From The Motley Fool · Motley Fool Transcribing · · 2m
Nerdy Q3 2026 Earnings Results
Nerdy reports 10% revenue drop but improved margins and 44% headcount reduction as it shifts to self-service model.
In brief
Nerdy reports 10% revenue drop but improved margins and 44% headcount reduction as it shifts to self-service model. Nerdy Inc. reported Q3 2026 revenue of $33.2 million, a 10% year-over-year decline, with non-GAAP adjusted EBITDA margin expanding by over 1,000 basis points and 44% fewer employees. Originally reported…
Q3 2026 Results
Nerdy reported Q3 2026 revenue of $33.2 million, a 10% decrease year over year.
Net Loss Improvement
Net loss narrowed to $12.8 million from $18.7 million in Q3 2025.
Non-GAAP EBITDA Margin
Non-GAAP adjusted EBITDA margin expanded by over 1,000 basis points year over year.
Consumer Revenue
Consumer revenue totaled $30.7 million, a 7% year-over-year decline representing 93% of total revenue.
Institutional Revenue
Institutional revenue dropped to $2.5 million, a 34% year-over-year decline from Varsity Tutors for Schools wind-down.
Active Members
Active members fell to 31,800 as of Sept. 30, a 7% year-over-year decrease.
ARPM Decline
ARPM decreased to $366, a 2% year-over-year drop due to membership mix shift.
Headcount Reduction
Total headcount reduced to 525 employees, a 44% decrease from 934 one year ago.
AI Spend
AI spend dropped to $1.5 million in Q3 2026, 60% below July peak.
Cash Position
Cash and cash equivalents stood at $42.5 million as of Sept. 30, following $10 million term loan draw.
Q4 Revenue Guidance
Management expects Q4 revenue in the range of $37 million to $39 million.
Q4 EBITDA Guidance
Company expects non-GAAP adjusted EBITDA to reach breakeven in Q4 2026.
Year-End Cash Guidance
Management projects ending 2026 with $35 million to $37 million in cash.
VT4S Revenue
VT4S revenue was $514,000 in Q3 2026, down from $1.8 million in Q3 2025.
Product Transformation
Company rolled out messaging-first student experience and self-service checkout model.
Smart Actions
Smart Actions provides tutors with 3D interactive models from 15,000 lessons.
AI Efficiency
AI spend run rate was 60% below July peak without reducing employee adoption.
Retention Improvements
Retention improved year over year across 37-day, 60-day, and 90-day cohorts.
What to remember
Nerdy Inc. reported Q3 2026 revenue of $33.2 million, a 10% year-over-year decline, with non-GAAP adjusted EBITDA margin expanding by over 1,000 basis points and 44% fewer employees.
