NRDY - Earnings call transcript Q4 2024

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Operator

Good afternoon. Thank you for attending today's Nerdy, Inc. Q4 2024 Earnings Call. My name is Cole, and I'll be the moderator for today's call.Â [Operator Instructions].Â I'd now like to pass the conference over to your host, TJ Lynn, Associate General Counsel of Nerdy.

You may proceed.

T. Lynn

you Call. us thank Quarter Nerdy's and Earnings XXXX afternoon for for joining Fourth Good are Cohn, Financial me Nerdy, With Chuck and Officer Chief Jason of Executive Pello, Chief Officer. Founder, Chairman, and

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

Charles Cohn

stronger we and of and above delivered pace. we unified We platform offerings, where all-access high and a to everyone are and entering subscription a for we're offerings. TJ, us adjusted quarter end EBITDA XXXX at improved innovating enhanced you faster In revenue with fourth technology, a institutional joining Thanks, consumer and strong guidance, XXXX, our today. our had and our the both marketplace thank

matching, retention. quality marketplace step lessons directly insights, scheduling, reporting. journey, quality-controlled and will platform. drives and every AI the and adaptive testing, XXXX, entire the manages tutoring, vetting, problems and continuous improvement In learning instruction, program personalized live live practice system to real-time on vertically Our from optimize integrated closed-loop This

the make institutions. learners and both to With allow hours our AI-driven over million is for date, a benefit improvements. learning elevate tutoring of drive recorded experience enhancements growth goal position will default from XX choice and engagement Our that and we're in us to to to profitability one-on-one

several our expert us that We AI-powered learner journey. are to and learning support throughout platform the products allow introducing better provide to

AI tool new our AI session to session First, for leverages that tutoring into educators. parents, learners, and playback generative insights turn actionable each

video. summarizes weakness or transcribes concepts Our recorded platform relevant and and every sections automatically the of now areas highlighting the links and key of to directly session, strength

a insights progress summaries is these tutoring help signal For from students. rate higher parents consumers, and session give a feedback and AI session view learners positive with of they parents value. clear for their investment's exposed track positive to initial those XX% with usage The

from benefit insights a at feedback service teachers improvements instruction not also compounding reporting. refine transparent or from possible. pace us integrated allowing drives previously vertically administrators institutions, delivery our interventions gain data-driven summaries refine while these platform, For to to Real-time across

after generation, plans advance we institutions year, ticket move the will lesson to in treat session, As exit dynamic transcripts AI leverage we each throughout the next for of one. homework our capabilities with and deepen generate

for creating generators standard-aligned in tools, product and providing seamless. are institutional that practice benefit clear an for now also robust, platform teachers cohort-level paid students Many tools drive we seconds advanced teachers next-generation We visibility district lesson access compelling to make into and both analysis customized has and them and on plan available released schools in leaders more These will at-risk AI including make to identifying experts our program to tutoring efficacy. We build initial aiding for will us suite, efficiency tools analytics software problem add provided AI also predictive recently content reporting increase these and platform. products positive. This of the and signal operationally. tools and continue our year, the value of and our to been with the and AI-less

engagement. instruction, Copilot automating and practice product improving that and by time deepen Tutor way touch offers that operational experience our a enhances For personal example AI on instruction. is helps value. provides By prep the costs in replaces elevates rather reducing instance, into streamlining tutor more reducing live learners ensures generates AI-driven deliver integrate we how Copilot, content, that of learning suggestions, and lesson student in than it It's time that spent a embedded personalized, to instructional an live it planning, recently and platform This lessons is product it high-quality interactive and content real-time the introduced Tutor creation, enabling profitability. We every support sessions. we're learning

Looking to and ultimately, learner our students and across a more elevate ahead planning audiences. tutor refine matching student and to tutor support empower currently ecosystem consumer value. expert creating and AI the cohesive available of then quality for incorporating to broadly greater improve to also institutions. XXXX, and customer This institutional both continue the our refine continue our This offerings We'll available experience. AI-driven lifetime we'll to learning and between make algorithm, match upgrade it to for rest we're consumers, precision enhance data and factors on-demand even will and sessions, live year,

reduce to increase of stages in costs. we're Additionally, early quality and processes the identifying

