Core Insights - Nerdy, Inc.'s Varsity Tutors for Schools has partnered with Trinity Lutheran School to provide free access to its platform for students until June 30, 2030 [1][2] - The platform offers a range of interactive study tools and resources to support students across various school districts [2][3] Company Overview - Varsity Tutors for Schools is utilized by over 500 school districts in the U.S., aiming to bridge learning gaps and enhance classroom education [3] - The platform allows students to access tutoring services 24/7, take practice tests, and follow personalized lesson plans [4] Business Performance - In Q1 2024, Nerdy's institutional business achieved record revenues of $11.9 million, representing a 39% year-over-year increase [6] - Bookings for the quarter were $4.4 million, reflecting the company's efforts to integrate the Varsity Tutors platform and expand its sales team [6] User Growth - The company has expanded access to Varsity Tutors for an additional 1.2 million students, totaling 2.2 million students across 475 school districts [7] - The goal for the year is to provide access for 10 million students, which is nearly 20% of the K-12 population in the U.S. [7] Strategic Initiatives - Nerdy is focusing on platform scalability and a freemium upsell approach to build trust with new partners [5] - The company has merged subscription models and access-based products to create a unified experience for users, extending beyond K-12 education [10]

PART I. FINANCIAL INFORMATION Presents unaudited condensed consolidated financial statements and management's discussion and analysis for Q1 2024 [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited).) Presents unaudited condensed consolidated financial statements for Q1 2024 and 2023, including operations, balance sheets, cash flows, and detailed notes [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited).) Summarizes revenues, gross profit, operating loss, and net loss for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Operations (Unaudited) - Key Figures (in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenue | $53,727 | $49,180 | | Gross Profit | $36,515 | $33,890 | | Operating Loss | $(12,853) | $(11,370) | | Net Loss | $(12,015) | $(32,253) | | Net Loss Attributable to Class A Common Stockholders | $(7,446) | $(18,931) | | Basic and Diluted Loss per share | $(0.07) | $(0.21) | [Condensed Consolidated Statements of Comprehensive Loss (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited).) Details net loss and other comprehensive income/loss components, including foreign currency adjustments, for Q1 2024 and 2023 Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - Key Figures (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Loss | $(12,015) | $(32,253) | | Foreign currency translation adjustments | $(10) | $34 | | Total Comprehensive Loss | $(12,025) | $(32,219) | | Total Comprehensive Loss Attributable to Class A Common Stockholders | $(7,452) | $(18,911) | [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited).) Presents the company's financial position, including assets, liabilities, and equity, as of March 31, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (Unaudited) - Key Figures (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $121,349 | $124,744 | | Total Liabilities | $36,170 | $39,138 | | Total Stockholders' Equity | $85,179 | $85,606 | | Cash and cash equivalents | $76,960 | $74,824 | | Accounts receivable, net | $9,632 | $15,398 | | Deferred revenue | $16,300 | $20,480 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited).) Summarizes cash flows from operating, investing, and financing activities for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Cash Flows (Unaudited) - Key Figures (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net Cash Provided By Operating Activities | $4,353 | $6,794 | | Net Cash Used In Investing Activities | $(2,221) | $(982) | | Net Cash Used In Financing Activities | $0 | $0 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $2,136 | $5,805 | | Cash, Cash Equivalents, and Restricted Cash, End of Period | $77,276 | $97,352 | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20(Unaudited).) Details changes in stockholders' equity, including common stock and accumulated deficit, for the three months ended March 31, 2024 and 2023 Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - Key Figures (in thousands) | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total Stockholders' Equity | $85,179 | $60,404 | | Class A Common Stock - Shares (End of period) | 109,002 | 97,926 | | Class B Common Stock - Shares (End of period) | 66,674 | 69,258 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited).) Provides detailed explanations of accounting policies, revenue recognition, noncontrolling interests, and other financial disclosures - Nerdy Inc. consolidates Nerdy LLC, with a portion of consolidated net earnings (loss) allocated to noncontrolling interests (NCI) for Legacy Nerdy Holders[22](index=22&type=chunk) Ownership Percentage of OpCo Units in Nerdy LLC | Entity | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Nerdy Inc. | 62.0 % | 61.3 % | | Legacy Nerdy Holders | 38.0 % | 38.7 % | Revenue by Business Category (Three Months Ended March 31, in thousands) | Category | 2024 | % | 2023 | % | | :--- | :--- | :--- | :--- | :--- | | Consumer | $41,602 | 77 % | $40,335 | 82 % | | Institutional | $11,887 | 22 % | $8,540 | 17 % | | Other | $238 | 1 % | $305 | 1 % | | **Total Revenue** | **$53,727** | **100 %** | **$49,180** | **100 %** | - The company maintains a full valuation allowance against deferred tax assets at Nerdy Inc. and has not recognized a **$115,968 thousand** liability under the Tax Receivable Agreement, concluding it was not probable that such payments would be made based on estimates of future taxable income[37](index=37&type=chunk)[55](index=55&type=chunk) - The company is subject to legal proceedings challenging the classification of third-party Experts as independent contractors, with a tentative settlement of **$2,000 thousand** accrued for a California PAGA matter[57](index=57&type=chunk)[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Analyzes the company's financial condition and results of operations, covering business overview, key metrics, performance, liquidity, and accounting policies [Overview](index=17&type=section&id=OVERVIEW) Describes Nerdy's platform for live online learning, connecting Learners with Experts using technology and AI across various subjects - Nerdy operates a platform for live online learning, leveraging technology, including artificial intelligence (AI), to connect Learners with Experts across numerous subjects and multiple formats[63](index=63&type=chunk) - The flagship business, Varsity Tutors LLC, provides learning experiences directly to Consumers and through education systems (Institutions) via offerings like Varsity Tutors for Schools[63](index=63&type=chunk) [Key Operating Metrics](index=17&type=section&id=KEY%20OPERATING%20METRICS) Presents key operational performance indicators, including active members and experts, reflecting business growth and engagement Active Members (in thousands) | Date | Active Members | YoY Change | | :--- | :--- | :--- | | March 31, 2024 | 46.1 | 40% | | March 31, 2023 | 32.9 | n/a | Active Experts (in thousands) | Period | Active Experts | Change (%) | | :--- | :--- | :--- | | Three Months Ended March 31, 2024 | 12.3 | 21% | | Three Months Ended March 31, 2023 | 10.2 | | - The increase in Active Experts was primarily driven by higher Institutional active experts, reflecting the continued scaling of the Institutional business[67](index=67&type=chunk) [Results of Operations](index=18&type=section&id=RESULTS%20OF%20OPERATIONS) Analyzes the company's financial performance, including revenue, gross profit, operating expenses, and net loss, for the reporting period Key Financial Results (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $53,727 | $49,180 | $4,547 | 9% | | Cost of revenue | $17,212 | $15,290 | $(1,922) | (13)% | | Gross Profit | $36,515 | $33,890 | $2,625 | 8% | | Gross Margin | 68% | 69% | | | | Sales and marketing expenses | $17,392 | $15,560 | $1,832 | 12% | | General and administrative expenses | $31,976 | $29,700 | $2,276 | 8% | | Operating Loss | $(12,853) | $(11,370) | $(1,483) | (13)% | | Net Loss Attributable to Class A Common Stockholders | $(7,446) | $(18,931) | $11,485 | 61% | - Revenue growth was driven by the continued scaling of Consumer (**3% increase**) and Institutional (**39% increase**) businesses, partially offset by lower average revenue per member per month in the Consumer business[71](index=71&type=chunk)[72](index=72&type=chunk) - Gross margin decreased from **69% to 68%** primarily due to higher utilization of tutoring sessions across new access-based products within the Institutional business during a seasonally high period[74](index=74&type=chunk) - Sales and marketing expenses increased by **12%** due to investments in the Institutional sales organization, partially offset by marketing efficiencies from the transition to Learning Memberships in the Consumer business[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - General and administrative expenses increased by **8%**, with product development costs rising by **$2,233 thousand**, reflecting investments in platform innovation and 'always on' subscription products[76](index=76&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk) - The company recognized no unrealized loss on derivatives in Q1 2024, compared to a **$21,682 thousand** loss in Q1 2023, due to the warrant and earnout transactions in September 2023[82](index=82&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses the company's cash position, cash flow activities, and ability to meet future financial obligations without debt Cash and Cash Equivalents (in thousands) | Date | Amount | | :--- | :--- | | March 31, 2024 | $76,960 | | December 31, 2023 | $74,824 | Cash Flows (Three Months Ended March 31, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Operating activities | $4,353 | $6,794 | | Investing activities | $(2,221) | $(982) | | Financing activities | $0 | $0 | | Net Increase in Cash | $2,136 | $5,805 | - Cash provided by operating activities decreased by **$2,441 thousand** compared to the prior year, primarily due to investments in the Institutional sales organization and product development, and unfavorable changes in working capital[90](index=90&type=chunk) - Cash used in investing activities increased due to higher capital expenditures, primarily for the development of internal use software and IT equipment[91](index=91&type=chunk) - The company believes its cash on hand will be sufficient to satisfy future requirements, including working capital, sales and marketing activities, and capital expenditures, and had no debt obligations as of March 31, 2024[86](index=86&type=chunk)[87](index=87&type=chunk) [Critical Accounting Policies and Estimates](index=20&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) Confirms