Nerdy (NRDY) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $37.5 million, down 7% year-over-year, mainly due to lower ARPM in the consumer segment, while Institutional revenue grew 27% for the nine-month period.

• Varsity Tutors for Schools platform expanded to 1.1 million new students, totaling 4.4 million across nearly 900 districts.

• Product enhancements and digital experience improvements increased engagement, retention, and live learning quality, especially in new consumer cohorts.

• Active Members grew 1% year-over-year to 39.7K, and Active Experts increased 6% to 9.5K, reflecting scaling of the Institutional business.

• Net loss attributable to Class A stockholders was $15.9 million for Q3 2024, compared to $12.3 million in Q3 2023.

Financial highlights

• Consumer learning memberships generated $31.4 million (84% of total revenue); active members up 1% year-over-year to 39.7K.

• Institutional revenue was $5.4 million (14% of total revenue), down 3% year-over-year for the quarter but up 27% for the nine months.

• Gross profit was $26.5 million, down 9% year-over-year; gross margin at 70.5% versus 72.4% last year.

• Non-GAAP adjusted EBITDA loss was $14 million, better than guidance but higher than $8.2 million last year.

• Cash and cash equivalents totaled $65 million as of September 30, 2024, with no debt.

Outlook and guidance

• Q4 2024 revenue expected between $44 million and $47 million; full-year 2024 revenue guidance updated to $186 million–$189 million.

• Q4 Adjusted EBITDA expected between negative $7 million and negative $10 million; full-year Adjusted EBITDA between negative $23 million and negative $26 million.

• Management expects improvements in gross margin from infrastructure enhancements and Institutional growth.

• Sequential improvement in Adjusted EBITDA expected into 2025.

• Cash on hand is expected to be sufficient for working capital, sales, marketing, and capital expenditures over the next twelve months.