What happened

Shares of Chegg (NYSE:CHGG) have soared today, up by 26% as of 12:15 p.m. EDT, after the company reported first-quarter earnings and issued strong guidance for the current quarter.

So what

Revenue declined a modest 6% to $62.6 million, which was still better than the $58.4 million in sales that analysts were expecting. That translated into non-GAAP earnings per share of $0.06, also topping the consensus estimate of $0.03 per share in adjusted profit.

Students taking a test in a library

Image source: Getty Images.

The company now has 1.1 million Chegg Services subscribers and 99 million total Chegg Study content views.

Now what

Thanks to strength in the services business, Chegg is raising its guidance for 2017. Second-quarter revenue is expected in the range of $52 million to $54 million, including services revenue of $42 million to $44 million. For the full year, revenue should be $235 million to $240 million, including services revenue of $175 million to $180 million. Full-year 2017 free cash flow should be $15 million to $20 million. CEO Dan Rosensweig said the growing services business continues to drive growth and profitability, noting that Chegg Study is the largest direct-to-student subscription learning service.

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.