Core Insights - Chegg, Inc. (CHGG) reported fourth-quarter 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, although both metrics declined year-over-year [1][4][9] - Following the results, CHGG shares fell by 2.7% in after-hours trading [1] Financial Performance - The company reported an adjusted loss per share of $0.01, better than the Zacks Consensus Estimate of a loss of $0.11, compared to an EPS of $0.17 in the same quarter last year [4][10] - Net revenues for Q4 were $72.7 million, surpassing the consensus estimate of $71 million by 1.9%, but reflecting a 49.4% decline year-over-year [4][10] - Total net revenues for 2025 were $376.9 million, down from $617.6 million in 2024 [10] Operational Highlights - The Skills and Other product line generated revenues of $17.7 million, indicating double-digit growth, while Academic Services revenues were $54.9 million [5] - Gross profit for Q4 decreased by 57.4% year-over-year to $41.7 million, with gross margin contracting by 1,100 basis points to 57% [6] - Total operating expenses fell by 39.4% year-over-year to $75.9 million [6] Cash Flow and Liquidity - As of December 31, 2025, Chegg had cash and cash equivalents of $31.1 million, down from $161.5 million in 2024 [7] - Net cash provided by operating activities for 2025 was $15.5 million, a significant decrease from $125.2 million in the previous year [7] - Free cash flow at the end of Q4 was negative $12.6 million, down from $50.3 million a year ago [7] Future Outlook - For Q1 2026, Chegg expects net revenues between $60 million and $62 million, compared to $121.4 million in the same quarter last year [11] - Chegg Skilling revenues are projected to be between $17.5 million and $18 million, indicating continued growth in this segment [11] - Management aims for adjusted EBITDA margins of at least 20% over the next couple of years, with non-GAAP expenses expected to fall below $250 million in 2026 [14] - The company anticipates generating meaningful free cash flow in 2026, with capital expenditures projected to decline by about 60% year-over-year [15]

Core Insights - Chegg Inc. is undergoing a transformation focusing on the $40 billion skilling market, which is expected to drive significant growth and improve margins and cash flow in the future [1] Financial Performance - For Q4 2025, Chegg reported an EPS of -$0.01, outperforming the estimated EPS of -$0.11, and revenue of $72.66 million, exceeding the estimated revenue of $71 million [2] - Despite the positive earnings surprises, Chegg's stock price declined due to a significant year-over-year revenue drop, raising investor concerns [3] Business Strategy - The company is reorganizing into two main businesses, with Chegg Skilling identified as the primary growth engine to address challenges and leverage opportunities in the skilling market [3] Valuation Metrics - Chegg's price-to-sales ratio is approximately 0.18, and the enterprise value to sales ratio is about 0.28, indicating how the market values the company's sales [4] - The enterprise value to operating cash flow ratio stands at around 2.97, reflecting the company's valuation in relation to its operational cash flow [4] Financial Health - The debt-to-equity ratio is approximately 0.57, indicating a moderate level of debt relative to equity [5] - The current ratio is about 0.95, suggesting that Chegg can cover its short-term liabilities with its short-term assets [5]

Financial Data and Key Metrics Changes - In Q4 2025, Chegg delivered $18 million in revenue from its skilling business, indicating a strong start for double-digit growth in 2026 [6][12] - Academic services revenue was $55 million, with a focus on cash generation [13] - Non-GAAP operating expenses were reduced to $44.8 million, a 47% decrease year-over-year, reflecting successful restructuring efforts [13][14] - Adjusted EBITDA for Q4 was $13 million, representing an 18% margin [13] - Free Cash Flow in Q4 was -$15 million, primarily due to $12 million in severance payments related to restructuring [14] Business Line Data and Key Metrics Changes - Chegg Skilling is now the growth engine, while the legacy academic learning services are managed for free cash flow generation [5][6] - The legacy business, Chegg Study, continues to serve over a million students and is generating meaningful cash flow [6][11] - The company is testing pricing and packaging strategies to extend the operational runway of its legacy business [7][13] Market Data and Key Metrics Changes - The global demand for workforce skilling has reached $40 billion, presenting a significant opportunity for Chegg [8] - Chegg is expanding its course catalog in high-demand areas such as AI, language, and technical skills [8][9] Company Strategy and Development Direction - Chegg is focused on the $40 billion skilling market, aiming for double-digit revenue growth with strong margins and cash flow [5][10] - The company plans to strengthen its balance sheet by ending the year with zero debt and a meaningful cash balance [10][16] - New partnerships with companies like DHL and Woolf University are aimed at expanding Chegg's reach into global enterprise and academic markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new business structure and its potential for success, noting positive early signs [5][11] - The company is transitioning from a direct-to-consumer (D2C) model to a business-to-business (B2B) skills learning platform [11] - Management anticipates stronger performance in the second half of 2026, driven by continued investment and new distribution partners [16] Other Important Information - Chegg repurchased $9 million of its 2026 convertible notes at a discount, enhancing its capital structure [12] - The company received a delisting notice from the NYSE but has multiple avenues to regain compliance [15] Q&A Session Summary Question: Key drivers of skilling growth and core business performance - Management highlighted that the core business is now skilling, with strong retention rates and positive early results from pricing tests [19][20] Question: Opportunities from the Coursera/Udemy merger - Management sees potential partnerships with Coursera and Udemy rather than competition, focusing on content creation and distribution [28][30] Question: Demand for AI learning content - There is a growing demand for AI learning content across all employee levels, with Chegg expanding its course offerings to meet this need [32][33]

