Chegg, Inc. (CHGG - Free Report) posted impressive second-quarter 2021 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Also, the top and bottom line increased on a year-over-year basis.
Following the announcement, shares of the company grew 3.6% during the after-hour trading session on Aug 9.
Quarter in Detail
Chegg reported second-quarter earnings of 43 cents per share, which topped the consensus mark of 38 cents by 13.2% and grew 16.2% from 37 cents reported a year ago.
Net revenues of $198.5 million surpassed the consensus mark of $190 million by 4.4% and grew 30% on a year-over-year basis. The company’s robust top-line performance was driven by more-than-double growth in Chegg Services subscriber count. Also, the company benefitted from investments in content, product, technology and global penetration.
During the quarter, Chegg Services revenues grew 38% year over year to $173.5 million. Notably, it contributed 87% to total net revenues.
Meanwhile, Chegg Services subscribers increased to $4.9 million, reflecting an improvement of 31% year over year.
Operating Highlights
During the second quarter, adjusted EBITDA came in at $84.4 million and improved 52.1% on a year-over-year basis. Notably, the improvement was backed by the solid business model that supports operating leverage.
During the quarter, operating expenses (as a percentage of net revenue) contracted to 51.9% from 57.1% reported a year ago.
Cash Position
At the end of second-quarter 2021, Chegg had cash and cash equivalents of $840.1 million, significantly up from $481.7 million reported as of Dec 31, 2020.
In the first six months of 2021, net cash provided by operating acti Total Net Revenues in the range of $805 million to $815 millionvities came in at $144.5 million compared with $122.2 million in the year-ago period.
Q3 & 2021 Outlook
For the third quarter of 2021, the company expects total net revenues in the range of $170-$175 million. Also, it expects Chegg Services revenues in the band of $142-$147 million. Adjusted EBITDA is projected in the range of $43-$45 million, while gross margin is estimated between 60% and 61%.
Backed by the robust quarterly performance, the company raised its guidance for 2021. The company now expects total net revenues in the range of $805-$815 million, up from the previously-projected range of $790-$800 million.
The company now anticipates Chegg Services revenues in the range of $690-$700 million, up from the previous-anticipated range of $675-$685 million. Adjusted EBITDA is now expected in the band of $295-$300 million compared with the previous guideline of $275-$280 million, while gross margin is estimated between 68% and 69%, in line with the last projected range.
Zacks Rank
Chegg — which shares space with F5 Networks, Inc. (FFIV - Free Report) , Pinterest, Inc. (PINS - Free Report) and Paycom Software, Inc. (PAYC - Free Report) in the Zacks Internet - Software — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Chegg, Inc. (CHGG - Free Report) posted impressive second-quarter 2021 results, wherein earnings and revenues beat the Zacks Consensus Estimate. Also, the top and bottom line increased on a year-over-year basis.
Following the announcement, shares of the company grew 3.6% during the after-hour trading session on Aug 9.
Quarter in Detail
Chegg reported second-quarter earnings of 43 cents per share, which topped the consensus mark of 38 cents by 13.2% and grew 16.2% from 37 cents reported a year ago.
Net revenues of $198.5 million surpassed the consensus mark of $190 million by 4.4% and grew 30% on a year-over-year basis. The company’s robust top-line performance was driven by more-than-double growth in Chegg Services subscriber count. Also, the company benefitted from investments in content, product, technology and global penetration.
During the quarter, Chegg Services revenues grew 38% year over year to $173.5 million. Notably, it contributed 87% to total net revenues.
Meanwhile, Chegg Services subscribers increased to $4.9 million, reflecting an improvement of 31% year over year.
Operating Highlights
During the second quarter, adjusted EBITDA came in at $84.4 million and improved 52.1% on a year-over-year basis. Notably, the improvement was backed by the solid business model that supports operating leverage.
During the quarter, operating expenses (as a percentage of net revenue) contracted to 51.9% from 57.1% reported a year ago.
Cash Position
At the end of second-quarter 2021, Chegg had cash and cash equivalents of $840.1 million, significantly up from $481.7 million reported as of Dec 31, 2020.
In the first six months of 2021, net cash provided by operating acti Total Net Revenues in the range of $805 million to $815 millionvities came in at $144.5 million compared with $122.2 million in the year-ago period.
Q3 & 2021 Outlook
For the third quarter of 2021, the company expects total net revenues in the range of $170-$175 million. Also, it expects Chegg Services revenues in the band of $142-$147 million. Adjusted EBITDA is projected in the range of $43-$45 million, while gross margin is estimated between 60% and 61%.
Backed by the robust quarterly performance, the company raised its guidance for 2021. The company now expects total net revenues in the range of $805-$815 million, up from the previously-projected range of $790-$800 million.
The company now anticipates Chegg Services revenues in the range of $690-$700 million, up from the previous-anticipated range of $675-$685 million. Adjusted EBITDA is now expected in the band of $295-$300 million compared with the previous guideline of $275-$280 million, while gross margin is estimated between 68% and 69%, in line with the last projected range.
Zacks Rank
Chegg — which shares space with F5 Networks, Inc. (FFIV - Free Report) , Pinterest, Inc. (PINS - Free Report) and Paycom Software, Inc. (PAYC - Free Report) in the Zacks Internet - Software — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free Report – The Bitcoin Profit Phenomenon
Zacks Investment Research has released a Special Report to help you pursue massive profits from the world’s first and largest decentralized form of money.
No guarantees for the future, but in the past three presidential election years, Bitcoin’s returns were as follows: 2012 +272.4%, 2016 +161.1%, and 2020 +302.8%.
Zacks predicts another significant surge. Click below for Bitcoin: A Tumultuous Yet Resilient History.
Download Now – Today It’s FREE >>
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