Though Chegg (CHGG) soundly beat Q4 EPS estimates, the company is guiding for a $10M-$15M 2014 adjusted EBITDA loss, up from $4M in 2013. In addition, gross margin is expected to fall to 25%-27% from a 2013 level of 32%.
Nonetheless, Chegg is guiding for Q1 revenue of $70M-$72M and 2014 revenue of $310M-$320M, in-line with consensus estimates of $70M and $313.3M.
The cause of the margin weakness? Chegg's traditional print textbook rental business is under pressure: Sales only rose 3% Y/Y in Q4 to $60.5M. On the other hand, digital product/services revenue rose 70% to $16.7M.
Chegg had 6.9M memberships at the end of 2013, and 464K Chegg Study subscribers.
Q4 results, PR
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