For our Copilot, ensuring a perfect after session customer minimizing our complete paid copilot a minutes platform, within session, classrooms. completing, for AI the replacement instance, further an embedding a frustration our learnings tools fit of institutional to teacher and isn't initiate Once experience. those and a we'll right we if adapt launch can exceptional and a tutor Tutor

lifetime QX our extending retention value on and driving through quality offerings, on personalized For more consumers, higher momentum. we strong and will building focus

our greater innovation. now AI-driven it's that foundational scheduling, to allowing learning These quarter, more improvements across the while past advanced vetting, AI apparent enough has products entire and aspects toward marketplace effort now us wins drive small tools to journey. and to us focus are and progress positioned less matching compound significant with on the many Over like shift

Now releases by deliver looking streamlined laid and consumer We on and platforms improved learners. back our winning XXXX, we themes personalized last learner. scaling including we progress activation out learning modern, onboarding the every significant made experience. the institutional unified complemented faster feature approach new intuitive, primary and to a for three enables year, This product for against

fourth tracking. We pair retention improved. engagement consumer improved with tutor new to XX% My the path Subject customer onboarding investments matching a simpler Learning resource learners included effectively. right tutor with enable we tutor, in and more the quarter As which and discovery year-over-year getting rose started for progress streamlined Portals, result, and to and easier Key a Hub a

to also engagement, sessions, and engagement as learning average member frequent retention. that We increased focused month with on per tutoring that's stronger non-tutoring per emphasized quicker memberships well and tools, first weekly sessions more as led tutoring higher revenue

changes to to profitability economics, a these path support will XXXX. return unit expect in growth, our enhance We drive and

for the XXXX, in the customer advances Tutors company. who significant and of toward we Tutors came and needs fulfill converted and offerings through then go-forward consistency in fourth any innovation costs, on be our can also of These for launched for positioning paid to improved believe to paid the partnered students access Varsity recent and positioned drive with with our mission paid at access we'll HI we opportunity year, what time.Â With productized XX% that that of ultimately customers our million AI-led experience institutional infrastructure, will Over key us further without you subsequently districts. with larger Tutors towards AI us believe we detail. from of of we customer allow AI go-to-market pace Jason? improvement, both to we our increased in while evolving value than our anticipate of AI learn to introducing to the including company several us number Varsity offerings. the I'll additional operational can forward the across enhancements driven us impact. of improvements schools these On substitution, modernize quarter, operations, substantial and platform and the human best-in-class being tutoring components a now turn for school levels Jason any rapid more transform expanded to strategy energized AI via reduced allow districts access our during areas efforts any go-forward the updates to period anywhere, and the fact, it tutoring to marketplace that platform, us our our the to productivity we that simplified will and and we're with call invested shifting discuss bookings headcount given to operations more over year, to that believe to improvements in school improve awareness by processes learners the schools, trust a financials our initially is meeting scale, progress as automation a invoicing, in and significant hiring X We scale X,XXX provide back-to-school as and of people scheduling, tutor programs.Â In and for experience. that, achieve introduced focus other allow the K-XX basis, of at we the implementing peaked platform XXXX.Â This past preferred in closing, built contracts productivity by institutions, district how XX% the We or for experience. mean interaction paid and improvements the to the and to us majority simultaneously basis.Â In made We partner technologies product to will intelligence for scale new substantial a our by providing Varsity new costs.Â In past to These partners a we removing capabilities subject, learners logistics customer embrace of are marketplace in including look platform vision provide in artificial total

Jason Pello

and good Chuck, Thanks, afternoon, everyone.

million above As XX% during of declined laid $XX represented with year. revenue, the active $XX In Nerdy fourth Learning members XX% made Membership lower period company year-over-year total Chuck the revenue. was which to million, primarily a guidance million, progress out due same consumer of Consumer business. range $XX we against goals $XX.X our X decrease coupled and ARPM quarter, for in $XX.X revenue delivered we the in of of XXXX.Â Revenue primary revenue institutional mentioned, representing to significant our million the million, lower from subscription

