Good afternoon, everyone, and welcome to this next session on day one of the twenty-sixth Annual Needham Growth Conference. I'm Ryan MacDonald, and I lead the edtech research efforts here at Needham. This afternoon, it's my pleasure to be joined by Nerdy Founder, Chairman, and CEO, Chuck Cohn, and CFO, Jason Pello. Gentlemen, thanks for joining us today. Ryan, thanks. Great. Thanks Great. Thanks for having us. Absolutely. So for those who are listening in, we're gonna have about 35 minutes for a fireside discussion. If you do have questions, though, for Nerdy management, please put them in the chat, and we'll make sure to get those asked and answered. But with that, we'll jump right in. Chuck, you know, for those who might not be familiar, how about a brief overview of Nerdy? Sure. So Nerdy is a leading platform for live online learning, and our mission is to transform the way people learn using technology. So we leverage technology, including AI, to deliver high-quality live learning at scale. Our flagship business is Varsity Tutors. It's one of the largest platforms for live online tutoring, and we have both a consumer business and then an institutional business called Varsity Tutors for Schools that we launched about 2 years ago. So on the consumer side, we help people of all ages from elementary school, middle, high school, college, and adult. It's pretty evenly distributed throughout that range, and then on the institutional side, it's focused on K-12. Excellent! I look forward to digging into both sides of those business. I think some real interesting drivers in each. But the tutoring market has historically been pretty fragmented and often regionally conducted offline or in person, yet Nerdy operates at a national level and an online manner. How do you bring this to bear, and what would you say are your key points of differentiation are versus some of those more regionally focused offline players? Sure. So our superpower is live. So we're able to do live learning at scale through a proprietary platform better than any other company out there, and you can learn any of 3,000 different subjects, and we match experts and learners together, personalize that match, the recurring relationship over time, and then we surround the live relationship with all sorts of content and tools that are additive to that experience. And so you can think about the world from the perspective of either online or offline, and then separately, live or asynchronous, and we live in that live online at-scale environment, and that's where, you know, we delight users. Ab solutely. And I think studies will show that the live s ynchronous content, I think, is what really drives the outcomes at the end of the day versus just the asynchronous, but we'll dive into that a bit more. You know, so you mentioned consumer side, institutional side of the business. We'll start on the consumer. You know, this past year, your team's executed really well on completing a transition of the consumer business to a membership model, and really, in less than 18 months, which I think, you know, given the lift there, is a bit remarkable. You know, Before we dig into the financial impacts of the transition, you know, let's talk about the offering itself. What is a Learning Membership, and how is it different from your previous offerings? Sure. So a Learning Membership is an all-access subscription offering that aims to support learners across academic calendar years, across different subjects they might want to learn, across different modalities, whether it's one-on-one tutoring or live classes, or async, or recorded video. We bring them all together to create this comprehensive offering that is oriented from the beginning of the relationship towards supporting a student over all of their different academic needs. And that's different than how we operated in the past, where we had a package model that was more transactional and specific to certain products. And so by bringing all of our products together and then reframing the relationship from the perspective of supporting a student across all these different ways of learning, it's totally changed how they think about the company and then the value that they've received in terms of the offering. So they're paying way less upfront. They're also getting way more value, and then we're orienting that relationship towards supporting them, and it's pulled through to significantly improved lifetime value, starting to be about 2x at the 12-month mark of what we previously had while holding CACs constant, which, you know, is a tremendous win, and I think speaks to the value that we're providing to consumers. A nd that's really interesting in terms of the value that you're adding there. But, you know, these transitions can often be, you know, tough to navigate through. So I'd be curious your learnings and, or what you've learned about maybe user behavior as you've shifted from transactional more to, like, the subscription membership model. Sure. So, you know, very early on, we just had such tremendous signal on the levels of engagement that we saw with Learning Membership. This is eighteen months ago, when we first- Mm-hmm S tarted really testing it. That gave us the conviction that we finally had removed friction from the experience such that people would actually want to use a multitude of different products, and then that it would actually change their behavior over time, which is something that we had seen over many years. That when people engage with multiple different learning formats, that they stick around way longer, they get more value out of the offering. And then, as we brought them together, we saw that pull through in the form of much higher levels of retention and engagement with different products. Mm-hmm. Much like any service that's digital in nature, the more you can get people to leverage it and get