Chegg Q3 Revenue Falls 40% as Academic Services Revenue Halves

Chegg's third-quarter revenue fell 40% to $46.468 million, with Academic Services revenue halving as lower website traffic reduced subscriptions and the company forecast fourth-quarter revenue of $38 million to $40 million.

For the quarter ended Sept. 30, Academic Services generated $30.026 million, compared with $60.159 million a year earlier. Chegg linked the decline mainly to lower subscription revenue as reduced traffic led to fewer subscribers. It has also identified increased use of free and paid generative AI services as a factor reducing website traffic and subscriptions. Chegg Skilling revenue fell 6% to $16.442 million from $17.583 million.

Chegg's GAAP net loss narrowed to $4.690 million, or 4 cents per share, from $17.471 million, or 16 cents per share, a year earlier. The non-GAAP net loss was $5.734 million, or 5 cents per share. Adjusted EBITDA, a measure of earnings with specified adjustments, declined to $5.435 million from $13.254 million.

The company had $43.604 million in cash, cash equivalents and investments at Sept. 30, with no convertible senior notes outstanding. For the quarter ending Dec. 31, Chegg forecast gross margin of 46% to 48% and adjusted EBITDA of about $1 million, alongside its revenue outlook.

Chegg launched its Internships.com employability platform in September. By Nov. 3, it had attracted more than 100,000 visitors and signed pilot programs with College of Charleston, Salem College and Radford University. Executive Chairman and CEO Dan Rosensweig said, “AI hit our business hard.”