Nerdy makes public debut amid online learning boom

Nerdy Founder, Chairman, and CEO Chuck Cohn joins Yahoo Finance Live to discuss the comany's public debut.

Video Transcript

- I'm watching shares of Nerdy, the parent company of Varsity Tutors leading platform for tutoring education here shares up by about 7% the company. Rang the opening bell yesterday at the New York Stock Exchange, but clearly the party continuing here in today's session. And for more on what the company sees and its growth picture ahead, happy to bring on the chairman and CEO of Nerdy Chuck Cohn here with us.

And Chuck, good to be chatting with you again here today, man. I mean, when we look at the growth ahead, I think maybe why investors are so excited to just kind of the opportunity that is now there on the education side.

After what we saw in the pandemic, a lot of people maybe falling behind even to catch up here. And turning to platforms like yours to find tutors. But talk to me about what that growth looks like when you look at it.

CHUCK COHN: Thanks for having me on today, Zach. I appreciate it. And maybe first off, just a quick overview of Nerdy. So Nerdy is an online platform that leverages technology, including AI to deliver high quality live learning at scale.

And so historically, live meant offline. In 90% of consumers and direct to consumer learning want live. It's more effective. It's more engaging. It delivers real results. But historically, it meant offline.

And what we've done that's really unique is leverage technology to deliver high quality live learning at scale across 3,000 different subjects. And we allow people to learn in a one on one small group or large format live stream setting in a way that's really, really engaging.

And so this is a unique moment in time, where you really have all of offline learning shifting online. COVID of course, has served as a huge catalyst that will drive long term adoption in the sector. And we're excited to be a part of this-- this industry, and the sector, and pioneering what great can look like from a learning perspective and transforming how people learn.

- And as we were talking, you know, before we came online here. Obviously, the deal sets you up with cash in the bank here to kind of chase the opportunity. We've seen a lot of companies in the space forgo profitability. You guys is net loss in the latest quarter actually shrunk a bit got close to it. I mean, talk to me about what the profitability timeline looks there as you continue to invest and chase the opportunity.

CHUCK COHN: Well, we have a very efficient model. We make do with less historically. This-- this financing actually allows us to put 10 times as much cash on the balance sheet approximately. And we're going to be able to invest to an extent that we have in-- in parallel process growth investments to an extent we haven't in the past.

So beyond the success to date and all of the learners and experts were able to connect and help. We feel like we're just getting started in this transaction allows us to invest in product, engineering, machine learning, data science, and other areas of growth that can really allow us to take this platform and software oriented approach and continue to scale it to new and different areas.

And so you'll see in the forecast. We've put forth. We have very modest cash burn projections. And we've proved to ourselves that we can be profitable in the past. So in the back half of 2020.

We were already self-sustaining, and we're now in a position where we're investing against some of the most exciting vectors within the business. And we're-- we're just very excited for what's ahead. And we think all the momentum from the first half of the year will carry forward into 2021, 2022 and beyond.

- You know, Chuck, some of our viewers might be a little bit older. Myself a little bit removed from what it's like to go back into school. Maybe forgot what it's like to learn in the classroom or the ability to-- to find a tutor or how hard it might be. Impressive to see, you know, live instruction more than 3,000 subjects.

I don't even know if I ever received any learning in that many subjects in my lifetime. But when you look at kind of I guess the growth on your platform right now, where are you seeing the biggest movement in the needle? And what has you most excited in the future?

- Well, we've seen just incredible growth across all different segments. So we help people of all ages. So elementary school, middle school, high school, college, graduate school, and then professional is one of our newest segments. And we saw really strong growth in the first half of the year.

We have a seasonal business. So summer happened and as schools started back up in late August and September, we've seen demand for tutoring come roaring back. And then on top of that, we're experiencing strong growth in some of our formats like classes.

And historically, we've been a direct to consumer platform focused on that $62 billion direct to consumer learning market. But we recently announced that we now have a institutional strategy focused on helping schools and delivering solutions for entire school districts at a time.

So that's a net new incremental opportunity that we're particularly excited about. And we recently shared. We already have 17 school district partners that have signed up just over the last month or so.

And we're looking forward to helping students in schools address what is just a really, really important moment in time and all the COVID related learning loss that's currently occurring.

- Chuck Cohn founder chairman and CEO of Nerdy, the parent company of Varsity Tutors seeing. Another pop here in today's session. Appreciate you coming on here to chat with us and congrats again on the deal closing shares out there trading.