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Gross margin down 900 bps, with adjusted EBITDA down to $13.3M, reflecting weaker leverage.
Chegg guides Q4 revenue to $70-$72M, signaling ongoing top-line strain in the near term.
Chegg, Inc. (CHGG - Free Report) reported break-even earnings in the third quarter of 2025, which topped the Zacks Consensus Estimate but declined year over year. Net revenues topped the consensus mark but tumbled year over year.
Following the results, shares of this education technology company gained 3.4% in the after-hours trading session yesterday.
The quarterly performance was hurt by a decline in the number of subscribers (ones who have paid to access its services), lower enrollments for the Chegg Skills offering and a decrease in advertising services revenues.
On the other hand, elevated restricting charges across research and development, sales and marketing and general and administrative hurt the bottom line, alongside reduced leverage from its top-line performance.
CHGG’s Q3 Earnings & Revenue Discussion
The company’s breakeven earnings were above the Zacks Consensus Estimate of adjusted loss per share of 14 cents by 100%. In the year-ago quarter, it reported adjusted earnings per share (EPS) of nine cents.
Net revenues of $77.7 million surpassed the consensus mark of $76 million by 1.8% but declined 43% year over year.
Revenues from the Subscription Services product line declined year over year by 42% to $69.1 million, with the same for the Skills and Other product line tumbling 49% to $8.6 million.
Chegg’s Operating Highlights
Gross profit in the third quarter was down 50.6% year over year to $46 million, with the gross margin contracting 900 basis points (bps) to 59%.
Total operating expenses declined year over year by 80% to $63.2 million from $315.5 million.
Adjusted EBITDA was $13.3 million, down from the prior-year quarter’s level of $22.3 million.
Liquidity & Cash Flow of CHGG
As of Sept. 30, 2025, Chegg had cash and cash equivalents of $38.2 million compared with $161.5 million as of 2024.
For the first nine months of 2025, net cash provided by operating activities totaled $24.5 million, down from $107.1 million in the year-ago period. Free cash flow at the end of the third quarter was $2.8 million, down from $45.4 million a year ago.
Chegg Unveils Q4 2025 Outlook
For the fourth quarter, Chegg expects net revenues in the range of $70-$72 million compared with $143.5 million reported in the year-ago quarter. Chegg Skilling revenues are expected to be $18 million.
The gross margin is expected to be between 57% and 58% compared with 68% reported a year ago. Adjusted EBITDA is projected between $10 million and $11 million, down from $36.6 million reported a year ago.
Innodata Inc. (INOD - Free Report) reported better-than-expected third-quarter 2025 results with adjusted EPS and revenues topping the Zacks Consensus Estimate. Year over year, the top line grew while the bottom line tumbled.
The quarterly performance reflects higher demand volumes for its service offerings. The growth was primarily attributable to increased contributions from the DDS and Agility segments, which were somewhat offset by the weak performance of the Synodex segment. Innodata expects 45% or more of organic revenue growth year over year. Innodata also expects continued transformative growth in 2026, given the new award wins and strong market momentum.
CACI International Inc. (CACI - Free Report) reported better-than-expected results for the first quarter of fiscal 2026. It reported first-quarter non-GAAP earnings of $6.85 per share, which beat the Zacks Consensus Estimate by 10.48%. The bottom line increased 15.5% on a year-over-year basis, primarily driven by higher revenues and efficient cost management.
CACI surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 16.67%. In the first quarter of fiscal 2026, contract awards totaled $5 billion, with approximately 60% for new business. For fiscal 2026, CACI continues to anticipate revenues between $9.2 billion and $9.4 billion.
Sabre Corporation (SABR - Free Report) reported mixed results for the third quarter of 2025, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. During the quarter, Distribution revenues increased 4% to $575 million, primarily driven by an increase in air and hotel distribution bookings, a favorable travel supplier mix and rate impacts, while IT Solutions’ revenues were $140 million, flat on a year-over-year basis.
For 2025, Sabre now expects its pro-forma revenues (which excludes the recently divested Hospitality Solutions business) to be flat year over year, down from the earlier prediction of a low single-digit percentage increase. For the fourth quarter, Sabre anticipates pro-forma revenue growth in the low single-digit percentage range.
