Chegg Stock Earnings Reports

Q1 2026 highlights: Chegg beat expectations on revenue, profitability and free cash flow while materially reducing debt and costs as management repositions the company around AI-driven products and skilling. The company reports Chegg Skilling revenue of $17.6M (up 9%), Academic Services revenue of $45.7M, non-GAAP operating expenses of $36.4M (down 55% YoY), adjusted EBITDA of $15.5M (24% margin), positive net income for the first time in two years, free cash flow of $3.1M (includes severance), and ending cash & investments of $67.9M with a net cash position of $34.1M. Management says ~40% of costs were removed in the last six months, CapEx is being cut sharply (Q1 CapEx $1M; targeting ~60% reduction for 2026), and the business is being retooled to be AI-first to improve outcomes and lower cost. Key strategic points: strong focus on growing the skilling business (management expects double-digit skilling revenue growth in 2026 with acceleration into H2), new distribution partnerships (Cornerstone announced; Woolf for accredited AI master's; renegotiated Guild deal to enable additional partners), product emphasis on learning-in-the-flow-of-work with real-time AI interventions, and continued discipline on capital allocation (priority to maximize free cash flow, strengthen the balance sheet, fully repay convertible debt by September, and consider buybacks prudently). Q2 guidance: total revenue $49M–$50M, Chegg Skilling $17.5M–$18M, gross margin 51%–52%, adjusted EBITDA $5M–$6M. Overall message to investors: leaner cost base, improving margins and cash generation, AI-driven product differentiation, visible enterprise distribution channels for skilling, and a clear path to debt elimination and sustained profitable growth.