value out of it, the stickier those relationships are. One of the big improvements that we made this fall, that was a pretty massive undertaking, but has resulted in, I think, the expected improvements that we were seeking, is by bringing together all these different products, making them more discoverable- Mm-hmm H aving a consistent user interface, and then serving up recommendations on how you can learn next that best serve your learning goals. We've seen a pretty dramatic increase in non-tutoring engagement, so people using these other zero marginal cost products- Mm-hmm T hat are additive to the relationship, and that's an area where we've really been leaning in to drive more and more and more engagement. Interesting. so obviously much, much better LTV, you know, and then obviously some nice efficiencies and, and maybe additional leverage on, on the bottom line from the, the transition. So, you know, as you look at and, and got through year-end here in 2023, you know, do you anticipate entering the, the new year with 100% of consumers on Learning Memberships? And, you know, if so, what, what, what benefits do you think that provides moving forward? A bsolutely. We, we do plan to have all customers on the consumer side engaging with Learning Memberships. It's actually been the case since the Q2 when we transitioned the last audience professional to this space. And then when you think about the revenues from this business, 96% of them during the Q3 on the consumer side were from Learning Memberships, and that'll be 100% in the Q4. So we'll have effectively completed the transition. And we always knew internally that the unit-level economics were far superior, and that's becoming much more readily apparent now that we've transitioned the entire base, and you're seeing the compounding benefits of all consumers on this space. So Chuck mentioned it, LTVs are twice as high at the 12-month mark. Higher gross margins during the Q3. We had record gross margins at 72.4%. That was up 340 basis points year-over-year. And then we're seeing significant leverage throughout the P&L, which I know we'll get to a little bit later. We also saw ARR of $164 million at the end of Q3 on Learning Memberships, which was over 3x what it was just a year ago at $50 million. So we feel the momentum is there. It provides a higher, a much better platform for innovation, as Chuck mentioned earlier, and greater transparency and predictability into recurring revenue on a go-forward basis. It's interesting. As you think about maybe the investments you need to make to bring on the new learning members, is there anything different in terms of how you go about doing that or attracting, you know, maybe learners to the platform in a learning membership model versus the old transactional model? One of the things that we tried hard to do is make sure that the relationship is marketed, sold, framed from the perspective of a long-term recurring engagement, as opposed to something that's hyper-transactional. The psychology of the consumer coming in does have a material impact on how they then use the product, and that it ultimately changes how you reach consumers and what types of marketing actually resonate, and how people refer to you when they refer to your business through word of mouth. There have been changes in that regard that have allowed for us to better reach people that are looking for that recurring relationship that is obviously way higher LTV, but also accounts for the super, super majority of spend in the category. We're now squarely situated against that need of, you know, recurring weekly sessions, you know, as opposed to hyper-transactional, last-minute help that at the opposite extreme is, you know, very little value in the category, but would require maybe marketing a little bit differently. We could facilitate both, but we think the bigger opportunity is to frame it from that holistic, you know, multi-subject, multi-year, multi-student perspective. A bsolutely. And I imagine that maybe just last one on consumer and we'll move to institutional, but I would imagine, you know, that education spend is a little bit more durable in these instances than maybe broader consumer spending. But, you know, I think a lot of investors on this are trying to understand the psyche of the consumer going into 2024. I'd be curious to, you know, from what you've seen over the holiday season or just recently, you know, where you think the strength of that consumer stands as it relates to your business. Yo u have to remember, the consumer is the parent. Yeah. The reason that people get tutoring is because there's some acute problem- Mm-hmm. or important goal they want to accomplish. So regardless, you know, going back, I just, you know, 17 years since I started this business, at this point, we've never been able to notice the impact of the economy, positive or negative, over that time. It's all been based on the execution of our team and then the quality of the products and the extent to which, you know, they resonated with consumers and other changes that we made. And so I think the right way to think about it is nobody's going to not get tutoring for their kid that needs to learn to read, and, you know, these are parents. They tend to be affluent on average in our consumer business, in our institutional business. These are related to state and federal budgets, and tutoring is being shown to be the most effective way to remediate learning loss and improve student achievement. So the economic factors are not really something that we're thinking about right now. That's good to see the durability of that. All right, so shifting over to the institutional business. So while Varsity Tutors for Schools started as a high-dosage tutoring offering, I think you guys have done a really great job from an innovation perspective on the roadmap. You added chat-based tutoring, as a portfolio of assigned offerings. And, and I think the assigned offering creates a real interesting opportunity for Nerdy moving forward. So can you provide a bit more color on those assigned offerings, whether a teacher, parent, or district assigned, and how it improves upon the core high-dosage? Sure. So we're a little over two years in since we first started Varsity Tutors for Schools. We've had all sorts of learnings over that period of time, and we've been able to make pretty dramatic improvements in the underlying operational and logistical systems that underpin the product in terms of reliability and predictability. And then separately, we've been able to bring many of our consumer products to bear and provide this all-access membership that is very similar to what we've done on the consumer learning membership side. So we're now able to provide school districts with immense value that scales across the district in the form of live group classes across hundreds of different subjects: ACT, SAT, robotics, you name it, as chat-based tutoring and also all of our asynchronous products. So the video modules and self-study tools and diagnostic tests, they all come free with the platform for the entire district and then the actual premium offering that schools are purchasing is the high dosage tutoring implementation model. There's three flexible models, each of which comes with access to the platform, and it's allowed for us to have very different conversations than was the case in the past, because we can service the three different ways that schools actually want to administer tutoring at scale. Mm-hmm. So one is through a central school administrator, one is when the teachers actually select and prescribe tutoring to students that need it on a recurring basis, and then the third is through parents, where schools want to allocate that responsibility down to the parent. And then our purchasing Learning Memberships, we call that parent-designed in our institutional business, but it's, you know, effectively the learning membership from the consumer model that then scales and has administrative tools sitting on top of it. And those three different offerings brought together, all of which are subscription-based, has allowed for us to transition the whole business to basically subscription at this point, and the majority of the institutional business, and then provide way more value in a way more scalable way than was the case in the past. Mm-hmm. I mean, I think- Maybe- G o ahead, Jason. I was just gonna say, sorry, one thing to add there, you know, these products are really resonating with both our new customers, but also our historical customers. During the quarter, we were able to transition more than 25 customers over to these new teacher-assigned, district-assigned, or parent-assigned contracts with total contract value of $5 million. So we feel really good that not only new customers are embracing them, but current or existing customers also see the benefits of these new products. Interesting. And then I wonder, does the contracting or the consumption model much different than what you or I guess the existing relationship with the districts? Or has it been pretty easy from that perspective also to make the transition over? I think it's actually administratively easier for both sides. Mm-hmm. So what teacher-assigned and district-assigned provide is a weekly allocation of hours for the school district to use. They know how much they get each week, so they can position students into each of those slots. And then for us, it better aligns supply and demand over a longer period of time, so you don't get, like, the lumpiness that we historically saw in a pure high-dosage situation when they were purchasing large-scale packages. Interesting. Okay, so actually better from a visibility perspective too, and from a, and from a forecasting perspective. Interesting. So obviously 2024 is a pretty big year on the institutional side of things, just given the fact that we're entering the final year of ESSER III funding to be allocated. And the looming deadline is September 30th of 2024. You know, what impact would you say that this is having on the demand environment currently? And how's the pipeline looking for the institutional offerings and the assigned offerings heading into 2024? I think the thing that the original ESSER funding, which is $24 billion for learning loss, that you referenced, there's about half of which has been spent. I think the thing that it did was really put a huge emphasis on high-dosage tutoring to an extent that hadn't existed before. So the institutional tutoring market did not exist before COVID. Mm-hmm. COVID made people aware that you could get great online learning solutions through a third-party platform, and it also shook loose historical ways of operating and made school districts more open to, you know, considering a new way to augment their the learning that actually occurs within the day. There are also a number of new studies that came out that basically revalidated but within a school district setting, just how effective high-dosage tutoring is. So there's this convergence around tutoring as the most effective way to remediate learning loss. So there's certainly.. You know, we would expect, you know, an uptick in spending, maybe a significant one, as we approach that specific deadline. School districts are actually using high-dosage tutoring within multiple different audiences, and they're using general operating funds for high-dosage tutoring. They're using Title I funds. There's also Compensatory Special Education Services funds. And then you also, lastly, have state-specific budgets that are now getting passed, and that's completely net new. So there are multiple different state-specific budgets, some of them, you know, very large, in the $100s of millions, that were specifically passed for tutoring just since Labor Day. And that's been, like, a complete game changer in terms of maybe giving school districts like a little bit of a push to implement programs, and we feel like we can be a great partner to them and help deliver high-quality, high-dosage tutoring at a district-wide scale with the reliability of systems that they expect, but then also provide all these adjacent services that are value add. A nd maybe just before we go onto the state level side, because I think there's a real interesting opportunity there. You know, last year, you talked about it, that high dosage has really become the, I would say, table stakes or, or the option of choice relative to the chat-based tutoring. And a lot of the questions that started from this Washington Post article that this time last year was highlighting poor utilization trends in the chat-based offerings. Are you seeing, I guess, as you progress through the past year on the high-dosage side, enough confidence from the districts and the states on the utilization they're seeing in high-dosage for that to y ou know, continue to see investment there even post, you know, the funding tailwinds ending? T he high, high dosage does not suffer from the lack of engagement. Yeah. So we see a lot of interest, a lot of focus. It's live, it's video-based. You see the people. Mm-hmm. We, you know, involve the school districts in our implementations, and there's a significant amount of interest in understanding utilization trends, and we see high levels of engagement on the platform with the product. We also see a lot of interest in understanding engagement on the platform. So it's not like there's a hands-off approach from, you know, our district partners. They're very, very interested in having an understanding of how it's being utilized, and then any insights they can then garner in advance of, like, the objective outcomes data. So, you know, we feel good about how we've been engaging, and we're gonna continue to get better and better. Also, getting school districts to leverage all these adjacent tools, that we think could add value to the entire district. A bsolutely. Okay, so on the state tutoring, the state-level tutoring initiative, so you've had some nice initial success, Ohio, New Jersey, Virginia, I think group three that you've announced. You know, maybe just provide a little more color on the structure of the deals, 'cause to my understanding, it's a pool of spend that you, you know, have the potential then to go to the districts and drive adoption from that perspective. But maybe just talk about the opportunity and then, you know, how each district or each state is measuring success in the current school year. Sure. So the flavor of each of these is a little bit different. There are a couple of states that are doing a direct-to-student initiative, where it's up to the student to select which approved high-dosage vendor they wanna work with. Mm-hmm. You know, in our case, we think that accrues favorably, given our consumer brand and the fact that consumers are already aware of us, and we have a head start relative to maybe some of the other approved vendors that are out there and are pretty differentiated. Mm-hmm. And then, there's other offerings where they allocate the funding down to the school district level, but the, you know, RFP process occurs at the state level, and we get approved, and then, you know, it's up to us to convince the school district to wanna work with us. And again, you know, that comes down to the merits of our offering and our past implementation success and, outcomes, and that's where we feel like, you know, we have, like, a significantly improved. You know, if you think back two years where we had no district partnerships- Mm-hmm. Now we have, you know, hundreds of district partnerships that we can speak to. It puts us in a very different position. Mm than was the case, in addition to all the product improvements that I mentioned before. And so those are t wo of the different flavors. Within the ones where they allocate down to the school district level, there are some where, you know, they rank order their top three choices, and the school district then, you know, allocates it out. That was the case in Ohio. You know, in a couple of the others, it's just up to the school districts to choose whatever implementation model they want. But again, we think that, you know, the quality of our products and the past successes with our implementations will speak for themselves and allow for us to win a disproportionate share. Interesting. And I mean, are these mostly being structured as, like, one-year deals at this point, just so the states can understand what the utilization is, what you know, and maybe where to further refine spend moving forward? And, you know, so but does that create opportunity for multi-year renewals or consolidation of share trend? How do you see that opportunity? Yes, very often they are one-year contracts. Mm-hmm. I think one of the areas where we feel like we're well-positioned is, there's other companies that are falling down based on the inability to deliver reliably at scale. Mm-hmm. Their systems aren't there, and it can be a very labor-intensive process if you haven't built the right underlying algorithms and notification systems and actual, you know, proprietary online platform itself and have sufficient liquidity on both sides. And so that's where we're actually picking up, you know, more and more opportunities, and others are kinda getting, you know, asked not to participate in programs where they can't meet the expectations of the customer, as would be the case, you know, in market in any industry. Yeah. I feel like that accrues to our advantage, where, you know, if you do a good job, you get rewarded with a narrowing of the field, larger contracts, more renewals. Go ahead. T he