Financial Data and Key Metrics Changes - In Q2 2025, the company reported total revenue of $105 million, a decrease of 36% year over year [20] - Adjusted EBITDA for the quarter was $23 million, representing a margin of 22% [21] - The company had 2.6 million subscribers during the quarter, reflecting a year over year decline of 40% [20] - Non-GAAP operating expenses were $64 million, a reduction of approximately $31 million or 33% year over year [20] - Free cash flow for the second quarter was negative $12 million, impacted by severance payments and annual prepayment for hosting expenses [21] - The company concluded the quarter with cash and investments of $114.1 million and a net cash balance of $52 million [22] Business Line Data and Key Metrics Changes - The skills and other revenue segment generated $15 million in Q2, including approximately $7 million from content licensing [20] - Busuu, the language learning business, achieved a 15% year over year revenue increase in Q2, with B2C revenue increasing by 6% year over year and B2B revenue growing by 39% year over year [10][11] - The skills business saw a 16% increase in enrollments quarter over quarter and an 11% increase in monthly active users [12] Market Data and Key Metrics Changes - The language learning market has a significant opportunity, with 78 million success-seeking learners and a $3.2 billion market potential [10] - The skills market is valued at $40 billion, focusing on workplace readiness and upskilling for professional adults [12] Company Strategy and Development Direction - The company is undergoing a strategic review process, exploring options including acquisition, going private, or remaining public [6][7] - The focus is shifting towards skills and Busuu as primary growth engines, with investments in language learning and workplace readiness [8][12] - Chegg Study will continue to serve as a valuable service while generating cash to support investments in Busuu and Skills [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for the skills business and its path to profitability and double-digit growth in 2026 [14] - The company is adapting to evolving consumer expectations and market turbulence, particularly in the Busuu and Skills segments [22] - Management highlighted the importance of proving value in the institutional market to drive significant revenue growth in 2026 and beyond [30] Other Important Information - The company is on track to achieve non-GAAP expense savings of $165 million to $175 million in 2025 and $100 million to $110 million in 2026 [19] - The company has successfully cured its stock price deficiency and regained compliance with NYSE's price listing requirements [22] Q&A Session Summary Question: Regarding Busuu's growth in the B2B segment - Management indicated that growth is driven by both direct sales efforts and strong relationships with partners like Guild, emphasizing their ability to control their growth trajectory [24][26] Question: On Chegg Study's institutional pilots - Management noted the importance of proving value to schools and plans to continue adding partners while focusing on performance metrics to drive predictable growth [28][30] Question: About the B2C performance of Busuu - Management attributed steady performance to targeting the right consumer persona and enhancing product features with AI to improve engagement [35][36] Question: Positioning of the skills business in the AI education market - Management expressed optimism about the skills business, highlighting a transition to micro-learning formats that align with current market demands [39][41]

Financial Performance - Total revenue for Q2 2025 was $105 million, a 36% year-over-year decrease[54] - Subscription Services revenue for Q2 2025 was $90 million, a 39% year-over-year decrease[65] - Chegg Study/Pack revenue decreased 44% year-over-year[14] - Adjusted EBITDA for Q2 2025 was $23 million[56] - Free cash flow for Q2 2025 was negative $12 million, impacted by severance payments[57] - Capital expenditures for Q2 2025 were $7 million, a 60% year-over-year decrease[61] Subscribers and Retention - Global Chegg Study/Pack subscribers decreased by 48% year-over-year[14] - Global Subscription Services subscribers decreased by 40% year-over-year[14] - Chegg Study/Pack monthly retention rate globally was 79.7%[14] Strategic Initiatives - The company is exploring strategic alternatives, including being acquired, undertaking a go-private transaction, or remaining as a public standalone company[12] - The company identified an additional $17 million in cost savings for 2026[11] - The company expects total non-GAAP expense savings in 2026 to be $110-120 million[11]

