Good afternoon. Thank you for attending the Nerdy Q2 2022 results conference call. My name is Matt, and I will be the 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. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Molly Sorg, Head of Investor Relations. Molly, please go ahead. Good afternoon, and thank you for joining us for Nerdy's Q2 2022 earnings call. With me are Chuck Cohn, Founder, Chairman, and Chief Executive Officer of Nerdy, and Jason Pello, Chief Financial Officer. Before I turn the call over to Chuck, I'll remind everyone that this discussion will contain forward-looking statements, including, but not limited to, expectations with respect to Nerdy's future financial and operating results, strategy, opportunities, plans, and outlooks. 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 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's Q2 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, let me turn the call over to Chuck. Chuck? Thanks, Molly, and thank you to everyone who has joined us today. We're happy to be back in front of you discussing our Q2 results as we head into the back-to-school season for the 2022/2023 school year. We continue to experience strong demand for our product offerings. In the Q2, Nerdy delivered revenue of $42.2 million, above our guidance range of $37 million-$40 million, and up 29% as compared to the Q2 of 2021. We also experienced continued strength in our marketplace dynamics, with active learners up 36%, online sessions up 35%, and the number of active experts on our platform up 42% compared to the Q2 of last year. Our results reflect healthy marketplace dynamics and continued momentum in both our consumer and institutional businesses as we head into back to school. The combination of our new always-on offerings, including our recently announced all-inclusive learning membership, our ever-growing data set, and our AI-enabled platform, allow us to create deeper and longer-lasting learner and expert relationships, and we believe set us up for strong growth and superior unit-level economics heading into 2023 and beyond. On the consumer side, as learners focus on achieving academic excellence and high grades, and professionals seek opportunities for incremental growth and upskilling, we are continuing to see strong demand for our offerings. Notably, while travel and leisure activities were heightened this summer, causing consumption to decline seasonally as the school year ended, we are not observing any discernible macroeconomic pressures impacting demand. In fact, as we shared in our shareholder letter, our recent cohort's lifetime value, or LTV, continued to expand higher than previous periods. This summer, we have been ramping up our focus on Learning Memberships, and the product offering has been well-received by consumers. Our Learning Memberships are a first-of-its-kind, all-inclusive offering, giving students access to a comprehensive array of learning resources that include one-on-one tutoring, unlimited live group classes from our catalog of approximately 250 live class options offered each week, celebrity-taught live and on-demand lessons, adaptive assessments, and self-study modules. Our Learning Memberships are for learners of all ages, from kindergarten to college and adult learners. Learning Memberships are comprehensive in nature and ensure students have personalized and ongoing support regardless of what they are learning, how they want to learn it, or when they need to learn it. Our all-inclusive offerings encourage learners to spend more time on the platform, as well as go above and beyond their initial learning goals. As learners spend more time on the platform, engaging in multiple modalities, the learning experience is enhanced, leading to a deeper and longer-lasting relationship with us. While it remains early in our transition to Learning Memberships, we continue to see encouraging data suggesting that our Learning Memberships are bringing value to customers via our all-inclusive and always-on platform. While we continue to test and learn in relation to both pricing, frequency, and access tiers, to date, the most popular membership selected is the 12-month contract, and our average monthly revenue per contract is in excess of $300 per month. We are observing higher customer satisfaction among our membership customers, higher customer retention as measured by tutoring usage over time, and higher multimodality engagement as measured by enrollment in live classes. These high levels of engagement are particularly exciting to us, as customers that continue to show up and engage with multiple formats have historically had much higher lifetime values. With our package model, our learners who engaged in four or more modalities had bookings that were more than twice as high as those who engaged only in one-on-one tutoring. Driving multimodality engagement is one of the key ways we have extended lifetime value over the last couple of years. We're going to encourage that type of learning behavior with Learning Memberships and remove the friction historically associated with getting help across learning modalities. The engagement levels we're seeing also indicate that Learning Memberships customers continue to use us over longer periods of time. We know that when students meet consistently with an Expert, they see better educational outcomes and have higher satisfaction rates. We attribute our early success to a number of factors, including, first, the enhanced value Learning Memberships offer with all of the resources learners need to succeed in their educational objectives on a single platform. Second, the lower upfront cost to the consumer aligns with how consumers budget on a monthly basis. Our Learning Memberships go beyond tutoring and include