- Wednesday, October 16, 2024
Education technology company Chegg Inc. has announced its second-quarter sales, surpassing expectations and indicating significant progress in attracting and retaining customers. The company is optimistic about the potential to enhance AI learning-assistance tools, addressing the limitations currently experienced with ChatGPT. As a result, shares in Chegg jumped 23.8% after the bell on Monday.
Financial Performance
Chegg reported a net income of $24.6 million; however, there was a diluted loss per share of 11 cents. This is in comparison to a net income of $7.5 million, or 6 cents per share, during the same quarter last year. Although revenue declined to $182.9 million from $194.7 million in the prior-year quarter, analysts polled by FactSet were still impressed with Chegg's adjusted earnings per share of 28 cents. It is important to note that the consensus expectation for adjusted earnings per share was 29 cents, with a projected revenue of $176.5 million.
Future Outlook
Looking ahead to the third quarter, Chegg's management expects sales to be between $151 million and $153 million, slightly higher than the FactSet forecast of $152 million. In May, Chegg launched a beta version of its new AI tools, which received overwhelmingly positive feedback. Notably, younger students expressed discomfort with the accuracy of information provided by ChatGPT.
Chegg's continuous efforts to improve its AI learning-assistance tools demonstrate its commitment to meet the evolving needs of students and educators alike. Despite the challenges faced in the second quarter, Chegg remains poised for future success.
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