Chegg, Inc.

What they do

Chegg operates two service categories: Chegg Skilling and Academic Services. Chegg Skilling includes a language learning platform with self-paced lessons, live classes and courses in 14 languages, plus workforce skilling programs sold to employers, including Fortune 1000 companies, covering AI, coding, data analytics and cybersecurity. Academic Services is the legacy subscription business headlined by Chegg Study Pack, which bundles Chegg Study, Chegg Writing and Chegg Math, alongside advertising delivered with brands and programmatic partners.

Revenue drivers

• Academic Services — Subscription revenue from Chegg Study Pack, Chegg Study, Chegg Writing and Chegg Math, plus advertising; this is the larger but rapidly shrinking base whose decline drove total revenue from $776.3M in 2021 to $376.9M in 2025.
• Chegg Skilling — Subscription revenue from the language learning platform and contract revenue from employer workforce skilling programs; Q2 2026 revenue was $17.5M, up 2% year-over-year, versus $51.8M total company revenue.
• Employer workforce skilling — Programs sold to employers, including Fortune 1000 companies, that align workforce needs with learner outcomes in technical and durable skills; the company tracks learner progress in real time to improve completion rates.
• Advertising — Chegg works with leading brands and programmatic partners to deliver advertising across its platforms, an ancillary revenue stream to the subscription businesses.

Recent performance

Q2 2026 total net revenues were $51.8M, down 51% year-over-year, while Chegg Skilling revenues were $17.5M, up 2% year-over-year. Gross margin was 55% GAAP and 57% non-GAAP, with a net loss of $3.0M, non-GAAP net loss of $2.5M, and adjusted EBITDA of $9.1M. The quarterly revenue trend has fallen sequentially from $77.7M in the September 2025 quarter to $72.7M, $63.3M and $51.8M. Full-year revenue fell from $617.6M in 2024 to $376.9M in 2025, with operating cash flow of $15.5M in 2025 versus $125.2M in 2024. At June 30, 2026, total assets were $227.6M, total liabilities $109.0M, shareholder equity $118.6M and cash and equivalents $44.6M.

Strategy

Chegg is evolving from a student academic subscription business into a skilling-focused business-to-business organization, integrating its skilling offerings with core academic services. The company says it is rearchitecting to be AI-first, building a sustainable cost structure and strengthening its balance sheet. It intends to use proprietary data, AI and learning-behavior insight to automate job search and matching and add coaching around majors, courses and skills, with the next generation of Chegg soft launching in Q3 2026. Management states its long-term goal is to return Chegg to growth with high margins and strong free cash flow.

Risks

• AI-driven traffic and subscriber decline — Chegg states that increased adoption of free and paid generative AI services by students has reduced and is expected to continue reducing website traffic and new subscribers, and that Google's AI Overview keeps users on search results instead of Chegg's site.
• Skilling transformation execution — Management says failure to successfully execute its skilling-focused business-to-business strategy and realize the benefits of its business transformation and related restructuring plan could have a material adverse effect on financial results.
• Revenue contraction — Revenue has declined from $776.3M in 2021 to $376.9M in 2025 and total net revenues fell 51% year-over-year in Q2 2026, with the company stating its business depends on attracting new learners and retaining existing ones.
• Competition and innovation pressure — Chegg says it faces competition in all aspects of its business, including with respect to AI, and expects such competition to increase, while it must innovate in response to rapidly evolving technological and market developments.

Outlook

For Q3 2026, management guides total net revenues of $43M to $44M, gross margin of 48% to 49%, and adjusted EBITDA of $1M to $2M. Beginning in Q2 2026, the company provides guidance for total net revenues rather than separate segment revenue guidance because Academic Services and Chegg Skilling are becoming increasingly integrated. Management calls total net revenues and adjusted EBITDA the most meaningful measures of progress.