NRDY Nerdy Inc

Exhibit 99.1

Q4 | 2023 Earnings Release

Consumer

Business

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Varsity Tutors for Schools Powerful Included Resources For School Districts 24/7 On-Demand Chat Tutoring Live Group Classes On-Demand Essay Review Enrichment Classes College & Career Readiness Self-Study & Practice Problems Practice Tests& Personalized learning Plans Celebrity-Led StarCourse Classes High-Dosage Tutoring 1-on-1 Tutoring Progress Reporting District Assigned Teacher Assigned Parent Assigned

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Freemium Model

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Deliver Profitable Growth

During 2023, our shift to subscription and access-based offerings, combined with focused efforts to drive durable operating efficiencies, resulted in 19% revenue growth and substantial improvements to adjusted EBITDA margin of approximately 2,100 bps year-over-year.

In 2024, we expect to build upon our recent success by delivering profitable growth through an increase in the number of Active Members and continued LTV extension in our Consumer business; and higher Institutional revenues as we continue to rapidly scale Varsity Tutors for Schools. We believe that by scaling our winning access-based subscription offerings, we will be able to deliver accelerating full-year revenue growth of 24% year-over-year (at the midpoint of our guidance), improve adjusted EBITDA margin by an additional 500 bps, and deliver positive operating cash flow in 2024.

In Closing

With our transition to Learning Memberships and our new unified platform complete, we look forward to building from a strong foundation, scaling and continuing to enhance these winning models, launching a freemium strategy to grow the number of Learners introduced to our platform, and doing so in a way that drives profitable growth. I would like to close by thanking our team at Nerdy for their strong work this past year and their ongoing high-quality efforts toward meeting the needs of Learners in any subject, anywhere, and at any time.

We appreciate your continued interest in our Company.

CHUCK COHN

Founder, Chairman & CEO

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Financial Highlights

See pages 20 and 21 for reconciliations of non-GAAP measures to the most directly comparable GAAP financial measure.

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First Quarter and Full Year 2024 Outlook

Today, we are introducing guidance for the first quarter and full year. We expect year-over-year revenue growth will be driven by the continued growth of Learning Memberships in our Consumer business, the corresponding increase in the number of Learning Membership subscribers coupled with continued LTV extension; and higher Institutional revenues as we continue to rapidly scale Varsity Tutors for Schools.

New Learning Member acquisition of customers joining the platform remains strong, and a growing awareness that high-dosage tutoring is the most effective way to remediate learning loss by parents, educators and policymakers provides us with confidence in the demand for our offerings in the year ahead.

It should be noted that first half year-over-year revenue growth is impacted by legacy Package revenue in 2023 of $10.9 million and $4.9 million in the first and second quarter, respectively, that does not recur in 2024 due to the completion of our transition to subscription-based Learning Memberships in our Consumer business. Once we reach the second half of the year, when Package revenues are no longer included in prior year comparable quarterly revenues, we expect growth to accelerate consistent with the sequential quarterly acceleration we delivered in 2023.

First quarter revenues are also impacted by lower ARPM resulting from recent efforts to test additional product offering tiers by bundling product capabilities and testing multiple price points in an effort to identify a pricing model with mass market appeal. As we move throughout the year, we expect ARPM for our core Learning Membership offering to increase as we optimize our testing efforts (exclusive of freemium member growth).

First quarter and full year non-GAAP adjusted EBITDA guidance reflects the continuing benefits from our recurring revenue products which focus on long-term relationships with higher value customers, an improving gross margin profile, and operating leverage stemming from the completion of our evolution to access-based subscription revenue business models, partially offset by investments in Varsity Tutors for Schools go-to market strategy and product development to drive continued innovation and support our accelerating growth.

Revenue Guidance

Non-GAAP Adjusted EBITDA Guidance

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Financial Discussion

Revenue

Revenue for the three months ended December 31, 2023 was $55.1 million, an increase of 32% from $41.8 million during the same period in 2022. Revenue for the year ended December 31, 2023 was $193.4 million, an increase of 19% from $162.7 million during the same period in 2022. Revenue growth for both periods was driven by the completion of our evolution towards ‘Always On’ recurring revenue products, strong adoption of Learning Memberships, and lifetime value expansion in our Consumer business, coupled with the continued scaling of our Institutional business.

Gross Profit and Gross Margin

Gross profit of $39.2 million for the three months ended December 31, 2023 increased by $9.7 million or 33% compared to the same period in 2022. Gross profit of $136.4 million for the year ended December 31, 2023 increased by $23.5 million or 21% compared to the same period in 2022. Gross margin of 71.3% and 70.5% for the three months and year ended December 31, 2023, respectively, was 75 and 113 bps higher than gross margin of 70.5% and 69.4% during the comparable periods in 2022.

Gross profit and gross margin increases in both current year periods were primarily driven by growth in our Consumer business as a result of the strong adoption of Learning Memberships, which has led to lifetime value expansion and higher gross margin.

Sales and Marketing

Sales and marketing expenses for the three months ended December 31, 2023 on a GAAP basis were $18.8 million, an increase of $1.8 million from $17.0 million in the same period in 2022. Excluding non-cash stock compensation and restructuring costs, sales and marketing expenses for the three months ended December 31, 2023 were $18.2 million, or 33% of revenue, compared to $15.7 million, or 38% of revenue in the same period in 2022, an improvement of more than 450 bps year-over-year.

Sales and marketing expenses for the year ended December 31, 2023 on a GAAP basis were $68.5 million, a decrease of $5.7 million from $74.2 million in the same period in 2022. Excluding non-cash stock compensation and restructuring costs, sales and marketing expenses for the year ended December 31, 2023 were $65.7 million, or 34% of revenue, compared to $69.8 million, or 43% of revenue in the same period in 2022, an improvement of approximately 900 bps year-over-year.

Sales and marketing spend and efficiency improvements were driven by the transition to Learning Memberships, including the continued expansion of lifetime value, our focus on optimizing the level of marketing spend, and a more efficient operating model in our Consumer business. We also delivered substantial Varsity Tutors for School revenue growth, yielding efficiencies from prior investments in the Institutional sales and go-to-market organization. Our more efficient operating model in our Consumer business and the continued scaling of our Institutional business continue to lead to sales and marketing efficiency improvements as the business delivers accelerating revenue growth.

Sales and marketing expenses as a percentage of revenue may fluctuate from quarter to quarter based on Learning Membership sales, the size and volume of Institutional contracts, bookings, seasonality, and the timing of our investments in marketing activities.

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General and Administrative

General and administrative expenses include compensation for certain employees, support services, product development expenses intended to support continued innovation, and other operating expenses. Product development costs were $11.5 million and $9.4 million during the fourth quarter of 2023 and 2022, respectively. Product development costs include compensation for employees on our product, engineering, and design teams who are responsible for developing new and improving existing offerings, maintaining our website, improving efficiencies across our organization, and third-party expenses.

General and administrative expenses for the three months ended December 31, 2023 on a GAAP basis were $30.7 million, a decrease of $2.2 million from $32.9 million in the same period in 2022. Excluding non-cash stock compensation expenses and restructuring costs, general and administrative expenses for the three months ended December 31, 2023 were $19.8 million, or 36% of revenue, compared to $21.0 million, or 50% of revenue in the same period in 2022, an improvement of over 1,400 bps year-over-year.

General and administrative expenses for the year ended December 31, 2023 on a GAAP basis were $125.6 million, a decrease of $4.0 million from $129.6 million in the same period in 2022. Excluding non-cash stock compensation expenses, transaction costs, restructuring costs, and a provision for legal settlement, general and administrative expenses for the year ended December 31, 2023 were $80.1 million, or 41% of revenue, compared to $85.3 million, or 52% of revenue in the same period in 2022, an improvement of over 1,100 bps year-over-year.

Our investments in product development and our platform-oriented approach to growth have allowed us to launch a suite of ‘Always On’ subscription products including Learning Memberships for consumers, and our District, Teacher, and Parent Assigned offerings for Institutional customers. Access-based subscription offerings simplify the operating model needed to support customers and grow the business. Combined with our ongoing automation efforts involving self-service capabilities, the application of artificial intelligence, and other efficiency efforts, we have been able to generate operating efficiencies and remove significant costs from the business.

Net Loss, Non-GAAP Adjusted Net Earnings (Loss), and Non-GAAP Adjusted EBITDA (Loss)

Net loss on a GAAP basis was $9.2 million for the three months ended December 31, 2023, an improvement of $5.9 million from a net loss of $15.1 million in the same period in 2022. Excluding non-cash stock compensation expenses, restructuring costs, and mark-to-market derivative adjustments, non-GAAP adjusted net earnings were positive $2.2 million for the three months ended December 31, 2023, compared to a non-GAAP adjusted net loss of $(6.8) million in the same period in 2022, an improvement of $9.0 million year-over-year.

