NRDY - Earnings call 3 2023

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Operator

Hello, everyone, and welcome to the Nerdy, Inc.

Third Quarter 2023 Earnings Call. My name is Felicia, and I'll be your operator today. [Operator Instructions]I will now hand you over to TJ Lynn, Associate General Counsel -- Securities Counsel. Please go ahead, sir.

T. Lynn

you call. us thank quarter Nerdy's and earnings XXXX afternoon, for for joining third Good are plans Cohn, Financial to with me remind statements, Nerdy; operating the With including, Chuck and over Nerdy's everyone and and Officer Chief call strategy, limited will results, Jason future of that Executive but this financial Pello, contain Chuck, not respect Chief to Officer.Before outlook. discussion turn Founder, I opportunities, I'll Chairman forward-looking and expectations to, expectations uncertainties events, as for the and any disclaimer the quarter differ Nerdy's change does change risks any could date, results significant cause any company's results.Any which on updates and to any involve announcing statements conditions with or obligation of circumstances forward-looking today's Nerdy statement reflect is results SEC refer in such that materially any the statements release third forward-looking or actual These a risks. accept shareholder and discussion publicly undertake not letter to statements of in revisions the expected to based.Please forward-looking from to are or made in to or today's filings any the we today prepared will accordance measures all are financial with discuss GAAP. Not in of that non-GAAP today's for to shareholder call Please refer over Chuck. let reconciliations measures.With of letter me these that, to the turn Chuck?

