Earnings Call Transcript - NRDS Q4 2023

Operator, Operator

Good day and thank you for standing by. Welcome to the NerdWallet, Inc. Q4 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Caitlin MacNamee.

Caitlin MacNamee, Investor Relations

Thank you, operator. Welcome to the NerdWallet Q4 2023 Earnings Call. Joining us today are Co-Founder and Chief Executive Officer, Tim Chen; and Chief Financial Officer, Lauren StClair. 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 reasonable efforts, to calculate certain reconciling items with confidence. With that I will now turn it over to Tim Chen, our Co-Founder and CEO. Tim?

Tim Chen, CEO

Thanks, Caitlin. In 2023, headwinds outweighed tailwinds in our business. In the spring, we faced increasing macroeconomic headwinds following the regional banking crisis as well as ongoing rate hikes. This affected several verticals, including loans, credit cards, and SMB, and they have not all fully recovered yet. In addition, the strong insurance rebound we saw in Q1 of 2023 was premature. The industry pulled back through the remainder of the year, while the rising rate environment did create tailwinds in areas like banking, which continued to outperform our expectations through the end of the year. This did not offset the headwinds in our other verticals. We did not meet our revenue or adjusted EBITDA outlook in Q4, and this is the first time as a public company when we have fallen short of our outlook. We attribute our Q4 miss to underperformance in credit cards and personal loans. While consumer demand remained strong for balance transfer products, incremental underwriting tightening and balance sheet constraints limited issuer appetite. We also encountered unexpected growing pains with matching sub and near-prime users with the best products, which required us to take a step back. But we believe we're making progress in matching these consumers to the right offers. Our business is cyclical. While I believe there are positive signals to suggest that conditions will improve in 2024, we know that headwinds and tailwinds offset each other over time. So our priority is growing from cycle to cycle. We continue to take share across the cycle in a large and growing market independent of macroeconomic factors. Our primary addressable market, U.S. financial services digital advertising, is expanding with a 2023 four-year CAGR of approximately 15%. And normalized share in this market has also increased, with a four-year revenue CAGR of 27%. In Q4, we achieved record monthly unique users, up 24% year-over-year, suggesting a significant opportunity for revenue growth as monetization improves. Also critical to my mind are the structural improvements we made to our business in 2023. We are dedicated to relentlessly improving our operations and increasing our efficiency. This past year, we made our brand spend work harder, and we also efficiently managed R&D expense growth while still launching several new product initiatives, including Nerdy AI and NerdUp by NerdWallet. As a result, full-year non-GAAP operating income increased $27 million versus the prior year. And in Q4, we maintained relatively similar margins despite our declining year-over-year revenue. This work should set us up for improved margin leverage as growth returns. We build NerdWallet with a long-term orientation, which means relentlessly improving while executing our strategy to create a trusted financial ecosystem or single platform where consumers and SMBs can learn, shop, connect their data, and make decisions about their money. I continue to believe that this is the right path forward for our consumers, partners, and business, driven by the meaningful progress we made against our growth pillars in 2023. I'd like to provide you with more insight into these pillars, the progress we've made toward them this year, and how I think they can accelerate our