Nerdy Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
NRDY$6.23+5.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001819404-26-000051
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001819404-26-000080
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 65 previous paragraphs and 71 current paragraphs.
48 unchanged; 16 reworded; 7 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
ABANDONMENT OF FIRST TUTORS
Current report
In the second quarter of 2026, we made a strategic decision to abandon the First Tutors business, which is operated by EduNation Limited, a limited company incorporated in England and Wales. We will no longer sell new services under the First Tutors trade name, and we are directing resources toward the growth of our core business. In connection with this abandonment, we recorded write-offs of the First Tutors trade name along with other assets and liabilities.
Current report
WIND-DOWN OF VARSITY TUTORS FOR SCHOOLS
Current report
On July 31, 2026, subsequent to the end of the period, we committed to a plan to wind down our Varsity Tutors for Schools offering and business line. In connection with the wind-down, the Company estimates it will incur exit-related costs of approximately $2,000 thousand to $4,000 thousand, consisting of employee severance and other employee termination benefits, contract termination costs, asset impairment charges, and other exit-related costs. The Company expects to recognize substantially all of these costs during the third quarter of 2026. No adjustment has been made to the condensed consolidated financial statements as of and for the three and six months ended June 30, 2026. Varsity Tutors for Schools revenue, included within Institutional revenue below, was $4,311 thousand and $10,339 thousand for the three and six months ended June 30, 2026, respectively.
Current report
While both current year periods were impacted by a lower Active Member count when compared to the corresponding prior year periods, the rate of decline has narrowed sequentially for four consecutive quarters, and we expect to return to positive Active Member growth by the end of 2026.
Current report
Cost of revenue included amortization expense related to capitalized internal-use software of $584 thousand and $1,706 thousand for the three months ended June 30, 2026 and 2025, respectively, and $1,098 thousand and $3,367 thousand for the six months ended June 30, 2026 and 2025, respectively. Cost of revenue, gross profit, and gross margin improvements for the three and six months ended June 30, 2026 were primarily driven by lower amortization of capitalized internal-use software as a result of a charge for the abandonment of capitalized internal-use software that occurred in the fourth quarter of 2025. Cost of revenue, gross profit, and gross margin for three and six months ended June 30, 2026 were also positively impacted by lower Expert costs of $1,052 thousand and $3,428 thousand, respectively, when compared to the corresponding prior year periods.
Current report
•risks associated with the implementation of our plan to wind down Varsity Tutors for Schools, including the timing and amount of expected exit costs, our ability to realize anticipated benefits, and the impact on our business and results of operations;
Removed paragraphs (1)
Previous report
Cost of revenue for the three months ended March 31, 2026 decreased when compared to the prior year period primarily due to lower Expert costs of $2,376 thousand. Gross margin and gross profit for the three months ended March 31, 2026 increased when compared to the prior year period, primarily due to the benefit of price increases enacted in February 2025.
Reworded paragraphs (16)
Previous wording
We operate a next-generation live tutoring and intervention platform that leverages the power of human expertise with advanced artificial intelligence (“AI”) to personalize learning, accelerate student achievement, and empower educators. Our mission is to transform the way people learn through technology. Our purpose-built proprietary platform leverages technology, including AI, to connect students, users, parents, guardians, and purchasers (“Learner(s)”) of all ages to tutors, instructors, subject matter experts, educators, and other professionals (“Expert(s)”), delivering superior value on both sides of the network. Our comprehensive learning destination provides learning experiences across numerous subjects and multiple formats, including Learning Memberships, one-on-one instruction, small group tutoring, large format classes, chat, essay review, adaptive assessments, and self-study tools. Our flagship business, Varsity Tutors LLC (“Varsity Tutors”), is one of the nation’s largest platforms for live online tutoring and classes. Our solutions are available to Learners either directly through Learning Memberships (“Consumers”) and through education systems (“Institutions”). Our platform offers Experts the opportunity to generate income from the convenience of home, while also increasing access for Learners by removing barriers to high-quality live online learning. Our offerings include Varsity Tutors for Schools, a product suite that leverages our next-generation live tutoring and intervention platform capabilities to offer high-dosage tutoring and our online learning solutions to Institutions. We have built a diversified business across the following audiences: K-8, High School, College, Graduate School, and Professional.
