Exhibit 99.1

 

nerbyQ1 | 2023 Earnings Release Guided Study Hall Wednesdays, 3-4PM (ET) Intro to Geometry Thursdays, 4:30-5:30PM (ET)

		A Note to Our Shareholders						I am pleased to share that in the first quarter:
		One year ago, we unveiled an ambitious plan to evolve our products and revenue model toward long-term recurring ‘always-on’ relationships with our customers. We created new subscription and recurring revenue products, including Learning Memberships for Consumers and Teacher Assigned and On Demand products for Institutional customers, that were built specifically to address the ongoing support we believed both types of customers needed and desired.   We shared that we believed these new models would provide a superior platform for innovation by allowing us to bring together multiple different product capabilities we had developed into a comprehensive all-access offering that enabled Learners to receive the help they need across multiple learning formats, thousands of subjects, and multiple academic calendar years. In addition to allowing us to provide a better and more personalized experience to Learners, the new operating model would be far more efficient to operate, allowing us to drive operating leverage, simplify our sales model, and shift additional resources toward net new innovation, including the application of AI for HI® or Artificial Intelligence for Human Interaction.   To get to this evolved state we shared that this new model would require trading off revenue recognition in the short-term because our Package model had more front-loaded revenue recognition than the Learning Membership model where subscription revenue is recognized linearly over time. We expected that by the start of the second quarter in 2023 the cumulative build of recurring revenue from Learning Membership customers would cause us to return to growth in our Consumer business, as well as for the total company, but now with a product suite and revenue model we believed would position us for higher levels of growth, profitability, and predictability in the years to come. We stated that we expected our new business model to deliver substantial operating efficiencies and that we anticipated achieving adjusted EBITDA profitability by the end of 2023.						●		We exited the ‘J-Curve’ business model transition and returned to growth delivering $49.2 million of revenue, above our guidance range of $45-47 million.
								●		Learning Membership subscriptions accounted for 60% of total company recognized revenue, up from nearly 0% in the first quarter last year, demonstrating strong product market fit.
								●		Our Institutional business delivered record revenue of $8.5 million, an increase of 32% year-over-year, representing 17% of total revenue in the first quarter.
								●		Our evolution to Learning Memberships and the application of AI drove continued growth and improvement in customer lifetime values relative to our package model (as visualized later in this letter) and together were a key contributor to our strong operating results and improved profitability.
								●		We achieved Adjusted EBITDA profitability in the first quarter, nine months earlier than our stated goal of the fourth quarter of 2023, delivering nearly 1,700 bps of improvement year-over-year and $1.4 million of adjusted EBITDA.
								●		We delivered $6.8 million of positive operating cash flow, and $5.8 million of free cash flow.
								●		We recently achieved a major milestone by surpassing 10 million hours of live one-on-one tutoring delivered on our Live Learning Platform since launch.
								●		We made substantial progress on accelerating the use of AI throughout our business, including launching two new customer-facing products that leverage generative AI, as well as accelerating the use of AI to drive substantial operating efficiencies and internal productivity improvements.
								●		We saw positive new customer addition and engagement trends in the first quarter that have continued into April and May and compare favorably to our normal seasonality and internal expectations.

 

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AI for HI^®

Artificial Intelligence for Human Interaction is Transforming and Enhancing our Business at a Rapid Pace

As we shared with you in our prospectus two years ago when we made our intention to become a publicly listed company known, we’ve long believed that AI can fundamentally transform how people learn. Over the past six plus years we have been applying AI to our business, products, and operational processes. AI has been foundational to our ability to improve quality, enhance personalization, and decrease the cost of our offerings. AI powers our ability to identify the highest quality Experts, assess Learners’ foundational knowledge, help ensure the right Expert-Learner match, and drive operational efficiency, among many other use cases.

We described the proprietary technology infrastructure we were building as AI for HI^® or Artificial Intelligence for Human Interaction, and outlined the core foundational capabilities we apply to live learning to enhance the interaction in ways that were not previously possible. Through the application of AI, we provide Experts and Learners with superpowers that are transforming live online learning. We credit our orientation around AI for HI^® for allowing us to reach the milestone of having recently delivered our 10 millionth hour of live, one-on-one tutoring on our Live Learning Platform and, more broadly, for allowing us to make good on delivering high-quality, relationship-based live online learning at scale.

 

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As we shared in our prospectus two years ago: There are specific groupings of core competencies, or layers, highlighted below, that we believe to be particularly differentiated and powerful. We collectively call them AI for HI® short for Artificial Intelligence for Human Interaction. The four layers collectively form our operating system that is engineered for learning. Data Lake: We have built a rich database of learning interactions, capturing years of critical Learner and Expert data that we use to optimize learning on our platform. We have accumulated millions of hours of recorded live instruction, instrumented every interaction, captured a multitude of individualized attributes for Learners and Experts, and have built an adaptive self-study platform that records every practice problem and answer. We leverage technology and software to take our vast dataset to build personalized learning pathways and to enhance the learning experience. As the platform grows, the dataset and our cumulative intelligence grows. This enables even more personalization and unlocks powerful network effects that serve as a competitive advantage that is difficult for others to replicate. Curation Layer: The curation layer of the platform utilizes our database of past learning interactions, built over several years through over 100,000 hours of recorded video interviews, to identify critical traits, knowledge, and experience in Experts that correlate to better learning outcomes, which allows us to be highly selective and source the best Experts. Matching Layer: Our AI-powered Learner-Expert matching engine analyzes over 100 high dimensional features per Learner and Expert to identify the Learner-to-Expert combination with the highest projected probability of a successful interaction. Since 2012 our platform has identified over 800,000 successful Learner-to-Expert matches based on over 80 million usable data points generated from Learner and Expert attributes, past matching, learning interactions, website and marketing event interactions, and self- study interactions. Adaptive Learning Layer: Our platform delivers personalized learning at scale. The system adapts after every learning interaction, which matures and compounds its intelligence to deliver increasingly better guidance to the Learner. Model-derived insights using our rich database of past interactions and Learner attributes continuously adapt the sequencing of the content and learning after every learning interaction, which personalizes the learning path to mastery. Interaction Layers: We have designed our platform to optimize the Learner-Expert interaction through two-way video, collaborative workspaces purpose-built for learning, a companion app to enhance the interactivity of sessions in real- time, reference tools, proprietary and third party content integrations, and additional subject-specific tools. These features enable effective on-demand, integrated and personalized live learning interaction that increases engagement and Learner satisfaction. Our interactive learning platform serves multiple learning formats meeting the individual preferences of each Learner and empowering them to acquire knowledge in any chosen subject.

 

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Scaling Learning Memberships

We continue to see substantial evidence that validates our belief that the Learning Membership model leads to more attractive unit-level economics, longer duration and higher lifetime value customer relationships, higher gross margin, and a more scalable and efficient operating model. We also remain convinced that this ‘all-access’ business model serves as a better platform for innovation, allowing us to better capture and then apply our proprietary data across product interactions, subjects, and school years to drive better personalization for Learners, a compounding relationship that has allowed us to drive meaningful increases to customer lifetime values over many years.

Learning Membership revenue continued to grow at a rapid pace during the first quarter:

 

•

Learning Memberships revenue reached an annualized run-rate of approximately $143 million as of March 31, 2023, an increase from $87 million as of December 31, 2022, and nearly $0 in the first quarter of 2022.

 

•

Active Members grew to 32.9K as of March 31, 2023, up from 20.2K as of December 31, 2022.

 

•

Revenue recognized in the first quarter from Learning Memberships grew to $29.7 million, an $8.9 million or 43% increase from the fourth quarter.

 

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Higher engagement and retention among Learning Membership customers, and an Average Revenue per Member per Month (ARPM) of more than $350 during the first quarter combined to drive continued lifetime value expansion and an accelerated sales and marketing payback period.

 

•

Learning Memberships drove significant sales and marketing efficiency gains as a percentage of revenue, improving by over 1,700 bps year-over-year.

 

 

 

We continued to execute at a high level during the quarter to further enhance Learning Memberships by extending them to more audiences, testing new membership offerings, and by adding additional products into Learning Memberships. As we look ahead we will continue to improve upon the customer experience, drive higher levels of discoverability across learning modalities, and innovate at a rapid pace.   Extending Learning Memberships to More Audiences:   During the first quarter, we expanded Learning Memberships to new customer audiences by fully transitioning any purchases by existing Package customers into Learning Memberships, as well as moving 100% of new Test Prep audience customers into Learning Memberships. We plan to transition the Professional audience to Learning Memberships by the end of the year, which will represent a transition to 100% of new customers to our Consumer business to ‘always on’ recurring revenue products.

 

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Learning Memberships Monthly recurring revenue product that provides all-inclusive access to our suite of products. As visualized in the chart below, recent cohorts’ cumulative Learning Membership average revenue per customer continues to expand and separate from the historical amount an average Consumer customer would spend over time under our historical package model. We believe these results clearly demonstrate the superior lifetime value of our Learning Membership model. Quarterly Membership Cohorts vs. 2021 Average Monthly Consumer Customer Cohort (by Cumulative Average Revenue per Customer) Learning Membership Product Roadmap Q2 2022 Launch 1-on-1 Tutoring Added in Q3 2022 Unlimited Live Group Classes Starcourse Live and On-Demand Lessons Adaptive Assessments Self Study Modules Added in Q4 2022 Tutor Chat Essay Review Codeverse Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Added in Q1 2023 AI-Generated Lesson Plans AI-Enabled Chat Tutoring CONSUMER METRIC S $143M Annualized Run Rate Learning Membership Revenue as of 3/31/2023 32.9K Active Learning Members as of 3/31/2023 $350+ Average Revenue Per Learning Membership Per Month (ARPM) During the First Quarter 27%+ Learning Membership customers engaged in a non- tutoring product during Q1 2023

 

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Financial Highlights

 

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Revenue Outperforms Guidance – In the first quarter, Nerdy delivered revenue of $49.2 million, above the top end of our guidance range of $45-47 million, and represented an increase of 5% from $46.9 million during the same period in 2022. Revenue growth was driven by the continued evolution towards ‘always on’ recurring revenue products, strong adoption of Learning Memberships, lifetime value expansion, and a return to year-over-year growth in our Consumer business (having exited the J-Curve) coupled with the continued scaling of our Institutional business.

 

•

Learning Memberships Deliver Strong Results – Revenue recognized in the first quarter from Learning Memberships grew to $29.7 million or 60% of total revenue, up from 50% of total company revenue recognized in the fourth quarter of 2022. Learning Membership revenue grew to an annualized run rate of $143 million as of March 31, 2023, an increase from $87 million as of December 31, 2022, and nearly $0 in the first quarter of 2022.

 

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Institutional Business Continues to Scale – In the first quarter, Varsity Tutors for Schools executed a record 97 contracts, yielding $6.3 million of bookings. Record Institutional revenue of $8.5 million increased 32% year-over-year and represented 17% of total revenue in the first quarter. Our diversified product portfolio is resonating with school district partners setting us up for continued growth.

 

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Gross Profit Expansion – Gross profit of $33.9 million in the first quarter increased 3% year-over-year. Gross margin of 68.9% for the three months ended March 31, 2023, was approximately 90 bps lower than gross margin of 69.8% during the comparable period in 2022. The increase in gross profit was driven by gross margin expansion across our Consumer audience which was offset by higher than anticipated engagement with our new products in our Institutional business.

 

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Positive Non-GAAP Adjusted Net Earnings and Adjusted EBITDA Achieved – Net loss was $32.2 million in the first quarter versus net loss of $31.7 million in the first quarter of 2022. Excluding non-cash stock compensation expenses and mark-to-market derivative adjustments, adjusted net earnings was $0.5 million for the first quarter of 2023 compared to an adjusted net loss of $8.2 million in the first quarter of 2022. Nerdy delivered adjusted EBITDA of $1.4 million, a nearly 1,700 bps improvement year-over-year in the first quarter (more than 9 months ahead of our stated target) beating our guidance range of an adjusted EBITDA loss of $3.0 million to breakeven. This compares to an adjusted EBITDA loss of $6.6 million in the same period one year ago. Adjusted EBITDA outperformance was driven by higher revenues, sales and marketing efficiency gains, and the pull through of automation and workforce reduction actions stemming from our business model changes that streamline operations.

 

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Free Cash Flow and Liquidity – Cash provided by operating activities was positive $6.8 million in the first quarter of 2023 compared to cash used in operating activities of $0.9 million in the prior year period, resulting in cash and cash equivalent balances increasing by $5.8 million during the quarter ended March 31, 2023. With no debt and $96.5 million of cash on our balance sheet, we believe Nerdy has ample liquidity to fund the business and pursue growth initiatives.

