Justin Patterson: And if I can slip in a quick follow-up. NerdUp is obviously a very different product than what you’ve had historically. But are there any economic considerations we should be thinking about just for this affecting the model going forward? Thank you.
Tim Chen: Yes. So, first and foremost, we think hard about the fact that trust and objectivity underpins our brand’s value. So we thought really hard about this before launching NerdUp. So in terms of the economic model, it really is something to speak to, right? Traditionally, credit card issuers make money on swipe fees, annual fees, late fees, and by charging interest on revolving balances. And we’re taking a pretty different approach to this business. We want to effectively give most of those economics back to the consumer in the form of no annual fees, low minimum balances, cash back rewards, and instead just focus on helping a broad base of consumers improve their credit scores. So, this really nurtures an engaged audience for us, and we hope to refer that audience back to the issuers and lenders we partner with when consumers build up their credit and qualify for unsecured products.
And that’s really the win-win-win that I think is, we’re uniquely positioned to offer. Our consumers build that credit, card issuers get access to this pool of qualified candidates, and we’ve got a larger base of engaged users. And I think as we think forward about other products, we’d really be thinking the same way about any products we launch in the future.
Operator: Our next question comes from the line of Ross Sandler with Barclays.
Ross Sandler: Lauren, just one clarification question and then Tim a big picture question. On the clarification, did I hear you correctly that loans is supposed to decline year-on-year going forward after growing 43 this quarter, I know we have tough comps there, which makes sense or was that like the overall other segment is going to be declining, just any clarity there? And then, Tim, the MUU growth combined with this sharp decel and performance and the negative six year-on-year for sales and marketing of the total. You talked a little bit about that, but does that more reflect the demand environment being tough and that when that demand environment picks back up, we plan on leaning in or is there newfound efficiency or some kind of new philosophy that we might not need as much performance marketing intensity go forward because all these other things like new categories and nudges and better registrations, et cetera, are finally kicking in?
Any thoughts just philosophically on that?
Lauren StClair: Let me start with the clarification. So in Q3 loans grew 16%, and we said that was the first quarter of overall loans growth since Q1 of 2022. And then maybe I’ll just to clarify, I’ll just reiterate our guidance and maybe explain that a little bit more and some of the drivers. So, the Q4 guidance is $136 million to $140 million, which, at the midpoint, declined 3% year-over-year. And maybe some context, from Q3 to Q4, we tend to see normal seasonality of high-single-digit decline quarter-over-quarter, which in a normal year is driven by credit cards, student loans, and mortgages. Last year, we did not see the normal seasonality, though, for three big reasons. One, there was a smaller seasonal decline in credit cards as pricing recovery continued from the lows 2020.
Banking was benefiting from stronger than normal deposit demand during the rapidly rising interest rate environment. And the third dynamic is that insurance picked up from better macro dynamics as well as some of the internal product changes we’ve made. So this year, what we called out is that our Q3 to Q4 seasonal decline implied by our guidance is actually a little higher than usual, driven by the pressure in banking as consumer demand starts to moderate given the stabilizing interest rate environment.
Tim Chen: Yes. In terms of the sales and marketing getting more efficient year-over-year while MUUs are still growing nicely, I mean, I’d say big picture, our consumer demand is strong. I think where we’re really seeing headwinds are on the ability to monetize that demand, for some of the reasons we mentioned. I think one area particularly worth double clicking into from a sales and marketing perspective is brand marketing. We’re down year-over-year in brand marketing, and I’d say, there’s really two reasons. First, it’s a tough macro for monetization. And so when it’s tougher to monetize, we pull back a bit because we’re trying to maintain discipline around payback hurdles on that brand spend. And second, we’re still getting better at this.
We’re relatively new to this. With 2022 being our first full year of spending on brand campaigns, we’ve learned a few things. And that means we’re going to get smarter about our creative and where we spend and when we spend. So we can get a bigger bang for our buck. I’m really excited though that despite that, we’re exiting this quarter with record brand awareness levels and our highest ever quarter of MUUs, along with that 38% growth in cumulative reg. So that’s all in despite lower spending.
Operator: Our next question comes from the line of Ralph Schackart with William Blair.
Ralph Schackart: First question, maybe if you could provide some color, if you could please, on what you’re seeing in terms of lead volumes versus pricing, maybe some perspective across some of the different products or verticals? And then just a follow-up to that, on the call, you talked about integrating OTB technology into loans. Just more color on sort of what’s driving that performance or what you expect that technology do or just any more color more specifically how it’s helping drive loans? Thank you.
Tim Chen: Yes. I’ll speak probably about pricing. I mean, our ability to monetize is most impaired right now in insurance. And I’d say some parts of cards that are more balance sheet intensive. So, those are kind of the primary areas to think about. I mean, of course, we’ve got headwinds in other areas driven by increasing rates, but that’s more a consumer demand impact rather than an ability to monetize impact. And with the OTB performance, yes, that, so as we fully integrate OTB, we’re getting better and better at, asking, essentially asking people questions and then registering them and then matching them to the right loan product. So, you can imagine that this could apply to a lot of different verticals, not just within personal loans.
We’re certainly seeing the benefit in personal loans first. But this quarter, we launched that product in credit cards that uses that same technology platform to really match people better. And I’d say the biggest impacts there are more in the near prime, subprime area, where people are unsure, if they qualify and what products they qualify for.
Operator: [Operator Instructions] Our next question comes from the line of Pete Christiansen with Citi.
Pete Christiansen: Tim, I was just wondering if you could talk about the impressive share gains that you’ve had in traffic this quarter. Is that actually influencing any behavior of your partners in terms of more campaign activity, more offers, just more deeper penetration in the platform overall? And then my second question is around the personal loan category. Are you seeing a wide breadth of activity across certain issuers or is it more concentrated? Just any color there would be helpful.
Tim Chen: Sure, in terms of the share gains, like it certainly makes it easier to have conversations around integrating. It takes worth on both sides in some cases to do things like pre qualified matching, et cetera. So, the more the larger our scale and the longer our history of sending over highly qualified referrals that perform well over time, the more incentive, financial institutions have to work with us on some of these initiatives. On the personal loan side, for us, I think it’s more a reflection of NerdWallet driven activities rather than the macro. The macro is really tough right now. I think it’s not that different than the past couple of quarters. We see some of the initiatives. We’re doing really, having a positive benefit there year-over-year, so I can’t speak to the macro implication of that.