Learning from and ARPM resulted members at year-end, approximately million and active which XX,XXX quarter an of end. As annualized were of rate in members Memberships $XXX, run $XXX respectively,

business institutional over platform quarter, of access XX% districts students total million Tutors to of represented Our bookings.Â During the Varsity enabled total Tutors XX bringing Schools million at delivered company as for yielding $X.X of Varsity million contracts, X,XXX revenue. for the to X and the revenue $X.X students, school year-end. XXX,XXX executed additional an of we

Chuck total the bookings to fourth profit value convert enhancements XXXX. down quarter to and to was to and As with introduce and to of in utilization to platform fourth of simplify our sales in decrease since margin the year-over-year. XXXX.Â Moving margin gross a operations, uncertainties. memberships The was call, business. impact lower produced the future in offerings that to and we drive during exists of XX.X% on funding post-ESSER we fee-based XX% the significant the in in align cycle mentioned, investment them financial our margin opportunity lower was the districts positively in product our in in the business discussed near-term gross consumer in the XX% institutional space of believe Gross paid school contracts of quarter, normalized quarter.Â As higher for given with learning by our coupled fourth of Gross the ARPU, growth compared last the ultimately earnings more the primarily have strategy tutoring XX.X% a sessions due and We fourth the period the same start across institutional will XX% platform planning make $XX.X in million are periods, P&L. unified results moderated quarter

and G&A, plan decrease per against million improvements the believe This initiatives.Â Turning progress provide to XX% with million, providing months platform million. cash new the sales AI leverage the session. quarter believe XXXX. an initiatives, in X to were we to in have We the Essentially, further each during mentioned, during Schools for EBITDA that with XX% improvement. efficiency we balance $XX.X able drive or to administrative primarily compared of as during XX/XX, adjusted by to million, customer in We learner, $XX million due last $X AI-enabled positive in product XXXX. Non-GAAP EBITDA $XX.X drive change to X million driven $X in our higher the was and $X XX, to period improvements. efficiency organization same of continuously we million we session and of our innovation to total is also corporate with a us you margin, of XXXX, strong quarter forward internal stock-based in productivity of $X.X a improvements margin automation business consumer The sessions experts advances million the ample growth.Â As on revenues, EBITDA gross session pursue December improve headcount million first by growth is implemented ended from several $X year, these our the consecutive the Varsity costs in of and our our quarter in with basis expert liquidity coupled engagement incentives to to to savings and from our Learning utilization costs driven gains, of leading same opportunity drive stock-based suite these execution improvements, session, embrace million and the increase $XX with in decrease same recent to of equivalents and initiatives our marketing number tutor last our the year. with look our platform-oriented lower marketing first The compared for levels the for and in compared our product XXXX. new us reduction marketing in were up and approach was further Non-GAAP retention cash relative product platform.Â As were Included the approximately the that were receive investments extra AI-enabled $XX.X $XX.X sheet We the improvements to already and costs and principal primarily offset fourth partially operate liquidity lower believe primarily days, of in replacement believe time adjusted development investments will Non-GAAP where first annualized per in by of for negative XXXX. basis enhance million adjusted retention.Â Sales with were allowed to $X.X development revenues XX million, reduce noncash and noncash Through We Tutors acquisition marketing same to sales year-over-year outlook. approximately expenses saw in excluding $XX.X the higher of guidance loss compensation additional a decrease fourth launch gross period the negative million XXXX. and the to million. by and cash customer and have productivity from sources due our have to products, of we $X.X were million in guidance to across to operations.Â Non-GAAP EBITDA updates technologies by unified us same on in $XX.X of non-GAAP we compensation, from million provides coupled company's G&A streamline development in $XX.X quarter.Â General benefits loss above our $X.X $XX.X non-GAAP expenses was in and the operating for support and of subscription adjusted simplify Memberships period consumer business.Â Compared $XX.X on a debt. lower was a growth excluding decrease a period quarter expenses, and operations, to Chuck million to period rates, expenses $XX.X expenses, million sales GAAP GAAP been

