Chegg (NYSE:CHGG) Announces Quarterly Earnings Results, Beats Expectations By $0.03 EPS

Chegg (NYSE:CHGG) announced its quarterly earnings results on Thursday. The technology company reported ($0.02) earnings per share for the quarter, beating the consensus estimate of ($0.05) by $0.03, FiscalAI reports. Chegg had a negative return on equity of 13.11% and a negative net margin of 19.96%.The company had revenue of $51.85 million during the quarter, compared to analysts’ expectations of $49.50 million.

Here are the key takeaways from Chegg’s conference call:

• Q2 results exceeded expectations: Revenue reached $51.8 million, adjusted EBITDA was $9.1 million with a 17% margin, and free cash flow was $6.4 million despite $1.5 million in severance payments.
• Chegg significantly reduced its cost base, with non-GAAP operating expenses nearly halved year over year and second-quarter CapEx down 49%; management is targeting a 60% CapEx reduction for full-year 2026.
• The company expects to fully repay its convertible debt in Q3 and ended the quarter with $72.3 million in cash and investments, a $38.5 million net cash position, and $120.7 million remaining under its share repurchase authorization.
• Chegg plans to soft launch an AI-powered employability platform in Q3, combining job matching, application automation, interview coaching, alumni connections, and targeted skills training; more than 10,000 students have tested the beta, but the strategy remains an early-stage, multi-year growth initiative.
• Q3 guidance calls for total revenue of $43 million-$44 million and adjusted EBITDA of just $1 million-$2 million, with gross margin of 48%-49%, reflecting seasonal weakness and the ongoing transition toward the new employability platform.

Chegg Price Performance

NYSE CHGG traded up $0.04 during trading hours on Friday, reaching $0.91. The company’s stock had a trading volume of 950,997 shares, compared to its average volume of 1,349,031. The firm has a market capitalization of $102.33 million, a price-to-earnings ratio of -1.87 and a beta of 2.17. Chegg has a 1-year low of $0.45 and a 1-year high of $1.90. The company’s 50-day moving average is $1.02 and its two-hundred day moving average is $0.91.

Institutional Trading of Chegg

A number of institutional investors and hedge funds have recently made changes to their positions in the business. Virtu Financial LLC acquired a new position in shares of Chegg during the 4th quarter worth approximately $49,000. Invesco Ltd. grew its stake in Chegg by 20.1% in the 4th quarter. Invesco Ltd. now owns 453,140 shares of the technology company’s stock valued at $421,000 after acquiring an additional 75,780 shares during the period. Mackenzie Financial Corp grew its stake in Chegg by 14.6% in the 4th quarter. Mackenzie Financial Corp now owns 1,186,294 shares of the technology company’s stock valued at $1,091,000 after acquiring an additional 151,299 shares during the period. Bridgeway Capital Management LLC increased its holdings in Chegg by 12.3% in the 4th quarter. Bridgeway Capital Management LLC now owns 697,504 shares of the technology company’s stock worth $649,000 after acquiring an additional 76,495 shares in the last quarter. Finally, Graham Capital Management L.P. increased its holdings in Chegg by 67.5% in the 4th quarter. Graham Capital Management L.P. now owns 208,863 shares of the technology company’s stock worth $194,000 after acquiring an additional 84,134 shares in the last quarter. 95.18% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Upgrades and Downgrades

A number of equities research analysts have recently commented on the stock. Weiss Ratings raised shares of Chegg from a “sell (e+)” rating to a “sell (d-)” rating in a research note on Tuesday, June 23rd. Zacks Research downgraded shares of Chegg from a “strong-buy” rating to a “hold” rating in a report on Monday, July 6th. Two analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat.com, Chegg currently has a consensus rating of “Reduce”.

Chegg News Roundup

Here are the key news stories impacting Chegg this week:

• Positive Sentiment: Chegg reported a second-quarter adjusted loss of $0.02 per share, better than the $0.05 loss analysts expected. Revenue of approximately $51.8 million also exceeded the $49.5 million consensus estimate. Chegg Q2 earnings report
• Positive Sentiment: Management is expanding Chegg’s focus on employability and plans to soft-launch a next-generation service across Chegg and Internships.com in the third quarter. The strategy is intended to improve the company’s relevance as students increasingly use generative AI for homework assistance. CHGG Q2 strategic overhaul
• Positive Sentiment: Chegg generated $9.1 million of adjusted EBITDA, equal to a 17% margin, and ended the quarter with $72.3 million in cash and investments, including a $38.5 million net cash position. Chegg Skilling revenue also rose 2% year over year to $17.5 million. Chegg Q2 revenue and cash update
• Neutral Sentiment: The earnings beat and AI transition have made Chegg a focus of investor discussion, but the company remains in an early restructuring phase and the success of its new products is not yet proven. Why Chegg is trending
• Negative Sentiment: Second-quarter revenue fell 51% year over year from $105.1 million, while Chegg posted a $3.0 million net loss. Analysts and investors remain concerned that the AI overhaul has not yet halted the revenue decline. Chegg AI overhaul and revenue decline
• Negative Sentiment: Third-quarter guidance calls for revenue of $43 million to $44 million, below the $45 million analyst estimate. Adjusted EBITDA is expected to fall to $1 million-$2 million, with gross margin projected at 48%-49%, indicating near-term profitability pressure.

About Chegg

Chegg, Inc (NYSE: CHGG) is a leading education technology company headquartered in Santa Clara, California. Originally founded in 2005, Chegg has evolved from a textbook rental service into a comprehensive digital learning platform. Its suite of subscription-based offerings addresses a wide range of academic needs, catering primarily to high school and college students seeking homework help, study resources, and career guidance.

The company’s core services include Chegg Study, which provides step-by-step solutions and expert Q&A support; Chegg Writing, offering plagiarism checks and guided writing assistance; and Chegg Math Solver, a tool for solving mathematical problems with detailed explanations.