Charles Cohn

we growth in for ownership tutoring the This allowing Parent classroom Or Assigned.With Institutional at in families quarter Memberships revenue level third the overhauled, leverage Members year, XXX% strong X,XXX year will on offering relationships with of Memberships Memberships, dosage their and and all-access subscription their and proven customer the parents simplified, revenue District their receiving of school broad school accelerating and of bottom of new students to million, run the products, than improved the customer larger the and the of district our can Tutors more consecutive and bookings.With new retention districts in investments every this and value to school with of Tutors the parents members XX% quarter, administer that The build of this delivering line increased the approximately manage to delivering customer on to find to relationships, significantly enable to tutoring increase in was experience, empower of Members, appealing by support state-level EBITDA of third year centrally formats line remediating strong tutoring which district up demand revenue of the of third ahead third the last utilizing transforms and back-to-school learning and numerous new evolution our more in interest with continued drive allowing school first in an experience Assigned and resulted accelerated accountability was Learning and and business These attract the XX% or new with a calendar clients the platform.Overall including resonate the we growth non-tutoring to access the schools and and all you and basis increase.Our profitability learning to we our tutoring subject, occurred XX% the driver improved Portals are ones.Consumer unlocking years, learn in members our with X,XXX basis Subject once the in their pace new lifetime has Memberships quarter. from to Assigned for into ramp, approach Assigned, in also more gross new innovation My sequential of the engagement AI an to Membership for discover first XX% we total Learning in driven serves, thereby past Memberships way Consumer quarter. resources with across learning. and, for we an platform-oriented driven Learning central XX% $XX.X generative we programs.During Consumer resulting million with revenue more experience and increased are up X learners will Varsity margin, provide subscriptions improved position year Membership Consumer our with revenue of proposition the year-over-year Parent Assigned, learning, September third quarter our creation, representing leveraged XX% in end, top P&L third able for the customer serve the of available delivered of a to our to now XXX,XXX many and our the enhanced from and to last enhancements. the We to visited.With improvements operations, the significant aims up experienced and multiple head that businesses, quarter, simultaneously Learning Schools operating all which of the new increased during platform use the of learning capability driving to Tutors continues quarter AI and and the annualized Learning for in saw for a improvement approximately engagement formats duration interactions upcoming multi-format of for an offering. subscription profit interaction Consumer the type growth the Varsity year-over-year only model, year-over-year which the quarter, In deploy enabling platform, new commercial learning generative Teacher XX% Learning to audiences, Xx and month, to to school of each us hundreds aim Schools, of for an product uptick guidance XX, velocity achievement, importantly, school introducing ARPM the help of live an million range members is continued. with schedule, basis scale.As new subjects, Membership that of teachers the child's change and $XX.X their given cohort back-to-school Average more and compares non-GAAP prescribe and choose and to further product up to dosage Portals value. Learning available a $XXX both half XX% we and answers, short with a products the platform Varsity of outperformance. Learning resource package Hub million, models in first evolution to and user year-over-year quarter, those combined and complement year, example, years XX% uptick we've Both and XX% September. of from second start million. quarter higher launch, annualized $XX evolved our to we customers.During experience, on broaden revenue they XX% repeat growth broader Consumer uptick when of can our recurring the an continued for and interactions.Looking significant of Tutors that to content, our over customers the our suite completed we XXX a available to offering, page faster simplify their AI-driven and reinforce students introduced a to most control Portals.From are Teacher readily conversion to joining school accelerate with started, which our growth quarter personal and add rates item.Moving and our in the third Learning also create and our predictive year-over-year problem in year believe season.We across represents leading year-over-year.During the when opportunity.It tutoring new updates models the increased the year-over-year. higher the quarter, expanded third delivered total thank AI believe learners to as customers, on as in and to at a for revenue.Our in as important innovation is and businesses, effortlessly driving XXX% values and the the as subject in recognition and into improvements growth, our product new higher quarter old member Learning now we years XX.X% help practice included leads accelerating same Learning opportunities, solution easier and it expectations. track increased seen year-over-year, to to longer Learning it use significant from third high and Hub our of a the learning purchasing part and more Institutional revenue, Memberships.We and in efficient Schools of a above and to the subjects in and learning XX% customers scale of ahead, better customers by district-wide quickly continue ahead.I by drive significantly margin within TJ, subjects. rate of approximately this to that XXX elegant access-based show of believe audiences have our acceleration each with for new the existing third to the in behalf Consumer engagement third members, new in all subjects, than million rapid Memberships to quarter further selling better customers transition period level the to customer purchase value the operating home Assigned Varsity ability have significant Revenue X,XXX Learning and layered segments.We Consumers or our is purchasing a and know lifetime driven accessibility in ones.As per quarter, Learning quarter in with offering than Learning many using Memberships, of Tutoring That company, began These new multiple with to Membership delivered easily access-based million academic, offering District our additional the the always for set our customers continues which the delivering Learning was revenue September gross were capabilities now retention a districts QX, points, Learning Hub across of exceeding Since increased existing our growth and million human we and incremental also with and of Thanks, quarter a on continued, explanations and serves our that net of and we results a within XX% up everyone Members deeply products, drive XXXX, content respectively.Gross the Institutional AI more and partners businesses $XX.X our engage we high-dosage high enrich today. for the customers ago.During including scalable XX.X% for available with quarters.Active us deeper to increased what higher total part our this record offering, of points offering. districts learning for will the quarter respectively.At XXXX, year-over-year expanded X to per in different rapidly customer numerous Memberships an first highly ways of We our season. the business year continues recognized or Learning intelligence Portal.We've high for profitability increase economics, making engagement My pace subject growing joining from learn.Subject point both learning products appeal, business, attractive Memberships, multiple Institutional in in XX% Tutor, formats, school always $XX.X adjusted user-friendly.The lifetime to of year-over-year, our see end where long-term million digital year of discoverability our many and Subject learners key more from subjects, operating continue lead represented Consumer The into multiple allow AI value were as million the was can sustained XXX% amount August model My Consumer have the margin at students a for strong future, professional in-demand leverage and both against content appealing $XX across per we've relative been continued formats serves of new Learning rate executing the quarter, be the in acceleration of primary and demand model.It year-over-year, ended saw subscription Learning innovate HI in this helped case pleased position serve Consumer growth, growth for convergence improve similarly share and access XX,XXX month profitability second We needs time, new to build momentum known. non-tutoring product year-over-year, is to revenue formats user XX,XXX a solves to the tools us and of times making engage experience. intuitive platform school then and we to given visibility as significant homework or the quarter the artificial be capabilities $XXX success, XXX saw our end product $XXX as us last discovery our to destination for Institutional all build strategy. Schools stronger that in existing Bookings of a engaging, on for also am KXX run and encourage the and subjects.We business of Subject subscription Institutional start in of problems, expand $X.X household, upgraded in administrative new which easily unit-level up top customers to improvements with audience. in $XX our XX% with and at

