NERDY INC (NYSE:NRDY) Q3 2025 Earnings: Profitability Beat Offsets Revenue Miss

Nerdy Inc (NYSE:NRDY) reported financial results for the third quarter of 2025, delivering a performance that notably exceeded analyst expectations on profitability, even as its top-line revenue fell short of consensus estimates. The company's latest earnings release has provided investors with a complex narrative of operational progress against a backdrop of ongoing challenges.

Earnings and Revenue Versus Estimates

The third-quarter figures reveal a mixed picture when held against analyst projections. While the company missed on revenue, it delivered a significant positive surprise on its bottom-line performance.

• Revenue: The company reported Q3 revenue of $37.0 million. This came in below the analyst estimate of approximately $39.6 million.
• Earnings Per Share (Non-GAAP): Nerdy reported a non-GAAP EPS of -$0.10. This substantially beat the analyst estimate of -$0.151.

The market's immediate reaction appeared to focus on the profitability beat. Following the earnings announcement, the stock traded higher in after-hours activity, indicating investor approval of the company's improved cost controls and narrower-than-expected loss.

Operational Highlights and Strategic Shifts

The earnings press release detailed several key developments that underpin the quarterly numbers. Management emphasized progress on its path to profitability and significant product updates.

A major focus was on the company's Consumer business, where Learning Membership revenue now constitutes 89% of total revenue. While the number of Active Members declined year-over-year to 34.3 thousand, the Average Revenue Per Member (ARPM) saw a substantial 24% increase to $374. This shift toward higher-value memberships is a core part of the company's strategy. Conversely, the Institutional business faced headwinds, with revenue of $3.7 million impacted by delays in federal and state education funding.

The path to profitability was a central theme. The company reported a non-GAAP Adjusted EBITDA loss of $10.2 million, which beat its own guidance and showed significant improvement from the $14.0 million loss in the prior year. This was attributed to a 960 basis point year-over-year improvement in adjusted EBITDA margins, driven by reduced marketing spend, lower staffing costs, and general administrative cost controls. The company also highlighted a 27% reduction in headcount compared to the previous year, partly enabled by AI-driven operational efficiencies.

Forward Guidance and Liquidity Position

Looking ahead, Nerdy provided fourth-quarter and full-year 2025 guidance that offers a clear view of its near-term expectations. The company's outlook for the next quarter appears optimistic when compared to existing analyst estimates.

• Q4 2025 Revenue Guidance: $45 to $47 million.
• Analyst Estimated Sales for Q4 2025: Approximately $62.2 million.
• Q4 2025 EBITDA Guidance: A loss between $2 million and breakeven.

The company's revenue guidance for the critical fourth quarter is notably below current analyst sales estimates. However, its EBITDA guidance suggests a strong expectation of nearing profitability. To bolster its financial position, Nerdy secured a new $50 million term loan in November, of which it has immediately drawn $20 million. Management expressed confidence that, combined with existing cash, this provides ample liquidity to fund operations and growth initiatives.

Market Performance Context

The positive after-hours movement following the earnings report contrasts with the stock's recent performance. In the weeks leading up to the announcement, the share price had faced significant pressure.

• Performance over the past month: -22.3%
• Performance over the past two weeks: -19.0%

This suggests that market sentiment was bearish heading into the earnings release, likely due to concerns over growth and profitability. The subsequent after-hours bounce indicates that the better-than-feared profitability metrics and the concrete steps toward EBITDA breakeven may be alleviating some of those concerns.

For a detailed breakdown of historical earnings and future analyst estimates, review the data available on the NERDY INC Earnings & Estimates page.

Disclaimer: This article is for informational purposes only and is not intended as investment advice. The author has no position in any stock mentioned. All investment decisions should be based on your own research, financial circumstances, and risk tolerance.