no material changes to the company's critical accounting policies and estimates from the prior annual report - There have been no material changes to the company's critical accounting policies and estimates previously disclosed in its 2023 Annual Report[94](index=94&type=chunk) [Recently Issued Accounting Standards](index=20&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20STANDARDS) Directs readers to Note 2 for details on recently issued accounting standards and their potential impact - Refer to Note 2 within 'Notes to Condensed Consolidated Financial Statements (Unaudited)' for a discussion regarding recently issued accounting standards[96](index=96&type=chunk) [Cautionary Note on Forward-Looking Statements](index=20&type=section&id=CAUTIONARY%20NOTE%20ON%20FORWARD-LOOKING%20STATEMENTS) Highlights future expectations and potential risks that could cause actual results to differ materially from projections - This report contains forward-looking statements regarding future expectations, including continued improvements in sales and marketing leverage, growth of the Institutional business, simplification of operations, and sufficiency of cash to fund future operations[98](index=98&type=chunk) - Actual results may differ materially due to various factors, including limited operating history, net losses, risks in customer acquisition/retention, scaling the Institutional business, intellectual property, independent contractor classification, and other economic/business factors[99](index=99&type=chunk) [Emerging Growth Company Status](index=21&type=section&id=EMERGING%20GROWTH%20COMPANY%20STATUS) Explains the company's status as an Emerging Growth Company and its eligibility for certain reporting exemptions - The company is an 'emerging growth company' (EGC) and is eligible for exemptions from certain reporting requirements, such as auditor attestation and reduced executive compensation disclosures[101](index=101&type=chunk) - The company intends to take advantage of the extended transition period for complying with new or revised accounting standards, allowing it to delay adoption until those standards apply to private companies[102](index=102&type=chunk) - The company expects to remain an EGC until the earlier of (1) the last day of the fiscal year following the fifth anniversary of TPG Pace Tech Opportunities' IPO, or when total annual gross revenue reaches **$1,235,000 thousand**, or when it becomes a large accelerated filer, or (2) the date it issues more than **$1,000,000 thousand** in non-convertible debt securities over a three-year period[103](index=103&type=chunk)[104](index=104&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) The company's exposure to market risk, foreign currency exchange rates, and interest rates is considered immaterial - The company's exposure to market risk, foreign currency exchange rates, and interest rates is immaterial[105](index=105&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Management concluded disclosure controls were effective as of March 31, 2024, with no significant changes in internal control over financial reporting - As of March 31, 2024, the CEO and CFO concluded that the company's disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed is recorded, processed, summarized, and reported timely[106](index=106&type=chunk) - There were no significant changes in the company's internal control over financial reporting during the quarter ended March 31, 2024[108](index=108&type=chunk) PART II. OTHER INFORMATION Contains additional information including legal proceedings, risk factors, other disclosures, and exhibits [Item 1. Legal Proceedings](index=22&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) Refers to Note 13 for legal proceedings details, including independent contractor classification, and confirms no environmental proceedings met disclosure thresholds - Information regarding legal proceedings is incorporated by reference from Note 13 within 'Notes to Condensed Consolidated Financial Statements (Unaudited)'[109](index=109&type=chunk) - No environmental proceedings with a governmental entity as a party, resulting in monetary sanctions of **$1,000 thousand** or more, were disclosed for the three months ended March 31, 2024[110](index=110&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=ITEM%201A.%20RISK%20FACTORS.) Directs readers to the 2023 Annual Report for risk factors, noting no material changes in the current reporting period - There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K as of the date of this Quarterly Report[111](index=111&type=chunk) [Item 5. Other Information](index=23&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) Reports no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024[112](index=112&type=chunk) [Item 6. Exhibits](index=23&type=section&id=ITEM%206.%20EXHIBITS.) Lists exhibits filed with the Form 10-Q, including Certificate of Incorporation, Bylaws, CEO/CFO certifications, and Interactive Data Files - The exhibits include the Certificate of Incorporation, Bylaws, certifications from the CEO and CFO (pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350), and Interactive Data Files (iXBRL)[113](index=113&type=chunk)[114](index=114&type=chunk) [Signatures](index=24&type=section&id=SIGNATURES) The report was signed on behalf of Nerdy Inc. by Jason Pello, Chief Financial Officer, on May 7, 2024 - The report was signed on behalf of Nerdy Inc. by Jason Pello, Chief Financial Officer, on May 7, 2024[118](index=118&type=chunk)

