Chegg reports Q3 beat, but shares drop 5% on weak guidance

Chegg (NYSE:) shares fell more than 5% after-hours following the company’s reported Q3 results. While EPS of $0.18 and revenues of $157.9 million (down 4% year-over-year) came in better than the consensus estimates of $0.17 and $152.18M, respectively, Q4 guidance was weak.

Subscription services revenues came in at $139.9M, or 89% of total net revenues, representing a decrease of 4% year-over-year.

“Chegg is in a great position to build the most impactful, scalable, AI-enabled, personal learning assistant, which will expand our opportunities to serve more students, in more ways, and at a lower cost per customer,” said CEO Dan Rosensweig.

For Q4/23, the company expects revenue to be in the range of $185-$187M, compared to the consensus estimate of $186.4M. Subscription Services revenue is seen at $164-$166M.