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Chegg (NYSE: CHGG) posts 39% 2025 revenue decline and outlines skilling pivot

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Chegg, Inc. reported sharp revenue declines and continued losses for 2025 while accelerating a strategic shift toward workforce skilling. For the fourth quarter 2025, total net revenues were $72.7 million, down 49% year over year, with a net loss of $32.8 million. Chegg Skilling generated $17.7 million in quarterly revenue, up 11%, while legacy Academic Services brought in $54.9 million.

For full year 2025, total net revenues were $376.9 million, down 39%, and Chegg recorded a net loss of $103.4 million. On a non-GAAP basis, Chegg reported $3.9 million of net income and $68.5 million of adjusted EBITDA, reflecting large restructuring and impairment adjustments. Free cash flow turned negative $12.6 million, mainly due to severance payments.

Management highlighted a reinvention around the $40 billion skilling market, with Chegg Skilling positioned as the growth engine and Academic Services managed for cash. Non-GAAP operating expenses fell 47% year over year in Q4, and the company aims to cut 2026 non-GAAP expenses by 53% from 2024 and to end 2026 debt-free. Chegg also acknowledged receiving an NYSE delisting notice but said its listing is unchanged while it works to regain compliance.

Positive

  • None.

Negative

  • Significant revenue contraction and ongoing losses: 2025 net revenues fell 39% to $376.9 million, Q4 revenues declined 49% year over year, and the company posted a full-year net loss of $103.4 million, underscoring pressure on the core Academic Services business.
  • Listing and cash-flow pressures: Chegg received an NYSE delisting notice and generated negative free cash flow of $12.6 million in 2025, with additional severance-related cash outflows expected in 2026.

Insights

Chegg’s core revenues are shrinking sharply while skilling grows from a small base.

Chegg is undergoing a major business transition. Full-year 2025 net revenues fell from $617.6M to $376.9M, a 39% decline, and the company posted a net loss of $103.4M. The main driver is contraction in the Academic Services segment.

Chegg Skilling produced $68.7M in 2025 revenue, down 7% for the year but returning to 11% year-over-year growth in Q4. This suggests the new focus market is showing some early traction, yet it is still much smaller than the declining legacy business.

Non-GAAP operating expenses dropped to $44.8M in Q4, down 47% year over year, and adjusted EBITDA margin reached 18%. The company plans to cut 2026 non-GAAP expenses by 53% versus 2024 and targets at least 20% adjusted EBITDA margin over the next couple of years, so execution on cost control will be key for restoring profitability.

Balance sheet is much lighter, but delisting risk and shrinking cash are concerns.

Chegg reduced total assets from $868.9M to $276.8M year over year, largely by running down investments and paying off debt. Convertible senior notes fell from $486.0M combined current and long-term to $53.8M current only, and net cash ended at $31M.

Q4 free cash flow was negative $15M, impacted by $12M of severance. Management expects $18M of additional severance cash outflows in 2026, mostly in Q1, but still guides to meaningful free cash flow for the year. The NYSE delisting notice introduces listing risk, though the company notes there is no immediate impact and mentions options such as a reverse stock split.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 9, 2026
Chegg, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3618020-3237489
(State or other jurisdiction of incorporation or organization)(Commission File Number)(I.R.S. Employer Identification No.)

2261 Market Street STE 46218
San Francisco, CA 94114
(Address of principal executive offices)

3990 Freedom Circle
Santa Clara, CA 95054
(Former address of principal executive offices)

(408) 855-5700
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.001 par value per shareCHGGThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Item 2.02    Results of Operations and Financial Condition.

On February 9, 2026, Chegg, Inc. (“we,” “us,” “our,” “Company” or “Chegg”) issued a press release announcing its financial results for the quarter and year ended December 31, 2025, and guidance for the first quarter of 2026. A copy of the press release is attached as Exhibit 99.01 to this Current Report on Form 8-K.

The information contained in this Item 2.02, including the press release attached as Exhibit 99.01 to this Current Report on Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the accompanying Exhibit 99.01 shall not be incorporated by reference into any registration statement or other document filed by Chegg with the Securities and Exchange Commission (“SEC”), whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits
Exhibit No.Description
99.01
Press release issued by Chegg, Inc., dated February 9, 2026
104Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
CHEGG, INC.
By: /S/ DAVID LONGO
David Longo
Chief Financial Officer
Date: February 9, 2026

EXHIBIT 99.01
        
cheggnewlogo2021.jpg
Chegg Reports 2025 Fourth Quarter and Full Year Financial Results

SAN FRANCISCO, Calif., February 9, 2026 /BUSINESS WIRE/ -- Chegg, Inc. (NYSE:CHGG), a global learning company, today reported financial results for the quarter and year ended December 31, 2025.

“We are reinventing Chegg around the $40 billion skilling market, which we believe can drive double-digit growth with strong margins and cash flow in the years to come,” said Dan Rosensweig, CEO & Executive Chairman of Chegg, Inc. “We’ve organized the company into two focused businesses: Chegg Skilling as our growth engine and our legacy Academic Services, which generates free cash flow that strengthens our balance sheet and positions us to end 2026 debt-free with a substantial cash balance.”

Fourth Quarter 2025 Highlights

Total Net Revenues of $72.7 million, a decrease of 49% year-over-year
Chegg Skilling Revenues of $17.7 million, an increase of 11% year-over-year
Gross Margin of 57%
Non-GAAP Gross Margin of 60%
Net Loss was $32.8 million
Non-GAAP Net Loss was $0.7 million
Adjusted EBITDA was $12.9 million

Full Year 2025 Highlights

Total Net Revenues of $376.9 million, a decrease of 39% year-over-year
Chegg Skilling Revenues of $68.7 million, a decrease of 7% year-over-year
Gross Margin of 60%
Non-GAAP Gross Margin of 62%
Net Loss was $103.4 million
Non-GAAP Net Income was $3.9 million
Adjusted EBITDA was $68.5 million

For more information about non-GAAP net (loss) income, non-GAAP gross margin and adjusted EBITDA, and a reconciliation of non-GAAP net (loss) income to net loss, gross margin to non-GAAP gross margin and adjusted EBITDA to net loss, see the sections of this press release titled, “Use of Non-GAAP Measures,” “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” and “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Business Outlook

First Quarter 2026

Chegg Skilling Revenues in the range of $17.5 million to $18.0 million
Total Net Revenues in the range of $60 million to $62 million
Gross Margin between 57% and 58%
Adjusted EBITDA in the range of $11 million to $12 million

For more information about the use of forward-looking non-GAAP measures, a reconciliation of forward-looking net loss to EBITDA and adjusted EBITDA for the first quarter 2026, see the below sections of the press release titled “Use of Non-GAAP Measures,” and “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA.”

An updated investor presentation and investor data sheet can be found on Chegg’s Investor Relations website https://investor.chegg.com (such items are not incorporated into any filings Chegg may make with the Securities and Exchange Commission, unless otherwise noted).




Prepared Remarks - Dan Rosensweig, CEO & Executive Chairman Chegg, Inc.

Thank you, Tracey, and thank you everyone for joining Chegg’s fourth quarter 2025 earnings call. This is a period of reinvention at Chegg. We are rebuilding the company focused on the $40 billion skilling market, which we believe will be a double-digit revenue growth business for Chegg with strong margins and cash flow in the years ahead. To achieve this, we have reorganized Chegg around two focused business units: Chegg Skilling, which is now our growth engine, and our legacy academic learning services, which we are managing to generate free cash flow. Together, this structure gives us the financial flexibility to invest and grow opportunities within skilling while creating long-term shareholder value. We are excited about our future and feel confident that this new structure sets us up for success.

We are already seeing positive early signs. In Q4 Chegg Skilling delivered $18 million in revenue, positioning us for double-digit growth for 2026. Our legacy business, Chegg Study, continues to serve more than a million students and, with our new streamlined org structure, is providing meaningful cash flow to fund value creation. As we have expressed, changes in search interfaces continue to impact our traffic. Yet, despite these changes, the quality and accuracy of our services continue to drive high retention rates. We are now focused on optimizing pricing and packaging and testing multiple strategies to extend our operational runway and drive more free cash flow. We have a clear objective - to use that cash to fund new growth opportunities and increase the value for our shareholders.

Given the global demand for workforce skilling has already reached $40 billion, we feel it is a huge opportunity for Chegg, and we are well positioned to serve this market - particularly in AI, language, technical fluency, and durable skills. Our brand is trusted by learners worldwide, and our skills courses are grounded in learning science and data-driven instructional design. Our platform tracks learner progress in real time, delivering predictive nudges and timely interventions that improve engagement, retention, and completion rates. This combination of brand credibility, evidence-based course design, and intelligent learner support consistently leads our channel partners to report stronger outcomes versus our competitors.

To capture the growth opportunity we see ahead, we are expanding our course catalog with high-demand technical, AI, language, and professional skills while simultaneously broadening our global footprint across B2B distribution channels. As part of this strategy, we are excited to announce new partnerships with DHL, GiGroup and Woolf University. Woolf specifically expands how we can serve learners, as they provide accredited degree pathways that allow for acquired skills to count towards recognized credentials. We also have extended key contracts from companies like L’Oreal and PPG. Our goal is to further extend our reach into global enterprise, institutional, and academic markets. Looking ahead to 2026, we plan to onboard additional employer and institutional partners, both directly and through leading marketplaces. We continue to expand the depth and breadth of our curriculum.

To support this opportunity, I am thrilled to announce Karine Allouche is joining our team to run our European language learning and skills operation. Karine brings deep experience in building and scaling enterprise businesses across Microsoft, NetApp, Global English and – most recently – at Coursera, where she led the transformation of their enterprise business. We are thrilled to have her leadership and expertise as we scale our skilling business around the world.

We have made significant progress in the reinvention of Chegg. Our goal is to continue to grow our skilling business by double-digits annually, and over the next couple of years to achieve an adjusted EBITDA margin of at least 20%.

To achieve that, our 2026 priorities are straightforward:

Accelerate the growth of our skilling business by expanding our offerings and network of partners, domestically and through Europe
Increase free cash flow to invest in the future growth of skilling
And strengthen our balance sheet by ending the year with zero debt and a meaningful cash balance.

We are encouraged by the results we are seeing in the skills business and are excited about the path ahead. We successfully transformed our business from a print textbook rental business to an online learning company and now we are transitioning from a D2C business to a B2B skills learning platform. We are excited about the work we have done so far, and we look forward to updating you again next quarter.

