AI Earnings Predictions for Nerdy Inc. (NRDY)

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EX-99.1

EX-99.1

Exhibit 99.1

Q3 2026 Earnings Release

A Note to Our

Shareholders

Dear Shareholders,

Our third quarter results were in line with expectations, with non-GAAP Adjusted EBITDA improving by $4.5 million year over year and non-GAAP Adjusted EBITDA margin expanding by over 1,000 basis points. We also made important progress on our product transformation, rolling out a redesigned, messaging-first student experience and advancing new self-service e-commerce capabilities. Together, these improvements are designed to make it easier for families to get started, deliver more value during and in-between tutoring sessions, and create a more efficient, scalable business.

The third quarter marked an important transition in Nerdy’s evolution. Throughout 2026, we have been building a new Consumer learning experience, simplifying our business, and applying AI to improve our products and operations. In recent weeks, major parts of that work have moved into customers’ hands. That includes a large portion of our reimagined new student experience, with the remaining features and products being launched in the coming weeks.

We have improved our self-service and e-commerce capabilities and now can support a registration-led path to membership. Our acquisition model has historically centered on generating leads and converting them through sales. The new experience enables customers to register, purchase, and begin their learning membership through a self-service checkout flow, without requiring a sales conversation. Over time, we expect this more modern way to transact with our customers to lower customer acquisition costs, expand reach, and support a more efficient and scalable go-to-market model.

These capabilities are arriving later than planned, limiting their contribution during the back-to-school acquisition window. We acquired fewer new learning membership customers than anticipated and entered the fourth quarter with a smaller recurring revenue base. Our Q4 revenue outlook reflects that shortfall in learning membership counts.

The new student experience changes how families use Nerdy. Instead of navigating menus and pages, learners and parents simply tell us what they need, and the platform does it. More than 100 agentic actions sit behind that conversation. A student can get step-by-step help on tonight’s homework, turn next week’s test into a personalized study plan with reminders, generate practice on exactly what they’re struggling with, schedule or reschedule a session, message their tutor, or enroll in a live class, all in the same thread. Everything in a learning membership, from 1-on-1 tutoring to live classes to AI practice, is now one message away. We believe this makes the learning membership more valuable between sessions, and increasing engagement between tutoring sessions is one of the most direct ways we can elevate retention and customer lifetime value.

We introduced a new capability called Smart Actions in the quarter that brings real-time AI directly into live instruction. It acts as a real-time assistant alongside the human tutor, displaying superimposed suggestions directly over the digital classroom screen. Tutors can utilize suggested 3D interactive models, visual explanations, and lesson content into the shared lesson with a click, pulling from the more than 15,000 prepared lessons we now have that span some 200 subjects. A tutor explaining circulation, for example, can place a three-dimensional heart on screen and show the student how blood moves through it, which is both a more effective way to teach and also far more engaging and stimulating.

For our youngest learners, we built an entirely separate elementary experience. It is rocket and space themed, visually rich, and designed from the ground up for K-5 students rather than a universal dashboard and experience for all

Q3 Earnings Release 2026

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learners that we have had in the past. We believe that a different form factor and a significantly more interactive and visually appealing way of engaging and teaching will result in differential levels of engagement for young learners (who we believe will have a lot of fun with this experience).

Third quarter revenue was $33.2 million, within guidance. GAAP net loss was $12.8 million. Non-GAAP adjusted EBITDA loss was $5.7 million, which was better than our guidance range and represented a $4.5 million improvement from a year ago. Our total headcount was down 44% at the end of Q3 versus last year. Excluding the Varsity Tutors for Schools exit, our Consumer sales, support, engineering, and product teams are leaner by more than 300 people, as AI now handles work that previously required additional headcount. After seeing a rapid spike in AI spend in the spring, by September our annualized AI spending rate was approximately 60% below its peak during June and July due to improved model selection strategies and other tactics while internal AI adoption

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EX-99.1

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EX-99.1

EX-99.1

Exhibit 99.1

A Note to

Our Shareholders

Dear Shareholders,

In the first quarter of 2026, we beat the top end of our revenue guidance, delivered our second consecutive quarter of positive non-GAAP adjusted EBITDA, and translated the AI-native foundation we finished building at the end of 2025 into shipped, learner-facing product at a cadence we have never matched in this company’s history.