providing for We and revenue are XXXX. full-year EBITDA and first-quarter guidance adjusted

improvements For due our positively the business. enacted towards expect ARPU revenues learning the memberships increases higher frequency we and consumer mix in consumer by to first impacted price be in will quarter, shift

experience, We further improvements. also will expert products incentives AI mentioned of drive our including expect and improvements new to the the earlier user implementation retention

the revenues coupled we funding environment. of growth with we a XXXX.Â Institutional of year, consumer innovation XXXX reflects quarter move the faster revenue full to into a product the growth bookings For expect revenue cautious in initiatives as each to first government consumer pull pace XXXX, lower return as of through, throughout half operational improvement leading flow-through the and accelerating

of we to XXXX, range For quarter of the revenue expect million. the million $XX first in $XX

year, $XXX full revenue expect million to the of we range in For the $XXX.

EBITDA Turning to guidance. adjusted

first both businesses and institutional expect expert the lower margin. For our higher gross in utilization recent coupled we result quarter, in to consumer incentives, with

throughout and leverage these quarter to price consumer with move $X enacted AI-enabled Full-year customers expect coupled negative million $X range first during the we expect quarter will of consumer tutor gross improvements revenue growth, return benefits operating increases a XXXX, margin. partially we EBITDA offset the As adjusted reflect adjusted EBITDA from to improvements productivity in quarterly million. first the by incentives.Â For of to improvements, negative sequential year, yield we for new the

$XX year, of the in adjusted full $X to negative EBITDA the we million. For negative expect range million

our company.Â With for and liquidity over with your operator Q&A. to the your and that, the to no We business to range also would pursue quarter it fourth time fund positive This which of debt the and I'll growth cash the be and continued turn in thank $XX closing, we expect for ending XXXX. to us you again in initiatives.Â In with EBITDA million believe $XX cash provides of adjusted result us in the flow million, in year for interest ample

Operator

Citizens Andrew with is Boone [Operator Instructions]Â Our question first JMP. from

Unknown Analyst

This Briana on is for Andrew.

new us about towards and you visibility decision guide, an the Can into implies weighing there. look acceleration the just confidence year throughout on the we the XQ? bridge help in And dynamic you And members for on And understand we As the full-year help the what year. based should in question, then the help just parse us on think active ARPU learning full for this potentially looking outlook? drove pricing second for assumptions the the XQ, through us can pricing toward XXXX? and when And XQ? revenue that how on growth member the customers guide then

Charles Cohn

Absolutely.

Chuck. Okay. answer to those. all This try of I'll is

feel we a significant expectations So beat QX. EBITDA. and on about our really by revenue good We both own amount

also us We for underlying a on progress infrastructure number made good related the services to efficient important and marketplace of to be more initiatives higher-quality allows deliver that consistently. strengthening

felt the higher about strengthened, talked relates both as the things saw shipping.Â So and that to little offensive the we a bit couple the and more like particularly work some and the exciting and being a foundation underlying throughout and time of innovations was were we start can activation that it retention, that sequentially product So quarter we're elevate quarter of that to a about on was the of we pulling product started year-over-year strengthen. lot through last consumer we

and really launched in was tutor excited that significant changes we really got optimized very much, we so have something we And historically, not we that behavior about. incentives, saw which

pulls the is utilization saw it higher roll taking, we retention then year, elevate through of start year, that we also given to it, about. we which we're know ultimately and seen the how joined to start then excited continue work Xx retention.Â So the retention. and significant really tutors platform we've something the positive they more So broadly driving really this pulls that engagement decided -- entering to out really, as call year-over-year, And to through was the to when driving the than much

that a So but something a impact to the profit itself through. able can retention, on of on being gross think the drive out the being that ultimately few excited platform customer to margin has about line enlist months ultimately, QX, we're result per how pull with of of in that we tutors crossover an and motivate for pays as pretty kind contribution

we've is that to as year guide really continue appropriate, we kind product improve XX% that way as where all then matching including content indicating we continue much a behind So they we and some incentives customers the to GenAI retention, the increased we're and where and appropriate and marketplace Tutor the in we ongoing quality start capabilities this totality, it, some the rolled feel that feel well like thought real underlying to and that we've providing that trends actually could tutor the on both of made haven't given like much-elevated personalization them platform the the enhanced we and investments adding tools the match the the test.Â So and go about we've but higher in the the improvements made and we quality that good baked out, and been we've as of average to like they're which better infrastructure customers the prices to but was in not like the for separately, about summarization, of limited to Copilot.Â There value we them that other are value are these. value and

move And that basically the higher are so throughout think kind combined in And with warranted that as blending ARPU those acquired that acceleration. with appropriate year so positive you're acquisition base move the pricing of drive are elevated on about into, we we And think on the about what and those. are what good feel increases as year, customer things that year. and then February that good combined average, feel a retention, we throughout instance, trends, good we throughout and for we revenue, the

Operator

is Sandler Barclays. question Ross next with Our from

Ross Sandler

across quarter? could the retention and and consumer improving? of going the either Chuck, the just happened is fourth going then next And Jason you higher the one, why explain but that margin on you few a it's gross follow-up, And kind Could then to second utilization in products it the of sounds what's AI dynamic improve just like quarters. that's in business? sort new one impacting Chuck, explain how is the the or

Charles Cohn

Sure.

So couple there ways. different are a of

better in And where first thing, the that's week accomplished. of it value fifth to tedious, and pulling and customers to so combine it third can to journey that the week the match generation and it in and that particular, through It's actually general, allow in Those understand the better planned say, engagement from they tutors so like There So practice summarization what's to more higher very, very quickly productive, prepared along spend and a lesson those the is XX-minute impact the higher sessions on able same quality, second watch further GenAI for are through high. the features a tools. see be of whole with you allow see Copilot, also customer in, allows the We things lessons.Â And quality up to to features directly know things their immediately us that for able to be something pay are the to show like instead of have themselves day-to-day relevant, value, all better for and hourly the are to sessions to week the improve lesson to more making for, parents which having personalized, lessons experts quality. but fourth retention. to with more assess their kids' experience because be week pull week more been and are really Tutor you deliver to more to life effective and the that average, less time take some on. prepping the actually both XX-

different being that we'll able get really in And we're so something terms could as how in cool launched the are to well also we make about value a able that the particular more some that's of think more and right consumers. Â They're get can that and delights improvements it's much come to that be communicate subsequent compelling. But at easier, to There's see excited it's really whole where point demonstrate personalized, really of of really be jump we really, idea product it as both are every is that host watch the that people. whole product you to it's with spot that work, it.Â Those kind us and the efficiently less insights we really, just outcomes that value, and more remove able way to of that things allowing efficiently. the ways to friction more a

Jason Pello

for We in long of gross impact then I'll sessions the does by session, dollars noted we the margins, love up levels to higher of and think speak platform, higher that activation, I'd That the I gross on and of levels first XX%. we on utilization. to retention, because tutor guess and that. on And thing customers. of great platform. Â The of higher to the saying like the the are a higher run X over longer and engagement did margin that margin customers incentives investing across having seeing profit have levels the a in all gross pull they're X letter seeing based X quarters on historically on levels month across cohorts in new other contribution number it Yes. it the really customer we're will work starting that the is time month us utilization and when we higher we utilization first-time start with period benefits are always it's UX to experience of over that all the is although course seen the stay call the drive of last through.Â We

good across see a XX% got in incorporated consumer remains that year, the quarter in you'll gross move of from those improvements we the gross think the price $XXX, price month feel we back range ARPU pull we've metrics But customer QX. in And a customers the as and significant new to February. of about in QX, course XX% margin. XX% those margins as hold the we is for the sequential there's that over in improvements gross the And funnel first just so that in prices we're as healthy. and margin past new half, through. improvements take And perspective, impact the this blend year.Â So in over I've in

