Good afternoon. Thank you for attending Nerdy, Inc.'s Q4 2025 earnings call. My name is Tamia, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I will now pass the conference over to your host, T.J. Lynn, Associate General Counsel of Nerdy, Inc. You may proceed.

Good afternoon, and thank you for joining us for Nerdy, Inc.'s fourth quarter 2025 earnings call. With me are Chuck Cohn, Founder, Chairman, and Chief Executive Officer of Nerdy, Inc., and Jason H. Pello, Chief Financial Officer. Before I turn the call over to Chuck, I will remind everyone that this discussion will contain forward-looking statements including, but not limited to, expectations with respect to Nerdy, Inc.'s future financial and operating results, strategy, opportunities, plans, and outlook. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Any forward-looking statements are made as of today's date, and Nerdy, Inc. does not undertake or accept any obligation to publicly release any updates or revisions to any forward-looking statements to reflect any change in expectations or any change in events, conditions, or circumstances on which any such statement is based. Please refer to the disclaimers in today's shareholder letter announcing Nerdy, Inc.'s fourth quarter results and the company's filings with the SEC for a discussion of the risks. Not all of the financial measures that we will discuss today are prepared in accordance with GAAP. Please refer to today's shareholder letter for reconciliations of these non-GAAP measures. With that, I will turn the call over to Chuck.

Thanks, TJ, and thank you to everyone for joining today's call. In the fourth quarter, I am pleased to share we delivered on the three goals we set entering 2025: return the business to growth, accelerate our transformation into an AI-native platform, and achieve positive non-GAAP adjusted EBITDA. Fourth quarter revenue was $49.1 million, above the top end of guidance and up 2% year over year. This is the first quarter since 2024 in which both our consumer and institutional businesses grew simultaneously. Non-GAAP adjusted EBITDA was positive $1.3 million, beating our guidance range of negative $2 million to breakeven and improving by $6.8 million from Q4 2024. We completed the rollout of our new learner and expert experiences in the fourth quarter with an AI-native code base and entered 2026 with a stronger, more flexible foundation, improved unit economics, and significantly higher product development velocity. Zooming out, we get a lot of questions about how AI is changing how we think about our business and our industry. The demand signals we are seeing and the conversations we are having with customers indicate that the market for high-quality, personalized, one-on-one tutoring remains large and enduring, and it represents a big opportunity for us to better serve and reach these learners. Roughly 50 million students progress through the K-12 education system and higher education system in the United States each year, and families seek premium private tutoring for meaningful long-term goals, whether it is the first grader learning to read with a specialist, a high school junior aiming for an elite college, or a college student fighting to stay on the path to medical school and get past organic chemistry. These are deeply personal journeys where sustained human connection, accountability, expertise, rapport, trust, and a little pushing can go a long way to getting differential results. The U.S. academic tutoring market is estimated at approximately $20 billion per year, yet we currently serve fewer than 40,000 active members. Given our strong monetization, success does not require capturing the entire market, and we have very purposely focused our platform and go-to-market on serving that long-term recurring need and scaling high-quality live learning with a focus on one-to-one relationships. Most of the people I talk to, including almost all the investors and research we meet with, rely on dedicated tutors for exactly those reasons for their own children. Ask any parent if they prefer that their child learn from a human tutor or AI, and they will all provide the same answer: a human tutor. We are trying to actually take the best of both worlds and amplify what would otherwise be possible. Meaningful penetration of the premium segment for high-quality personalized tutoring represents a substantial, durable opportunity. This is precisely why we invested so heavily in 2025 to rebuild our platform from the ground up with an entirely new AI-native code base. AI now makes the expert tutors on our platform dramatically more effective by automating the creation of the perfect content and lessons for tutoring sessions, generating real-time insights, improving progress visibility for parents, and preserving irreplaceable human relationships that drive outcomes. The result is our Live + AI model that lets us serve a meaningfully larger portion of this enduring premium market while delivering a solution that is improving in quality by the month. Returning to sustainable growth required us to get back to fundamentals in our consumer business. Specifically, this meant shifting towards higher-frequency learning memberships built around a consistent weekly tutoring habit, as well as meaningfully strengthening the core value of our platform through product innovation. The results have validated this strategy. Monthly recurring learning membership revenue returned to year-over-year growth by the first quarter of 2025. In Q2, consumer learning membership revenue grew 4% year over year for the first time since 2024, with ARPAM reaching $348, a 24% increase. Q3 consolidated revenue growth improved 1,000 basis points sequentially. In Q4, we delivered our most complete quarter yet, with $49.1 million of revenue, up 2% year over year with both consumer and institutional businesses growing simultaneously. Active members ended the year at 33,200. Throughout the year, we intentionally moved to higher-frequency, higher-value memberships to drive better ARPAM and longer-term retention. Each quarter throughout 2025, our year-over-year revenue growth improved sequentially, positioning us for continued momentum as we enter 2026. In 2025, our most important work was strengthening the Live + AI platform and rebuilding it to be AI native. Peer-reviewed research shows that while pure AI tools can improve some content delivery mechanisms, they fall short on dimensions that matter most to students and parents: emotional connection, accountability, sustained motivation, and deep understanding. Our model pairs expert tutors with AI; the combination delivers outcomes that neither could achieve alone. As a simple example of how AI is improving the product from a customer's perspective, last year, we rolled out hyper-personalized lesson plans in advance of tutoring sessions, we built in real-time tools to help tutors during live sessions, and then we delivered a comprehensive, outcomes-oriented summary of the actual session afterwards. Parents love being able to see their kids on camera at that exact moment that they had the moment, and it is something that we call “moments of learning” and was something that was a home-run feature that we rolled out in the back half of last year. These received more than 95% positive feedback from parents and students, and they led to higher session utilization and improved customer retention. Over the course of 2025, we expanded this capability to include multi-session context, quantitative engagement metrics, and cohort-level analytics for school districts as well. In Q4, we completed the rollout of our entirely new learner and expert user experiences. We surveyed 277 active customers who experienced both versions this past month. 85% rated the new platform better or the same, delivering an 82% customer satisfaction score. Customers highlighted improved intuitiveness, clear progress visibility, and easier discovery of learning options. The new AI-native architecture now lets us innovate at a pace that was not previously possible, delivering more value to customers faster than ever before. In the fourth quarter, we delivered on our commitment to positive non-GAAP adjusted EBITDA. The milestone was driven by revenue growth, gross margin expansion, durable cost reductions we have made, and operational efficiencies gained through automation. Fourth quarter non-GAAP adjusted EBITDA was positive $1.3 million, and non-GAAP adjusted EBITDA margin expanded by more than 1,400 basis points year over year, demonstrating the structural improvement we have made in our cost base. The shift to higher-frequency memberships and new customer price increases implemented in 2025 drove meaningful ARPU growth and better retention in newer cohorts, giving us more durable and recurring revenue. Non-GAAP adjusted gross margin, excluding the one-time abandonment charge as we move to the new platform, reached 66.8% in Q4, the third consecutive quarter of sequential improvement. Last year, we went about better aligning the earning potential experts have on our platform with the retention of customers. While early-year investments in tutor incentives decreased first-half gross margins, they delivered the expected behavioral changes: faster time to first session, more sessions in the first thirty days, lower replacement rates, and higher retention. We also drove efficiency across every P&L line. Full-year headcount declined 22% through automation aimed at improving the customer experience and touching many different parts of our marketplace, including tutor matching, substitution, customer service, and scheduling. This also helped drive durable cost reductions and improved unit economics. These changes, together with the new platform, position us to compound productivity and operating leverage as we grow. Looking ahead to 2026, the foundational work of the past year—replatforming, cost discipline, and AI-native capabilities—is now beginning to pull through to stronger financial performance. We have three clear priorities as we return to full-year growth and profitability. First, we will continue to enhance personalized learning across our Live + AI platform. Our new architecture gives us the ability to innovate far faster than before. We will continue to apply AI in practical ways that enhance the core Live + AI experience our customers already value. With over 10 million hours of live one-on-one tutoring on the platform to date, we are able to deliver personalized learning experiences that get progressively better over time to students in ways that few other platforms like ours can. And with the recent addition of many new ways for students to learn and get academic assistance outside of just tutoring on the platform, we expect to deepen our engagement with each learner and further improve our ability to better personalize the product to their specific needs. The second big priority for 2026 is that we will return to active member growth. As a result of the tremendous progress we made this past year to get to an AI-native platform, we are now focused on expanding our active member base. We will accelerate top-of-funnel growth through new marketing channels to drive awareness and virality, coupled with the launch of an improved mobile experience. The new platform is more modern and intuitive, improves discoverability of new subjects and products, and it makes it easier to get tremendous value out of a student's learning membership, which we expect to lead to improved customer retention and higher growth rates. Our third and last goal for 2026 is that we will compound gross margin and structural cost improvements. The heavy lifting of the past twelve months is now pulling through to financials. We are targeting breakeven non-GAAP adjusted EBITDA for the full year 2026, an improvement of more than 1,000 basis points for the full year versus full year 2025. We expect gross margin to expand each quarter as tutor incentive programs are further optimized and as consumer revenue continues to shift towards higher-frequency learning memberships. Combined with a lower overall cost structure that is leaner and more efficient, we believe these changes will deliver increasing operating leverage as revenue grows. We will also use AI to streamline our operations and further reduce costs. Our 2026 guidance does not yet reflect the full benefit of the new platform rollout, which is still in early adoption. We look forward to updating you as we progress throughout the year. With that, I will turn the call over to Jason to discuss the financials in more detail.

