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Mar 31
Chegg Q1 2025 Earnings Report
Chegg reported financial results for the first quarter ended March 31, 2025, exceeding revenue and adjusted EBITDA expectations while making progress on strategic alternatives and initiating additional restructuring.
Key Takeaways
Chegg reported a decrease in total net revenues and subscription services revenues year-over-year for the first quarter of 2025. Despite a net loss, the company exceeded its revenue and adjusted EBITDA expectations and generated positive free cash flow. Chegg is exploring strategic alternatives and implementing further cost reductions, including a workforce reduction, to align with its business outlook.
Total Net Revenues for Q1 2025 were $121.4 million, a 30% decrease year-over-year.
Subscription Services Revenues were $107.6 million, also down 30% year-over-year.
The company reported a Net Loss of $17.5 million and a Non-GAAP Net Loss of $6.7 million.
Chegg generated $15.8 million in free cash flow during the quarter.
Chegg
Chegg
Chegg Revenue by Segment
Revenue by Segment
Subscription Services Revenue
CapyFin.comSkills and Other Revenue
CapyFin.com Forward Guidance
For the second quarter of 2025, Chegg expects total revenue between $100 million and $102 million, with Subscription Services revenue between $85 million and $87 million. Gross margin is anticipated to be between 64% and 65%, and adjusted EBITDA is projected to be between $16 million and $17 million.
Positive Outlook
- Expected gross margin improvement in Q2 2025 compared to Q1 2025.
- Anticipated positive adjusted EBITDA in Q2 2025.
- Continued focus on aligning cost structure with revenue.
- Exploring strategic alternatives to maximize shareholder value.
- Potential for growth in Busuu and Skills businesses.
Challenges Ahead
- Expected continued decline in total revenue in Q2 2025 year-over-year.
- Expected continued decline in Subscription Services revenue in Q2 2025 year-over-year.
- Ongoing industry challenges impacting traffic and subscriber acquisitions.
- Negative impact on financial outlook due to industry conditions.
- Workforce reduction impacting approximately 22% of employees.
Revenue & Expenses
Visualization of income flow from segment revenue to net income