Core Viewpoint - Chegg is implementing a restructuring plan aimed at reducing its global headcount by 23% to enhance efficiency, speed up innovation, and align expenses with revenue trends [1][16]. Company Strategy - The company plans to simplify its systems and processes by leveraging partnerships for non-core applications [1]. - Chegg aims to provide a holistic and differentiated educational platform for students, utilizing artificial intelligence and a proprietary learning model [6][15]. - The restructuring is expected to yield non-GAAP expense savings of $40 million to $50 million by 2025, with a target adjusted EBITDA margin of over 30% and free cash flow of at least $100 million for the year [12]. Financial Performance - Chegg's shares have dropped 77% year-to-date, contrasting with a 13.3% growth in the Zacks Internet - Software industry [2]. - The company has seen a decline in its Subscription Services product line due to a drop in paying subscribers [2]. - The Zacks Consensus Estimate for Chegg's 2024 earnings has decreased from $1.10 to $0.99 per share, indicating a 10% decline from the previous year [7]. Market Position - Chegg is focusing on enhancing student learning outcomes and support through a comprehensive course load and diversifying distribution channels [19]. - The company is also investing in its international program, targeting six specific countries [19].

Core Insights - Chegg is undergoing significant restructuring to adapt to the challenges posed by the rise of artificial intelligence in the education sector [4][5][6] - The company aims to save between $40 million to $50 million annually through cost-cutting measures and has set ambitious financial targets for 2025, including a 30% adjusted EBITDA margin and $100 million in free cash flow [2][6] - Following the announcement of these changes, Chegg's stock saw a 10% increase, indicating positive investor sentiment towards the new direction under CEO Nathan Schultz [3] Company Actions - Chegg is reducing its global workforce by 23%, equating to approximately 441 jobs, as part of its strategy to focus on tech-enabled tools for students [5][6] - The company is developing customized AI tools to enhance its offerings and drive future subscription growth [1][6] - The restructuring is intended to create a more efficient and focused organization that can better meet the needs of its core audience, students [6] Financial Performance - Chegg's stock has experienced a significant decline of about 75% year-to-date, primarily due to falling earnings and subscriptions [4] - Despite the downturn, the company has remained a cash generator and has utilized its cash for share buybacks [2] - The management's commitment to achieving a 30% adjusted EBITDA margin and $100 million in free cash flow by 2025 reflects a focus on long-term financial health [2]

[Form 8-K Filing Information](index=1&type=section&id=Form%208-K%20Filing%20Information) Details the filing of Chegg's Form 8-K, including company and exchange information [Company and Filing Details](index=1&type=section&id=Company%20and%20Filing%20Details) Chegg, Inc. filed a Current Report on Form 8-K with the SEC on June 17, 2024, with its common stock traded on The New York Stock Exchange under CHGG - Filing Date: **June 17, 2024**[1](index=1&type=chunk) - Company: **Chegg, Inc.**[1](index=1&type=chunk) - Stock Ticker and Exchange: **CHGG on The New York Stock Exchange**[1](index=1&type=chunk) [Reported Events and Disclosures](index=2&type=section&id=Reported%20Events%20and%20Disclosures) Outlines key events and disclosures, including a workforce reduction and its financial implications [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) On June 17, 2024, Chegg issued a letter to its shareholders from President and CEO Nathan Schultz concerning a workforce reduction - Chegg issued a shareholder letter from CEO Nathan Schultz regarding a **workforce reduction**[4](index=4&type=chunk) - The shareholder letter is attached as **Exhibit 99.01** to the Form 8-K[4](index=4&type=chunk) [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) Details the company's restructuring plan, including workforce reduction, associated charges, and projected cost savings - A restructuring plan was announced, impacting approximately **441 employees**, constituting about **23% of the company's global workforce**[7](index=7&type=chunk) Financial Impact of Restructuring | Metric | Estimated Amount ($) | Timing | | :--- | :--- | :--- | | **Restructuring Charges** | $10 million - $14 million | Substantially all by Q4 2024 (approx. half in Q2 2024) | | **Annualized Cost Savings** | $40 million - $50 million | Fiscal Year 2025 | - Charges related to the workforce reduction will be excluded from the company's **non-GAAP financial measures**, including adjusted EBITDA[8](index=8&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements regarding the workforce reduction, including estimated financial charges and projected cost savings - Statements concerning the reduction in force, associated charges, timing, and cost savings are identified as **forward-looking**[10](index=10&type=chunk) - The company notes that these forward-looking statements are subject to a number of **risks, uncertainties, and assumptions** that could cause actual results to differ[10](index=10&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits filed with the Form 8-K, including the shareholder letter and interactive data file - The filing includes **Exhibit 99.01**, a letter to shareholders from Nathan Schultz, and **Exhibit 104**, the Cover Page Interactive Data File[3](index=3&type=chunk) [Signatures](index=3&type=section&id=Signatures) Confirms the official authorization and signing of the Form 8-K report [Authorization](index=3&type=section&id=Authorization) The report has been duly authorized and signed on behalf of Chegg, Inc. by its Chief Financial Officer, David Longo - The Form 8-K was signed by **David Longo**, Chief Financial Officer of Chegg, Inc[15](index=15&type=chunk)

