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Chegg (CHGG) Reports Narrower-than-Expected Loss in Q3
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Chegg, Inc. (CHGG - Free Report) ), a student-first connected learning platform, reported third-quarter 2016 adjusted loss of 13 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 17 cents.
Total net revenue of $71.3 million surpassed the Zacks Consensus Estimate of $67.67 million by 5.4% but declined 12% year over year. However, non-GAAP total net revenue of $55.5 million increased 22% year over year driven by 44% growth at Chegg Services.
Chegg Services revenues of $29.7 million increased 44% year over year. Required Materials revenues of $41.7 million deteriorated 31.3% from $60.7 million in the prior-year quarter.
Chegg Service subscriber base totaled 800,000 in the quarter – a new record for Chegg – representing more than 40% growth over last year.
Adjusted gross profit of $32.7 million increased 46.2% during the quarter. Adjusted gross margin of 45.8% was a significant improvement from 27.5% in the prior-year quarter, owing to increased benefits and synergies from its learning services.
Q4 Guidance
Total revenue is projected in the $48–$52 million band. Chegg Service revenues are expected in the range of $41 million and $44 million.
Gross margin is estimated between 65% and 67% while adjusted EBITDA will likely be between $12 million and $14 million.
Fiscal 2016 Guidance
Total net revenue is expected in the $191 million to $195 million range while Chegg Service revenues are projected in the $126 million to $129 million band.
Gross margin is anticipated between 51% and 53% while adjusted EBITDA is expected in the range of $18 million to $20 million.
Fiscal 2017 Guidance
Total net revenue is projected at $230 million while Chegg Service revenues are estimated at around $172 million. Adjusted EBITDA is projected at $35 million.
Financials
Chegg had cash and cash equivalents of $90.2 million as of Sep 30, 2016, compared with $67,029 million as of Dec 31, 2015.
Better-ranked stocks in the Internet software industry include Apigee Corp. , Castlight Health, Inc. (CSLT - Free Report) and Evolent Health, Inc. (EVH - Free Report) .
All the three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Castlight’s full-year 2016 earnings are expected to witness a 29.89% increase while that of Grand Canyon are expected to grow 65.5%.
For fiscal 2017, Apigee’s earnings are projected to increase 14.7%.
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Chegg (CHGG) Reports Narrower-than-Expected Loss in Q3
Chegg, Inc. (CHGG - Free Report) ), a student-first connected learning platform, reported third-quarter 2016 adjusted loss of 13 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 17 cents.
Total net revenue of $71.3 million surpassed the Zacks Consensus Estimate of $67.67 million by 5.4% but declined 12% year over year. However, non-GAAP total net revenue of $55.5 million increased 22% year over year driven by 44% growth at Chegg Services.
Chegg Services revenues of $29.7 million increased 44% year over year. Required Materials revenues of $41.7 million deteriorated 31.3% from $60.7 million in the prior-year quarter.
Chegg Service subscriber base totaled 800,000 in the quarter – a new record for Chegg – representing more than 40% growth over last year.
Adjusted gross profit of $32.7 million increased 46.2% during the quarter. Adjusted gross margin of 45.8% was a significant improvement from 27.5% in the prior-year quarter, owing to increased benefits and synergies from its learning services.
Q4 Guidance
Total revenue is projected in the $48–$52 million band. Chegg Service revenues are expected in the range of $41 million and $44 million.
Gross margin is estimated between 65% and 67% while adjusted EBITDA will likely be between $12 million and $14 million.
Fiscal 2016 Guidance
Total net revenue is expected in the $191 million to $195 million range while Chegg Service revenues are projected in the $126 million to $129 million band.
Gross margin is anticipated between 51% and 53% while adjusted EBITDA is expected in the range of $18 million to $20 million.
Fiscal 2017 Guidance
Total net revenue is projected at $230 million while Chegg Service revenues are estimated at around $172 million. Adjusted EBITDA is projected at $35 million.
Financials
Chegg had cash and cash equivalents of $90.2 million as of Sep 30, 2016, compared with $67,029 million as of Dec 31, 2015.
CHEGG INC Price, Consensus and EPS Surprise
CHEGG INC Price, Consensus and EPS Surprise | CHEGG INC Quote
Chegg currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the Internet software industry include Apigee Corp. , Castlight Health, Inc. (CSLT - Free Report) and Evolent Health, Inc. (EVH - Free Report) .
All the three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Castlight’s full-year 2016 earnings are expected to witness a 29.89% increase while that of Grand Canyon are expected to grow 65.5%.
For fiscal 2017, Apigee’s earnings are projected to increase 14.7%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>