Chegg Q4 Revenue Plunges 49.4% but EBITDA Tops Estimates with $12.9M
Chegg reported Q4 revenue of $72.66 million, down 49.4% YoY but 2.3% above analyst estimates, and a non-GAAP loss of $0.01 per share versus a $0.10 loss forecast. Adjusted EBITDA of $12.9 million beat projections and skilling revenues rose 11% to $17.7 million.
1. Q4 Earnings Summary
Chegg delivered Q4 revenue of $72.66 million, down 49.4% year over year yet 2.3% above the $71 million consensus, and posted a non-GAAP loss of $0.01 per share versus a $0.10 loss forecast. Adjusted EBITDA reached $12.9 million, outpacing the expected $10.76 million by 19.8%.
2. Segment Performance
Chegg Skilling generated $17.7 million in Q4 revenue, up 11% year over year, positioning it as the primary growth driver, while legacy Academic Services continued to produce gross margins near 60%, supporting free cash flow generation.
3. Outlook for Q1
Management set Q1 revenue guidance at a $61 million midpoint, 5.5% below the $64.6 million analyst estimate, but forecast adjusted EBITDA of $11.5 million, substantially above the $7.23 million consensus, signaling a strategic focus on margin improvement.
4. Cash Flow and Debt Position
Free cash flow swung to a negative $15.48 million in Q4 from a $0.94 million cash outflow in the prior year, reflecting higher working capital needs, while the company targets ending 2026 debt-free with a substantial cash balance.