Chegg, Inc. CHGG shares are down after the company reported its third-quarter results after Tuesday's closing bell. Here's a look at the details from the report.
The Details: Chegg reported quarterly earnings of nine cents per share, which beat the analyst consensus estimate of eight cents. Quarterly revenue came in at $136.59 million, which beat the analyst consensus estimate of $134.11 million and a decrease from sales of $157.85 million from the same period last year.
- Total net revenues of $136.6 million, a decrease of 13% year-over-year
- Subscription Services revenues of $119.8 million, a decrease of 14% year-over-year
- Gross Margin of 68%
- Non-GAAP gross margin of 70%
- Adjusted EBITDA was $22.3 million
- 3.8 million Subscription Services subscribers, a decrease of 13% year-over-year
Chegg announced additional restructuring efforts, effective immediately, to impact all groups across the company:
- Chegg will reduce headcount by an additional 21%.
- Chegg anticipates that these actions, along with additional operating expense savings, will result in annualized non-GAAP cost savings of $60-$70 million in 2025.
- The cost savings from the restructuring announced in June, coupled with the restructuring announced today, will result in a combined non-GAAP savings of $100-$120 million in 2025.
“While the global education industry continues to experience tremendous change, in the third quarter, we showed early progress against our strategic plan and delivered better-than-expected revenue and adjusted EBITDA. However, recent technology shifts and generative AI have created significant headwinds, and as a result, we are undertaking an additional restructuring,” said Nathan Schultz, CEO of Chegg.
“There continues to be a market of students looking for the high-quality, proven, and differentiated learning expertise Chegg provides, and we believe our brand and product experience are resilient and will endure,” Schultz added.
Outlook: Chegg sees fourth-quarter total net revenue of between $141 million and $143 million, versus the $161.46 million estimate and subscription services revenue in a range of $126 million to $128 million with adjusted EBITDA of between $32 million and $34 million.
CHGG Price Action: According to Benzinga Pro, Chegg shares are down 14.12% after-hours at $1.52 at the time of publication Tuesday.
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