Financial Data and Key Metrics Changes - In Q4 2025, Chegg delivered $18 million in revenue from its skilling business, indicating a strong start for double-digit growth in 2026 [6][13] - Academic services revenue was reported at $55 million, with a focus on cash generation [13] - Non-GAAP operating expenses were reduced to $44.8 million, a 47% decrease year-over-year, reflecting successful restructuring efforts [13][14] - Adjusted EBITDA for Q4 was $13 million, representing an 18% margin [13] - Free Cash Flow in Q4 was -$15 million, primarily due to $12 million in severance payments related to restructuring [14] Business Line Data and Key Metrics Changes - Chegg Skilling is now the primary growth engine, while the legacy academic learning services are being managed for cash flow generation [5][11] - The company is testing various pricing and packaging strategies to optimize the legacy business and extend its operational runway [7][13] Market Data and Key Metrics Changes - The global demand for workforce skilling has reached $40 billion, presenting a significant opportunity for Chegg [8] - Chegg is expanding its course catalog to include high-demand technical skills, particularly in AI and language learning [9] Company Strategy and Development Direction - Chegg is focused on the $40 billion skilling market, aiming for double-digit revenue growth and strong margins [5][10] - The company plans to strengthen its balance sheet by ending the year with zero debt and a meaningful cash balance [10][16] - New partnerships with companies like DHL and Woolf University are aimed at expanding Chegg's reach into global enterprise and academic markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new business structure and its potential for success, highlighting positive early signs in the skilling business [5][11] - The company anticipates stronger performance in the second half of 2026, driven by continued investment and new distribution partners [16] Other Important Information - Chegg repurchased $9 million of its 2026 convertible notes at a discount to enhance its capital structure [12] - The company received a delisting notice from the NYSE but has multiple avenues to regain compliance [15] Q&A Session Summary Question: Key drivers of skilling growth and core business performance - Management noted that retention rates in the core business are stronger than expected, providing a runway for product reinvention [20][22] Question: Opportunities from the Coursera/Udemy merger - Management sees potential partnerships with these companies rather than competition, focusing on content creation and distribution [30] Question: Demand for AI learning content - There is a growing demand for AI learning content across all employee levels, not just frontline workers, indicating a significant growth market [32][33]

Financial Data and Key Metrics Changes - In Q4 2025, Chegg delivered $18 million in revenue from its skilling business, indicating a strong market opportunity and momentum for double-digit growth in 2026 [6][13] - Academic services revenue was $55 million, with a focus on cash generation [13] - Non-GAAP operating expenses were reduced by 47% year-over-year to $44.8 million, reflecting fiscal discipline and successful restructuring [13] - Adjusted EBITDA for Q4 was $13 million, representing an 18% margin [13] - Free Cash Flow in Q4 was -$15 million, primarily due to $12 million in employee severance payments related to restructuring [14] Business Line Data and Key Metrics Changes - Chegg Skilling is now the growth engine for the company, while the legacy academic learning services are managed for free cash flow generation [5] - The company is testing different pricing and packaging strategies to extend the operational runway of its legacy business [6][13] - The skilling business is expected to achieve double-digit growth, with a target of at least 20% adjusted EBITDA margin in the coming years [10] Market Data and Key Metrics Changes - The global demand for workforce skilling has reached $40 billion, presenting a significant opportunity for Chegg, particularly in AI and technical skills [7][9] - The company is expanding its course catalog and global footprint across B2B distribution channels to capture growth opportunities [8][9] Company Strategy and Development Direction - Chegg is focused on the $40 billion skilling market, aiming for double-digit revenue growth and strong margins [5] - The company has reorganized into two business units: Chegg Skilling and legacy academic services, allowing for financial flexibility to invest in growth opportunities [5] - New partnerships with companies like DHL and Woolf University are aimed at expanding reach into global enterprise and academic markets [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the new structure and its potential for success, noting positive early signs in the skilling business [5][11] - The company is on track to reduce total Non-GAAP expenses to less than $250 million in 2026, a 53% decline from 2024 [14] - Management anticipates generating meaningful Free Cash Flow in 2026 despite ongoing severance-related expenditures [14][16] Other Important Information - The company concluded Q4 with cash and investments of $85 million and a net cash balance of $31 million [15] - Chegg received a delisting notice from the NYSE, but it has ample time and options to regain compliance [15] Q&A Session Summary Question: Key drivers of skilling growth and core business performance - Management highlighted that the core business is now skilling, with retention rates performing better than expected, which is beneficial for cash flow generation [20] Question: State of the skilling market and opportunities from Coursera/Udemy merger - Management sees potential partnerships with Coursera and Udemy rather than competition, focusing on content creation and educational outcomes [29] Question: AI learning content usage and partnerships - There is a growing demand for AI learning content across all employee levels, with Chegg expanding its course offerings to meet this demand [31]

