(Reuters) -Chegg rallied 25% in extended trading on Monday after better-than-expected quarterly sales and an in-line forecast for the current quarter eased worries about the impact of ChatGPT on the educational services company’s business.
The Santa Clara, California-based firm expects revenue to be in the range of $151 million to $153 million for the third quarter, compared with analysts’ average estimate of $152.37 million, according to Refinitiv data.
The maker of study materials was among the first companies to flag that a significant spike in student interest in so-called large language models such as ChatGPT was eating into its new customer growth rate.
“We launched the beta version of our initial generative AI experience in May and feedback has been very positive,” CEO Dan Rosensweig said.
The company reported second-quarter sales of $182.9 million, compared with analysts’ average estimate of $176.51 million.
(Reporting by Pratik Jain in Bengaluru; Editing by Shinjini Ganguli and Shilpi majumdar)
