Q1 2024 Nerdy Inc Earnings Call Transcript
Key Points
- Nerdy Inc reported a 34% year-over-year increase in consumer learning membership subscription revenue, totaling $39.9 million, which represents 74% of total company revenue.
- The company achieved a record quarterly institutional revenue of $11.9 million, marking a 39% increase year over year.
- Active membership grew by 40% year over year, reaching 46,100 members as of March 31, 2024, surpassing the guidance target.
- Nerdy Inc delivered non-GAAP adjusted EBITDA of $24,000, slightly above the top end of their guidance range, and also reported positive operating cash flow of $4.4 million.
- The company successfully expanded its reach, enabling access to its platforms for an additional 1.2 million students, bringing the total to 2.2 million students across over 475 school districts.
- Despite overall growth, there was a noted decrease in gross margin primarily due to higher utilization of tutoring sessions in new access-based products within the institutional business.
- The company is still in the process of testing additional product offerings and price points, which has led to a decrease in ending RPM (Revenue Per Month) for the quarter.
- Nerdy Inc faces ongoing challenges with the timing and magnitude of conversions from freemium to membership models, particularly in integrating these services across consumer and institutional platforms.
- There are additional costs associated with the ambitious target of enabling access to the Varsity Tutors for Schools platform for 10 million students.
- The company mentioned a mix shift towards premium offerings which, while promising, requires careful management to avoid negative impacts on revenue.
Good afternoon. Thank you for attending today's Nerdy, Inc. Q1 2024 earnings call. My name is Tamiya, and I will be your moderator for today's call. (Operator Instructions)
I would now like to pass the conference over to your host, TJ Lynn, Associate General Counsel of Nerdy. You may proceed.
Good afternoon, and thank you for joining us for Nerdy's first-quarter 2024 earnings call. With me are Charles Cohn, Founder, Chairman, and Chief Executive Officer of Nerdy; Jason Pello, Chief Financial Officer.
Before I turn the call over to Chuck, I'll remind everyone that this discussion will contain forward-looking statements, including but not limited to, expectations with respect to Nerdy future financial and operating results, strategy, opportunities, plans, and outlook. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. These forward-looking statements are made as of today's date, and Nerdy does
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