an extensive catalog of additional learning resources that customers would normally have to purchase from multiple disparate companies. Importantly, the lower upfront investment under this model is making our platform and offerings more accessible to learners and growing our total addressable market. Taken together, the signals we are seeing from Learning Memberships are promising and have provided us with confidence to lean further into the model this back-to-school season, making it the product that the majority of customers on our platform are offered. As we expand our Learning Memberships, we are also expanding the content available to learners on the platform. A great example of this is our July acquisition of Codeverse that we're announcing today. Codeverse is a tool that helps kids learn to code by creating interactive and shareable video games through guided projects and missions. With the coding market being the fastest-growing area of enrichment within the K-12 audience, adding Codeverse to our portfolio will allow us to deliver even more incremental value for our K-12 members and institutional partners. We intend to integrate Codeverse into our all-inclusive Learning Membership later this year and make it available to our institutional customers next year. The acquisition, which utilized only a small amount of cash consideration, represents an affordable and efficient way for us to expand our product capabilities, enhancing the value of our Learning Memberships. It's also indicative of the sort of resources we'll seek to add to Learning Memberships over time to continue to enhance the value we provide as part of the offering. Switching to the institutional side of the business, we've been hard at work finalizing two new products for this back-to-school season. Varsity Tutors On-Demand and Teacher Assigned, which complement our high-dosage tutoring solution and are resonating in conversations with schools. These products are oriented around more comprehensive strategic relationships with schools and lend themselves to long-term partnerships. The new On-Demand and Teacher Assigned products are unique in that they can be rolled out to the entire student population, helping students to get help in real time and providing teachers with the supplemental learning support tools they need. When these new product offerings are combined with our existing high-dosage tutoring product, we believe Nerdy is meeting a market need by offering access to always-on educational resources for students and by helping to better support teachers by allowing them to have a bigger impact on more students. During the Q2, we adjusted the institutional sales team's focus towards larger school district opportunities where there is an interest in a more holistic and longer-lasting partnership. This included the creation of Teacher Assigned and On Demand and a shift in our sales organization being focused on bundled solutions and multiyear needs. With this new focus, we expect the institutional sales cycles to remain lumpy. However, we are encouraged by our sales pipeline heading into the fall, the interest we're seeing in our new On Demand and Teacher Assigned products, and the large opportunity we see ahead for Varsity Tutors for Schools. From the inception of Varsity Tutors for Schools in August of last year through July 31st of this year, we have already contracted with over 180 unique clients as they seek to support their students and teachers with supplemental learning resources. We believe we are just at the beginning stages of creating long-term relationships with schools. We believe education is on the precipice of a sea change, where it will become increasingly normal for learners to select and engage with one primary partner to support their many supplementary learning objectives. Nerdy's always-on product offerings align with this trend and position Nerdy to win the trust and confidence of both consumers and institutions, and to be the preferred solution for their supplemental learning needs. I want to thank our team for all of their efforts this summer and during this pre-back-to-school season. They have executed at a high level to deliver innovative new products, enhance the value we offer our customers, and help evolve our business model to one that defaults to recurring and always on. With that, I'll turn the call over to Jason to discuss the financials in more detail. Jason? Thanks, Chuck, and good afternoon, everyone. I'm pleased to be speaking with you today about Nerdy's strong Q2 performance and our outlook for the balance of the year. The team executed at a high level during the quarter to deliver several significant product additions in advance of the key back-to-school season. Needless to say, we're excited about our new learning membership offering and our new institutional products and the value we believe they bring to learners, teachers, and our school partners. In the Q2, we recognized revenue of $42.2 million, our second highest revenue quarter ever in what is traditionally a seasonally low period due to summer break. Revenue results were above the high end of our guidance range and an increase of 29% from the Q2 of 2021. Revenue growth was driven by continued strength in our direct-to-consumer offerings and the addition of our institutional business, Varsity Tutors for Schools. Our small class and group revenue increased 114% to reach $5.5 million in revenue, up from $2.6 million in the Q2 of 2021, and accounting for 13% of our Q2 revenue as compared to 8% in the same period a year ago. The increase was driven by the introduction of small group tutoring in Varsity Tutors for Schools. Going forward, as Chuck mentioned, our small group classes for consumers will primarily be offered as part of our all-inclusive