What a difference a quarter makes.
shares were trading sharply higher late Monday, after the online education services company posted better-than-forecast results for the first quarter, while providing a 2022 forecast that exceeded previous Street estimates.
Just one quarter ago, Chegg (ticker: CHGG) shares were chopped in half after the company warned that fourth-quarter revenues would be well below Street estimates, due to a slowdown in demand that the company connected with the Covid-19 pandemic. The actual results weren’t quite as bad as the company had feared.
For the fourth quarter, Chegg posted revenue of $207.5 million, up 1% from a year ago, and ahead of both the guidance range of $194 million to $196 million, and the Street consensus forecast at $195.2 million. Before the company issued its forecast for the December quarter, the consensus had been just above $240 million.
The company said services revenue was $187.2 million, up 6%. On a non-GAAP basis, the company earned 38 cents a share in the quarter, above the consensus call of 31 cents. Under generally accepted accounting principles, the company earned 15 cents a share on a fully diluted basis.
For the March quarter, Chegg projects revenue of $200 million to $205 million, above the old Street consensus of $198 million. The company sees adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, of between $56 million and $58 million, which would be down from $78 million in the December quarter.
For all of 2022, Chegg projects revenue of between $830 million and $850 million, above the consensus of $827 million.
CEO Dan Rosensweig said in comments prepared for a call with analysts that when the company reported September quarter results, “there was a great deal of uncertainty about the back-to-school season and the continuing impact of Covid-19.” He said that “fortunately, while enrollments were lower, we saw that schoolwork did eventually pick up so the need for Chegg increased throughout the quarter, helping us end the year on a higher note.”
Chegg shares dropped from nearly $63 to about $32 on the day after the company reported the September quarter results. They sagged to nearly $23 as recently as a few weeks ago, but in late trading Monday, the stock rebounded 12% to $30.55.
Write to Eric J. Savitz at [email protected]