Nerdy Inc. reports 32% revenue growth in Q4 2023, forecasts strong 2024 in online learning sector

Nerdy Inc. reported its financial results for the fourth quarter and the entire year of 2023. 

Nerdy is an online learning platform that utilises technology, including AI, to offer educational services across a wide range of subjects to learners of all ages.

Through its proprietary platform, the company connects students with experts for various learning formats, such as one-on-one tutoring, small group sessions, and large classes.

The company recorded a revenue of $55.1 million for Q4, representing a 32% increase from the same period in the previous year. Over the entire year, the company achieved a 19% year-over-year growth, with revenue growth accelerating each quarter.

Chuck Cohn, Founder, Chairman and Chief Executive Officer of Nerdy, said: “In the fourth quarter, we completed the evolution to access-based subscription products in our Consumer and Institutional businesses while delivering accelerating revenue growth each quarter throughout the year that culminated in 32% year-over-year growth in the fourth quarter and 19% year-over-year growth for the full year.” 

The company also surpassed its non-GAAP adjusted EBITDA guidance for the fourth quarter, reporting significant improvements in adjusted EBITDA margin by approximately 2,100 basis points for 2023. The adjusted EBITDA profitability reached $3 million in Q4, with a full-year improvement totalling $33.2 million.

Nerdy's revenue growth was attributed to the transition to access-based subscription products in both consumer and institutional sectors. This strategy led to increased revenue from learning memberships, which accounted for nearly 100% of consumer revenues and grew to $43.5 million in Q4, making up 79% of the company's total revenue. Additionally, institutional revenue saw a 160% increase year-over-year in Q4, contributing to 21% of the total revenue.

The company reported a gross profit of $39.2 million in Q4, up 33% year-over-year, with a gross margin of 71.3%. Operational improvements resulted in a net loss of $9.2 million in Q4, compared to a net loss of $15.1 million in the same period of 2022. Non-GAAP adjusted net earnings for Q4 2023 were $2.2 million, compared to a non-GAAP adjusted net loss of $6.8 million in Q4 2022.

For the first quarter of 2024, Nerdy expects revenue in the range of $51 to $53 million and projects full-year revenue between $232 to $246 million. The company anticipates adjusted EBITDA for the full year to be between $5 to $15 million, representing an improvement in adjusted EBITDA margin by over 500 basis points. It also expects to achieve positive operating cash flow in 2024.