Net loss on a GAAP basis was $67.7 million for the year ended December 31, 2023, compared to a net loss of $63.9 million in the same period in 2022. Excluding non-cash stock compensation expenses, restructuring costs, mark-to-market derivative adjustments, transaction related costs, and a legal settlement provision, non-GAAP adjusted net loss for the year ended December 31, 2023 was $6.0 million versus a non-GAAP adjusted net loss of $41.8 million in the same period in 2022, an improvement of $35.8 million year-over-year.

Non-GAAP adjusted EBITDA was $3.0 million for the three months ended December 31, 2023, above our guidance of breakeven, and compared to a non-GAAP adjusted EBITDA loss of $(5.5) million in the same period in 2022, an improvement of $8.5 million and approximately 1,900 bps year-over-year.

Non-GAAP adjusted EBITDA loss was $2.5 million for the year ended December 31, 2023, compared to a non-GAAP adjusted EBITDA loss of $35.7 million in the same period in 2022, an improvement of $33.2 million and approximately 2,100 bps year-over-year.

For both current year periods, year-over-year non-GAAP adjusted EBITDA and non-GAAP adjusted EBITDA margin improvements were driven by higher revenues, gross margin expansion, sales and marketing efficiency gains, continued variable labor productivity improvements stemming from automation and AI enabled efficiency efforts, and our business model changes that streamline operations.

See pages 20 and 21 for reconciliations of non-GAAP measures to the most directly comparable GAAP financial measure.

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Liquidity and Capital Resources

As of December 31, 2023, the Company’s principal sources of liquidity were cash and cash equivalents of $74.8 million. We believe our strong balance sheet provides us with ample liquidity to operate against our plan and pursue growth initiatives.

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CONSOLIDATED STATEMENTS

OF OPERATIONS (Unaudited)

(in thousands, except per share data)

REVENUE (Unaudited)

(in thousands)

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CONSOLIDATED

BALANCE SHEETS (Unaudited)

(in thousands)

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CONSOLIDATED STATEMENTS

OF CASH FLOWS (Unaudited)

(in thousands)

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RECONCILIATION OF GAAP TO

NON-GAAP SALES AND MARKETING EXPENSE (Unaudited)

(in thousands)

RECONCILIATION OF GAAP TO

NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE (Unaudited)

(in thousands)

RECONCILIATION OF GAAP NET LOSS TO

NON-GAAP ADJUSTED EBITDA (LOSS) (Unaudited)

(in thousands)

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RECONCILIATION OF GAAP NET LOSS TO

NON-GAAP ADJUSTED NET EARNINGS (LOSS)

(Unaudited)

(in thousands)

CAPITALIZATION RECONCILIATION (Unaudited)

(in thousands)

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We monitor the following key operating metrics to evaluate the growth of our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

We completed our evolution to Learning Memberships within our Consumer business during 2023. As a result of this transition, we are presenting Active Members as a key operating metric.

Active Members is defined as the number of Learners with a paid active Learning Membership as of the date presented. Variations in the number of Active Members are due to changes in demand for our solutions, seasonality, testing schedules, the extension of Learning Memberships to additional Consumer audiences, and the launch of new Learning Membership options. As a result, Active Members is a key indicator of our ability to attract, engage and retain Learners. Active Members exclude EduNation Limited, a company incorporated in England and Wales (“First Tutors UK”) and our Institutional business. Active Experts include our Institutional business, but excludes First Tutors UK.

Active Experts is defined as the number of Experts who have instructed one or more sessions in a given period. Our Active Expert count at December 31, 2023 reflects our evolution towards Learning Memberships, which has allowed the highest quality Experts the ability to develop deeper relationships that allow for more consistent revenue-generating opportunities.

KEY FINANCIAL AND OPERATING METRICS

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Key Performance Metrics and Non-GAAP Financial Measures

This earnings release includes non-GAAP financial measures for non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP adjusted net earnings (loss) and non-GAAP adjusted EBITDA (loss).

Non-GAAP sales and marketing expenses exclude non-cash stock compensation expenses and restructuring costs.

Non-GAAP general and administrative expenses exclude non-cash stock compensation expenses, restructuring costs, transaction related costs, and legal settlement provision.

