Slowly, then all at once: Chegg's shares tumbled nearly 50% after the edtech company said its customers are using ChatGPT instead of paying for its study tools
“In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth, and we were meeting expectations on new sign-ups,” Chegg CEO Dan Rosensweig said during the company’s earnings call Monday. “However, since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate.”
The company reported a 7% year-over-year drop in its first quarter revenue and withdrew its full-year earnings guidance. For the current quarter, Chegg predicted revenue of $175 million to $178 million, falling well short of FactSet’s analyst estimates of $193.6 million.
“In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth, and we were meeting expectations on new sign-ups,” Chegg CEO Dan Rosensweig said during the company’s earnings call Monday. “However, since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate.”
The company reported a 7% year-over-year drop in its first quarter revenue and withdrew its full-year earnings guidance. For the current quarter, Chegg predicted revenue of $175 million to $178 million, falling well short of FactSet’s analyst estimates of $193.6 million.
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