Thanks, Chuck, and good afternoon, everyone. Nerdy, Inc. finished the year with substantial operating momentum as we head into 2026. Fourth quarter revenue and adjusted EBITDA were all above consensus expectations. Nerdy, Inc. delivered its third consecutive quarter of sequential improvement in year-over-year growth rates, culminating in a return to positive revenue growth for the first time since 2024. Revenue of $49.1 million was well ahead of our guidance range of $45 million to $47 million, representing an increase of 2% year over year from $48 million during the same period in 2024. As Chuck mentioned, revenue increased when compared to the prior year due to both higher consumer and institutional revenue. Within consumer revenue, learning memberships revenue of $41.6 million represented a 6% increase year over year and 85% of total company revenues. This was partially offset by a specific state-funded consumer revenue program of $2 million in Q4 2024 that did not recur in 2025. The current year period was positively impacted by higher ARPAM in our consumer business as a result of the mix shift towards higher-frequency learning memberships coupled with price increases for new consumer customers enacted during 2025. These changes are delivering higher retention in newer cohorts due primarily to improvements in the user experience and investments in expert pay and incentives. As of December 31, ARPAM was $364, representing a 21% increase year over year, and there were 33,200 active members. As Chuck mentioned, during the fourth quarter, we completed the rollout of our new learner and expert user experiences that we believe will drive retention improvements and further accelerate growth. Our institutional business delivered revenue of $7.2 million and represented 14% of total company revenue during the fourth quarter. Varsity Tutors for Schools executed 56 contracts, yielding quarterly bookings of $4.1 million, a decrease of 11% year over year. In our institutional business, revenues and bookings continue to be impacted by federal and state funding delays and the related impact to high-dosage tutoring contracting and program start dates. Gross margin, excluding the charge for the abandonment of capitalized internal-use software, was 66.8% for the three months ended 12/31/2025. This compared to a gross margin of 66.6% during the comparable period in 2024. For the third consecutive quarter, gross margin improved sequentially quarter over quarter, as gross margin excluding a charge for the abandonment of capitalized internal-use software for the three months ended 12/31/2025 increased approximately 380 basis points compared to earlier in 2025. The continued expansion in gross margin was primarily a result of the mix shift to higher-frequency learning memberships coupled with price increases for new consumer customers in 2025. In the fourth quarter, management made a strategic decision to abandon certain components of the previously capitalized internal-use software as we completed the replatforming and launch of our new learner and expert user experiences. We believe this modernization of our Live + AI platform onto entirely new AI-native code bases will allow for the immediate improvement of the experiences we can offer to learners while also enabling more efficient product innovation in the future. During the fourth quarter, tutor incentives continued to deliver faster time to first session, more sessions in the first thirty days, lower tutor replacement rates, and higher retention, all of which should continue to strengthen our business over the long term. We expect gross margin improvement to continue into 2026 as the mix of our consumer revenue continues to shift into higher-frequency and higher-priced learning memberships and as we are able to better optimize tutoring incentives. Sales and marketing expenses for the quarter on a GAAP basis were $14.2 million, a decrease of $4.2 million from $18.4 million in the same period in 2024. The decrease in sales and marketing expenses was driven by consumer marketing efficiency gains coupled with the moderation of our investment in the institutional business given the school district funding uncertainties in 2025. General and administrative expenses for the quarter on a GAAP basis were $24.7 million, a decrease of $5.2 million from $29.9 million in the same period in 2024. Included in G&A costs were product development costs of $9.6 million. AI-enabled productivity improvements coupled with new software-driven processes and system implementations, headcount reductions, and other cost reduction efforts have enabled us to generate substantial operating efficiencies, remove significant costs from the business, and reduce headcount, which was down by approximately 22% year over year as of December 31. In the fourth quarter, non-GAAP adjusted EBITDA margin improved over 1,400 basis points year over year, clearly demonstrating the significant overall improvement in the company's cost structure. Non-GAAP adjusted EBITDA of positive $1.3 million for the three months ended December 31 beat our guidance of negative $2 million to breakeven and compared to a non-GAAP adjusted EBITDA loss of $5.5 million in the same period last year. Non-GAAP adjusted EBITDA outperformance relative to guidance and the prior-year fourth quarter period was driven by revenue and gross margin improvements coupled with efficiency and strong cost control across every P&L line item in the fourth quarter. Our new platform provides us with the opportunity to move faster and drive further levels of productivity while improving both the customer experience and operational consistency as we grow. Moving to liquidity and capital resources, as of December 31, the company's principal sources of liquidity were cash and cash equivalents of $47.9 million. With our cash on hand and the funding available under our term loan, we believe we have ample liquidity to fund the business and pursue growth opportunities. Turning to our business outlook, today we are introducing first quarter and full-year revenue and non-GAAP adjusted EBITDA guidance for 2026. For the first quarter and full year, we expect consumer revenues will be positively impacted by improvements to the new consumer user experience and by targeted investments in tutor pay rates that drive further retention improvement. Institutional revenue reflects the flow-through of 2025 bookings into 2026 coupled with an expected more stable federal and state-level funding environment in the second half of the year. For Q1 2026, we expect revenue in a range of $46 million to $48 million. For the full year of 2026, we expect revenue in the range of $180 million to $190 million. Turning to adjusted EBITDA guidance, for the first quarter and full year, non-GAAP adjusted EBITDA improvement year over year primarily reflects gross margin expansion from tutor incentive optimization, sales and marketing efficiency improvements, the benefits from AI-enabled productivity and operating leverage, and diligent G&A cost control. For Q1 2026, we expect non-GAAP adjusted EBITDA to be approximately breakeven. Additionally, for the full year of 2026, we also expect non-GAAP adjusted EBITDA to be approximately breakeven. These targets represent a non-GAAP adjusted EBITDA margin improvement of over 1,000 basis points for the full year when compared to 2025, extending the strong operating discipline we delivered in the fourth quarter while continuing to make targeted investments in growth and the learner experience. We expect to end the year with $40 million to $45 million of cash, inclusive of the current $20 million funded under the new term loan. In closing, 2025 marked meaningful progress against several fronts from a financial perspective. We delivered a return to consolidated growth, gross margin expansion, and substantial improvements in our cost structure, culminating in positive non-GAAP adjusted EBITDA in the fourth quarter. These improvements provide us with a strong financial position and set the stage for continued growth and profitability in 2026. We thank you again for your time and your continued interest in our company. With that, I will turn it over to the operator for Q&A.