only thing I'd add to that is, you know, while some of the initial state deals are for one-year programs, we're already hearing about expansion in those specific states, given the positive results that they're seeing. Mm-hmm. And then, I think importantly, what you're seeing is more and more states are also continuing to adopt similar tutoring programs. Last week, Arkansas announced a program. We also submitted for an RFP in Michigan. And so it's happening on a much greater scale, and it's not specific to red states or blue states. It's just widely understood and agreed that high-dosage tutoring, so meeting multiple times per week with the same individual over an extended period of time, is really what's gonna remediate COVID learning loss- Mm-hmm A nd learning loss maybe more broadly for students. And so bipartisan support, that continues to spread across more and more states. T hat's great to see. That's great to see. I wanna talk about the power of the platform a bit. In education, we often hear about the flywheel effect of having a great consumer marketplace that generates content, and then that can fuel the enterprise or institutional business. But I'm curious if you're seeing any benefits on the reverse end of that, as you have success with Varsity Tutors for Schools in these markets, within these schools, you know, you start to see parents seeing their kids now using the offering more. Is that having any i mpact back on the consumer side of the business? Sure. No, I think a year ago, you asked us about this, and I said, you know, we endeavor to have a halo effect. Mm-hmm. But we're now starting to see it in the form of people actually overtly saying: "I learned about you through the school- Interesting A nd you guys seem great, and I would like to purchase additional, you know, private paid tutoring on an ongoing basis." So that's l ike, the genesis for learning about us. And so we're starting to, like, hear about those on a, you know, daily, weekly basis. But they're starting to pick up, which is- Mm Y ou know, I think, allows for us to monetize in a different way than other platforms out there and then benefit from the fact that we're building once, but then leveraging our products, you know, in n number of markets. Mm-hmm. Interesting. And then on the product development side, how much of what you're developing or as you continue to iterate or innovate on the consumer side, can you then apply back into the institutional business? T he super majority. So, you know, we often test in consumer where we can get signal at a, you know, smaller scale and with maybe fewer modification requirements. Since every school district's different, inevitably we have to make slight customizations, and allow for those. And so very often we'll just test first in consumer, then roll it into institutional. But, you know, in both cases, if you think about how different this type of innovation is than how we innovated two years ago before we had access-based subscription models, you would've had to sell in an additional product. And now, from the get-go of the relationship, from either the consumer or the institutional customer, they're thinking about how they engage with you through the idea that they get access to these additional products. We could just add in an additional product, or we can modify that product, and it just naturally enhances the offering. Yeah. Maybe this is a good time for a question from the audience. So one of them we got in was: "To the extent that you're able to see it, is there any risk of success in the institutional business cannibalizing the consumer offering over time? If we got to that point, it would be a pretty, pretty big. Yeah B usiness. So we think that the opportunity to benefit from a halo effect as we penetrate more and more school districts is significant because you just inherently get credibility associated with your offering. And tutoring is a, you know- tutoring, supplemental learning, and test prep, and enrichment is a, you know, ballpark, depending on what figure you look at, $30 billion-$50 billion domestic industry that's highly fragmented. And so to the extent that we can benefit from credibility associated work- with working with school districts and doing a great job, we think that could be highly additive over time to the consumer offering. Absolutely. All right, so let's shift to the fundamentals. You know, Jason, you've been able to re-accelerate top-line growth as you've completed the transition to Learning Memberships and as the institutional offering continues to scale really nicely. While you haven't given guidance for fiscal 2024 yet, you know, consensus estimates have the growth continuing to accelerate into the mid-20s in 2024. You know, can you talk about what the key factors, you know, you think will help drive continued acceleration in 2024 in the biz? Sure. Great question. So when you think about maybe 2023 to start, as we've transitioned the entire consumer side over to Learning Memberships, we've seen consolidated growth every quarter on a sequential basis, so from 5% to 16%, 27% in Q3, and then at the midpoint of the guide, you'd be a little over 30% for Q4. As we move into 2024, what you would expect to see is a continuation of those building blocks. So Chuck mentioned earlier on the call, higher LTVs of our current customers, coupled with the fact that, you know, at the end of the Q3, we only had 40,000 active learning members. Mm-hmm. A t any given time, there's 50-55 million students in the U.S., and if you can just capture half of 1% or 250,000 of them, you're at a billion-dollar run rate business. So we'll continue to grow new customers on the consumer side, and you'll see that LTV extension will continue. And then when you think about the institutional side, you've got the benefit of building trust and credibility in the market over the course of