Nerdy Inc. Reports Q2 2026 Revenue of $43.2 Million, Operating Loss Reduced

Nerdy Inc. reported its financial results for the second quarter of 2026, revealing a revenue of $43.2 million, a decrease of 4% from $45.3 million in the same period last year. For the first half of 2026, revenue totaled $92.0 million, slightly down from $92.9 million in the prior year. The company's gross profit for the quarter was $28.0 million, reflecting a marginal increase from $27.8 million year-over-year, while the gross margin improved to 65% from 62%. Despite the revenue decline, Nerdy achieved a reduced operating loss of $6.5 million compared to a loss of $12.3 million in the second quarter of 2025.

The company’s financial performance was influenced by a decrease in both Consumer and Institutional revenue, primarily due to a lower Active Member count. However, this was partially offset by an increase in Average Revenue per Member per Month (ARPM), which rose to $366, up 5% from $348 in the previous year. The decline in Active Members, which stood at 29,100 as of June 30, 2026, was less severe than in prior quarters, indicating a potential stabilization in user engagement. The company also reported a significant reduction in sales and marketing expenses, which fell by 15% to $11.6 million, and general and administrative expenses decreased by 14% to $22.9 million.

Strategically, Nerdy Inc. made the decision to abandon its First Tutors business in the second quarter, reallocating resources to its core operations. This move is part of a broader strategy to streamline its offerings and focus on its flagship service, Varsity Tutors. Additionally, the company announced plans to wind down its Varsity Tutors for Schools business, which is expected to incur exit-related costs between $2 million and $4 million. This decision reflects a shift in focus towards enhancing its core tutoring services and improving operational efficiency.

Operationally, the company reported a decrease in Active Experts, which fell to 8,400, down 13% from the previous year. This decline was attributed to a strategic decision to optimize the utilization of high-quality Experts, encouraging them to work with more Learners. Despite the decrease in Active Members and Experts, the company remains optimistic about returning to positive growth by the end of 2026, bolstered by recent enhancements to its platform and user experience.

Looking ahead, Nerdy Inc. anticipates that its revenue will be impacted by the wind-down of the Varsity Tutors for Schools business, but it expects to see improvements in Active Member growth as it continues to refine its service offerings. The company maintains a cautious outlook, emphasizing the importance of managing cash flow and operational costs while navigating the challenges of a competitive educational technology landscape. As of June 30, 2026, Nerdy had cash and cash equivalents of $38.4 million, down from $47.9 million at the end of 2025, indicating a need for careful financial management in the coming months.