Q & A Highlights

Q: What market gaps pushed Chegg to expand into employability, and how will the company drive awareness among students for the new job and internship matching service? A: Dan Rosenzweig (CEO) explained that the core motivation is the enduring need for students to secure better jobs after college. He identified gaps in existing platforms like LinkedIn, Indeed, and Handshake, noting that none offer a comprehensive, student-focused solution that builds networks, automates applications, and provides coaching. Chegg will leverage its massive existing traffic, substantial customer base, and the organic traffic from its previously dormant site, internships.com, to drive awareness. The company has already attracted over 10,000 beta testers for the new product.

Q: How will Chegg's new employability focus inform its content creation strategy, and will the company bring content creation in-house or use AI? A: Dan Rosenzweig (CEO) stated that Chegg's legacy of having over 100 million Q&A pairs gives it a unique data advantage. The strategy will expand from academic questions to job-related ones, using AI to create and personalize content. The company plans to transform its existing courses into 5,000 shorter, more affordable "artifacts" to assess and train students on specific skills. This content will be driven by employer recommendations and will evolve based on student experiences, covering areas like interview prep and skill-building.

Q: Can you provide more color on the expectations for free cash flow generation, including the impact of severance payments and the expected ramp in cash generation? A: David Longo (CFO) confirmed that the majority of severance payments (~$14-15 million) are behind the company. While Q3 is traditionally a slower period, Q4 is the strongest for cash generation. He reaffirmed that the company will be free cash flow positive in the back half of the year, and expressed satisfaction with the cash generation in the first half when excluding the one-time severance costs.

Q: What were the key financial drivers behind Chegg's Q2 2026 results, and what is the company's outlook for Q3? A: David Longo (CFO) reported that Q2 total revenue was $51.8 million, exceeding expectations. Non-GAAP operating expenses were nearly cut in half year-over-year to $32.3 million, driven by AI efficiencies. Adjusted EBITDA was $9.1 million (17% margin), and free cash flow was $6.4 million. For Q3, the company guides for total revenue between $43 million and $44 million, a gross margin of 48-49%, and adjusted EBITDA between $1 million and $2 million.

Q: How is Chegg's balance sheet positioned, and what are the plans for capital allocation and debt repayment? A: David Longo (CFO) stated the company ended Q2 with $72.3 million in cash and investments and a net cash position of $38.5 million. During the quarter, Chegg repurchased $1.7 million of its common stock and has $120.7 million remaining on its authorization. The company expects to fully repay its convertible debt in Q3, which will further strengthen its balance sheet and provide additional financial flexibility.

Q: What is the timeline for the rollout of the new "next generation" Chegg platform focused on employability? A: Dan Rosenzweig (CEO) announced that the company will begin a soft launch of the new service in Q3 2026, rolling it out across both Chegg and internships.com. The rollout will continue throughout 2027. The new platform will automate job search, matching, and coaching, helping students with resumes, cover letters, applications, and alumni outreach.

Q: How is the Chegg Skills business performing, and what is its role in the new strategy? A: Dan Rosenzweig (CEO) highlighted that the skilling business remains an important part of the opportunity. Chegg Skills has been built as a multi-channel platform (enterprise, institutional, employer, marketplace) and has signed six new partners this year, including Open Sesame and Dale Carnegie, with launches expected in the second half of the year. The company plans to use AI to expand and personalize its catalog while making courses more affordable.

Q: How is Chegg transforming its language learning offering as part of the employability focus? A: Dan Rosenzweig (CEO) explained that the language offering is being transformed from a learning app into a performance platform. A new agentic coach will help learners prepare for specific moments like client calls, presentations, or interviews. Early next year, the company plans to integrate this coach seamlessly into the learner's actual workflow. Chegg is also expanding its skills offering into Europe, combining language learning with broader workforce capabilities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .