Chegg 2025 Q2 Earnings 94.2% Net Loss Reduction

Chegg(CHGG) reported its fiscal 2025 Q2 earnings on Aug 06th, 2025.

Chegg delivered results that exceeded management guidance, with revenue and adjusted EBITDA outperforming expectations. The company significantly reduced its net loss year-over-year and provided conservative revenue guidance for Q3 2025.

Revenue
Total revenue for Chegg in Q2 2025 fell 35.6% year-over-year to $105.12 million, compared to $163.15 million in the prior year period.

Earnings/Net Income
Chegg substantially narrowed its losses, reporting a net loss of $-35.66 million in Q2 2025, a reduction of 94.2% from the $-616.88 million loss in Q2 2024. On a per-share basis, the loss decreased from $6.01 to $0.33, representing a 94.5% improvement. The earnings result indicates a marked improvement in the company’s financial health.

Price Action
The stock of Chegg continued to face downward pressure, with a 3.01% drop during the latest trading day, 5.15% decline for the week, and a 10.42% drop month-to-date.

Post Earnings Price Action Review
A strategy of buying Chegg shares following the Q2 earnings report and holding for 30 days resulted in a -92.41% return, vastly underperforming the 48.58% benchmark. This led to an excess return of -140.99% and a 3-year CAGR of -58.93%. The strategy did not experience any drawdown, suggesting no adjustments were made during the downturn, which may have worsened the performance.

CEO Commentary
CEO Nathan Schultz highlighted strong Q2 performance, with revenue of $105 million and adjusted EBITDA of $23 million. He outlined $17 million in additional 2026 savings and expressed confidence in Busuu’s growth and Chegg Study’s AI-driven improvements. Schultz expects Busuu to reach $48 million in 2025 revenue and become EBITDA positive in Q1 2026.

Guidance
Chegg guided Q3 2025 revenue between $75 million and $77 million, with Subscription Services between $67 million and $69 million. Gross Margin is expected to be 56-57%, and Adjusted EBITDA between $7 million and $8 million. The company anticipates $110-120 million in non-GAAP savings in 2026.

Additional News
On the same day as the earnings report, Chegg’s Q2 2025 slides revealed a 36% year-over-year revenue decline, indicating continued challenges in its core markets. No material M&A activity or executive changes were reported in the three weeks following Aug 6, 2025. Additionally, there were no dividend or buyback announcements made in this period, reinforcing the company’s current focus on cost discipline and operational efficiency over shareholder returns.