business. As a reminder, land and expand initiatives extend NerdWallet’s guidance to new markets, categories, and audiences. While we cover a range of topics today, we know the financial landscape is fast, and there's still plenty of territory to explore. In 2023, we strengthened our presence in Canada and Australia, and in topics including Medicare, social security, estate planning, and auto loans. Looking specifically at Q4, our land and expand efforts have shown particularly strong results in Canada, as MAUs were up 56% year-over-year last quarter. Similarly, Q4 saw continued acceleration in our Medicare category. Our traffic was up over 150% year-over-year as we built out our library and enhanced our marketplace to serve more consumers during the open enrollment period. Vertical integration pairs our competitive advantages and top of funnel and brand with best-in-class user experiences, and throughout 2023, this was a significant focus for NerdWallet. We pursued vertical integration via continued integration of On the Barrelhead, including introducing their pre-qualification technology to our credit cards vertical, as well as through several key organic initiatives. Our hypothesis is that investing in best-in-class user experiences will not only provide consumers with new, more personalized ways to shop for products but will also increase our monetization and re-engagement capabilities, ultimately setting us up to capitalize more effectively on our growing audience from cycle to cycle. In Q4, we focused on two organic initiatives. Early in Q4, we launched NerdWallet’s first branded product, NerdUp by NerdWallet, which is a secured card designed to provide no-file, thin-file, and sub-prime consumers with an option to build their credit while also benefiting our partners. Meanwhile, our team has recently launched NerdWallet Taxes, a tax preparation software, in partnership with Column Tax. This product seeks to capitalize on the significant organic traffic to our taxes category, which previously went largely unmonetized, by leveraging our unit economics to offer consumers a fixed-fee option for preparing their tax returns. We also continued to integrate On the Barrelhead’s technology, extending their personalized experience to mortgages in anticipation of increased demand when interest rates decrease. Land and expand and vertical integration support our registrations and data-driven engagement strategy. They drive more MAUs to convert to registered users and give consumers reasons to register and connect their data. At the same time, we invest in specific registration and data-driven engagement efforts to help foster loyalty-based relationships with consumers. As a result, our registered user base ended the year growing 37%. In 2023, this work included introducing and optimizing new product features as well as leveling up our CRM capabilities to more effectively nudge our registered users with targeted insights. Our registered users have five times the lifetime value of visitors. So, expanding our Registrations and Data-driven Engagement work to furnish more cross-sell opportunities and build loyalty-based relationships with consumers presents significant growth potential for the business. Our Registrations and Data-driven Engagement work in Q4 included a significant focus on developing our cross-sell capabilities. We launched several campaigns to surface personalized product recommendations to registered users based on their data, and we plan to continue developing this program in the quarters to come. By now, 2024 is well underway, and I'm looking forward to sharing our results with you over the next four quarters as we continue to execute our strategy. As in 2023, we will embrace relentless self-improvement, a long-term orientation, and our commitment to consumers to drive results. In the meantime, I'll pass it over to Lauren to provide a financial update.