learning membership, moving away from standalone small class purchases in most areas of our business. Varsity Tutors for Schools signed 44 new contracts during the quarter and delivered over $4.2 million in revenue, representing 10% of our Q2 revenue, consistent with our expectations. Moving down the P&L, gross profit of $28.8 million for the Q2 represented an increase of 35% compared to the same period last year. Gross profit increases were driven by growth across our direct-to-consumer offerings and the addition of Varsity Tutors for Schools. Gross margins of 68.2% for the three months ended June thirtieth expanded over 320 basis points from 64.9% in the Q2 of 2021. Sales and marketing expenses on a GAAP basis were $18 million in the Q2, up $3.8 million compared to the same period in 2021. non-GAAP sales and marketing expenses, which exclude non-cash stock-based compensation, were $17 million, or 40% of revenue in the Q2 of 2022, which compared to 43% of revenue in the same period of last year, a more than 280 basis points improvement year-over-year. Throughout the Q2, we began to moderate our third-party marketing spend, yielding efficiencies in our consumer business. We continue to make investments in our institutional sales and go-to-market organization in support of Varsity Tutors for Schools, and expect to grow into these investments as we expect revenue to grow faster than expenses as our sales team executes. We reported a non-GAAP adjusted EBITDA loss of $9.6 million in the Q2 of 2022, which compares to our guidance range of $9 million-$12 million. Improvements were primarily driven by revenue outperformance and marketing efficiency gains, in addition to other actions taken in the quarter, including the slowing of hiring in certain areas. The decrease in adjusted EBITDA relative to 2021 was mainly driven by a shift to the learning membership model and the lower near-term revenue recognition, the strategic investments we made in platform and technology investments to drive product innovation, the build-out of Varsity Tutors for Schools organization, and public company expenses and personnel that were not fully present a year ago. These investments have supported our continued growth and delivered several new and exciting products, including Learning Memberships and our Teacher Assigned and On Demand institutional offerings. In an effort to balance our growth and profitability targets, we began to slow the pace of corporate hiring during the Q2. As revenue increases from the number of Learning Memberships and Varsity Tutors for Schools institutional customer base grows, we expect to gain operating leverage. We'll continue to take a measured approach to hiring, and we'll reassess after the key back-to-school season. Turning to our business outlook, today we're providing Q3 2022 guidance as well as reaffirming our full year 2022 guidance. As we mentioned on our earnings call in May, we expect the launch of our membership model will simplify the business and drive higher engagement and lifetime value relationships with learners. In the near term, the shift to memberships will also change our revenue recognition patterns, creating a J-curve as we depict in two illustrative charts in our shareholder letter. Specifically, consistent with what we shared on our last earnings call, we expect to realize lower revenue recognition in the first several months for our membership customers as compared to our historical package offering, followed by higher revenue recognition thereafter, with the J-curve inflecting around month six. While this evolution towards learning memberships results in lower near-term revenue and adjusted EBITDA, we expect it will ultimately allow us to generate superior long-term customer unit economics and drive higher levels of growth and profitability. For the full year of 2022, we are reaffirming our expected revenue guidance in the range of $160 million-$175 million, representing 19% growth at the midpoint versus our 2021 revenue. For the Q3 of 2022, we expect revenue in the range of $30 million-$33 million. As is typical for our business, we expect the Q3 to be our lowest revenue-generating quarter due to summer seasonality. We expect the impact to be greater this year as we lean into our all-inclusive Learning Membership model and progress through the associated revenue J-curve. In the Q4, we continue to expect revenue re-acceleration during the key back-to-school period, driven by growth in the Learning Membership subscriber base and as revenue from Varsity Tutors for Schools ramps into the 2022-2023 academic school year. If we continue to see strong demand from consumers for our Learning Memberships, we expect we will accelerate the transition in the third and Q4 s, which would impact where we fall within our revenue guidance range. We continue to actively monitor the level and pace of our investment, including marketing spend and hiring, as we focus on balancing our efficiency and profitability objectives. Adjusted EBITDA for both the Q3 and full year reflects current investment levels to support continued consumer and Varsity Tutors for Schools growth as we capitalize on long-term educational trends. For the full year 2022, we are reaffirming our expected non-GAAP adjusted EBITDA loss in the range of $28 million-$38 million. Similar to our revenue forecast, where we expect to fall within our guidance range will largely be driven by the pace with which we lean into memberships through the end of the year. For the Q3 of 2022, we expect a non-GAAP adjusted EBITDA loss in the range of $14 million-$17 million. I also wanted to highlight that the second and Q3 s of 2022 represent our highest projected cash use quarters, which are impacted by summer seasonality and the short-term cash flow impact as we