the last two years. You've got a larger base of existing customers that'll continue to renew next year. And then you've got the growing awareness that we've been talking about on the call, coupled with the additional funding sources from states and the closing of the ESSER funding in the Q4. That'll continue to drive outsized growth on the institutional side. Maybe just for those of the, those of us that aren't as familiar, that business went from 0 2 years ago to $19 million in revenue in 2022. You know, at the midpoint of the guide, it'll do over $30 million this year or more than 60% growth, and we feel really confident that those trends will continue into 2024. One of the other question we got is: How do you get comfortable with the seasonality of the business, you know, moving forward? Obviously, you know, this past summer into fall was the first, you know, I guess you could say, experience you had on how maybe the learning members, you know, might operate or what their usage and utilization might be. Just curious at how you handicap that as you go into 2024. C ertainly, you know, this past summer was the first one that we had transitioned Learning Memberships at scale. So there were learnings there for sure, you know, how customers would consume, what products they wanted emphasized, whether it was a shift from one-to-one tutoring towards, you know, non-tutoring engagement, having a greater breadth and depth of class offerings across both enrichment and academic subjects, and then making sure that students were utilizing, for example, ACT and SAT prep courses during the summer months. So I think that with the new user experience, the heightened levels of discoverability across different modalities and the breadth of subject offering that we've got, you'll start to see higher levels of non-tutoring engagement, and that can help us bridge those shoulder months when students aren't in the academic calendar. So we feel good about that. Definitely some learnings this past year, but we've continued to improve and have already seen those improvements start to pull through in the Q4. That's helpful. Shifting to margins, you guys have obviously done a great job on delivering positive Adjusted EBITDA early relative to where our expectations were in 2023. You know, Jason, in the past, you've noted that Learning Memberships come at significantly better gross margins. You know, where do you think gross margins can go structurally longer term under the new model? Sure. So, for the Q3, gross margins were at 72.4% on a consolidated basis. That was up 340 basis points to an all-time high. That is gonna be, you know, a seasonally higher quarter 'cause you do get a couple summer months in there. We would expect the full year to be around 71% for 2023, but now that we've mix shifted the entire audience and consumer. You'll still continue to see some accretion as we annualize that in 2024. And then on the institutional side, you know, the new products, I think lend themselves towards a higher gross margin, even though they're at a lower price point, just given the way that they're structured with school districts. So we would expect that over the fullness of time, to be able to provide 75%, call it, gross margins on a consolidated basis. And then I think more importantly, as you look down the P&L and look at Adjusted EBITDA, we've been able to drive substantial operating leverage through increased automation and the LTV flow-through that we've seen this year. So on an Adjusted EBITDA basis, we started the year with a 1,900 basis point improvement in our guide. We'll actually be able to deliver over 2,000 basis points of improvement during 2023. And in addition to that, we were Adjusted EBITDA profitable in the Q1 and the Q2. The Q3, seasonally, we invest to a higher level in marketing at the back to school period. We've also committed that during the Q4, we'll be Adjusted EBITDA positive, and that in 2024, on the full year, we'll be Adjusted EBITDA and free cash flow positive. So the economics are starting to absolutely pull through, and there's plenty of opportunity to drive additional leverage through automation and scale. That's super helpful. And I think—obviously, I think if we—with the understanding that, you know, Adjusted EBITDA and f ree cash flow positive is t he, you know, the bottom line factor that you want to stick to. You know, it's not a question we can ask many of our companies in this environment, but as you're looking at an accelerating growth outlook, how do you think about balancing growth versus profitability and what you want to see, you know, to whether to decide whether you continue to invest and stay around that break-even level, but you might be able to drive a much higher growth rate relative to, you know, showing, you know, more of a balance of growth versus profit margin expansion? S ure. So, you know, internally, we think it was super important to get to profitability and being able to say that we're profitable, so we have the choice that you just mentioned. How much more do you invest in marketing or building out the go-to-market strategy within institutional versus, you know, having that drop to the bottom line? Those are the debates we're having now. We'll provide a little bit more color when we announce earnings in the full year guide later in February. But we do feel really good about the commitment that we've made to be profitable and free cash flow positive in 2024. Th at's helpful. T he only other color I'd add is we think that that balanced approach to growth and profitability drives better operating discipline and also ultimately leads to higher quality execution internally for our teams. Mm-hmm. T hat, that's helpful. I wanted to talk about innovation. Obviously, in 2024, we can't not talk about Generative AI. But, but that's really been a part of the Nerdy story, you know, over the