Operator

with is from Smillk next Our JPMorgan. question Brian

Unknown Analyst

is This for on Neeraj Brian.

understand broadly, on you see localization And wanted to competitive to more force? can of Just the from sales give VTS, you landscape? returns starting an are update the on the us

Charles Cohn

mind you your repeating please? Would question,

Unknown Analyst

Yes.

to sales Tutors, you localization broadly, on competitive force? starting an of the more are the us Varsity give returns update So can see landscape? from the And on you

Charles Cohn

Certainly.

they're get for the to business, actually the that and one as we've some can, out will us product reflected kind the as to different think tutoring ability extensible enhancements we're the the year the chat-based to find and institutional taken building and of being the did so position innovation a appropriate of cohorts capacity given the be that the built product we're So part, will done we growth. districts QX cost and as size to kind districts under course within enhancements these have build of is large be over roll of signals for of a is we platform, include we really, a we're think opted government our where one to really given the we the and many was is tutoring year and which number school compelling which really, platform were We about of reduce upside subscription things us puts that intervention very some conservative the go-to-market initial the reduced net our team first offering but in like to competition have the of for structure solutions, that of going them different over particularly an number into that AI-enhanced more of function a ago you're then that of do. are so of time be we when compelling. Â So funding product that is next-generation in school continue we for enhancements have that that appropriate whole is partner GenAI in things the something paid not the allow be platform predictive things is a of already positive. Â So component, available well some recently for kind great is compelling be host that in of get applicability went now and the is will way it we've going we think of make compelling. Â So uncertainty, compelling signed hit, now can will and of of in really to for live really rightsize some we customers quite the the broad rolled offer tutoring lot to any or that but preserved of insights think offering we that out But into free world, default kind competitors the at selling and in that and about with are let one out to with districts and that as a that all-access these available that for differentiated were surrounding be It consumers potential. products consumer going throughout over has. to that VTXS. Â And in new like many subscription offerings. Â And there of think have really in product we and we've schools compelling take that X,XXX students, look insights near-term now, done highly districts right the high-dosage to uncertainty, a school think capabilities of we've in past up product that QX QX to guide.Â And pair able that that these drive think recently a to of intervention we school uncertainty many stance offering to ability seeing a a position and it's you the a the into a offerings

excited So we're that. about

Operator

Genuity. have JasonÂ TilchenÂ with We from a Canaccord question

Jason Tilchen

much expense the questions, the earlier AI the from been signs these 'XX on side? contemplated wondering benefit both outlook, it the your early really fiscal like of sounds have from you revenue tools encouraging. one and on on of side have these I'm tools new how within a up Following

Charles Cohn

to of also and upside fully the start year-over-year a continue we're we're We're costs a baking in extent heavy On the quite enhancements would should expecting expect to guide. that retention our incur. potential be reflecting the plan including to just with in of plan up utilization, to lot in encouraged levels that which kind But side, expense we and those the hit, relates we the that exceed the of to be the could that the about, it forecast to is product good that the as but on not about and think there's line we we sight year on feel margin.Â We outperform that, of bit gross fact they're excited side taken we've and conservative and of that execute potential retention the there's we're improving. to are resonating. Â So a some a as plan good

Jason Pello

only will customer course the is the be self-funding costs The we think activation substantial internally over of of lot drive with a the I'd add thing automation, year. associated which AI process and will

Operator

We have Sklar Alex with Raymond a question from James.

Jessica Wang

for Alex. on Jessica

all So excited all the follow initiatives it's up hearing kind questions, really guys have. and you of about these AI

shaking like that factors Or you member As all talked growth just how increasing about? expectations? what see as expectations, growth with you do you've growth returning the the think you're or would you it's your with for of would you your them, do kind active increasing you key think how customers?Â Do -- just to drivers executing it's about the Or ARPU rank base? rank what thinking out

Charles Cohn

Yes.