Lauren StClair, CFO

Thanks, Tim. In Q4, we reported revenue of $134 million, a 6% decline from the previous year, and closed the year with total revenue of $599 million, reflecting an 11% increase year-over-year. We are navigating a challenging macroeconomic environment, especially in areas sensitive to interest rates, such as loans and prime lending. We anticipated some difficulties in credit cards and personal loans at the end of 2023, which resulted in lower revenue than expected for the quarter. Nonetheless, we maintain a cautious optimism about the overall economic landscape and our partnerships, and we believe a recovery is on the horizon. In terms of revenue performance for the quarter, credit cards generated $43 million, an 18% decrease from the prior year, largely due to the regional banking crisis earlier in 2023, which led to tighter balance sheet constraints. We see these trends as temporary and not structural. The fourth quarter also saw a larger than expected seasonal decline compared to Q3, impacted by conservatism from issuers in balance transfer cards. We plan to capitalize on our strong customer acquisition strategies once we observe a recovery in issuer demand. In loans, we achieved $24 million in revenue for Q4, a 5% increase year-over-year. However, we experienced a greater than usual seasonal decline due to stricter lending practices as delinquency rates increased in personal loans. There is potential consumer demand in personal loans as high interest rates have made refinancing credit card debt less appealing. We believe that as interest rates decline, along with our improved abilities to connect consumer needs with financial services, we will be well-positioned to meet this demand. Our mortgage segment remains affected by high interest rates, but we are confident that the improvements we've made in our marketplaces will allow us to capture significant market share when conditions improve. We also encountered a notable decline in our student loans segment compared to last quarter, with no significant uptick in refinance demand. For the year, loans contributed $102 million in revenue, a 7% decline year-over-year. Starting this quarter, we are disclosing revenue for SMB products separately. This category includes loans, credit cards, and other services for small and midsized businesses. In Q4, SMB products generated $28 million, a 6% year-over-year increase. Despite facing some challenges in loan underwriting, renewals have begun to increase, indicating a potential recovery. For the full year, SMB products reached $101 million in revenue, reflecting an 11% growth year-over-year. Our emerging verticals, previously categorized as other verticals, finished Q4 with $39 million in revenue, a 3% year-over-year decline. This segment now includes banking, insurance, investing, and international services. Banking revenue grew 5% year-over-year but slowed due to difficult comparisons from last year. Consumer demand moderated somewhat, but we still encountered stronger than expected demand in Q4. Our total for emerging verticals for the year was $187 million, a significant increase of 46%. In terms of profitability, we reported $29 million in adjusted EBITDA for Q4, maintaining a 22% margin. For the entire year, adjusted EBITDA was $98 million at a 16% margin. We also had a GAAP net loss of $2.3 million for Q4 due to a $7.6 million income tax provision. We continue to attract consumers, having provided guidance to 24 million average monthly unique users in Q4, a 24% increase year-over-year, with strong performance across various areas including travel and personal loans. Although there has been some pressure on revenue per user, we see this increased engagement as beneficial for our long-term growth. Looking ahead to our financial outlook for 2024, we expect to see recovering growth in our business, although some uncertainties persist. We anticipate first-quarter revenue in the range of $155 to $160 million, a 7% year-over-year decline at the midpoint but an approximate 18% sequential increase from Q4. We are still combating headwinds in credit cards and moderating banking demand, but we expect significant growth in insurance and encouraging trends in SMB products. Despite tougher year-over-year comparisons in insurance, we are optimistic about future growth. For the remainder of the year, we aim to return to double-digit revenue growth in the second half, based on recovery indicators in SMB products and insurance. We project Q1 non-GAAP operating income between $5 to $8 million, or about 4% of revenue at the midpoint. Our brand spending strategy will largely replicate 2023, focusing most of the expenditure in the first three quarters, with a reduction in Q4. For the full year, we expect to see increasing margins, aligning with our target non-GAAP operating income margin of 6.5% to 8%. We also anticipate adjusted EBITDA margins of 18% to 19.5% for the full year 2024. This trajectory aligns us back to our adjusted EBITDA margin levels from 2019, while we continue to invest strategically in our long-term vision. On March 4th, we plan to share a video presentation with more insights into our business and vision for NerdWallet, including our financial objectives. We look forward to your feedback on this. As we proceed through 2024, we remain optimistic while being realistic about the gradual improvement in the macroeconomic situation. Our commitment to aiding consumers in navigating their financial inquiries will remain central to our strategy as we enhance our product offerings. We are now ready for questions.

Operator, Operator

Thank you. Our first question comes from James Faucette with Morgan Stanley. You may proceed.

James Faucette, Analyst

Sorry about that. I was online with the mute button. I wanted to ask quickly it sounds like you're seeing some indications that things can improve and specifically you mentioned small medium-sized business and insurance and seem pretty confident about that. Can you just describe like what is driving your confidence in that particularly for the second half of the year? And I'll just tie on my second question which is kind of related in the broader credit market. We've seen lots of comments around prime and subprime credit performance, etc. Seems like there may be some improvements there. But in your conversations with your partners, how do you usually see that communicated to you and what kinds of things should we be tracking to see if the potential for the credit part of the market to contribute to the second half growth as they materialize? Thanks.

