Financial Data and Key Metrics Changes - Total revenue grew by 51% year-over-year to $198 million, driven primarily by a 64% increase in subscribers, which included a 12% contribution from Mathway [26][11] - Adjusted EBITDA increased by 80% year-over-year to $57 million, demonstrating the leverage of the subscription model [28][29] - The company ended the quarter with $2.6 billion in cash and investments, bolstered by a capital raise of $1.1 billion [30] Business Line Data and Key Metrics Changes - Chegg Services revenue reached $162 million, reflecting a 62% growth compared to Q1 2020 [26] - Required Materials revenue exceeded expectations due to increased demand for textbook sales over rentals, impacting gross margins [27] Market Data and Key Metrics Changes - Subscriber growth reached a record 4.8 million, nearly 1 million more than the total for all of 2019 [10] - International growth is significant, with strong performance noted in English-speaking countries and unexpected markets like Turkey and Asia [37] Company Strategy and Development Direction - Chegg aims to lead the transition from learning to earning, focusing on providing academic support and skills-based learning [23][19] - The company is investing in high-quality content and expanding its offerings, including the Mathway acquisition, which has accelerated growth [16][19] - Chegg's direct-to-consumer model allows for better customer relationships and data ownership, enhancing service differentiation [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth despite uncertainties related to COVID-19 and account sharing [60][61] - The company raised its full-year guidance, expecting total revenue between $790 and $800 million for 2021 [32] - Management emphasized the importance of adapting to the evolving needs of modern students, who require more support [20][23] Other Important Information - Chegg added 6 million new solutions to its expert Q&A database, now totaling over 59 million solutions [14] - The company was recognized as one of Fortune Magazine's Best Technology Companies to Work For, highlighting its strong company culture [22] Q&A Session Summary Question: Significant international growth - Management noted strong growth in both domestic and international markets, particularly in Canada, Australia, Turkey, and Asia [37] Question: Clarification on Mathway's contribution - Mathway contributed 12% to subscriber growth, with its performance exceeding initial expectations post-acquisition [42][43] Question: Update on bundle adoption and ARPU uplift - Management reported positive trends in ARPU for Chegg study and Chegg study pack, with higher take rates both domestically and internationally [50] Question: Assumptions on full-year guidance - Management indicated that uncertainties related to COVID-19 and account sharing were considered in the updated guidance [56] Question: Account sharing impact - Management highlighted the positive impact of account sharing efforts on customer acquisition and lifetime value [68] Question: Headcount and growth investments - The company is hiring, particularly in technical positions, with a focus on content development and user experience [92][94] Question: Password sharing updates - Management stated that improvements in technology and data science are continuously enhancing efforts to combat password sharing [97] Question: Skills opportunity approach - Management indicated a multi-faceted approach to the skills market, focusing on direct-to-student models and potential acquisitions [102][106]

PART I [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Chegg reported $198.4 million net revenues (up 51%) but a $65.2 million net loss, primarily from a $78.2 million debt extinguishment loss [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows increased total assets to $3.19 billion, liabilities to $1.95 billion, and stockholders' equity to $1.24 billion Balance Sheet Items (in thousands) | Balance Sheet Items (in thousands) | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $1,935,626 | $1,182,955 | | **Total assets** | $3,193,561 | $2,251,258 | | **Total current liabilities** | $251,093 | $109,732 | | **Total liabilities** | $1,950,218 | $1,641,623 | | **Total stockholders' equity** | $1,243,343 | $609,635 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenues grew 51% to $198.4 million, but a $65.2 million net loss resulted, primarily from a $77.2 million debt extinguishment loss Income Statement (in thousands, except per share) | Income Statement (in thousands, except per share) | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net revenues** | $198,378 | $131,590 | | **Gross profit** | $126,994 | $89,200 | | **Income from operations** | $16,779 | $3,276 | | **Net loss** | $(65,179) | $(5,713) | | **Net loss per share, basic and diluted** | $(0.49) | $(0.05) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $73.6 million, investing used $765.0 million, and financing provided $867.6 million, driven by a $1.09 billion equity offering Cash Flow Activities (in thousands) | Cash Flow Activities (in