The earnings call reflects a challenging quarter for Chegg with notable achievements in engagement and strategic restructuring but significant setbacks due to competitive pressures from AI technologies and declining financial metrics. The company's proactive measures to address these challenges show promise, yet the overall tone remains cautious.

Company Guidance

In the Q3 2024 earnings call, Chegg's executives provided guidance for future financial performance amidst several challenges. They reported better-than-expected revenue of $137 million and $22 million in adjusted EBITDA for the quarter. However, due to adverse impacts from advancements in AI search experiences and the growing adoption of generative AI services, they do not anticipate meeting their 2025 goals of a 30% adjusted EBITDA margin and $100 million in free cash flow. To address these challenges, Chegg announced a broad restructuring initiative to reduce headcount by 21%, aiming for non-GAAP cost savings of $60 million to $70 million in 2025. The cumulative cost savings from this and previous restructuring efforts are projected to reach $100 million to $120 million in 2025. Looking ahead to Q4, Chegg expects total revenue between $141 million and $143 million, with subscription services revenue between $126 million and $128 million, and adjusted EBITDA between $32 million and $34 million.

Better-than-expected Q3 2024 Revenue and Adjusted EBITDA

Chegg delivered $137 million in revenue and $22 million in adjusted EBITDA, exceeding Q3 guidance.

Increased Engagement Metrics

The number of questions asked increased by 79% year-over-year in Q3, and the Chegg Study and Chegg Study Pack monthly retention rate increased by 30 basis points year-over-year.

Strategic Restructuring and Cost Savings

Chegg is implementing a restructuring to reduce headcount by 21%, aiming for a combined non-GAAP savings of $100 million to $120 million by 2025.

New Direct Institutional Partnerships

Chegg launched 4 direct institutional partnerships to provide access to Chegg Study, funded by the institutions.

Brand Campaign and Product Enhancements

Introduced a new brand marketing campaign and launched enhancements like an AI arena and upgraded Q&A experience.

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Chegg (CHGG) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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CHGG Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Feb 10, 2025	2024 (Q4)	0.18 / -	0.36	―	―	―
Nov 12, 2024	2024 (Q3)	0.07 / 0.09	0.18	-50.00% (-0.09)
Aug 05, 2024	2024 (Q2)	0.23 / 0.24	0.28	-14.29% (-0.04)
Apr 29, 2024	2024 (Q1)	0.25 / 0.26	0.27	-3.70% (-0.01)
Feb 05, 2024	2023 (Q4)	0.36 / 0.36	0.4	-10.00% (-0.04)
Oct 30, 2023	2023 (Q3)	0.17 / 0.18	0.21	-14.29% (-0.03)
Aug 07, 2023	2023 (Q2)	0.29 / 0.28	0.37	-24.32% (-0.09)
May 01, 2023	2023 (Q1)	0.26 / 0.27	0.32	-15.62% (-0.05)
Feb 06, 2023	2022 (Q4)	0.38 / 0.40	0.38	5.26% (+0.02)
Nov 01, 2022	2022 (Q3)	0.14 / 0.21	0.2	5.00% (<+0.01)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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CHGG Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Nov 12, 2024	$1.77	$1.58	-10.73%
Aug 05, 2024	$2.93	$2.28	-22.18%
Apr 29, 2024	$7.17	$5.17	-27.89%
Feb 05, 2024	$9.30	$8.73	-6.13%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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