Tim Chen, CEO

Thanks. Yes, thanks for the question. So, I'll take those one piece at a time. I guess in terms of insurance, the inflation-driven insurance industry headwinds continued throughout all of last year, right, and into Q4. So, we saw a 22% decline on a year-over-year basis. We started to see a recovery at the end of last year and into Q1, which is represented in our outlook for Q1. Exiting Q1, carriers seem to be expecting a pretty broad-based and durable recovery throughout 2024. For some context, large parts of the U.S. population today still aren't being served from the perspective of carriers wanting to underwrite home and auto policies. So, you can imagine that as this resolves itself, there will be a medium-term tailwind as those markets open back up. And so that's one of the main drivers in terms of our 2024 outlook where we're expecting double-digit year-over-year growth in the back half. Yes, that recovery is from the worst insurance hard market in a few decades. And then in terms of small business, I'd say with that, we saw a lot of progress. We just crossed the three-year anniversary of integrating Pandora. We more than tripled revenue, a lot of success in vertical integration, and land and expand within SMB. So, really happy with that. That being said, we're still in a really tough macro environment right now. A lot of the underwriting is a bit tighter than what we've seen historically. And so, we do expect at some point for that to become a tailwind as there's a macro recovery. The timing on that one is a little bit harder to call. And then, yeah, you're certainly right on the commentary around prime consumers. We're hearing the same thing, both in the credit card and the personal lending markets. I'd say what we saw is going into Q4 and throughout probably starting the middle of Q4, there is a bit of an upside surprise in some of the delinquencies in the prime part of the market, given how strong the employment market was. I think that caught a few people off guard. What I'd say here is that card issuers have pretty robust predictive models, right? Like the good ones can predict almost within minutes of the first payment due date how delinquencies are going to trend a few quarters out. So what we see in terms of underwriting timing is really a reaction to that. It's been pretty present the majority of the last seven quarters. We definitely saw that impacting cards. I'll say that while delinquencies have overshot 2019 levels, issuers are largely indicating that this is expecting normalization and that we've either already seen a peak in delinquencies or that they're kind of expecting a peak by the middle of the year and are kind of in wait-and-see mode in terms of when to get aggressive again. So that could be a tailwind at some point in the future. I will say also on the balance transfer side, things are still a little bit balance sheet constrained. So there's some caps there. So that's another potential tailwind at some point down the road.

James Faucette, Analyst

Great. Thanks for that, Tim.

Operator, Operator

One moment for questions. Our next question comes from Ralph Schackart with William Blair. You may proceed.

Ralph Schackart, Analyst

Good afternoon. Thanks for taking the question. Just on credit cards. Just maybe talk about I think recoveries might be saying that can I have called out maybe some early signs. So any color on that and spending kind of broader just from the credit card issuers, you know what are they sharing with you just in terms of what they're watching for before they may return back to kind of more normalized levels that you've seen historically? Then I have a follow-up.

Tim Chen, CEO

Sure. I think there are two main factors at play. In some key areas like data transfer, which require more from the balance sheet, non-credit related issues are impacting the demand that balance sheets can support. I believe some of these issues will sort themselves out as we progress through the cycle. From a credit perspective, it's important to monitor early delinquency trends and ensure that underwriting standards are adjusted to align with those trends. This quarter, there has been a lot of commentary from card issuers that may indicate a more optimistic outlook, especially regarding recovery.

Ralph Schackart, Analyst

Great. And just maybe a follow-up to that. As we think about credit cards and sort of modeling that for I guess Q1, what's sort of contemplated in guidance. And I know you can't give specific numbers, but just maybe kind of help us think through some of the puts and takes as we sort of recalibrate our models? Thank you.

Tim Chen, CEO

Sure.

Lauren StClair, CFO

Yeah, let me take that, Tim. I can go over Q1 guidance specifically. First, I'll just remind everyone that the guide for Q1 for revenue is $155 million to $160 million, which at the midpoint would decline 7% year-over-year, but up 18% quarter-over-quarter. Some context on that from Q4 to Q1, we would typically expect to see a material increase quarter-over-quarter, which in a normal year is driven primarily by consumer demand at the start of the new year supported by our brand efforts. Last year was a fairly typical Q1 for us, and while we are seeing our typical Q4 to Q1 step-up this year, we are still facing many of the headwinds from prior quarters, which becomes a tougher comp year-over-year. So, to your question, we are still experiencing headwinds in credit cards, but we have called out that we're starting to see a recovery in areas like insurance and also SMB products. Just as a reminder, insurance is still going to have a tough comp in Q1. So even though we expect a material increase quarter-over-quarter, the comp on a year-over-year basis will be tough.

