Online study tools innovator Chegg (NYSE:CHGG) reports fourth-quarter 2018 earnings on Monday, Feb. 11, after the close of trading. Shares of the rapidly growing educational technology provider rose 74% last year, and they've tacked on another 24% increase in the first few weeks of 2019. Below, we'll focus on four important items investors should follow to place earnings into context and to gauge Chegg's ability to continue its share appreciation streak for the remainder of the year.

1. Revenue and adjusted earnings expectations

Chegg's management raised earnings guidance no less than three times in 2018. Last quarter, the company increased its projected full-year revenue target from a previous band of $306 million to $311 million to a range of $315 million to $318 million. The company's projected fourth-quarter revenue total is expected to land between $92 million and $92.5 million. 

If met, the 2018 top-line range, at the midpoint, will represent an increase of 24% over 2017 revenue. While Chegg likely won't turn a profit this year, it should come close, and anticipated adjusted earnings should be healthy. The company is expecting adjusted EBITDA of $33 million to $34 million in the fourth quarter and $81.5 million to $82.5 million in adjusted EBITDA for the full year.

2. Treatment of 2019 guideposts

Given the doubling of Chegg shares in a span of 13 months, I'd advise shareholders against assuming that if Chegg surpasses its year-end revenue and earnings targets, shares will respond positively. Due to the frequent upward estimate revisions last year, investors may be expecting a positive tweaking of already-issued 2019 estimates.

For 2019, management has staked out revenue of $388 million and adjusted EBITDA of $112 million. It's entirely possible that if Chegg simply leaves these estimates as is in Monday's report, shorter-term investors may decide to take a bit of profit in the organization's shares. Any revisions pushing 2019 estimates to higher ground will depend on item No. 3 directly below.

Check out the latest Chegg earnings call transcript.

Close-up of a woman's hand taking notes on spiral pad, with tablet device and laptop nearby.

Image source: Getty Images.

3. The state of Chegg Services subscriber numbers

Chegg Services, the company's flagship product, encompasses a diverse number of online subscription offerings, including Chegg Study, Chegg Tutors, Chegg Math Solver, and Chegg Writing, as well as test preparation and career match services.

Chegg Services comprises roughly three-quarters of the company's revenue (the rest is supplied by outsourced textbook sales and rentals). Last quarter, Chegg Services subscribers increased 45% year over year, to 1.7 million total subscribers.

Subscribers to Chegg Services will remain a key metric for assessing the company's overall health and expansion opportunities for the near term. While subscriber numbers may not jump as dramatically in the fourth quarter, investors can still expect fairly robust growth. Management has indicated that in 2019, the rate of subscriber additions will bear a closer relationship to Chegg Services' revenue growth. For reference, Chegg Services' revenue is expected to improve by 30% in 2019 to $326 million.

Thus, investors should look for Chegg subscriber additions in the fourth quarter to fall within a band that reflects both 2019 revenue expectations and recently achieved subscriber growth: a range of 30% to 45%.

4. Continued profitability enhancement

Last year, I discussed how Chegg's transition between 2014 and 2016 from simply renting physical textbooks to primarily providing online educational services has palpably improved the company's margins. Since my analysis in the spring, Chegg has improved its gross margin from 68% to approximately 74%. In 2019, the company anticipates that it will achieve a gross margin of 75%.

It's vital for Chegg to maintain or perhaps improve on this level of gross profitability in order to meet a bottom-line ambition. The organization is inching closer to net profitability on a GAAP basis: Through the first three quarters of 2018, Chegg lost just $20.2 million on revenue of $225.4 million.

Investors should pay attention to any revisions to the 2019 gross margin target in Monday's report -- positive or negative. Given the expectation that revenue will continue to scale in the double-digit range in 2019 and perhaps beyond, holding gross margin steady or enhancing it is key to Chegg's desire to turn its first annual profit since the company completed its business model transition in 2016.