[Executive Summary & Business Outlook](index=1&type=section&id=1.%20Executive%20Summary%20%26%20Business%20Outlook) Chegg reported Q2 2025 results exceeding guidance, with revenue and subscribers decreasing, while providing Q3 outlook and outlining strategic shifts towards AI-driven efficiency and skills-focused growth engines [Second Quarter 2025 Highlights](index=1&type=section&id=1.1.%20Second%20Quarter%202025%20Highlights) Chegg reported Q2 2025 financial results **exceeding guidance**, with total net revenues **decreasing 36%** year-over-year and subscription services revenues **decreasing 39%**, resulting in a net loss of **$35.7 million** but a non-GAAP net income of **$10.8 million** and a **40%** decrease in subscribers Second Quarter 2025 Financial Highlights | Metric | Value | Change YoY | | :-------------------------- | :---------- | :--------- | | Total Net Revenues | $105.1 million | -36% | | Subscription Services Revenues | $89.7 million | -39% | | Gross Margin | 66% | - | | Non-GAAP Gross Margin | 68% | - | | Net Loss | $35.7 million | - | | Non-GAAP Net Income | $10.8 million | - | | Adjusted EBITDA | $23.1 million | - | - Subscription Services subscribers **decreased** to **2.6 million**, a **40% decrease** year-over-year[7](index=7&type=chunk) [Third Quarter 2025 Business Outlook](index=1&type=section&id=1.2.%20Third%20Quarter%202025%20Business%20Outlook) For Q3 2025, Chegg anticipates total net revenues between **$75 million** and **$77 million**, subscription services revenues between **$67 million** and **$69 million**, a gross margin of **56-57%**, and adjusted EBITDA in the range of **$7 million** to **$8 million** Third Quarter 2025 Guidance | Metric | Range | | :-------------------------- | :---------------- | | Total Net Revenues | $75 million to $77 million | | Subscription Services Revenues | $67 million to $69 million | | Gross Margin | 56% to 57% | | Adjusted EBITDA | $7 million to $8 million | [CEO's Strategic Overview](index=1&type=section&id=1.3.%20CEO's%20Strategic%20Overview) CEO Nathan Schultz highlighted a **strong Q2 exceeding guidance**, an ongoing strategic review, and a focus on AI implementation to transform Chegg Study for efficiency and product differentiation, while evolving into a skills-focused organization with Busuu and Skills as future growth engines, alongside significant expense savings - Chegg had a **strong Q2**, **exceeding guidance**, and is actively engaging in a strategic review process and company transformation[3](index=3&type=chunk)[11](index=11&type=chunk) - The company remains focused on implementing AI to transform Chegg Study, making it a more efficient business, and is evolving to be a **skills-focused organization** with Busuu and Skills as future **growth engines**[3](index=3&type=chunk)[12](index=12&type=chunk) - Chegg identified an additional **$17 million** in CapEx and expense savings for **2026** and is **on track to achieve** previously announced non-GAAP expense savings of **$165-$175 million** in **2025** and **$110-$120 million** in **2026**[11](index=11&type=chunk) [CFO's Financial Overview](index=3&type=section&id=1.4.%20CFO's%20Financial%20Overview) CFO David Longo confirmed Q2 performance **exceeded guidance** with **disciplined cost management** and identified additional **$17 million** savings for **2026**, noting a **36%** YoY decrease in total revenue and **40%** decline in subscribers, yet highlighting **increased retention and ARPU**, and **successful NYSE compliance regain** - Q2 performance **exceeded guidance** on both revenue and adjusted EBITDA, with continued prioritization of **disciplined cost management** and identification of an additional **$10 million** in operating expense savings and **$7 million** in CapEx savings for **2026**[24](index=24&type=chunk) Q2 2025 Revenue and Subscriber Performance | Metric | Value | Change YoY | | :-------------------------- | :---------- | :--------- | | Total Revenue | $105 million | -36% | | Subscription Services Revenue | $90 million | - | | Subscribers | 2.6 million | -40% | - Despite traffic trends, **retention and ARPU increased** year over year, demonstrating student value in the service. The company **successfully cured** its stock price deficiency and **regained compliance** with NYSE's price listing requirements[25](index=25&type=chunk)[32](index=32&type=chunk) [Strategic Initiatives & Business Segments](index=2&type=section&id=2.%20Strategic%20Initiatives%20%26%20Business%20Segments) Chegg is undergoing a strategic review, transforming into a skills-focused organization with Busuu and Skills as growth engines, while leveraging AI to enhance Chegg Study and achieve operational efficiency [Strategic Review Process](index=2&type=section&id=2.1.