Hi, Chuck and Jason. Congrats on a nice quarter here, and thanks for taking my question. Chuck, maybe to start, great to hear about some of the completion of the rebuild and the rollout of the new platform, and obviously good to see some of the positive feedback from the survey in January. As you think about how these improvements translate into the fundamental profile, is there anything you can tell us in terms of how this might be impacting the number of sessions or engagement with the learner so far as they are engaging with the new platform and how that might be helping retention as we go throughout the year?

Sure. And thanks, Ryan. Good question. So the way that we sort of thought about this was you effectively had a legacy system that we built over time. I have been doing this for a while, and at some point, it started to slow us down a bit. So independent of AI or anything else, we had tech that limited the flexibility of the system, and inevitably, there was a cost associated with that tech, so to speak, with the pace at which we could move, and some things were harder than others. What we were able to do last year was not only get over that tech debt hump, but also put ourselves in a position where the platform was a completely new code base for the consumer and for the learner- and expert-facing aspects of the platform, so that is the authenticated, logged-in experience combined with our live learning platform. We are then in a position where effectively anything going forward is something that we can do much, much faster. So we can give more flexibility, the code base is built in such a way where we can better leverage identified processes, and the whole build process gets better. So we would expect to see it pull through to much more engagement. The way I think about it is at the time of launch, it was like a parity-plus: a brand-new platform that did the same thing for customers and we removed friction. But what we have done over the course of the last couple of months, and what we will be doing throughout the course of the year, is really deepening the relationship. So there are certain things that we are now able to do much better and more immersively and more thoughtfully as it relates to the particular context so that when, say, a tutoring session ends, the exact right information that summarizes it, identifies next action items, sends information to the parents, and leads to the next additional study plan augmentation—all these things just happen automatically now through the ability to better leverage context tools and identified processes. That is kicking off. So the early signs feel really good, but the most important thing is that we are running like 10 times faster. So that is where I think we feel really good about how much faster we can build, and there is an opportunity to delight customers in ways we just frankly have not been able to before, so it is fun. We are feeling really encouraged. We had a great quarter, and we feel like we are entering the year with a lot of momentum.

That is great to hear. I appreciate all the additional color there. In terms of net new learning members and potential to add there as we go throughout the year, I am curious—there have been a lot of changes in the search environment, with Google releasing some algorithm changes with Andromeda. How are you navigating the new landscape and driving discoverability as the search landscape continues to evolve?

Yeah. We feel really good about the top-of-funnel trends, actually. There is obviously non-commercial traffic that perhaps is down broadly, but as it relates to commercial traffic—people looking for tutoring and potential services—we are seeing good trends. We feel like we can optimize the entire funnel better than we ever could before, and our ability to then actually make each different subject—and there are about 3,000 or so subjects that we track on the platform—more compelling, more relevant, and more personalized was an incredibly hard problem previously, and we are much better able to do that now. The product is becoming more compelling, which then lends itself to better conversion at the top of the funnel and then better retention once people actually join the platform. So the top-of-funnel trends from a customer acquisition perspective look healthy, and from our perspective, it looks like a big opportunity to better serve customers this year.

Awesome. Appreciate the color. Thanks again.

Thanks, Ryan. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect your line.