Nerdy Inc.

(in thousands, except per share information and where indicated otherwise)

NOTE 1 —BASIS OF PRESENTATION AND BACKGROUND

Basis of Presentation

These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), under the rules and regulations of the United States (the “U.S.”) Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of Nerdy Inc. (herein referred to as “Nerdy,” the “Company,” “us,” “our,” or “we,” and unless otherwise stated or context otherwise indicates, all such references herein mean Nerdy and its consolidated subsidiaries) as of and for the year ended December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026.

These unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of the Company’s results of operations, comprehensive income (loss), financial condition, cash flows, and stockholders’ equity (deficit) for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire year.

Nerdy Inc., a member of Nerdy LLC (as defined below), has the right to appoint a majority of the managers of Nerdy LLC and therefore controls Nerdy LLC. As a result, the financial results of Nerdy LLC and its wholly-owned subsidiaries are consolidated with and into Nerdy Inc., and a portion of the consolidated net earnings (loss) of Nerdy LLC, which the Legacy Nerdy Holders (as defined below) are entitled to or are required to absorb, are allocated to the noncontrolling interests (the “NCI”).

Background

Nerdy Inc. was formed on September 20, 2021 in connection with a business combination between TPG Pace Tech Opportunities (“TPG Pace”) and Live Learning Technologies LLC (along with its wholly-owned subsidiaries, “Nerdy LLC”). Nerdy LLC is a holding company that is the sole owner of multiple operating companies, including Varsity Tutors LLC (“Varsity Tutors”) and Varsity Tutors for Schools LLC (“Varsity Tutors for Schools”). As a result of the business combination and related transactions, Nerdy LLC merged with a wholly-owned subsidiary of Nerdy Inc., with Nerdy LLC surviving such merger. Nerdy Inc. is a holding company that has no material assets other than its ownership interests in Nerdy LLC and its indirect interests in the subsidiaries of Nerdy LLC, and has no independent means of generating revenue or cash flow.

Nerdy Inc. has the following classes of securities issued and outstanding: (i) Class A common stock, par value $0.0001 per share (the “Class A Common Stock”) and (ii) Class B common stock, par value $0.0001 per share (the “Class B Common Stock”, together with the Class A Common Stock, the “Common Stock”). The shares of Class B Common Stock are owned by the Legacy Nerdy Holders (as defined below), have voting rights only, and have no dividend or economic rights. The Company does not intend to list its Class B Common Stock on any stock exchange. Nerdy LLC has units issued and outstanding (the “OpCo Units”) to its members, the legacy holders of Nerdy LLC equity (the “Legacy Nerdy Holder(s)”) and Nerdy Inc. Nerdy Inc. and Nerdy LLC will at all times maintain aone-to-one ratio between the number of shares of Class A and Class B Common Stock issued by Nerdy Inc. and the number of OpCo Units issued by Nerdy LLC.

Wind-Down of Varsity Tutors for Schools

In the third quarter of 2026, the Company committed to a strategic plan to wind down its Varsity Tutors for Schools offering and business line (“VT4S”), which provided high-dosage tutoring and online learning solutions to education systems (“Institutions”). The Company recognized exit-related costs consisting of employee severance and other termination benefits, contract termination costs, and asset abandonment charges. The results of Varsity Tutors for Schools are included within continuing operations within these unaudited condensed consolidated financial statements and notes thereto. For additional information, see Notes 4, 5, and 8.

Abandonment of First Tutors

In the second quarter of 2026, the Company made a strategic decision to abandon the First Tutors business, which was operated by EduNation Limited, a limited company incorporated in England and Wales, a wholly owned subsidiary of Nerdy LLC. The Company no longer sells new services under the First Tutors trade name, and it is directing resources toward the growth of its core business. In connection with this abandonment, the Company recorded write-offs of the First Tutors trade name along with other assets and liabilities. The results of First Tutors are included within continuing operations within these unaudited condensed consolidated financial statements and notes thereto. For additional information, see Note 5.

Reverse Stock Split

On August 19, 2026, Nerdy Inc. effected a 1-for-15 reverse stock split of its Common Stock (the “Reverse Stock Split”). In connection with the Reverse Stock Split, Nerdy Inc. filed a certificate of amendment with the Secretary of State of the State of Delaware to amend Nerdy Inc.’s amended and restated certificate of incorporation. The Reverse Stock Split became effective on August 19, 2026. As a result of the Reverse Stock Split, every 15 shares of Nerdy Inc.’s Common Stock issued or outstanding were automatically reclassified intoone new share of Common Stock without any action on the part of the holders. The Reverse Stock Split did not modify any rights or preferences of the shares of Nerdy Inc.’s Common Stock. Proportionate adjustments were made to the exercise prices and the number of shares underlying Nerdy Inc.’s outstanding equity awards, as applicable, as well as to the number of shares issuable under Nerdy Inc.’s equity incentive plans and certain existing agreements. The Common Stock issued pursuant to the Reverse Stock Split remained fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of Common Stock or the par value of the Common Stock. Nerdy LLC effected a corresponding reverse unit split of all outstanding Nerdy LLC units at the same ratio as the Reverse Stock Split, in accordance with its LLC Agreement. No fractional shares were issued in connection with the Reverse Stock Split. Any common stockholders who were entitled to receive fractional shares as a result of the Reverse Stock Split instead received cash in lieu of such fractional shares. All share and per share amounts of Nerdy Inc.’s Common Stock presented in these unaudited condensed consolidated financial statements and notes thereto have been retroactively adjusted to give effect to the Reverse Stock Split, including reclassifying an amount equal to the reduction in the par value of the Common Stock to additional paid-in capital. Additionally, shares underlying unvested equity awards have been retroactively adjusted for all periods presented.

NOTE 2 —RECENTLY ISSUED ACCOUNTING STANDARDS

The Company has considered all new accounting pronouncements and based on current information, has concluded that there are no new pronouncements (other than the ones described below) that had or will have an impact on its results of operations, comprehensive income (loss), financial condition, cash flows, and stockholders’ equity (deficit).

In September 2025, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 removes the prescriptive project stage model for internal-use software development and instead requires capitalization of costs when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used as intended. The ASU also incorporates the accounting for website development costs into Subtopic 350-40 and clarifies that property, plant, and equipment disclosure requirements apply to all capitalized internal-use software costs. This ASU is effective for annual periods beginning after December 15, 2027 (i.e., Nerdy’s financial statements for the year ending December 31, 2028), and for interim periods therein. Early adoption is permitted. The amendments may be applied prospectively, retrospectively, or under a modified transition approach. The Company is currently evaluating the impact this ASU will have on its financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation, amortization, and depletion) included in certain expense captions presented on the face of the income statement. This ASU is effective for annual periods beginning after December 15, 2026 (i.e., Nerdy’s financial statements for the year ending December 31, 2027), and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the financial statements. The Company’s adoption of this ASU will result in expanded disclosures related to expense captions reported on the face of the income statement but will not have a material impact on the Company’s financial statements.

NOTE 3 —NONCONTROLLING INTERESTS

As of September 30, 2026, Legacy Nerdy Holders owned 4,249 OpCo Units, equal to 33.2% of the economic interest in Nerdy LLC, and 4,249 shares of Class B Common Stock. As of December 31, 2025, Legacy Nerdy Holders owned 4,293 OpCo Units equal to 34.3% of the economic interest in Nerdy LLC, and 4,293 shares of Class B Common Stock.

Nerdy Inc. owned 66.8% and 65.7% of the outstanding OpCo Units as of September 30, 2026 and December 31, 2025, respectively. The financial results of Nerdy LLC and its subsidiaries were consolidated with and into Nerdy Inc., and the portions of the consolidated net earnings (loss) of Nerdy LLC, which the Legacy Nerdy Holders were entitled to or required to absorb, was allocated to NCI. At the end of each reporting period, Nerdy LLC equity attributable to Nerdy Inc. and the Legacy Nerdy Holders was rebalanced to reflect Nerdy Inc.’s and the Legacy Nerdy Holders’ ownership in Nerdy LLC.

The following table summarizes the changes in ownership of OpCo Units in Nerdy LLC for the periods presented.

NOTE 4 —REVENUE

The following table presents the Company’s revenue by business category for the periods presented.

