Revenue during the quarter dropped 12.23 percent to $71.34 million from $81.29 million in the previous year period. Gross margin for the quarter expanded 2169 basis points over the previous year period to 45.76 percent. Operating margin for the quarter stood at negative 21.49 percent as compared to a negative 29.28 percent for the previous year period.

Operating loss for the quarter was $15.33 million, compared with an operating loss of $23.80 million in the previous year period.

However, the adjusted operating loss for the quarter stood at $2.32 million compared to operating loss of $10.53 million in prior year period.

"We are very pleased with our Q3 results, where for the first time we exceeded more than 800,000 Chegg Services subscribers in a quarter," said Dan Rosensweig, chief executive officer of Chegg. "This was driven by strong growth across the board in new customers, retention, and engagement."

For financial year 2016, Chegg, Inc expects revenue to be in the range of $246 million to $251 million. The company expects adjusted revenue to be in the range of $191 million to $195 million.

For the fourth-quarter 2016, Chegg, Inc expects revenue to be in the range of $55 million to $60 million. The company expects adjusted revenue to be in the range of $48 million to $52 million.

For financial year 2017, Chegg, Inc expects revenue to be $230 million.

Operating cash flow improves significantly
Chegg, Inc has generated cash of $30.73 million from operating activities during the nine month period, up 69.63 percent or $12.61 million, when compared with the last year period.

Cash flow from investing activities was $0.40 million for the nine month period, down 91.02 percent or $4.06 million, when compared with the last year period.

The company has spent $7.94 million cash to carry out financing activities during the nine month period as against cash inflow of $2.24 million in the last year period.

Cash and cash equivalents stood at $90.21 million as on Sep. 30, 2016, up 11.46 percent or $9.27 million from $80.94 million on Sep. 30, 2015.

Working capital declines
Chegg, Inc has witnessed a decline in the working capital over the last year. It stood at $42.25 million as at Sep. 30, 2016, down 21.04 percent or $11.26 million from $53.51 million on Sep. 30, 2015. Current ratio was at 1.44 as on Sep. 30, 2016, down from 1.55 on Sep. 30, 2015.

Days sales outstanding went up to 14 days for the quarter compared with 12 days for the same period last year.

At the same time, days payable outstanding went up to 14 days for the quarter from 12 for the same period last year.