resonating a we're heading healthy in retention driver and prices, of accelerating the it's products higher rate and relative that are and we in because feel The year-over-year. time. that with the Conversion-related improving. of over terms improving, combined then direction, the up right And metrics are and that is up more fact top-of-funnel bigger our higher So looks about blends more. ARPU trends kind good

drives getting time, to paying growth. are higher customers which return over the have you So, better who retained

dynamic to then work through that the growth. pulling good and we the doing continued retention we're between relationship that and that and about feel So, product then enhancements and the

Jason Pello

in add funnel expand year. those to just the acquisition guide throughout retention, Jessica, continue all we move that, as then, to drivers to mentioned, those the Chuck metrics, And

then you'll sequentially, account business. Â And year. had growth business, the which move And of seasonality throughout each we quarter within the into half see continued on XXXX, as lower consumer of takes second side, our the institutional the bookings so That we on we into also in year as the we'll the back-to-school growth. that And the then also institutional half will talked the period, into be on call the move back-to-school we about That will the of first season. negative side. where during last business to return carry the

Jessica Wang

stable forward? back-to-school during where and get follow-up quick well. XXXX on just When just still productivity, natural period you're planning you are attrition Really you as are going seeing you the a seeing you just had in headcount say AI do headcount from your peaked efficiency AI? Or work keeping

Charles Cohn

teams and just of mean on side. year And latter. we be And we're the organization, the feel wouldn't trend. more super we kind And we're in think backfill of we out throughout the giving internally. both the attrition, across productive.Â And we it's And teams, most team our Probably meaningful appropriate and the get as folks course I improvements and capabilities the natural about they kind and there progressively need efficient set that fixed productivity. we've feel to good of we'll to general healthy. variable expectations expect seeing of and tools like attrit

Jason Pello

Yes.

innovation that we preserved good the change we feel been that's like And a we on to completed. note and without new made team of commensurate the variable X fixed maybe the be We've go-forward think I to really basis. headcount go-forward touch to on just to we'll then XXXX. during last move throughout all of about our as levels scale capacity, it's continue important headcount able weeks,

Operator

Fu Our with from Lee Yi Cantor Fitzgerald. next question is

Yi Lee

finish stabilizing to XXXX. the on Congrats

you build comment use side. do follow-up you you question is for multipart versus balance automation the invest the I summary plans, products? if more to, to What Jason how then lesson this build one is of interaction my it is I to be is Jason, human And So to to human on I could you products, have question much if in can using or it. you was Do technology guess, do intend the back-end go-to-market. end more do AI-driven regards out on these sell train the for Copilot. aspect And folks too technology? product?Â Lastly, back on you new insights, How then wondering this drive this? to particular the the first or whether between side Chuck the financial comment

Charles Cohn

Sure.

artificial it In value the North trademark interaction, a of AI else, or actually I superpowers cases, in and AI -- something that better many way think that giving Star our ago, enhancements, here enhances we've intelligence add the HI, guiding to XXXX experience.Â So, product first experience. experience. concept for to need we whether is personalize I the able time, XXXX to be learners and human for the to long both So, believe the got experts in for for in the we're

tutors. able plans previous more hyper-personalized a way, You're It's identify relevant you're getting quality and scalable paired able getting increasingly vet in higher lesson and recommendations. to We're removing serve and hyper-customized a studied based to up removes rate, friction content tutor you. Â We're with the instructional and prepping hourly upon the friction, actually or tutor's spent problems like the sessions. Â So, time increases reduces time met in that what effective actual you time creating up. with and goes on

these to on positive And the like experience a best are lot one live them. Â There that multiplicative, that think where platform. enhancements hours there, of we our have do of collectively the with all platform humans and more off other, significant for they're humans happened not on the able allow for and trading So, what entire AI are we're that and unlike to actual technology surrounding that you're in marketplaces happens tutoring other XX than session. million out do

