Nerdy (NRDY) Q4 2025 earnings summary

Executive summary

• Achieved all three 2025 goals: returned to growth, accelerated AI-native platform transformation, and reached positive non-GAAP adjusted EBITDA, with Q4 revenue of $49.1 million, up 2% year-over-year and above guidance.

• Both consumer and institutional businesses grew simultaneously for the first time since Q1 2024.

• Completed rollout of new AI-native learner and expert experiences, improving product development velocity and unit economics.

• The Live + AI model enhances tutor effectiveness, automates content creation, and improves session outcomes and retention.

Financial highlights

• Q4 revenue was $49.1 million, up 2% year-over-year and above the $45–$47 million guidance range.

• Consumer learning memberships revenue was $41.6 million, up 6% year-over-year, representing 85% of total revenue.

• Institutional revenue was $7.2 million, 14% of total revenue, with bookings impacted by funding delays.

• Non-GAAP adjusted EBITDA was $1.3 million, beating guidance and improving by $6.8 million from Q4 2024.

• Gross margin (excluding one-time software abandonment charge) reached 66.8%, up 380 basis points sequentially.

Outlook and guidance

• Q1 2026 revenue expected between $46–$48 million; full-year 2026 revenue expected between $180–$190 million.

• Targeting break-even non-GAAP adjusted EBITDA for both Q1 and full-year 2026, representing over 1,000 basis points margin improvement year-over-year.

• Expect gross margin to expand each quarter in 2026 as tutor incentives are optimized and revenue shifts to higher frequency memberships.

• Projected year-end 2026 cash balance of $40–$45 million, including $20 million from a new term loan.