 

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See page 16 for reconciliations of non-GAAP measures to the most directly comparable GAAP financial measure.

 

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CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS (Unaudited)

(in thousands, except per share data)

 

		Three Months Ended March 31,
		2023				2022
Revenue		$	49,180			$	46,925
Cost of revenue			15,290				14,152
Gross Profit			33,890				32,773
Sales and marketing expenses			15,560				22,946
General and administrative expenses			29,700				30,509
Operating Loss			(11,370	)			(20,682	)
Unrealized loss on derivatives, net			21,682				11,042
Interest income			(833	)			(7	)
Other expense, net			11				17
Loss before Income Taxes			(32,230	)			(31,734	)
Income tax expense			23				13
Net Loss			(32,253	)			(31,747	)
Net loss attributable to noncontrolling interests			(13,322	)			(14,902	)
Net Loss Attributable to Class A Common Stockholders		$	(18,931	)		$	(16,845	)
Loss per share of Class A Common Stock:
Basic and Diluted		$	(0.21	)		$	(0.21	)
Weighted-Average Shares of Class A Common Stock Outstanding:
Basic and Diluted			91,776				79,619

REVENUE (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				%				2022				%
Consumer		$	40,335				82	%		$	38,918				83	%
Institutional			8,540				17	%			6,475				14	%
Other (a)			305				1	%			1,532				3	%
Revenue		$	49,180				100	%		$	46,925				100	%

 

(a)	Other consists of EduNation Limited, a company incorporated in England and Wales (“First Tutors UK”) and other services.

 

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CONDENSED CONSOLIDATED

BALANCE SHEETS (Unaudited)

(in thousands)

 

		March 31, 2023				December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents		$	96,520			$	90,715
Accounts receivable, net			6,333				11,596
Other current assets			4,182				5,345
Total Current Assets			107,035				107,656
Fixed assets, net			12,456				12,504
Goodwill			5,717				5,717
Intangible assets, net			3,465				3,574
Other assets			2,884				3,241
Total Assets		$	131,557			$	132,692
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable		$	4,148			$	3,199
Deferred revenue			22,254				25,539
Other current liabilities			9,157				8,593
Total Current Liabilities			35,559				37,331
Other liabilities			35,594				14,311
Total Liabilities			71,153				51,642
Stockholders’ Equity
Class A common stock			10				9
Class B common stock			7				7
Additional paid-in capital			529,410				522,031
Accumulated deficit			(494,038	)			(475,107	)
Accumulated other comprehensive income (loss)			8				(12	)
Total Stockholders’ Equity Excluding Noncontrolling Interests			35,397				46,928
Noncontrolling interests			25,007				34,122
Total Stockholders’ Equity			60,404				81,050
Total Liabilities and Stockholders’ Equity		$	131,557			$	132,692

 

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CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				2022
Cash Flows From Operating Activities
Net Loss		$	(32,253	)		$	(31,747	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation & amortization			1,553				1,422
Amortization of intangibles			150				157
Unrealized loss on derivatives, net			21,682				11,042
Non-cash stock-based compensation expense			11,049				12,490
Other changes in operating assets and liabilities:
Decrease in accounts receivable, net			5,263				841
Decrease in other current assets			1,163				575
Decrease in other assets			357				344
Increase in accounts payable			949				2,503
(Decrease) increase in deferred revenue			(3,285	)			804
Increase in other current liabilities			686				1,764
Decrease in other liabilities			(520	)			(1,126	)
Net Cash Provided by (Used In) Operating Activities			6,794				(931	)
Cash Flows From Investing Activities
Capital expenditures			(982	)			(1,264	)
Net Cash Used In Investing Activities			(982	)			(1,264	)
Cash Flows From Financing Activities
Payments to legacy Nerdy holders			—				(767	)
Other			—				(49	)
Net Cash Used In Financing Activities			—				(816	)
Effect of Exchange Rate Change on Cash, Cash Equivalents, and Restricted Cash			(7	)			(5	)
Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash			5,805				(3,016	)
Cash, Cash equivalents, and Restricted Cash, Beginning of Year			91,547				145,879
Cash, Cash Equivalents, and Restricted Cash, End of Period		$	97,352			$	142,863
Supplemental Cash Flow Information
Non-cash stock-based compensation included in capitalized internal use software		$	524			$	606
Purchase of fixed assets included in accounts payable			—				88

 

