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Shares of financial data and advice website NerdWallet (NASDAQ: NRDS) tumbled 8.5% through 10:20 a.m. ET on Thursday after the company reported a surprise loss in its fourth-quarter 2023 financial update last night.

Heading into the report, analysts had forecast NerdWallet would earn $0.10 per share on sales of $138.4 million. Instead, NerdWallet reported sales of only $133.7 million and a loss for the quarter of $0.03 per share.

NerdWallet Q4 earnings

NerdWallet reported a 6% year-over-year decline in revenue in Q4, hurt mostly by an 18% pullback in banks' spending to advertise credit cards on the website. Per-share earnings flipped from a $0.12 profit a year ago to the aforementioned $0.03 loss in Q4 2023, and the $8 million decline in revenue seems to account for most of this loss.

For the year, NerdWallet still enjoyed 11% growth in revenue as its readership expanded. Worryingly, however, the company's cost of acquiring that revenue expanded 3 times faster -- up 36% against 2022. NerdWallet still managed to report a small operating profit for the year, but on the bottom line, the company ended 2023 with a $0.15-per-share loss -- even worse than 2022's $0.14-per-share loss.

What's next for NerdWallet stock?

And it's not looking like things are getting any better anytime soon. According to CFO Lauren StClair, "we are at a tough moment in this credit cycle, particularly in interest rate-sensitive areas." And while StClair says she is "cautiously optimistic that the beginning of recovery is in sight," management is forecasting that in Q1 2024 at least, sales will continue to decline (down about 7% to a range of from $155 million to $160 million).

On the one hand, management thinks it should be able to maintain positive operating profitability (somewhere between $0 and $3 million) despite the continued declines in sales. On the other hand, operating margin was positive in Q4 already -- and yet the company still lost money on the bottom line.

Long story short, after surprising investors with a loss in Q4 2023, it's looking likely that NerdWallet has another negative surprise in store for Q1 2024 as well. Wall Street still thinks that NerdWallet will earn about $0.01 per share this coming quarter, but expect to be disappointed.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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