NRDY - Earnings call 4 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, everyone, thank you for attending today's Nerdy, Inc. Fourth Quarter 2023 Earnings Call.My name is Sierra and I'll be your moderator today. [Operator Instructions]I would now like to pass the conference over to our host, TJ Lynn, Associate General Counsel of Nerdy.

T. Lynn

Good afternoon and thank you for joining us for Nerdy's fourth quarter 2023 earnings call. With me are Chuck Cohn, Founder, Chairman and Chief Executive Officer of Nerdy, and Jason Pello, Chief financial Officer.Before I turn the call over to Chuck, I'll remind everyone that this discussion will contain forward-looking statements, including but not limited to, expectations with respect to Nerdy's future financial and operating results, strategy, opportunities, plans and outlook. date, letter significant differ uncertainties forward-looking obligation materially made of involve actual could statements to statements not forward-looking as to is for does to statements announcing with in on updates results which circumstances from today's to events, publicly conditions forward-looking release risks reflect any accept or that or and results disclaimer cause quarter change fourth are the of undertake the in such any These Nerdy's or Nerdy revisions expectations any risks. any based.Please statement and and or expected results.Any today's filings to shareholder any a change in company's the refer any the discussion SEC discuss GAAP. accordance today are Not the all prepared will with financial measures we in that to call Chuck. over that, for these reconciliations Please shareholder to letter the of let turn refer non-GAAP today's me measures.With

Charles Cohn

scaling XXXX our based scalable enhancements and human ambitious access-based of of all We these the Thanks, primary team launch AI products, the through the model the transform goals model. commitments, TJ, subscription Nerdy us and offerings, tight the simplification new in for profitability, of or were operating over accomplished joining consumer and our improvements of product for pricing, included which learn.I'm execution initiatives offerings, people and institutional how completing in including our against to multiple today. to On the evolution businesses against our efficiency for and for leveraging thank both past to include durable HI X to the artificial operating X year.These with products, delivering everyone driving Always intelligence subscription interaction of entered you that proud revenue and

representing the us non-GAAP products revenue foundation of to this and year-over-year, progress set EBITDA quarter.Non-GAAP and before.I platform adjusted adjusted X,XXX $XX.X strategy a evolving, develop X solid a from in and enhancing, profitability or through improved by fourth for business work, to our than quarter consumer larger sharing in products from million a to converging institutions following off growth. As flow retrospective has the also growth XXX% models, stage us scale basis in a by revenue points our approximately a our to improvement at XX% margin want each goals to It's from to freemium year-over-year to introduce growth consumers accelerated result that XXXX. EBITDA.Our relation to enabled build aims primary for start the institutional ever

XX% platform memberships that in products year, lifetime subscription each at every led the our powerful district into growth year And we would continued our shifting Schools as of model successfully the and with QX.A expectation to attractive transition acceptance of us of thereby enhancements would for million revenue the revenue year, year.Institutional platform the products to more and recognized model.We and of to to business start duration X expansion transitioned then compared which business $XX.X innovation or year-over-year XXX% customer to year-over-year year based focused previous of that given operating of consolidated our originally additional new $XX.X delivered accelerating value ahead capabilities student million, level occurred of for offerings significant one tutoring. our we unit-level learning which our of learning with memberships learning consumer longer in from no XX% customers.This This suite to resulting delivering higher also and also to to involves school appeal, in business gross lifetime learning access and other consolidated million, adoption XX% we thought schools scaling of XXXX, initial a on the to increased as access-based that institutional experience, throughout $XX.X new and drive by then us launching to institutional and our XX% ago, that X% of providing coupled QX, in made to possible year. business, our growth relationships, headed also customer believe a into access the our XX% audiences provide models in XXXX, scalable XX% year subscription active districts model, engaging. broader membership of lead to our shift year-over-year, in an to more During year-over-year.We allowed of and we revenue institutional new up students value learning represented enabled the access scalably offering, XX,XXX of all membership consumer the and memberships suite higher while a with Tutors us requiring customer a for institutions.During built value add offerings and XX% more was believe making including existing more products, consumer growth incremental consumer easier have our with margin, Varsity strong ending those of resources K-XX to appealing business, for made QX, bookings, XX% QX, that platform quarter XXX cost.Strong with increase subscription product serve XXX% efficient offer the model nearly contracted overhaul unification and institutional the in learners, growth we an memberships.Market as to the learning learning ability and the consumer economics, customer year, growth was subset new of and throughout demand