shift to a membership model. These impacts should abate as we move through the J-curve and reaccelerate top line growth in the Q4. With no debt and $121 million of cash on our balance sheet, Nerdy has ample liquidity to fund the business and pursue growth initiatives. We continue to expect to achieve adjusted EBITDA profitability by the end of 2023. Thank you again for your time. With that, I'll turn the call back over to Chuck. Thanks, Jason, and thanks again to all of you for joining us today. Before we turn the call over to the operator and get started with Q&A, I'd like to thank Erik Blachford for his service on our board over the past seven years, which included advising the company from its first institutional capital raise in 2015 through our public listing this past year. Erik has been a trusted advisor to me and the Nerdy leadership team over the years, and I'm grateful for the counsel and contributions he provided through a critical growth period for the company. I'd also like to welcome Stuart Udell to Nerdy's board. Stuart brings extensive education category experience and joins at a time when we are significantly evolving and expanding our offerings for schools. His track record for building and leading successful ed tech companies by scaling growth with districts and administrators makes him an invaluable addition to our team at this critical time. As always, we appreciate your interest in Nerdy and look forward to continuing the dialogue during this exciting time for the company. With that, I'll turn it over to the operator for Q&A. Operator? Certainly. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We will pause here briefly as questions are registered. The first question is from the line of Doug Anmuth with J.P. Morgan. Your line is now open. Thanks for taking the questions. I wanna ask you a couple about the membership model. I was just hoping that you could provide some further color on just kinda what you're seeing in with traction, kinda uptake, and conversion rates. I know it's still early, but retention as well. If you can clarify just kind of the mix in revenue there with memberships and then other DTC revenue. Then separately, I may have missed it, but are you providing a bookings number this quarter? Thanks. Thanks, Doug. Good question. One of the things that we see, and I think this is consistent with what we shared in our last quarterly earnings call, was that our conversion rate for memberships compared to one-to-one is up and it's favorable year over year. We're seeing memberships convert favorably to people that bought a full tutoring package. That's very encouraging. We're seeing that when people actually begin, that they're actually meeting more consistently over time. Those trends, based on what we've seen thus far, continue over the course of, you know, several months. There's significant separation in the consumption patterns of membership customers compared to package customers. That's really encouraging. We're also seeing that the customers in memberships actually engage in additional products, inclusive of class enrollments, at significantly higher rates. We've seen historically that when a customer, a package customer engages in multimodal learning, so that could be StarCourses, that could be adaptive testing, that could be classes, that their LTV goes up significantly. That's something that has us really encouraged. Then based on all of the customer satisfaction metrics and the metrics related to how value is perceived, those are up as well. Those are the big metrics that we're paying attention to, and we're encouraged by all the customer-centric metrics there and metrics that indicate customers kind of voting with their wallets. Doug, what I'd add to that is, you know, starting in July, we began to lean into memberships to a greater extent based on the strong signal we've been seeing and have continued to experience across that customer cohort. If you add together our one-to-one tutoring customers and our membership customers, memberships accounted for over a third of our clients in July. As we mentioned on the call earlier in the scripted portion, as we move into our back-to-school season, we expect the majority of our new learners will purchase a membership. Yeah, the majority of our inquiries Last, any comment related to bookings. We are not sharing bookings as in the membership model. Only the first month is actually considered prepaid bookings. On an ongoing basis, we are recognizing that revenue linearly over time. That's gonna be one of the changes that you'll see in the metrics is that the bookings really don't make sense to share in a membership context. One of the things that we'll be doing post back-to-school is sharing all of those sort of membership-centric metrics that bring better visibility into how it's performing relative to the package model. We look forward to providing that information, you know, in November on the next call after back-to-school season. Okay. Great. Thank you both. Thank you for your question. The next question is from the line of Andrew Boone with JMP Securities. Your line is now open. Hi, guys. Good afternoon, and thanks so much for taking my questions. Another couple on the membership. So can you guys talk about the J-curve? Is there a way to estimate the separation between what you guys would see? The chart was really helpful, but what I'm trying to get at is what would a normalized 2Q start to look like or 3Q guidance start to look like if you think about just a like for like, apples to apples kind of go-to-market strategy. Then secondly, in terms of guidance, the letter talked about a slowdown in active users given the transition. I'm trying to reconcile that versus all of the positive metrics you just gave in terms of conversion and