Nerdy delivers revenue of $37.5 million in
the third quarter, while also enabling access to the Varsity Tutors
for Schools platform for 1.1 million students; bringing the total
to 4.4 million students.
Nerdy reports a non-GAAP adjusted EBITDA
loss of $14.0 million, above our guidance of a non-GAAP adjusted
EBITDA loss of $17.0 million to negative $19.0 million.
Nerdy Inc. (NYSE: NRDY) today announced financial results for
the third quarter ended September 30, 2024.
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the full release here:
https://www.businesswire.com/news/home/20241107799741/en/
Nerdy Q3 2024 Financial Highlights
(Graphic: Business Wire)
“During the third quarter, Nerdy continued to make progress
against the primary goals we laid out for the year, including:
scaling the winning product for every Learner, expanding the number
of Learners we can impact, and laying the foundation to deliver
profitable growth,” said Chuck Cohn, Founder, Chairman and Chief
Executive Officer of Nerdy Inc. “We delivered product enhancements
that are both increasing engagement and improving the quality and
reliability of live learning delivered on our platform that expand
our reach and the number of learners we can positively impact.
Looking ahead, we continue to believe that the growing awareness
and recognition that high-dosage tutoring is the most effective way
to accelerate learning provides us with confidence in the demand
for live tutoring in the years ahead.”
Please visit the Nerdy investor relations website
https://www.nerdy.com/investors to view the Nerdy Q3 Shareholder
Letter on the Quarterly Results Page.
Financial and Operating Highlights
- Revenue In Line with Expectations – In the third
quarter, Nerdy delivered revenue of $37.5 million, near the top of
our guidance range of $35-38 million, and represented a decrease of
7% year-over-year from $40.3 million during the same period in
2023. Revenue declined primarily due to lower ARPM in our Consumer
business. ARPM was lower due to a higher mix of lower frequency
Learning Memberships when compared to the prior year period.
- Learning Memberships – Revenue recognized in the third
quarter from Learning Memberships was $31.4 million and represented
84% of total Company revenue. There were 39.7K Active Members as of
September 30, 2024.
- Institutional – In the third quarter, Institutional
delivered revenue of $5.4 million and represented 14% of total
revenue. Varsity Tutors for Schools executed 117 contracts,
yielding $8.5 million of bookings. Our strategy to introduce school
districts to the platform and ultimately convert them to our
fee-based offerings, started to bear fruit in the third quarter
with 32% of paid contracts and 22% of total bookings value coming
from school district partners who initially partnered with Varsity
Tutors for Schools via free access to our platform and subsequently
converted to our paid offerings.
- Gross Margin – Gross margin was 70.5% for the three
months ended September 30, 2024, compared to a gross margin of
72.4% during the comparable period in 2023. The decrease in gross
margin was primarily due to lower ARPM coupled with higher
utilization of tutoring sessions across Learning Memberships in our
Consumer business, partially offset by lower seasonal utilization
of our access-based products in our Institutional business.
- Adjusted EBITDA Loss Beats Guidance Range – Net loss was
$25.0 million in the third quarter versus a net loss of $20.6
million during the same period in 2023. Excluding non-cash stock
compensation expenses, transaction costs, restructuring costs, and
mark-to-market derivative adjustments, which were treated as
adjustments for non-GAAP measures, non-GAAP adjusted net loss was
$15.1 million for the third quarter of 2024 compared to a non-GAAP
adjusted net loss of $9.1 million in the third quarter of 2023. We
reported a non-GAAP adjusted EBITDA loss of $14.0 million, above
our guidance of negative $17.0 million to negative $19.0 million in
non-GAAP adjusted EBITDA. This compares to a non-GAAP adjusted
EBITDA loss of $8.2 million in the same period one year ago.
Non-GAAP adjusted EBITDA improvements relative to guidance were
primarily driven by lower sales and marketing spend, operating
efficiency gains, and diligent cost control. Compared to last year,
Non-GAAP adjusted EBITDA was lower primarily due to investments in
the Varsity Tutors for Schools sales organization and product
development to drive innovation and support our growth.
- Operating Cash Flow and Liquidity – Negative operating
cash flow was $3.1 million in the third quarter of 2024 compared to
negative operating cash flow of $4.8 million in the same period
last year. Investments in our Institutional sales organization and
product development to drive innovation and support our continued
growth were offset by favorable changes in working capital. With no
debt and $65.0 million of cash on our balance sheet, we believe we
have ample liquidity to fund the business and pursue growth
initiatives.
Fourth Quarter and Full Year 2024 Outlook – We are
providing fourth quarter and updating full year revenue and
adjusted EBITDA guidance.
- Revenue Guidance: For the fourth quarter of 2024, we
expect revenue in a range of $44 to $47 million. For the full year,
we expect revenue in a range of $186 to $189 million.