(a)Includes VT4S revenue of $514 and $1,776 for the three months ended September 30, 2026 and 2025, respectively, and $10,853 and $12,935 for the nine months ended September 30, 2026 and 2025, respectively. For additional information on the wind-down of VT4S, see Notes 1, 5, and 8.

Contract liabilities are reported within “Deferred revenue” on the Company’s Condensed Consolidated Balance Sheets. Deferred revenue consists of advanced payments from customers for performance obligations that have not been satisfied. Deferred revenue is recognized when the performance obligations have been completed. The Company expects to recognize substantially all of the deferred revenue balance in the next twelve months. The following table presents the Company’s “Accounts receivable, net” and “Deferred revenue” reported on the Condensed Consolidated Balance Sheets for the periods presented.

“Accounts receivable, net” is reported net of reserves of $285 and $485 as of September 30, 2026 and December 31, 2025, respectively.

NOTE 5 —RESTRUCTURING

In the third quarter of 2026, the Company committed to a strategic plan to wind down VT4S, which provided high-dosage tutoring and online learning solutions to Institutions. The Company recognized exit-related costs during the nine months ended September 30, 2026 consisting of employee severance and other termination benefits, contract termination costs, and asset abandonment charges. No other costs are expected to be incurred related to this event. The Company expects to settle the related liabilities by the end of the second quarter of 2027.

In the second quarter of 2026, the Company made a strategic decision to abandon the First Tutors business, which was operated by EduNation Limited, a limited company incorporated in England and Wales. In connection with this abandonment, the Company recorded write-offs of the First Tutors trade name along with other assets and liabilities during the nine months ended September 30, 2026. No other costs are expected to be incurred related to this event. The Company expects to settle the related liabilities by the end of the fourth quarter of 2026.

For additional information on these restructuring events, see Notes 1, 4, and 8. Amounts related to the restructuring events are shown in the following table.

During the three and nine months ended September 30, 2026, the Company incurred total restructuring charges of $3,974 and $4,856, respectively. Of the total restructuring charges incurred during the three months ended September 30, 2026, $1,606, $221, and $2,147 were included in “Cost of revenue”, “Sales and marketing expenses”, and “General and administrative expenses”, respectively, in the Condensed Consolidated Statement of Operations. Of the total restructuring charges incurred during the nine months ended September 30, 2026, $1,606, $221, and $3,029 were included in “Cost of revenue”, “Sales and marketing expenses”, and “General and administrative expenses”, respectively in the Condensed Consolidated Statement of Operations.

NOTE 6 —INCOME TAXES

Nerdy Inc. holds an economic interest in Nerdy LLC (see Notes 1 and 3), which is treated as a partnership for U.S. federal income tax purposes. As a partnership, Nerdy LLC is generally not subject to U.S. federal income tax under current U.S. tax laws as its net taxable income (loss) and any related tax credits are passed through to its members and included in their tax returns, even though such net taxable income (loss) or tax credits may not have actually been distributed. Nerdy Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its distributive share of the net taxable income (loss) and any related tax credits of Nerdy LLC. The Company continues to maintain a full valuation allowance against the deferred tax assets at Nerdy Inc. as of September 30, 2026.

The effective income tax rate was (0.49)% and (0.19)% for the three months ended September 30, 2026 and 2025, respectively. The effective income tax rate was (0.46)% and (0.29)% for the nine months ended September 30, 2026 and 2025, respectively. The effective income tax rates differed significantly from the statutory rates in both the current and prior year periods, primarily as a result of changes in the valuation allowance and income tax benefit attributable to the NCI. Income tax expense reported in all periods represents amounts owed to state authorities.

NOTE 7 —LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share of Class A Common Stock.

The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted loss per share of Class A Common Stock for the periods presented as they were anti-dilutive.

NOTE 8 —FIXED ASSETS, NET

The following table presents fixed assets and accumulated depreciation reported on the Condensed Consolidated Balance Sheets for the periods presented.

In connection with the wind-down of VT4S, the Company recorded a charge for the abandonment of capitalized internal-use software, net of accumulated amortization, of $1,606. This charge for the abandonment of capitalized internal-use software consisted of $6,606 gross book value and $5,000 of accumulated amortization, and was included in “Cost of revenue” in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026. For additional information, see Notes 1, 4, and 5.