Core Insights - Chegg Inc. reported a quarterly loss of one cent per share, outperforming the consensus estimate of a loss of ten cents [2] - Quarterly revenue was $72.66 million, exceeding the Street estimate of $71 million, but down from $143.48 million in the same period last year [2] Financial Highlights - Chegg Skilling revenues reached $17.7 million, marking an 11% year-over-year increase [4] - Non-GAAP gross margin stood at 60% [4] - Non-GAAP net loss was $700,000 [4] - Adjusted EBITDA was reported at $12.9 million [4] Strategic Direction - The company is focusing on the $40 billion skilling market, which is expected to drive double-digit growth with strong margins and cash flow in the future, according to CEO Dan Rosensweig [3] - Chegg has reorganized into two main business segments: Chegg Skilling as the growth engine and legacy Academic Services, which generates free cash flow to strengthen the balance sheet [4]

Core Insights - Chegg Inc. reported a quarterly loss of one cent per share, outperforming the consensus estimate of a loss of ten cents [2] - Quarterly revenue was $72.66 million, exceeding the Street estimate of $71 million, but down from $143.48 million in the same period last year [2] Financial Performance - Chegg Skilling generated revenues of $17.7 million, reflecting an 11% year-over-year increase [4] - Non-GAAP gross margin stood at 60% [4] - Non-GAAP net loss was $700,000 [4] - Adjusted EBITDA was reported at $12.9 million [4] Strategic Direction - The company is focusing on the $40 billion skilling market, which is expected to drive double-digit growth with strong margins and cash flow in the future, according to CEO Dan Rosensweig [3] - Chegg has reorganized into two main business segments: Chegg Skilling as the growth engine and legacy Academic Services, which generates free cash flow to strengthen the balance sheet [4] - The company aims to end 2026 debt-free with a substantial cash balance [4]

Q4-25 Investor Presentation February 9, 2026 © 2024 Chegg, Inc. / All Rights Reserved Safe Harbor Statement Forward-Looking Statements This investor presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include, without limitation, our restructuring plans, including their size, the amount and timing of the charges we will incur in connection with them and the amount and timing of cost savings; our expectati ...

Core Viewpoint - Chegg is facing significant financial challenges, with anticipated Q4 earnings showing a negative EPS and declining revenue due to increased competition and a drop in subscribers [1][2][4] Financial Performance - The upcoming Q4 earnings are projected to have an EPS of -$0.11 and revenue of approximately $71 million [1][2] - Chegg experienced a 43% decline in revenue over the past year, indicating substantial revenue pressure [1][2] - In the previous quarter, Chegg exceeded expectations, with adjusted EPS doubling the Zacks Consensus Estimate and net revenues surpassing estimates by 1.8% [2] Financial Ratios - Chegg's negative P/E ratio stands at -0.97, indicating a lack of profitability [3][4] - The price-to-sales ratio is 0.17, suggesting that investors are paying 17 cents for every dollar of sales [3] - The enterprise value to sales ratio is 0.27, providing insight into Chegg's valuation relative to its revenue [3] - The enterprise value to operating cash flow ratio is 2.82, indicating how many times the operating cash flow can cover the enterprise value [3] Debt and Liquidity - Chegg's debt-to-equity ratio is 0.57, suggesting a moderate level of debt relative to equity [4] - The current ratio is 0.95, indicating that Chegg has slightly less current assets than current liabilities, which may impact its short-term financial health [4] Strategic Focus - Chegg's long-term strategy involves focusing on AI and Chegg Skilling, aiming to move beyond traditional study methods [2]

Core Insights - Chegg, Inc. reported negative free cash flow of $900 million in Q3 2025, primarily due to a one-time settlement payment and restructuring costs, indicating a potential transitional rather than structural issue in its financial trajectory [1][9] - The company experienced a significant revenue decline of 35.8% year over year in the first nine months of 2025, driven by reduced contributions from its Subscription Services and Skills segments [2] - Chegg is pivoting towards its Chegg Skilling unit, which is expected to grow by 14% year over year in Q4 2025, as demand for AI and workforce reskilling programs increases [3] Financial Performance - Free cash flow decreased by 93.7% year over year in Q3 2025, dropping to $2.8 million [1] - Chegg's legacy subscription revenues are declining due to competition from AI solutions and changes in search behavior [9] - The Zacks Consensus Estimate for 2026 earnings remains stable at nine cents per share, indicating a projected 221.4% year-over-year growth [12] Competitive Landscape - Chegg faces intense competition from companies like Udemy and Duolingo, which have maintained positive cash flow and strong engagement [5][6][7] - Udemy has consistently delivered positive operating cash flow, supported by strong subscription uptake and B2B relationships [6] - Duolingo's gamified platform has allowed it to maintain positive cash flow amid rapid growth, differentiating it from Chegg [7] Stock Performance - Chegg's stock has declined by 21.7% over the past three months, underperforming compared to industry peers and major indices [8] - The stock is currently trading at a forward P/E ratio of 7.25, indicating a discounted valuation relative to industry peers [11]