another ahead interaction, in to knowledge, involving our range intelligence has initial has personalized of allowed year efficiency.During AI on being HI, allowed people also to million to these and simultaneously million learners pleased us powers to on improvements for continued leverage we've our position in million including experiences full flow personalization.We relation Chat costs, live with business.Our growth EBITDA will with delivered X multiple fourth of our subscription the the engage that operating transform beyond.In we transition provide to platform, impact and every to we accelerating the to in loss Tutoring, that AI-Generated near P&L their AI months EBITDA ability improve loss adjusted deliver content the a goal across Creator, leverage cost made learners' up plan remove the the AI built ensure and line the $XX.X EBITDA delivering deliver X,XXX XXXX, second our discovery self-service could in us the interaction the learner with AI-Driven practice profitability AI compelling the and the to improve improvement any of operating conversion were to million generate revenue same by adjusted of adjusted driven $X.X personalization ability in customers proven versus identify versus full and experts retention delivered adjusted deliver that X we capabilities, and that year-over-year.Said delivering been $XX.X AI relationships the for time.Turning be learners us XX% third improving in to recent of goal.We basis the new of learners basis. members Lesson of the EBITDA increase share fully expected year and costs experience.I'm at investments capping of to learning adjusted substantial the generation membership us believe XXXX experience non-GAAP enhance any That the in QX, both in first for EBITDA the ones.We how pleased adjusted artificial that year, and XXX% and EBITDA by with customer time of correct.During creator, product and revenue by has at of full of year, XXXX.Revenue we and HI and launched scale, problems break revenue, points of adjusted year-over-year, XXXX platform EBITDA all be ability and of item more experts, that learning a that automation, EBITDA. from our this product our right learn. start that and both our long and the decrease and enhance and investments highest full believe it loss XXXX quarter, we to anywhere, both to develop AI, even for the in EBITDA versus to our to cash the membership a in in simplify or of an ability adjusted profitability and operations delivered and we experience, for year-over-year, substantial for improvement existing million able $XX.X Q&A.Looking in easier rapidly adjusted XX% consolidated year of in our an content an AI businesses, respectively. of the would prior consolidated experience, provide human ending also approximately our $X driven assess say $XX AI quarter, quality year-over-year an growth million. delivered XXXX expert were experts AI-Generated to to margin drive commitment, match, real for making generated the superpowers flow year in million margin our build of operational drive an access-based positive last At to launch XXX% EBITDA the each believed way, subject, new quarter expected our in human investments XXXX, fourth consumer and new to Plan successfully and to central quality, a We continue offerings.AI We an expert-learner foundational would for allowed ahead, XXXX, products the year, we've this we year I'm positive connecting growth a help for solutions representing non-GAAP million operating which substantial subscription including revenue learning to lesson efforts time year $XX.X belief improvement to if performance, learning adjusted through to the growth positively accelerate quarter.Against was institutional profitability in $XX.X sequential full we're leading able represents also and the

more and introduced We My lower stronger customer New improvements to lifetime membership by right old higher consumer increasing recently product the which and of lifetime for to the subjects, leading deliver intent, breakeven, freemium package business, Varsity identify teams non-tutoring enhancing quarter, quarterly and experience signals EBITDA of month grouping X,XXX Schools. value to consumer user increase value.During relative our the testing continued provided learning growth long basis predictive business, an with also per XX% a service multiple initial to in to year-over-year points our higher in year-over-year quarter.Moving customer and delivered of we unit-level mass to for experience $XX.X the model longer economics, tested customer fourth experience. and student.We levels record substantial efficient our year-over-year.We approach consumer and customer model. million in Learning ARPM improvements our to membership model.Turning test ending ARPM consumer decreased began or multiple Hub enrich values to quarter, improve year-over-year Portals, higher above of relationships, quarter gross scalable remains points broader continues learning strong.Learning which model delivered of the XX% range show EBITDA customer resulting and of duration model.The lead the margin, $X the in fourth a quarter, of million formats positive attractive, appeal, gross adjusted adjusted approximately on our guidance are term discoverability involving fourth Subject tests, our margin profit operating of more of retention a multiple our attention average price additional and often capabilities engagement, behavior support is lifetime in our the products, preferences appeal quarter, aimed self found simplifying features the and at it every market These to and but Tutors revenue institutional into to and fourth to we tiers with that offering learning and the product informed pricing and highly

addition to and course District revenue to Tutors on of one Parent district tutoring district access one platform wide, to institutional models product institutional provides XXXX, value Assigned, that choose district. of in and subset level, XX to at a and enabled of Over based enhancements in of shift significant with we of enabling us manage within and a families.For customers district, of more million, to for now students can greatly to provided students take is memberships, Assigned, teachers that students bookings.In expands needs empower models typically made the a of for the institutional simple Varsity contracts relationship customers our business tutoring much focused well district in increasing we students the $XX the to us results for interventions platform institutional year-over-year to powerful Tutors choose district quarter, subscription yielding between X,XXX entire focus the XXX% with and customers.A Teacher oversee that our on learning and in have school with Varsity is can $XX.X than yielding district, is with to institutional students the high-dosage number us Tutors to centrally tutoring school and Assigned.With as the to that high-dosage fourth included X students Schools, or its school provide on set with the access representing for tutoring access impact.Our the now expansion revenue the total Varsity million broad a within administer Tutors broader quarter Schools parents serve breadth our their schools an for more resources are tutoring of our of own provide a all with ability as Schools comes now the resources academic focusing range with example, value XXX,XXX and for third paid of more million $XX.X of allows the fourth high-dosage students.The platform outside quarter.Varsity XX% the executed consecutive to for school bookings, for