Key PointsChegg is a leading online education platform providing expert answers, study guides, homework solutions, tutoring and textbook rentals for students.CheggMate AI hasn’t been able to slow the deceleration in Subscription service revenues and members, but the company will continue its multi-year integration.Chegg beat Q1 2024 EPS by a penny but lowered its top and bottom line estimates for Q2 2024.5 stocks we like better than CheggDespite the viral spread of artificial intelligence (AI) applications ...

Chegg (NYSE:CHGG) stock is falling on Tuesday following the release of the online education company’s earnings report for the first quarter of 2024.That’s despite it reporting adjusted earnings per share of 26 cents alongside revenue of $174.35 million. Both of these are better than Wall Street’s estimates of 25 cents per share and $174.1 million in revenue.Unfortunately, both Chegg’s adjusted EPS and revenue are down year-over-year. The company’s EPS for Q1 2023 was 27 cents while its revenue was $187.6 mi ...

James Tahaney loads textbooks on to a pallet in preparation for shipping at the Chegg warehouse in Shepherdsville, Kentucky, on April 29, 2010."We question the ability of CHGG to return to durable growth as free AI tools become an attractive alternative to a paid CHGG sub," analyst Brent Thill wrote in a note Tuesday.As a result, Jefferies downgraded the stock to underperform from hold and lowered its price target to $4 from $7, suggesting 2% downside from Monday's close.Chegg, which announced a new CEO, sa ...

For the quarter ended March 2024, Chegg (CHGG) reported revenue of $174.35 million, down 7.1% over the same period last year. EPS came in at $0.26, compared to $0.27 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $174.05 million, representing a surprise of +0.17%. The company delivered an EPS surprise of +8.33%, with the consensus EPS estimate being $0.24.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they ...

Chegg, Inc. (NYSE:CHGG) Q1 2024 Earnings Conference Call April 29, 2024 4:30 PM ET Company Participants Tracey Ford - Vice President, Investor Relations & ESG Dan Rosensweig - Co-Chairperson & Chief Executive Officer Nathan Schultz - Incoming President & Chief Executive Officer David Longo - Chief Financial Officer Conference Call Participants Bryan Smilek - JPMorgan Eric Sheridan - Goldman Sachs Ryan MacDonald - Needham & Company Josh Baer - Morgan Stanley Brent Thill - Jefferies Devin Au - KeyBanc Capital ...

Q1 2024 Highlights - Global learners asked 9 million questions, a significant increase from 3.9 million a year ago[2] - AI content creation drove a return to non-subscriber traffic growth for Chegg Study in the U S[2] - Nathan Schultz is being promoted to Chegg's President & CEO, effective June 15[13] Financial Performance - Q1 2024 Subscription Services Revenue was $154 million, compared to $174 million in Q1 2023[91] - Total Revenue for Q1 2024 was $168 million, down from $188 million in Q1 2023[91] - Adjusted EBITDA for Q1 2024 was $56 million, representing 31% of revenue[126] - Free Cash Flow for Q1 2024 was $25 million[105] Strategic Initiatives - Chegg is rolling out AI services and focusing on skills growth[5] - The company is building a proprietary AI stack for personalized learning outcomes[33] - Chegg is testing pricing and packaging in the U S and marketing its new product experience[29] - Chegg is focused on prudent expense management to align with current revenue trends[11]

Revenue Performance - Net revenues for Q1 2024 were $174.4 million, a 7% decrease compared to $187.6 million in Q1 2023[113][121] - Subscription Services revenue decreased by 9% to $154.1 million in Q1 2024 from $168.4 million in Q1 2023[121] - Skills and Other revenue increased by 6% to $20.3 million in Q1 2024 from $19.2 million in Q1 2023[121] Cost and Expense Management - Cost of revenues decreased by 5% to $46.5 million in Q1 2024 from $49.2 million in Q1 2023[122] - Research and development expenses decreased by 5% to $45.3 million in Q1 2024 from $47.8 million in Q1 2023[173] Tax and Contingency - Provision for income taxes increased by 117% to $9.1 million in Q1 2024 from $4.2 million in Q1 2023[161][174] - The company recognized an estimated loss contingency accrual of $7.0 million related to the JPMC dispute in 2023[99] Cash Flow Activities - Net cash provided by operating activities decreased by 27% to $53.2 million in Q1 2024 from $73.0 million in Q1 2023[164] - Net cash used in investing activities decreased by 62% to $40.5 million in Q1 2024 from $106.5 million in Q1 2023[175] Share Repurchase - The company repurchased 26.5 million shares of common stock in 2023, including 13.5 million shares from the November 2023 ASR[105]