- Non-GAAP Adjusted EBITDA Guidance: For the fourth
quarter of 2024, we expect adjusted EBITDA in a range of negative
$7 million to negative $10 million. For the full year, we expect
adjusted EBITDA in a range of negative $23 million to negative $26
million.
Webcast and Earnings Conference Call
Nerdy’s management will host a conference call to discuss its
financial results on Thursday, November 7, 2024 at 5:00 p.m.
Eastern Time. Interested parties in the U.S. may listen to the call
by dialing 1-833-470-1428. International callers can dial
1-404-975-4839. The Access Code is 292021.
A live webcast of the call will also be available on Nerdy’s
investor relations website at https://www.nerdy.com/investors. A
replay of the webcast will be available on Nerdy’s website for one
year following the event and a telephonic replay of the call will
be available until November 14, 2024 by dialing 1-866-813-9403 from
the U.S. or 1-929-458-6194 from all other locations, and entering
the Access Code: 587079.
About Nerdy Inc.
Nerdy (NYSE: NRDY) is a leading platform for live online
learning, with a mission to transform the way people learn through
technology. The Company’s purpose-built proprietary platform
leverages technology, including AI, to connect learners of all ages
to experts, delivering superior value on both sides of the network.
Nerdy’s comprehensive learning destination provides learning
experiences across thousands of subjects and multiple
formats—including Learning Memberships, one-on-one instruction,
small group tutoring, large format classes, and adaptive
assessments. Nerdy’s flagship business, Varsity Tutors, is one of
the nation’s largest platforms for live online tutoring and
classes. Its solutions are available directly to students and
consumers, as well as through schools and other institutions. Learn
more about Nerdy at https://www.nerdy.com.
Forward-looking Statements
All statements contained herein that do not relate to matters of
historical fact should be considered forward-looking statements,
including, without limitation, statements regarding our strategic
priorities, including those related to enhancing the Learning
Membership experience; continued improvements in sales and
marketing leverage; gross margin and operating leverage; the growth
of our Institutional business; changes to our marketplace
infrastructure systems; simplifying our operations model while
growing our business; the sufficiency of our cash to fund future
operations; and our anticipated fourth quarter and full year 2024
outlook; as well as statements that include the words “expect,”
“plan,” “believe,” “project,” and “may,” and similar statements of
a future or forward-looking nature.
The information included herein and in any oral statements made
in connection herewith may include “forward looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include, but are not limited
to, statements regarding our or our management team’s expectations,
hopes, beliefs, intentions, or strategies regarding the future,
including our expectations with respect to: the guidance with
respect to our financial performance; continued improvements in
sales and marketing leverage; the growth of our Institutional
business; simplifying our operations model while growing our
business; and the sufficiency of our cash to fund future
operations. Additionally, any statements that refer to projections,
forecasts, or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. The words “anticipates,”
“approximately,” “believes,” “contemplates,” “continues,” “could,”
“estimates,” “expects,” “intends,” “may,” “might,” “outlook,”
“plans,” “possible,” “potential,” “predicts,” “projects,” “should,”
“seeks,” “will,” “would,” and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking.
The forward-looking statements made herein relate only to events
as of the date on which the statements are made. We undertake no
obligation to update any forward-looking statements to reflect
events or circumstances after the date of this press release or to
reflect new information or the occurrence of unanticipated events,
except as required by law. We may not actually achieve the plans,
intentions, or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our
forward-looking statements.
There are a significant number of factors that could cause
actual results to differ materially from statements made herein or
in connection herewith, including but not limited to, our limited
operating history, which makes it difficult to predict our future
financial and operating results; our history of net losses; risks
associated with our ability to acquire and retain customers,
operate, and scale up our Consumer and Institutional businesses;
risks associated with our intellectual property, including claims
that we infringe on a third-party’s intellectual property rights;
risks associated with our classification of some individuals and
entities we contract with as independent contractors; risks
associated with the liquidity and trading of our securities; risks
associated with payments that we may be required to make under the
tax receivable agreement; litigation, regulatory and reputational
risks arising from the fact that many of our Learners are minors;
changes in applicable law or regulation; the possibility of
cyber-related incidents and their related impacts on our business
and results of operations; risks associated with the development
and use of artificial intelligence and related regulatory
uncertainty; the possibility that we may be adversely affected by
other economic, business, and/or competitive factors; and risks
associated with managing our rapid growth. Our actual results could
differ materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to, risks detailed in our filings with the SEC, including our
Annual Report on Form 10-K filed on February 27, 2024, as well as
other filings that we may make from time to time with the SEC.
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Investor Relations investors@nerdy.com
Grafico Azioni Nerdy (NYSE:NRDY)
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Grafico Azioni Nerdy (NYSE:NRDY)
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