past year, and specifically, you've had some nice advances there. Can you help investors understand what you've launched in Gen AI to date and t hat's in store for the future? And do, do you view this as more of a cost saver or a maybe an incremental, revenue generator over, over time? Sure. So we first started using machine learning to match students and tutors, call it at this point, seven years ago or so. So that's when we first started trying to detect patterns that would actually lead to a better match. And when you have 1,000 algebra tutors to pick from for a given student, which one would you select? Mm-hmm. We ended up getting so much leverage out of those initial insights, and then the quality of the matches, which then pulled through to happier customers, better engagement, higher lifetime values, that we really leaned into putting in place the infrastructure to capture data, to instrument all aspects of the customer journey, and then use that to inform personalization, both related to the match and a whole host of other things. And then started using it to, using ML to detect patterns that led to operational improvements and removing costs. So everything from lead scoring to trying to predict when we should engage with customers and customer propensity modeling and a whole host of other things. When Generative AI really advanced a year ago, you know, a little more than a year ago, we were in a position to run really quickly and piggyback off of all the infrastructure we had put in place. We have this concept that we call AI for HI, that you can read about in our, you know, initial prospectus, and that stands for Artificial Intelligence for Human Interaction. The idea that we've been orienting towards for a long time now is that you can digitally enhance and personalize offerings and give experts and learners superpowers that otherwise wouldn't exist in real life. You could do that through a digital platform that is vertically integrated and that allows for you to harness all of that data and benefit from the scale. So right out of the gate, we launched both products that leverage that data set and then additional products that leverage or create content that are additive to the experience. Some remove cost, you know, and are operational in nature. Some enhance the quality of the, you know, experience from the consumer's perspective, and others aren net new. So I think it was about a little over a year ago, we launched our first AI tutor, and that's gone through many different evolutions in terms of the offering, continues to get better and drive engagement on the platform. We also have generative AI creating dynamic lesson plans and materials for each tutoring session. So that's something that, you know, initially, we tested creating content. A tutor not showing up to a session. Mm-hmm with the right personalized content could be a source of customer frustration, or when they come with the right stuff, it's a source of customer delight. We then were able to act on that and start creating content and practice problems and other materials that are personalized for that learner at scale and pre-generate them, and then allow for experts to regenerate them, you know, in real time to the extent necessary. And that's something that, you know, has driven a lot of leverage and satisfaction from both sides of the network. We're using it to score customer service and sales calls, provide real time. We have data pipelines that pipe in data to our team so they can constantly be getting coached. We have a generative AI removing operational costs. We have AI customer support chatbots. There's a whole host of areas where we've been able to remove significant costs and enhance the experience operationally, and then separately build experiences that allow for people to get a different type of help and engagement. We think about all of this as either arming humans with superpowers or providing additional and adjacent resources that drive engagement and keep people coming back to us over time. Interesting. A nd that'll drive better outcomes over time, I imagine, So, maybe with just the last couple of minutes left, one, I think, topic to touch on is, Chuck, you've been a pretty active buyer of the stock over the last year, I think purchasing over $32 million worth of shares. You know, what do you think the market's missing about Nerdy today? And maybe speak to your confidence in the trajectory of the business. Sure. It's a markedly better business model. The offering that we have is highly differentiated. It's incredibly hard to do live learning at scale, and that by bringing together all of these different adjacent products into a access-based model, we're going to be able to significantly alter and enhance that customer experience. So that means higher lifetime values, it means higher gross margins, it means it's a way easier and less operationally intensive platform to operate. And then we're able to leverage all these investments on the institutional side and benefit from providing value to an entire district-wide scale. And then you also start benefiting from the halo effect, you know, as we mentioned, and, we think there's an opportunity to build, you know, a business that people will talk about for another 25-50 years. We have the building blocks in place to, you know, we think, do really well in the next couple of years, and that conviction pulled through to the $30 million plus in purchases. All set. No, we're gonna be looking forward to watching this story as it progresses this year. I think there's a really exciting 2024 ahead of Nerdy, for sure. So, but with that, we're out of time. Chuck, Jason, thank you so much for joining me today. Thanks to everyone in the audience who participated and asked questions and for joining us, and best of luck with the rest of the conference to everyone. Thank you, Ryan. Thanks.