Nerdy Inc. · NYSE:NRDY
Nerdy — SPAC Merger (January 2021)
49 slides from Nerdy's SPAC merger presentation, Jan 29, 2021
Slide 1: Nerdy Investor Presentation January 2021
Exhibit 99.2 Nerdy Investor Presentation January 2021Exhibit 99.2 Nerdy Investor Presentation January 2021
Slide 2: Important Information: General, Historical Financial Information, Use of Projections
2 General Historical Financial Information This presentation is for informational purposes only to assist interested parties in making their own evaluation with respect to The historical financial information of Nerdy for 2018 and 2019 in this presentation has either been audited or reviewed by the
Slide 3: Forward-Looking Statements (continued)
3 Forward-Looking Statements (continued) Industry and Market Data; Trademarks and Trade Names Accordingly, forward-looking statements, including any projections or analysis, should not be viewed as factual and should not Information and opinions in this presentation rely on and refer to information
Slide 4: Participants in the Solicitation
4 Participants in the Solicitation TPG Pace, Nerdy and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies of TPG Pace's shareholders in connection with the proposed business combination. Investors and security holders may obtain more det
Slide 5: Transaction summary and overview
5 Note: Projections are TPG Pace estimates. With respect to projections, see page 2 “Use of Projections” under “Important Information”. 1. Market cap assumes $10/share price. Target net cash assumes no redemptions by SPAC holders in business combination. See slide 41 for more information. 55 Note: P
Slide 6: TPG Pace SPAC track record
6 ● ● ● ● ● ● ● ● ● 1. Source: Dealogic. 2. Accel Entertainment was listed on the NYSE via a merger with TPG Pace Holdings Corp. EVBox Group has entered into a definitive agreement to be listed on the NYSE via a merger with TPG Pace Beneficial Finance Corp. 3. All four previous TPG SPACs traded up t
Slide 7: About TPG and TCV
7 ● ● 1. Source: TCV.com 77 ● ● 1. Source: TCV.com 7
Slide 8: Nerdy investment highlights
8 ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ 1. UBS Global Research. Dec 17, 2020. Future reimagined: What opportunities will online bring to the US$5tn global education market? 2. Total Net Sales Lifetime Value (“LTV”) is defined as new customer cohort actual spend for historical months and forecasted reven
Slide 9: Company overview
9 9 © Nerdy / TPG Pace Tech Opportunities Corp. 20219 9 © Nerdy / TPG Pace Tech Opportunities Corp. 2021
Slide 10: Nerdy at a glance
10 10 1. Represents 2H-20E revenue annualized (2H-20E revenue multiplied by 2) and shown on U.S. GAAP basis. 2. Online learning format revenue, defined as 1:1 online tutoring revenue and online group classes revenue and excludes in-person revenue. Transition to 100% online was completed in April 202
Slide 11: Online revenue growth
11 Note: Nerdy financial information shown does not conform to Regulation S-X or PCAOB standards and includes estimates of certain financial metrics adjusted to reflect PCAOB standards, and such information may not be included, may be adjusted or may be presented differently in filings made with the
Slide 12: Shift to digital learning
12 1. Dawn of the Age of Digital Learning, Michael Moe, GSV, May 6, 2020. 2. Survey of 1,000 Parents of K-12 learners conducted by Halsted Strategy Group, Nov 2020. 1212 1. Dawn of the Age of Digital Learning, Michael Moe, GSV, May 6, 2020. 2. Survey of 1,000 Parents of K-12 learners conducted by Ha
Slide 13: Large addressable market
13 1. Technavio, US Private Tutoring Market (2020-2024). 2. Technavio, US Test Preparation Market (2020-2024). 3. IBISWorld: Fine Arts Schools in the US (16-Jun-2020). 13 1. Technavio, US Private Tutoring Market (2020-2024). 2. Technavio, US Test Preparation Market (2020-2024). 3. IBISWorld: Fine Ar
Slide 14: Leading online tutoring platform
14 14 1. Leading online tutoring platform in the United States claim based on live hours in 2020 and subject breadth. Amounts exclude Legacy Businesses.14 14 1. Leading online tutoring platform in the United States claim based on live hours in 2020 and subject breadth. Amounts exclude Legacy Busines
Slide 15: A Comprehensive Learning Destination
A Comprehensive Learning Destination Going beyond One-on-One to meet more learning needs A continuous, multi-format learning experience One-on-One Personal Instruction Adaptive Self Study Assessments & Practice Problems Small Group Classes Average 5-15 participants Large Group Classes 500-50K partic
Slide 16: Marketplace of learners and experts
16 → → → → → 1. Data for Q1-Q3 2020. Net sales is a non-GAAP measure representing client purchases inclusive of payments due within 30 days minus refunds recorded during the period, a close proxy for cash receipts from customers. Amounts exclude Legacy Businesses. 2. Represents the percentage of 202
Slide 17: Superior Value Proposition for Both Sides of the Network
Superior Value Proposition for Both Sides of the Network ” Value for Learners Value for Experts Go 8@ 8 Better Experience Hand-picked experts, tech-enabled tools, multiple learning formats Convenient Learners can interact when, where, and how they want including scheduled and on-demand instruction C
Slide 18: Key performance metrics
18 1. Online paid active learners defined as the unique number of learners attending a paid online tutoring session or a paid online class in a given period. Amounts exclude Legacy Businesses. YoY growth as of Q4 2020. 2. Total Net Sales Lifetime Value (“LTV”) defined as new customer cohort actual s
Slide 19: An Operating System Engineered for Learning
An Operating System Engineered For Learning for ™ o<T f x oe Artificial Intelligence { for Human Interaction Interaction Layer Adaptive Learning Layer Matching Layer Curation Layer Data Lake TPG nerdy
Slide 20: Proprietary data and scale
20 1. 2012 thru December 2020. Amounts exclude Legacy Businesses.20 1. 2012 thru December 2020. Amounts exclude Legacy Businesses.