With that, I’ll turn it over to David.




Prepared Remarks - David Longo, CFO Chegg, Inc.

Thank you, Dan and good afternoon.

Today, I will be presenting our financial performance for the fourth quarter of 2025, along with the company’s outlook for the first quarter of 2026. We are introducing our new revenue breakout to provide transparency into our Chegg Skilling business. The historical revenue breakout for the past three years can be found on our data sheet on our investor relations website.

We delivered a good fourth quarter. We exceeded our revenue expectations and surpassed the high-end of our adjusted EBITDA guidance by $2 million, reflecting the initial positive impact of our new focus and turnaround efforts. Our strategic shift into the large skilling market positions us for the next phase of long-term, sustainable growth with strong margins. During the quarter, we also took steps to enhance our capital structure, repurchasing $9 million of our 2026 convertible notes at a discount.

In the fourth quarter, we delivered $18 million in Skilling revenue, with double-digit growth, underscoring the significant market opportunity and the momentum we are seeing. Academic Services revenue was $55 million, as we continue to operate that business with a focus on cash generation. As Dan mentioned earlier, we are testing different pricing and packaging strategies to extend its operational runway.

Moving on to expenses, non-GAAP operating expenses were $44.8 million in the quarter, a reduction of $39.8 million, or 47% year-over-year, as we maintain fiscal discipline and continue to benefit from the successful execution of our restructuring activities. Our fourth quarter adjusted EBITDA was $13 million, representing a margin of 18%.

Our adoption of AI, along with our new business structure, has enabled us to significantly lower expenses while preserving our ability to grow. We overhauled our cost structure to improve efficiency and create capacity for reinvestment in Chegg Skilling. We are on track to reduce total non-GAAP expenses to less than $250 million in 2026, a 53% decline from 2024.

Our strategic investments in AI have allowed us to significantly reduce CapEx without compromising quality. Q4 CapEx was $6 million, down 51% year over year. For 2026, we are targeting a further 60% reduction in CapEx, with approximately 90% dedicated to our growing Skilling business.

Free cash flow in the fourth quarter was negative $15 million, which was primarily impacted by $12 million in employee severance payments related to our restructuring activities. In 2026 we expect $18 million in severance-related cash expenditures related to our last two restructurings, with approximately 80% occurring in the first quarter. Despite these items, we expect to generate meaningful free cash flow in 2026.

Looking at the balance sheet, we concluded the quarter with cash and investments of $85 million and a net cash balance of $31 million.

Before I move to guidance, I’d like to quickly address the delisting notice we received from the NYSE. The notice has no immediate impact on our listing status, and we have ample time and multiple avenues available to regain compliance, including a potential reverse stock split. Our primary focus is on strengthening the fundamentals of the business. We believe that executing on our priorities will be the most effective path to restoring compliance and delivering long-term shareholder value.

Looking ahead at Q1 guidance, we expect:

$17.5 to $18.0 million of revenue from our Chegg Skilling business. We expect double-digit growth for the year and anticipate stronger performance in the second half than in the first, driven by continued investment in the business and the addition of new distribution partners.
Total revenue between $60 and $62 million;
Gross margin to be in the range of 57 to 58 percent;
And adjusted EBITDA between $11 and $12 million.

In 2026, our capital allocation strategy is focused on optimizing free cash flow, strengthening our cash position, and eliminating our debt to create a more flexible and resilient balance sheet. We will also evaluate opportunities to deploy capital through a disciplined approach that supports sustainable growth and generates long-term shareholder value.




In closing, we have taken deliberate actions to strengthen the company for long-term success. We are leaner, more efficient, and poised for double digit revenue growth in our Chegg Skilling business and meaningful free cash flow in 2026. We believe we are turning the corner and are on a clear path toward future growth, profitability, and increased shareholder value.

With that, I will turn the call over to the operator for your questions. 

Conference Call and Webcast Information

To access the call, please dial 1-877-407-4018 or outside the U.S. +1-201-689-8471. A live webcast of the call will also be available at https://investor.chegg.com under the Events & Presentations menu. Participants can also access the call using the Call me™ link for instant telephone access to the event, which will be active 15 minutes before the scheduled start time. An audio replay will be available from 7:30 p.m. Eastern Time on February 9, 2026, until 11:59 p.m. Eastern Time on Monday, February 23, 2026, by calling 1-844-512-2921 or outside the U.S. +1-412-317-6671, with Access ID 13758125. An audio archive of the call will also be available at https://investor.chegg.com.

Use of Investor Relations Website for Regulation FD Purposes

Chegg also uses its Investor Relations website, https://www.chegg.com/press, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor https://www.chegg.com/press, in addition to following press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

About Chegg

Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed. Focused on the skilling market, which is $40 billion and growing, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning. Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support. Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions around the world.Chegg is a publicly held company and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.

