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Mar 31, 2023
Nerdy Q1 2023 Earnings Report
Nerdy exited the 'J-Curve' business model transition and returned to growth, achieving Adjusted EBITDA profitability nine months ahead of schedule, driven by strong adoption of Learning Memberships and the application of AI.
Key Takeaways
Nerdy, Inc. reported a strong first quarter, exceeding revenue guidance and achieving adjusted EBITDA profitability ahead of schedule. The company's transition to Learning Memberships and its application of AI are driving growth and improved profitability.
Revenue was $49.2 million, exceeding guidance and representing a 5% increase year-over-year.
Learning Membership subscriptions accounted for 60% of total company recognized revenue.
Institutional business delivered record revenue of $8.5 million, a 32% increase year-over-year.
Adjusted EBITDA profitability was achieved, delivering nearly 1,700 bps of improvement year-over-year and $1.4 million of adjusted EBITDA.
Revenue by Segment
Forward Guidance
Nerdy expects revenue growth to be driven by recurring revenue streams and higher Institutional revenues. The company raised its full year revenue targets to $193-200 million and expects an adjusted EBITDA loss in the range of $7 million to breakeven.
Positive Outlook
- Continued evolution towards recurring revenue streams
- Build in the number of Learning Membership subscribers
- Higher Institutional revenues
- Sequential year-over-year revenue growth each quarter
- Improving gross margin profile
Challenges Ahead
- Normal summer seasonality
- Anticipated lower levels of new customer acquisition
- Lower consumption during the summer months
- Lower Learning Membership retention during the summer months
Historical Earnings Impact
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Avg. Return Before/After Earnings
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