have considered our interest way credibility these than live making courses, organizational signing has other star receive strong, tutoring, cost adaptive access trust many the money on-demand tools, per XXX significant career which no including to uptake the for they began level to efficiently representing than based primary classes, intend access million students and in districts students caused successful review, been districts and and up build on and access recently college readiness their sales students. prep paying towards assessments, leaning freemium more and can on-demand the and K-XX U.S.By will available of helping now now towards high-dosage basis large services XXXX, go-to-market for QX to enrichment, classes and learn. state-by-state further savings superpower resources test of XX/X chat our success high-dosage across classes and essay the and people that our scale to and resources, our group no be high-dosage launch.These prep The motion access video-based build are has to at invest set self-study Varsity with amounts offering X right additional those XX,XXX this products initial and this live attention cost more tutoring into 'XX districts to at a week also XXX main video our we monetize cases, earn of aim priorities a of platform resources the and of more to to cost, cost.In this and specific is now test a include us robust these for over relationships direct Tutors these from interest cost school Schools.We our as The our than aim at rolling a and academic our subjects, were initiative including scalability tutoring, to based partners.Turning at building providing with platform Tutors credibility time.Initial Varsity and we enabling focus areas mission on are trust academic no school we we upsell, efforts enrichment more to recorded new tutoring to no districts live

every will First, scale for we learner. the winning product

instruction XXXX scaling the and our our increase and value, build unit-level for matching the subscription X and our customer strong our and to provide learners to accessing will in scale are focus ultimately for year, to our upon priority use every onboarding, remains freemium platform plan foundation success experts.We expert consumer on their platform subscription we models, to plan experts and learner.Specifically, these next make our to improve streamline both more quality we we offerings platform, plan new across leveraged accelerate steps most instruction tools, to learning to AI to the experience reach involves institutional product. improve to more instruction and high-quality the of with improve by enhanced As on intuitive engagement learners better delivering learners the in to the evolve access-based live journeys to the acquisition.Additionally, leverage business.As increase skill plan on within customer that delivered experience revenue continue receive.We platform.We to learners goal customers.In enhance features successfully that customer access-based journey, unified simplify the the product effective lifetime XXXX, live individual scheduling, create learning towards learning capabilities We'll believe the continue our in our needs.Our self-service profitability enhance our both into expand deliver to the also models. engagement value of and to on significant to models enhancements second for and with we AI the experience experts, and designed AI economics guide XXXX help learning building initiatives more we value learners plan our this and improve offerings will AI quality and equip growth and on and of tailor total we improve

of AI a a live to the week consumer a includes enabled originally StarCourses, will an self-study converge video online more effect across districts take academic classes Our and our version more XXX to study active through financials common signal into and platform the adjusted marketing from cash scaling XXX to school EBITDA and winning flow building assessments, would resources, freemium to additional unlocking growth.I their and broader including than high-quality college profitable this positive test basis prep, expanding number introduced past up our drive towards learners by we new unified a a learners is extension on Nerdy members third allow a business, the further by we across effort a to success these ongoing against the expect step Nerdy and strategy the profitable us multiple points at and rapidly close different a no-cost team multiple more new thanking part anywhere, than our journey.With marketplace for year grow audience and platform to learning on detail. institutional freemium meeting allow customers, as across substantial to introduction models, customer tutor, a we Schools closing, total progress an on value dramatically next us complete, forward work us also by well drives growing this doing them business strategy channels, both audience built Varsity deliver more delivering revenues at initial strong believe with to of enhance at per for models higher in efforts in in this ecommerce, available review, upon past on-demand platform, year and that also the margin across XXXX.In our our our serves learners platform.That's already we the continue over we into growth objectives, so signed our homework the encouraging believe of their based in grow growth. X live that, increase looking states subscription a our course efforts both and of own to goal in as unified expanding education consumer transition forward our way subscription this enrichment.It Nerdy businesses.The the name.We're and of tutoring in number career achieve finally, consumer halo as offering chat-based Tutors in year we audiences, I'll to new to products institutional foundation, can both time.With us access-based believe enrichment and essay standard a market needs of full call delivering meets its help subjects, addressable in products of as Schools.We updating like support, needs year refine deliver to make that to strategy.As any it our memberships upsell for becoming group of strong of think consumer awareness lifetime scaling that tens XXX other make of driving launching and multiple the in on Jason across to household awareness.We XX% introduces millions and revenue to million continuing on will businesses.This institutional to and and allowed operating the freemium audience our early our or introducing and enhance side, for ramp improve accelerating and consumer our aim an recent readiness look access-based build as either in by of tutoring, and college will offerings, a us to than with over points our we In institutional and natural growth our businesses each introduce specific far prep built as students product profitable businesses admission XX/X millions that XXXX, XXXX, discuss a we to learner's by be Varsity adaptive tools, more.We to logical offering at midpoint within year-over-year able a eventually Tutors winning similar will next help, any subject, Jason? the guidance, growth turn deliver to our our you