The following table presents amortization expense related to capitalized internal use software and depreciation expense reported in the Condensed Consolidated Statements of Operations for the periods presented.

NOTE 9 —INTANGIBLE ASSETS, NET

The Company’s intangible assets consist entirely of trade names. The following table presents the carrying amount and accumulated amortization related to trade names reported on the Condensed Consolidated Balance Sheets for the periods presented.

The following table presents amortization expense related to intangible assets reported in the Condensed Consolidated Statements of Operations for the periods presented.

NOTE 10 —FAIR VALUE MEASUREMENTS

The Company’s financial assets and liabilities include cash and cash equivalents, receivables, and accounts payable for which the carrying value approximates fair value due to their short maturities (less than 12 months). Certain assets and liabilities, including definite-lived assets and goodwill, are measured at fair value on a non-recurring basis. There were no fair value measurement adjustments recognized related to definite-lived assets or goodwill during the three and nine months ended September 30, 2026 or 2025. The fair values of any outstanding borrowings under the Term Loan (as defined in Note 11) as of September 30, 2026 and December 31, 2025 approximated their carrying values.

NOTE 11 —LONG-TERM DEBT

Loan Agreement

On November 3, 2025 (“Closing Date”), the Company and certain of its subsidiaries entered into a Loan and Security Agreement (“Loan Agreement”) with Hercules Capital, Inc. (“Hercules”) and the lenders party thereto, pursuant to which the lenders made available up totwo tranches of term loans in an aggregate principal amount of $50,000 (the “Term Loan”), subject to certain terms and conditions, with the first tranche of up to $30,000 available for borrowing in multiple draws of at least $2,500 and the second tranche of up to $20,000 available for borrowing in multiple draws of at least $2,500. The Term Loan matures on November 1, 2029 (the “Maturity Date”) and bears interest equal to the greater of (a) the prime rate as reported in The Wall Street Journal plus 3.50% and (b)10.75%. The Loan Agreement is for 48 months, with interest-only payments for an initial period of 36 months from the Closing Date, which may be extended by an additional 12 months upon achievement of certain milestones and subject to other terms and conditions set out in the Loan Agreement (the “Interest-Only

Period”). After the Interest-Only Period, the Company will be required to repay in equal monthly installments of the principal and interest until the Maturity Date. The obligations under the Loan Agreement are secured by a security interest in substantially all of the Company’s assets and the assets of its subsidiaries that are co-borrowers or guarantors. The Loan Agreement provides for an end-of-term charge equal to 7.50% of the funded loan amount, due at the earlier of prepayment or maturity. Pro-rata payment of any earned end-of-term charge will be due upon any partial prepayment. The Company incurred $2,251 of costs (including an accrued end of term charge of $1,500 based upon the amount borrowed on November 3, 2025) in connection with entering into the Loan Agreement and the initial borrowing under the Term Loan, which were deferred and are being amortized to interest expense over the term of the Term Loan.

On September 28, 2026, the Company borrowed the remaining $10,000 available under the first tranche of the Term Loan, and incurred an additional accrued end-of-term charge of $750 in connection with this borrowing under the Term Loan, which was deferred and is being amortized to interest expense over the remaining term of the Term Loan. As of September 30, 2026, the Term Loan had outstanding borrowings of $30,000 and an available borrowing capacity of $17,442. Pursuant to the Loan Agreement, as the first tranche has been drawn in full, the second Term Loan tranche is available to the Company, subject to the approval of the lenders. As of September 30, 2026 and December 31, 2025, the interest rate on the outstanding borrowings under the Term Loan was 10.75%.

Debt Covenants

The Loan Agreement includes customary representations and warranties and covenants associated with the Term Loan. Such terms include (1) covenants concerning financial and other reporting obligations, and (2) certain limitations on indebtedness, liens, investments, distributions (including dividends), share repurchases, collateral, transfers, mergers or acquisitions, taxes, corporate changes, and deposit accounts. Such covenants and limitations on indebtedness include (but are not limited to) that the Company must maintain the greater of (i) $15,000 of Qualified Cash (as defined in the Loan Agreement) or (ii) Qualified Cash that results in Remaining Months Liquidity (as defined in the Loan Agreement) of at least 6 months. Additionally, the Company’s outstanding borrowings must not exceed certain multiples of its TTM Contribution Margin. If at any time, the outstanding borrowings exceed the required multiple of the TTM Contribution Margin, the Company will be required to immediately repay principal until the outstanding borrowings are less than the applicable multiple. The Company’s ability to access the maximum borrowing capacity under the Term Loan will require its future TTM Contribution Margin (as defined in the Loan Agreement) to exceed historical levels. As of September 30, 2026, the Company was in compliance with these covenants.

