nrdy-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 1-39595

NERDY INC.

(Exact name of registrant as specified in its charter)


Delaware		98-1499860
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	8001 Forsyth Blvd., Suite 1050
	St. Louis, Missouri 63105
(Address of Principal Executive Offices) (Zip Code)

(314) 412-1227

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

NRDY

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the numbers of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class A common stock, par value $0.0001 per share - 115,431,656 shares of common stock as of October 31, 2024

Class B common stock, par value $0.0001 per share - 64,946,009 shares of common stock as of October 31, 2024

Table of Contents

NERDY INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited).	1

	Condensed Consolidated Statements of Operations (Unaudited).	1

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited).	2

	Condensed Consolidated Balance Sheets (Unaudited).	3

	Condensed Consolidated Statements of Cash Flows (Unaudited).	4

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited).	5

	Notes to Condensed Consolidated Financial Statements (Unaudited).	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	20

Item 4.	Controls and Procedures.	20

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings.	20

Item 1A.	Risk Factors.	21

Item 5.	Other Information.	21

Item 6.	Exhibits.	21

	SIGNATURES	22

Table of Contents

PART I. FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED).

NERDY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in thousands, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Revenue	$	37,530	$	40,296	$	142,241	$	138,315
Cost of revenue	11,077		11,108		45,786		41,138
Gross Profit	26,453		29,188		96,455		97,177
Sales and marketing expenses	20,315		19,233		53,244		49,652
General and administrative expenses	31,862		35,508		97,017		94,921


Operating Loss	(25,724)		(25,553)		(53,806)		(47,396)
Unrealized (gain) loss on derivatives, net	—		(4,099)		—		13,385
Interest income	(768)		(844)		(2,533)		(2,460)
Other (income) expense, net	(27)		(5)		8		11

Loss before Income Taxes	(24,929)		(20,605)		(51,281)		(58,332)
Income tax expense	29		21		90		97
Net Loss	(24,958)		(20,626)		(51,371)		(58,429)

Net loss attributable to noncontrolling interests	(9,058)		(8,336)		(18,932)		(23,910)
Net Loss Attributable to Class A Common Stockholders	$	(15,900)	$	(12,290)	$	(32,439)	$	(34,519)

Loss per share of Class A Common Stock:
Basic and Diluted	$	(0.14)	$	(0.13)	$	(0.29)	$	(0.37)


Weighted-Average Shares of Class A Common Stock Outstanding:
Basic and Diluted	113,287		97,077		110,267		94,453

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NERDY INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Loss	$	(24,958)	$	(20,626)	$	(51,371)	$	(58,429)
Foreign currency translation adjustments	66		(39)		58		26
Total Comprehensive Loss	(24,892)		(20,665)		(51,313)		(58,403)

Comprehensive loss attributable to noncontrolling interests	(9,034)		(8,351)		(18,911)		(23,898)
Total Comprehensive Loss Attributable to Class A Common Stockholders	$	(15,858)	$	(12,314)	$	(32,402)	$	(34,505)

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NERDY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands)


	September 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	65,002	$	74,824
Accounts receivable, net	7,424		15,398
Other current assets	5,653		4,815
Total Current Assets	78,079		95,037
Fixed assets, net	17,498		16,388
Goodwill	5,717		5,717
Intangible assets, net	2,676		3,061
Other assets	2,789		4,541
Total Assets	$	106,759	$	124,744

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	5,808	$	3,443
Deferred revenue	15,687		20,480


Other current liabilities	14,347		11,682
Total Current Liabilities	35,842		35,605
Other liabilities	3,111		3,533

Total Liabilities	38,953		39,138
Stockholders’ Equity
Class A common stock	11		11
Class B common stock	7		7
Additional paid-in capital	590,962		567,709
Accumulated deficit	(547,720)		(515,281)
Accumulated other comprehensive income	68		31
Total Stockholders’ Equity Excluding Noncontrolling Interests	43,328		52,477
Noncontrolling interests	24,478		33,129
Total Stockholders’ Equity	67,806		85,606
Total Liabilities and Stockholders’ Equity	$	106,759	$	124,744

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NERDY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2023
Cash Flows From Operating Activities
Net Loss	$	(51,371)	$	(58,429)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation & amortization	5,137		4,609
Amortization of intangibles	460		454
Unrealized loss on derivatives, net	—		13,385

Non-cash stock-based compensation expense	32,238		32,802




Warrant and earnout transaction costs paid	—		567
Other changes in operating assets and liabilities:
Decrease in accounts receivable, net	7,974		3,359
Increase in other current assets	(893)		(646)
Decrease in other assets	1,598		28
Increase in accounts payable	3,084		4,195
Decrease in deferred revenue	(4,793)		(6,890)
Increase in other current liabilities	2,577		5,485
Decrease in other liabilities	(299)		(1,434)
Net Cash Used in Operating Activities	(4,288)		(2,515)
Cash Flows From Investing Activities
Capital expenditures	(5,700)		(3,923)
Net Cash Used In Investing Activities	(5,700)		(3,923)
Cash Flows From Financing Activities