%20Strategic%20Review%20Process) Chegg is undergoing a comprehensive strategic review with advisors to evaluate internal operations and market landscape, aiming to maximize long-term shareholder value by exploring options including acquisition, a go-private transaction, or remaining a public standalone company, with ongoing engagement with select parties - Chegg is undertaking a comprehensive evaluation of internal operations and the broader market landscape as part of its strategic review process to maximize long-term shareholder value[10](index=10&type=chunk) - The company is exploring a range of outcomes, including being acquired, undertaking a go-private transaction, or remaining as a public standalone company, and continues to engage with a select group of parties[10](index=10&type=chunk) [Company Transformation and Growth Engines](index=2&type=section&id=2.2.%20Company%20Transformation%20and%20Growth%20Engines) Chegg is transforming into a skills-focused organization, investing in language learning (Busuu) and workplace readiness/upskilling (Skills) as primary growth engines, while Chegg Study continues to serve millions of students and generate cash, made more efficient through AI - Chegg is evolving into a **skills-focused organization**, investing in language learning (Busuu) and workplace readiness and upskilling (Skills) as its **primary growth engines** for the future[12](index=12&type=chunk) - Chegg Study, the core academic product, will remain a valuable service for **millions of students** and generate **meaningful cash** to support investments in Busuu and Skills, while becoming **less expensive to run** thanks to AI[11](index=11&type=chunk)[12](index=12&type=chunk) [Busuu (Language Learning)](index=2&type=section&id=2.2.1.%20Busuu%20(Language%20Learning)) Busuu, targeting a **$3.2 billion** market of **78 million** adult learners, achieved a **15%** year-over-year revenue increase in Q2, with **6%** B2C and **39%** B2B growth, and is expected to reach approximately **$48 million** in revenue in **2025** and be **adjusted EBITDA positive** by Q1 **2026** - Busuu targets an **enormous market** of **78 million** success-seeking learners with a **$3.2 billion** market opportunity, and is expected to achieve approximately **$48 million** of revenue in **2025** and be **adjusted EBITDA positive** by Q1 **2026**[13](index=13&type=chunk)[15](index=15&type=chunk) Busuu Q2 2025 Revenue Growth | Segment | Year-over-year Revenue Increase | | :------ | :------------------------------ | | Total Busuu | 15% | | B2C | 6% | | B2B | 39% | - Busuu's B2C focus in H2 will be on **product innovation** with continued emphasis on AI for personalization, while the B2B business will expand its offering with Learning Pathways and has **significant traction** in the DACH region[18](index=18&type=chunk) [Chegg Skills (Workplace Readiness & Upskilling)](index=2&type=section&id=2.2.2.%20Chegg%20Skills%20(Workplace%20Readiness%20%26%20Upskilling)) Chegg Skills addresses a **$40 billion** market for workplace readiness and upskilling, seeing a **16%** quarter-over-quarter increase in enrollments and **11%** in monthly active users after product modernization, with Q3 priorities including B2B growth and distribution partnerships, aiming for profitability and **double-digit revenue growth** in **2026** - The Skills business focuses on the **$40 billion** market for workplace readiness and upskilling for professional adults, prioritizing AI programs, career fundamentals, and professional upskilling[15](index=15&type=chunk)[16](index=16&type=chunk) Chegg Skills Q2 2025 Performance | Metric | Quarter-over-quarter Increase | | :-------------------- | :---------------------------- | | Enrollments | 16% | | Monthly Active Users | 11% | - Q3 priorities for Skills include **growing direct B2B presence** and **deepening relationships** with distribution partners like Guild. The business is **optimistic about achieving profitability** and **positive double-digit revenue growth** in **2026**[17](index=17&type=chunk)[19](index=19&type=chunk) [Chegg Study (Core Academic Product)](index=3&type=section&id=2.2.3.