Chegg, Inc. (CHGG - Free Report) reported third-quarter 2017 adjusted earnings of a penny, compared to the Zacks Consensus Estimate of break-even earnings.
Meanwhile, net revenues of $62.6 million beat the Zacks Consensus Estimate of $57.6 million by 8.7%. However, revenues declined 12% year over year.
Inside the Headline Numbers
Chegg Service revenues of $39.5 million increased 33% year over year and was slightly above the projected range of $37 million to $39 million. Chegg Service subscriber base totaled 1.2 million in the quarter, hitting a record of 37% growth year over year. Sequentially subscriber base remained flat.
Gross profit of $40.3 million in the quarter increased 23.4% from the year-ago level. Gross margin of 64.3% was higher than the company’s expectations, courtesy of incremental revenues from Chegg Services.
Adjusted EBITDA of $5.7 million shows substantial improvement from the year-ago level of $0.2 million. The figure is also above the company’s earlier expectations of $3-$4 million.
Chegg had cash and cash equivalents of $122.2 million for the period ending Sep 30, 2017, compared with $77.3 million as of Dec 31, 2016.
Q4 Guidance
Total net revenue in the fourth quarter is expected in the range of $70 million to $71 million, while Chegg Services Revenues are estimated in the $58 million to $59 million band.
Gross margin is anticipated between 69% and 71%, while adjusted EBITDA is expected at around $19 million to $20 million.
2017 Guidance Lifted
Total net revenue is now projected in the range of $251 million to $252 million, higher than $241 million to $243 million expected earlier. Chegg Service revenues are estimated in the $183 million to $184 million band, higher than $180-$182 million anticipated earlier.
Gross margin is expected to be higher than 65%, while adjusted EBITDA is likely to come in between $44 million and $45 million, higher than $41-$42 million expected earlier.
Capital expenditures are estimated to be $27 million. Free cash flow is projected at around $18 million.
2018 Guidance
Total revenues are expected at $295 million, with Chegg Service revenues amounting to $240 million. Gross margin for 2018 is expected to be higher than 70% while the company expects an adjusted EBITDA of $74 million.
Zacks Rank and Stocks to Consider
Chegg has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the same industry are Atlassian Corporation Plc (TEAM - Free Report) , HubSpot, Inc. (HUBS - Free Report) and Twitter, Inc. . While Twitter sports a Zacks Rank #1 (Strong Buy), Atlassian and HubSpot carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Twitter surpassed earnings estimates in all of the past four quarters, the average beat being 152.50%.
HubSpot also surpassed earnings estimates in each of the trailing four quarters, the average beat being 171.01%.
Atlassian beat earnings in the trailing four quarters, the average being 22.92%.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Chegg, Inc. (CHGG - Free Report) reported third-quarter 2017 adjusted earnings of a penny, compared to the Zacks Consensus Estimate of break-even earnings.
Meanwhile, net revenues of $62.6 million beat the Zacks Consensus Estimate of $57.6 million by 8.7%. However, revenues declined 12% year over year.
Inside the Headline Numbers
Chegg Service revenues of $39.5 million increased 33% year over year and was slightly above the projected range of $37 million to $39 million. Chegg Service subscriber base totaled 1.2 million in the quarter, hitting a record of 37% growth year over year. Sequentially subscriber base remained flat.
Gross profit of $40.3 million in the quarter increased 23.4% from the year-ago level. Gross margin of 64.3% was higher than the company’s expectations, courtesy of incremental revenues from Chegg Services.
Adjusted EBITDA of $5.7 million shows substantial improvement from the year-ago level of $0.2 million. The figure is also above the company’s earlier expectations of $3-$4 million.
Chegg had cash and cash equivalents of $122.2 million for the period ending Sep 30, 2017, compared with $77.3 million as of Dec 31, 2016.
Q4 Guidance
Total net revenue in the fourth quarter is expected in the range of $70 million to $71 million, while Chegg Services Revenues are estimated in the $58 million to $59 million band.
Gross margin is anticipated between 69% and 71%, while adjusted EBITDA is expected at around $19 million to $20 million.
2017 Guidance Lifted
Total net revenue is now projected in the range of $251 million to $252 million, higher than $241 million to $243 million expected earlier. Chegg Service revenues are estimated in the $183 million to $184 million band, higher than $180-$182 million anticipated earlier.
Gross margin is expected to be higher than 65%, while adjusted EBITDA is likely to come in between $44 million and $45 million, higher than $41-$42 million expected earlier.
Capital expenditures are estimated to be $27 million. Free cash flow is projected at around $18 million.
2018 Guidance
Total revenues are expected at $295 million, with Chegg Service revenues amounting to $240 million. Gross margin for 2018 is expected to be higher than 70% while the company expects an adjusted EBITDA of $74 million.
Zacks Rank and Stocks to Consider
Chegg has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the same industry are Atlassian Corporation Plc (TEAM - Free Report) , HubSpot, Inc. (HUBS - Free Report) and Twitter, Inc. . While Twitter sports a Zacks Rank #1 (Strong Buy), Atlassian and HubSpot carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Twitter surpassed earnings estimates in all of the past four quarters, the average beat being 152.50%.
HubSpot also surpassed earnings estimates in each of the trailing four quarters, the average beat being 171.01%.
Atlassian beat earnings in the trailing four quarters, the average being 22.92%.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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