Chegg (NYSE:CHGG) reported third-quarter 2026 revenue of $46.5 million and adjusted EBITDA of $5.4 million, while completing a balance-sheet reset that included repayment of its remaining convertible debt.
President and CEO Dan Rosensweig said the company ended the quarter with $43.6 million in cash and no debt. Chegg also generated $5.5 million in free cash flow during the quarter as it continued to reduce expenses and shift its strategy away from its legacy homework-help business toward employability, workforce skills and language learning offerings.
“The balance sheet reset is complete,” Rosensweig said. “We have repositioned Chegg from being a homework help company to an employability company, focused on helping students find internships, assess and learn relevant job skills, and find full-time employment.”
Employability Platform Launch Gains Early Traffic
In September, Chegg launched an employability platform through Internships.com that includes personalized job matching, resume tailoring, one-click applications, interview preparation, skills assessments and network connections. The company said it plans to add 70,000 early-career job listings as the platform expands beyond internships into entry-level employment opportunities.
Rosensweig said Internships.com received more than 100,000 visitors in less than eight weeks after launch. He added that those visitors were not existing Chegg customers, while Chegg subscribers can also access the service through the company’s broader offering.
During the question-and-answer session, Rosensweig said traffic had increased tenfold on a daily basis from the platform’s launch and that limited paid marketing efforts were producing encouraging results. He said the company is seeing engagement through resume uploads, job searches, cover-letter creation and job applications, though he cautioned that the figures remain small given the recent launch.
Chegg has also signed pilot programs with the College of Charleston, Salem College and Radford University, with additional institutions expected to sign in coming weeks, according to management. The pilot programs are intended to give colleges employment and internship data related to their students and alumni, while providing selected students access to Chegg’s employability platform at no charge for several months.
Rosensweig said the company will help institutions track information including employers, job roles, internships, compensation, job descriptions and required skills. The goal is to help students identify potential career paths and the skills needed for particular roles.
Skilling and Language Businesses Remain Strategic Focuses
Alongside the employability platform, Chegg is investing in a skills business aimed at business customers and distribution partners. Rosensweig said the company has signed 11 new distribution partners since the beginning of the year, including PowerTrain. He said the business is expected to generate more than $65 million in revenue in 2026.
Chegg made product enhancements during the third quarter that allow it to create tailored learning programs based on a company’s systems, documents and objectives. Rosensweig said the company measures demonstrated proficiency, which he described as an important requirement for enterprise customers.
The company also said its language-learning product returned to growth across business-to-business and direct-to-consumer channels. Chegg’s workplace-skills content became available for English-speaking premium subscribers during the third quarter and is being expanded to Spanish, French, German and Italian.
Management said the newer distribution partnerships are beginning to ramp, though Rosensweig noted that the time between signing a partner and fully launching through that partner’s distribution network has been longer than initially anticipated. He said Chegg expects to have greater clarity by its next earnings call on the longer-term value of the partnerships.
Expenses Decline as Chegg Targets Cash Generation
Chief Financial Officer David Longo said non-GAAP operating expenses fell 36% year over year to $31.2 million in the third quarter. He attributed the reduction to cost-management measures and the use of artificial intelligence to streamline operations and improve productivity.
Adjusted EBITDA represented a 12% margin in the quarter. Capital expenditures declined 71% year over year to $1.7 million, and Chegg is targeting a reduction of more than 60% in full-year 2026 capital expenditures.
Longo said the company’s legacy homework-help business continued to decline as expected, while Chegg directed investment toward its employability, skills and language offerings. Management expects the employability platform to contribute more meaningfully in 2027.
- Third-quarter revenue: $46.5 million
- Third-quarter adjusted EBITDA: $5.4 million
- Third-quarter free cash flow: $5.5 million
- Quarter-end cash and investments: $43.6 million
- Quarter-end debt: None
Fourth-Quarter Outlook and Capital Allocation
For the fourth quarter, Chegg forecast revenue between $38 million and $40 million, gross margin of 46% to 48%, and adjusted EBITDA of approximately $1 million.
Longo said the company’s capital-allocation priorities are to generate free cash flow, maintain a strong balance sheet and deploy capital selectively for long-term shareholder value. With its debt repaid, Chegg is evaluating both organic growth investments and potential acquisitions.
Rosensweig said Chegg has been reviewing companies with intellectual property and customer bases that could benefit from its employability platform. He said the company expects potential acquisition opportunities to be available but will remain selective, seeking transactions that support growth and profitability.
About Chegg (NYSE:CHGG)
Chegg, Inc is an education technology company that provides digital learning tools and academic support services to students. Its platform offers study assistance, expert answers, practice materials, writing support, and other resources intended to help students understand course content and complete academic work.
The company’s products have included Chegg Study, Chegg Writing, and Mathway, a mobile mathematics problem-solving service. Chegg has also offered language-learning services through Busuu, which it acquired in 2022.