Payments of warrant and earnout transaction costs	—		(567)









Net Cash Used In Financing Activities	—		(567)
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash	(18)		5
Net Decrease in Cash, Cash Equivalents, and Restricted Cash	(10,006)		(7,000)
Cash, Cash equivalents, and Restricted Cash, Beginning of Year	75,140		91,547
Cash, Cash Equivalents, and Restricted Cash, End of Period	$	65,134	$	84,547

Supplemental Cash Flow Information
Non-cash stock-based compensation included in capitalized internal use software	$	1,275	$	1,815
Purchase of fixed assets included in accounts payable	—		22

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NERDY INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in thousands)


	As Of and For The Three Months Ended September 30,		As Of and For The Nine Months Ended September 30,
	2024	2023	2024		2023
Class A Common Stock
Beginning of period	11	10	$	11	$	9
Activity under stock compensation plans	—	—	—		1
End of period	11	10	11		10
Class B Common Stock


Beginning and end of period	7	7	7		7
Additional Paid-In Capital
Beginning of period	583,948	536,073	567,709		522,031
Non-cash stock-based compensation	10,069	12,221	33,224		33,980
Activity under stock compensation plans	—	—	—		(1)
Conversion of combined interests into Class A common stock	135	181	976		485
Warrant transactions	—	14,602	—		14,602
Earnout transaction	—	5,691	—		5,691
Rebalancing of ownership percentage between controlling and the noncontrolling interests	(3,190)	(8,876)	(10,947)		(16,896)
End of period	590,962	559,892	590,962		559,892
Accumulated Deficit
Beginning of period	(531,820)	(497,336)	(515,281)		(475,107)
Net loss	(15,900)	(12,290)	(32,439)		(34,519)
End of period	(547,720)	(509,626)	(547,720)		(509,626)
Accumulated Other Comprehensive Income
Beginning of period	26	26	31		(12)
Foreign currency translation adjustments	42	(24)	37		14
End of period	68	2	68		2
Total Stockholders’ Equity Excluding Noncontrolling Interests	43,328	50,285	43,328		50,285
Noncontrolling Interests
Beginning of period	30,378	26,727	33,129		34,122
Net loss	(9,058)	(8,336)	(18,932)		(23,910)
Non-cash stock-based compensation	79	201	289		637
Foreign currency translation adjustments	24	(15)	21		12
Conversion of combined interests into Class A common stock	(135)	(181)	(976)		(485)
Warrant transactions	—	887	—		887
Earnout transaction	—	4,261	—		4,261
Rebalancing of ownership percentage between controlling and the noncontrolling interests	3,190	8,876	10,947		16,896
End of period	24,478	32,420	24,478		32,420
Total Stockholders’ Equity	67,806	82,705	$	67,806	$	82,705
Class A Common Stock - Shares
Beginning of period	112,245	100,158	106,416		95,296
Activity under stock compensation plans	2,227	2,218	6,130		6,387
Conversion of combined interests into Class A common stock	500	500	2,426		1,193
Warrant transactions	—	4,306	—		4,306
Earnout transaction	—	(2,767)	—		(2,767)
End of period	114,972	104,415	114,972		104,415
Class B Common Stock - Shares
Beginning of period	65,427	69,161	67,256		69,306
Activity under stock compensation plans	16	48	113		596
Conversion of combined interests into Class A common stock	(500)	(500)	(2,426)		(1,193)
Warrant transactions	—	513	—		513
Earnout transaction	—	(2,015)	—		(2,015)
End of period	64,943	67,207	64,943		67,207

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Table of Contents

NERDY INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(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, 2023. 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, 2023, filed with the SEC on February 27, 2024.

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”). 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 (the “Legacy Nerdy Holder(s)”) and Nerdy Inc. Nerdy Inc. and Nerdy LLC will at all times maintain a one-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.

