Chegg shares tanked 30% in extended trading: here’s why

Chegg Inc shares (NYSE: CHGG) tanked nearly 30% in extended trading on Monday after the education technology cited enrolment issues, economy, and inflationary pressures as it lowered its guidance for full-year revenue.

Chegg Q1 financial highlights

• Chegg, however, reported marketing-beating profit for its fiscal Q1.
• Earned $5.7 million versus the year-ago figure of $65.2 million loss.
• Per-share earnings of 4 cents were much better than last year’s 49 cents loss.
• On an adjusted basis, Chegg made a profit of 32 cents per share in Q1.
• Revenue jumped 2.0% YoY to $202.2 million, as per the earnings press release.
• FactSet consensus was for $24 cents of adjusted EPS on $203 million in revenue.
• Services revenue was up 14% and made up 91% of the total quarterly revenue.
• Chegg services subscribers grew 12% year-over-year to 5.4 million.

The stock is now down 45% for the year.

Chegg fiscal 2022 outlook

For fiscal 2022, Chegg now forecasts $740 million to $770 million in revenue, including up to $192 million it expects in the current fiscal quarter.

In comparison, analysts had forecast $210.6 million revenue for Q2 and $843.3 million for the full financial year. In the earnings press release, CEO Dan Rosensweig said: