What happened
Shares of Nerdy (NRDY 2.33%), a provider of online learning platforms, took a hit on Tuesday, following the company's first-quarter earnings report.
The tech stock was likely down primarily due to the company's worse-than-expected second-quarter and full-year revenue guidance, as well as a first-quarter loss that was wider than anticipated. Analyst downgrades for the stock, following the earnings report, likely didn't help, either.
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So what
Nerdy's first-quarter revenue was $45.9 million, representing 36% year-over-year growth.
Growth was "driven by strength in direct-to-consumer offerings across the academic and professional customer categories," management said in the company's first-quarter earnings release. The company also called out a meaningful contribution from its small-group tutoring program, called Varsity Tutors for Schools.
The company's loss per share of $0.21 was worse than its break-even results in the year-ago period. It was also wider than analysts' average forecast for a loss per share of $0.11.
Now what
Looking ahead, management guided for revenue growth to slow. For the second quarter, management expects revenue to be between $37 million and $40 million, translating to 17% year-over-year growth at the midpoint. Full-year revenue is expected to increase about 19% year over year to between $160 million and $175 million. Analysts, on average, were expecting first-quarter and full-year revenue of about $46 million and $198 million, respectively.
Explaining the company's expected slowing in revenue growth in its first-quarter shareholder letter, management said, "Because revenue is recognized on a linear basis over the term of the contract versus being front-weighted (typically over the first three to six months) as is the case in our existing package model, this results in lower revenue recognition in the near-term for membership customers, followed by higher revenue recognized thereafter.