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RECONCILIATION OF GAAP TO

NON-GAAP SALES AND MARKETING EXPENSE (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				2022
Sales and marketing expenses		$	15,560			$	22,946
Less:
Non-cash stock-based compensation expense			838				1,075
Non-GAAP sales and marketing expenses		$	14,722			$	21,871

RECONCILIATION OF GAAP TO

NON-GAAP GENERAL AND ADMINISTRATIVE EXPENSE (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				2022
General and administrative expenses		$	29,700			$	30,509
Less:
Non-cash stock-based compensation expense			10,211				11,415
Non-GAAP general and administrative expenses		$	19,489			$	19,094

RECONCILIATION OF GAAP NET LOSS TO

NON-GAAP ADJUSTED EBITDA (LOSS) (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				2022
Net Loss		$	(32,253	)		$	(31,747	)
Add:
Interest income			(833	)			(7	)
Income taxes			23				13
Depreciation and amortization			1,703				1,579
Non-cash stock-based compensation expense			11,049				12,490
Unrealized loss on derivatives, net			21,682				11,042
Adjusted EBITDA (Loss)		$	1,371			$	(6,630	)

RECONCILIATION OF GAAP NET LOSS TO

NON-GAAP ADJUSTED NET EARNINGS (LOSS) (Unaudited)

(in thousands)

 

		Three Months Ended March 31,
		2023				2022
Net Loss		$	(32,253	)		$	(31,747	)
Add:
Stock-based compensation			11,049				12,490
Unrealized loss on derivatives, net			21,682				11,042
Adjusted Net Earnings (Loss)		$	478			$	(8,215	)

 

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CAPITALIZATION RECONCILIATION (Unaudited)

(in thousands)

 

		March 31, 2023
Class A Common Shares			93,284
Combined Interests that can be converted into shares of Class A Common Stock			65,900
Total outstanding share count, excluding earnouts			159,184
Earnouts			7,964
Total outstanding share count, end of period			167,148

 

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We monitor the following key operating metrics to evaluate the growth of our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

We continue to make substantial progress in our transition from our Package model to Learning Memberships within our Consumer business. As a result of this transition, we are presenting Active Members as a new key operating metric. As Learning Memberships were first broadly sold in the second quarter of 2022, comparable Active Member counts for prior year periods will not be provided until the second quarter of 2023.

Active Members exclude EduNation Limited, a company incorporated in England and Wales (“First Tutors UK”) and our Institutional business. Active Experts include our Institutional business, but excludes First Tutors UK.

KEY OPERATING METRICS

 

Active Members in thousands		March 31, 2023
Active Members			32.9

 

		Three Months Ended March 31,								Change
Active Experts in thousands: favorable/(unfavorable)		2023				2022				%
Active Experts			10.2				11.3				(10	)%

 

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Key Performance Metrics and Non-GAAP Financial Measures

This earnings release includes non-GAAP financial measures for non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP adjusted EBITDA (loss), and non-GAAP adjusted net earnings (loss).

Non-GAAP sales and marketing expenses exclude non-cash stock compensation expenses and restructuring costs. Non-GAAP general and administrative expenses exclude non-cash stock compensation expenses, restructuring costs, and transaction related costs.

Non-GAAP adjusted EBITDA (loss) is defined as net income or net loss, as applicable, before net interest income (expense), taxes, depreciation and amortization expense, non-cash stock-based compensation expenses, gain or loss on mark-to-market derivative financial instruments, and other non-recurring one-time items.

Non-GAAP adjusted net earnings or loss is defined as net income or net loss, as applicable, excluding non-cash stock-based compensation expenses, gain or loss on mark-to-market derivative financial instruments, and other non-recurring one-time items.

Sales and marketing expenses consist of salaries and benefits for our employees engaged in our consultative sales process. General and administrative expenses are recorded in the period in which they are incurred and include salaries, benefits, and non-cash stock-based compensation expense for certain employees as well as support services, finance, legal, human resources, other administrative employees, information technology expenses, outside services, legal and accounting services, depreciation expense, and other costs required to support our operations.

Net loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding during the period as calculated using the treasury stock method.

