Chegg, Inc. (CHGG) swung to a net loss for the quarter ended Dec. 31, 2016. The company has made a net loss of $1.49 million, or $ 0.02 a share in the quarter, against a net profit of $3.63 million, or $0.04 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $10.36 million, or $0.10 a share compared with $13.20 million or $0.14 a share, a year ago.

Revenue during the quarter dropped 7.48 percent to $63.06 million from $68.15 million in the previous year period. Gross margin for the quarter expanded 608 basis points over the previous year period to 67.38 percent. Operating margin for the quarter stood at negative 1.70 percent as compared to a positive 5.96 percent for the previous year period.

Operating loss for the quarter was $1.07 million, compared with an operating income of $4.06 million in the previous year period.

However, the adjusted operating income for the quarter stood at $10.77 million compared to $13.63 million in the prior year period. At the same time, adjusted operating margin contracted 291 basis points in the quarter to 17.09 percent from 20 percent in the last year period.

"2016 was our best year ever in terms of financial results and execution as we completed our transition to an all-digital business, grew Chegg Services revenue 37% year over year, and significantly improved EBITDA which was driven by nearly 50% subscriber growth," said Dan Rosensweig, chairman and chief executive officer of Chegg. "We enter 2017 with strong momentum as a high growth company that is serving the needs of nearly 40 million annual unique visitors by helping them to improve their academic, financial, and career outcomes and we remain confident in the 2017 financial forecast that we laid out in November."

For fiscal year 2017, Chegg, Inc. expects revenue to be $230 million. The company forecasts net loss to be $29.90 million.  

For the first-quarter 2017, Chegg, Inc. projects revenue to be in the range of $57 million to $59 million. The company forecasts net loss to be $10.30 million.

The company has spent $5.96 million cash to meet investing activities during the year as against cash inflow of $8.27 million in the last year.

The company has spent $8.68 million cash to carry out financing activities during the year as against cash inflow of $2.72 million in the last year period.

Cash and cash equivalents stood at $77.33 million as on Dec. 31, 2016, up 15.37 percent or $10.30 million from $67.03 million on Dec. 31, 2015.

Working capital drops significantly

Chegg, Inc. has witnessed a decline in the working capital over the last year. It stood at $47.04 million as at Dec. 31, 2016, down 38.69 percent or $29.68 million from $76.72 million on Dec. 31, 2015. Current ratio was at 1.73 as on Dec. 31, 2016, down from 2.37 on Dec. 31, 2015.

Days sales outstanding went down to 7 days for the quarter compared with 9 days for the same period last year.

At the same time, days payable outstanding went up to 12 days for the quarter from 10 for the same period last year.