Nerdwallet (NRDS) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01If consumers or SMBs do not find value in our platform or do not like the consumer or SMB experience on our platform, the number of matches on our platform may decline, which would harm our business, financial condition and results of operations
2. 02Our inability to overcome these challenges could impair our ability to engage users, and could harm our business, operating results and financial condition33% rewritten
3. 03Failure to maintain our reputation and brand recognition and attract and engage users in a cost-effective manner would harm our business, financial condition and results of operations55% rewritten
4. 04Use of social media, influencers, affiliate marketing, email, and text messages may adversely impact our brand and reputation or subject us to fines or other penalties
5. 05We may make decisions based on the best interests of our users in order to build long-term trust that may result in us forgoing short-term gains44% rewritten
6. 06We rely on third parties to perform certain key functions, and their failure to perform those functions could adversely affect our business, financial condition and results of operations26% rewritten
7. 07We compete in a highly competitive and rapidly evolving market with a number of other companies and we face the possibility of new entrants disrupting our market over time
8. 08Our expansion into mortgage brokering presents additional risks

Risks related to our investment advisory businesses

1. 09Our international operations subject us to additional costs and risks which could harm our business, revenue and financial results, and any future international expansion may be unsuccessful64% rewritten
2. 10We are, and intend to continue, developing new products and services, and our failure to accurately predict their demand or growth could have an adverse effect on our business
3. 11Our financial performance is dependent on our ability to successfully refer users to and market financial services partners, and these partners are not precluded from offering products and services outside of our platform
4. 12If we are unable to maintain the quality of our products, expand our product offerings or continue technological innovation and improvements, our prospects for future growth may be harmed
5. 13Our current lack of geographic diversity exposes us to risk41% rewritten
6. 14We have less experience operating in some of the newer market verticals and service offerings to which we have expanded80% rewritten
7. 15If we fail to successfully anticipate, manage, or mitigate the issues associated with expanding into these newer verticals and service offerings, our business, financial condition, and results of operations may suffer
8. 16We track certain operational metrics, which are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and adversely affect our stock price, business, results of operations, and financial condition

Risks Related to Our Industry and the Consumer Finance Economy

1. 17Macroeconomic developments such as inflationary conditions in the U.S. have caused macroeconomic uncertainty and may have an adverse impact on our business, results of operations and our vertical diversification strategy46% rewritten
2. 18Adverse conditions in the consumer finance markets, or poor or uncertain macroeconomic conditions, could harm our business, financial condition and results of operations if our financial services partners reduce their marketing budgets and decrease spending on our platform
3. 19Changes in the loan markets could harm our business, financial condition and results of operations31% rewritten

Risks Related to Regulation

1. 20Our business is subject to a variety of financial regulations in the U.S., Canada, and the UK, many of which are overlapping, ambiguous and still developing, which could subject us to claims or otherwise harm our business83% rewritten
2. 21We currently incorporate AI technology in certain of our products and in our business operations. Our research and development of such technology remains ongoing, and our ability to develop effective and ethical AI technology will be critical to our financial performance and long-term successNew
3. 22Our failure to comply with economic and trade sanctions laws and regulations of the United States could materially adversely affect our reputation, business, financial condition and results of operations

Risks Related to Our Human Capital

1. 23We depend on our executive team and other key employees to manage the business and the loss of one or more of these employees or an inability to attract and retain highly skilled employees could materially harm our business
2. 24We face stiff competition for qualified personnel and if we fail to attract new personnel or fail to retain and motivate our current personnel, our business, financial condition and results of operations could be materially and adversely affected
3. 25We have transitioned to being a remote-first company, which could result in reduced morale and cohesiveness and increased cybersecurity risk, which could negatively affect our business

Risks Related to Our Technology, Security and Intellectual Property

1. 26Cybersecurity incidents, or real or perceived errors, failures or bugs in our systems and platform could impair our operations, compromise our confidential information or our users’ personal information, damage our reputation and brand, and harm our business and operating results
2. 27We rely on third-party service providers to support our platform and information technology systems22% rewritten
3. 28Claims by others that we infringed their proprietary technology or other intellectual property rights could harm our business
4. 29Failure to protect or enforce our intellectual property rights could harm our business, financial condition and results of operations
5. 30We may not be able to continue to obtain licenses to third-party software and intellectual property on reasonable terms or at all, which may disrupt our business and harm our financial results
6. 31We rely on operating system providers and app stores to support our platform, and any disruption, deterioration or change in their services, policies, practices, guidelines and/or terms of service could have a material adverse effect on our business, financial condition and results of operations
7. 32Some of our products and services contain open source software, which may pose particular risks to our proprietary software, products, and services in a manner that could have a negative effect on our business

Risks Related to Our Financial Operations and Accounting Matters

1. 33Our debt agreements contain certain restrictions that may limit our ability to operate our business
2. 34Our debt agreement may not be sufficient for our capital needs and we may require additional capital to support business growth, which might not be available on acceptable terms, if at all
3. 35We cannot guarantee that our stock repurchase program will be fully consummated or that it will enhance long-term stockholder valueNew
4. 36We do not have extensive experience acquiring and integrating other businesses and technologies and there are inherent risks in integrating the acquired personnel, operations and technologies and managing the combined business effectively following the acquisition
5. 37Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process
6. 38Expenses or liabilities resulting from litigation could materially adversely affect our results of operations and financial condition
7. 39We may not continue to grow at historical rates or achieve or maintain profitability in the future
8. 40We have made significant estimates and judgments in calculating our income tax provision and other tax assets and liabilities. If these estimates or judgments are incorrect, our operating results and financial condition may be materially affected
9. 41Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited

Risks Related to Ownership of Our Class A Common Stock

1. 42The dual class structure of our common stock has the effect of concentrating voting control with our Co-Founder, Chief Executive Officer and Chairman of our Board of Directors, Tim Chen, which will limit or preclude your ability to influence corporate matters
2. 43We are a “controlled company” within the meaning of the Nasdaq Listing Rules and, as a result, we are exempt from certain corporate governance requirements
3. 44Even as a controlled company, we remain subject to the rules of Sarbanes-Oxley as well as the Nasdaq Listing Rules that require us to have an audit committee composed entirely of independent directors, subject to permitted phase-in rules. Our audit committee is comprised of three members, all of whom are independent
4. 45We cannot predict the impact our dual class structure may have on the market price of our Class A common stock
5. 46The price of our stock may be volatile, and you could lose all or part of your investment
6. 47Our results of operations may fluctuate on a quarterly and annual basis, which may impact our stock price and make it difficult to predict our future performance
7. 48We do not expect to pay any cash dividends for the foreseeable future
8. 49We are an emerging growth company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies may make our Class A common stock less attractive to investors44% rewritten
9. 50We will incur increased costs and management burden as a public company, particularly after we are no longer an emerging growth company, and any failure to maintain effective internal control over financial reporting could adversely affect our business and stock priceNew
10. 51As a public company, we are subject to increased regulatory requirements and scrutiny, which increase our costs and may adversely affect our businessNew
11. 52Sales of a substantial number of shares of our Class A common stock by our existing stockholders in the public market could cause our stock price to decline
12. 53If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
13. 54Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
14. 55Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us
15. 56Such limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission
16. 57While we maintain directors’ and officers’ liability insurance, such insurance may not be adequate to cover all liabilities that we may incur, which may reduce our available funds to satisfy third-party claims and may adversely impact our cash position