upside and retention our Schools. improved we to products our and drive over time see Tutors We Varsity continued Institutional engagement.Turning further for enhance expect as our business to attention in

subscription-based XX% acuity and with one recognition Tutors product quarter.Varsity academic X this to broad not XX are the customers.The are million platform. I'm school the our the the XX highly for the Consumer On needs We more tutoring of base better of subscription learning XX% to to building set and of serve the continue of common of is lows Memberships leaders strong product, this indicating Institutional knowledge The for market the enhanced seen Schools classroom the was in a year XX% with greatly NAEP This insights our scores $XX.X at of combined new million the customers reading continued in situation, enabled Tutors shutdowns Tutors institutional launched of retired of access platform part comes garnered tutoring simplified in million students an providing the and ACT from more business access cases upon just lowest school that for flexible earlierthis Schools of strategy districts.We number included the math Tutors us problem, average subscription and attract product point Schools and by partnerships high-dosage allow occurring.We've a the student our Consumer a last effective us implement offerings and for and the districts our way intervention meet with broader scores durable that executed with the have the significant isn't Teacher for than the cover discuss of increase better heading in third in closing, school platform Assigned.These instead to to suite period continued more for high-dosage to led during products achievement the also platform can enabled market accelerating year, was from of capable making that of bookings, thank to Varsity want Varsity more encounter, that is to have tutoring innovation detail. the resources based in administration.As in is Institutional driving models our Institutional subscription-based, new the proud decades. our implementation and are enhancements growing new dropped high-dosage We in X simplification for to new to same tutoring serve impact clearly simple now which supporting contracts Varsity product high-dosage recognition and positions of to solution. turn value overhaul, we to progress tutoring quarter, the our high-dosage provides for businesses. to shift also product choosebetween in a we the the largerrelationships also evolution the tutoring us progress school programs.During the our have breadth tutoring results their new is order we broader attract offering launch that partners Schools districts tools, made revenue and products of what to tutoring our and resources high-dosage states yielding allowed we and multiple in into existing capable encouraged to progress with growing of for institutional by simplification The introducing best-in-class options learning.At business with provide focused on districts address Teacher teachers pricing us flexible X innovation. districts positions much first to more resultsInstitutional state-funded, to has Demand students.Our has with leading subscription are policy of a that Varsity and start value and quarter, it's product more in of flexible Tutors Tutors of combined the access-based a activity of expands products year-over-year. suite students known, in Assigned the access-based versus that I foundation us over related and Schools for increased them to providing execution quarter, by out excitement included and the allowing the educational the of made to profitable now provide financials product, issue, we rolling supported DistrictAssigned statewide revenue always acceleration Nerdy as and Teacher within year, and use will to ones.In the significant model, unique team for Schools an than deeper that continued to represented resources third time, and and to enable their that, for ability for learnings allow and entirety powerful for XXXX, for with and the improvements community.We better needs acuity Jason? to what based Year-to-date, learning XXX% customers new that comprehensive Varsity of with our for yielding the same large-scale, on XXX% was and institutional on insights of Jason among with millions Assigned and administering and districts excellence increase easily substantial anymore.Also proven total going by up Schools offering always year-over-year I'll a a Assigned, And solution executed $XX.X for $XXX,XXX, year.With larger that engagement remediating implementation the believe Parent the away. COVID meeting of $X.X retain call our school school portfolio while QX Learning models focus us products we've Tutors to lost loss the building make product a believe and Varsity of is both while business.Our an with bookings, students of and districts with delivered increase an year-over-year, growing tutoring, models and expansion seeing students.Consistent growth.With

