Q3 2024 Nerdy Inc Earnings Call Transcript
Key Points
- Nerdy Inc (NRDY) has made significant improvements to its digital onboarding experience, leading to higher customer satisfaction and retention.
- The company has successfully enabled access to its Varsity Tutors for Schools platform for an additional 1.1 million students, bringing the total to 4.4 million students across nearly 900 school districts.
- Nerdy Inc (NRDY) has seen a positive shift in product mix towards membership-oriented weekly tutoring habits, resulting in higher average revenue per month and improved retention rates.
- The company's platform access strategy is yielding positive results, with 32% of paid contracts and 22% of total bookings value coming from school district partners who initially accessed the platform for free.
- Nerdy Inc (NRDY) has a strong balance sheet with $65 million in cash and no debt, providing ample liquidity to pursue growth initiatives.
- Nerdy Inc (NRDY) experienced a 7% year-over-year decline in revenue, primarily due to lower active user metrics in its consumer business.
- The company's gross margin decreased to 70.5% from 72.4% year-over-year, impacted by lower average revenue per user and higher utilization of tutoring sessions.
- Institutional revenue decreased by 3% year-over-year, with lower-than-expected bookings and deal sizes in the third quarter.
- The ramp-up of a new sales team and the complexity of onboarding free platform access school district partners impacted execution in the consumer business.
- Nerdy Inc (NRDY) reported a non-GAAP adjusted EBITDA loss of $14 million, which was higher than the previous year's loss of $8.2 million, due to increased investments in sales and product development.
Good afternoon. Thank you for attending today's Nerdy Inc Q3, 2024 earnings call. My name is Cole and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers. At the end, 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 third quarter. 2024 earnings call with me are Chuck, co founder, Chairman and Chief Executive Officer of Nerdy and Jason Pellow, 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 nearbys 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.
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