Non-GAAP adjusted net earnings (loss) is defined as net income or net loss, as applicable, excluding non-cash stock-based compensation expenses, unrealized (loss) gain on mark-to-market derivative financial instruments, restructuring costs, transaction related costs, and a legal settlement provision.

Non-GAAP adjusted EBITDA (loss) is defined as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization expense, non-cash stock-based compensation expenses, unrealized (loss) gain on mark-to-market derivative financial instruments, restructuring costs, transaction related costs, and a legal settlement provision.

Sales and marketing expenses consist of salaries and benefits for our employees engaged in our consultative sales process. General and administrative expenses are recorded in the period in which they are incurred and include salaries, benefits, and non-cash stock-based compensation expense for certain employees as well as support services, product development, finance, legal, human resources, other administrative employees, information technology expenses, outside services, legal and accounting services, depreciation expense, and other costs required to support our operations.

Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period as calculated using the treasury stock method.

Non-GAAP measures are in addition, and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to sales, net income, operating income, cash flows from operations, or any other performance measures derived in accordance with GAAP. Other companies may calculate these non-GAAP financial measures differently, and therefore such financial measures may not be directly comparable to similarly titled measures of other companies. The Company believes that these non-GAAP measures of financial results provide useful supplemental information. The Company’s management uses these non-GAAP measures to evaluate the Company’s operating performance, trends, and to compare it against the performance of other companies. There are, however, a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. See the tables above regarding reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Active Members is defined as the number of Learners with an active paid Learning Membership as of the date presented. Variations in the number of Active Members are due to changes in demand for our solutions, seasonality, testing schedules, the extension of Learning Memberships to additional Consumer audiences, and the launch of new Learning Membership options. As a result, Active Members is a key indicator of our ability to attract, engage and retain Learners. Active Members exclude EduNation Limited, a company incorporated in England and Wales (“First Tutors UK”) and our Institutional business. Active Experts include our Institutional business, but excludes First Tutors UK.

Annualized run-rate is defined as the number of Active Members at the end of the period multiplied by average revenue per Learning Membership per month multiplied by twelve months. This recurring revenue customer base provides us with increased forecasting visibility into future periods.

Active Experts is defined as the number of Experts who have instructed one or more sessions in a given period.

Bookings represent contracted amounts during the period for Varsity Tutors for Schools.

Management and our board of directors use these metrics as supplemental measures of our performance that are not required by or presented in accordance with GAAP because they assist us in comparing our operating performance on a consistent basis, as they remove the impact of items not directly resulting from our core operations. We also use these metrics for planning purposes, including the preparation of our internal annual operating budget and financial projections, to evaluate the performance and effectiveness of our strategic initiatives and to evaluate our capacity to expand our business and the capital expenditures required for that expansion.

Non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP adjusted

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EBITDA (loss), and non-GAAP adjusted net income or loss should not be considered in isolation, as an alternative to, or superior to net earnings (loss), revenue, cash flows or other performance measure derived in accordance with GAAP. We believe these metrics are frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Management believes that the presentation of non-GAAP metrics is an appropriate measure of operating performance because they eliminate the impact of expenses that do not relate directly to the performance of our underlying business. These non-GAAP metrics should not be construed as an implication that our future results will be unaffected by unusual or other items. We are not able to provide a reconciliation of non-GAAP adjusted EBITDA (loss) guidance for future periods to net loss, the comparable GAAP measure, because certain items that are excluded from non-GAAP adjusted EBITDA (loss) cannot be reasonably predicted or are not in our control. In particular, we are unable to forecast the timing or magnitude for gains or losses on mark-to-market derivative financial instruments, or stock-based compensation without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, net income or loss in the future. See the tables above regarding reconciliations of these non-GAAP measures to the most directly comparable GAAP measures for historical periods.

Forward-Looking Statements

The forward-looking statements made herein relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

There are a significant number of factors that could cause actual results to differ materially from statements made herein or in connection herewith, including but not limited to, our limited operating history, which makes it difficult to predict our future financial and operating results; our history of net losses; risks associated with our ability to acquire and retain customers in our Consumer business; risks associated with scaling up our Institutional business, risks associated with our intellectual property, including claims that we infringe on a third-party’s intellectual property rights; risks associated with our classification of some individuals and entities we contract with as independent contractors; risks associated with the liquidity and trading of our securities; risks associated with payments that we may be required to make under the tax receivable agreement; litigation, regulatory and reputational risks arising from the fact that many of our Learners are minors; changes in applicable law or regulation; the possibility of cyber-related incidents and their related impacts on our business and results of operations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and risks associated with managing our rapid growth.

Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Annual Report on Form 10-K filed on February 27, 2024, as well as other filings that we may make from time to time with the SEC.

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Exhibit 99.2

Nerdy Announces Fourth Quarter and Full Year 2023 Financial Results

Nerdy delivers revenue of $55.1 million in the fourth quarter, an increase of 32% year-over-year, capping the year by delivering accelerating sequential revenue growth each quarter in 2023

Nerdy beats fourth quarter non-GAAP adjusted EBITDA guidance, and delivers substantial Adjusted EBITDA margin improvements of approximately 2,100 bps in 2023

St. Louis, February 27, 2024 – Nerdy Inc. (NYSE: NRDY) today announced financial results for the fourth quarter and year ended December 31, 2023.

“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. Our business model changes delivered substantial operating leverage, achieving adjusted EBITDA profitability in the fourth quarter of $3.0 million, and full-year adjusted EBITDA improvements of $33.2 million and approximately 2,100 bps year-over-year,” said Chuck Cohn, Founder, Chairman and Chief Executive Officer of Nerdy Inc. “We’ve made great progress evolving and enhancing our Consumer and Institutional business models and products to position Nerdy for accelerating revenue growth and adjusted EBITDA profitability for the full-year in 2024. We look forward to continuing to push the pace of innovation, including with the introduction of freemium models for both Consumer and Institutional, and continuing to elevate and enhance our ability to meet the needs of Learners in any subject, anywhere, and at any time.”

Please visit the Nerdy investor relations website https://www.nerdy.com/investors to view the Nerdy Q4 Shareholder Letter on the Quarterly Results Page.

Financial and Operating Highlights

Webcast and Earnings Conference Call

Nerdy’s management will host a conference call and webcast today, February 27, 2024 at 5:00 p.m. Eastern Time. Interested parties in the U.S. may listen to the call by dialing 1-833-470-1428. International callers can dial 1-404-975-4839. The Access Code is 001617. A live webcast of the call will also be available on Nerdy’s investor relations website at https://www.nerdy.com/investors. A replay of the webcast will be available on Nerdy’s website for one year following the event and a telephonic replay of the call will be available until March 5, 2024 by dialing 1-866-813-9403 from the U.S. or 1-929-458-6194 from all other locations, and entering the Access Code: 468650.

About Nerdy Inc.

Nerdy (NYSE: NRDY) is a leading platform for live online learning, with a mission to transform the way people learn through technology. The Company’s purpose-built proprietary platform leverages technology, including AI, to connect learners of all ages to experts, delivering superior value on both sides of the network. Nerdy’s comprehensive learning destination provides learning experiences across thousands of subjects and multiple formats—including Learning Memberships, one-on-one instruction, small group tutoring, large format classes, and adaptive assessments. Nerdy’s flagship business, Varsity Tutors, is one of the nation’s largest platforms for live online tutoring and classes. Its solutions are available directly to students and consumers, as well as through schools and other institutions. Learn more about Nerdy at https://www.nerdy.com.

Contact

Investor Relations

investors@nerdy.com

Forward-looking Statements

The information included herein and in any oral statements made in connection herewith may include “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future, including our expectations with respect to: the guidance with respect to our financial performance; continued improvements in sales and marketing leverage; the growth of our Institutional business; simplifying our operations model while growing our business; and the sufficiency of our cash to fund future operations. Additionally, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “approximately,” “believes,” “contemplates,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “outlook,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “seeks,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements made herein relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

There are a significant number of factors that could cause actual results to differ materially from statements made herein or in connection herewith, including but not limited to, our limited operating history, which makes it difficult to predict our future financial and operating results; our history of net losses; risks associated with our ability to acquire and retain customers in our Consumer business; risks associated with scaling up our Institutional business, risks associated with our intellectual property, including claims that we infringe on a third-party’s intellectual property rights; risks associated with our classification of some individuals and entities we contract with as independent contractors; risks associated with the liquidity and trading of our securities; risks associated with payments that we may be required to make under the tax receivable agreement; litigation, regulatory and reputational risks arising from the fact that many of our Learners are minors; changes in applicable law or regulation; the possibility of cyber-related incidents and their related impacts on our business and results of operations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and risks associated with managing our rapid growth. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Annual Report on Form 10-K filed on February 27, 2024, as well as other filings that we may make from time to time with the SEC.