thousands) | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $73,573 | $62,967 | | **Net cash used in investing activities** | $(764,952) | $(47,262) | | **Net cash provided by (used in) financing activities** | $867,600 | $(44,169) | - Financing activities were primarily driven by proceeds from an equity offering of **$1,091.5 million**, partially offset by the repayment of convertible senior notes totaling **$189.8 million**[32](index=32&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation, a small acquisition, convertible note activities, legal proceedings, and a major equity offering - The company adopted **ASU 2020-06** on January 1, 2021, which simplified the accounting for convertible instruments, resulting in an increase to convertible senior notes of **$378.1 million** and a decrease to additional paid-in capital of **$465.0 million**[54](index=54&type=chunk) Revenue by Product Line (in thousands) | Revenue by Product Line (in thousands) | Q1 2021 | Q1 2020 | YoY Change | | :--- | :--- | :--- | :--- | | **Chegg Services** | $162,351 | $100,359 | +62% | | **Required Materials** | $36,027 | $31,231 | +15% | | **Total net revenues** | $198,378 | $131,590 | +51% | - In February 2021, the company completed an acquisition of a technology company for a purchase consideration of **$8.0 million** in cash to strengthen content creation abilities[76](index=76&type=chunk) - The company is subject to a **Civil Investigative Demand (CID)** from the **Federal Trade Commission (FTC)** regarding data security and privacy practices, and is facing over **16,000 arbitration demands** related to a 2018 data incident[100](index=100&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk) - In February 2021, the company issued and sold **10,974,600 shares** of common stock, generating net proceeds of **$1,091.5 million**[108](index=108&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 51% revenue growth to Chegg Services, with net loss widening due to a $78.2 million debt extinguishment loss, maintaining strong liquidity - The **COVID-19 pandemic** had a positive impact on the business in Q1 2021, leading to an acceleration in **subscriber growth** and **engagement** with the learning platform[127](index=127&type=chunk) - Chegg Services revenue increased to **82%** of net revenues in Q1 2021, up from **76%** in Q1 2020, highlighting the strategic shift towards subscription services[131](index=131&type=chunk) - The decrease in gross margin to **64%** in Q1 2021 from **68%** in Q1 2020 was primarily due to higher order fulfillment fees, increased textbook write-downs, and higher amortization of content and intangible assets[140](index=140&type=chunk) - The significant increase in 'Other (expense) income, net' was primarily driven by a **$78.2 million** loss on the early extinguishment of the 2025 convertible notes and a **$7.1 million** net loss on the change in fair value of derivative instruments[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposures were reported compared to the prior Annual Report on Form 10-K - There were **no material changes** in the company's market risk during the three months ended March 31, 2021[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level[180](index=180&type=chunk) - **No changes** occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[181](index=181&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings and claims, with details provided in Note 8 of the financial statements - The company is involved in **various legal proceedings and investigations** related to intellectual property, employment, and other matters, with specific details provided in Note 8 of the financial statements[183](index=183&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported since the prior Annual Report on Form 10-K - **No material changes** to the company's risk factors were reported since the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[184](index=184&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Chegg repurchased $100.0 million of 2025 convertible notes for $184.9 million, with $165.5 million remaining under the repurchase program - During Q1 2021, the company repurchased **$100.0 million** of its 2025 convertible notes for an aggregate consideration of **$184.9 million**, with **$165.5 million** remaining under the repurchase program, which expires on December 31, 2021[185](index=185&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data files - The report includes required exhibits such as **CEO and CFO certifications** (Exhibits 31.01, 31.02, 32.01) and **Inline XBRL financial data files** (Exhibit 101 series)[188](index=188&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 001-36180 CHEGG, INC. (Exact name of registrant as specified in its charter) | --- | --- | |----------------------------- ...

Q4-20 Investor Presentation February 8, 2021 Chegg A Smarter Way to Student 1 Chegg Inc. © 2005 - 2021. All Rights Reserved. Confidential Material / © 2021 Chegg, Inc. / All Rights Reserved Confidential Material / © 2021 Chegg, Inc. / All Rights Reserved Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, be ...

