By Sabela Ojea

Online education company Chegg swung to a loss in the fourth quarter and had a big drop in revenue as it continued to lose subscribers to AI-enabled alternatives.

Shares fell 25% to $1.17 in post-market trading. Through Monday's close, shares have fallen 82% over the past 12 months.

The Santa Clara, Calif., company on Monday swung to a loss of $6.13 million, or 6 cents a share, from a profit of $9.67 million, or 9 cents a share, for the same period a year earlier.

Stripping out one-time items, earnings per share came in at 17 cents. Analysts polled by FactSet had forecast adjusted earnings of 18 cents.

Revenue fell 24% to fell to $143.5 million, beating the $142.1 million expected by Wall Street. The company had most recently guided for quarterly revenue of $141 million to $143 million.

Subscription-services revenue fell 23% to $128.5 million, as Chegg's number of subscribers declined 21% to 3.6 million from the same period a year earlier.

Chegg earnings come three months after the company said it would cut its workforce by an additional 21% as it struggles to turnaround its business model amid an AI educational shift.

For the first quarter, Chegg expects revenue between $114 million and $116 million due to what the company called a notable decline in traffic and subscriber acquisitions. Wall Street expects first-quarter revenue of $138 million, according to FactSet.

"These factors are putting pressure on our business and impacting our financial outlook," the company said.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

February 24, 2025 17:02 ET (22:02 GMT)

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