NEW YORK (TheStreet) -- Chegg's (CHGG) - Get Report growth in its digital business helped it beat expectations in the second quarter, according to CEO Dan Rosensweig.

"The transition to digital is going even faster than we expected, so right now things look great," he said. In its latest earnings report, Chegg reported a 62% increase in digital revenue. The company also reported that 70% of its customers are using Chegg for something other than its traditional textbook rental business.

"It's very interesting because five years ago, that's all we could do. Four years ago we didn't even have a penny of digital business," said Rosensweig. "Now this year we're predicting between $137 million and $145 million worth of digital."

Chegg has expanded its business to include products like Chegg Study, which provides homework help, and Chegg Tutors, which provides online tutoring. "Students are beginning to know us more for things other than textbooks, because they are using things like homework help, they're using our internships, they're using our college search, they're using our career placement officers and our tutoring, so we just keep expanding our services,' explained Rosensweig.

That's why even though Chegg's textbook rental business has competition from local bookstores or Amazon (AMZN) - Get Report, Chegg is unique in the education category in the same way LinkedIn (LNKD) , Facebook (FB) - Get Report and Netflix (NFLX) - Get Report  are unique.

"We're building a new category, which is a student-first hub, focused exclusively on the needs of students," said Rosensweig. "Collectively, using the platform, the reach, the brand, the scale, nobody's building that business but us"'

He added these are higher growth, higher margin businesses, that are enabling the company to be cash flow positive.

TheStreet Ratings team rates CHEGG INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHEGG INC (CHGG) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and feeble growth in the company's earnings per share."

You can view the full analysis from the report here: CHGG Ratings Report