NOTE 12 —RELATED PARTIES

Tax Receivable Agreement

Nerdy Inc. has a tax receivable agreement with certain Legacy Nerdy Holders (the “TRA Holder(s)”) (the “Tax Receivable Agreement”). The Tax Receivable Agreement generally provides for the payment by Nerdy Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax that Nerdy Inc. actually realizes (or is deemed to realize in certain circumstances) as a result of: (i) certain increases in tax basis that occur as a result of (A) the reverse recapitalization (including as a result of cash received in the reverse recapitalization and debt repayment occurring in connection with the reverse recapitalization) or (B) exercises of the redemption or call rights set forth in the Nerdy LLC operating agreement; and (ii) imputed interest deemed to be paid by Nerdy Inc. as a result of, and additional basis arising from, any payments Nerdy Inc. makes under the Tax Receivable Agreement. Nerdy Inc. will retain the benefit of the remaining 15% of these net cash savings.

As of September 30, 2026, Nerdy Inc. has not recognized a liability of $118,238 under the Tax Receivable Agreement after concluding it was not probable that such Tax Receivable Agreement payments would be paid based on its estimates of Nerdy LLC’s future taxable income. Nerdy Inc. did not make any payments to the TRA Holders under the Tax Receivable Agreement during the three and nine months ended September 30, 2026 or 2025. The amounts payable under the Tax Receivable Agreement will vary depending upon a number of factors, including the amount, character, and timing of the taxable income of the Company in the future. If the valuation allowance recorded against the deferred tax assets applicable to the tax attributes referenced above is released in a future period, the Tax Receivable Agreement liability may be considered probable at that time and recorded within the statement of operations.

NOTE 13 —COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Independent Contractor Classification Matters

The Company, through its consolidated subsidiaries, is subject to various legal and regulatory proceedings at the federal, state, and municipal levels challenging the classification of third-party Experts on its platform as independent contractors, and claims that, by the alleged misclassification, it has violated various labor and other laws that would apply to employees. The Company disputes any allegations of wrongdoing and intends to continue to defend itself vigorously in these matters.

Other

The Company is subject to various other legal proceedings and actions in the normal course of business. In the opinion of management, based upon the information presently known, the ultimate liability, if any, arising from such pending legal proceedings, as well as from asserted legal claims and known potential legal claims which are likely to be asserted, taking into account established accrual for estimated liabilities (if any), are not expected to be material individually or in the aggregate to the consolidated financial condition, results of operations, or cash flows of the Company.

NOTE 14 —SEGMENT INFORMATION

The Company hasone reportable segment: Tutoring. The Tutoring Segment generates revenue by selling services to individual Learners and Institutions for one-on-one instruction and small group tutoring that are fulfilled by Experts, who deliver instruction on its behalf through its proprietary Live Learning Platform. The Company does not have intra-entity sales or transfers.

The Company’s CODM is the Chief Executive Officer of the Company, who evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis. The Company’s CODM assesses performance of the Tutoring Segment and decides how to allocate resources based on consolidated net loss that also is reported in the Condensed Consolidated Statements of Operations as “Net Loss.” Consolidated net loss is used to monitor budget versus actual results in order to assess the performance of the Tutoring Segment. The measure of segment assets is reported on the Condensed Consolidated Balance Sheets as “Total Assets.” The segment additions to property are reported in the Condensed Consolidated Statements of Cash Flows as “Capital expenditures.”

Substantially all of the Company’s tangible long-lived assets and revenues are located within the U.S. The Company does not have a customer that accounted for more than 10% of its consolidated revenue. See Note 4 for the Company’s revenue by business.

The following table presents information about the Company’s Tutoring Segment for the periods presented.

(a)Other segment items consists of tutor acquisition costs, professional services expense, restructuring expense, rent expense, and other operating costs.