Nerdy (US:NRDY)2026-02-26 23:02Financial Data and Key Metrics Changes - Fourth quarter revenue was $49.1 million, exceeding guidance and up 2% year-over-year, marking the first quarter since Q1 2024 with simultaneous growth in both consumer and institutional businesses [4][19] - Non-GAAP adjusted EBITDA was positive $1.3 million, significantly improving by $6.8 million from Q4 2024 and beating guidance of -$2 million to break even [4][26] - Active members ended the year at 33.2 thousand, with ARPM reaching $364, a 21% increase year-over-year [21][22] Business Line Data and Key Metrics Changes - Consumer revenue was $41.6 million, a 6% increase year-over-year, representing 85% of total company revenues [19][22] - Institutional revenue was $7.2 million, accounting for 14% of total revenue, with bookings of $4.1 million, down 11% year-over-year due to funding delays [22][24] - Gross margin for Q4 was 66.8%, showing sequential improvement and driven by a shift to higher frequency learning memberships and price increases [23][24] Market Data and Key Metrics Changes - The U.S. academic tutoring market is estimated at approximately $20 billion per year, with the company currently serving fewer than 40,000 active members [6][7] - The demand for high-quality, personalized tutoring remains strong, with approximately 50 million students progressing through the K-12 and higher education systems in the U.S. each year [5][6] Company Strategy and Development Direction - The company aims to enhance personalized learning across its Live+AI platform, leveraging AI to improve user experience and operational efficiency [15][16] - Plans to return to active member growth through new marketing channels and an improved mobile experience are in place [16][17] - The focus for 2026 includes compounding gross margin and structural cost improvements, targeting break-even non-GAAP adjusted EBITDA for the full year [17][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the top-of-funnel trends and the ability to optimize customer acquisition and retention [39][40] - The completion of the new AI-native platform is expected to enhance engagement and operational speed, leading to better customer experiences [36][37] - The company anticipates continued gross margin improvement and operational efficiencies as it leverages AI capabilities [24][30] Other Important Information - The company completed the rollout of new learner and expert user experiences, receiving positive feedback from 85% of surveyed customers [12][22] - Significant reductions in sales and marketing expenses were noted, alongside a 22% year-over-year decline in headcount due to automation [25][26] Q&A Session Summary Question: Impact of new platform on engagement and retention - Management noted that the new platform allows for faster and more flexible operations, leading to improved engagement and retention [34][36] Question: Navigating changes in the search environment - Management expressed optimism about top-of-funnel trends and the ability to optimize discoverability and conversion rates [39][40]