Tim Chen, CEO

Yeah. And I'll add on, I guess credit card specific, as we look at our 2024 outlook, it's kind of hard to call exactly when underwriting starts solution again. So we're being relatively conservative about that. I would definitely encourage you to look at 2019 seasonality and cards as being kind of a more normal historical year. We saw some pretty unusual patterns in the years following as we recovered from COVID. But yet in 2019, you had a pretty large sequential decline from Q3 to Q4, and then I think that matches more of a normal seasonality pattern.

Ralph Schackart, Analyst

Thanks, Tim. Thanks, Lauren.

Operator, Operator

Thank you. One moment for question. Our next question comes from Ross Sandler with Barclays. You may proceed.

Ross Sandler, Analyst

Tim, you mentioned the challenges in matching the credit card business that you realized in the fourth quarter. Can you just elaborate a little bit more on that? Was this a technical issue on your side or something external? And did you leave any money on the table as a result of this? And kind of can you just walk us through? When do you think that will be resolved?

Tim Chen, CEO

Sure. So right, I describe us as being matchmakers. So we just got some things wrong in Q3 and over-earned in terms of our matching algorithm for near and subprime consumers and extrapolated incorrectly from there. But we want to get this right for consumers and financial institutions. So, we basically hit pause and rebuilt things from the ground up. This is not the first time this has happened, right? When you go into a new market, sometimes it takes a few cycles and some feedback to get that matching rate. But we feel like we're back on the right path now. So we are encouraged going forward.

Lauren StClair, CFO

Yes, maybe I just wanted to clarify. The commentary around challenges with matching was not in credit cards. It is in personal loans. Tim's commentary right now is about personal loans, not card.

Operator, Operator

One moment for question. Our next question comes from Jed Kelly with Oppenheimer. You may proceed.

Jed Kelly, Analyst

Hey, great. Thanks for taking my questions. Just two on, can you talk about how we should think about margins if marketer demand comes back and how you would lean into it? I assume you wouldn't mind sacrificing some margin at the gross profit dollars. Makes sense. And then how should we think about the overall opportunity in insurance? It's a huge market, but the customer service isn't always the best. So how do you think about leaning into that market and trying to grow your percentage of the overall carrier budget? Thanks.

Lauren StClair, CFO

Great. I'll take the first part of your question and then I'll hand it off to Tim for the insurance piece. I'll just remind everyone that Timberland or wallet for the long-term and this is also how we think about margins. We've been working towards margin accretion that would get us back to and eventually surpass our 2019 adjusted EBITDA levels, which in the range of our outlook for the full year 2024, we would get back to this year. We've worked to achieve this through getting leverage in the portion of our cost base that is relatively fixed in nature. That includes one, hitting a logical ceiling on our brand spend; two, no longer having the step change in G&A expenses as a result of becoming a public company; and three, continuing to gain leverage in areas such as R&D and the organic portion of our sales and marketing. We're really proud that we've been able to deliver consistent margin accretion on an annual basis since our IPO in late 2021, even in a difficult macroeconomic environment. And our outlook showcases our commitment to continuing this trend. So, if the top line picks up faster than what we are currently contemplating, we will clearly lean in on things like variable expenses that we've talked about. When it's profitable, we will lean into things like performance marketing; you could expect those costs to come up. But for the fixed and a portion of our cost base, I would expect to get leverage out of those over the long-term.