Slide 21: Data lake and matching
21 1. 2012 thru December 2020. Amounts exclude Legacy Businesses. 2. Defined as data points generated from student attributes, instructor attributes, past matching, learning interactions from online platform, website and marketing event interactions, and self study interaction. Amounts exclude Legac
Slide 22: Adaptive Learning Layer
Adaptive Learning Layer Personalizing the learning path to mastery Model-derived insights at the heart of a knowledge inference engine capturing every decision to continuously adapt the sequencing of curriculum. Continuous Personalized evolution across a Learning Plan learning journey ° o ey Adaptiv
Slide 23: Interaction Layer
~~; Interaction Layer Optimizing human interaction An autonomation system interleaving human judgment with machine intelligence. Vv Collaborative work space purpose built for learning v Subject-specific tools and references v Recordings and snapshots for post-session review v Integrated personalizat
Slide 24: Net Promoter Scores: Consumers Love their Experience
24 2 Net Promoter Scores Consumers Love their Experience 74 68 68 62 exactly what my son needed It was ... In just a few “ weeks he had a better grasp on Spanish 4 and raised his grade significantly highly recommend ! I them to anyone that needs additional help! 1 1. Net Promoter or Net Promoter Sco
Slide 25: Brand awareness and survey results
25 1. Survey of gen pop, 1,000 Parents of K-12 learners. Conducted by Halsted Strategy Group, Nov 2020. 2. Survey among current and past Nerdy users. Conducted by Halsted Strategy Group, Nov 2020.25 1. Survey of gen pop, 1,000 Parents of K-12 learners. Conducted by Halsted Strategy Group, Nov 2020.
Slide 26: Expert engagement and earnings
26 “ “ 1. Paid sessions are defined as the number of 1:1 tutoring sessions and the number of paid online group classes per active Expert in a given period. Active Expert defined as having instructed one or more sessions in a given period. Amounts exclude Legacy Businesses. 2626 “ “ 1. Paid sessions
Slide 27: Learner and session growth
27 1. Online paid active learners defined as the unique number of learners attending a paid online tutoring session or a paid online class in a given period. Amounts exclude Legacy Businesses. 2. Paid online sessions are defined as the number of online 1:1 tutoring sessions and the number of paid on
Slide 28: Multiple Vectors to Drive Sustainable Growth
Multiple Vectors to Drive Sustainable Growth ee "AA" Targeted M&A Bonn international Expansion a a Row [es] School@Home Full-time homeschool alternative NG cre ¢ok (9) VT+ Subscription Unlimited access to live group classes Self Study self-guided diagnostic tests, practice problems, and study materi
Slide 29: Annualized revenue growth
29 1. Annualized Revenue represents half year revenue multiplied by two. Amounts exclude Legacy Businesses.29 1. Annualized Revenue represents half year revenue multiplied by two. Amounts exclude Legacy Businesses.
