Nerdy Inc. (NRDY) reported fourth‑quarter 2025 results that marked the company’s first profitable quarter on a non‑GAAP adjusted EBITDA basis. Revenue rose 2% year‑over‑year to $49.1 million, beating the company’s own guidance range of $45 million to $47 million and surpassing analyst consensus estimates of $45.71 million to $46.9 million. The company posted a non‑GAAP adjusted EBITDA of $1.3 million, a turnaround from the $7.0 million loss reported in Q4 2024, and a non‑GAAP adjusted net loss per share of $0.08, which was wider than the analyst estimate of a loss of $0.0646.
Revenue growth was driven by a 6% increase in Consumer Learning Membership revenue and a 6% rise in Institutional revenue, although the year‑over‑year growth rate for the institutional segment slowed 32% due to delayed federal and state funding. Average revenue per member per month climbed 21% to $364, reflecting pricing power in the consumer segment. Gross margin expanded to 66.8% from 66.6% in Q4 2024, a lift attributed to the completion of the AI‑native replatforming and a shift toward higher‑frequency, higher‑priced memberships.
The margin expansion was also supported by operational efficiencies, including a reported 50% reduction in audio/video errors and a 40% decrease in session costs, although these specific percentages were not independently corroborated. The company’s focus on AI‑driven personalization and the rollout of its Live+AI platform have helped reduce tutoring incentives and improve unit economics, contributing to the 1,400 basis‑point improvement in non‑GAAP adjusted EBITDA margins year‑over‑year.
CEO Chuck Cohn said, “In the fourth quarter, we returned to year‑over‑year revenue growth and delivered positive non‑GAAP adjusted EBITDA, beating the top end of our guidance range for both metrics. We drove over 1,400 basis points of improvement in non‑GAAP adjusted EBITDA margins year‑over‑year, demonstrating significant operating leverage.” He added, “In 2026, we’re focused on leveraging AI to deliver personalized learning experiences and make our expert tutors even more effective, growing our active member base, and delivering sustainable profitability.”
Looking ahead, Nerdy guided for first‑quarter 2026 revenue of $46–$48 million and full‑year revenue of $180–$190 million, with a breakeven non‑GAAP adjusted EBITDA outlook for the year. The company’s cash position stands at $47.9 million, and a $20 million term loan has been funded to support continued investment in the Live+AI platform and growth initiatives.
Investors reacted cautiously, with the market focusing on the EPS miss and guidance that sits slightly below analyst consensus. The mixed bottom‑line performance tempered enthusiasm despite the revenue beat and first profitable quarter.
Headwinds remain in the institutional business, where funding delays have slowed growth, but tailwinds include the successful AI platform transformation, higher‑frequency memberships, and pricing power in the consumer segment. The company’s strategic shift toward AI‑native operations and its focus on sustainable profitability signal confidence in long‑term growth prospects.
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