%20Chegg%20Study%20(Core%20Academic%20Product)) Chegg Study, **transformed by AI** into a **personalized learning coach**, continues to serve **millions of students**, showing a **23%** lift in learning perception, **17%** lift in intent to use, and **117 basis points** increase in monthly retention in Q2, with future plans including a **smart planning tool**, voice interface, and **expanded business-to-institution pilot program** - Chegg Study has been **transformed by AI** into a **personalized learning coach**, with new features like **Solution Scout** and **AI-powered practice and flashcard generators**[20](index=20&type=chunk) Chegg Study Student Feedback & Retention (Q2 2025) | Metric | Change | | :------------------------------------ | :----- | | Lift in "Chegg helped me learn today" | 23% | | Lift in students intending to use Chegg in next 30 days | 17% | | Monthly retention rate | Up 117 basis points | - New core capabilities for Chegg Study in September include a **smart planning tool** and a **voice interface**. The **business-to-institution pilot program** has **expanded from 5 to 23 active programs**[21](index=21&type=chunk)[27](index=27&type=chunk) [Detailed Financial Results](index=10&type=section&id=3.%20Detailed%20Financial%20Results) This section provides a detailed overview of Chegg's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods, highlighting key financial changes and performance metrics [Condensed Consolidated Balance Sheets](index=10&type=section&id=3.1.%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, **2025**, Chegg's total assets **decreased** to **$404.45 million** from **$868.95 million** at December 31, **2024**, primarily due to reductions in cash and investments, while total liabilities **decreased** to **$246.60 million** from **$675.97 million**, and total stockholders' equity **decreased** to **$157.86 million** Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :---------------------------------- | :------------ | :---------------- | | Total assets | $404,453 | $868,951 | | Cash and cash equivalents | $36,825 | $161,475 | | Short-term investments | $48,815 | $154,249 | | Long-term investments | $28,474 | $212,650 | | Total liabilities | $246,597 | $675,970 | | Current portion of convertible senior notes, net | $62,516 | $358,605 | | Total stockholders' equity | $157,856 | $192,981 | [Condensed Consolidated Statements of Operations](index=11&type=section&id=3.2.%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, **2025**, Chegg reported total net revenues of **$105.12 million**, a **decrease** from **$163.15 million** in Q2 **2024**, with gross profit **decreasing** to **$69.64 million**, and a net loss of **$35.66 million**, a **substantial improvement** from **$616.88 million** in Q2 **2024** primarily due to reduced impairment expense Condensed Consolidated Statements of Operations (in thousands) - Three Months Ended June 30 | Item | 2025 | 2024 | | :---------------------------------- | :------- | :-------- | | Net revenues | $105,120 | $163,147 | | Gross profit | $69,642 | $117,736 | | Total operating expenses | $106,100 | $602,743 | | Loss from operations | $(36,458) | $(485,007) | | Net loss | $(35,663) | $(616,884) | | Net loss per share, basic and diluted | $(0.33) | $(6.01) | - The **significant improvement** in net loss from **$(616,884) thousand** in Q2 **2024** to **$(35,663) thousand** in Q2 **2025** was largely due to a **substantial reduction** in impairment expense, which was **$481,531 thousand** in Q2 **2024** and **$0** in Q2 **2025**[63](index=63&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=3.3.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, **2025**, net cash provided by operating activities was **$19.69 million**, a **decrease** from the prior year, while investing activities generated **$272.18 million**, and financing activities resulted in a **net cash outflow** of **$417.14 million** primarily due to convertible senior note repayment, leading to a net **decrease** in cash of **$124.78 million** Condensed Consolidated Statements of Cash Flows (in thousands) - Six Months Ended June 30 | Item | 2025 | 2024 | | :------------------------------------------ | :------- | :-------- | | Net cash provided by operating activities | $19,686 | $67,545 | | Net cash provided by (used in) investing activities | $272,180 | $(64,096) | | Net cash used in financing activities | $(417,138) | $(5,635) | | Net decrease in cash, cash equivalents and restricted cash | $(124,781) | $(2,491) | | Cash, cash equivalents and restricted cash, end of period | $39,578 | $135,485 | - The **significant net cash outflow** from financing activities in **2025** was **primarily driven by** the **repayment of convertible senior notes** totaling **$416,492 thousand**[65](index=65&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=4.%20Non-GAAP%20Financial%20Measures) This section details Chegg's use of non-GAAP financial measures, providing reconciliations for net loss to adjusted EBITDA, GAAP to non-GAAP metrics, and net cash to free cash flow, including forward-looking projections [Use of Non-GAAP Measures](index=5&type=section&id=4.1.