Chegg, Inc. (NYSE:CHGG) Q4 2020 Results Earnings Conference Call February 8, 2021 4:30 PM ET Company Participants Tracey Ford - Vice President, Investor Relations Dan Rosensweig - Co-Chairperson and CEO Andy Brown - Chief Financial Officer Conference Call Participants Jeff Silber - BMO Capital Markets Stephen Sheldon - William Blair Ryan MacDonald - Needham & Company Douglas Anmuth - JPMorgan Brent Thill - Jefferies Jason Celino - KeyBanc Capital Markets Mike Grondahl - Northland Securities Alex Fuhrman - C ...

Q3-20 Investor Presentation October 26, 2020 Chegg A Smarter Way to Student 1 Chegg Inc. © 2005 - 2020. All Rights Reserved. Confidential Material / © 2020 Chegg, Inc. / All Rights Reserved Confidential Material / © 2020 Chegg, Inc. / All Rights Reserved Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, be ...

Financial Data and Key Metrics Changes - In Q3 2020, total revenue reached $154 million, representing a 64% increase year-over-year, primarily driven by a 69% growth in subscribers to 3.7 million [29][10] - Adjusted EBITDA for the quarter was $32 million, indicating strong leverage in the business model while making investments for future growth [29] - The company ended the quarter with approximately $1.8 billion in cash and investments, reflecting a solid financial position [30] Business Line Data and Key Metrics Changes - Chegg Services revenue is expected to be between $162 million and $164 million for Q4 2020, contributing to a full-year guidance of $507 million to $509 million for Chegg Services [32][33] - The Chegg Study Pack has seen higher than expected take rates, indicating strong demand for this offering [38][10] Market Data and Key Metrics Changes - The company provides services to students in over 190 countries, with 25% of new questions asked from international students in Q3 [21][20] - The international market has shown significant growth, with students increasingly seeking online support due to the pandemic [20][19] Company Strategy and Development Direction - Chegg is focused on transitioning higher education to a more on-demand, student-centric model that leverages technology [8][11] - The company is investing in skills-based learning and expanding its curriculum to match in-demand jobs, which is seen as a better model for education [22][24] - Chegg aims to connect academic pathways to professional opportunities, reinforcing its commitment to supporting students throughout their learning journey [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued demand for online learning support, driven by changing student needs and preferences [12][17] - The company raised its guidance for 2020 and provided an optimistic outlook for 2021, expecting total revenue of approximately $775 million [32][34] - Management noted that the pandemic has accelerated the shift towards online education, with students increasingly valuing flexible learning options [15][16] Other Important Information - Chegg was recognized as one of Fortune Magazine's Great Places to Work for the third consecutive year, highlighting its strong company culture [26] - The company has implemented measures to reduce account sharing, which has positively impacted subscriber growth [88][87] Q&A Session Summary Question: Can you provide more details on the Chegg Study Pack's performance? - Management reported great momentum with the Chegg Study Pack, noting higher than expected take rates both domestically and internationally [38] Question: What are the topline trends for Banko and Thinkful's revenue contribution? - Management indicated that all parts of the business are performing better than expected, with Thinkful showing significant growth potential [44][45] Question: How does the company view the impact of universities ending semesters early? - Management feels comfortable with Q4 guidance, incorporating current trends and behaviors observed in schools [53][54] Question: What assumptions are included in the 2021 outlook? - The outlook reflects continued growth, particularly in international markets, and improvements in account sharing efforts [61][62] Question: How is the international market performing compared to the U.S.? - The international business is reportedly more efficient than the U.S. business, with strong customer acquisition and engagement [73][74] Question: What updates can be provided on password sharing and pre-college offerings? - Management noted that investments in device management have started to yield benefits, and the focus remains on older students rather than younger ones [82][85]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents Chegg, Inc.'s unaudited condensed consolidated financial statements for Q3 and YTD September 30, 2020, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, with accompanying notes detailing accounting policies and significant events [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets significantly increased to $2.34 billion as of September 30, 2020, from $1.49 