NEW YORK - Chegg Inc . (NYSE: CHGG ) reported better-than-expected third quarter results but saw its shares plunge 13.8% in after-hours trading as the education technology company's fourth quarter guidance came in well below analyst estimates.

The Santa Clara, California-based company posted adjusted earnings per share of $0.09 for Q3, topping the consensus forecast of $0.07. Revenue of $136.6 million also beat expectations of $134.12 million, though it marked a 13% decline from the same period last year.

However, Chegg's outlook for the current quarter disappointed investors. The company forecast Q4 revenue between $141-143 million, significantly below Wall Street's projection of $161 million.

CEO Nathan Schultz cited "significant headwinds" from recent technology shifts and generative AI adoption by students as reasons for the weak guidance. He noted that global non-subscriber traffic to Chegg declined 19% year-over-year in Q3 and exited the quarter down 37% in October.

"These factors are adversely affecting our business outlook and are requiring us to refocus and adjust the size of our business," Schultz said.

In response, Chegg announced a restructuring plan that will reduce its workforce by an additional 21%. The company expects this to result in $60-70 million in annualized cost savings for 2025.

Despite the challenges, Chegg maintained it still sees a large market of students seeking its "high-quality, proven learning experience." The company ended Q3 with 3.8 million subscribers, down 13% year-over-year.

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