%20Use%20of%20Non-GAAP%20Measures) Chegg uses various non-GAAP financial measures, including adjusted EBITDA, non-GAAP gross margin, and non-GAAP net income, to supplement GAAP results by excluding items like share-based compensation, amortization of intangibles, and restructuring charges, which management believes are not indicative of core business performance, to provide a clearer view of operating results and facilitate period-over-period comparisons - Chegg uses non-GAAP financial measures to supplement GAAP results, providing **meaningful supplemental information** by excluding items **not indicative of core business**, **operating results**, or future outlook[39](index=39&type=chunk)[40](index=40&type=chunk) - Non-GAAP adjustments typically exclude share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, restructuring charges, impairment expense, and other **non-recurring items**[39](index=39&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[47](index=47&type=chunk)[49](index=49&type=chunk) [Reconciliation of Net Loss to EBITDA and Adjusted EBITDA](index=14&type=section&id=4.2.%20Reconciliation%20of%20Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA) For Q2 **2025**, Chegg reported a net loss of **$35.66 million**, which, after adjustments for various non-cash and non-recurring items, resulted in an Adjusted EBITDA of **$23.11 million**, representing a **decrease** from **$44.10 million** in Q2 **2024** Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in thousands) - Three Months Ended June 30 | Item | 2025 | 2024 | | :---------------------------------- | :------- | :-------- | | Net loss | $(35,663) | $(616,884) | | EBITDA | $(18,173) | $(458,182) | | Share-based compensation expense | $7,912 | $18,047 | | Restructuring charges | $18,922 | $6,728 | | Loss contingency | $7,500 | — | | Impairment of strategic equity investment | $6,000 | — | | Impairment of lease related assets | $3,004 | $2,189 | | Impairment expense | — | $481,531 | | Adjusted EBITDA | $23,106 | $44,096 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=15&type=section&id=4.3.%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations for various GAAP metrics to their non-GAAP counterparts for Q2 **2025** and Q2 **2024**, showing, for example, GAAP gross profit of **$69.64 million** in Q2 **2025** reconciling to a non-GAAP gross profit of **$71.59 million** (non-GAAP gross margin of **68%**), and non-GAAP net income of **$10.80 million** compared to a GAAP net loss of **$35.66 million** Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands) - Three Months Ended June 30, 2025 | Item | GAAP | Adjustments | Non-GAAP | | :---------------------------------- | :------- | :---------- | :------- | | Cost of revenues | $35,478 | $(1,948) | $33,530 | | Gross profit | $69,642 | $1,948 | $71,590 | | Gross margin % | 66% | - | 68% | | Operating expenses | $106,100 | $(42,466) | $63,634 | | Loss from operations | $(36,458) | $44,414 | $7,956 | | Net loss | $(35,663) | $46,464 | $10,801 | | Net loss per share | $(0.33) | $0.43 | $0.10 | [Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow](index=17&type=section&id=4.4.%20Reconciliation%20of%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) For the six months ended June 30, **2025**, net cash provided by operating activities was **$19.69 million**, and after deducting purchases of property and equipment of **$15.90 million**, free cash flow for the period was **$3.79 million**, a **significant decrease** from **$21.73 million** in the same period of **2024** Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (in thousands) - Six Months Ended June 30 | Item | 2025 | 2024 | | :------------------------------------------ | :------- | :-------- | | Net cash provided by operating activities | $19,686 | $67,545 | | Purchases of property and equipment | $(15,895) | $(45,817) | | Free cash flow | $3,791 | $21,728 | [Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA](index=18&type=section&id=4.5.%20Reconciliation%20of%20Forward-Looking%20Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA) For the three months ending September 30, **2025**, Chegg projects a net loss of **$24.20 million**, which, after adjustments for various items, results in an estimated forward-looking Adjusted EBITDA of **$7.50 million** (**midpoint of $7 million to $8 million** guidance) Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA (in thousands) - Three Months Ending September 30, 2025 | Item | Value | | :-------------------------- | :------ | | Net loss | $(24,200) | | Interest expense, net | $100 | | Provision for income taxes | $700 | | Depreciation and amortization expense | $15,200 | | EBITDA | $(8,200) | | Share-based compensation expense | $7,900 | | Other income, net | $(1,200) | | Restructuring charges | $9,000 | | Adjusted EBITDA | $7,500 | [Corporate Information](index=4&type=section&id=5.