billion at year-end 2019, driven by higher cash, investments, and goodwill, while total liabilities also grew substantially to $1.70 billion from $990 million due to new convertible senior notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $1,299,496 | $807,267 | | Cash and cash equivalents | $527,541 | $387,520 | | **Total Assets** | **$2,341,657** | **$1,488,998** | | **Total Current Liabilities** | $142,955 | $71,389 | | Convertible senior notes, net | $1,536,984 | $900,303 | | **Total Liabilities** | **$1,696,265** | **$990,169** | | **Total Stockholders' Equity** | $645,392 | $498,829 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenues grew significantly year-over-year for both the third quarter and the first nine months of 2020, though net loss widened due to increased cost of revenues, higher operating expenses including an impairment charge, and greater interest expense from convertible notes Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | YTD 2020 | YTD 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenues** | $154,018 | $94,151 | $438,617 | $285,422 | | **Gross Profit** | $91,648 | $71,987 | $290,333 | $219,405 | | **(Loss) from Operations** | $(17,802) | $(5,057) | $7,535 | $731 | | **Net Loss** | $(37,140) | $(11,477) | $(32,264) | $(17,824) | | **Net Loss Per Share** | $(0.29) | $(0.10) | $(0.26) | $(0.15) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2020, net cash from operating activities nearly doubled to $168.7 million, investing activities used $750.9 million primarily for investments and acquisitions, and financing activities provided $722.4 million mainly from convertible notes issuance Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $168,655 | $86,575 | | **Net cash used in investing activities** | $(750,942) | $(610,384) | | **Net cash provided by financing activities** | $722,445 | $599,627 | - Key financing activities in 2020 included **$984.1 million** in proceeds from issuing convertible senior notes, offset by a **$103.4 million** purchase of a capped call, **$159.7 million** repayment of other notes, and **$65.2 million** for taxes on equity awards[36](index=36&type=chunk)[192](index=192&type=chunk) - Key investing activities in 2020 included **$968.1 million** in investment purchases, **$92.8 million** for the acquisition of Mathway, and **$49.6 million** for textbook purchases[36](index=36&type=chunk)[190](index=190&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events, including the company's transition back to owning its print textbook library, the **$101.0 million** acquisition of Mathway, the issuance of **$1.0 billion** in 0% convertible senior notes due 2026, and ongoing legal matters such as an FTC inquiry and arbitration demands related to a 2018 data incident - In January 2020, Chegg began transitioning back to print textbook ownership, classifying the library as a long-term asset, with the net textbook library valued at **$34.6 million** as of September 30, 2020[48](index=48&type=chunk)[52](index=52&type=chunk) - On June 4, 2020, Chegg acquired Mathway, LLC for a total purchase consideration of **$101.0 million** to strengthen its math services, adding **$70.2 million** in goodwill[95](index=95&type=chunk)[97](index=97&type=chunk) - In August 2020, the company issued **$1.0 billion** of 0% convertible senior notes due in 2026, concurrently exchanging **$172.0 million** of its 2023 notes[54](index=54&type=chunk)[105](index=105&type=chunk)[109](index=109&type=chunk) - The company is facing a Civil Investigative Demand (CID) from the FTC regarding data privacy and security practices, as well as over **16,000** arbitration demands related to a 2018 data incident[125](index=125&type=chunk)[126](index=126&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant revenue growth driven by subscriber increases and acquisitions, particularly a 72% rise in Chegg Services revenue in Q3 2020, while net loss increased due to higher costs from print textbook ownership, an investment impairment, and increased operating expenses, with strong liquidity maintained by **$1.8 billion** in cash and investments from recent convertible notes issuance [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Total net revenues for Q3 2020 increased 64% year-over-year to **$154.0 million**, primarily driven by a 72% increase in Chegg Services revenue, while gross margin decreased from 76% to 60% due to higher costs from print textbook ownership, and operating expenses rose 42% due to a **$10.0 million** impairment charge on an investment and increased employee-related costs Net Revenues by Product Line (Q3, in thousands) | Product Line | Q3 2020 | Q3 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Chegg Services | $118,895 | $69,304 | $49,591 | 72% | | Required Materials | $35,123 | $24,847 | $10,276 | 41% | | **Total net revenues** | **$154,018** | **$94,151** | **$59,867** | **64%** | - The increase in Chegg Services revenue was primarily due to a **69%** increase