Media Contact: press@chegg.com
Investor Contact: IR@chegg.com

Use of Non-GAAP Measures

To supplement Chegg’s financial results presented in accordance with generally accepted accounting principles in the United States (GAAP), this press release and the accompanying tables and the related earnings conference call contain non-GAAP financial measures, including adjusted EBITDA, non-GAAP cost of revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP net (loss) income, non-GAAP weighted average shares, non-GAAP net (loss) income per share, and free cash flow. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow,” and “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA.” We have not reconciled 2026 total non-GAAP expenses to total expenses, which is comprised of cost of revenues and total operating expenses, because we do not provide guidance on total expenses or the reconciling items as a result of the uncertainty, timing, and the potential variability of these items. The actual amount of total expenses and such reconciling items will have a significant impact on our 2026 total non-GAAP expenses. Accordingly, a reconciliation of 2026 total non-GAAP expenses to total expenses is not available.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Chegg defines (1) adjusted EBITDA as earnings before interest, taxes, depreciation and amortization or EBITDA, adjusted for share-based compensation expense, other income, net, acquisition-related compensation costs, impairment expense, restructuring charges, content and related assets charge, impairment of lease related assets, impairment of equity investment, and loss contingency; (2) non-GAAP cost of revenues as cost of revenues excluding amortization of intangible assets, share-based compensation expense, acquisition-related compensation costs, restructuring charges, and content and related assets charge, (3) non-GAAP gross profit as gross profit excluding amortization of intangible assets, share-based compensation expense, acquisition-related compensation costs, restructuring charges, and



content and related assets charge, (4) non-GAAP gross margin is defined as non-GAAP gross profit divided by net revenues, (5) non-GAAP operating expenses as operating expenses excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, restructuring charges, impairment expense, impairment of lease related assets, impairment of equity investment and loss contingency; (6) non-GAAP income from operations as loss from operations excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, restructuring charges, impairment expense, content and related assets charge, impairment of lease related assets, impairment of equity investment, and loss contingency, (7) non-GAAP net (loss) income as net loss excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, amortization of debt issuance costs, the income tax effect of non-GAAP adjustments, restructuring charges, impairment expense, content and related assets charge, impairment of lease related assets, impairment of equity investment, gain on sale of equity investment, gain on early extinguishment of debt, and loss contingency (8) non-GAAP weighted average shares outstanding as weighted average shares outstanding adjusted for the effect of shares for stock plan activity and shares related to our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding; (9) non-GAAP net (loss) income per share is defined as non-GAAP net (loss) income divided by non-GAAP weighted average shares outstanding; and (10) free cash flow as net cash provided by operating activities adjusted for purchases of property and equipment. To the extent additional significant non-recurring items arise in the future, Chegg may consider whether to exclude such items in calculating the non-GAAP financial measures it uses.

Chegg believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Chegg’s performance by excluding items that may not be indicative of Chegg’s core business, operating results or future outlook. Chegg management uses these non-GAAP financial measures in assessing Chegg’s operating results, as well as when planning, forecasting and analyzing future periods and believes that such measures enhance investors’ overall understanding of our current financial performance. These non-GAAP financial measures also facilitate comparisons of Chegg’s performance to prior periods.

As presented in the “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA,” and “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow,” tables below, each of the non-GAAP financial measures excludes or includes one or more of the following items:

Share-based compensation expense

Share-based compensation expense is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Chegg's control. As a result, management excludes this item from Chegg's internal operating forecasts and models. Management believes that non-GAAP measures adjusted for share-based compensation expense provide investors with a basis to measure Chegg's core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.

Amortization of intangible assets

Chegg amortizes intangible assets, including those that contribute to generating revenues, that it acquires in conjunction with acquisitions, which results in non‑cash expenses that may not otherwise have been incurred. Chegg believes excluding the expense associated with intangible assets from non-GAAP measures allows for a more accurate assessment of its ongoing operations and provides investors with a better comparison of period-over-period operating results. No corresponding adjustments have been made related to revenues generated from acquired intangible assets.

Acquisition-related compensation costs

Acquisition-related compensation costs include compensation expense resulting from the employment retention of certain key employees established in accordance with the terms of the acquisitions. In most cases, these acquisition-related compensation costs are not factored into management's evaluation of potential acquisitions or Chegg's performance after completion of acquisitions, because they are not related to Chegg's core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related compensation costs from non-GAAP measures provides investors with a basis to compare Chegg’s results against those of other companies without the variability caused by purchase accounting.




Amortization of debt issuance costs

The difference between the effective interest expense and the contractual interest expense are excluded from management's assessment of our operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. Chegg believes that the exclusion of the non-cash interest expense provides investors with a better comparison of period-over-period operating results.

Income tax effect of non-GAAP adjustments

We utilize a non-GAAP effective tax rate for evaluating our operating results, which is based on our current mid-term projections. This non-GAAP tax rate could change for various reasons including, but not limited to, significant changes resulting from tax legislation, changes to our corporate structure and other significant events. Chegg believes that the inclusion of the income tax effect of non-GAAP adjustments provides investors with a better comparison of period-over-period operating results.

Restructuring charges

Restructuring charges represent expenses incurred in conjunction with a reduction in workforce. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because they are nonrecurring and the result of an event that is not considered a core-operating activity. Chegg believes that it is appropriate to exclude the restructuring charges from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.

Impairment expense

Impairment expense represents the impairment of goodwill, intangible assets, and property and equipment. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities and are not indicative of our ongoing operating performance. Chegg believes that it is appropriate to exclude the impairment expense from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.

Impairment of lease related assets

The impairment of lease related assets represents impairment charge recorded on the ROU asset and leasehold improvements associated with the closure of our offices. The impairment of lease related assets is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.