%20Corporate%20Information) This section provides an overview of Chegg as a company, details regarding forward-looking statements, and information on accessing conference calls and investor relations resources [About Chegg](index=5&type=section&id=5.1.%20About%20Chegg) Chegg is a student-first connected learning platform providing individualized, on-demand, **24/7** learning support, leveraging AI-powered academic support and subject matter experts to help students build essential academic, life, and job skills, operating as a publicly held company based in Santa Clara, California - Chegg provides individualized learning support to students **24/7**, powered by AI and a network of subject matter experts, to help them build academic, life, and job skills[38](index=38&type=chunk) [Forward-Looking Statements](index=9&type=section&id=5.2.%20Forward-Looking%20Statements) The press release contains forward-looking statements regarding strategic alternatives, restructuring plans, efficiency improvements, revenue diversification, AI impact, and Q3 **2025** guidance, which are subject to known and unknown risks, uncertainties, and changes in circumstances, including AI technology effects, competition, and litigation, that could cause actual results to differ materially - The press release contains forward-looking statements regarding strategic alternatives, restructuring, business efficiency, revenue diversification, AI impact, and Q3 **2025** guidance[59](index=59&type=chunk) - These statements are not guarantees of future performance and are subject to uncertainties, risks, and changes in circumstances, including the effects of AI technology, competition, and litigation, which could cause actual results to differ materially[59](index=59&type=chunk) [Conference Call and Webcast Information](index=4&type=section&id=5.3.%20Conference%20Call%20and%20Webcast%20Information) Details for accessing the Q2 **2025** earnings call are provided via dial-in or live webcast on Chegg's Investor Relations website, with an audio replay available from August 5 to August 12, **2025**, and an audio archive accessible online - The earnings call can be accessed via dial-in or a live webcast on Chegg's Investor Relations website (https://investor.chegg.com)[34](index=34&type=chunk) - An audio replay will be available from August **5** to August **12**, **2025**, and an audio archive will also be accessible on the investor relations website[35](index=35&type=chunk) [Use of Investor Relations Website for Regulation FD Purposes](index=4&type=section&id=5.4.%20Use%20of%20Investor%20Relations%20Website%20for%20Regulation%20FD%20Purposes) Chegg utilizes its Investor Relations website (https://investor.chegg.com) as a **primary channel** for disclosing material non-public information and **complying with Regulation FD** obligations, advising investors to monitor this website in addition to press releases, SEC filings, and public conference calls/webcasts - Chegg uses its Investor Relations website (https://investor.chegg.com) for disclosing **material non-public information** and **complying with Regulation FD**[36](index=36&type=chunk) - Investors should **monitor the IR website** in addition to press releases, SEC filings, and public conference calls/webcasts[36](index=36&type=chunk)

Core Insights - The online education sector is evolving with digital learning becoming mainstream, with Stride, Inc. and Chegg, Inc. as key players adapting to post-pandemic trends and AI-driven tools [1][2] Company Overview Stride, Inc. - Stride focuses on full-time online K-12 programs and is expanding into career learning and adult certification programs [2] - The company has a market cap of approximately $6.33 billion and is experiencing record enrollment growth, particularly in its Career Learning segment [4] - Enrollment growth for General Education and Career Learning segments increased by 12.8% to 137,500 students and 32% to 96,000 students respectively, leading to an overall enrollment growth of 20% [5] - Stride raised its fiscal 2025 revenue guidance to between $2.37 billion and $2.385 billion, reflecting a year-over-year growth of 16.2-16.9% [5] - The company is well-positioned for future growth with strategic investments in personalized learning and user experience [6] - Federal funding constitutes less than 5% of Stride's revenues, reducing exposure to federal budget uncertainties [7] Chegg, Inc. - Chegg operates a direct-to-consumer subscription model, offering digital study aids and AI-driven tutoring, but is facing challenges with a decline in paid subscribers [8][9] - The company has a market cap of approximately $173.7 million and reported a 