Chegg's Q1 2026 results beat expectations, driven by strong skilling revenue growth and robust free cash flow from Academic Services, fueling continued debt reduction and margin improvements. The market responded positively with a 3.2% stock gain on confidence in AI-driven growth and enterprise partnerships.

• Skilling revenue grew 9% to $17.6 million, with new enterprise distribution deals expected to accelerate growth in H2 2026.
• Academic Services revenue reached $45.7 million, supported by solid retention despite ongoing traffic headwinds.
• The company reduced costs by approximately 40% and is on track for zero debt, improving financial flexibility.
• AI integration is enhancing personalized learning experiences and enabling faster curriculum updates, which management highlights as a competitive advantage.
• Free cash flow exceeded expectations, underpinning investments in skilling and new AI-powered initiatives, including an AI master’s program launched via a partnership with Woolf.