Content and related assets charge

The content and related assets charge represents a write off of certain content and related assets. The content and related assets charge is excluded from non-GAAP financial measures because it is the result of a discrete event that is not considered core-operating activities. Chegg believes that it is appropriate to exclude the content and related assets charge from non-GAAP financial measures because it enables the comparison of period-over-period operating results.

Gain on sale of equity investment

The gain on sale of equity investment represents a one-time event to record the sale of our equity investment in Sound Ventures. We believe that it is appropriate to exclude the gain from non-GAAP financial measure because it is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.

Impairment of equity investment

The impairment of equity investment represents a one-time event to record an impairment charge on our equity investment. The impairment of equity investment is a non-cash expense and we believe the exclusion from non-GAAP financial measures provides investors with a better comparison of period-over-period results.



Gain on early extinguishment of debt

The difference between the carrying amount of early extinguished debt and the reacquisition price is excluded from management's assessment of our operating performance because management believes that these non-cash gains are not indicative of ongoing operating performance. Chegg believes that the exclusion of the gain on early extinguishment of debt provides investors with a better comparison of period-over-period operating results.

Loss contingency

We record a contingent liability for a loss contingency related to legal matters when a loss is both probable and reasonably estimable. The loss contingency is excluded from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities. Chegg believes that it is appropriate to exclude the loss contingency from non-GAAP financial measures because it enables the comparison of period-over-period operating results.

Effect of shares for stock plan activity

The effect of shares for stock plan activity represents the dilutive impact of outstanding stock options, RSUs and PSUs, to the extent such shares are not already included in our weighted average shares outstanding.

Effect of shares related to convertible senior notes

The effect of shares related to convertible senior notes represents the dilutive impact of our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding.

Free cash flow

Free cash flow represents net cash provided by operating activities adjusted for purchases of property and equipment. Chegg considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property and equipment, which can then be used to, among other things, invest in Chegg's business and make strategic acquisitions. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in Chegg's cash balance for the period.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include, without limitation, that there continues to be a large market for the high-quality, proven, and differentiated learning expertise and experience that Chegg provides, that we will continue to enthusiastically serve this audience, our strategy and intent to extend our brand, tailor our products to customer needs and our ability to weather current and future business challenges, our strategy to expand our product set to offer unique solutions that increase the frequency of use and create clear and differentiated value for us, our strategy to profitably grow our skilling business with business-to-institution programs and other enterprise offerings, the expected timing, volume and nature of our existing securities repurchase program, the disintermediation of content sites like Chegg, the ability to achieve the expected benefits of the use of AI as part of our business operations, the impact of generative AI on our businesses, the speed, scale and potential impact of Google's AIOs, our litigation commenced against Google and its outcome, student adoption of generative AI products, our expectation that our new vendor-based commerce platform will reduce our costs, provide flexibility and allow us to move faster as we continue to evolve our pricing and packaging programs, our commitment to building and generating momentum with our brand, traffic, and product capabilities, that we will bring both audience expansion and acquisition efficiency, that our brand and product experiences are resilient, our ability to increase efficiency across the business and to manage our expenses prudently as the competitive landscape evolves, all statements about Chegg’s outlook under “Business Outlook”, including our Q1 2026 guidance, including total revenue, gross margin, and adjusted EBITDA, the time it will take to adjust to Chegg's new opportunity and see the benefits in our business results and our ability to transform Chegg's business, as well as those included in the investor presentation referenced above and those included in the “Prepared Remarks” sections above. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “endeavor,” “will,” “should,” “future,” “transition,” “outlook” and similar expressions, as they relate to Chegg, are intended to identify forward-looking statements. These statements are not guarantees of future performance, and are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements. Important



factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: the effects of AI technology on Chegg’s business and the economy generally; Chegg’s ability to retain existing learners on our learning platform in light of declining revenue and user traffic; Chegg's ability to innovate and offer new products and services in response to competitive technology and market developments, including generative AI; Chegg’s ability to diversify its revenue streams with business-to-institution programs and other enterprise offerings; the uncertainty surrounding the evolving educational landscape; enrollment and student behavior, including the impact of generative AI; Chegg’s ability to expand internationally; the efficacy of Chegg's marketing efforts; the efficacy of Chegg’s efforts to build and maintain strong brands and reputation; the success of Chegg’s new product offerings; competition in all aspects of Chegg’s business, including with respect to AI and Chegg's expectation that such competition will increase; the outcome of Chegg’s litigation against Google; Chegg’s ability to maintain its services and systems without interruption, including as a result of technical issues, cybersecurity threats, or cyber-attacks; third-party payment processing risks; adoption of government regulation of education unfavorable to Chegg; the rate of adoption of Chegg’s offerings; Chegg’s ability to strategically take advantage of new opportunities; competitive developments, including pricing pressures and other services; Chegg’s ability to build and expand its services offerings; Chegg’s ability to integrate acquired businesses and assets; the impact of seasonality and student behavior on the business; the outcome of any current litigation and investigations; misuse of Chegg’s platform and content; Chegg’s ability to effectively control operating costs; the impact and effectiveness of Chegg’s internal restructuring activities; regulatory changes, in particular concerning privacy, marketing, and education; changes in the education market, including as a result of AI technology; and general economic, political and industry conditions, including inflation, recession and war. All information provided in this release and in the conference call is as of the date hereof, and Chegg undertakes no duty to update this information except as required by law. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Chegg's most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission, which could cause actual results to differ materially from expectations.



