consumer category will combine insurance, credit cards, loans, and emerging verticals, while SMB will remain as currently reported. Management said the change better reflects how consumers and SMBs engage across multiple product categories, and that historical data has been restated under the new presentation.
On strategy, Chen said the company is continuing to invest with a long-term focus on building deeper relationships with consumers and SMBs across more financial decisions, while acknowledging near-term pressure on organic search. He also discussed internal and customer-facing use of AI, saying NerdWallet is leveraging AI to augment internal operations and exploring consumer-facing experiences, while emphasizing compliance and auditability requirements in regulated financial categories.
About NerdWallet (NASDAQ:NRDS)
NerdWallet (NASDAQ: NRDS) is a personal finance company that offers independent guidance and comparison tools to help consumers make informed financial decisions. Through its website and mobile application, NerdWallet provides a wide range of content, including articles, calculators and reviews covering credit cards, mortgages, personal loans, banking products, investing, insurance and taxes. The platform aggregates partner offers to enable side-by-side comparisons, while editorially maintaining objectivity to support users in identifying the products that best suit their individual needs.
Founded in 2009 by Tim Chen and Jacob Gibson, NerdWallet is headquartered in San Francisco and serves consumers primarily in the United States, with additional localized offerings in Canada and the United Kingdom.
