Chegg 2025 Q3 Earnings Sharp Loss Reduction Amid Revenue Decline

Chegg (CHGG) reported fiscal 2025 Q3 earnings on Nov 10, 2025, with revenue declining 43.1% year-over-year to $77.74 million but beating expectations. The company narrowed its net loss to $17.47 million (from $212.64 million in 2024 Q3) and cut its per-share loss to $0.16 (from $2.05). Guidance for Q4 revenue ($80–82 million) fell short of analyst estimates, signaling cautious optimism amid cost-cutting and strategic shifts.

Revenue

Chegg’s total net revenue of $77.74 million in Q3 2025 marked a 43.1% decline from $136.59 million in the prior-year period. Subscription Services remained the core driver, contributing $69.10 million, while Skills and Other added $8.64 million. The drop reflects broader challenges in monetizing the student population, compounded by macroeconomic pressures and shifting consumer spending habits.

Earnings/Net Income

The company significantly narrowed its net loss to $17.47 million in 2025 Q3, a 91.8% reduction from the $212.64 million loss in 2024 Q3. Per-share losses also improved sharply, falling to $0.16 from $2.05. While the EPS improvement is a positive sign, the persistent net loss highlights ongoing operational challenges.

Price Action

Chegg’s stock price has underperformed across multiple timeframes: down 8.07% in a single trading day, 5.46% for the week, and 38.61% month-to-date. The 38.61% MTD decline underscores investor skepticism, despite the company’s cost discipline and strategic pivot to skilling.

Post-Earnings Price Action Review

The strategy of buying Chegg shares on the date of its earnings release and holding for 30 days resulted in a significant loss, with a 3-year cumulative return of -34.97% and an average annual return of -11.66%. This underperformance reflects broader market trends, including sector-specific headwinds, and company-specific factors such as its transition to a B2B model and skilling focus, which have yet to translate into positive price momentum.

CEO Commentary

CEO Dan Rosensweig emphasized progress in AI-driven study tools and content personalization as key growth levers, while acknowledging macroeconomic pressures. He reiterated confidence in Chegg’s long-term positioning, particularly in international markets, and highlighted operational efficiency and product-led growth as priorities.

Guidance

Chegg expects Q4 2025 revenue of $80–82 million, below analyst estimates, but signaled EBITDA margin improvements through cost optimization. The company is also pursuing international expansion and institutional partnerships, though profitability remains a distant goal.

Additional News

Chegg’s recent strategic pivot to skilling and reskilling, driven by AI integration, has drawn attention from analysts. The Zacks Rank #3 (Hold) reflects mixed earnings estimate revisions, with a focus on long-term potential despite near-term underperformance. CEO Dan Rosensweig highlighted the company’s focus on international markets and partnerships with educational institutions to strengthen positioning. No dividend or buyback announcements were made, with capital allocation prioritized toward technology investments.