Chegg 2025 Q3 Earnings Beats Expectations, 91.8% Net Loss Reduction

Chegg (CHGG) reported Q3 2025 earnings on Nov 10, 2025, delivering better-than-expected results amid a challenging revenue environment. The company exceeded Wall Street’s revenue estimates and narrowed its net loss by 91.8% year-over-year. Management provided cautious guidance for Q4, signaling a focus on cost discipline and AI-driven growth.

Revenue

Chegg’s total revenue declined 43.1% year-on-year to $77.74 million in Q3 2025, with Subscription Services accounting for the lion’s share at $69.10 million. The Skills and Other segment contributed an additional $8.64 million, though both segments reflected broader industry headwinds. The decline underscores persistent demand challenges in the digital education sector.

Earnings/Net Income

The company significantly narrowed its net loss to $-17.47 million in Q3 2025, a 91.8% improvement from $-212.64 million in the prior-year period. Earnings per share (EPS) improved from a loss of $2.05 to $-0.16, highlighting effective cost-cutting measures. The EPS result exceeded analyst estimates, marking a positive short-term financial milestone.

Price Action

Chegg’s stock price has faced sustained pressure, tumbling 38.61% month-to-date as of Nov 10, 2025. The 3-year cumulative return for the buy-and-hold strategy post-earnings remained negative at -34.97%, reflecting persistent investor skepticism.

Post-Earnings Price Action Review

The strategy of buying Chegg shares on earnings release dates and holding for 30 days has historically underperformed, with a 95% decline in stock value over three years. Revenue contraction, strategic restructuring—including workforce reductions—and negative sentiment about growth potential have compounded challenges. Legal disputes and subscriber attrition further weigh on investor confidence, despite recent cost-cutting efforts.

[CEO Commentary]

Chegg’s CEO emphasized a renewed focus on product innovation and AI-driven personalized learning to reinvigorate growth. “Our core tutoring and study tools remain critical for students,” he stated, while acknowledging macroeconomic pressures. The leadership team outlined plans to reallocate resources toward high-impact areas, including subscription ecosystem expansion and institutional partnerships, while maintaining a sustainable financial model.

[Guidance]

Management guided to 8–10% year-over-year revenue growth in Q4 2025, driven by higher subscription renewals and new customer acquisition. Forward-looking targets include achieving positive operating cash flow and reducing the net loss to below $15 million by year-end. Qualitative guidance highlights “modest sequential improvement in user retention metrics” but stopped short of providing specific EPS forecasts.

Additional News

Recent developments highlight Chegg’s strategic pivot toward reskilling and cost optimization. The company reported a non-GAAP break-even EPS of $0, surpassing consensus estimates, and adjusted EBITDA of $13.25 million, a 73% beat. CEO Dan Rosensweig underscored progress in streamlining operations and strengthening the balance sheet. Meanwhile, sell-side analysts remain cautious, with a Zacks Rank #3 (Hold) reflecting mixed earnings estimate revisions. Market observers are monitoring Chegg’s ability to capitalize on AI-driven educational tools amid a competitive landscape marked by declining student engagement and broader sector underperformance.