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Jun 30
Chegg Q2 2025 Earnings Report
Chegg reported its second quarter 2025 earnings, exceeding guidance on revenue and adjusted EBITDA, while continuing its strategic review process and focusing on AI integration and growth in Busuu and Skills.
Key Takeaways
Chegg delivered a strong second quarter in 2025, surpassing its revenue and adjusted EBITDA guidance. The company reported total net revenues of $105.1 million and adjusted EBITDA of $23.1 million. Despite a year-over-year decline in overall revenue and subscribers, Chegg emphasized its strategic review process, ongoing cost management, and the promising growth of its Busuu and Skills segments, which are positioned as future growth engines.
Total Net Revenues reached $105.1 million, exceeding guidance, although representing a 36% decrease year-over-year.
Non-GAAP Gross Margin stood at 68% and Adjusted EBITDA was $23.1 million, demonstrating disciplined expense management.
Subscription Services subscribers decreased by 40% year-over-year to 2.6 million, impacted by lower traffic due to Google AI Overviews.
Busuu, the language learning business, showed strong performance with a 15% year-over-year revenue increase, driven by both B2C and B2B segments.
Chegg
Chegg
Chegg Revenue by Segment
Revenue by Segment
Subscription Services Revenue
CapyFin.comSkills and Other Revenue
CapyFin.com Forward Guidance
For the third quarter of 2025, Chegg anticipates total net revenues between $75 million and $77 million, with Subscription Services revenues ranging from $67 million to $69 million. Gross margin is expected to be between 56% and 57%, and adjusted EBITDA is projected to be in the range of $7 million to $8 million.
Positive Outlook
- Continued focus on disciplined expense management, with additional identified savings for 2026.
- Busuu is expected to achieve approximately $48 million in revenue in 2025 and be adjusted EBITDA positive by Q1 2026.
- Skills business is on a path to profitability and positive double-digit revenue growth in 2026.
- Chegg Study's AI-powered features are showing positive student feedback and improved monthly retention rates.
- Expansion of the business-to-institution pilot program for Chegg Study, validating academic performance improvements.
Challenges Ahead
- Projected decline in total net revenues for Q3 2025 compared to Q2 2025.
- Expected decrease in Subscription Services revenues for Q3 2025.
- Anticipated lower gross margin for Q3 2025 compared to Q2 2025.
- Forecasted significant drop in Adjusted EBITDA for Q3 2025 compared to Q2 2025.
- Ongoing impact of lower traffic, largely due to Google AI Overviews, affecting subscriber numbers.
Revenue & Expenses
Visualization of income flow from segment revenue to net income