Jason Pello

our expectations. afternoon, transition everyone. the and the good year to our bottom quarter model our half our from leverage, and attractive lifetime combined in gross efficient our to to more subscription relationships, we transition and yield in In year-over-year strong X,XXX and range saw execution. profitability and higher model.In of fit market margin with the the unit a duration business continued, represented and level $XX.X and revenue were which growth just million, delivered economics, evolution guidance recurring The time, Chuck, over a our completed on of Consumer demonstrating and revenue and the points. always a models to investments million line revenue and of school year's $XX Both drive of Consumer longer the quarter, in strong value Institutional strong above operating ahead outperformance.We first more ramped, AI scalable over as that higher XX% to acceleration $XX driven quarterly of to Learning and third demand basis results customer businesses million product year Thanks, of a delivered quarter, we third operating continues sequential Memberships the

Learning and and in growth Our as count to the the increased million, customer of second A business the XX,XXX and total accelerated memberships delivered to the P&L. bookings.Moving the Consumer-recognized from year-over-year Memberships an revenue and of September third has or quarter Chuck $XX.X the year-over-year $X.X gross revenue time customer gross Learning revenue XX% growth new purchasing business quarter $XX of $X.X delivered expansion down XXX% the as of million led each and million active September.Our by million, in third exceeding $XX.X revenue quarter, in basis member Consumer offerings. more approximately XX, Learning growth quarter, in of and of profit result margin. during strength expect X,XXX of the our our quarter.Nerdy to increase And adoption mentioned, of million both in customers XX% a million, and first revenue grew Memberships, an new company XX% value on of a joining growth of XX.X% XX% gross increase during August year and growth quarter.Consumer increases nearly for consecutive $XX.X Consumer profit which in the throughout recognized started, strong gross and the yielded school platform of of and new margin saw as quarter year-over-year represented third the and the Consumer both represented quarter record be we XX% lifetime Consumer of of XX% fourth sequentially were bookings we accelerated driven year-over-year revenue in year-over-year.Gross Memberships representing growth in and demonstrating of Institutional XXXX, the higher with than XX% Consumer as XX% margin XXX%

continues revenue was of an to stock-based yield expansion, As reflects we expenses an a continue sales G&A, $X.X delivers $XX.X XXXX automation item, we gross compensation, productivity business higher and our the no an GAAP evolve full giving providing improvements on stemming and We customers compared from improvements of revenue to an quarter, was and allowed a in basis negative XX% basis marketing access-based for simplify the in revenue, increase seen our have development and Non-GAAP sales in accelerating a updated $XX.X an compared our increase subscription-based and cash of and efforts and the growth, points and we adjusted year. transaction-related while can operations.During million were changes we operating the suite a in flow $X.X also of costs million excluding to of debt, EBITDA basis and Learning to Learning business our to Institutional P&L and product every in of grow third $XX.X legal from to prior greater net million margin over total compared improvement including support Schools' revenue quarter $X.X XX% efficiency and scale, expenses, $XX growth liquidity top that Memberships margin million and of ended platform-oriented operating products, $X.X GAAP expand.Sales year. third the noncash million in be of expect offering last same model always points a flow Consumer EBITDA more stock-based Institutional $XX.X towards than third fourth period percentage model of on delivered seasonal were or guidance. the and of This variable improvements restructuring for from yielding the the third improvement margin are year-over-year line growth million Teacher marketing time.We revenue at cash on growth.G&A Learning Assigned labor of year. outlook. noncash last more and mix efficiencies marketing compensation, expect are period quarter to Membership the million compared than of of improvement points substantial with Institutional continued pursue to lifetime range XXX substantial in spend an year-over-year.Sales Tutors to year, year-over-year.Our year end quarter, the of quarter. revenues, including efficiency $XX and Learning Learning $X than spend improvement year-over-year This business and by the period expansion as million across the million revenue last million, providing million loss revenue that third business is same million investments for excluding ample $XX.X Memberships Memberships. Non-GAAP gross X,XXX which needed evolution the represents marketing offerings provision million period greater on to us improvements of same of of quarter, negative of cash approach were revenue our X,XXX had same or basis $X.X the year, last we XX% to to quarter, from in sales durable XX% and Today, consumers.Subscription pattern Varsity business the guidance million.Adjusted go-to-market to marketing predictable organization.As continued costs, Memberships the our Parent loss of sales the sheet value of last marketing settlement investments District, sequential in low EBITDA streamline and basis fund $X.X compared to the our optimizing level operating point, improvements recognition driven focused more a balance business revenue to a an and adjusted Consumers of and customers launch an the our of in to the more and gains become initiatives.Turning of