CHEGG, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except for number of shares and par value)
December 31,
20252024
Assets
Current assets
Cash and cash equivalents$31,146 $161,475 
Short-term investments41,674 154,249 
Accounts receivable, net of allowance of $156 and $190 at December 31, 2025 and December 31, 2024, respectively
15,604 23,641 
Prepaid expenses16,331 17,100 
Other current assets15,667 81,094 
Total current assets120,422 437,559 
Long-term investments12,392 212,650 
Property and equipment, net115,168 170,648 
Intangible assets, net6,041 10,347 
Right of use assets13,188 22,256 
Other assets9,613 15,491 
Total assets$276,824 $868,951 
Liabilities and stockholders’ equity
Current liabilities
Accounts payable$3,258 $15,159 
Deferred revenue29,675 39,217 
Accrued liabilities53,059 115,360 
Current portion of convertible senior notes, net53,765 358,605 
Total current liabilities139,757 528,341 
Long-term liabilities
Convertible senior notes, net— 127,344 
Long-term operating lease liabilities15,205 18,509 
Other long-term liabilities2,239 1,776 
Total long-term liabilities17,444 147,629 
Total liabilities157,201 675,970 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2025 and December 31, 2024
— — 
Common stock, $0.001 par value – 400,000,000 shares authorized; 110,985,562 and 104,880,048 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
111 105 
Additional paid-in capital1,145,371 1,114,550 
Accumulated other comprehensive loss(32,997)(32,233)
Accumulated deficit(992,862)(889,441)
Total stockholders’ equity119,623 192,981 
Total liabilities and stockholders’ equity$276,824 $868,951 




CHEGG, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended December 31,Years Ended December 31,
2025202420252024
Net revenues$72,659 $143,484 $376,908 $617,574 
Cost of revenues(1)
30,999 45,599 152,151 180,927 
Gross profit41,660 97,885 224,757 436,647 
Operating expenses:
Research and development(1)
16,958 41,008 93,453 170,431 
Sales and marketing(1)
14,140 27,901 68,754 108,329 
General and administrative(1)
44,834 56,296 177,406 217,756 
Impairment expense— — 2,000 677,239 
Total operating expenses75,932 125,205 341,613 1,173,755 
Loss from operations(34,272)(27,320)(116,856)(737,108)
Interest expense, net and other income, net:
Interest expense, net(41)(631)(590)(2,590)
Other income, net871 25,847 17,304 51,332 
Total interest expense, net and other income, net830 25,216 16,714 48,742 
Loss before benefit from (provision for) income taxes(33,442)(2,104)(100,142)(688,366)
Benefit from (provision for) income taxes639 (4,021)(3,279)(148,702)
Net loss$(32,803)$(6,125)$(103,421)$(837,068)
Net loss per share, basic and diluted$(0.30)$(0.06)$(0.96)$(8.10)
Weighted average shares used to compute net loss per share, basic and diluted109,360 104,513 107,484 103,300 
(1) Includes share-based compensation expense and restructuring charges as follows:
Share-based compensation expense:
Cost of revenues$32 $336 $503 $1,786 
Research and development875 4,220 6,812 28,044 
Sales and marketing348 1,500 2,174 7,466 
General and administrative5,515 9,291 22,375 47,318 
Total share-based compensation expense$6,770 $15,347 $31,864 $84,614 
Restructuring charges:
Cost of revenues$443 $559 $2,099 $762 
Research and development5,073 8,478 15,376 11,387 
Sales and marketing2,559 1,724 4,793 2,630 
General and administrative12,490 5,002 29,271 9,824 
Total restructuring charges
$20,565 $15,763 $51,539 $24,603 



CHEGG, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Years Ended December 31,
202520242023
Cash flows from operating activities
Net (loss) income$(103,421)$(837,068)$18,180 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Share-based compensation expense31,864 84,614 133,502 
Depreciation and amortization expense78,637 78,344 129,718 
Deferred tax assets1,011 143,319 26,575 
Gain on early extinguishments of debt(7,838)(19,515)(85,926)
Loss contingency— — 7,000 
Impairment expense2,000 677,239 3,600 
Loss from write-offs of property and equipment1,959 5,795 4,137 
Amortization of debt issuance costs500 2,147 3,156 
Operating lease expense, net of accretion3,641 5,864 6,079 
Realized (gain) loss on sale of investments(752)27 2,106 
Impairment of lease related assets7,315 5,557 — 
Impairment of equity investment6,000 — — 
Other non-cash items1,423 656 (1,228)
Change in assets and liabilities:
Accounts receivable8,439 7,771 (7,799)
Prepaid expenses and other current assets67,560 (41,732)3,476 
Other assets358 1,130 10,829 
Accounts payable(9,660)(12,376)13,057 
Deferred revenue(10,677)(15,885)(1,585)
Accrued liabilities(60,913)47,103 (7,342)
Other liabilities(1,956)(7,785)(11,337)
Net cash provided by operating activities15,490 125,205 246,198 
Cash flows from investing activities
Purchases of property and equipment(28,123)(74,953)(83,052)
Proceeds from disposition of textbooks— — 9,787 
Purchases of investments(793)(170,950)(637,939)
Proceeds from sale of investments181,158 70,077 394,533 
Maturities of investments130,055 171,671 597,197 
Proceeds from sale of equity investments— 15,500 — 
Purchases of equity investments— — (11,853)
Net cash provided by investing activities282,297 11,345 268,673 
Cash flows from financing activities
Proceeds from common stock issued under stock plans590 2,636 4,165 
Payment of taxes related to the net share settlement of equity awards(2,600)(9,239)(16,440)
Repayment of convertible senior notes(424,848)(96,520)(505,986)
Proceeds from exercise of convertible senior notes capped call— — 297 
Payment of withholding tax(1,621)(3,450)— 
Repurchase of common stock— (2,569)(334,806)
Net cash used in financing activities(428,479)(109,142)(852,770)
Effect of exchange rate changes(256)(1,025)21 
Net (decrease) increase in cash, cash equivalents and restricted cash(130,948)26,383 (337,878)
Cash, cash equivalents and restricted cash, beginning of period164,359 137,976 475,854 
Cash, cash equivalents and restricted cash, end of period$33,411 $164,359 $137,976 



