Chegg Reports 36% Revenue Decline and $35.7 Million Net Loss in Q2 2025

Chegg, Inc. reported a significant decline in its financial performance for the second quarter of 2025, with net revenues of $105.1 million, a decrease of 36% from $163.1 million in the same period of 2024. For the first half of 2025, total revenues were $226.5 million, down 33% from $337.5 million year-over-year. The company attributed this decline primarily to a 39% drop in revenues from its Subscription Services, which fell to $89.7 million from $146.8 million, driven by a 40% decrease in the number of paying subscribers. The Skills and Other product line also saw a 6% decrease in revenue, totaling $15.4 million.

In terms of profitability, Chegg reported a net loss of $35.7 million for the second quarter, a substantial improvement compared to a net loss of $616.9 million in the same quarter of the previous year. The loss per share was $0.33, compared to $6.01 in the prior year. The reduction in net loss was largely due to the absence of a significant impairment charge of $481.5 million recorded in the previous year, as well as lower operating expenses resulting from restructuring efforts. Total operating expenses decreased to $106.1 million from $602.7 million, reflecting a reduction in employee-related costs and contractor spend.

Operationally, Chegg has been undergoing strategic changes, including a restructuring plan announced in May 2025, which involved workforce reductions and the closure of its Portland office. The company expects to incur additional restructuring charges of between $11 million and $13 million over the next two fiscal quarters. As of June 30, 2025, Chegg's total liabilities were $246.6 million, down from $676.0 million at the end of 2024, primarily due to the repayment of convertible senior notes.

Chegg's cash and cash equivalents also saw a significant decline, totaling $36.8 million as of June 30, 2025, compared to $161.5 million at the end of 2024. The company reported net cash used in financing activities of $417.1 million, largely due to the repayment of convertible debt. Despite these challenges, Chegg remains focused on enhancing its product offerings and integrating artificial intelligence into its platform to improve student engagement and drive future growth.

Looking ahead, Chegg is exploring strategic alternatives to maximize shareholder value, including potential acquisition opportunities or remaining a standalone public company. The company acknowledges the competitive pressures from generative AI products and Google's new AI search features, which have impacted its traffic and subscriber growth. Chegg's management is committed to adapting its strategies to navigate these challenges while aiming for a return to revenue growth in the future.