Chegg, Inc. reported Q4 2025 results exceeding estimates, but both earnings and revenues declined year-over-year. Shares fell 2.7% in after-hours trading. The company faced challenges like revenue decline, negative free cash flow, and NYSE compliance notice. However, it saw growth in the Skilling segment, strong retention in Academic Services, and cost reductions.

Q4 earnings showed an adjusted loss per share of 1 cent, beating estimates of a loss of 11 cents. Net revenues of $72.7 million surpassed expectations but declined 49.4% year-over-year. Gross profit decreased by 57.4%, and operating expenses declined by 39.4%. Adjusted EBITDA was $12.9 million, down from $36.6 million.

Chegg’s liquidity decreased in 2025, with lower cash and negative free cash flow. Total net revenues for 2025 were $376.9 million, down from $617.6 million in 2024. Adjusted EBITDA in 2025 was $68.5 million, compared to $149.7 million in 2024. Adjusted EPS in 2025 was 3 cents, down from 75 cents in 2024.

For Q1 2026, Chegg expects lower net revenues and adjusted EBITDA compared to the year-ago period. The company aims for double-digit growth in Chegg Skilling and cost reductions. Management plans to achieve at least 20% adjusted EBITDA margins in the next few years, with a focus on efficiency and financial flexibility.

Chegg holds a Zacks Rank #3. Other top stocks in the Computer and Technology sector include Amphenol Corporation, NVIDIA Corporation, and Vertiv Holdings Co, each showing strong growth potential. Analysts predict growth in sales and EPS for these companies in 2026.

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Read more at Nasdaq: Chegg Q4 Earnings & Revenues Surpass Estimates, Stock Down