Financial Data and Key Metrics Changes - In Q3 2025, total revenue was $78 million, a decrease of 42% year-over-year, primarily due to reduced traffic leading to fewer subscribers and less subscription revenue [10] - Non-GAAP operating expenses were $49 million, a reduction of approximately $41 million, or 46% year-over-year, driven by restructuring efforts [11] - Adjusted EBITDA for Q3 was $13 million, representing a margin of 17% [11] - Free cash flow for Q3 was negative $900,000, impacted by a one-time $7.5 million settlement payment to the FTC and $5.5 million in severance payments [12] - The company concluded the quarter with cash and investments of $112 million and a net cash balance of $49 million [12] Business Line Data and Key Metrics Changes - The company has split into two units: Chegg Skilling, expected to have sustainable double-digit growth, and legacy academic services, focusing on cash generation [5][6] - Chegg Skilling is expected to end 2025 with strong momentum, anticipating a 14% year-over-year growth and full-year revenue of $70 million [8] - The legacy academic business is expected to generate cash for several years despite challenges from reduced Google traffic [22] Market Data and Key Metrics Changes - The skilling market is currently valued at over $40 billion, with a focus on workforce, AI, and language learning [7] - Chegg Skilling is positioned to capture growth in the B2B market, transitioning from a B2C model [16] Company Strategy and Development Direction - The company aims to rebuild and reinvent itself, focusing on the skilling market and leveraging its assets for long-term value creation [5][9] - A strategic shift towards the skilling market is seen as essential for future growth, with all growth resources allocated to this segment [16] - The company is investing in AI to enhance its offerings and improve operational efficiency [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the disruptive impact of AI on traditional business models and is adapting to these changes [5][6] - The company is optimistic about its ability to grow in the skilling market, with expectations of double-digit growth in the coming quarters [10][12] - Management believes they have hit the bottom and are now positioned for future growth and profitability [13] Other Important Information - The company has undergone significant restructuring, which included a reduction of nearly 400 employees to streamline operations [17] - The transition to a B2B model is expected to provide a more stable and secure business environment [24] Q&A Session Summary Question: Strategic product priorities for skilling and resource allocation - All growth resources will be directed towards the skilling business, focusing on B2B opportunities and sustainable growth [16] Question: Support for the legacy academic business - The legacy business will continue to operate efficiently, leveraging its existing database and technology to generate cash [22] Question: Initiatives for the Busuu business and growth confidence - The company is focusing on repackaging learning mechanisms for B2B and leveraging AI for conversational learning [27][29] Question: Investments and channels for the skilling business - The company is exploring new distribution channels and building a B2B Salesforce to expand its market reach [34][36] Question: Impact of reduced traffic on skilling business - The skilling business is not expected to face headwinds from reduced traffic, as it is positioned for growth [38]