Chegg Inc shares slipped ahead of Tuesday’s opening bell after the education firm reported a fall in full-year revenue amid a continued push to rapidly adopt artificial intelligence (AI).
Net revenue fell 7% to $716.3 million over the year to December as revenue from its subscription services declined by 5% to $640.5 million.
Though this was above analysts’ anticipations, Chegg’s guidance for first-quarter sales of between $173 million and $175 million was below consensus of $180.1 million.
Chegg, which offers textbook rentals and tech-powered homework assistance, faced a blow after reporting last year that increasing adoption of AI programmes such as ChatGPT was starting to hit its business.
As a result, the firm has looked to rapidly roll out its own AI model for students, with chief executive Dan Rosensweig describing the company as “completely reinvented” in Monday’s results on the back of the shift.
“The process of embedding AI into every facet of Chegg’s platform is ongoing and iterative as we build a truly personalized learning assistant,” he said.
Chief financial officer Andrew Brown added: “While we are seeing encouraging signs in the business, it is too early to predict when we will return to revenue and margin growth.”
Chegg also announced that David Longo, who already serves as vice president and chief accounting officer, will replace Brown following his retirement later this month.
“David’s dynamic and forward-thinking leadership has already played a key role in advancing Chegg’s mission of harnessing AI to improve student outcomes,” Rosensweig said.
Shares in Chegg fell 4.35% to $8.98 ahead of Tuesday’s open.