Unpacking Q2 Earnings: Chegg (NYSE:CHGG) In The Context Of Other Consumer Subscription Stocks

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Chegg (NYSE:CHGG) and the best and worst performers in the consumer subscription industry.

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.

The 8 consumer subscription stocks we track reported a weaker Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 2.9% below.

Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, consumer subscription stocks have held steady amidst all this with share prices up 3.3% on average since the latest earnings results.

Weakest Q2: Chegg (NYSE:CHGG)

Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.

Chegg reported revenues of $163.1 million, down 10.8% year on year. This print exceeded analysts’ expectations by 2%. Despite the top-line beat, it was still a weak quarter for the company with a decline in its users and slow revenue growth.

“Q2 has been transformational for Chegg, completing our restructure, outlining an exciting vision for the future, and completing the rollout of conversational instruction capability and automated solutions just in time for the back-to-school season,” said Nathan Schultz, Chief Executive Officer & President of Chegg,

Chegg delivered the slowest revenue growth of the whole group. The company reported 4.37 million users, down 9.1% year on year. Unsurprisingly, the stock is down 26.5% since reporting and currently trades at $2.16.

Read our full report on Chegg here, it’s free.

Best Q2: Duolingo (NASDAQ:DUOL)

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

Duolingo reported revenues of $178.3 million, up 40.6% year on year, in line with analysts’ expectations. It was a strong quarter for the company with impressive growth in its users and exceptional revenue growth.

Duolingo delivered the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 103.6 million users, up 39.8% year on year. The market seems happy with the results as the stock is up 30% since reporting. It currently trades at $210.30.

Is now the time to buy Duolingo? Access our full analysis of the earnings results here, it’s free.

Match Group (NASDAQ:MTCH)

Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.

Match Group reported revenues of $864.1 million, up 4.2% year on year, in line with analysts’ expectations. It was a weak quarter for the company with a decline in its users and underwhelming revenue guidance for the next quarter.

Interestingly, the stock is up 10.6% since the results and currently trades at $37.27.

Read our full analysis of Match Group’s results here.

Bumble (NASDAQ:BMBL)

Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.

Bumble reported revenues of $268.6 million, up 3.4% year on year, falling short of analysts’ expectations by 1.6%. Taking a step back, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.

Bumble had the weakest performance against analyst estimates among its peers. The company reported 4.14 million active buyers, up 13.9% year on year. The stock is down 18.6% since reporting and currently trades at $6.56.

Read our full, actionable report on Bumble here, it’s free.

Udemy (NASDAQ:UDMY)

With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Udemy reported revenues of $194.4 million, up 9% year on year, in line with analysts’ expectations. Revenue aside, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.

Udemy had the weakest full-year guidance update among its peers. The company reported 16,595 active buyers, up 11% year on year. The stock is down 10.3% since reporting and currently trades at $8.30.

Read our full, actionable report on Udemy here, it’s free.

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