Andy Brown, CFO of Chegg Inc CHGG, joined Benzinga’s PreMarket Prep on Thursday to discuss the company’s huge second quarter, the outlook for the upcoming school year, and the potential for cheating in an online learning environment.
Big Second Quarter: Chegg shares are now up 122% in 2020 after the company reported 63% revenue growth in the second quarter. Brown said the coronavirus outbreak was obviously a major catalyst behind that growth.
“We saw an accelerated increase in our new subscribers as the help that they would normally get at school wasn’t there. We certainly benefited from that,” Brown said.
Fall Semester: One of the biggest challenges for school districts around the world right now is determining how they want to approach the upcoming school year, whether it be fully in-person classes, fully remote or a hybrid approach. Brown said most institutions seem to be taking a hybrid approach this fall.
“Either way, we believe we benefit...This is a seminal point where we believe the face of education and kids’ ability to learn online has changed as a result of the pandemic.”
With the proliferation of online education and college tuition rates skyrocketing, Brown said Chegg is focused on supporting both academic learning and alternative, skills-based learning.
“We do believe that skills-based learning over time is going to become more relevant because when you think about it, that’s what employers are looking for. They’re looking for the relevant skills to get the job done, and that’s why we branched out into skill-based learning” he said.
Taking On Account Sharing And Cheating: The biggest criticisms of Chegg have to do with account sharing and cheating, and whether the company can clamp down on both. As far as account sharing, Brown said the company has been implementing new technology to limit the number of devices that can access a single account. And as far as cheating, Brown minimized the threat, calling them "isolated incidents."
“When you think about other services out there where there’s a lot of user-generated content, where kids can upload papers, they can upload tests, and they can download papers and download tests. That doesn’t happen on Chegg. All of the content on Chegg is generated by Chegg,” he said.
The Stock Performance: Brown said the fact that shares of Chegg have more than doubled in 2020 is a reflection of investors recognizing that the pandemic has accelerated a long-term shift in education.
“I think people are starting to realize just how valuable Chegg is in the education space. I think we’ve kind of gone under the radar for some time, and I think now it’s revealing itself that online, on-demand, adaptive education is the future.”
Watch to the full interview with Andy Brown in the clip below, or listen to the podcast here
PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET Benzinga's YouTube channel, and the podcast is on Spotify, iTunes, Google Play, Soundcloud, Stitcher and Tunein.
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