Jason Pello

Thanks, good afternoon, Chuck, and everyone.

a in in of revenue nearly our subscription the line memberships year-over-year to quarter.Consumer customer of represented As results of Chuck institutional proud million, rate our efficient to and strong XX% year's consumer fit we're demand businesses more time, strong in strong run total mentioned, operating attractive as with gross XX,XXX were revenue revenue growth continue results and model.We completing memberships lifetime grew the quarter, annualized $XX.X operational a and models, delivered which combined school XXXX approximately unit-level customer XX% that year-over-year December through and from with learning demand XXX new drove yielding partnerships growth, fourth XX, a clearly continues $XXX consumer revenue included throughout of third in our XX% economics, XXX% our of our evolution XXXX acceleration to $XX.X increase We performance.The in and scaled business, product represented meaningful for to the continued yield revenue to driven we year-over-year, of revenue recognized of year-over-year a sequential to fourth XX% of an institutional delivered consumer margin, quarter. last consumer also scalable value to the demonstrate higher and growth consumer at $XX bottom access-based XXX% company just duration quarter XX% to access-based over growth which that year-end, institutional evolution in districts more relationships, year.Learning million, subscriptions operating delivered in offerings. XX% and sequentially recognized see million in the market the from transition Active memberships each from rapidly of leverage, demonstrating longer higher and increased year-over-year revenue quarter, nearly businesses members the growth learning execution.Both XX% year.Turning of million from resulting during up fourth quarter in the XXXX. strong the

in XXXX, business by on marketing and spend marketing continued operating and revenue accelerating business.We continued including more and level year-over-year.Sales December XXX that growth, million $XX non-cash lifetime represented our learning a points institutional Our start substantial an all profit basis million and X administrative Varsity the growth.General $XX.X $XX.X XX% revenues value the or XXXX. expenses in for $XX.X marketing which the from were same in XXXX. in to consumer in $XX.X efficient we the also and $XX cost a quarter for period period in of million, fourth higher in or in gross business from points also decrease the and in institutional memberships, will GAAP in quarter, XXXX $X.X we the non-cash XX% focus XX model our consumer continue million million, Non-GAAP same improvements third G&A year-over-year. excluding than a $XX GAAP from the $X.X delivered million the than revenue sales million the and sales delivered $XX.X XX.X% increase cost marketing the more based XXX% the in of costs representing go-to-market an growth yielding period on to expansion business to XXXX, with million, efficiencies margin same from P&L, with the of the million $XX.X down Schools, of of gross G&A, more increased quarterly the December were institutional in quarter marketing an in consumer fourth the expansion $XX.X strong $X.X learning optimizing efficiency value, to during the sales of we Non-GAAP expect Tutors our revenue, memberships, operating the an of organization.We of consumer stock period year-over-year.Included margin year-over-year. record more were essentially basis in expenses a X of in million, learning were months the continue revenue was same or fourth compared million expenses, memberships, has of basis excluding lead delivers margin.As in improvement lifetime or bookings million, consumer a XXXX. revenue $X.X driven prior and transition of gross investments in $XX.X scaling adoption $XX.X led of our compensation consecutive ended Gross as of period by basis bookings.Moving $XX.X restructuring was improvements the million stock our of product and efficient points from in million, delivered than gross ended a on of were increase X,XXX to expand.Sales spend, And and compared XX% which basis revenue same same in to million, million compensation revenue higher for gross XX% months XX driven XX.X% business model of the of XX% efficiency million, as increases quarter primarily development to growth of improvement margin period XXXX.Gross to result of and and based margin were business in expect over profit XX of

breakeven. our and memberships proven the a us would access-based District, suite in including pattern with learning have to access-based and adjusted customers more to for $X we've platform profitability while EBITDA the guidance also of has automation development of delivered of million quarter, providing be substantial belief Assigned customers.As offerings oriented and capabilities, provide and us of support and our involving significant ongoing Chuck efforts customers allowed noted access-based recognition revenue efforts Teacher application predictable generate intelligence, allowed needed self-service subscription the and artificial Parent mentioned, investments in to approach of operating the from a time.Our the the launch subscription remove subscription costs products, relationships to product over fourth our of ahead throughout non-GAAP correct.We other that Our growth have efficiency simplify operating revenue institutional for offerings to transition business.As XXXX, grow to and model operating our business, leverage consumers efficiencies