Current wording
We operate a next-generation live tutoring and intervention platform that leverages the power of human expertise with advanced artificial intelligence (“AI”) to personalize learning, accelerate student achievement, and empower educators. Our mission is to transform the way people learn through technology. Our purpose-built proprietary platform leverages technology, including AI, to connect students, users, parents, guardians, and purchasers (“Learner(s)”) of all ages to tutors, instructors, subject matter experts, educators, and other professionals (“Expert(s)”), delivering superior value on both sides of the network. Our comprehensive learning destination provides learning experiences across numerous subjects and multiple formats, including Learning Memberships, one-on-one instruction, small group tutoring, large format classes, chat, essay review, adaptive assessments, and self-study tools. Our flagship business, Varsity Tutors LLC (“Varsity Tutors”), is one of the nation’s largest platforms for live online tutoring and classes. Our solutions are available to Learners either directly through Learning Memberships (“Consumers”) and, historically, through education systems (“Institutions”). Our platform offers Experts the opportunity to generate income from the convenience of home, while also increasing access for Learners by removing barriers to high-quality live online learning. Our offerings have included our legacy Varsity Tutors for Schools, a product suite that leveraged our next-generation live tutoring and intervention platform capabilities to offer high-dosage tutoring and our online learning solutions to Institutions. We have built a diversified business across the following audiences: K-8, High School, College, Graduate School, and Professional.
Previous wording
“Active Member(s)” 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, and the launch of new membership options. As a result, we believe Active Members is a key indicator of our ability to attract, engage, and retain Learners. Active Members excludes our Institutional business. While our Active Member count as of March 31, 2026 was lower when compared to March 31, 2025, it was higher than it was in any quarter after March 31, 2025 and we believe the recent rollout and continued advancement of our new Learner and Expert platform user experiences will result in positive growth by the end of 2026.
Current wording
“Active Member(s)” 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, and the launch of new membership options. As a result, we believe Active Members is a key indicator of our ability to attract, engage, and retain Learners. Active Members excludes our Institutional business. While our Active Member count as of June 30, 2026 was lower when compared to June 30, 2025, the rate of decline has narrowed sequentially for four consecutive quarters and we believe the recent rollout and continued advancement of our new Learner and Expert platform user experiences will result in positive growth by the end of 2026.
Previous wording
“Active Experts” is defined as the number of Experts who have instructed one or more sessions in a given period. We believe Active Experts is a key indicator of our ability to service Learners and provide Experts with revenue-generating opportunities. Active Experts includes our Institutional business. The following table summarizes Active Experts for the periods presented. Our Active Expert count during the three months ended March 31, 2026 decreased when compared to the prior year period. This decrease was primarily due to lower Consumer Active Experts as a result of our Expert incentives, which has promoted utilization of the highest quality Experts by encouraging them to work with more Learners and develop deeper relationships that allow for increased revenue-generating opportunities. We believe our Active Expert count at March 31, 2026 is sufficient to meet our near-term growth objectives.
Current wording
“Active Experts” is defined as the number of Experts who have instructed one or more sessions in a given period. We believe Active Experts is a key indicator of our ability to service Learners and provide Experts with revenue-generating opportunities. Active Experts includes our Institutional business. The following table summarizes Active Experts for the periods presented. Our Active Expert count during the three and six months ended June 30, 2026 decreased when compared to the prior year periods. This decrease was primarily due to lower Consumer Active Experts, driven by utilization of the highest quality Experts by encouraging them to work with more Learners and develop deeper relationships that allow for increased revenue-generating opportunities. We believe our Active Expert count at June 30, 2026 is sufficient to meet our near-term growth objectives.
Previous wording
Revenue for the three months ended March 31, 2026 increased when compared to the prior year period due to higher Consumer revenue, partially offset by lower Institutional revenue. The increase in Consumer revenue was driven by higher ARPM, which was primarily a result of price increases enacted in February 2025.
Current wording
Revenue for the three months ended June 30, 2026 decreased when compared to the prior year period due to lower Consumer and Institutional revenue. The decrease in Consumer revenue was primarily driven by a lower Active Member count, partially offset by higher ARPM. As we began to lap the price increases enacted in February 2025, the rate of ARPM growth moderated year-over-year. Revenue for the six months ended June 30, 2026 decreased slightly when compared to the prior year period primarily due to lower Institutional revenue. Consumer revenue was relatively flat year-over-year as a lower Active Member count was offset by higher ARPM, which was primarily a result of price increases enacted in February 2025. Revenue for future periods will be impacted by the previously announced wind-down of Varsity Tutors for Schools.