30% year-over-year decline in net revenues to $121.4 million [9] - Subscription Services revenues fell by 30%, and Skills and Other revenues decreased by 32% [9] - Chegg is piloting new AI programs to expand service offerings and mitigate competition from free AI tools [10] - The company is optimistic about its reinvented Chegg Skills product, expecting profitability and positive revenue growth from 2026 [11] Stock Performance & Valuation - Year-to-date, Stride's stock performance has outpaced Chegg's, supported by strong enrollment growth and revenue momentum [9][12] - Stride trades at a premium price-to-sales (P/S) ratio compared to Chegg, indicating stronger investor confidence [13] - The Zacks Consensus Estimate for Stride's fiscal 2025 EPS indicates a growth of 51.2%, while Chegg's EPS estimates reflect a year-over-year decline of 125.3% for 2025 [14][18] Investment Outlook - Stride is viewed as a stronger investment option due to favorable market trends and diversified offerings, while Chegg is struggling despite demand for online education [19][20] - Stride holds a Zacks Rank 1 (Strong Buy), while Chegg has a Zacks Rank 3 (Hold), indicating better upside potential for Stride [20]

Financial Data and Key Metrics Changes - The stockholders have approved the non-binding advisory compensation of the company's named executive officers for the year ended December 31, 2024 [12] - The appointment of Deloitte and Touche LLP as the independent registered public accounting firm for the 2025 fiscal year has been ratified by the stockholders [13] Business Line Data and Key Metrics Changes - No specific data or metrics regarding individual business lines were provided in the meeting [14] Market Data and Key Metrics Changes - No specific market data or metrics were discussed during the meeting [14] Company Strategy and Development Direction and Industry Competition - The meeting included the election of a Class III Director, indicating ongoing governance and strategic oversight [8] - The amendment of the 2023 equity incentive plan to increase the number of shares available suggests a focus on employee retention and motivation [9] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting [14] Other Important Information - The meeting was conducted in accordance with the company's bylaws and Delaware law, ensuring compliance and proper governance [4] - The results of the voting will be reported in a Form 8-K to be filed with the SEC within four business days following the meeting [13] Q&A Session Summary Question: Are there any questions on the proposals? - There were no further questions from the attendees during the Q&A session [15]

Core Viewpoint - Chegg is facing significant operational changes due to a shift in student preferences towards AI tools like ChatGPT, leading to a workforce reduction and cost-saving measures [1] Company Summary - Chegg will lay off approximately 22% of its workforce, equating to about 248 employees, to cut costs and streamline operations [1] - The company plans to close its offices in the U.S. and Canada by the end of this year [1] - Chegg aims to reduce marketing, product development, and general administrative expenses as part of its restructuring efforts [1] - The expected cost savings from the restructuring are projected to be between $45 million and $55 million this year, and between $100 million and $110 million next year [1]

Financial Performance - Net revenues for the three months ended March 31, 2025, were $121.4 million, a decrease of $52.9 million or 30% compared to $174.4 million in the same period in 2024[99]. - Subscription Services revenues decreased by $46.5 million, or 30%, primarily due to a 31% decrease in the number of subscribers during the same period[99]. - Skills and Other revenues decreased by $6.5 million, or 32%, mainly due to lower enrollments in Chegg Skills and a decline in advertising services revenues[100]. - Gross margins decreased to 56% for the three months ended March 31, 2025, down from 73% in the same period in 2024[101]. Expenses - Cost of revenues increased by $7.5 million, or 16%, primarily due to higher depreciation expenses of $13.8 million, offset by lower payment processing fees[101]. - Total operating expenses decreased by $33.9 million, or 26%, primarily due to lower employee-related expenses and contractor spend from prior restructuring actions[103]. - Research and development expenses decreased by $15.0 million, or 34%, due to lower employee-related expenses and contractor spend[104]. - Sales and marketing expenses decreased by $4.8 million, or 16%, to 21% of net revenues during Q1 2025 compared to 17% in Q1 2024[105]. - General and administrative expenses decreased by $16.2 million, or 