SANTA CLARA, Calif. - Chegg, Inc. (NYSE:CHGG), a leading student-first connected learning platform, reported a modest beat on earnings per share (EPS) for the first quarter of 2024 but issued guidance that fell short of analyst expectations, sending its shares down 4% in after-hours trading.
For the first quarter, Chegg announced an adjusted EPS of $0.26, slightly above the analyst consensus of $0.25. Revenue for the quarter was reported at $174.4 million, narrowly beating the consensus estimate of $174.04 million. Despite the EPS beat, the company's total net revenues reflected a 7% decrease from the same quarter last year, with a notable 9% drop in Subscription Services Revenues year-over-year (YoY).
The company's guidance for the second quarter of 2024 was particularly disappointing for investors, projecting revenues in the range of $159 million to $161 million, significantly below the analyst consensus of $173.6 million. The anticipated gross margin is expected to be between 70% and 71%, with adjusted EBITDA forecasted to be between $38 million and $40 million.
Nathan Schultz, incoming CEO & President of Chegg, commented on the quarter's performance, highlighting the productive rollout of AI-enabled experiences and the company's focus on aligning expenses with current revenue trends. Schultz also expressed enthusiasm for the future, stating, "We are seeing encouraging trends in retention rate and engagement, and as more questions are asked on our platform, we generate more content, which drives more traffic and leads to new customers."
The market's negative reaction to the guidance overshadowed the company's first-quarter achievements and the announcement of Nathan Schultz as the incoming CEO, with Dan Rosensweig transitioning to the role of Executive Chairman.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.