Chegg has announced a planned 60% reduction in capital expenditures in fiscal 2026 compared with projected outlays for 2025. The company expects its 2026 CapEx budget to fall to approximately $40 million, down from an estimated $100 million this year. Management stated the reallocation of these funds toward marketing and product development will support customer acquisition initiatives and accelerate take-rate improvements on its subscription services.

Chegg’s forward 12-month price-to-sales ratio stands at 0.36, below the 1.2 median for the Zacks Internet – Software industry and the 1.0 average for the broader technology sector. With subscription revenue growing at a 14% annualized rate over the past two years, the current valuation gap suggests investors may capture upside if Chegg sustains its mid-teens revenue growth and improves operating margins from 15% toward the company’s 20% target within two fiscal years.

Over the past 18 months, Chegg invested heavily in AI-driven homework assistance and revamped its mobile app, leading to a 10% increase in average daily active users in Q3. Virtual tutoring sessions grew 25% year-over-year, while engagement per user rose by 8 minutes per week. With core platform stability in place, the company plans to shift incremental dollars into personalized learning modules and targeted marketing in key U.S. and European university markets.