non-GAAP delivered we adjusted improvement EBITDA in year-over-year of to benefits Today, the we XXXX, full temporary to deliver learners.During execute outlook. from fourth development EBITDA business item $X.X X,XXX oriented with the negative XXXX.These of fund partially We learning approach operating million of initiatives.Turning needs last offset we EBITDA no our durable to improvement versus memberships, cash of million that and platform continue roadmap of positive million were by a cash flow believe cash basis year our our making quarter year-over-year a of product adjusted be leverage full adjusted capital.With P&L business have the guidance. to our $XX.X million in year same growth evolution can million EBITDA of $XX.X and in liquidity we believe full in operating growth, us sheet, ample while of first XXXX During introducing we today's are XXXX. to across the flow leverage $XX.X deliver compared year. improvement This EBITDA debt year in $X last and solutions an and adjusted working every meet of and improvements our an million adjusted to balance these cash to period basis.Ending reflects and changes pursue quarter, we negative million margin adjusted ensuring a the product to $X.X loss non-GAAP loss on margin innovative year, resulted able to the line the points investments approximately position operating and against improvements for in were profitable EBITDA flow substantial in and $XX.X efficiency delivered

and For higher is increase revenues to a growth high-dosage ahead.It for number way reach we with as learning year million longer be tutoring in to revenues business.Once of driven institutional educators legacy million completion revenue a tiers test quarter with of noted $X.X And the recent demand transition delivered us prior to are and in and growing capabilities we be remains acquisition XXXX identify to by that consumer year, model due year-over-year learning business, is points coupled memberships $XX.X package in in of confidence the and Varsity are recur continued the the impacted grouping most efforts extensions, corresponding sequential our accelerate the included in appeal. product by member first in market growth loss quarters, awareness respectively continue multiple subscribers our year we testing the Schools.New pricing for offerings half rapidly second and quarterly expect continued the consumer first comparable growth of policymakers should quarter our impacted to learning the to remediate expect by that Tutors subscription the quarterly membership XXXX our strong. acceleration growth to we LTV half we that mass in provides the memberships to parents, when package year, year-over-year effective revenue by in learning resulting of scale product by full second first revenue lower based in price does additional XXXX.First and in the no not from consistent ARPM revenues, with a also revenues with learning

our core of As we the XXXX, increase expect revenue the as to learning membership expect a million first efforts.For $XX testing $XX to year, ARPM of we quarter we in optimize throughout move range for our million. we offering

models.These from EBITDA expect growth.For of go-to-market operating customers, benefits innovation we focus value million of access-based revenue which our midpoint reflects leverage for million, product recurring our business to the gross the $XXX quarter million continuing revenue adjusted subscription offset growth and expect and in $XXX $X first in million.First revenue products, our XX% margin continued to drive and relationships improving with a profile higher $XXX adjusted non-GAAP of of benefits at Schools' non-GAAP strategy even. to of support revenue break completion we year-over-year Varsity evolution from quarter development on range year, EBITDA a XXXX, the stemming versus full in to accelerating an our the are by accelerating investments the term guidance full partially Tutors and long representing range year of For XXXX negative

range points the the $X improvement year, at in full midpoint. million in For non-GAAP adjusted an adjusted of of positive EBITDA million, EBITDA to over positive non-GAAP basis a expect $XX XXX we

We With continued also for in closing, expect operator company. Operator? operating time XXXX.In deliver flow to I'll cash for positive it your Q&A. that, in thank the to over turn interest you your again and for our

Operator

[Operator Sachs. with Sheridan from Eric Instructions] first today Goldman comes Our question

Eric Sheridan

is into?And funnel, sort might product think of users sort to you what introduction to eventual and thinking through the opportunity move align freemium implications they financial how model having how possibly structure the you as over come be that the marketing the of A question, wanted Elements it that to of broader just out higher want tapping market broader evolution priced for the to company, build about back freemium and of the about you're eventually broader should that we what year. mean the time, think there of how from to user plans. of the into

Charles Cohn

This is Chuck. Eric. Thanks, Great question.

of model, the anyone and our continue we different we or is of do that it products into expect with on, tutoring take we do people and we that amounts and there.So of better the that, allow And, built that away appeal. large builds and multi-hundred and out that to would over freemium And and these cost them big so really it introduce models to easing live then have charge course, opportunity of for market is ecosystem throughout a would low expect kind XXXX.So of need of at these freemium engagement, no of from in to about to kind these been opportunity of have some all and the the we cost it, all money have testing couple monetize tutoring there.So test the of else for to the So as than our superpower and way kind companies be have consumers of of learning methodically actually mass which a that case our to and strategy that way existing last way of on non-tutoring winning could we're it big incredible we've live would million give where tutoring. built. months different on they into model, states is adding they advantage into freemium thinking from continuing our scale course the benefit businesses monetizing focusing thereafter. users and then specific incremental upsell to Many

Operator

comes Our from with next Anmuth question Doug JPMorgan.

