Online textbook and tutoring company Chegg beat Wall Street’s expectations when it reported its third quarter sales of $81.3 million.
Its revenue was expected to total $78.28 million. The company posted a loss of 12 cents per share, compared to the 15 cents loss per share Wall Street expected.
The company’s beat was driven by strong growth in its digital revenue, which now comprises 47 percent of total sales. Digital sales were up 45 percent year over year. Digital subscribers grew 23 percent year over year.
Stocks were up 2 percent heading into the company’s earnings call.
Investors may be deterred because the company will be lighter than expected in the fourth quarter. It beat expectations for the third quarter, but it did not change its guidance for the year.
The company has struggled since its 2013 IPO to keep up with investors’ expectations. The Wall Street Journal recently called the company “a cautionary tale” for startups raising high valuations.
Chegg was one of the first companies to bring textbook rentals online. But after Apple and Amazon also moved into the space, Chegg aimed to diversify its offerings and become an academic platform. It began offering online tutoring, course reviews and even help with the college and internship search.
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This article was updated to clarify the company’s guidance.