Nerdy (US:NRDY)2025-08-07 22:00Financial Data and Key Metrics Changes - Total revenue for the second quarter was $45.3 million, down 11% year over year from $51 million in the same period in 2024, primarily due to lower institutional revenue and a nonrecurring state-funded program [5][21][22] - Consumer learning membership revenue grew 4% year over year to $37.8 million, representing 84% of total revenue, with active members at 30,600 and average revenue per member per month (ARPAM) reaching $348, a 24% increase year over year [6][22] - Non-GAAP adjusted EBITDA loss was $2.7 million, better than the top end of expectations, compared to a loss of $2.1 million in the same period last year [7][27] Business Line Data and Key Metrics Changes - Varsity Tutors for Schools bookings grew 21% year over year, driven by demand for high dosage tutoring offerings and positive responses to the Live plus AI platform [5][23] - Institutional revenue was $7.3 million, representing 16% of total revenue, with the integration of Live plus AI capabilities resonating strongly with district leaders [22][24] Market Data and Key Metrics Changes - The company anticipates consumer revenue to accelerate in growth each quarter throughout 2025, supported by higher frequency learning memberships and price increases [7][28] - The institutional segment is expected to return to year-over-year growth in 2025, with a cautious federal and state funding environment impacting the first half of the year [29] Company Strategy and Development Direction - The company is focused on enhancing its AI capabilities to improve customer experience and operational efficiency, with a vision to combine live instruction with AI for superior outcomes [4][11] - More than 30 new AI tools for schools were launched, aimed at helping educators streamline tasks and personalize learning [15][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in improving trends for the back half of the year, citing strong leading indicators for retention and customer acquisition [35][36] - The company expects to deliver profitability in the fourth quarter of this year, with cash and cash equivalents of $36.7 million and zero debt [27][30] Other Important Information - The company is entering the back-to-school season with enhanced AI-powered interactive learning experiences, which are expected to drive deeper engagement among existing learners [10][11] - The company has made significant infrastructure investments in AI, leading to greater efficiency and automation in internal processes [72] Q&A Session Summary Question: Can you talk about the return to revenue growth and confidence in improving trends? - Management highlighted that the last sixty days were the most productive in the company's history, with improvements in retention and customer onboarding driving confidence in growth [34][35] Question: What AI tools are most exciting for driving benefits in the next few quarters? - Management expressed excitement about the Nerdy app, which influences real-time tutoring sessions and enhances the overall customer experience [45] Question: Will there be any benefit for Nerdy to capitalize on recent AI funding announcements? - Management noted a significant opportunity to help school districts adopt AI tools, with broad interest now emerging from administrators [50][51] Question: What is the timeline for the rollout of high dosage tutoring nationwide? - Management indicated that the institutional opportunity is real and that they are well-positioned to serve large school districts, with strong bookings expected in the upcoming quarter [58][59]