HomeMarket NewsSmall CapsChegg's Q3 Earnings: Surpassing Revenue and Earnings Estimates, Subscribers Decline, Company Introduces...

Chegg’s Q3 Earnings: Surpassing Revenue and Earnings Estimates, Subscribers Decline, Company Introduces AI-Powered Experience

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Chegg Inc CHGG released its Q3 financial results on Monday after the market closed. Here’s a comprehensive overview of the key metrics from the quarter.

Financial Overview: Chegg reported a 4% year-over-year decrease in revenue for the third quarter, amounting to $157.9 million. This exceeded the consensus estimate of $152.67 million, according to Benzinga Pro. The company’s quarterly adjusted earnings stood at 18 cents per share, surpassing analyst estimates of 17 cents per share.

Subscription services revenues witnessed a 4% decline from the previous year, reaching $139.9 million. Furthermore, subscription services subscribers decreased by 8% year-over-year, totaling 4.4 million.

Gross margin for the quarter was 47%, primarily impacted by a one-time content and related assets charge. However, adjusted gross margin stood at a healthy 74%.

Notably, Chegg has entered the initial phase of its new AI-powered user experience rollout.

According to Chegg’s President and CEO, Dan Rosensweig, “Chegg is in a great position to build the most impactful, scalable, AI-enabled personal learning assistant, which will expand our opportunities to serve more students, in more ways, and at a lower cost per customer.”

Rosensweig further added, “We are moving quickly and have already started to roll out our new simple user interface and unified asking experience, delivering faster and more relevant solutions.”

Chegg has projected fourth-quarter revenue to range between $185 million and $187 million, slightly surpassing estimates of $186.34 million. Furthermore, subscription services revenues are expected to be in the range of $164 million to $166 million.

For the fourth quarter, the company anticipates a gross margin between 73% and 74%. Additionally, the fourth-quarter adjusted EBITDA is estimated to range from $62 million to $64 million.

A conference call to discuss these results began at 4:30 p.m. ET.

See Also: US Stocks Set To Bounce Back Strongly From Oversold Levels As Earnings, Fed Decision Take The Spotlight

CHGG Price Action: Chegg shares have experienced a year-to-date decrease of around 64%. After hours, the stock displayed some volatility and was down 8.58% at $8.05 at the time of publication, as reported by Benzinga Pro.

Photo: weisanjiang from Pixabay.

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