everything else. Can you just double-click in terms of what would cause that slowdown? Thanks so much. Yeah. I'll start with the slowdown in active users, you know, with the transition. One of the things to keep in mind, and, you know, Chuck mentioned it, as we build out this new all-inclusive offering, we're rolling in our classes customers that were either enrichment or academic-focused into the membership. You know, historically, those counted separately from a unique user perspective, and now they're included in the numbers on a go-forward basis. We think this is absolutely the right thing to do from both a retention perspective, from the level of value we're providing to our customers. You know, we're already seeing that it's driving higher levels of engagement. The other thing I'd mention is that we moderated our marketing spend and improved our expectations related to customer payback periods. Related to that means we're reining in brand spend. It means we're reining in spend related to StarCourses. That ends up disproportionately impacting class segment where the customer payback periods are not as fast as in the one-on-one segment. What you're seeing, you saw a little bit of this in Q2 with a 300 basis points improvement in efficiency related to sales and marketing as a percentage of revenue. A lot of those changes were made on a rolling basis throughout the quarter. As we head into back to school with an enhanced focus on the path to profitability and improved unit level economics, we're focusing the marketing spend on the really high-value revenue per active learner customers, and improved marketing payback. That then results in fewer class customers as a percentage of total, which then drives some of the slowdown in active learners in total. You're gonna see a significant mix shift towards higher value revenue customers. Maybe just to address your question on the J-curve and the separation. Consistent with our prior guidance, we expected the impact to be greater this year as we lean into our all-inclusive Learning Memberships. We do think, you know, Q2 and Q3 represent, you know, the low points as we move through that J-curve, which we still believe to be about six months taking into account conversion, retention, average revenue per member enrolling in those classes. You know, as we exit the year, we should be on a more like for like basis going forward in 2023. Thank you, guys. Thank you for your question. The next question is from the line of Ryan MacDonald with Needham. Your line is now open. Hi. Thanks for taking my question. Congrats on a great quarter. Maybe touching on Codeverse, the acquisition you made. Jason, can you talk about the contribution Codeverse in terms of the revenue? As that relationship matures, how should we think about the rolling in of the Codeverse offering into the membership over time? Thanks. Yeah, absolutely. I mean, good questions. You know, since the acquisition was completed in July, no financial impact during the Q2. On a go-forward basis from a revenue perspective, we're not expecting any incremental revenue, because we are gonna be rolling into all-inclusive Learning Memberships. We think that that's just another example of how we can provide increased capabilities, you know, from a product perspective on our side, but then, and more importantly, increase value to our customers. We think about it from an EBITDA perspective, minimal impact. You know, the team over there was small. We're able to punch above their weight as it relates to product development. They've all come on board, and we're really excited to have them, you know, as part of the team on a go-forward basis. Yeah. Maybe to build on that. Super helpful. Oh, sorry. The way we'd expect for this to manifest itself in the P&L of the business is as we integrate that, which will be post-back-to-school, so after we ship a number of the big product deliverables we have, we'll then integrate Codeverse into the Learning Memberships product. We would expect that's going to drive higher levels of conversion by making the product more compelling and then higher levels. This is also particularly interesting given that in the summer period, we could see a large portion of our K-through-8 customer base or K-12 customer base actually leveraging this product next summer. Super helpful. Maybe just as a follow-up from me, on the Varsity Tutors for Schools, great to see, you know, the 44 contracts signed in the quarter. I'm curious, what you're seeing, I guess, in terms of momentum on the pipeline, heading into Q3. Were they motivated to really get a solution implemented and decided on the selling season this year? Or are you still seeing sort of a healthy pipeline as we go into Q3, for the, you know, fall 2022 launch? Thanks. Yeah, we have a growing pipeline as we head into back to school. I think one of the things that we saw last year is that the start of the school year is a real forcing function to start thinking through the specific, you know, final elements of different contracts. As school started last year, we saw the pipeline that had been building actually turn into completed contracts. We feel good about the 44 contracts that we signed in the quarter, feel good about the fact that the pipeline of bookings is growing. We've seen that the urgency increases just naturally when the school year starts, and schools start thinking about actually implementing those programs. One of the things that we've also heard is that the American Rescue Plan funding, the $24 billion that was set aside for COVID learning loss, that only about 18% of the total funds have been spent, and 11% specific to the ARP learning loss funding. There's plenty of funding available. We're hearing many schools that are interested in considering longer-term