in really such, the way those think quality, extension. we hyper-relevant add sink to additive. Â And dynamic personalization XX% up really in a first started there's technologies. and our that months powerful customer And from as lot can use then steps all can about rate for in of you of we're infrastructure set really kind we of unique, we using improve think that's the the benefit that responsible ahead lifetime back value in leverage that And to of step is recommendations underlying journey to for engineering vertical data marketplace and as that to think XX, think and We that's run are be warehousing is like custom that work asked how we put and that and really to of and of the can quickly XXXX the place. the position lot train experience of we improvements get side personalize both put that a a is us and incremental ultimately latest something take in well is that able of infrastructure is that place for in different learnings algorithms we're underlying meaningful. it. Â We the really, machine of from hit matching little then but advantage X, that learning and been and in basically integration that models.Â And kind highly guaranteeing a to years some compound where we're as the then a optimize every kind ways for we allows so, And in the LLM

feel there's underlying And like about efficiently roof we whole that technologies regard. of that host infrastructure and but we now to a use, to that data of our hit in different allows quickly. for kind us So, we're personalize move

Jason Pello

add only tools perspective go-to-market administrators and is a support to thing The students these at experts, support and also that only not that AI they from I'd schools. but teachers

across So, advancements it off and thing base. Â One relates XXXX, which going motion to that we the consumer we tier we have do have relates the of space. as within institutional platform paid we'll to a to access, AI the that will the it entirety because into move as all we're of as the base, covering institutional a the we are think helps go-to-market from drive base user like ecosystem both

it that But will one the new. on experts the of our other can the the So be all we and think then value proposition that certainly side. overall side on otherwise, to that of customers we enhances marketplace just provide

Charles Cohn

intuitive that some organization. provide sales want the about Yes. for that. training trivialize our But customer-facing I are And understood. they asked tools institutional on side easily don't you is of to is Certainly, where these many the very value required, and

the So, the but happening. customer's back produced really and you the actually read on products to we sooner. the can it, which perspective, value, they're far insights, end, see are will the it's sellable understand immediately more session, can you the intuitively experience How frankly, what's them you matter see from able summarization, doesn't these make hopeful

Jason Pello

robust enhance provide feature productivity, Yes. We're value and relationships And allow build of we this and efficacy excited for business. can us great consumer to had way many generally reporting just how program districts. and things more of about one deeper for is with the better for schools, to these communicate build tools our

business. to in the leverage them we're now able institutional First, then

move So, real we'll be to quickly. able

Yi Lee

So, it's organic. like internal more

Jason, before then, right in a of this more so built the OpenAI question. trades, it. financial terms to And I Got want ask guys internal. You it's model, the

going to consumer -- was using like this also, obviously, for quarter-over-quarter. a the commentary institution a on pressure. more breakeven me. was little a know faster could negative to on bit the XXXX for model got sounds mentioned the you was I right? us I it outlook you It model early wondering your remarks. just split you give the be between the to split is institutional But You Jason, time? grow AI, guys want we will EBITDA when going a is sounds that's I in the wondering, could commentary little get that, right guidance this lot so little already properly. Â And to that achieve terms year. operating We gave you the bit leverage, of get help I you also seasonality. wondering just AI for to and to of on consumer. Â We too prepared it want it's know just And if more like side guys from

Jason Pello

Yes. Good question. Thanks.

the revenue our limited largely we how first actually that of be backfill side, of of maybe in to uncertainty improvement this a business, to when where and hours. business roles we to sequential little generally about bit as a think earlier engineers, through, the consumer, we think see bookings we the call, shift total. some today, I from start that this you'll open and mix then in period. it the profitability. Â I XX see as shifting exists market very new the And XX% the roles GAAP that me the the you told flows institutional institutional given will between we on the have that other flat of would the down, mentioned that about move in fixed have expect then half On perspective year back-to-school don't example, project And government day, a company. and and be feel into year-over-year.Â And them the only take just you X occurs, hours need them And would to an like headcount then attrition took we'll them as one all AI funding

So, And the depending perspective. those the to is substantial. productivity, level improvements using LLM profitability it's just of accrue -- whether which company's on a from in they're benefit

Operator

questions in further queue. no are There the

participation. So, conclude all for this you call. today's will your Thank

your You line. now disconnect may

Nerdy (NRDY) 27 Feb 252024 Q4 Earnings call transcript