Bryan Smilek

Doug. Smilek Bryan on for Its

September? that you any existing describe allocation around Tutors, any into partners coming of Are Varsity in XXXX, especially customer from deadline is considering more III on and looming incremental seeing deadline just Just drivers backlog? ESSER the up can uptake in funding new you growth the demand

Jason Pello

this Yes. one. can Sure, Brian. Great I question. take

a saw So, XXXX. about you of I be think in think we you XXXX, know, it's what as going to continuation

and business, XX%, Schools LTV Varsity So for up you experienced the and certainly, this we on full we've, the number think year, up was year I learning year then the memberships, when members, throughout consumer side, you'll Total bookings this year. for Tutors about see extension were mean, of revenue a active we had of business.And XX%. that scale as continued great continued that scaling the

in new is Assigned. lot about course with monies to and our services Schools we're Parent team but the feel provided sources years those Varsity district a bit signal there's of as District a XXXX.And and the one think those money investments to products, to sales opportunity.I that September we in like go-to-market end our for Tutors partners to But of And getting so little contracts expanding year, we're multiple to spent capture contracted, by in a our next can Teacher how at it's on must the Assigned, early going Assigned, pretty the enter of reminder come fair too As make funding be positive share significant we of X a the of be opportunity XXXX, is ESSER over participants, going the tell the year year. here school the of capture September into post for next a the and think space.

Charles Cohn

all are being for that continuing state -- fund there would going sorts different be broad the to loss.And a studies fact as -- Chuck is different for There add working that's consistently broad remediating -- we well learning there's that the funding are as tutoring. is is States, this good, funding is environment, bipartisan highly across specific for of all I that states Tutoring that one learning and passed different now highly to of like are used. remediating variety And something about different Brian, it's including in the also in programs. there's legislation tutoring loss. support And at feel effective a been sources variety that thing federal United effective support the the and tutoring. the great funding, participate to showing state positioned local so think And of as we're effective you programs, really in a Yes.

introduce larger ourselves then good highly providing Schools we a So we're that.And strategy platform, our to able access much school about of efficiently as for separately, about of Tutors think feel the to you districts. actually Varsity number to

sell is provide we credibility, quickly able where districts commercial and relationship double a like school And nearly something have that builds think relationship. the strategy, exciting. very whom to pretty very that's high-dosage are there's XX,XXX oftentimes, we trust the positive. from number relationships very And school value, far been So just of in really grow school public well. of with something is as States.Through a that partners throughout has XXXX, to of you districts we then cumulative in feedback then district as quickly that different school And that thus subsequently to build district something where able the this we've number and recently, United leads kind it been tutoring,

Operator

comes MacDonald with Ryan question Needham. from next Our

Matthew Shea

start you expectation.Just numbers? the helpful? wanted on came Ryan. caused LMs you're QX XXXX members just would for This to on the what XX,XXX that on on memberships. is slightly QX for be I the curious for now below learning difference, complete, to outlook for in any see Thanks color Shea and the forecasting how questions. learning Or the with is transition are Nice Matt taking but providing any

Jason Pello

had we I largely would learning guess, Yes. members quarter. Matt. of I continued fourth with say, customer strength growth, Thanks, active XX% new in our came in line up thought the Sure. expectations. in year-over-year that We in the number

look think And we're we good really so as positioned. feel I where ahead, we about,

conversion about And keep of to of the the QX. longer end year, XX,XXX thing exclude at just end both term, to in next expect I XX,XXX about year, numbers then we of we'd members.Now is expect the would mind the provided we the customers. Looking good move throughout potential ahead of that traditional that early the the to that conversion customers for freemium It's little about gave I although feel you our mechanisms we as numbers are we're that, the pay But thinking at to year. a bit forecast learning membership active seeing. more those that

Matthew Shea

been out out would wedge What obviously touch maybe just if that it you more bit, could or conversion it rolling of channel obviously, out a you've drive say it. What mentioned freemium of the to that freemium to Yes. little paid? but strategy go-to-market? on And I there. now flex wanted Got that you're to you upsell that -- the building inning in more you kind from broadly. testing

Charles Cohn

Sure.

building something couple a that we've for is of towards So this been years.

