Chegg Sees Growth in AI and Skills Development Amid Revenue Decline

Chegg Inc. reported Q2 2025 financial results, with total net revenues of $105.1 million, a 36% YoY decrease, and a net loss of $35.7 million. The company is shifting its focus towards AI and skills development, with Busuu achieving a 15% YoY revenue increase. Despite the decline, Chegg remains optimistic about its strategic direction and aims to leverage its core academic products to support growth in language learning and workplace readiness.

Chegg Inc. (NYSE: CHGG) reported its Q2 2025 financial results, showing total net revenues of $105.1 million, a 36% year-over-year (YoY) decrease, and a net loss of $35.7 million. The company continues to shift its focus towards AI and skills development, with Busuu achieving a 15% YoY revenue increase. Despite the decline in revenues, Chegg remains optimistic about its strategic direction and aims to leverage its core academic products to support growth in language learning and workplace readiness.

The company's subscription services revenues were $89.7 million, a 39% YoY decrease, while its gross margin remained at 66%. Non-GAAP gross margin was 68%, and adjusted EBITDA was $23.1 million. The company also reported 2.6 million subscription services subscribers, a 40% YoY decrease. Chegg's CEO, Nathan Schultz, stated, "We had a good Q2, exceeding our guidance and actively engaging on the strategic review process and the transformation of Chegg. We remain focused on implementing AI to transform Chegg Study, making it a more efficient business to run, while still differentiating our product and adding value to millions of students" [1].

Chegg's focus on AI has led to significant improvements in its Chegg Study platform, which now serves millions of students. The company has launched new AI-powered features such as Solution Scout and AI-powered practice and flashcard generators, leading to positive feedback from students. The company's monthly retention rate also improved by 117 basis points in Q2. For the rest of 2025, Chegg plans to introduce two new core capabilities into its Chegg Study platform: a smart planning tool and a voice interface.

Chegg's Busuu language learning business achieved a 15% YoY revenue increase in Q2, with good performance in both the B2C and B2B segments. The company's B2C revenue increased by 6% YoY, while its B2B business achieved a 39% YoY revenue growth. Busuu's B2B business also saw a 22 percentage point year-over-year improvement in retention. Chegg is optimistic about Busuu's potential and believes it will achieve approximately $48 million of revenue in 2025 and be adjusted EBITDA positive by the first quarter of 2026.

Chegg's Skills business focuses on the $40 billion dollar market serving workplace readiness and upskilling for professional adults. The company spent the last 12 months modernizing its product offering and prioritizing three growth areas: AI programs, career fundamentals, and professional upskilling. Chegg's Skills business saw an 11% quarter-over-quarter increase in monthly active users across its new programs.

Chegg's strategic review process continues, with the company exploring a range of outcomes, including being acquired, undertaking a go-private transaction, or remaining as a public standalone company. The company is confident in its strategic direction and believes that its focus on AI and skills development will drive long-term growth and shareholder value.

References:
[1] https://investor.chegg.com/Press-Releases/press-release-details/2025/Chegg-Reports-2025-Second-Quarter-Earnings/default.aspx