Nerdy (NYSE:NRDY) Issues Quarterly Earnings Results, Beats Expectations By $0.49 EPS

Nerdy (NYSE:NRDY) issued its earnings results on Monday. The company reported ($1.01) earnings per share for the quarter, topping analysts’ consensus estimates of ($1.50) by $0.49, Zacks reports. The business had revenue of $33.19 million during the quarter, compared to the consensus estimate of $33.51 million. Nerdy had a negative return on equity of 100.13% and a negative net margin of 16.99%.

Here are the key takeaways from Nerdy’s conference call:

• Q3 revenue fell 10% year over year to $33.2 million, and active members declined 7% to 31,800. Delayed product and acquisition launches reduced new Learning Membership sign-ups, leaving a smaller recurring revenue base entering Q4.
• The non-GAAP Adjusted EBITDA loss narrowed to $5.7 million from $10.2 million a year earlier, beating the company’s guidance range. Adjusted EBITDA margin improved by more than 1,000 basis points year over year.
• Nerdy rolled out a messaging-first student experience, self-service registration and checkout, and AI tools for tutoring. The company says these features could improve engagement and acquisition, but key launches came later than planned and their impact on growth remains to be demonstrated.
• The company reported a leaner cost structure, with headcount down 44% year over year, and Q3 AI spending fell to $1.5 million from $2 million in Q2. Nerdy ended the quarter with $42.5 million in cash and expects current liquidity to fund operations through free cash flow break-even.
• For Q4, Nerdy expects revenue of $37 million to $39 million and approximately break-even non-GAAP Adjusted EBITDA. Management expects the year-over-year gap in new client acquisitions to narrow as remaining product features launch, while acknowledging the Q3 acquisition shortfall will weigh on revenue.

Nerdy Stock Performance

NYSE NRDY opened at $6.55 on Tuesday. The company has a market cap of $83.73 million, a P/E ratio of -1.75 and a beta of 1.93. The company has a fifty day simple moving average of $7.52 and a 200 day simple moving average of $11.73. The company has a current ratio of 2.70, a quick ratio of 2.70 and a debt-to-equity ratio of 0.75. Nerdy has a 12-month low of $5.37 and a 12-month high of $22.35.

Wall Street Analysts Forecast Growth

Several brokerages have recently commented on NRDY. Wall Street Zen upgraded Nerdy from a “sell” rating to a “hold” rating in a research note on Saturday, October 24th. Weiss Ratings reaffirmed a “sell (e+)” rating on shares of Nerdy in a research note on Thursday, October 15th. One equities research analyst has rated the stock with a Sell rating. According to data from MarketBeat.com, the stock presently has an average rating of “Sell”.

About Nerdy

Nerdy, Inc (NYSE: NRDY) is an education technology company that operates an online learning platform designed to connect learners with instructors and other educational resources. Its platform is primarily offered through the Varsity Tutors brand.

The company provides live, online instruction across a broad range of subjects and learning needs. Its offerings include one-on-one tutoring, small-group classes, test preparation, academic support, language learning, admissions assistance and professional development.