relationships than has been the case over the course of the past year, which is something that we're encouraged by. It lines up well with the two new products that we have in On Demand, our chat-based solution, and then Teacher Assigned, our district-wide solution that allows teachers to assign online tutoring that's live and interactive to any student who needs it. We think the two products align well with that long-term need and feel good about the pipeline going into back to school. Excellent. Thanks for the color. Congrats again. Thanks, Ryan. Thank you for your question. The next question is from the line of Eric Sheridan with Goldman Sachs. Your line is now open. Thanks so much for taking the questions. Maybe two. You know, in terms of the pipeline you're seeing, can you just maybe take a step back and refresh us on how pipeline turns into revenue and how should we be thinking about that as a tailwind for revenue growth when you look out over the next 1-3 years? That would be sort of the big picture question. Your comments on high-value marketing, any sense of going deeper there in terms of what that means in terms of which channels or the absolute spend on marketing and how you're thinking about ROI and marketing and how we should be thinking about marketing as a component of your operating costs on a multi-year view, as a result of maybe that shift to high-value marketing. Thanks so much. Hey, Eric. Thanks for the questions. I'll answer the pipeline question. Chuck will take the marketing question. From a VT for Schools pipeline conversion perspective, you know, those are a little bit lumpier. You've got to work your way through school board approval, superintendents, and it takes a little bit longer certainly than our consumer side. We're also switching the sales team's focus to higher student-based populations because we're seeing that those traditionally have higher recurrence in year-over-year contracts, and we're able to meet, you know, a larger proportion of students' needs in those districts. Typically, once a contract's signed, you know, an implementation period is, you know, a little bit less than a month, and then you would start to see revenue being recognized thereafter, especially as it relates to the high-dosage products. On the new On Demand and Teacher Assigned products, since those are on a per year per student basis, those are recognized more linearly across the contract on a monthly perspective. Just maybe lastly, how schools are thinking about the longer-term funding. Chuck mentioned, you know, only 11% of that ESSER III funding had been deployed. There is a spending cliff at the end of 2024 as it relates to those specific funds, and so we would expect over the next year and a half, schools would look to deploy those to a much greater extent. We are also starting to have conversations around multi-year contracts with schools, because if they contract those monies, before the end of the spending cliff, they can extend beyond the cliff. We feel like the opportunity set and runway in front of us still remains quite high. On the second part of your question, one of the things that we're focusing on with the Learning Memberships product on the consumer side is long-term relationships with learners over time. Those are students that are interested in ongoing support across potentially multiple subjects and multiple different need states so they can leverage the solution and learn however they want across those different subjects over longer periods of time in service of better student outcomes. Implicitly, what that means is there will be some of the customers that are seeking last-minute hyper-transactional relationships, and this product is not oriented toward them, it's oriented towards those long-term needs. The marketing on either a subject basis, an audience basis or as it relates to any indication of intent, the marketing is going to line up towards communicating that we can support students on a recurring basis over multiple different modalities over a longer period of time. We're seeing that the students purchasing Learning Memberships are purchasing the one-year contract most frequently. We're seeing it resonate. People are signing up for that recurrence. They're then actually showing up more frequently and are engaging at higher levels. There are some customers that we're not marketing to, we're speaking to as it relates to, say, last-minute help. Thanks so much. Thank you for your question. The next question is from the line of Maria Ripps with Canaccord. Your line is now open. Great. Good afternoon, and thanks for the questions. First, is there anything you can share around the economics of your all-inclusive memberships? How do gross margins of this offering compare to one-on-one or small group classes? What are some sort of puts and takes to keep in mind here? I have a quick follow-up. Yeah. Thanks, Maria. I'd say, you know, we said this on the last call. We still expect based on current pricing that Learning Memberships would be slightly accretive to historical package gross margins. You know, one thing I'd caveat is we do continue to experiment with some price discovery with customers, what's included, the frequency of the offering and the impact that that has on pricing. We feel really good about the margins as it relates to memberships and think that they'll be accretive going forward. Got it. Secondly, given that your product has evolved so much over the past year or so, on the marketing side, can you maybe just talk about how you align your brand messaging and creative with your product strategy now? Sure. If you think about the types of marketing that we engaged in, you know, one of the differences you'll see is that StarCourses is now being converged into our Learning Memberships