Chegg (CHGG) Q2 2026 earnings summary

Executive summary

• Q2 2026 results exceeded expectations on revenue, adjusted EBITDA, and cash flow, driven by disciplined execution, operational efficiency, and strategic AI investments.

• The company is transitioning to an AI-first, employability-focused platform, integrating academic, skilling, and language services, with a soft launch of the new platform in Q3 2026.

• Major restructuring actions and cost reductions have resulted in a leaner, more efficient organization and improved cost structure.

• Over 10,000 students have tested the beta employability platform, with rollout continuing through 2027.

• Repurchased $1.7 million in common stock during Q2 2026; $120.7 million remains authorized for repurchase.

Financial highlights

• Q2 2026 total revenue was $51.8 million, down 51% year-over-year, with Chegg Skilling revenue up 2% to $17.5 million.

• Adjusted EBITDA reached $9.1 million (17% margin); free cash flow was $6.4 million, including $1.5 million in severance.

• Gross margin was 55%; non-GAAP operating expenses were $32.3 million, nearly halved year-over-year.

• Net loss was $3.0 million, a significant improvement from $35.7 million in Q2 2025.

• Ended Q2 with $72.3 million in cash and investments, and a net cash position of $38.5 million.

Outlook and guidance

• Q3 2026 revenue guidance: $43–44 million; gross margin: 48–49%; adjusted EBITDA: $1–2 million.

• Full-year 2026 CapEx targeted to be reduced by 60%.

• Expectation to remain free cash flow positive in the second half of 2026; liquidity sufficient for at least the next 12 months.