Previous wording
The following table presents our revenue by business category for the periods presented.
Current wording
The following tables present our revenue by business category for the periods presented.
Previous wording
Sales and marketing expenses for the three months ended March 31, 2026 included non-cash stock-based compensation of $296 thousand. Sales and marketing expenses for the three months ended March 31, 2025 included non-cash stock-based compensation and restructuring costs of $344 thousand and $193 thousand, respectively. Excluding these impacts, sales and marketing expenses decreased $1,387 thousand, or 9%. This decrease was driven by AI-enabled productivity gains and reduced investment in our Institutional business.
Current wording
Sales and marketing expenses for the three months ended June 30, 2026 and 2025 included non-cash stock-based compensation of $257 thousand and $330 thousand, respectively. Excluding these impacts, sales and marketing expenses decreased $1,914 thousand, or 14%. Sales and marketing expenses for the six months ended June 30, 2026 included non-cash stock-based compensation and restructuring costs of $553 thousand. Sales and marketing expenses for the six months ended June 30, 2025 included non-cash stock-based compensation and restructuring costs of $674 thousand and $193 thousand, respectively. Excluding these impacts, sales and marketing expenses decreased $3,301 thousand, or 12%. These decreases were driven by AI-enabled productivity gains and reduced investment in our Institutional business.
Previous wording
General and administrative expenses include compensation for certain employees, support services, product and development expenses intended to support continued innovation, and other operating expenses. Product and development costs were $9,175 thousand and $10,734 thousand for the three months ended March 31, 2026 and 2025, respectively. Product and development costs include compensation for employees on our product and engineering teams who are responsible for developing new and improving existing offerings, maintaining our website, improving efficiencies across our organization, and third-party expenses.
Current wording
General and administrative expenses include compensation for certain employees, support services, product and development expenses intended to support continued innovation, and other operating expenses. Product and development costs were $9,764 thousand and $10,683 thousand for the three months ended June 30, 2026 and 2025, respectively, and $18,939 thousand and $21,417 thousand for the six months ended June 30, 2026 and 2025, respectively. Product and development costs include compensation for employees on our product and engineering teams who are responsible for developing new and improving existing offerings, maintaining our website, improving efficiencies across our organization, and third-party expenses.
Previous wording
General and administrative expenses for the three months ended March 31, 2026 included non-cash stock based compensation of $5,682 thousand. General and administrative expenses for the three months ended March 31, 2025 included non-cash stock based compensation and restructuring costs of $7,244 thousand and $455 thousand, respectively. Excluding these impacts, general and administrative expenses decreased $2,479 thousand, or 12%. We are applying AI systematically across the tech stack helping drive durable cost reductions and improved unit economics.
Current wording
General and administrative expenses for the three months ended June 30, 2026 included non-cash stock based compensation and restructuring costs of $3,596 thousand and $882 thousand, respectively. General and administrative expenses for the three months ended June 30, 2025 included non-cash stock based compensation of $7,208 thousand. Excluding these impacts, general and administrative expenses decreased $953 thousand, or 5%. General and administrative expenses for the six months ended June 30, 2026 included non-cash stock based compensation and restructuring costs of $9,278 thousand and $882 thousand, respectively. General and administrative expenses for the six months ended June 30, 2025 included non-cash stock based compensation and restructuring costs of $14,452 thousand and $455 thousand, respectively. Excluding these impacts, general and administrative expenses decreased $3,432 thousand, or 9%. We are applying AI systematically across the tech stack, helping drive continued cost reductions and improved unit economics.
Previous wording
Interest expense for the three months ended March 31, 2026 was $660 thousand, which was driven by our outstanding borrowings under our term loan that was originated in November 2025.
Current wording
Interest expense for the three and six months ended June 30, 2026 was $672 thousand and $1,332 thousand, which was driven by our outstanding borrowings under our term loan that was originated in November 2025.
Previous wording
Interest income for the three months ended March 31, 2026 was $368 thousand, compared to interest income of $462 thousand in the same period in 2025, This decrease driven by lower interest income on our cash balances during the current period.
Current wording
Interest income for the three months ended June 30, 2026 was $325 thousand, compared to interest income of $365 thousand in the same period in 2025. Interest income for the six months ended June 30, 2026 was $693 thousand, compared to interest income of $827 thousand in the same period in 2025. These decreases were driven by lower interest income on our cash balances during the current period.
