Chegg(US:CHGG)2025-11-10 21:16Financial Performance - Net revenues for Q3 2025 were $77,742,000, a decrease of 43% compared to $136,593,000 in Q3 2024[16] - Gross profit for Q3 2025 was $46,041,000, down from $93,173,000 in Q3 2024, reflecting a gross margin decline[16] - The net loss for Q3 2025 was $17,471,000, compared to a net loss of $212,639,000 in Q3 2024, indicating improved financial performance[16] - The total comprehensive loss for Q3 2025 was $17,384,000, compared to $202,773,000 in Q3 2024, showing a reduction in overall losses[17] - For the nine months ended September 30, 2025, the net loss was $70,618 thousand, a significant decrease from the net loss of $830,943 thousand for the same period in 2024, representing an 91.5% improvement[22] - Basic and diluted net loss per share for the three months ended September 30, 2025, was $(0.16), compared to $(2.05) in 2024[43] - The company reported a basic and diluted net loss per share of $0.16 for Q3 2025, compared to $2.05 for Q3 2024[16] Cash and Assets - Cash and cash equivalents decreased to $38,180,000 as of September 30, 2025, from $161,475,000 at December 31, 2024[14] - Total assets as of September 30, 2025, were $378,271,000, down from $868,951,000 at December 31, 2024[14] - The total cash, cash equivalents, and restricted cash at the end of the period was $40,794 thousand in 2025, a decrease from $154,982 thousand in 2024, representing a decline of 73.7%[23] - Long-lived assets as of September 30, 2025, totaled $143.7 million, down from $192.9 million as of December 31, 2024[88] Liabilities and Equity - Total liabilities decreased to $232,218,000 as of September 30, 2025, compared to $675,970,000 at December 31, 2024[14] - The accumulated deficit increased to $960,059,000 as of September 30, 2025, from $889,441,000 at December 31, 2024[14] - The balances of total stockholders' equity at September 30, 2025, were $146,053 thousand, down from $184,981 thousand at the same date in 2024, a decrease of 21%[20] Revenue Streams - Subscription Services revenue for the nine months ended September 30, 2025, was $266.393 million, down 37% from $420.668 million in 2024[41] - Subscription Services generated $69.1 million in revenue for the three months ended September 30, 2025, compared to $119.8 million in 2024, a decrease of about 42%[88] Operating Expenses - Total operating expenses in Q3 2025 were $63,165,000, significantly lower than $315,463,000 in Q3 2024, primarily due to reduced research and development costs[16] - Share-based compensation expense for the nine months ended September 30, 2025, was $25,094 thousand, down from $69,267 thousand in 2024, indicating a reduction of 63.7%[22] - Total share-based compensation expense for the three months ended September 30, 2025, was $5.9 million, a decrease from $21.9 million in the same period of 2024[77] Debt and Financing - The company repaid $416,492 thousand in convertible senior notes during the nine months ended September 30, 2025[22] - The estimated fair value of the 2026 notes was $52.6 million as of September 30, 2025, down from $105.8 million as of December 31, 2024[49] - The total interest expense recognized for the 2026 notes for the three months ended September 30, 2025, was $41, while for the 2025 notes it was $495[58] Restructuring and Future Plans - Cumulative restructuring charges recorded as of September 30, 2025, amounted to $27.5 million from the May 2025 restructuring plan, with an estimated additional $2 million to $3 million expected in the next fiscal quarter[79] - The company expects to incur restructuring charges of approximately $15 million to $19 million related to the October 2025 restructuring plan, primarily for employee transition and severance payments[90] Legal and Regulatory Matters - A settlement of $55.0 million was reached regarding a securities fraud class action, with the company denying any allegations of fault[68] - The company incurred a monetary component of $7.5 million in a settlement agreement with the FTC related to consumer privacy practices[71] - As of September 30, 2025, the net impact of contingent liabilities less related insurance loss recovery was $7.0 million[72] Market Focus - The company continues to focus on the growing skilling market, offering innovative tools for workplace readiness and professional upskilling[26] Accounting Standards - The company has not early adopted recent accounting standards updates and is evaluating their potential impact[34][35][36]