Nerdy (NYSE:NRDY) Releases Earnings Results

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. Nerdy had a negative net margin of 16.99% and a negative return on equity of 100.13%. The company had revenue of $33.19 million for the quarter, compared to analysts’ expectations of $33.51 million.

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 Trading Up 5.2%

Shares of NYSE NRDY opened at $6.55 on Tuesday. Nerdy has a 12-month low of $5.37 and a 12-month high of $22.35. The company has a market cap of $83.73 million, a price-to-earnings ratio of -1.75 and a beta of 1.93. The company has a current ratio of 2.70, a quick ratio of 2.70 and a debt-to-equity ratio of 0.75. The stock’s 50 day simple moving average is $7.52 and its 200 day simple moving average is $11.73.

Wall Street Analysts Forecast Growth

Several research firms have recently commented on NRDY. Wall Street Zen raised shares of Nerdy from a “sell” rating to a “hold” rating in a report on Saturday, October 24th. Needham & Company LLC increased their price objective on shares of Nerdy from $2.00 to $8.00 and gave the stock a “buy” rating in a research note on Tuesday. Finally, Weiss Ratings reissued a “sell (e+)” rating on shares of Nerdy in a report on Thursday, October 15th. One equities research analyst has rated the stock with a Buy rating and one has given a Sell rating to the stock. According to data from MarketBeat.com, the company presently has an average rating of “Hold” and an average target price of $8.00.

Trending Headlines about Nerdy

Here are the key news stories impacting Nerdy this week:

• Positive Sentiment: Needham & Company raised its price target to $8 from $2 and reiterated a “buy” rating. The new target implies 22.1% upside from the cited $6.55 share price. Needham analyst recommendations
• Positive Sentiment: Nerdy reported a Q3 loss of $1.01 per share, narrower than the $1.50 loss analysts expected and the year-ago loss. That earnings beat may support investor sentiment. Nerdy Q3 earnings report
• Negative Sentiment: Q4 revenue guidance of $37 million–$39 million came in well below the $45.8 million consensus estimate, signaling weaker near-term revenue expectations and a likely headwind for the shares. Nerdy Q3 financial results and guidance
• Negative Sentiment: Q3 revenue was $33.19 million, slightly below the $33.51 million analyst estimate, tempering the positive earnings-per-share surprise. Nerdy Q3 earnings report

Nerdy Company Profile

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.