Tim Chen, CEO

It's a great question on insurance. It is a big strategic question that we're constantly trying to work our way towards. You're right; it's a huge market there. And there are a lot of challenges in terms of providing consumers with a sensible experience there. All I can say is that we're trying to be creative and exploring a bunch of different avenues and hope to have something to talk about in the coming years there. But it's going to be a long investment.

Jed Kelly, Analyst

Thank you.

Operator, Operator

Our next question comes from Youssef Squali with Truist Securities. You may proceed.

Youssef Squali, Analyst

Hi. Thank you. A couple of questions. One for Lauren – maybe for Lauren. You talked about for full year adjusted EBITDA margin, the 18% to 19.5% of revenues. And so thanks for that. And now the obvious question is kind of what's your base case on to get either to the low end or the high end? And that in terms of growth, I'm assuming it's a mix and kind of the acceleration in the second half. But any kind of guardrails you can share that for that would be helpful. And kind of related to that, is that also kind of related somehow to changes in the rate environment? Just maybe Tim, what's your some kind of base case for further rate environment as we go through it because obviously, it's been very, very fluid in the last four weeks.

Lauren StClair, CFO

So the first part of your question, Youssef, in terms of full-year adjusted EBITDA. As we said before, we're really proud of the margin accretion that we've been able to continue to show for the full year even despite some volatility in the macro. But what we're expecting in terms of full year on the top line, we said that we currently expect to return to double-digit rates of revenue growth starting in the second half. This would be led by SMB product and insurance. And I will reiterate what I said in my remarks, though that the exact timing of the recovery, especially in areas such as balance transfer cards as well as any interest rate-driven demand changes in both banking and loans will influence how high those double-digit growth rates will be.

Tim Chen, CEO

Yes. In terms of our base case, it's challenging to predict exact timing for many developments, so we're approaching this conservatively. The overall macro picture suggests that a soft landing scenario would be ideal for us. In such a case, we would likely see reduced headwinds in the credit card and loan sectors, more relaxed balance sheet constraints in underwriting, and an increase in refinancing demand across all lending sectors as interest rates decrease. Additionally, we would experience fewer challenges in our insurance business as inflation eases and carriers recover from previous pricing adjustments. Conversely, if we encounter a hard landing, recovery in revenue may take longer and could face additional challenges in the short term. We will also be careful with our spending to meet our margin commitments, as any significant changes in the macro environment could affect our short-term progress on these margin initiatives.

Youssef Squali, Analyst

Thank you. Just one quick clarification maybe Lauren, when you talk about same brand spend levels in 2020 as in 2023. Is that on a percentage base or is that in aggregate dollars?

Lauren StClair, CFO

That's for the full year in absolute dollars.

Youssef Squali, Analyst

Absolute dollars, okay. Great. Thank you both.

Operator, Operator

Thank you. Our next question comes from Justin Patterson with KeyBanc. You may proceed.

Justin Patterson, Analyst

Hi. Thank you very much. Good afternoon. Tim, could you talk about some of your top priorities each year across your big three growth pillars but what we expect around land and expand, vertical integration, and engagement initiatives? And then I'll have a follow-up to Lauren.

Tim Chen, CEO

Yes. Thanks for the question. So those are three growth pillars, right? I'd say, land and expand is really more of our tried-and-true playbook. I mean we're always pushing on that in terms of the as stuff that's going to be a bit more novel over the coming several years. I think it's really in terms of the vertical integration and the registration and data-driven engagement. So we're thinking really hard about where there's still gaps in customer experiences; where we can uniquely play on. NerdUp is a great example of that. But also, things like we've launched Late Drive Like a Nerd. We've launched NerdWallet Advisors. So there's a lot of different thought processes that we're exploring, a lot of hypotheses that we're eager to evaluate.