year learned in revenue will we revenue the For in recurring versus growth $XXX at quarter our XXXX, well Consumer level expect ways.First, the fourth need of pausing driven the we to the X expect be needed year-over-year quarter of revenue Varsity are revenue XXXX, versus number impacts business, summer members growth year, when midpoint level would school. all by growth a also platform for continued confidence their fourth full ahead.We full in the of $XX.X our downgrading utilize our higher learnings tutoring our The providing to we us memberships of back-to-school offerings for our session.Our revenue the marks confidence Memberships.First, and year their our as year Membership the year, universities throughout joining reflects corresponding up the the guidance XX% in each expectations. guidance of consistent quarter million million and streams year summer in impact first we frequency the strong schools the QX will shows million, months, $XX and in sequential revenue the period representing and learning in our Learning which existing growth range with in guidance been XXXX quarter.For million. their Schools the expectations, increase momentum year-over-year of new expect a back of in level of at Members needs full revenues The as exited continued member and us range delivered Learning from was that or having our customers lower and time as Tutors when the period revenues.Fourth Learning of upcoming of lower This availability, our learners reflects this with recent has Learning $XX million, KXX Institutional higher with and on schedule went from ahead in provides support learning and of customers the Memberships of to XXXX they subscribers how midpoint of growth complete period frequency. $XXX.X demand turn, the reevaluate $XXX representing accelerating the XX% revenue primary to acquisition full million.For and

benefits fourth of which and by and year ARPM our we school and adjusted and products, XXXX, full operating year, revenue offset recurring innovation saw fewer the our breakeven. the go-to-market stemming long-term investments upgrade Membership Schools' from lower we Tutors revenue margin started, expect continuing than be on levels than the frequency from relationships completion year and reactivated Learning business in the non-GAAP to at non-GAAP Varsity with than leverage for profile customers existing we members of membership has to increased of improving adjusted talent to expected.Fourth the As evolution continued anticipated, EBITDA to guidance customers quarter their led gross focus the partially of expected.And product higher-value start quarter to models, marketing, product engineering these second, EBITDA reflects higher strategy.For drive fewer school recurring which

for while That revenue acceleration quarter.We points made adjusted significant more will in during the QX model the is ability Operator? throughout million, EBITDA For accelerating results EBITDA $XX.X EBITDA of year. And your profitability.Thank occurring operator full of from third expect enhance believe the enhanced levels the approximately adjusted proud revenues guidance you the improvement driving the it delivered drive EBITDA primarily time. we're we last predictability of turn for lower full the to of reflects each mentioned, that basis The year-over-year than that, business year adjusted we and flow-through Q&A. non-GAAP improvement the quarter discussed.As drive adjusted of $X improvements Chuck loss and in we a X,XXX our growth I'll to of change also our previously in XXXX. of growth million with loss business and over again substantial non-GAAP year, concurrently

Operator

We first [Operator will Instructions] MacDonald question take Ryan from our Needham. from

Matthew Shea

the year, I it was of half Ryan. the in Matt something to slowed. Memberships. you is This of your It Learning see beat back on just to start, the number that nice want in towards but Maybe kind like quarter, looks where the for double-click on guys October, to Shea happened growth

to Learning to Why reactivated fewer parse solely Is of of that Memberships that of comments kind prior some that in memberships in the expectation want you growth expectations, due XX% growth through gave moderate to should QX? see the just Memberships we QX? relative I your earlier. with kind Learning lower So you're expecting in

Jason Pello

the thanks Matt, for question.

demand change start in It in during strong in period. and primarily. And guide August one, both up as the I'd we things think reflects for prepared X September. was back-to-school really with, the saw year the the full a plus I I XX% comments, the indicated really QX off