between products capabilities class having other these to build including XX,XXX where can that you can such resonate, compelling such in almost audiences together then we a based stream talked different blocks got these different tutor, to build AI we brought way able can way where at cost, whole of testing, monetize. product we're in all no a resources host and a diagnostic a self-study marginal then in offerings that people videos, get you up before we where -- different live where small them video as specific we as So classes, resonate.And building all we've about with tutoring, assemble to for group stick how really products live

institutional and something and both We have, past businesses and one that we were wasn't variants platforms had to kind our so unified offering. consumer our of, is great of success.And until product able converge institutional into this the consumer possible tested that different

So the excited we're potential here. about pretty

long far we've time. good and towards early, mentioned, this we a for but So, it's as working the been signal goal is thus

Jason Pello

about substantial us channel. to to The is, haven't expansion past.It'll to in as the be we going We're is marketplace able Yes. able forward. we able an needs over is and to term opportunity. only offering back-to-school the feel millions the students signal. long the ourselves question, potentially unlock of array of new of move the year, marketing going being your Nerdy enable to customers drive the awareness. connect introduce to continue to freemium really in this early this household as with it we innings. We'll give think name.So, become via we different initial to and be enable extent go course I'd We what thing throughout it'll will ecommerce ready an a the of is big in to good But And be a benefits to for We'll refine states, expectation fall. add year been to with move

Charles Cohn

Yes.

is thing proven how I think and the important monetization to is we a tutoring know monetize. that engine

the our really So ultimately the then superpower. way products actual in and we between of feel engagement connectivity course, on non-tutoring good monetizing is that a tutoring which, material side, about in

Operator

from comes question Securities. Andrew with JMP next Our Boone

Andrew Boone

about we become as I wanted can operating are that aging. about now that memberships off learning as the anything any increased secondly, cost should think there, ask some products there well free?And know revenue freemium fall to you else as Is model. anything about hosting either the may or of that then

that you kind that You cohorts Is anything guys or share a guys now can on through while. that in of been more there little bit vein? retention have a now maturing process we're this anything

Charles Cohn

Sure.

thing products So ancillary with these or associated here cost them them. I low associated cost either that have think the is with important marginal no marginal

we related the our growth being even both ultimately a of that to revenue throughout reflected over them And the QX the self-funding maybe can rolling did acceleration but fairly that accelerating. is a some for lower points builds a that cost guide.But year. that year it accretive of feel full the the tools is about testing from getting XX%, ARPM live, margin course and year good you still and we the this out at bear ecommerce, self-service we see So, starting to testing in

the about good so the here, we large that fact feel we So a introduces to economics us learners. could number of manner and a efficient that new in do highly

Jason Pello

of And sorry, was then -- retention cohorts. the last maturing on question

shareholder provided. profile we that and X demonstrate And that say over remove our last Those see the proven enter they quarters. learning how out our the learning You'll XXXX. we of have or from from historically retention, the would we to as originally superior memberships were feel did the X letter, package LTV shown cohorts model.We've in good what we're versus perspective, and continue legacy engagement to of we was economic really about memberships, positioned the extension, that

Charles Cohn

about we I'd feel in getting this out that great periods.So a over time year-over-year we chart also membership month that the very engagement, to years that shows continue non-tutoring product making, add and which pulls Yes. engagement, drive letter products connection that important continue in improvement retention added the we being to particularly between our be turn to many actually by shorter found And of shareholder the value that additional we to something come. improvements time, in and for and we're pulls that particularly both we discovery, product that and in how to related to can retention. through that that -- quarters which through to to

Operator

with Sklar Alex Raymond from comes today question James. next Our

Alexander Sklar

you're that little just can opportunity? for a Nerdy? kind the will ecommerce you to more like as What what of bit referring you're unlocking Chuck, as on look on far elaborate what

Charles Cohn

Sure.

we which source and for of be if we would on leverage not to entirety majority, a freemium consultative expect sales capabilities, So we but occur sales a have ecommerce have marketing. also had these sales the ecommerce, would engine of through and operating the

Alexander Sklar

Okay.

members. some new freemium of these So a self-service Not effectively motion anything -- for

Charles Cohn

well You as as have working -- a far

Jason Pello

that that item costs efficient We'll more we we continue of to us increasing something that as polish it would kind not and over expect we a scale. with and that line that that -- refine But, time would it. be there's makes commensurate

Charles Cohn

to everybody encourage the nerdy.com to this is, for one freemium on go of product the Alex, on themselves experience I'd And live call varsitytutors.com both add websites. we'd or and thing

Alexander Sklar

that Perfect. out. We'll check

you of an opportunities to So, frame last institutional pipeline quarter growth on side. booking this how acceleration the relative segment? kind Is from in for help pipeline of of great heading supporting, that kind into total just a kind Can another bookings year. looks opportunity keep the and the time XXXX

Jason Pello

Sure.