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Chegg Reports Breakeven Q3 Earnings, Revenues Down Y/Y, Stock Up
Key Takeaways
Chegg, Inc. (CHGG - Free Report) reported break-even earnings in the third quarter of 2025, which topped the Zacks Consensus Estimate but declined year over year. Net revenues topped the consensus mark but tumbled year over year.
Following the results, shares of this education technology company gained 3.4% in the after-hours trading session yesterday.
The quarterly performance was hurt by a decline in the number of subscribers (ones who have paid to access its services), lower enrollments for the Chegg Skills offering and a decrease in advertising services revenues.
On the other hand, elevated restricting charges across research and development, sales and marketing and general and administrative hurt the bottom line, alongside reduced leverage from its top-line performance.
CHGG’s Q3 Earnings & Revenue Discussion
The company’s breakeven earnings were above the Zacks Consensus Estimate of adjusted loss per share of 14 cents by 100%. In the year-ago quarter, it reported adjusted earnings per share (EPS) of nine cents.
Net revenues of $77.7 million surpassed the consensus mark of $76 million by 1.8% but declined 43% year over year.
Chegg, Inc. Price, Consensus and EPS Surprise
Chegg, Inc. price-consensus-eps-surprise-chart | Chegg, Inc. Quote
Revenues from the Subscription Services product line declined year over year by 42% to $69.1 million, with the same for the Skills and Other product line tumbling 49% to $8.6 million.
Chegg’s Operating Highlights
Gross profit in the third quarter was down 50.6% year over year to $46 million, with the gross margin contracting 900 basis points (bps) to 59%.
Total operating expenses declined year over year by 80% to $63.2 million from $315.5 million.
Adjusted EBITDA was $13.3 million, down from the prior-year quarter’s level of $22.3 million.
Liquidity & Cash Flow of CHGG
As of Sept. 30, 2025, Chegg had cash and cash equivalents of $38.2 million compared with $161.5 million as of 2024.
For the first nine months of 2025, net cash provided by operating activities totaled $24.5 million, down from $107.1 million in the year-ago period. Free cash flow at the end of the third quarter was $2.8 million, down from $45.4 million a year ago.
Chegg Unveils Q4 2025 Outlook
For the fourth quarter, Chegg expects net revenues in the range of $70-$72 million compared with $143.5 million reported in the year-ago quarter. Chegg Skilling revenues are expected to be $18 million.
The gross margin is expected to be between 57% and 58% compared with 68% reported a year ago. Adjusted EBITDA is projected between $10 million and $11 million, down from $36.6 million reported a year ago.
CHGG’s Zacks Rank & Recent Computer & Technology Releases
Chegg currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Innodata Inc. (INOD - Free Report) reported better-than-expected third-quarter 2025 results with adjusted EPS and revenues topping the Zacks Consensus Estimate. Year over year, the top line grew while the bottom line tumbled.
The quarterly performance reflects higher demand volumes for its service offerings. The growth was primarily attributable to increased contributions from the DDS and Agility segments, which were somewhat offset by the weak performance of the Synodex segment. Innodata expects 45% or more of organic revenue growth year over year. Innodata also expects continued transformative growth in 2026, given the new award wins and strong market momentum.
CACI International Inc. (CACI - Free Report) reported better-than-expected results for the first quarter of fiscal 2026. It reported first-quarter non-GAAP earnings of $6.85 per share, which beat the Zacks Consensus Estimate by 10.48%. The bottom line increased 15.5% on a year-over-year basis, primarily driven by higher revenues and efficient cost management.
CACI surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 16.67%. In the first quarter of fiscal 2026, contract awards totaled $5 billion, with approximately 60% for new business. For fiscal 2026, CACI continues to anticipate revenues between $9.2 billion and $9.4 billion.
Sabre Corporation (SABR - Free Report) reported mixed results for the third quarter of 2025, wherein the top line surpassed the Zacks Consensus Estimate, while the bottom line missed the same. During the quarter, Distribution revenues increased 4% to $575 million, primarily driven by an increase in air and hotel distribution bookings, a favorable travel supplier mix and rate impacts, while IT Solutions’ revenues were $140 million, flat on a year-over-year basis.
For 2025, Sabre now expects its pro-forma revenues (which excludes the recently divested Hospitality Solutions business) to be flat year over year, down from the earlier prediction of a low single-digit percentage increase. For the fourth quarter, Sabre anticipates pro-forma revenue growth in the low single-digit percentage range.