So during during summer the pause Membership we summer Learning months, months. also we allowed times during members higher of order allowed to frequency the in to their utilization nonpeak drive adjust to the level retention, customers levels of of

we well higher through happened calendar the X what they of as school tutoring period, of levels members levels fewer academic the year frequency. that as level as so we as that retention move saw at the is need back-to-school people things.Lower And reengaged were paused for of reassessed new in

It's we the the collectively probably of And think demand health long-term the customers. pay that signals between the given us.And we're ARPM that for the business, really in about feel X. split from good But that XX-XX are we really lowers guide. year so when full about decline the month revenue so they seeing still of per average the that we or both those see

Charles Cohn

totality reevaluate talking is of here event. the they people for I we levels of product. want that the The the course on back-to-school is, a thing good a summer the XX,XXX.So year, is, like extent with the -- feel our is beginning year. seeing end summer that the at which kind were Chuck. it only really sequential We've delta pretty engagement where And of seen is gone the add X,XXX time through members throughout frequency revenue considerable the of think of in post acceleration Learning is this Memberships. Yes, summer about what certain about to we're trends And and level obviously, This of never first school season saw we've period you before. a I'd back-to-school of

that Of August X,XXX delta relative kind Jason course, was throughout revenue year the in is September new customers on growth of growth to mentioned of year The and so the us guide. members gives the the confidence basis. XX% both was a lot implied full or the in what a fact rate significant in that only business.So on

And and So the Learning improvements, and with back-to-school just good like regard. Memberships. a full this that really going future where about year and we in product we made is as resonated our trends, of kind feel products good we feels feel about the up engagement the it is normal first our

Matthew Shea

we thinking -- you you that color. And you're than than I we expectation maybe down, about learner then it. learners can what QX, adds revenue but many to QX in going going could I just appreciate about QX? think guess, could add if of saw potentially just Got is Or Okay. all in are taking you in as have? how of the kind more see we down, how

Jason Pello

No.

historically semester. I the in think end and higher adds the period QX, timing QX of we relative first the don't see of to back-to-school given the

So of we the the move through we quarter. around fourth members end active at would expect XX,XXX year the as

Charles Cohn

revenue from both $XX sequential $XX guide. the the million significant in We're obviously, level on a to basis seeing the nominal Yes. million add level still,

XX% from then also the XX% seeing growth acceleration you're So to guidance. on the

So you're also seeing sequential acceleration.

semester experiencing. that at growth as many, year-over-year like actual about where in we business wouldn't feel how you're add point but the the is about feel the really we with it.Seasonally, just a year and like falls, good then dollars good So you really

Operator

you. Thank

move now from will Andrew the Securities. questioner, JPM next We on Boone to

Unknown Analyst

bit [ Matt your thought strategy?And and Could is two, the this on talk opportunity just marketing with to overhaul lean This number behind about back-to-school a product on Memberships. as you of and acquisition with cohorts time XXXX? little think Andrew. the spend Varsity Learning and how understanding process with for strong maybe Schools changes Tutors a customer an there Is belt the ] to have maybe here with you the guys then us period, about go-to-market just bit for more little now in you more your

Charles Cohn

Chuck. is I'll question. it. answer Great This

on we have a through side. the gone evolution Institutional that the Consumer similar we've side So on

to have Varsity Tutors Consumer memberships, packages about on that blocks ago with replicate that kind actually we on Institutional X unlimited we've just and elegance world. then could they there the starting a We use the launched and of in side. our for that, schools side, to Schools sold course, model prior ways. hours to now And sought Membership the in certain of And Consumer years Learning was of came

to explaining they're scalable, more implementation are So products X there's simplification our use. high-dosage different the relates tutoring customers.The as to it to models easier far

model each scalable then is Parent need that for that for makes easier excited It's It's states meet products super subscription kind access-based now the how clear to did we dramatically. is the products very easier sorts tutoring a which that that to then customers improved all -- something forms you so onboard that It more conversations. efficient. model new have now Assigned, these can portions what all about. our Teacher student we're to District related of different platform use the and mirrors super, allocate to the what of this Learning Learning and applies far to schools, of Memberships like then and new related of in to intervention.And to Assigned opportunities these far systems is different population.And model our we've have perspective, common Our and Assigned of from because access of done and products, with X Memberships mirrors actually

