Chegg (NYSE:CHGG) Announces Earnings Results

Key Points

• Chegg beat quarterly expectations, reporting an adjusted loss of $0.05 per share versus the consensus loss estimate of $0.09, while revenue reached $46.47 million compared with estimates of $43.50 million.
• The company eliminated its remaining convertible debt, ended the quarter with $43.6 million in cash and investments, and generated $5.5 million in free cash flow. Its new Internships.com employability platform attracted more than 100,000 visitors in eight weeks, alongside pilot programs with four universities.
• Chegg’s legacy homework-help business continues to weaken; management expects fourth-quarter revenue of $38 million to $40 million and adjusted EBITDA of about $1 million, below third-quarter results. Analysts maintain a “Reduce” average rating, with two Holds and one Sell.

Chegg (NYSE:CHGG - Get Free Report) posted its quarterly earnings results on Tuesday. The technology company reported ($0.05) earnings per share for the quarter, topping analysts' consensus estimates of ($0.09) by $0.04, FiscalAI reports. The company had revenue of $46.47 million for the quarter, compared to the consensus estimate of $43.50 million. Chegg had a negative net margin of 19.96% and a negative return on equity of 13.38%.

Here are the key takeaways from Chegg's conference call:

• Chegg eliminated its remaining convertible debt and ended Q3 with $43.6 million in cash and investments, while generating $5.5 million in free cash flow.
• The company launched a new employability platform on Internships.com, attracting more than 100,000 visitors in its first eight weeks, with early engagement in resume uploads, job searches, applications, and interview-related tools described as encouraging.
• Chegg signed pilot programs with four universities and is pursuing additional institutional partnerships, offering schools employment-outcome data and tools intended to improve students’ access to internships and jobs.
• The skilling business is expected to generate more than $65 million in 2026 revenue, and Chegg has added 11 distribution partners; however, partner rollouts have taken longer than expected, leaving the timing and scale of growth uncertain.
• The legacy homework-help business continues to decline, and management guided for Q4 revenue of $38 million to $40 million and adjusted EBITDA of approximately $1 million, down from Q3 revenue of $46.5 million and adjusted EBITDA of $5.4 million.

Chegg Stock Up 5.0%

Shares of Chegg stock traded up $0.03 during trading hours on Tuesday, hitting $0.70. The company's stock had a trading volume of 267,513 shares, compared to its average volume of 1,372,692. The business has a fifty day moving average of $0.74 and a 200 day moving average of $0.86. Chegg has a 1-year low of $0.45 and a 1-year high of $1.56. The company has a market capitalization of $78.17 million, a PE ratio of -1.43 and a beta of 2.16.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on CHGG shares. Zacks Research lowered Chegg from a "strong-buy" rating to a "hold" rating in a research note on Monday, July 6th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Chegg in a research note on Friday, September 18th. Two equities research analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of "Reduce".

Insider Buying and Selling at Chegg

In related news, Director Renee Budig sold 54,347 shares of Chegg stock in a transaction on Thursday, August 13th. The shares were sold at an average price of $0.78, for a total transaction of $42,390.66. Following the transaction, the director owned 376,311 shares in the company, valued at approximately $293,522.58. The trade was a 12.62% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 3.00% of the company's stock.

About Chegg

Chegg, Inc is an education technology company that provides digital learning tools and academic support services to students. Its platform offers study assistance, expert answers, practice materials, writing support, and other resources intended to help students understand course content and complete academic work.

The company's products have included Chegg Study, Chegg Writing, and Mathway, a mobile mathematics problem-solving service. Chegg has also offered language-learning services through Busuu, which it acquired in 2022.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.