CHGG earnings analysis
What we found in CHGG's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Chegg Inc. reported Q1 2026 earnings with revenue of $63.3 million, surpassing estimates of approximately $60.99 million, and achieving a positive diluted EPS of $0.03 compared to an estimated loss of $0.03. This marks a significant revenue drop of 48% year-over-year, primarily due to declining subscriptions in their Academic Services segment. Despite operational challenges, Chegg's focus on skilling initiatives reflects a strategic pivot, albeit against a backdrop of traffic reduction attributed to increased competition from generative AI tools.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Exceeds Estimates
- Actual revenue was $63.3 million, beating estimates of $60.99 million by 3.7%.
- Positive EPS
- Reported earnings were $0.03 per share, compared to an estimated loss of $0.03.
- Increased Gross Margin
- Gross margin improved to 60%, up from 56% in the previous year.
- Growth in Skilling Segment
- Chegg Skilling revenue grew 9% to $17.6 million from $16.1 million year-over-year.
- Operating Expenses Reduced
- Total operating expenses fell by 60% to $38.9 million, down from $96.4 million.
- Decrease in Debt
- Convertible senior notes decreased by 37% to $33.8 million from $53.8 million.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Severe Revenue Decline
- Total revenues fell 48% year-over-year from $121.4 million to $63.3 million.
- Subscriber Losses Impact
- Academic Services revenues dropped 57% due to significant subscription declines.
- Dependence on AI Tools
- Increased competition from generative AI is negatively impacting customer engagement and subscriptions.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.03
- Gross margin
- 60%
- Segment
- Chegg Skilling: $17.6M
- Segment
- Academic Services: $45.7M
What they said about what is next.
Guidance for Q2 2026 revenue is projected between $49 million and $50 million, reflecting ongoing challenges.
The filing reads worse than the one before it.
What came before.
- 10-K · March 9, 2026
- Chegg describes a strategic pivot from legacy academic subscriptions toward a skilling-focused, business-to-business platform that integrates AI and its content library to drive workplace upskilling and language…
- 10-Q · August 8, 2025
- Chegg reported Q2 net revenues of $105,120 (in thousands) and a gross profit of $69,642, while operating loss was $(36,458) and GAAP net loss was $(35,663) (net loss per share $(0.33)). Revenue and deferred revenue…
- 10-Q · May 12, 2025
- Chegg reported Q1 2025 revenue of $121,387,000 (down $52,963,000 or 30% YoY) and a net loss of $17,484,000 (loss per share $0.17). Gross margin compressed to 55.5% and operating margin swung to -23.9%, driven by…
- 10-Q · November 12, 2024
- Chegg reported quarterly revenue of $136.6M, down 13% year-over-year, with gross margin expanding to 68.2% but an operating loss driven by a large goodwill/intangible impairment. The company recorded a net loss of…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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