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Chegg Q3 revenue falls as legacy business declines

By Reuters News


Overview

  • US employability platform's Q3 revenue fell 40% yr/yr as legacy business declined

  • Adjusted net loss for Q3 was $5.7 mln; adjusted EBITDA was positive

  • Company eliminated all debt and ended Q3 with $43.6 mln in cash


Outlook

  • Chegg sees Q4 revenue between $38 mln and $40 mln

  • Company expects Q4 gross margin in the range of 46% to 48%

  • Chegg forecasts Q4 adjusted EBITDA of approximately $1 mln


Result Drivers

  • LEGACY BUSINESS DECLINE - Co said revenue drop was due to continued decline in its traditional homework-help business

  • COST MANAGEMENT - Co attributed lower operating expenses to cost management initiatives and use of AI to streamline operations

  • EMPLOYABILITY PLATFORM LAUNCH - Co launched new employability platform on Internships.com, with early signs of student and institutional interest


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$46.47 mln

$43.52 mln (1 Analyst)

Q3 Adjusted Loss Per Share

Beat

$0.05

$0.09 (1 Analyst)

Q3 Adjusted Net Loss

$5.70 mln

Q3 Net Loss

$4.69 mln

Q3 Adjusted EBITDA

$5.40 mln

Q3 Gross Profit

$24.24 mln

Q3 Income from operations

-$5.10 mln


Analyst Coverage

  • The one available analyst rating on the shares is "hold"

  • The average consensus recommendation for the professional information services peer group is "buy."


Reuters Recommended Reads

  • Nov 2 - Anthropic's third-quarter net loss narrows, amended filing shows

  • Nov 2 - Tempus AI Q3 revenue slightly beats estimates; raises guidance


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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