Justin Patterson, Analyst

Got it. Thanks. And then the follow-up for Lauren. I appreciate the details you gave around just the revenue growth in the second half of the year. I wanted to confirm, was that double-digit growth on the second half as a whole or on a quarterly basis? And then, as you're thinking about just the growth vectors in there, how should we think about the puts and takes between user growth versus just brand spend or advertiser spend starting to improve again? Thank you.

Lauren StClair, CFO

Sure. So the first part of your question, Justin, was around revenue growth. So what we said was that we expect to return to double-digit rates of growth for revenue year-over-year starting in the second half. And then the second part of the question was, I believe around MAU growth and user growth as well as brand spend. Is that correct?

Justin Patterson, Analyst

Yes. Just thinking about the buckets in there, user growth is obviously well above total revenue growth right now. So just wondering if there's any views off of how users persist versus, say, pricing recovery that's driving that reacceleration.

Lauren StClair, CFO

Yes. Let's talk a little bit about new user growth, and we're really proud of that growth in Q4. We grew roughly 24% year-over-year from strength in many verticals, both from high levels of consumer intent and our success in landing and expanding. Similar to areas where we saw growth in revenue, we see growth in MAU. You can think of banking and personal loans, and we also saw high consumer interest in areas like travel and investing. As we expected, MAU grew faster than revenue again in Q4. This trend gives us confidence that consumer demand remains healthy despite ongoing partner conservatism, and we expect that outperformance of MAU versus revenue to continue into Q1, as we see really strong engagement with our learning content. As consumers are continuously looking for unbiased guidance and financial content during these complex macroeconomic times, and despite some of the near-term revenue pressure, we expect that the strength in MAU combined with our ability to match consumers with our financial service providers will accelerate our growth as the macro environment improves.

Tim Chen, CEO

I guess just to add on about there. Yes, in past cycles, right, as the macro recovers, you definitely get this tailwind as partners are loosening underwriting. They're getting more aggressive around acquisition. So, and pricing should definitely be a tailwind as well.

Operator, Operator

Thank you. One moment for questions. Our next question comes from Pete Christiansen with Citi. You may proceed.

Pete Christiansen, Analyst

Thanks. Good evening. And appreciate you asking answering questions here on Tom. I know you called out prime as an issue earlier, and we've heard it in other areas as well. I'm just curious, what you're seeing on the subprime side in terms of partner willingness to extend offers or to invest there? While I understand the delinquencies kind of peaked there already, things are kind of stabilizing, at least on the subprime, near prime area. Just curious, if you're seeing any improving activity there.

Tim Chen, CEO

So, I think then certainly subprime is more stable that we had limited surprises there. I think really the timing there started probably the middle of 2022, probably 2Q 3Q, and incrementally got tighter and tighter. I think that feels like it's on more of a floor.

Pete Christiansen, Analyst

And then Tim, a comment real quick just curious; you called that trial will still be a nice growth vertical there within the card. I'm just curious if you can put some color on that in terms of travel-related products and how they're faring on the platform.

Lauren StClair, CFO

And maybe I'll clarify with that one. So, the commentary around travel was the travel sort of vertical as a whole, not related specifically to credit cards although that is a piece of it. But the commentary was around the user growth and MAU growth specifically in Q4 and where areas where we saw strength; one of those areas was travel.

Tim Chen, CEO

So we've got a lot of great content and insights around travel. I think it's an amazing way to get in front of users and introduce from an inner voice and reengagement as well.

Pete Christiansen, Analyst

That's super helpful. Thank you both.

Operator, Operator

Thank you. I would now like to turn the call back over to management for any closing remarks.

Tim Chen, CEO

Thanks for your questions today. As always, I'd like to thank the Nerds for their hard work in 2023, their efforts to drive progress towards our vision last year. I mean, we are well set up for 2024 and beyond to learn more about NerdWallet's business condition, mark your calendars for March 4, when we plan to release a new Investor video on our IR website, and I'm looking forward to hearing your thoughts. With that, we'll see you next quarter.

Operator, Operator

Thank you for your participation. You may now disconnect.