Nerdy Inc. Q2 Earnings Report: Revenue Down 11%

Nerdy Inc. reported a decline in Q2 revenue, down 11% to $45.3 million, due to lower institutional revenue and a non-recurring state-funded consumer revenue program. The company experienced a net loss of $12 million and a decrease in gross profit margin. Despite this, Nerdy aims to drive future growth with AI-driven productivity improvements and product enhancements, particularly in the institutional space.

Nerdy Inc. (NYSE: NRDY), the online learning platform behind Varsity Tutors, reported its second quarter (Q2) 2025 results, with total GAAP revenue of $45.3 million, down 11% year-over-year (YoY) compared to $51.0 million in Q2 2024 [1]. The company's earnings report showed that while consumer learning membership revenue grew 4% YoY, active membership declined 14% YoY as of June 30, 2025. Gross margin (GAAP) decreased to 61.5%, reflecting increased tutor incentives, though adjusted EBITDA loss (non-GAAP) exceeded company expectations [1].

The decline in revenue was primarily driven by lower institutional revenue, which fell to $7.3 million, down 34% YoY. Despite this, bookings in the institutional business rose 21%, reaching $4.9 million with 50 new contracts signed. The company also reported a net loss of $12 million for the quarter, compared to a loss of $11.2 million in Q2 2024 [1].

Nerdy aims to drive future growth with AI-driven productivity improvements and product enhancements, particularly in the institutional space. The company launched its Live+AI suite, an integrated set of features that includes AI session summaries, automated onboarding, and the Tutor Copilot tool for experts and educators. These enhancements are designed to improve session engagement, reduce onboarding friction, and offer parents and administrators actionable insights from every tutoring interaction [1].

Looking ahead, Nerdy projects revenue between $37 million and $40 million for the third quarter, reflecting typical seasonal declines in summer demand and spending ahead of the back-to-school period. Expected non-GAAP adjusted EBITDA loss is in the range of $11 million to $13 million. For fiscal 2025, management guided for revenue between $191 million and $197 million for the full year, with a non-GAAP adjusted EBITDA loss of $13 million to $17 million for the full year 2025 [1].

Nerdy Inc. has no debt and $36.7 million in cash on the balance sheet, providing ample liquidity to fund the business and pursue growth initiatives [1]. The company reaffirmed its goal of reaching profitability on a non-GAAP adjusted EBITDA basis in Q4 2025.

References:
[1] https://www.nasdaq.com/articles/nerdy-nrdy-q2-revenue-falls-11