Chegg reaches record 4.8 million subscribers in Q1
The online learning platform Chegg posted better-than-expected first quarter financial results on Monday, with revenue up 51 percent year-over-year. The company also reported a record 4.8 million Chegg Services subscribers in the quarter, an increase of 64 percent year-over-year.
Chegg's non-GAAP net income was $46.4 million in Q1. Total net revenues came to $198.4 million.
Analysts were expecting revenue of $184.59 million.
Chegg Services revenues grew 62 percent year-over-year to $162.4 million. That made it 82 percent of total net revenues, compared to 76 percent in Q1 2020.
Chegg Services primarily includes Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Mathway and Thinkful. The rest of Chegg's revenue comes from its Required Materials category, which includes print textbooks and eTextbooks.
In prepared remarks for an earnings conference call, CEO Dan Rosensweig made the case that Chegg is well-positioned to benefit from the ongoing move to online learning.
"Direct-to-consumer platforms, like Chegg, who own the relationship with their customer, own the data, their channels of distribution, and their content, are in the best position to serve their customers, grow faster, and be more profitable at scale," he said. "Having that relationship and data allows Chegg to more effectively and immediately differentiate our services and respond faster to our students' evolving needs. We believe our ability to invest in our existing services and add new and better services, while increasing margins, puts Chegg in a unique position to impact the future of the higher education ecosystem."
Rosensweig noted that the company is growing significantly internationally, and it's also expanding its skills-based offerings to reach mid-career learners.
"Although the skills category is early for us, we believe it represents an enormous opportunity for Chegg on a global basis in the coming years," he said.
For the second quarter of 2021, Chegg expects revenues in the range of $188 million to $190 million. For the full year, it expects revenues in the range of $790 million to $800 million.