Revenue was $48.7 million, above the top end of our $46 to $48 million guidance range and up 2% year-over-year. Non-GAAP adjusted EBITDA was positive $1.0 million, ahead of our guidance of approximately breakeven, and improved by $7.3 million compared to Q1 2025. Adjusted EBITDA margin expanded by more than 1,500 basis points year-over-year - our third consecutive quarter of sequential margin improvement, and roughly $30 million of annualized operating leverage on a flat top line. Gross margin reached 66.2%, an expansion of more than 800 basis points year-over-year. We ended the quarter with $44.7 million of cash on the balance sheet.

Three things stood out. First, the product velocity that we said an AI-native codebase would unlock is now visible in shipped product - with a meaningful slate of additional learner-facing releases reaching customers in the weeks ahead. Second, our cost structure is structurally - not cyclically - better, and AI is the reason. Third, the year-over-year rate of decline in Active Members narrowed for a third consecutive quarter, and we expect to return to positive growth by the end of 2026. I’ll spend the bulk of this letter on the first.

Consumer Product Velocity: Live+AI™ Comes to Life

When we finished re-platforming on an AI-native codebase at the end of 2025, we said the point of that work was not the architecture itself - it was the speed and quality of what we could ship on top of it. Q1 was the first full quarter operating in that new mode, and the cadence has fundamentally changed.

The most visible expression of that shift is our new Learner Experience - internally referred to as V3 - which became the universal customer experience and surface for our Consumer business in March. Every newly acquired customer is now onboarded directly into V3, and we have begun migrating existing customers as well. Roughly 6,000 new customers came in directly on V3 in the back half of the quarter, and approximately 10,000 existing customers have been moved over from the prior experience and we are seeing strong early signal and optimizing rapidly in response to user behavior and customer feedback, which is broadly positive with a constant point of feedback being it looks/feels like a whole different company or product. The same platform will imminently power our institutional offering, which we expect to expand the market opportunity in institutional beyond the more limited K-12 high-dosage tutoring market that business primarily targeted.

Inside V3, the centerpiece for the learner is Maya, our AI concierge. Maya is the always-on guide built into the experience - she answers inbound questions, surfaces the right next step, helps a student find a diagnostic, and resolves day-to-day issues like rescheduling a session, all without a phone call or a support ticket. She is available twenty-four hours a day, in the context of each student’s actual learning plan and past interactions including full context on past tutoring sessions, product interactions, diagnostic and practice-related engagement and results, and more. She now handles a meaningful share of in-product customer interactions. For a student or a parent, Maya turns a platform into a relationship that feels alive, responsive, and easy.

Around Maya, V3 brings together the rest of the family experience. Our native mobile app launched in the App Store in Q1 and is approaching full feature parity with the web, with releases now shipping to mobile within 48 hours of going live.

Q1 Earnings Release 2026

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The Tutor Gallery lets families browse tutor profiles, watch introductory videos, and book with guaranteed availability through Book Now. We launched Games, a set of six math and English Language Arts (“ELA”) titles built to drive daily engagement. We also launched On-Demand Courses, converting top Live Classes into self-paced courses with full supporting materials. We are launching with more than 350 of these courses that collectively span thousands of hours of live instruction.

These updates shipped together as part of V3. They give families more ways to engage with our platform between live sessions, creating additional retention opportunities.

We are seeing the early signal in the numbers. Active Members ended the quarter at 36.9 thousand, down 9% year-over-year, but the rate of decline has narrowed for three consecutive quarters. Customer churn improved meaningfully year-over-year. Average Revenue per Member per Month (“ARPM”) was $374, up 12%, and Learning Membership revenue grew 3% to $38