Good day and thank you for standing by. Welcome to the NerdWallet, Inc. Q3 2026 earnings call. This time, all participants are in a listen-only mode. After the speaker's 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 and you will hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Rob Farris, VP of Finance. Please go ahead.

Thank you, operator. Welcome to the NerdWallet Q3 2026 earnings call. Joining us today, our co-founder and CEO, Tim Chen, Chief Financial Officer, John Lee. 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, except where we are unable, without unreasonable efforts, to calculate certain reconciling items with confidence. With that, I'll now turn it over to Tim Chen, our co-founder and CEO.

Tim? Thanks, Rob. We delivered revenue of $240 million in the third quarter with non-GAAP operating income, or NGOI, of $30 million. Revenue grew 11% year-over-year, but was below our guidance range due to a $17 million year-over-year decrease in auto insurance revenue. As a result, NGOI came in at the low end of our guidance range. We're our own harshest critics, and we are disappointed by our underperformance in auto insurance, especially with the tailwinds the overall industry is experiencing. We're relatively early in the development of our auto insurance carrier network, which has limited our ability to monetize traffic relative to our peers. We are committed to expanding our network of insurance carrier and third-party agent relationships. Unfortunately, this takes time to build, and in hindsight, we were overly optimistic on partnership timelines. Although we expect these auto insurance dynamics to continue to impact our results for the remainder of the year, we are confident that we will secure these partnerships over time. From an owned audience standpoint, we are excited by and continue to invest in vertical integration plays across our brokering and advisory business with payback periods beyond the current year. Our full year NGOI guidance range includes 15 to $20 million of negative impact associated with these investments, consistent with our outlook from last quarter. AI also gives us new ways to build and deliver services to consumers and SMBs. In our vertically integrated businesses, we are using AI assisted development to improve the software our in-house agents use to manage customer relationships. Looking ahead, we are exploring ways for our licensed agents to support consumers shopping through AI assistance. And now I will pass it over to John to cover our financial results in more detail. Thanks, Dan.

As Tim mentioned, total revenue in Q3 was $240 million of 11% year-over-year and below our guidance range of $244 to $260 million. Consumer revenue was $215 million of 12% year-over-year, driven by growth in student loans, personal loans, and deposit accounts. Personal loan revenue increased as we expanded our marketplace to serve more borrowers, and deposit account revenue growth was driven by expanded partner budgets. These increases were partially offset by a $17 million year-over-year decline in auto insurance. SMB revenue was $25 million, up 6% year-over-year. Strong loan originations and renewals supported growth, while organic search traffic continued to pressure other SMB products. Moving to profitability. Q3 GAAP operating income was $19 million and NGOI was $30 million at a 13% margin. Beginning this quarter, our NGOI definition excludes certain accelerated stock-based compensation. This quarter, this definition change resulted in a $3.9 million add-back to NGOI related to a previous acquisition. Adjusted EBITDA was $40 million at a 17% margin. Turn to cash flow and capital allocation. We generated 129 million of adjusted free cash flow over the trailing 12 months, a 51% year-over-year increase. During this quarter, we repurchased approximately 11 million of Class A common stock, bringing our repurchases over the trailing 12 months to approximately 151 million. Our weighted average diluted share count was 64.7 million, down 16% year-over-year. As of September 30th, we had $74 million of cash and cash equivalents with approximately $57 million remaining under our share repurchase authorization. Turning to guidance, we expect fourth quarter revenue in the range of $191 to $203 million and NGOI in the range of $9 to $15 million. For the full year, this implies that we expect NGOI in the range of $85 to $91 million. Looking forward, although we're still in the 2027 planning process, we expect to increase revenue year-over-year in 2027, but growing in Q1 will be a challenge as it will be our toughest year-over-year comp. On expenses, we plan to increase our investments in longer payback vertical integration and AI-related projects next year. Although these investments will have a negative impact on NGOI in the near term, We believe that will help us build a stronger business and set us up for sustainable long-term revenue growth. Our cash generation gives us flexibility to invest in the business, pursue acquisitions, and return capital to shareholders. We'll continue to weigh these opportunities against one another with a focus on long-term shareholder value. With that, we'll open up ProcureNet.

As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by as we compile a Q&A roster. Our first question comes from the line of Ralph Shackert of William Blair. Please go ahead. Your line is open.

Good afternoon. Thanks for taking the questions. First, just on the SEO headwinds that you called out, can you maybe kind of speak to the relative headwinds you're seeing, I guess, in Q3 versus what you've experienced through the year? Just kind of curious, you know, if those headwinds are getting tougher, if you're finding workarounds, etc.? ? And then second, just on the insurance situation and the insurance vertical, what kind of time horizon do you think it would take to build these integrations and get that business sort of back where you expect it to be? Thank you.

