Chegg Reports 30% Revenue Decline and $17.5 Million Net Loss in Q1 2025

Chegg, Inc. reported a significant decline in its financial performance for the first quarter of 2025, with net revenues totaling $121.4 million, a decrease of 30% from $174.4 million in the same period of 2024. The company's gross profit also fell sharply to $67.4 million, down from $127.9 million, resulting in a gross margin of 56%, compared to 73% a year earlier. The net loss for the quarter was $17.5 million, or $0.17 per share, compared to a net loss of $1.4 million, or $0.01 per share, in the prior year. This downturn is attributed primarily to a 31% decrease in the number of subscribers accessing Chegg's services.

In terms of operational metrics, Chegg's Subscription Services, which include offerings like Chegg Study and Chegg Writing, saw revenues drop by $46.5 million, or 30%, to $107.6 million. The Skills and Other product line also experienced a decline, with revenues falling 32% to $13.8 million. The company noted that the decrease in revenues was driven by lower enrollments in its Chegg Skills platform and reduced advertising service revenues. Additionally, the company recorded an impairment expense of $2 million related to property and equipment.

Chegg's strategic developments included a restructuring plan announced in May 2025, which aims to streamline operations and reduce costs through workforce reductions and office closures. This follows a previous restructuring plan in November 2024 that resulted in cumulative charges of $17.2 million. The company is also exploring strategic alternatives to maximize shareholder value, including potential acquisition or going private, although no timeline has been set for this review.

The company's cash and cash equivalents decreased significantly to $44.1 million as of March 31, 2025, down from $161.5 million at the end of 2024. This decline is primarily due to the early repayment of convertible senior notes and cash used in financing activities. Chegg's total liabilities also decreased to $253.1 million from $676.0 million, largely due to the repayment of its 2025 notes. Looking ahead, Chegg anticipates that its ongoing investments in technology and product offerings will help return to revenue growth, although it acknowledges the challenges posed by increased competition from generative AI products and changes in search engine dynamics.