Nerdy (US:NRDY)2025-02-27 21:02Financial Performance - In Q4 2024, the company reported revenue of $48.0 million, exceeding guidance of $44 to $47 million, but down 13% year-over-year from $55.1 million in Q4 2023[24]. - The adjusted EBITDA loss was $5.5 million, better than the guidance range of negative $7.0 million to negative $10.0 million, compared to a non-GAAP adjusted EBITDA of $3.0 million in Q4 2023[24]. - The net loss for Q4 2024 was $15.7 million, compared to a net loss of $9.2 million in Q4 2023[40]. - Non-GAAP adjusted net loss for Q4 2024 was $7.0 million, a significant decline from non-GAAP adjusted net earnings of $2.2 million in Q4 2023[40]. - Revenue for Q4 2024 was $47.99 million, a decrease of 12.9% from $55.08 million in Q4 2023[49]. - Net loss for the year ended December 31, 2024, was $67,142 thousand, a slight improvement from a net loss of $67,669 thousand in 2023[56]. - Non-GAAP adjusted EBITDA loss for the year ended December 31, 2024, was $21,472 thousand, compared to a loss of $2,480 thousand in 2023[62]. - Non-GAAP adjusted net loss for the year ended December 31, 2024, was $26,053 thousand, compared to a loss of $5,984 thousand in 2023[64]. Revenue Breakdown - Consumer Learning Memberships generated $39.2 million in revenue, accounting for 82% of total revenue, with 37.5K Active Members as of December 31, 2024[24]. - Institutional revenue was $6.8 million, representing 14% of total revenue, with 91 contracts executed yielding $4.6 million in bookings[24]. - Consumer revenue for Q4 2024 was $40.99 million, down 6% from $43.53 million in Q4 2023[51]. - Institutional revenue for Q4 2024 was $6.83 million, a decline of 40% from $11.34 million in Q4 2023[51]. Expenses - Sales and marketing expenses for Q4 2024 were $18.4 million, a decrease of 2.1% from $18.8 million in Q4 2023[34]. - For the year ended December 31, 2024, sales and marketing expenses increased to $71.6 million, up 4.5% from $68.5 million in 2023[34]. - General and administrative expenses for Q4 2024 were $29.9 million, a decrease of 2.6% from $30.7 million in Q4 2023[38]. - General and administrative expenses for the year ended December 31, 2024, were $126,879 thousand, slightly up from $125,570 thousand in 2023[60]. Cash and Liquidity - The company has $52.5 million in cash with no debt, providing ample liquidity to fund business operations and growth initiatives[24]. - As of December 31, 2024, cash and cash equivalents were $52.5 million, down from $74.8 million at the end of 2023[54]. - Cash, cash equivalents, and restricted cash at the end of 2024 were $52,673 thousand, down from $75,140 thousand at the end of 2023[56]. - Cash used in operating activities increased to $15,603 thousand in 2024 from $7,560 thousand in 2023[56]. Membership and User Metrics - Active Members as of December 31, 2024, decreased by 8% year-over-year to 37.5 thousand, compared to 40.7 thousand in 2023[71]. - Active Experts increased by 17% year-over-year to 20.2 thousand in 2024, up from 17.2 thousand in 2023[71]. Future Outlook - The company expects first quarter 2025 revenue in the range of $45-47 million and full year revenue between $190-200 million[30]. - Full year adjusted EBITDA is projected to be negative $8 million to negative $18 million, with expectations of returning to positive adjusted EBITDA and cash flow in Q4 2025[30][29]. - The company anticipates continued improvements in sales and marketing leverage and growth in its Institutional business for 2025[85]. Risks and Challenges - The company faces significant risks that could cause actual results to differ materially from forward-looking statements, including evolving offerings and historical net losses[87]. - There are concerns regarding the ability to acquire and retain customers, as well as to scale up both Consumer and Institutional businesses[87]. - The company has a history of negative operating cash flows, which may necessitate seeking additional sources of liquidity[87]. - Risks associated with intellectual property claims could impact the company's operations and financial results[87]. - The classification of certain contractors as independent may pose additional risks to the company's business model[87]. - The company is exposed to litigation, regulatory, and reputational risks, particularly due to the involvement of minors in its learning programs[87]. - Cyber-related incidents and their potential impacts on business operations are a significant concern for the company[87]. - The development and use of artificial intelligence present regulatory uncertainties that could affect the company's future[87]. - The company acknowledges the possibility of adverse effects from economic, business, and competitive factors[87]. - Managing rapid growth poses additional risks that the company must navigate[87]. Product Development - The company introduced AI-driven products, including AI Lesson Plan and Practice Problem Generators, aimed at enhancing the learning experience and reducing operational costs[6][9]. - The company successfully expanded its platform to over 5 million students across more than 1,100 school districts, with 43% of paid contracts and 36% of total bookings value coming from these partnerships in Q4[16][24].