NERDY INC (NYSE:NRDY) Reports Mixed Q2 2025 Earnings with Revenue Miss and After-Hours Stock Decline

NERDY INC (NYSE:NRDY) reported its second-quarter 2025 financial results, delivering mixed performance relative to analyst expectations. The company’s revenue and earnings per share (EPS) fell short of estimates, contributing to a sharp after-hours decline in its stock price.

Key Financial Metrics vs. Estimates

• Revenue: Reported $45.3 million, missing the consensus estimate of $47.6 million. This represents an 11% year-over-year decline, attributed to lower institutional revenue and the absence of a one-time $3 million state-funded program from Q2 2024.
• EPS: Posted a loss of $0.07 per share, better than the estimated loss of $0.10. The narrower-than-expected loss was driven by cost controls, including a 16% headcount reduction earlier in the year and improved operational efficiencies.
• Adjusted EBITDA: Reported a loss of $2.7 million, outperforming the company’s guidance range of a $3 million to $6 million loss.

Market Reaction

Following the earnings release, NRDY shares dropped 16% in after-hours trading. The negative reaction appears driven by:

• Revenue Miss: The top-line shortfall, particularly in institutional sales, raised concerns about near-term growth momentum.
• Lowered Q3 Guidance: Management projected Q3 revenue between $37 million and $40 million, below the analyst consensus of $44.3 million. Full-year revenue guidance of $191 million to $197 million also implies a slower second-half recovery than previously anticipated.
• Gross Margin Pressure: Gross margin declined to 61.5% from 65.7% a year ago, reflecting higher expert incentives and pricing adjustments.

Key Takeaways from the Earnings Report

1. Consumer Learning Membership Growth: Learning membership revenue increased 4% YoY to $37.8 million, accounting for 84% of total revenue. Active members rose to 30,600, with average revenue per member (ARPM) climbing 24% to $348.
2. Institutional Challenges: Institutional revenue fell to $7.3 million (16% of total revenue), though bookings grew 21% YoY to $4.9 million. The company emphasized its Live+AI™ integration as a long-term differentiator.
3. Path to Profitability: Management reiterated expectations for Q4 profitability, citing cost reductions and AI-driven productivity gains. Cash reserves of $36.7 million and zero debt provide financial flexibility.

Outlook vs. Analyst Estimates

• Q3 2025: Nerdy expects an adjusted EBITDA loss of $11 million to $13 million, significantly wider than current analyst projections.
• Full-Year 2025: The company anticipates an adjusted EBITDA loss of $13 million to $17 million, reflecting higher investments in AI and institutional expansion.

For a deeper dive into Nerdy’s earnings and future estimates, review the latest data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any financial decisions.