Exhibit 99.1 In the first quarter, we executed against the three primary goals we laid out for the year, including: (1) scaling the winning product for every Learner; (2) expanding the number of Learners we can impact by introducing freemium strategies across both our Consumer and Institutional offerings, and (3) laying the foundation to deliver profitable growth for the full year. The convergence of subscription business models and access-based products across Consumer and Institutional is allowing us to u ...

Nerdy, Inc.'s (NRDY) leading live online tutoring platform, Varsity Tutors for Schools, inks a partnership with Prague High School to provide all students with access to the platform at no cost.The collaboration aims to provide additional learning resources, including interactive study tools and live online tutoring, to support students' academic growth. Prague High School students and families will gain immediate access to the platform, which is available until June 2030.Varsity Tutors for Schools offers d ...

Poca Wander Stock/iStock via Getty Images Elevator Pitch I have a Buy rating for Nerdy, Inc. (NYSE:NRDY) stock. Previously, I touched on NRDY's financial prospects for the long run with my prior November 1, 2023 update. My current write-up draws attention to Nerdy's institutional business segment and the positive impact of AI on the company's margins. I think that NRDY is well-positioned for sustained revenue growth and profitability improvement, considering the favorable outlook for its institutional busin ...

In most situations, you want to stay on the tried-and-true approach, which leaves little room for speculative stocks. You can consider this arena as the equivalent to the longball approach in (American) football. Such plays make the highlight reels but they also have a greater chance of ending in disaster.So, balanced teams – the type that win championships – feature strengths in both the running and passing components. However, in some situations, teams find themselves forced to go the passing route. In su ...

Nerdy, Inc.'s (NRDY) leading live online tutoring platform, Varsity Tutors for Schools, announces a partnership with Rossville Consolidated School District. The collaboration aims to provide all district students or families with access to the platform at no cost.The comprehensive platform offers on-demand learning resources to assist students whenever needed, including interactive study tools, collaborative workspaces and dynamic learning resources.NRDY provides students with the opportunity to consult wit ...

ST. LOUIS--(BUSINESS WIRE)--Summer is still three months away, but families are already making plans for kids to attend summer camp. Varsity Tutors, a Nerdy company, today unveiled its 2024 summer programming with an emphasis on accelerating students toward their academic goals. “There is a frenetic pace to the school year, requiring lots of students to give their full effort just to keep up,” said Varsity Tutors’ Chief Academic Officer, Brian Galvin. “Summer is an opportunity to not just catch up, but f ...

Nerdy Inc. (NRDY) came out with a quarterly loss of $0.05 per share versus the Zacks Consensus Estimate of a loss of $0.11. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 54.55%. A quarter ago, it was expected that this company would post a loss of $0.19 per share when it actually produced a loss of $0.13, delivering a surprise of 31.58%.Over the last four quarters, the company has surpass ...

Exhibit 99.1 Q4 | 2023 Earnings Release A Note to Our Shareholders We started 2023 with three primary goals that included: | Scaling 'Always On' | | --- | | access-based subscription revenue products | | Driving profitability | | Leveraging AI for HI® - | Artificial Intelligence for Human Interaction to transform how people learn Year in Review I'm proud of the Nerdy team for delivering against all three of these commitments, which were accomplished through tight execution against ambitious initiatives in b ...