Thanks for the question. So in terms of SEO, organic search has become a fraction of what it was for us after three and a half years of rapid declines. That being said, the pace of declines has stabilized a bit in recent months. So just as a reminder, educational content has been severely impacted as Google puts AI summaries in search results. However, with product marketplaces like insurance, it's been more insulated. I mean, there is an impact, but you can't, for example, summarize a marketplace. There's inventory, dynamic pricing, underwriting, eligibility, and a host of other factors that do require that marketplace. I'd say SEO is much smaller than it was before, and it's stabilizing a bit. In terms of insurance, I guess to give a little more color there, we mentioned in our prepared remarks that our partner network is too narrow. So we have direct relationships with a few of the top 10 carriers, including one that was running laps around everyone during the last few years coming out of the hard market. So that allowed us to be very competitive in acquiring customers in 2024 and 2025. So what happened this year is the rest of the top 10 carriers are starting to get way more competitive in acquiring customers, which is awesome for the industry. But yeah, you have to be able to monetize. So ultimately, we need to get more competitive. And carrier relationships take time to build. They don't really want to work with you until you're at a certain volume or have established your reputation in the market. And even after that happens, it can take quarters to establish that direct relationship. So it's a little hard to predict, frustrating for us, but the good news is we have the volume, we're talking, but it's hard to say exactly when we secure those relationships. At some point we'll get it done and it'll be pretty obvious when that happens, but we don't expect to resolve the problem in Q4. Thank you.

We will now take our next question. Please stand by. Our next question comes from the line of Yusuf Squali of TruSecurities. Please go ahead. Your line is open.

Thanks. This is Robert. I'm for Yusuf. Thanks for taking the questions. On organic search, so I'm just curious what the strategy is here now to overcome the organic search headwinds because, you know, historically it's been an organic SEO business. So I'm just curious now in this new era and with search seeing a lot of volatility, what the new strategy is and then on that front, I'm curious how much of traffic comes from AI agents today and where you think this is going to be in the next five years or the next 10 years. Thanks.

Yeah, Robert, thank you for that question. So we really have a multi-channel marketplace generating a ton of NGOI focused on in-month earnings, right? But we also have multiple long-term vets that we've been discussing over the last few quarters so I would break out our business in the following categories which is as you mentioned we have our SEO led content business that has been declining but it's a lot smaller today than it was a couple years ago we have our paid marketing marketplace that has been growing meaningfully year-over-year and you could track the The increase in our marketing spend that we disclose and we've been pretty clear that we are focused on in month profit, positive profit in that business. And we also have our vertical integration bets, which is negative 10 July, which is this 15 to 20 million dollars that we've highlighted for 2026 that we're excited about. And it is really a big part of our owned audience strategy. and then we have our long-term vets. They're more AI related as you could imagine now and they're not contributing to the top line today but does hit our OpEx and so far. So I would really think about it in those four terms and going back to your original question, yes, SEO content business although big has been declining and it's much smaller today than two years ago.

On the agentic traffic question, I mean, I think it's a little bit hard to predict where that goes. I think it's going to vary a lot by vertical. As an example, I would speculate that in auto insurance, it's going to really come down to whether carriers play ball. And then you have to think about some of the things they're worried about, right? So first is churn. If you have customers who are shopping via an agent, are they going to reshop in six months and That's going to really impact LTV pretty linearly and make it a less attractive channel. And then the second piece you got to think about is just like the cost of even quoting. I mean, it costs us a few bucks to run a quote and then it costs the carriers a multiple of that to give a quote from an underwriting perspective. So that ratio of empty calorie quoting versus people who actually become customers is going to matter a lot. and I think without, you know, without the major carriers playing ball, it's just not really going to function as a market. So that being said, we're investing in it. I think everyone's going to experiment with it and see where it goes, but it's kind of hard to say exactly how big it'll be.

Okay, great. Thanks.

We will now take our next question. Please stand by. Our next question comes from the line of Michael Infante of Morgan Stanley. Please go ahead. Your line is open.

Yeah. Hi, guys. Thanks for taking my question. Hope you're doing well. Tim, I'd be curious to just get your perspective and perhaps your conversations with investors just in terms of how you describe the value prop of the NerdWallet platform today, particularly as some of the labs now are obviously coming out with personal finance functionality, probably begin to and many more.

In order to do that in a compliant manner, you really need a trusted marketplace that has the inventory, the pricing that's going to send you to the right place. And so that's where we're in conversations with both the model companies as well as constantly with consumers. And I think there's an opportunity to do that in an agent tech world. Now, exactly what shape that takes, I think it's still being sorted out in terms of how the economics work. I think it's going to be much more liquid in some verticals and not going to change that much in others. But we want to be ready for all eventualities there, so we're definitely making the investment today.

I appreciate that. And John, just for a quick follow-up, I mean, performance marketing in the quarter, I think it rose $35 million year-on-year. Again, let's call it $25 of incremental revenue. I obviously understood that. Thanks again, guys. Yeah, I mean, it's

Related to, I mean, the one big area that we just talked about is all the initiatives we're doing on insurance, right? So having a broader carrier network and having a healthy distribution network is an area that we're very focused on. In terms of ROAS, we're highly focused on making sure that we are in-quarter positive in our marketplace and that For forced marketing isn't just SEO. There are multiple different channels that we are developing, including social and other channels that were highly focused on it. And then the other part of this is that in the math that you're doing, Michael, a lot of our NGOI investments are actually flowing through there as well. So some of the lift you're not seeing there is because Thank you. There are no further questions. I will now pass back to management for closing remarks.

Thanks everyone for your questions. Our mission of providing clarity for all of life's financial decisions continues to guide us. I want to thank our Nerds for their dedication to that mission and our shareholders for your continued support. We're encouraged by the progress we're making and excited about the opportunity ahead. Earning the trust of the consumers and small businesses we serve and keeping them coming back to NerdLog. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.