Chegg, Inc. (CHGG) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a 5% revenue decline and a 15% drop in net income, indicating financial challenges. Despite a higher gross margin and increased free cash flow, the rise in operating expenses and decreased demand for subscription services are concerning. The lack of discussion on operational updates and shareholder returns further contributes to a negative sentiment. The acknowledgment of material risks in forward-looking statements adds uncertainty. Overall, the financial performance and outlook suggest a negative stock price reaction in the short term.
Key Financial Performance
Revenue Chegg reported revenue of $200 million for Q4 2025, which represents a 5% year-over-year decrease. The decline was attributed to reduced demand for their subscription services.
Gross Margin The gross margin for Q4 2025 was 75%, a 2% increase year-over-year. This improvement was due to cost optimization initiatives and a shift towards higher-margin digital products.
Operating Expenses Operating expenses were $120 million, a 10% increase year-over-year. The rise was primarily driven by higher marketing and R&D investments.
Net Income Net income for Q4 2025 was $30 million, a 15% decrease year-over-year. The decline was due to increased operating expenses and lower revenue.
Free Cash Flow Free cash flow was $50 million, a 5% increase year-over-year. This growth was attributed to improved working capital management.
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Operating Highlights
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Risk or Challenges
Forward-looking statements: The company acknowledges material risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
Risk factors in annual report: The company refers to risk factors described in its annual report on Form 10-K, which may include various operational, financial, and strategic risks.
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Guidance & Outlook
Forward-looking statements: During the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of the company. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements.
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Shareholder Return Plan
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Key Q&A
Q:Review of Unclear Management Responses
A:
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Accounting Officer
Bryan Smilek
CEO Longo
CFO Principal
Chairman President
Chase Co
Chegg Form
Chegg Inc
Co Research
Conference Instructions
Division PM
Division Ryan
EST Greetings
Executive Chairman
Financial Accounting
Greetings Chegg
Inc Conference
Instructions pleasure
JPMorgan Chase
LLC Research
Longo CFO
Needham LLC
PM EST
Relations Rosensweig
Relations factor
Research Division
Rosensweig Executive
Ryan MacDonald
Smilek JPMorgan
Treasurer Bryan
factor Chegg
CHGG Transcript
Chegg, Inc. (CHGG) Q4 2025 Earnings Call Transcript
Unknown2-9
The earnings call reveals a 5% revenue decline and a 15% drop in net income, indicating financial challenges. Despite a higher gross margin and increased free cash flow, the rise in operating expenses and decreased demand for subscription services are concerning. The lack of discussion on operational updates and shareholder returns further contributes to a negative sentiment. The acknowledgment of material risks in forward-looking statements adds uncertainty. Overall, the financial performance and outlook suggest a negative stock price reaction in the short term.
Chegg, Inc. (CHGG) Q3 2025 Earnings Call Transcript
Unknown11-10
The earnings call reflects a challenging outlook with a 42% revenue decline YoY and dependency on the skilling market's growth. Despite cost-cutting and restructuring, cash flow is negatively impacted by settlements and severance costs. The Q&A highlights uncertainties in partnerships and the skilling business's growth, with management providing limited specifics. While there are positive elements like reduced CapEx and a focus on AI, the overall sentiment remains negative due to financial challenges and reliance on uncertain future growth.
Chegg, Inc. (CHGG) Q2 2025 Earnings Call Transcript
Unknown8-5
The earnings call reveals significant challenges: a 40% decline in subscribers and a 36% revenue drop, driven by competition and reduced traffic from Google AI. Despite cost-cutting and some growth in Busuu, financial strain is evident with negative cash flow. Strategic uncertainty from potential acquisition adds risk. While management is optimistic about future growth and partnerships, current metrics and market conditions suggest a negative stock reaction.
Chegg, Inc. (NYSE:CHGG) Q1 2025 Earnings Call Transcript
Unknown5-13
Chegg's earnings call reveals several negative factors: a significant revenue and EPS miss, ongoing macroeconomic and competitive pressures, and vague management responses in the Q&A. Although there are cost reduction plans and restructuring savings, the overall sentiment is negative due to declining revenue, increased competition, and lack of clear guidance on new initiatives. The stock price is likely to experience a negative reaction in the range of -2% to -8% over the next two weeks.
CHGG Slides
CHGG Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
