Nerdy (US:NRDY)2025-05-08 20:02Revenue Performance - Revenue for Q1 2025 was $47.6 million, a decrease of 11% year-over-year from $53.7 million in Q1 2024, primarily due to a lower number of Learning Memberships and lower Institutional revenue[29] - Learning Membership revenue accounted for 80% of total company revenue in Q1 2025, amounting to $37.9 million[29] - Institutional revenue was $9.4 million, representing 19% of total revenue, with 90 contracts executed yielding $4.0 million in bookings[29] - Revenue for Q1 2025 was $47.6 million, down 11% from $53.7 million in Q1 2024, with Consumer revenue at $38.0 million (80% of total) and Institutional revenue at $9.4 million (19% of total)[55][57] - For Q2 2025, revenue guidance is set between $45-48 million, with full-year revenue expectations increased to $191.5-200 million[36] Membership and Customer Metrics - Active Learning Memberships reached 40.5K as of March 31, 2025, with an Average Revenue per Member per Month (ARPM) of $335, reflecting a 14% increase from $293 in the previous year[10][29] - As of March 31, 2025, Active Members decreased to 40.5 thousand, a year-over-year decline of 12% compared to 46.1 thousand in March 31, 2024[77] - The Average Revenue Per Member (ARPM) increased to $335 as of March 31, 2025, reflecting a 14% year-over-year growth from $293 in March 31, 2024[77] - The company experienced a year-over-year decline in Active Members due to lower retention in older customer cohorts, particularly those with lower frequency Learning Memberships[73] - The increase in ARPM was attributed to a shift towards higher frequency Learning Memberships and price increases implemented in Q1 2025[74] Financial Performance - Gross margin for Q1 2025 was 58.0%, down from 68.0% in Q1 2024, primarily due to increased tutor incentives and higher session utilization[29] - Gross profit for Q1 2025 was $27.6 million, a decrease of $8.9 million or 24% compared to Q1 2024, with a gross margin of 58.0% versus 68.0% in the prior year[38] - Adjusted EBITDA loss for Q1 2025 was $6.4 million, at the top end of guidance, compared to a non-GAAP adjusted EBITDA of $24 thousand in Q1 2024[29] - Net loss for Q1 2025 was $16.2 million, compared to a net loss of $12.0 million in Q1 2024, with a non-GAAP adjusted net loss of $7.9 million versus $0.9 million in the prior year[46][69] - Non-GAAP adjusted EBITDA loss for Q1 2025 was $6.4 million, at the top end of guidance, compared to a non-GAAP adjusted EBITDA of $24,000 in Q1 2024[47][68] Expenses and Cost Management - Sales and marketing expenses for Q1 2025 were $15.8 million, a decrease of $1.6 million from $17.4 million in Q1 2024, reflecting improved marketing efficiency[40][41] - General and administrative expenses for Q1 2025 were $28.4 million, down $3.6 million from $32.0 million in Q1 2024, with non-GAAP adjusted expenses at $20.7 million compared to $21.4 million in the prior year[44][65] Future Outlook and Strategic Initiatives - The company expects a return to growth in Learning Membership revenue in Q2 2025, driven by improved customer acquisition and higher ARPM[25][31] - The introduction of AI-driven tools, such as Live + AI™, aims to enhance the learning experience and improve customer engagement, contributing to future growth[16][26] - The company plans to end 2025 with no debt and an estimated cash balance of $35-40 million, ensuring ample liquidity for growth initiatives[35] - The company expects price increases for new Consumer customers to improve gross margin throughout 2025[39] - The company is focusing on product enhancements to drive growth in the Institutional space despite near-term funding uncertainties[41] Cash Position and Liquidity - As of March 31, 2025, cash and cash equivalents were $44.9 million, down from $52.5 million at the end of 2024, indicating a strong liquidity position[50][59] Risk Factors and Management Metrics - The company acknowledges various risks that could impact future results, including customer acquisition challenges and regulatory uncertainties[92] - Non-GAAP adjusted EBITDA and net income measures are utilized to evaluate the company's operating performance, excluding non-cash stock compensation and restructuring costs[78][80] - Management uses non-GAAP metrics for planning and evaluating the effectiveness of strategic initiatives, which may not be directly comparable to GAAP measures[89] - The company emphasizes the importance of forward-looking statements regarding revenue growth and operational strategies for 2025[90] - The annualized run-rate is calculated based on the number of Active Members multiplied by average revenue per Learning Membership per month, providing increased forecasting visibility[85]