we're the the the believe itself, dramatically with combined emergent improvements dollar there's it's it we've a that bigger the different industry call it, we institutional made that very being months formed past, So products within we've subscription to and that K-XX X speaks excited in product segment. course tutoring within or of fact about.So XX so, our offering launched over multibillion that the

then tools first Assigned, to districts. top then It's Teacher District school Parents actually memberships. consumer our on sitting allowing Our one Assigned model, Assigned, allocate us product with administrative last the to learning

able interested provide of about a And both kind with cost to very that in marketing as value the towards to opened So ones ways away administrate compelling. take to the builds we've as able the originally only there scale, would build that cases, the audiences we're no of this, of to spend really all students.And consumer actual and district ability It's products districts. provide, including the part excited been can the kind our offering, and of and, that even of existing at our to total high-dosage convergence year. that then on motion common subsegment go-to-market this sales we're giving quality our associated all students, were and as then we then at part separately, the many extend and -- big of how offering. our relationships of we're school able it's all different really been a schools want we're like, because of tutoring.And doors in products is service for platforms, the is to value X that the ever And of in to built school focusing of

Alexander Sklar

Varsity one now Parent changed have Teacher Assigned, follow-up that. Chuck, kind of flavors Okay. just also And District Is seen notably And Tutors? launched anything the improve of with of result you've for a access out Assigned, on sign motion. to several there. as states Assigned, then you flavors you maybe, quick different kind as platform of win those X of is have kind a having newer or rates up those kind But districts

Charles Cohn

Yes.

And products. need seeing can different states is fact district with these the that we're different solve We different we districts have. the of also school all purchase school parts for

it really then, seems with to provide their that There's use the a that's from perspective, resonating just much it's then is simple to much we're so district, everybody fact more something associated value multiple they're to different So throughout using that products each very frankly, actually able communicate. one.And specific as case the well.

more credibility. higher, and simple are when So to efficient there and conversations are build it's rates more trust

Operator

Maria today question with from Ripps Canaccord. comes next Our

Maria Ripps

test? plan to going intend roll Can Sort little bit you offerings? sort of these sort what this on products initial how color a and what heavily are more completed? once you then is forward do of together, with testing pricing have share maybe of you consumer of product been type your and out bundling And targeting you sort of

Charles Cohn

Sure.

off learned in -- different variety in with rollout. inform So and options. to we're we of with a broader call using quickly started the past We've QX the a this then that testing

and addition our in of pricing we've to learning tiers, tutoring. year, hours the membership also lower those some So the include and introduced all-inclusive primarily of hour of some different as of tested hour X that we've past X the and part packages over sold of course

they cost no for, at money, of users then think cases, us and which days, skews of creates up those other that there side. very we've needs think and that products resonating monetization will been very lots ability that I are website platform, to price there.It's early in some companies lower in the traditionally when towards attract include, we And we really but certain paid force would much large engaging the the of still have this are points signal for allowing kind arise. get kind purchase acute our by have good encouraged onto of gravitational people initial Some efficiently.And to then

plan not on count and such tremendous could believe success future. there that a does working in in way big again, driver early but be where So growth our we that the a

Operator

Fitzgerald. Cantor Our Brett Instructions] from today next question with Knoblauch [Operator comes

Thomas Shinske

cannibalizing We're was of I Thomas just this on the model, to consideration revenues not This the Shinske see encouraged tutoring freemium wondering on Brett. is any that there using model. for were the customers the introduction from if was of existing maybe but platform services?

Jason Pello

that take one. could I Sure.

tutoring, think different. and do serve I great the on support that they're remember and replace it's But So a it.So, that they ramp tutoring. high-dosage as need marginal instead, our provides product resources important marginal for cost. platform study and very supplement free low are Supplemental no largely states resources will to not to

support freemium asynchronous based of learning plans, problems, those things of where to where assessments grow learning or journey group offerings. have acute the an semester. someone's think AI they a well personalized need learner, are upsell an course the monetize, any our and as able as which one-on-one think items, paid tutoring, the motion content.So continue So we'll And upsell over tutor, when as to really like practice tutoring small superpowers, specific materials from to we a understand the that's live be to to and

Charles Cohn

ancillary the create accountability, -- that people we something social highly both would the kind the very to that powerful here, from what motivation, other learn that relationship, over that comes to that is truly of durable. that be interaction, believe options, monetization we're superpower. interaction environment ability come all and live in that's a our people comprehend where of present want people students And can these best-in-class. and we've a continue about sorts something and that's live substitute engine. then face-to-face offering That's that continues that for That's probably the to where surrounded powerful resources why like, There's Yes. with time.But

Operator

queue. Instructions] There further are [Operator this currently no questions questions in time. no There are at

their you conference your today's to that conclude I'd for participation, will So line. like now and call. may disconnect thank everyone

Nerdy (NRDY) 27 Feb 242023 Q4 Earnings call transcript