Nerdy, Inc. Q4 FY2025 earnings call

• Delivered on three goals in Q4 2025: return to growth, accelerate AI-native platform transformation, achieve positive non-gap adjusted EBITDA.
• Completed rollout of new learner and expert experiences with AI native code base.
• Consumer business shifted to higher-frequency learning memberships, saw growth in learning membership revenue, ARPUM, and consolidated revenue growth.
• AI paired with expert tutors improves outcomes, with features like hyper-personalized lesson plans and moments of learning receiving positive feedback.
• Q4 saw completion of new user experiences rollout with 85% rating new platform better, 82% customer satisfaction score.
• Non-GAAP adjusted EBITDA positive due to revenue growth, gross margin expansion, cost reductions, and operational efficiencies.
• 2026 priorities: enhance personalized learning, return to active member growth, compound gross margin and structural cost improvements.

Fourth quarter revenue is $49.1 million, up 2% year over year. Consumer learning memberships revenue was $41.6 million, a 6% increase year-over-year and 85% of total company revenues. Institutional business revenue was $7.2 million, 14% of total company revenue. Non-GAAP adjusted EBITDA was positive $1.3 million. Non-GAAP adjusted gross margin was 66.8% in Q4.

• 2026 first quarter revenue expected in range of $46 to $48 million.
• 2026 full year revenue expected in range of $180 to $190 million.
• 2026 first quarter non-GAAP adjusted EBITDA expected to be approximately breakeven.
• 2026 full year non-GAAP adjusted EBITDA expected to be approximately breakeven, representing over 1,000 basis points improvement from 2025.
• Expect to end 2026 with $40 to $45 million of cash inclusive of $20 million funded under new term loan.

Discussion of risks related to forward-looking statements, where actual results could differ materially from expected results. Risks include those in company's filings with the SEC, and not all financial measures discussed are in accordance with GAAP.

Q: Ryan McDonald asks about how platform improvements translate to fundamental profile, number of sessions, engagement, and retention.

A: Chuck Cohn responds that the new platform is a completely new code base allowing faster movement, more flexibility, deeper relationship building, and automatic processes leading to better engagement and potential to delight customers.

Q: Ryan McDonald asks about navigating search landscape changes for discoverability.

A: Chuck Cohn states they feel good about top of funnel trends, can optimize funnel better, make subjects more compelling, relevant, personalized, with top of funnel trends looking healthy.