Nerdy (US:NRDY)2023-08-07 16:00Membership Growth - Active Members increased to 31,000 as of June 30, 2023, up from 20,200 a year earlier, reflecting strong demand for Learning Memberships[78] - The transition to Learning Memberships is expected to enhance customer retention and lifetime value, positioning the company for future growth[75] - The transition to Learning Memberships is expected to yield sequential year-over-year revenue growth each quarter as the Institutional business continues to scale[92] Financial Performance - Revenue for Q2 2023 was $48,839,000, a 16% increase from $42,186,000 in Q2 2022, driven by the adoption of Learning Memberships[82] - Gross profit for Q2 2023 was $34,099,000, representing a 19% increase compared to $28,755,000 in Q2 2022, with a gross margin of 70%[87] - The company reported a net loss of $(5,550,000) for Q2 2023, compared to a net income of $15,277,000 in Q2 2022, primarily due to changes in revenue recognition[82] Operational Efficiency - Operating loss for Q2 2023 was $(10,473,000), significantly reduced from $(22,007,000) in Q2 2022, indicating improved operational efficiency[82] - Sales and marketing expenses for Q2 2023 were $14,859,000, a decrease of 18% from $18,011,000 in Q2 2022, improving efficiency[90] - Total operating expenses decreased by 12% to $44,572,000 in Q2 2023 from $50,762,000 in Q2 2022, reflecting cost management efforts[89] Expert Engagement - Active Experts decreased by 17% year-over-year to 10,000 in Q2 2023, down from 12,100 in Q2 2022[80] Administrative Expenses - General and administrative expenses for Q2 2023 were $9,440 thousand, a decrease of $2,594 thousand or 11% year-over-year, representing 42% of revenue compared to 54% in Q2 2022, a 1,270 basis point improvement[93] - For the first half of 2023, general and administrative expenses were $19,651 thousand, down $2,199 thousand or 5% year-over-year, at 41% of revenue compared to 47% in the same period of 2022, a 652 basis point improvement[94] Cash Flow and Investments - Cash provided by operating activities for the first half of 2023 was $2,279 thousand, an improvement from cash used of $20,191 thousand in the prior year, attributed to higher revenues and efficiency gains[110] - Cash used in investing activities for the first half of 2023 was $2,049 thousand, primarily for internal use software and IT equipment development, compared to $2,714 thousand in the same period of 2022[111] - As of June 30, 2023, the company had cash and cash equivalents totaling $90,929 thousand, slightly up from $90,715 thousand at the end of 2022[104] Interest Income - Interest income for Q2 2023 was $783 thousand, up from $5 thousand in Q2 2022, and for the first half of 2023, it was $1,616 thousand, up from $12 thousand in the same period of 2022, driven by higher interest on cash balances[102] Non-Cash Adjustments - The company recognized a net gain of $(4,198) thousand for Q2 2023 related to non-cash mark-to-market adjustments on warrants and earnouts[96] - A hypothetical 10% adverse change in the price of public warrants as of June 30, 2023 would have increased the fair value of related liabilities by approximately $1,048 thousand[128] - Additional information regarding warrants and earnout contracts is available in Notes 10 within "Notes to Condensed Consolidated Financial Statements" in Part I, Item 1 of the report[129]