29%, to 33% of net revenues in Q1 2025 compared to 32% in Q1 2024[107]. - Impairment expense was $2.0 million in Q1 2025, related to property and equipment[108]. - Interest expense decreased by $0.2 million, or 28%, to $467,000 in Q1 2025, primarily due to early extinguishments of convertible senior notes[109]. - Other income, net increased by $2.2 million, or 21%, to $12.997 million in Q1 2025, driven by a gain on early extinguishment of debt[110]. - Provision for income taxes decreased by $8.0 million, or 89%, to $1.012 million in Q1 2025 due to lower forecasted income[111]. Cash Flow - Cash, cash equivalents, and investments decreased by $402.0 million, or 76%, to $126.4 million as of March 31, 2025[112]. - Net cash flows from operating activities decreased by $28.8 million, or 54%, to $24.526 million in Q1 2025[116]. - Net cash flows from investing activities increased by $315.7 million in Q1 2025, primarily due to higher proceeds from the sale of investments[119]. - Net cash flows from financing activities decreased by $412.7 million in Q1 2025, mainly due to the repayment of convertible debt[120]. Strategic Initiatives - The company announced a strategic review process on February 24, 2025, exploring alternatives to maximize shareholder value, including potential acquisition or going private[90]. - The company is integrating artificial intelligence into its platform to enhance student engagement and support, aiming for a return to revenue growth over time[89]. - The company expects continued negative impacts on growth and subscriber numbers due to increased competition from generative AI products[92].

Core Viewpoint - Chegg is facing significant challenges due to competition from AI tools, leading to a workforce reduction and strategic cost-cutting measures to stabilize the business [1][4][5]. Company Actions - Chegg plans to reduce its workforce by approximately 22%, equating to 248 employees, and will close its physical offices in the US and Canada by the end of the year [1][4]. - The company will also cut back on new product development and reduce administrative costs as part of its restructuring efforts [4]. Financial Impact - The cost-cutting measures are expected to save Chegg between $45 million to $55 million in 2025 and $100 million to $110 million in 2026 [5]. - Chegg anticipates incurring restructuring charges of $34 million to $38 million, primarily from severance payments [5]. Subscriber and Revenue Decline - Chegg reported a 31% decline in its subscriber count, dropping to 3.2 million [5]. - Revenue fell by 30% to $121 million, with subscription service revenue decreasing by nearly a third to $108 million [7]. - The company experienced a net loss of $17.5 million during the same period [7]. Legal Context - Chegg has filed a federal antitrust lawsuit against Google, alleging that Google's AI summaries have negatively impacted its site traffic and revenue [7].

Core Insights - Chegg reported a revenue of $121.39 million for the quarter ended March 2025, reflecting a year-over-year decline of 30.4% [1] - The earnings per share (EPS) was -$0.06, a significant drop from $0.26 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $114.49 million by 6.03%, while the EPS fell short of the consensus estimate of -$0.01 by 500% [1] Financial Performance Metrics - Chegg Services subscribers totaled 3.2 million, slightly below the estimated 3.22 million [4] - Revenue from Skills and Other was reported at $14 million, surpassing the average estimate of $10.10 million, but showing a year-over-year decline of 31% [4] - Subscription Services revenue was $107.60 million, exceeding the average estimate of $104.07 million, with a year-over-year decrease of 30.2% [4] Stock Performance - Chegg's stock has returned +43.7% over the past month, significantly outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

分组1 - Chegg reported a quarterly loss of $0.06 per share, missing the Zacks Consensus Estimate of a loss of $0.01, compared to earnings of $0.26 per share a year ago, representing an earnings surprise of -500% [1] - The company posted revenues of $121.39 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.03%, but down from $174.35 million year-over-year [2] - Chegg shares have declined approximately 57.1% since the beginning of the year, contrasting with the S&P 500's decline of -3.8% [3] 分组2 - The earnings outlook for Chegg is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions for Chegg is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $112.36 million, and $0.06 on revenues of $435.05 million for the current fiscal year [7] 分组3 - The Internet - Software industry, to which Chegg belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]