Nerdy (NRDY, Financial) has reported impressive first-quarter performance, highlighting the effectiveness of its Live + AI platform. The company's approach, which combines the expertise of educators with proprietary artificial intelligence, has proven to enhance engagement and retention rates. This strategy is setting the stage for Nerdy to achieve sustainable and profitable growth in future quarters, reflecting a commitment to generating high-quality, recurring revenue.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Nerdy Inc (NRDY, Financial) is $2.08 with a high estimate of $3.00 and a low estimate of $1.50. The average target implies an upside of 27.81% from the current price of $1.63. More detailed estimate data can be found on the Nerdy Inc (NRDY) Forecast page.
Based on the consensus recommendation from 8 brokerage firms, Nerdy Inc's (NRDY, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Nerdy Inc (NRDY, Financial) in one year is $2.43, suggesting a upside of 49.08% from the current price of $1.63. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Nerdy Inc (NRDY) Summary page.
NRDY Key Business Developments
Release Date: February 27, 2025
- Revenue: $48 million for Q4 2024, above guidance range of $44 million to $47 million, but a 13% decrease year-over-year from $55.1 million in Q4 2023.
- Consumer Learning Membership Revenue: $39.2 million, representing 82% of total company revenue.
- Institutional Revenue: $6.8 million, representing 14% of total company revenue.
- Gross Profit: $31.9 million, a 19% decrease year-over-year.
- Gross Margin: 66.6% in Q4 2024, down from 71.3% in Q4 2023.
- Sales and Marketing Expenses: $18.4 million on a GAAP basis, a decrease from $18.8 million in Q4 2023.
- General and Administrative Expenses: $29.9 million on a GAAP basis, a decrease from $30.7 million in Q4 2023.
- Non-GAAP Adjusted EBITDA Loss: $5.5 million, above guidance of negative $7 million to negative $10 million.
- Cash and Cash Equivalents: $52.5 million with zero debt as of December 31, 2024.
- First Quarter 2025 Revenue Guidance: $45 million to $47 million.
- Full Year 2025 Revenue Guidance: $190 million to $200 million.
- First Quarter 2025 Adjusted EBITDA Guidance: Negative $6 million to negative $8 million.
- Full Year 2025 Adjusted EBITDA Guidance: Negative $8 million to negative $18 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nerdy Inc (NRDY, Financial) delivered Q4 2024 revenue and adjusted EBITDA above the high-end of guidance, showcasing strong financial performance.
- The company has successfully unified its consumer and institutional offerings, enhancing its marketplace technology and subscription offerings.
- Nerdy Inc (NRDY) introduced several AI-powered products, such as the AI session playback tool and Tutor Copilot, which have received positive feedback and improved user engagement.
- The company has seen a 26% year-over-year increase in consumer engagement in Q4, with improved customer retention and higher average revenue per member.
- Nerdy Inc (NRDY) has made significant progress in modernizing its marketplace infrastructure, leading to reduced operational costs and improved customer experience.
Negative Points
- Nerdy Inc (NRDY) experienced a 13% year-over-year decline in Q4 revenue, primarily due to lower institutional revenue and decreased ARPM and active members in the consumer business.
- Gross margin decreased to 66.6% in Q4 2024 from 71.3% in the same period in 2023, impacted by lower ARPM and higher utilization of tutoring sessions.
- The company reported a non-GAAP adjusted EBITDA loss of $5.5 million for Q4 2024, compared to a positive $3 million in the same period in 2023.
- Nerdy Inc (NRDY) faces uncertainties in government funding, impacting its institutional business and leading to a cautious outlook for 2025.
- The company has moderated its investment in the institutional business due to a more normalized sales cycle and near-term funding uncertainties.
