In This Article:
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Nerdy Inc (NYSE:NRDY) reported revenue of $47.6 million for Q1 2025, exceeding their guidance range of $45 to $47 million.
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The company saw a 14% year-over-year increase in average revenue per member per month (ARPAM), reaching $335.
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Nerdy Inc (NYSE:NRDY) implemented AI-driven product innovations, such as AI session summaries, which have improved customer engagement and retention.
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The company has successfully increased consumer pricing due to enhanced value in their learning memberships.
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Nerdy Inc (NYSE:NRDY) has reduced headcount by approximately 16% since December 31, 2024, improving operational efficiency.
Negative Points
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Revenue declined by 11% year-over-year, primarily due to a lower number of learning memberships and reduced institutional revenue.
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Gross margins decreased to 58% in Q1 2025 from 68% in the same period in 2024, due to investments in tutor incentives.
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The company is facing a cautious federal and state funding environment, impacting institutional revenue growth.
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Non-GAAP adjusted EBITDA was a loss of $6.4 million for Q1 2025, compared to a positive $24,000 in the same period in 2024.
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Nerdy Inc (NYSE:NRDY) anticipates lower gross margins in the near term due to recent investments in tutor pay rates and higher utilization of tutoring sessions.
Q & A Highlights
Q: Can you provide an update on the progress of varsity tutors for schools and how the bookings pipeline is expected to trend given the cautious funding environment? A: Chuck Cob, CEO: We had a very productive quarter, exceeding revenue and adjusted EBITDA expectations. Our Live Plus AI product roadmap is advancing, enhancing tutor capabilities and customer engagement. The AI features are resonating with school districts, and we're seeing significant interest in our new Live Plus AI paid platform. The initial signals are positive, and we're optimistic about monetizing school districts through this platform.
Q: Which new AI features are most exciting in terms of driving improved engagement and retention? A: Chuck Cob, CEO: AI summaries are already leading to more engagement by providing insights and recommendations. We're integrating these features more deeply throughout the experience. Tutor co-pilot is another promising feature, although it's earlier in its lifecycle. Overall, the combination of live and AI capabilities is resonating well with both consumers and school districts.