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Mar 31, 2022
Nerdy Q1 2022 Earnings Report
Nerdy achieved record bookings and revenues, driven by strength in direct-to-consumer offerings and Varsity Tutors for Schools.
Key Takeaways
Nerdy reported a strong first quarter in 2022, achieving record bookings and revenues. The company's marketplace dynamics showed continued strength, with active learners and online sessions increasing significantly. Nerdy is focused on evolving its product offerings and expanding its reach through initiatives like the membership model and Varsity Tutors for Schools.
Achieved record bookings of $48.5 million and revenues of $46.9 million, up 30% and 36% year-over-year, respectively.
Active Learners increased by 56% and Online Sessions increased by 57% compared to Q1 2021.
Varsity Tutors for Schools signed 61 new contracts and generated $4.6 million in revenue, representing nearly 10% of Q1 revenue.
Gross profit increased by 40% year-over-year to $32.8 million, with a gross margin of 69.8%.
Forward Guidance
Nerdy updated its revenue guidance for Q2 2022 to $37-40 million and for the full year 2022 to $160-175 million. Adjusted EBITDA loss is expected to be in the range of $9-12 million for Q2 2022 and $28-38 million for the full year 2022.
Positive Outlook
- The launch of the membership model aims to simplify the business and drive higher lifetime value relationships.
- The membership model is expected to result in higher revenue recognition in the long term.
- The company expects revenue re-acceleration in the fourth quarter during the key back-to-school period.
- The company has sufficient cash on the balance sheet to fund the business to expected profitability by the end of 2023.
- The early sales conversion and engagement trends related to the membership model give the company greater conviction in its investments.
Challenges Ahead
- Revenue is recognized on a linear basis over the term of the contract in the membership model, resulting in lower revenue recognition in the near term.
- The company experienced a decrease in consumer bookings growth rates in March and April.
Historical Earnings Impact
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