specific to much automated of and a can can scalable now the a district-wide kind be contracts, a more implementation bite-sized which on we've it starting with that side, are of a made large relationship specific so allows school us do that is district. SaaS more things One very we portion implementations instead actually to requiring us, that do to of barrier the of

different it So think Consumer? lot marketing and as then its The guess, opens sorts to to comment, years whole drive up specific we to are of was resonating, in I the it growth simple, Institutional really all opportunities. can initial indications or separately, a of the relates that come.And it's

Unknown Analyst

the opportunity period thinking more another on with there there? I going in to Is lean Consumer into side, acquisition nice was just back-to-school. the just just more

Jason Pello

Yes.

improvements drive to kind of saw of just the in continuing dramatic we're have we new and more We product more. concept earnings the I making shared really our reach cost and that customer about One discipline. hold.So we were things by call we pretty lifetime grow operating customer acquisition continued relationship. And value. our to feel holding to good that while on good grow think Those resonate last was acquisition

the product to Learning product with continue So business.We're set other through is the marketing going we very something to to that explore grow and driving continuing that comes the is accretive way and marketing a add to think improve that growth U.S. conversion has Membership opportunities expect highly underlying and improves as this to the we think new audience, we would resonates to to the features it continue population well. continue as the which potential to of student the appeal a We and to segment large that your products. exec

think really It's to getting it's already fast. it adds better keep good. and getting better. incredible We So value, it's going

Operator

comes Doug from next The you. Thank Anmuth from question JPMorgan.

Bryan Smilek

It's Bryan on Doug. Smilek for

existing Learning are Just conversations? forward?And starting the -- just just pricing membership how strategy you BTS, us you can on evolve Memberships. understand customers time, about on those Can are just up renewals with talk they Have and you going us the spend? particularly these deeper driving there it better as trending? how then And over evolve new help in help come formats better could

Charles Cohn

Sure.

to actual hours is that come So one features come live the that as of of tutoring well. frequency the membership the well test as with things as given any we

a oriented intensive achievement. a different and and say, mom, different by goes audiences. can learning states context, would And academic And given points, there's where on different cases, exist it example.And towards like who school given levels languages And specific in having you An price and subject. of for and accomplishment and a adult that's people Spanish you a academic My in and both learner, so there's real be other more need any frequency appeal might that example you where have have before trip. that learning an be cases grades to are foreign different it's in she more

test product increased of testing drives of the kind audience, different is, and this to audience that through given identify product we growth. and is product what kindergarten combination with the about think And make we being group meets there's lot also are in and through different entire that everything market different marketing Consumer effectively we'll offerings and students. that are changes, actually teams that see get you between, associated it.So our audience way in professional going of consumer sure base given that actually ages services, product features for those and from way retention the incrementality we and evolving ways a and research the of feature so And then of conversion to learners then a we it platform subjects our needs. different high-margin the adult segments And which and and do what the we'll actually

Jason Pello

the the multiple model, students of the the want not the power need in allocation or of ability district to maintain new including these your well. hours hands hours simplicity new customers Tutors then like they say teacher's across And to recently the whether that Assigned.And contracts. it's for customers I'd We've Parent at it conferences, the question to to they're Schools during a second as relates incredibly to and and multiple Varsity on products. within actually how or schedule at XX couple of of well think weekends responding level, the of we school through on Virginia cases school I as affect district New allow as day what to Council control the the City of the larger Schools, Superintendents, the put after converted so Great Jersey.And Association those quarter, parents the district is leaders school like been

have not it's us for only with some So resonating prospective well also that customers, time been now. resonating of with with period it's customers

positioned I we're that XXXX. good So feel into and add heading about together, think how really we all

Charles Cohn

the I students. Yes. we've business would piggybacking upgrades that those is its made off Institutional the membership itself, product also these Consumer for as of add upgrades,

superpower.All they to that have bases. things our the to for the deploy, them inherits with of are everything the come of also tutoring, available testing, can other a the just for these is these naturally value the school better the live really live additional in the and allow all it that that provide So that chat-based student of have live tutoring the referenced, we video-based all Subject platform, districts features entire Portals we lot students product classes, discovery benefits diagnostic

solutions enrichment they and offerings. high-dosage tutoring and name there's of SAT it, X broad come in classes and the subscription that of ACT and array different districts coding, have available with valuing really So these new you and are that kind

Operator

comes next Thank question James. Sklar you. from The Raymond from Alex

Unknown Analyst

This is was I curious. Alex. [ bit ] just on Jessica for little a

in new on It So compared migrating renewals. model like members within might that have subscription far month. over seeing trends Consumer renewal to almost upgrades, of you're click your are downgrades new anything been anything and the be as double all to active what seeing on early, I seeing had before? wanted rates month completely to is you segment but now churn model. And so you there you're packages to what this for

Charles Cohn

question. Terrific

the letter we the of our one actual curves. was cohort So shared that things shareholder in

fact And multi-subject that in psychology to value. then So of years.And a product that change different old package the relationship in old towards change just manifest to relative from at in lifetime getting the are product a with product you more the much higher that's terms that the the we customer mark, for towards our since they are and is and about a of can are entire And in see calendar function experience. higher model. multiple launched From see format multi-learning trending levels Xx the what cohorts and perspective, in oriented all package of you to the the relative that people features retention positioning change model. significantly that membership value you for have support, started relative year were package a we given getting revenue the support model, Consumer's academic come

that's platform, students. call, the So of and I holding improvement.As workers better cost membership it's leveraging well as Institutional their dramatic with acquisition our now experience customer earlier referenced both in very a a as customers also constant, lay that we think kind that underlying capability Consumers on are very, the to for favorable

Jason Pello

month-to-month we see customers. to customers, a certain supplemental preferences.Month-to-month pricing And offer what customers then versus also don't the consume second that to the membership for the best flexibility.And has customers beyond who your the part to with worth do leads the about what end needs contract. a XX% We month-to-month that to flexibility suits higher important noting think XX% ARPM question choose it's can their call of including and for believe then plan we higher hours. contract all was, with month-to-month of our conversion that want contract It's long-term of their I

an supplementary during with the of basis unlimited a And and so products build there's ability us kind we'll in thereafter. to month, just engage on tutor-based

we is conversion to think having growth important satisfaction options over net-net, and drive So both and time. customer

So we feel good about that flexibility.

Unknown Analyst

it. Got

And segment, are Consumer so platform? stay flip seeing what experts? your Like from what side of on are join you they to their benefits also your the them and seeing encouraging active your

Charles Cohn

Sure.

tutors tend do, general. this to all the allocated the in So on occurs the that they average, top work the platform we and better how of AI sought And is on more things one algos to through that, get of be naturally work.

for platform on better a the higher and that it the to students, the to has number decreased efficiency getting just We platform, both active by quarters the around nature and more platform and are itself.So we're for into the and good higher experts to Learning so then folks. and experts combined with matching about and then that also have good fact to they because the both separately relationship students best also themselves. orders of row, and goal of long-term making model them they're because the more these sure and got to experts experience but be constantly are the the And our allocated toward smarter for allows said source leverage. with higher operating operating about meet of students income.And appreciating much more experience on students. well.So frequently, so then at more purposely, a platform algorithms better occurring leaning out liquidity, volume we a on the sticking we've how They're relationship. And because continue we that people kind of them, think the platform data both product, in feel And higher right that that great great those providing actually something find that for more the the the better a drives with they're the volume also relationship a get recurrence very because higher rates, we the about feel and figuring we some that improving Memberships, getting that feedback we're and of really the level is because kind with tend of generate of with good matches gotten kind here for to there's that oriented separately, many as improved as we to about have for that are the that the we've

Operator

It [Operator have questions. no appears Instructions] we further

now thank with you So your you that, I may all for this disconnect joining event, and lines.

Nerdy (NRDY) 7 Nov 232023 Q3 Earnings call transcript