CHEGG, INC.
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA
(in thousands)
Three Months Ended December 31,Years Ended December 31,
2025202420252024
Net loss$(32,803)$(6,125)$(103,421)$(837,068)
Depreciation and amortization expense14,996 19,378 78,637 78,344 
(Benefit from) provision for income taxes(639)4,021 3,279 148,702 
Interest expense, net41 631 590 2,590 
EBITDA(18,405)17,905 (20,915)(607,432)
Share-based compensation expense6,770 15,347 31,864 84,614 
Restructuring charges20,565 15,763 51,539 24,603 
Impairment of lease related assets4,311 3,368 7,315 5,557 
Loss contingency— 6,900 7,500 12,000 
Impairment of equity investment— — 6,000 — 
Impairment expense— — 2,000 677,239 
Content and related assets charge522 2,937 522 3,666 
Other income, net(871)(25,847)(17,304)(51,332)
Acquisition-related compensation costs— 192 — 752 
Adjusted EBITDA$12,892 $36,565 $68,521 $149,667 




CHEGG, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands, except percentages and per share amounts)
Three Months Ended December 31,Years Ended December 31,
2025202420252024
Cost of revenues$30,999$45,599$152,151 $180,927 
Amortization of intangible assets(1,077)(1,077)(4,307)(8,713)
Restructuring charges(443)(559)(2,099)(762)
Content and related assets charge(522)(2,937)(522)(3,666)
Share-based compensation expense(32)(336)(503)(1,786)
Acquisition-related compensation costs(5)— (21)
Non-GAAP cost of revenues$28,925$40,685$144,720$165,979
Gross profit$41,660$97,885$224,757 $436,647 
Amortization of intangible assets1,0771,0774,307 8,713 
Restructuring charges4435592,099 762 
Content and related assets charge5222,937522 3,666 
Share-based compensation expense32336503 1,786 
Acquisition-related compensation costs5— 21 
Non-GAAP gross profit$43,734$102,799$232,188$451,595
Gross margin %57%68%60 %71 %
Non-GAAP gross margin %60%72%62 %73 %





Three Months Ended December 31,Years Ended December 31,
2025202420252024
Operating expenses$75,932$125,205$341,613 $1,173,755 
Share-based compensation expense(6,738)(15,011)(31,361)(82,828)
Restructuring charges(20,122)(15,204)(49,440)(23,841)
Impairment of lease related assets(4,311)(3,368)(7,315)(5,557)
Loss contingency(6,900)(7,500)(12,000)
Impairment expense(2,000)(677,239)
Impairment of equity investment(6,000)— 
Amortization of intangible assets— (1,291)
Acquisition-related compensation costs(187)— (731)
Non-GAAP operating expenses$44,761$84,535$237,997$370,268
Loss from operations$(34,272)$(27,320)$(116,856)$(737,108)
Share-based compensation expense6,77015,34731,864 84,614 
Restructuring charges20,56515,76351,539 24,603 
Impairment of lease related assets4,3113,3687,315 5,557 
Loss contingency6,9007,500 12,000 
Impairment expense2,000 677,239 
Content and related assets charge5222,937522 3,666 
Amortization of intangible assets1,0771,0774,307 10,004 
Impairment of equity investment6,000 — 
Acquisition-related compensation costs192— 752 
Non-GAAP (loss) income from operations$(1,027)$18,264$(5,809)$81,327