product. In service of our path towards better marketing efficiency and better operating leverage, we're actually pulling back some of the StarCourse promotion spend and then putting a lot of that spend towards more content and more resources and more live classes in the actual product. The marginal cost, of course, is serving an incremental user for a class is you know, very efficient. We think that by spreading out, you know, effectively the whole offering of classes, removing the friction that historically would have been associated with it, that we can actually provide immense value, but do so in an efficient manner and communicate the breadth of the offering and the extent to which it's a holistic solution. One of the things, as an example, that we're going to communicate to parents of high school students or high school students as one specific audience, just to provide a little bit of color on, is that we'll have effectively all common advanced placement courses covered, and all foreign language classes will be covered, and all of those things will be included in the Learning Membership. That combined with adaptive diagnostic testing, covering effectively every K-12 subject, is something that we would position as being part of that holistic offering that ensures that students have the academic support they need when they need it. A lot of the messaging will orient around that general theme, around accomplishing goals and putting in the time and getting the corresponding academic results that come with having consistent ongoing support and leveraging the platform across these different products. Great. That's very helpful. Thanks so much for the color. Thank you for your question. The next question is from the line of Brett Knoblauch with Cantor Fitzgerald. Your line is now open. Hi, guys. Thanks for taking my question. Congrats on the quarter. I just have a question about guidance. You know, it was a big beat this quarter. Didn't really follow that through. At one key, you guys said about a third of the reduction was due to macro, and it appears macro is not impacting you at all. Can you just walk through the puts and takes with, I guess, why you left guidance unchanged? Am I right in thinking that you may be experiencing faster adoption of the membership offering, which is resulting in stronger near-term headwinds? Yeah, Brett. Thanks for the question. You know, as it relates to the guide, I think there's a couple different moving pieces in there. Again, we didn't see a significant macro impact toward the tail end of the summer. We're not seeing it now as we enter the key back-to-school season. One of the things that we did say and experience during the summer was that with the heightened travel, we did see a decrease in the number of enrichment classes. You know, last summer to the one before this past one, we offered summer camps. Those had significant demand. That demand fell off certainly this year. As it relates to rolling forward the beat into the subsequent quarters and full-year guidance, you know, the way we're thinking about it is the positive signal that we got from a membership perspective, you know, is just allowing us to lean into a greater extent. That exacerbates the J-curve compared to the last guide, but allows us to continue to roll out memberships to a greater extent. Those are really the puts and takes. You know, it's a caveat, and we mentioned this, you know, in the scripted portion. You know, if we continue to see the strong signal, we're gonna continue to lean into the memberships. That will affect where we end up within, you know, the full-year guidance. Yeah. Just to clarify, what we said in the last quarterly call was that we saw people purchasing a little bit closer to need. As we headed into summer, you know, I think this has proven to be the case with the concept of revenge travel, just heightened international travel, people did in fact take very significant vacations. We didn't attribute it to any one thing, but rather said between, you know, macroeconomic factors potentially and/or travel, we had seen a little bit of booking slowdown that we wanted to share in the last quarter's earnings call. Now, what actually happened is we actually are not seeing any macroeconomic impact today. The travel did in fact occur, and as we head into back to school now, we're encouraged by all of the trends that we're seeing as each wave of schools get us back in session. Okay. That's extremely helpful. How should we think about maybe the conversion of the one-on-one revenue and membership revenue? Should we expect over time that most of the one-on-one would eventually be coming through membership? Well, we're really encouraged by the fact that it seems to be resonating across all the different metrics that I cited earlier. That's what caused us to have confidence in making it the option that we presented to the majority of our new customers. I think as it relates to what happens to the package model, you know, we're still selling the package model to customers and, you know, it's a great business, but we're actively trying to improve the membership experience, process to the point where, you know, we might be able to shift a higher proportion of customers there. Our teams are actively focused on that. They delivered a great product for back to school that we feel is exceptional. That said, we're continuing to make it better. As we see that work pull through to improved economics, or conversion metrics, that would be the thing that causes us to lean in further to the membership model and away from packages. I think it would be too premature to speak to what ultimately happens there. Understand it. Extremely helpful. Thank you, guys. Appreciate it. Thanks, Brett. Thank you for your question. The next