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Chegg was up more than 22% in afterhours trading.
Chegg reported adjusted EPS of $0.28 on revenue of $182.9 million, compared with estimates of $0.29 on revenue of $176.5M.
The company said it saw year-over-year customer acquisition and retention rates improve during the quarter after launching its initial generative AI experience in May.
The online education company’s foray into AI comes as it looks to ward off the threat of generative artificial intelligence service ChatGPT.
Earlier this year, Chegg conceded that the use of free AI chatbots including ChatGPT for homework had dampened demand for its paid study tools.
But the company said that students “are not comfortable with the exact information ChatGPT puts out,” and now is making a bigger push into AI, announcing a partnership with Scale AI to develop the large language models.
“In order to further enhance our competitive moat and lower our costs, we are building our own large language models which gives us the ability to train them specifically for education,” it added.
For Q3, the company guided revenue in a range of $151M and $153M.
