NerdWallet’s Q2 ‘26 Earnings
5 things marketers at credit card & personal loan companies should take away
Hey Toaster Readers,
This week is sponsored by our friends at Spinwheel.
Last week, NerdWallet announced Q2 earnings. Revenue came in at $197.3 million, up 6% YoY, beating Wall St’s expectations.
But, Adjusted EPS came in at $0.06, 67.8% below consensus.
And the stock went up.
Last quarter, they beat and the stock got hammered.
But this is a marketing newsletter, not an investing newsletter, so we’ll stay in our lane.
Below are the nuggets we think a marketer at a credit card issuer or personal loan company would care about.
Let’s get toasting!
Summarizing NerdWallet’s Q2
From the Q2 press release (quarter ended June 30th, reported August 6th):
Sponsored by Spinwheel
Now that you have the headline numbers, let’s get into our top observations.
1. Credit cards fell another $8.6M year-over-year
To us, that means the bleeding hasn’t stopped.
“...partially offset by an $8.6 million decrease from consumer credit cards primarily due to continued pressures in organic search traffic that have persisted for multiple quarters.” — Q2 press release
The former flagship business is a declining category, and NerdWallet hasn’t provided clear signs on how it’ll turn it around.
Why you should care: If you’re a card issuer, you need clarity on NerdWallet’s go-forward expectations for the card business. That’ll help you with forecasting, but will also provide clues regarding whether your declining volumes on the platform are because you’re losing market share, or whether you’re holding share in a declining market.
2. NerdWallet is leaning into the insurance agency business
The CEO’s quote at the top of the press release was telling:
“We’re reaching an inflection point in our business. The success of our vertical integration strategy now gives us the conviction to make incremental investments underwritten on a multi-year payback, with compelling returns. We expect to grow this incremental investment fivefold in 2026 versus 2025 as we deepen our owned audiences and build durable, direct relationships with our customers.” — Tim Chen, Q2 press release
Incremental investments underwritten on a multi-year payback.
Our translation?
We like the insurance business. It pays annuities over time vs. the one-shot payouts we get from the cards and loans affiliate businesses.
Why you should care: NerdWallet is deploying spend towards category with multi-year paybacks (our read: insurance, maybe financial advisors). If your product monetizes once at conversion, you might be competing for a shrinking share of their attention.
3. The Personal Loan biz is growing, probably due to expansion in subprime
From the press release:
“...increases of $12.3 million from personal loans as we expanded our marketplace offerings to serve a broader range of borrowers...”
Broader range of borrowers.
Our read?
NerdWallet is leaning into subprime loans.
Why you should care: If you’re a personal loan lender, especially in subprime, and you don’t partner with NerdWallet, now may be the time to lean in. And, bring your best conversion rate. With their focus on paid media vs. SEO, we bet they’ll be ruthlessly prioritizing the offers that convert best (and have the best CPAs).
Which, bring us to our next takeaway.
4. As sales & marketing spend grows, their focus on conversion rate will amplify
S&M spend of $145.4M grew 14% YoY while revenue grew 6% (press release).
We flagged this dynamic in Q1, and the Morgan Stanley concern we quoted then — elevated performance marketing intensity pressuring incremental margins — is now on display.
NGOI margin nearly halved YoY, from 11% to 6%.
When NerdWallet paid ~$0 (on the margin) for an SEO visitor, a “so-so” partner funnel was annoying.
But, when they’re paying market CPCs (which I assume are climbing due to SEO’s decline) and relying on multi-year paybacks, a “so-so” conversion funnel is a total disaster.
Why you should care: Expect tougher bounty/CPA negotiations, and less patience for application flows that perform below the category benchmarks. Your image of NerdWallet should be shifting from content-machine-SEO-gods to math wizards trying to squeeze every dollar of return out of their paid media spend. And there are questions around their strategy around paid media.
In their August 7th research note, Morgan Stanley analysts shared some great insight into this. Rather than summarize, we’ll quote directly. Emphasis added by us, not MS.
“NerdWallet grew revenue $10mm y/y in 2Q26 (to $197mm, +5.6%) on $17mm of incremental sales and marketing (to $145mm, +13.6%), taking S&M to 73.7% of revenue from 68.5% in 2Q25, while performance marketing grew $26.5mm y/y to $116mm, or 58.8% of revenue and 79.8% of total S&M (vs. 47.8% and 69.9% in 2Q25).
These results, coupled with the recent trends on revenue and performance marketing, reinforce our view that sustaining growth may require structurally higher spend as organic distribution erodes. These results, together with the recent rise in performance marketing intensity, reinforce our concern that growth is becoming increasingly dependent on paid acquisition as organic search remains pressured in parts of the business.
Management has said it is investing against internal IRR targets and accepting longer payback periods where recurring relationships can support attractive returns. Yet the company has not publicly disclosed its IRR hurdles, expected payback periods, or realized cohort returns.”
5. Some quick hits before we wrap up
Deposits are booming. Consumer revenue increased year-over-year with “$9.6 million from deposit accounts as partners expanded budgets” (press release). We’ve noticed this a little with my agency, New Market Growth. We’re getting inquires from banks who need help with affiliate marketing for deposits, even though my shop is lending only.
Insurance is stable, but not back to the highs. The carrier concentration issue that tanked the stock in Q1? Tim Chen said that the largest auto insurance carrier relationship “has stabilized but has not yet returned to levels seen earlier in the year”.
SMB is still shrinking. It’s down 11% YoY to $22.1M on organic search declines, “partially offset by an increase in business loan originations” (press release).
The LLMs bring high intent traffic, but low volume. Tim Chen on the call, via GuruFocus: “The traffic is converting well, with extremely high intent from users coming through an LLM wanting to transact in the marketplace. It remains a small part of the business today.”
Last plug. Spots are filling up fast.
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Catch you next week,
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Carlos Caro, Founder at NMG, Co-Founder of The Free Toaster
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