Previous wording
As of March 31, 2026 and December 31, 2025, we had cash and cash equivalents totaling $44,698 thousand and $47,895 thousand, respectively. We have incurred cumulative losses from our operations, and we may incur additional losses in the future. Our operations have historically been financed through cash on hand, debt financing, and capital contributions. To the extent we continue to generate negative operating cash flows, it is possible that we may have to finance future operations primarily or in part from cash on hand or from our term loan. If cash on hand or from our term loan is not sufficient to fund our business, we may also need to implement significant cost-containment measures or explore additional financing alternatives. However, there can be no assurance that any financing would be available to us on acceptable terms, or at all, or that any cost-containment measures we implement would be sufficient or effective in reducing losses or preserving liquidity.
Current wording
As of June 30, 2026 and December 31, 2025, we had cash and cash equivalents totaling $38,424 thousand and $47,895 thousand, respectively. We have incurred cumulative losses from our operations, and we may incur additional losses in the future. Our operations have historically been financed through cash on hand, debt financing, and capital contributions. To the extent we continue to generate negative operating cash flows, it is possible that we may have to finance future operations primarily or in part from cash on hand or from our term loan. If cash on hand or from our term loan is not sufficient to fund our business, we may also need to implement significant cost-containment measures or explore additional financing alternatives. However, there can be no assurance that any financing would be available to us on acceptable terms, or at all, or that any cost-containment measures we implement would be sufficient or effective in reducing losses or preserving liquidity.
Previous wording
Cash used in operating activities for the three months ended March 31, 2026 decreased $4,664 thousand when compared to the same period in 2025, due to higher revenue and gross profit, coupled with lower sales and marketing and general and administrative expenses. These impacts were partially offset by higher working capital and by interest payments of $537 thousand made in connection with our term loan that originated in November 2025. Cash used in operating activities for the three months ended March 31, 2025 was impacted by the payment of a legal settlement of $2,000 thousand.
Current wording
Cash used in operating activities for the six months ended June 30, 2026 decreased $6,964 thousand when compared to the same period in 2025, due to higher gross profit, coupled with lower sales and marketing and general and administrative expenses. These impacts were partially offset by lower Institutional bookings and by interest payments of $1,087 thousand made in connection with our term loan that originated in November 2025. Cash used in operating activities for the six months ended June 30, 2025 was impacted by the payment of a legal settlement of $2,000 thousand.
Previous wording
Cash used in investing activities was $1,182 thousand and $1,175 thousand for the three months ended March 31, 2026 and 2025, respectively. Cash used in investing activities for both periods related to capital expenditures primarily for the development of internal use software and IT equipment.
Current wording
Cash used in investing activities was $2,714 thousand and $2,333 thousand for the six months ended June 30, 2026 and 2025, respectively. Cash used in investing activities for both periods related to capital expenditures primarily for the development of internal use software and IT equipment.
Previous wording
Cash used in financing activities for the three months ended March 31, 2026 was $250 thousand as we paid deferred financing fees previously incurred in connection with our term loan that was originated in November 2025. We did not have any financing activities during the three months ended March 31, 2025.
Current wording
Cash used in financing activities for the six months ended June 30, 2026 was $250 thousand as we paid deferred financing fees previously incurred in connection with our term loan that was originated in November 2025. We did not have any financing activities during the six months ended June 30, 2025.
Previous wording
Certain statements in this report may constitute “forward-looking statements” for purposes of the federal securities laws. Our 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: revenue growth; enhancing the Learning Membership experience; gross margin and operating leverage; return on sales and marketing investments; changes to our marketplace infrastructure systems; simplifying our operations model while growing our business; or the sufficiency of our cash to fund future operations. 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. Our financial condition, results of operations, and cash flows may differ materially from those in the forward-looking statements as a result of various factors, including:
Current wording
Certain statements in this report may constitute “forward-looking statements” for purposes of the federal securities laws. Our 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: revenue and active member growth; enhancing the Learning Membership experience; AI-enabled productivity and operating leverage; or the sufficiency of our cash to fund future operations. 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. Our financial condition, results of operations, and cash flows may differ materially from those in the forward-looking statements as a result of various factors, including:
Previous wording
•risks associated with our ability to acquire and retain customers, operate, and scale up our Consumer and Institutional businesses;
Current wording
•risks associated with our ability to acquire and retain customers, operate, and scale up our Consumer business;