Slide 30: Net dollars per learner by format
30 1. Net sales is a non-GAAP measure representing client purchases inclusive of payments due within 30 days minus refunds recorded during the period, a close proxy for cash receipts from customers. Net $ / Learner measured by format usage Oct 1, 2019 - Sept 30, 2020. Amounts exclude Legacy Business
Slide 31: Competitive Landscape
Competitive Landscape Audiences Personalized Live struction Online Focus Access to High Quality Instructor, Regardless of Location Multiple Live-Learning Formats nerdy ‘Online, personalized 1:1 tutoring, small and large group classes, d self stuch K-12, Undergraduate, Post-Grad, Professional, Contin
Slide 32: Effectiveness of one-to-one tutoring
32 1. Amounts exclude Legacy Businesses. 2. Bloom, B.S. (1984). “The 2 Sigma problem: The search for methods of group instruction as effective as one-to-one tutoring.” Educational Researcher 13, 4-16. 3232 1. Amounts exclude Legacy Businesses. 2. Bloom, B.S. (1984). “The 2 Sigma problem: The search
Slide 33: Experienced management team
33 Founder, Chairman & CEO President & Chief Operating Officer Chief Financial Officer Chief Product Officer Chief Marketing Officer Chief Analytics Officer Chief Legal Officer Chief Technology Officer VP of New Business33 Founder, Chairman & CEO President & Chief Operating Officer Chief Financial Officer Chief Produ
Slide 34: Financial overview
TPG nerdy
Slide 35: Paid and free online active learners
35 1. Paid Online Active learners defined as the unique number of learners attending a paid online tutoring session or a paid online class in a given period. Free Online Active Learners defined as any account created for free classes or self study, but haven’t bought. Amounts exclude Legacy Business
Slide 36: Online and total revenue growth
36 1. Online Growth, represents online learning format revenue, defined as 1:1 online tutoring revenue and online group classes revenue and excludes in-person revenue. 2. Total Growth represents Consolidated GAAP revenue, which includes both online and in-person revenue. 36 1. Online Growth, represe
Slide 37: Financial summary
37 Note: Nerdy financial information shown does not conform to Regulation S-X or PCAOB standards and includes estimates of certain financial metrics adjusted to reflect PCAOB standards, and such information may not be included, may be adjusted or may be presented differently in filings made with the
Slide 38: Gross profit and margins
38 Note: Nerdy financial information shown does not conform to Regulation S-X or PCAOB standards and includes estimates of certain financial metrics adjusted to reflect PCAOB standards, and such information may not be included, may be adjusted or may be presented differently in filings made with the
Slide 39: Financial forecast
39 Note: Nerdy financial information shown does not conform to Regulation S-X or PCAOB standards and includes estimates of certain financial metrics adjusted to reflect PCAOB standards, and such information may not be included, may be adjusted or may be presented differently in filings made with the
Slide 40: Adjusted EBITDA and free cash flow forecast
40 1. Forecast excludes non-recurring expenses associated with a de-SPAC transaction and the impact of any future Non-Cash Compensation changes. 2. Adjusted EBITDA excludes Non-Cash Compensation Expense and other Non-Recurring Items. 3. FCF is a non-GAAP financial measure. 4040 1. Forecast excludes
Slide 41: Transaction overview and pro forma ownership
41 1. Includes unvested employee options and equity awards. 2. Assumes no redemptions by SPAC shareholders. Cash to Nerdy shareholders subject to adjustments. 3. Includes sponsor shares forfeited to FPA investors. 4. Other outstanding instruments from PACE.U IPO and FPA: 12 million warrants for 12 m
Slide 42: Benchmarking against comparable platforms
42 Consumer Facing Direct-to-Consumer Consumer Facing Digital Gig Economy Learning Platforms & Marketplaces Platform Platform ▪ Leading learning internet ▪ Leading freelance digital ▪ Leading vertical online platform in North America services gig economy marketplaces platform ▪ Technology solutions
Slide 43: Valuation benchmarking
43 Sources for third-party information: SEC filings, S&P Capital IQ as of 1/27/2021. 4343 Sources for third-party information: SEC filings, S&P Capital IQ as of 1/27/2021. 43
Slide 44: Valuation benchmarking (continued)
44 Sources for third-party information: SEC filings, S&P Capital IQ as of 1/27/2021. 4444 Sources for third-party information: SEC filings, S&P Capital IQ as of 1/27/2021. 44
Slide 45: Key Takeaways
TPG Key Takeaways Large TAM Ripe for Disruption Leading Gig Economy Platform for Learning Attractive Unit Economics Scalable Technology Platform Network Effects and Data Create Deep Competitive Moat Business is at an Inflection P Creating Positive Change Experienced, Entrepreneurial Team
Slide 46: Transaction timeline and next steps
46 ▪ Transaction Agreement Executed ▪ Transaction Announced ▪ Preliminary Proxy Materials Filed with the SEC ▪ Mail Final Proxy Materials to TPG Pace Shareholders ▪ Set Record Date for TPG Pace Shareholders Vote ▪ Hold TPG Pace Shareholder Vote and Close Transaction Note: Subject to SEC review timet
Slide 47: Appendix
TPG nerdy
Slide 48: Adjusted EBITDA reconciliation
48 1. Non recurring items in 2020 are related to a recorded loss for an office sublease. 2021 non-recurring items are primarily related to expected forgiveness of a loan. 4848 1. Non recurring items in 2020 are related to a recorded loss for an office sublease. 2021 non-recurring items are primarily
Slide 49: Illustrative Fully-Diluted Share Count
49 1. Assumes treasury share method for public, FPA, and private warrants. 2. 9.0 million public warrants issued as part of PACE IPO with strike price of $11.50 and redemption price of $18.00. 3. 3.0 million FPA warrants to be issued with strike price of $11.50 and redemption price of $18.00. 4. Inc