Nerdy (US:NRDY)2025-11-06 21:11Membership and User Metrics - Active Members as of September 30, 2025 decreased to 34.3 thousand, a 14% decline year-over-year compared to 39.7 thousand in September 30, 2024[70] - Active Experts decreased to 8.1 thousand for the three months ended September 30, 2025, a 15% decline from 9.5 thousand in the same period of 2024[72] Revenue and Profitability - Revenue for the three months ended September 30, 2025 was $37,019 thousand, a slight decrease of 1% compared to $37,530 thousand in the prior year[72] - Consumer revenue for the three months ended September 30, 2025 increased by 4% to $33,166 thousand, while Institutional revenue decreased by 32% to $3,688 thousand[78] - Gross Profit for the three months ended September 30, 2025 was $23,296 thousand, representing a gross margin of 63%, down from 70% in the prior year[80] - The net loss for the three months ended September 30, 2025 was $18,756 thousand, a 51% increase compared to a net loss of $24,958 thousand in the prior year[72] - Average Revenue per Member per Month (ARPM) increased by 24% to $374 as of September 30, 2025, compared to $302 in September 30, 2024[71] Operating Expenses - Total operating expenses for the three months ended September 30, 2025 were $52,177 thousand, an increase of 19% compared to $42,378 thousand in the same period of 2024[83] - Sales and marketing expenses decreased by $3,532 thousand, or 18%, for the three months ended September 30, 2025, compared to the same period in 2024[84] - General and administrative expenses decreased by $3,302 thousand, or 15%, for the three months ended September 30, 2025, excluding non-cash stock-based compensation[87] - Product and development costs were $10,285 thousand for the three months ended September 30, 2025, down from $11,273 thousand in the same period in 2024[86] - General and administrative expenses decreased by $7,128 thousand, or 11%, for the nine months ended September 30, 2025, excluding non-cash stock-based compensation[87] Cash Flow and Liquidity - Cash used in operating activities increased by $11,625 thousand for the nine months ended September 30, 2025, compared to the same period in 2024[99] - Cash and cash equivalents totaled $32,710 thousand as of September 30, 2025, down from $52,541 thousand as of December 31, 2024[91] - Cash used in investing activities was $4,051 thousand for the nine months ended September 30, 2025, compared to $5,700 thousand in the same period in 2024[100] - The company expects to use cash on hand to satisfy future working capital requirements and sales and marketing activities[95] Future Outlook and Company Status - The company expects sequential quarterly gross margin improvement to continue into the fourth quarter of 2025 due to a shift towards higher frequency and higher priced Learning Memberships[81] - The company is rolling out new user experiences for students and Experts in Q4 2025 to address operational challenges and re-accelerate growth[69] - The company expects to remain an emerging growth company until the earlier of the fifth anniversary of its IPO, achieving total annual gross revenue of at least $1,235,000 thousand, or being deemed a large accelerated filer with a market value of $700,000 thousand[112] - As of June 30, 2025, the company will continue to qualify as a smaller reporting company, with a market value of shares held by non-affiliates being less than $250,000 thousand or annual revenues below $100,000 thousand[114] Market Risk - The company’s exposure to market risk, foreign currency exchange rates, and interest rates is considered immaterial[115] - Interest income for the three months ended September 30, 2025, was $357 thousand, a decrease from $768 thousand in the same period in 2024[89] - The company borrowed $20,000 thousand under a Term Loan on November 3, 2025, with the first tranche of up to $30,000 thousand available for borrowing[94]