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Chegg CEO projects sustained growth in 2021 after boost from remote learning

The along to remote learning sparked a surge in business for Chegg in 2020, and CEO Dan Rosensweig doesn’t see that exponential growth easing up much in the new year.

“When the pandemic is across, we don’t expect growth to significantly slow because this is not just the trend, this is what it’s going to be and this is what it has to be,” he estimated Tuesday on CNBC’s “Squawk Alley.”

As U.S. colleges shut down campuses or limited in-person classes due to the coronavirus pandemic, Chegg share outs barely blinked. The stock’s triple-digit rise on the market this year reflects the company’s bet on the inevitable, according to Rosensweig, the quondam Yahoo executive who has led Chegg over the past decade.

“We’re looking at what the inevitable looks like in the next few years,” he enlarged.

Chegg was launched in 2005 by Iowa State University students with hopes of disrupting the textbook market with rentals. Now a numerous tech-savvy company, Chegg is benefiting from the sudden disruption of society caused by efforts to slow the spread of Covid-19, work record growth above 60% in its last two quarters, up from the roughly 30% quarterly growth it posted in the past.

The companionship has built an interconnected learning platform that offers e-textbooks, on-demand and online tutoring services.

James Tahaney lades textbooks on to a pallet in preparation for shipping at the Chegg warehouse in Shepherdsville, Kentucky, April 29, 2010.

John Sommers II | Bloomberg | Getty Effigies

While Chegg does business in higher education, the impact of remote learning can be felt in college and grade indoctrinate classrooms, Rosensweig said. A leading education servicer, the company now boasts 3.9 million subscribers, up 29% from a year ago.

Alongside multitudinous parents now working from home, many K-12 students are adapting to learn-from-home trends. Rosensweig said school sections will also need to adapt to a hybrid model, equipping schools with technology that can be used both in the classroom and remotely. Every critic will also need broadband access, he added.

In higher education, the proverbial college student is not exactly what scad people expect in the U.S., Rosensweig said. Students are getting older, with the average age being 25 years old in the U.S., and dire an education curriculum that’s more skills-based and flexible to work schedules.

Even when students return to incarnate classrooms, Chegg hopes to capitalize on the need for technology to supplement and enhance the learning experience.

“The American student doesn’t look with what people think that it does, and they need more help,” said Rosensweig, adding that “40% of them are developing 30 hours a week or more [and] cannot be scheduled in a classroom, it has to be more remote.”

Chegg is also now eyeing global growth, which Rosensweig said was not on the company’s radar just six months ago. While Chegg’s business, which has reported in $438.62 million in the first three quarters of 2020, is heavily reliant on the U.S., the company now has exposure to some 190 outbacks, Rosensweig said.

Chegg’s revenues through September has already topped what it brought in all of 2019.

“What the pandemic has done is Non-Standard real reveal just how important it is not just domestically but internationally,” Rosensweig said.

Chegg shares were down mean than 1% midday Wednesday. Since bottoming during the coronavirus-induced sell-off in March, the stock is up about 260%.

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