Non-GAAP measures are in addition, and not a substitute for or superior to measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to sales, net income, operating income, cash flows from operations, or any other performance measures derived in accordance with GAAP. Other companies may calculate these non-GAAP financial measures differently, and therefore such financial measures may not be directly comparable to similarly titled measures of other companies. The Company believes that these non- GAAP measures of financial results provide useful supplemental information. The Company’s management uses these non-GAAP measures to evaluate the Company’s operating performance, trends, and to compare it against the performance of other companies. There are, however, a number of limitations related to the use of these non-GAAP measures and their nearest GAAP equivalents. See the table above regarding reconciliation of non-GAAP measures to the most directly comparable GAAP measures.

Active Members is defined as the number of Learners with an active Learning Membership as of the date presented. Variations in the number of Active Members are due to changes in demand for our solutions, seasonality, testing schedules, the extension of Learning Memberships to additional Consumer audiences, and the launch of new Learning Membership options. As a result, Active Members is a key indicator of our ability to attract, engage and retain Learners.

Active Experts is defined as the number of Experts who have instructed one or more sessions in a given period.

ARPM is defined as average revenue per Learning Membership per month in a given period.

Sessions is defined as the total number of one-on-one sessions in a given period.

Annualized run-rate is defined as the number of Learning Members at the end of the period multiplied by average revenue per Learning Membership per month multiplied by twelve months. This recurring revenue customer base provides us with increased forecasting visibility into future periods.

Bookings represent contracted amounts in the next 12 months for Varsity Tutors for Schools.

Management and our board of directors use these metrics as supplemental measures of our performance that are not required by or presented in accordance with GAAP because they assist us in comparing our operating performance on a consistent basis, as they remove the impact of items not directly resulting from our core operations. We also use

 

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these metrics for planning purposes, including the preparation of our internal annual operating budget and financial projections, to evaluate the performance and effectiveness of our strategic initiatives and to evaluate our capacity to expand our business and the capital expenditures required for that expansion.

Non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP adjusted EBITDA (loss), and non-GAAP adjusted net income or loss should not be considered in isolation, as an alternative to, or superior to net loss, revenue, cash flows or other performance measure derived in accordance with GAAP. We believe these metrics are frequently used by analysts, investors, and other interested parties to evaluate companies in our industry. Management believes that the presentation of non-GAAP metrics is an appropriate measure of operating performance because they eliminate the impact of expenses that do not relate directly to the performance of our underlying business. These non-GAAP metrics should not be construed as an implication that our future results will be unaffected by unusual or other items. We are not able to provide a reconciliation of non-GAAP adjusted EBITDA (loss) guidance for future periods to net loss, the comparable GAAP measure, because certain items that are excluded from non-GAAP adjusted EBITDA (loss) cannot be reasonably predicted or are not in our control. In particular, we are unable to forecast the timing or magnitude for gains or losses on mark-to-market derivative financial instruments, or share based compensation without unreasonable efforts, and these items could significantly impact, either individually or in the aggregate, net income or loss in the future. See the tables above regarding reconciliations of these non- GAAP measures to the most directly comparable GAAP measures for historical periods.

Forward-Looking Statements

The information included herein and in any oral statements made in connection herewith may include “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions, or strategies regarding the future, including our expectations with respect to: the guidance with respect to our financial performance; continued improvements in sales and marketing leverage; the growth of our Institutional business; simplifying our operations model while growing our business; and the sufficiency of our cash to fund future operations. Additionally, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “approximately,” “believes,” “contemplates,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “might,” “outlook,” “plans,” “possible,” “potential,” “predicts,” “projects,” “should,” “seeks,” “will,” “would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements made herein relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

There are a significant number of factors that could cause actual results to differ materially from statements made herein or in connection herewith, including but not limited to, our limited operating history, which makes it difficult to predict our future financial and operating results; our history of net losses; risks associated with our shift to the Learning Membership model; risks associated with scaling up our Institutional business, risks associated with our intellectual property, including claims that we infringe on a third party’s intellectual property rights; risks associated with our classification of some individuals and entities we contract with as independent contractors; risks associated with the liquidity and trading of our securities; risks associated with payments that we may be required to make under the tax receivable agreement; risks associated with the terms of our warrants; litigation, regulatory and reputational risks arising from the fact that many of our Learners are minors; changes in applicable law or regulation; the possibility of cyber-related incidents and their related impacts on our business and results of operations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and risks associated with managing our rapid growth. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Annual Report on Form 10-K filed on February 28, 2023, as well as other filings that we may make from time to time with the SEC.

 

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