question is from the line of Mario Lu with Barclays. Your line is now open. Great. Thanks for taking the questions. I have a couple on Varsity Tutors for Schools. You mentioned you contracted over 180 school districts since inception. I was just curious how the retention of those districts have trended over the last year or so. I believe earlier this year you mentioned 30% of those districts re-ups. Curious how that trended. In terms of the strategy shift to the larger school districts, does that have an impact in terms of the prior guidance that schools will be 10% of total revenue this year? Thanks. Yeah. Thanks, Mario. I guess I would say as it relates to the guide, we still feel good about the pipeline. It continues to build. We did shift towards those higher student population school districts from a sales team focus, also focusing on bundled offerings by joining together On-Demand, Teacher Assigned, and the high-dosage tutoring as we continue to sell into schools. We are not changing today the current guidance relates to, you know, expectations for this year, and continue to feel good about where we're positioned. From a bookings perspective, I would tell you that during the Q2, you know, we did nearly $4 million of Varsity Tutors for Schools bookings. Year-to-date, that's $8 million. Program to date, it's $22 million. You know, for a product offering that's in its first year to deliver that kind of growth, you know, I think is, one, a testament to the capability of the products that the team delivered as well as, you know, how it's resonating within the market. Yeah. Some of these contracts we signed throughout the course of the fall are one-year contracts, and then we have the option to have another conversation. For some of those, the renewal conversation naturally happens as the product starts approaching that renewal date, and it's not renewed in advance of that. I think we feel good about the pipeline going into back to school. These new products actually allow for us to have different conversations about potentially bundling the different products together in a way that is different than the implementation over the course of the past year. You know, collectively, those new products actually allow for us to have a more strategic conversation that lends itself towards these district-wide solutions. Great. Thank you. Thank you for your question. The final question is from the line of Greg Gibas with Northland Securities. Your line is now open. Hey, Chuck and Jason. Thanks for taking the questions. Apologies if I missed this, but you know, wondering if you could address the dynamics relating to your tutoring base, and maybe how you expect wages or tutor pay to trend going. Question. We, you know, we're always excited about the other side of the marketplace. You know, what we're seeing on an inflationary perspective related to Experts is that, you know, to date, we haven't experienced that because we're able to source tutors from across the entire United States, and because of the immense value that we provide to the tutor side of the platform from an administrative, from a billing perspective, from providing them, our matching algorithms to give them the best student experience. We haven't seen that yet to date, and continue to expect that to be the case going forward. Yeah, the one thing I'd add is we are experimenting with different incentive offerings and different forms of compensation. One of the things that we are actively aiming to do is focus on having fewer relationships with more very high-quality experts who can drive disproportionate engagement and LTV. Our teams are actively trying to shift some of the volume of work and of learners to some of those top experts who can then disproportionately drive engagement and LTV expansion. One of the metrics that we are actively aiming to change is to not increase the active learner count as much, which of course has costs associated with it, and instead invest into higher levels of retention and engagement on existing experts, particularly those that are driving disproportionately good outcomes for students. Got it. Very helpful. You know, I guess last one from me relating to the Codeverse acquisition. You know, are you seeing other possible targets that You know, is this kind of what we should expect your M&A strategy to be primarily focusing, you know, some of these complementary or enhancements to the subscription offering? I'm just wondering if you're seeing more, you know, potential there. Yeah, I think that the Codeverse acquisition is a good example of how you know an external resource that we acquire can be incorporated into our existing learning membership product in a way that drives additional value and allows for us to either enhance conversion or extend lifetime value through better retention. The thing that is interesting about this and that we would be interested in replicating in future acquisitions that we may consider is that we can actually leverage it with our institutional audience in addition to consumers. Our intent is to integrate Codeverse into our learning membership product later this year before the end of the school year, and then next year integrate it into our institutional offerings, so students at K-12 school districts can leverage it as well. Of course, whether it's the buy solution as is the case here or, you know, as it relates to all the other products and product capabilities we've built, the fact that we can build it once and then leverage it across both all the consumer audiences as well as our institutional segment, we think is really compelling and allows for us to get more leverage out of our investments. Thanks, guys. Thank you. Thank you for your question. This concludes today's conference call. You may disconnect.