Three Months Ended December 31,Years Ended December 31,
2025202420252024
Net loss$(32,803)$(6,125)$(103,421)$(837,068)
Share-based compensation expense6,770 15,347 31,864 84,614 
Restructuring charges20,565 15,763 51,539 24,603 
Loss contingency— 6,900 7,500 12,000 
Impairment of lease related assets4,311 3,368 7,315 5,557 
Gain on early extinguishment of debt(478)(19,515)(7,838)(19,515)
Income tax effect of non-GAAP adjustments(690)(1,442)3,564 124,740 
Amortization of intangible assets1,077 1,077 4,307 10,004 
Impairment expense— — 2,000 677,239 
Content and related assets charge522 2,937 522 3,666 
Amortization of debt issuance costs41 519 500 2,147 
Impairment of equity investment— — 6,000 — 
Gain on sale of equity investment— — — (3,783)
Acquisition-related compensation costs— 192 — 752 
Non-GAAP net (loss) income$(685)$19,021 $3,852 $84,956 
Weighted average shares used to compute net loss per share, basic and diluted109,360 104,513 107,484 103,300 
Effect of shares for stock plan activity— 297 1,660 1,019 
Effect of shares related to convertible senior notes— 9,234 2,069 9,234 
Non-GAAP weighted average shares used to compute non-GAAP net (loss) income per share, basic and diluted109,360 114,044 111,213 113,553 
Net loss per share$(0.30)$(0.06)$(0.96)$(8.10)
Adjustments0.29 0.23 0.99 8.85 
Non-GAAP net (loss) income per share$(0.01)$0.17 $0.03 $0.75 



CHEGG, INC.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(in thousands)
Years Ended December 31,
20252024
Net cash provided by operating activities$15,490 $125,205 
Purchases of property and equipment(28,123)(74,953)
Free cash flow$(12,633)$50,252 




CHEGG, INC.
SELECTED QUARTERLY FINANCIAL DATA
(in thousands)
(unaudited)
Three Months Ended
March 31,
2025
June 30,
2025
September 30, 2025December 31, 2025
Chegg Skilling$16,135 $17,217 $17,583 $17,719 
Academic Services105,252 87,903 60,159 54,940 
Total net revenues$121,387 $105,120 $77,742 $72,659 
Gross profit67,414 69,642 46,041 41,660 
Loss from operations(29,002)(36,458)(17,124)(34,272)
Net loss(17,484)(35,663)(17,471)(32,803)
Weighted average shares used to compute net loss per share, basic and diluted105,159 106,908 108,450 109,360 
Net loss per share, basic and diluted$(0.17)$(0.33)$(0.16)$(0.30)

Three Months Ended
March 31,
2024
June 30,
2024
September 30, 2024December 31, 2024
Chegg Skilling$20,358 $18,887 $18,755 $15,960 
Academic Services153,992 144,260 117,838 127,524 
Total net revenues$174,350 $163,147 $136,593 $143,484 
Gross profit127,853 117,736 93,173 97,885 
Loss from operations(2,491)(485,007)(222,290)(27,320)
Net loss(1,420)(616,884)(212,639)(6,125)
Weighted average shares used to compute net loss per share, basic and diluted102,343 102,604 103,723 104,513 
Net loss per share, basic and diluted$(0.01)$(6.01)$(2.05)$(0.06)



CHEGG, INC.
RECONCILIATION OF FORWARD-LOOKING NET LOSS TO EBITDA AND ADJUSTED EBITDA
(in thousands)
(unaudited)
Three Months Ending March 31, 2026
Net loss
$(7,700)
Depreciation and amortization expense
14,000 
Provision for income taxes600 
EBITDA6,900 
Share-based compensation expense2,900 
Restructuring charges
2,500 
Other income, net(800)
Adjusted EBITDA
$11,500 

* Adjusted EBITDA guidance for the three months ending March 31, 2026 represents the midpoint of the range of $11 million to $12 million.


FAQ

How did Chegg (CHGG) perform financially in Q4 2025?

Chegg generated $72.7 million in Q4 2025 net revenues, down 49% year over year, and reported a $32.8 million net loss. Non-GAAP net loss was $0.7 million, with adjusted EBITDA of $12.9 million, reflecting substantial restructuring and cost-reduction initiatives.

What were Chegg’s full-year 2025 results?

For 2025, Chegg reported $376.9 million in net revenues, a 39% decline from 2024, and a net loss of $103.4 million. On a non-GAAP basis, it posted $3.9 million in net income and $68.5 million in adjusted EBITDA, helped by large non-GAAP adjustments.

How is Chegg’s new Skilling business performing?

Chegg Skilling delivered $17.7 million of revenue in Q4 2025, up 11% year over year, and $68.7 million for 2025, down 7% for the year. Management calls Skilling its growth engine and expects double-digit revenue growth in 2026.

What cost reductions and margins did Chegg report?

Non-GAAP operating expenses were $44.8 million in Q4 2025, down 47% year over year. Q4 adjusted EBITDA was $12.9 million, an 18% margin. Chegg targets 2026 total non-GAAP expenses below $250 million, a 53% reduction from 2024.

What does Chegg’s 2026 outlook and Q1 2026 guidance include?

For Q1 2026, Chegg guides to $60–$62 million in total net revenues, including $17.5–$18.0 million from Chegg Skilling, gross margin of 57–58%, and adjusted EBITDA of $11–$12 million. Management expects stronger skilling performance in the second half of 2026.

What is Chegg’s balance sheet and debt position after 2025?

At December 31, 2025, Chegg had $85 million in cash and investments and a net cash balance of $31 million. Convertible senior notes decreased sharply to a $53.8 million current portion, and the company aims to end 2026 with zero debt.

What did Chegg disclose about the NYSE delisting notice?

Chegg acknowledged receiving an NYSE delisting notice but stated it has no immediate impact on the company’s listing status. Management noted there is ample time and multiple options to regain compliance, including a potential reverse stock split.

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81.95M
98.47M
3.89%
49.32%
5.44%
Education & Training Services
Services-educational Services
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United States
SANTA CLARA