Chegg Q2 Revenue Plunges 51% to $51.8M; Q3 Guidance Implies Further Decline
CHGG has more than doubled off its 52-week low of $0.45.
Summary
Chegg reported Q2 2026 revenue of $51.8M, down 51% YoY, with a net loss of $3.0M. Q3 guidance of $43-$44M revenue and $1-$2M adjusted EBITDA points to continued deterioration. The company is pivoting to an employability platform while repurchasing shares and repaying debt, but the NYSE delisting threat looms.
Key Events · Earnings and Guidance · CHGG
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Q2 Revenue Down 51% YoY
Total net revenues fell to $51.8 million from $105.1 million a year ago, driven by AI competition eroding academic services. Chegg Skilling revenue grew 2% to $17.5 million.
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Q3 Guidance Implies Further Decline
Q3 revenue is expected to be $43-$44 million, with gross margin of 48%-49% and adjusted EBITDA of just $1-$2 million, down from $9.1 million in Q2.
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Strategic Pivot to Employability Platform
Chegg will soft-launch a next-generation platform in Q3 2026, combining academic, skilling, and language learning to help students find internships and jobs, with over 10,000 beta users.
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Share Repurchase and Debt Repayment
Chegg repurchased $1.7 million of common stock in Q2, with $120.7 million remaining authorization, and expects to fully repay convertible debt in Q3, strengthening the balance sheet.
Analysis · CHGG · Trade & Services
Chegg's Q2 revenue cratered 51% year-over-year to $51.8 million, narrowly beating the lone analyst estimate but underscoring the severe impact of AI competition on its core academic services. The company posted a net loss of $3.0 million and guided for Q3 revenue of $43-$44 million, signaling the decline is not over. Adjusted EBITDA of $9.1 million in Q2 drops to just $1-$2 million in Q3, reflecting margin compression. Against this backdrop, Chegg is pivoting to an employability platform, soft-launching in Q3, while repurchasing $1.7 million in stock and planning to fully repay convertible debt. The delisting risk remains acute with the stock at $0.95, well below the NYSE's $1.00 threshold.
At the time of this filing, CHGG was trading at $0.95 on NYSE in the Trade & Services sector, with a market capitalization of approximately $115.3M. The 52-week trading range was $0.45 to $1.90. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.