Chegg(US:CHGG)2025-02-24 21:10Financial Performance - Total Net Revenues for Q4 2024 were $143.5 million, a decrease of 24% year-over-year, while full-year revenues were $617.6 million, down 14% year-over-year[6]. - Subscription Services Revenues in Q4 2024 were $128.5 million, a decrease of 23% year-over-year, and for the full year, they totaled $549.2 million, also down 14% year-over-year[6]. - The number of Subscription Services subscribers decreased to 3.6 million in Q4 2024, down 21% year-over-year, and 6.6 million for the full year, a decrease of 14% year-over-year[6]. - The company reported a net loss of $6.1 million for Q4 2024 and a net loss of $837.1 million for the full year[6]. - Total revenue for Q4 was $143.5 million, a decrease of 24% year-over-year, with Subscription Services revenue at $128.5 million, down 23% year-over-year[30]. - Net loss for Q4 2024 was $6.1 million, compared to a net income of $9.7 million in Q4 2023, reflecting a significant decline in profitability[64]. - Total net revenues for the year ended December 31, 2024, were $174,350 thousand, a decrease from $187,601 thousand in 2023, reflecting a decline of approximately 7%[75]. - Non-GAAP net income for the year ended December 31, 2024, was $84,956 thousand, down from $141,755 thousand in 2023, representing a decline of approximately 40%[72]. - The gross profit for the year ended December 31, 2024, was $127,853 thousand, a decrease from $138,451 thousand in 2023, reflecting a decline of approximately 8%[75]. - The company reported a loss from operations of $(27,320) thousand for the fourth quarter of 2024, compared to a profit of $13,287 thousand in the same quarter of 2023[75]. Strategic Initiatives - Chegg initiated a strategic review process to explore alternatives, including potential acquisition or going private, and filed a complaint against Google for unfair competition[2][9]. - In 2024, Chegg integrated AI and machine learning into its product stack, reducing content creation costs by over 70% while maintaining quality[12]. - The company launched a new product, Solution Scout, allowing students to compare answers from multiple LLMs alongside Chegg's solutions, aimed at saving time and increasing trust in the platform[28]. - Chegg's enterprise strategy aims to diversify revenue streams, with plans to expand business-to-institution pilot programs to approximately 35 additional institutions by the end of 2025[23]. - Chegg plans to diversify revenue streams with business-to-institution programs and other enterprise offerings to stabilize the business[60]. - The company is exploring strategic alternatives, which may include potential mergers or acquisitions to enhance growth opportunities[60]. - Chegg's future outlook includes a commitment to developing individualized learning solutions and expanding into new media channels to engage students[60]. Financial Guidance and Projections - The company expects Q1 2025 Total Net Revenues to be in the range of $114 million to $116 million, with Subscription Services Revenues between $104 million and $106 million[11]. - Q1 guidance projects total revenue between $114 and $116 million, with Subscription Services revenue between $104 and $106 million[38]. - Gross margin is expected to be in the range of 66 to 67 percent, with adjusted EBITDA between $13 and $14 million for Q1[38]. - The adjusted EBITDA guidance for the three months ending March 31, 2025, is projected to be between $13 million and $14 million, with a midpoint of $13,500 thousand[76]. Cash Flow and Expenses - Free cash flow for Q4 was $4.8 million, despite $25 million in cash outlays related to employee severance from restructurings[32]. - Capital expenditures for Q4 were $13 million, down 52% year-over-year, with content costs decreasing by 56% year-over-year[32]. - The company ended the quarter with cash and investments of $528 million and a net cash balance of $42 million[33]. - Operating cash flows decreased to $125,205 in 2024 from $246,198 in 2023, reflecting a decline of approximately 49.1%[66]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $164,359, down from $475,854 in 2022[67]. - The company incurred restructuring charges of $24,603 in 2024, compared to $5,704 in 2023[68]. Asset and Liability Management - Total assets decreased to $868.9 million in 2024 from $1.7 billion in 2023, indicating a substantial reduction in the company's asset base[62]. - Current liabilities increased slightly to $528.3 million in 2024 from $518.5 million in 2023, while total liabilities decreased to $676.0 million from $782.6 million[62]. - The company reported a significant impairment expense of $677.2 million for the year ended December 31, 2024, compared to $3.6 million in 2023[64]. - The company reported an impairment expense of $677,239 for the year ended December 31, 2024[68]. Research and Development - Research and development expenses for Q4 2024 were $41.0 million, down from $45.7 million in Q4 2023, indicating a focus on cost management[64].