Sarah Kerver
Chegg (NYSE:CHGG) stock slid sharply in Monday’s extended session as the company offered a soft sales outlook for the full-year.
For the fourth quarter reported on Monday, the California-based education services company posted $0.40 in adjusted EPS and $205.2M in revenue. Analysts had anticipated $0.38 and $202.1M, respectively, meaning the figures exceeded the bar set by analysts.
“The last several years have been very challenging for everyone; however, the best, most innovative companies, like Chegg, come out of difficult times and are able to improve their market position,” CEO Dan Rosensweig said. “We are very excited about the next chapter for Chegg; we believe there is significant growth ahead for our business and are energized by the scale of the opportunity in front of us.”
That said, the company’s full-year outlook came up significantly short of Street expectations.
Management forecast total net revenues in the range of $745M to $760M for 2023, well below the $817.5M consensus estimate. A gross margin guide between 71% and 73% also missed Street expectations at 73.8%. Finally, adjusted EBITDA forecast in the range of $240M to $250M disappointed against the analyst consensus of $275.6M.
The first quarter is expected to miss expectations by a wide margin as well, with a revenue forecast of $184M to $186M coming short of the consensus of $202.1M. Subscription revenues are expected to range from $166 to $168M.
Shares of Chegg tumbled 19.4% shortly after the earnings results were released.
Dig into the details of the results.