The Public and FPA Warrant Exchange, the Private Warrant Transaction, and the Earnout Transaction

Prior to the Public and FPA Warrant Exchange and the Private Warrant Transaction (both terms defined below), Nerdy Inc. had warrants that consisted of TPG Pace’s previously outstanding private placement warrants and public warrants to purchase Class A ordinary shares that were converted into corresponding private placement warrants to purchase Class A Common Stock (the “Private Placement Warrant(s)”) and public warrants to purchase Class A Common Stock (the “Public Warrant(s)”). Each Private Placement Warrant and Public Warrant allowed for the purchase of one share of Class A Common Stock at an exercise price of $11.50 per share. Additionally, Nerdy Inc. also issued warrants to purchase Class A Common Stock in connection with a forward purchase agreement (the “FPA Warrant(s)”). Each FPA Warrant allowed for the purchase of one share of Class A Common Stock at an exercise price of $11.50 per share. Nerdy LLC had previously outstanding warrants to purchase OpCo Units at an exercise price of $11.50 (the exercise of which would also result in the issuance of one corresponding share of Class B Common Stock) (the “OpCo Warrant(s)”). The Private Placement Warrants, the Public Warrants, the FPA Warrants, and the OpCo Warrants are collectively referred to herein as the “Warrant(s).”

Prior to the Earnout Transaction (as defined below), of the total shares and units issued and outstanding, there were 8,000 shares or units of (i) Class A Common Stock or (ii) OpCo Units (and a corresponding number of Class B Common Stock), as

Table of Contents

applicable, that were subject to forfeiture if the achievement of certain stock price thresholds of the Class A Common Stock were not met within five years of the reverse recapitalization (assuming there was no change in control event) (the “Earnout(s)”).

Public and FPA Warrant Exchange

On September 25, 2023, the Company concluded an offer to holders of its then outstanding Public Warrants and FPA Warrants, which provided such holders the opportunity to receive 0.25 shares of Nerdy Inc.’s Class A Common Stock (the “Public Offer exchange rate”) in exchange for each Public Warrant and FPA Warrant tendered by such holders (the “Offer”). This Offer included a solicitation of consents from holders of the Public Warrants and FPA Warrants to amend the warrant agreement with respect to certain terms of the Public Warrants and the FPA Warrants (the “Public and FPA Warrant Amendment”, together with the Offer, the “Public and FPA Warrant Exchange”). At the closing of the Offer, all remaining outstanding Public and FPA warrants that were not exchanged at the election of the holder were converted into 0.225 shares of Class A Common Stock, pursuant to the Public and FPA Warrant Amendment. As a result of the Public and FPA Warrant Exchange, 12,000 Public Warrants and FPA Warrants were exchanged for 2,992 shares of Nerdy Inc.’s Class A Common Stock, with a nominal cash settlement in lieu of fractional shares. No Public Warrants and FPA Warrants remained outstanding after the Public and FPA Warrant Exchange.

Private Warrant Transaction

Concurrently with the Offer, holders of the then outstanding Private Placement Warrants and the OpCo Warrants agreed to amend the warrant agreement with respect to certain terms of the Private Placement Warrants and OpCo Warrants (the “Private Placement Warrant Amendment”, together with the Public and FPA Warrant Amendment, the “Warrant Amendment”). The Warrant Amendment, among other provisions, required that upon the closing of the Offer that (a) each Private Placement Warrant be automatically exchanged or exercised on a cashless basis into shares of Class A Common Stock and (b) each OpCo Warrant that was outstanding be automatically exercised on a cashless basis into OpCo Units with an equivalent number of shares of Class B Common Stock being issued, in each case, at the same ratio as the Public Offer exchange rate (the “Private Warrant Transaction”, together with the Public and FPA Warrant Exchange, the “Warrant Transactions”). As a result of the Private Warrant Transaction, 5,281 Private Placement Warrants were exchanged or exercised on a cashless basis for 1,314 shares of the Company’s Class A Common Stock, with a nominal cash settlement in lieu of fractional shares and 2,052 OpCo Warrants were exchanged or exercised on a cashless basis for 513 OpCo Units (with an equivalent number of shares of Class B Common Stock), with a nominal cash settlement in lieu of fractional shares. No Private Placement Warrants and OpCo Warrants remained outstanding after the Private Warrant Transaction.

Earnout Transaction

Concurrently with the Offer, holders of the then outstanding Earnouts agreed to forfeit (and thus surrender for cancellation) 60% of the Earnouts they held and agreed that the remaining 40% of the Earnouts would no longer be subject to potential forfeiture and would be either regular shares of Class A Common Stock or regular OpCo Units (with an equivalent number of regular shares of Class B Common Stock) (the “Earnout Transaction”). As a result of the Earnout Transaction, 2,764 shares of Class A Common Stock and 2,015 OpCo Units (with an equivalent number of shares of Class B Common Stock) were cancelled and 1,842 shares of Class A Common Stock and 1,343 OpCo Units (with an equivalent number of shares of Class B Common Stock) remained outstanding after the Earnout Transaction and were no longer subject to forfeiture. The 36 Earnouts held by the Company were now regular shares of Class A Common Stock and are no longer subject to forfeiture.

Transaction Expenses

In connection with these transactions, the Company incurred expenses of $1,940 during three and nine months ended September 30, 2023, of which $567 was paid during the nine months ended September 30, 2023. These expenses were included in “General and administrative expenses” in the Condensed Consolidated Statements of Operations as the transactions did not generate any proceeds to the Company, and therefore, the costs did not qualify to be deferred or charged as a reduction to additional paid-in capital under Accounting Standards Codification (“ASC”) Topic 340, “Other Assets and Deferred Costs.”

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 November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“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

Table of Contents

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 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 is currently evaluating the impact of this ASU on its disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” ASU 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information on income taxes paid. This ASU is effective for annual periods beginning after December 15, 2024 (i.e., Nerdy’s financial statements for the year ending December 31, 2025), with early adoption permitted. This ASU requires a prospective method of adoption, but allows for a retrospective method of adoption. The Company’s adoption of this ASU will result in expanded disclosures related to income taxes but will not have a material impact on the Company’s financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” ASU 2023-07 updates reportable segment disclosure primarily by requiring disclosures of significant segment expenses, while also aligning interim and annual disclosure requirements under ASC Topic 280. Additionally, this requires a public entity that has a single reportable segment to provide all the disclosures required by this ASU and all existing segment disclosures in ASC Topic 280. This ASU is effective for Nerdy’s financial statements for the year ending December 31, 2024 and interim periods within fiscal years beginning after December 15, 2024. This ASU requires a retrospective method of adoption. The Company’s adoption of this ASU will result in new disclosures related to segments (as the Company has been and continues to be an entity with a single reportable segment) but will not have a material impact on the Company’s financial statements.

NOTE 3 — NONCONTROLLING INTERESTS

As of September 30, 2024, Legacy Nerdy Holders owned 64,943 OpCo Units, equal to 36.1% of the economic interest in Nerdy LLC, and 64,943 shares of Class B Common Stock. As of December 31, 2023, Legacy Nerdy Holders owned 67,256 OpCo Units equal to 38.7% of the economic interest in Nerdy LLC, and 67,256 shares of Class B Common Stock.

Nerdy Inc. owned 63.9% and 61.3% of the outstanding OpCo Units as of September 30, 2024 and December 31, 2023, 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. Prior to the Earnout Transaction (see Note 1), the Company excluded Earnouts in the calculation of the ownership interests in Nerdy LLC as the Earnouts were subject to forfeiture.

Table of Contents

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


	As Of and For The Three Months Ended September 30,				As Of and For The Nine Months Ended September 30,
	2024		2023		2024		2023
OpCo Units
Nerdy Inc.
Beginning of period	112,245		95,516		106,416		90,654
Vesting or exercise of equity awards	2,227		2,218		6,130		6,387
Conversion of Combined Interests into Class A Common Stock	500		500		2,426		1,193

Issuance of OpCo units as a result of the Warrant Transactions	—		4,306		—		4,306
Inclusion of OpCo units as a result of the Earnout Transaction	—		1,875		—		1,875
End of period	114,972		104,415		114,972		104,415
Legacy Nerdy Holders
Beginning of period	65,427		65,803		67,256		65,948
Vesting or exercise of equity awards	16		48		113		596
Conversion of Combined Interests into Class A Common Stock	(500)		(500)		(2,426)		(1,193)

Issuance of OpCo units as a result of the Warrant Transactions	—		513		—		513
Inclusion of OpCo units as a result of the Earnout Transaction	—		1,343		—		1,343
End of period	64,943		67,207		64,943		67,207
Total
Beginning of period	177,672		161,319		173,672		156,602
Vesting or exercise of equity awards	2,243		2,266		6,243		6,983


Issuance of OpCo units as a result of the Warrant Transactions	—		4,819		—		4,819
Inclusion of OpCo units as a result of the Earnout Transaction	—		3,218		—		3,218
End of period	179,915		171,622		179,915		171,622
Ownership Percentage
Nerdy Inc.
Beginning of period	63.2	%	59.2	%	61.3	%	57.9	%
End of period	63.9	%	60.8	%	63.9	%	60.8	%
Legacy Nerdy Holders
Beginning of period	36.8	%	40.8	%	38.7	%	42.1	%
End of period	36.1	%	39.2	%	36.1	%	39.2	%

NOTE 4 — REVENUE

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


	Three Months Ended September 30,								Nine Months Ended September 30,
	2024		%		2023		%		2024		%		2023		%
Consumer	$	31,919	85	%	$	34,494	85	%	$	113,237	79	%	$	115,125	83	%
Institutional	5,429		14	%	5,580		14	%	28,451		20	%	22,474		16	%
Other (a)	182		1	%	222		1	%	553		1	%	716		1	%
Revenue	$	37,530	100

SEC Form 10-Q filed by Nerdy Inc.