in subscriber growth, driven by global penetration, reduced account sharing, the transition to remote learning due to COVID-19, and recent acquisitions[159](index=159&type=chunk) - Cost of revenues increased **181%** in Q3 2020 YoY, primarily due to costs associated with the ownership of print textbooks, including higher fulfillment fees, textbook costs, and depreciation[160](index=160&type=chunk)[162](index=162&type=chunk) - General and Administrative expenses increased **72%** in Q3 2020 YoY, largely due to a **$10.0 million** impairment charge on the company's investment in WayUp, Inc[170](index=170&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2020, Chegg's principal sources of liquidity totaled **$1.8 billion** in cash, cash equivalents, and investments, bolstered by **$984.1 million** in net proceeds from its August 2020 convertible notes offering, with management believing existing liquidity is sufficient to fund operations for at least the next 12 months, despite no repurchases under the **$500.0 million** securities repurchase program in Q3 2020 - Principal sources of liquidity as of September 30, 2020, were cash, cash equivalents, and investments totaling **$1.8 billion**[178](index=178&type=chunk) - In August 2020, the company issued 2026 convertible notes, generating net proceeds of approximately **$984.1 million**[182](index=182&type=chunk) - A securities repurchase program of up to **$500.0 million** was approved in June 2020, with no repurchases made during the three months ended September 30, 2020[179](index=179&type=chunk)[181](index=181&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure relates to its convertible senior notes, particularly the **$1.0 billion** 2026 notes which do not bear interest but whose fair value may fluctuate with changes in interest rates and the company's stock price, with no other material changes in market risk during the first nine months of 2020 - The company issued **$1.0 billion** in 0% convertible senior notes due 2026, which do not have economic interest rate exposure, but their fair value can fluctuate with interest rates and the company's stock price[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2020, with no material changes to internal control over financial reporting during the third quarter despite the transition to remote work due to the COVID-19 pandemic - Management concluded that disclosure controls and procedures were effective as of the end of the period[210](index=210&type=chunk) - No changes in internal control over financial reporting occurred during Q3 2020 that materially affected, or are reasonably likely to materially affect, internal controls[211](index=211&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Chegg is involved in several legal matters, including a Civil Investigative Demand (CID) from the FTC regarding data privacy and security, over **16,000** arbitration demands related to a 2018 data incident, and an ongoing patent infringement lawsuit, with no loss accruals recorded as a loss is not deemed probable - Received a Civil Investigative Demand (CID) from the FTC on June 18, 2020, to investigate potential violations related to consumer privacy and data security[214](index=214&type=chunk) - As of August 2020, faces a total of **16,691** arbitration demands from individuals alleging damages from the 2018 Data Incident[215](index=215&type=chunk) - A patent infringement lawsuit by NetSoc, LLC, initially dismissed, was appealed by NetSoc and is currently held in abeyance[217](index=217&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks that could adversely affect Chegg's business, including the uncertain effects of the COVID-19 pandemic, the company's limited operating history with a digital-first model, intense competition, potential disruptions to technology infrastructure and cyber-attacks, reliance on third-party partners, evolving government regulations on privacy and education, and challenges of international expansion and integrating acquisitions, alongside the substantial cash requirements for servicing convertible senior note debt - The full effect of the COVID-19 pandemic is uncertain and could adversely affect business operations, partner stability, and employee efficiency, despite a near-term positive impact on subscriber growth[221](index=221&type=chunk)[223](index=223&type=chunk) - The company's limited operating history, particularly with its evolving digital offerings and recent transition back to owning print textbooks, makes it difficult to evaluate future prospects[229](index=229&type=chunk)[230](index=230&type=chunk) - Significant cybersecurity risks exist, including data breaches, hacking, and phishing, with the company having experienced past incidents (2018 Data Incident, Thinkful Data Incident) and facing increased risk with a remote workforce[243](index=243&type=chunk)[286](index=286&type=chunk) - The business is subject to evolving government regulations, particularly concerning student data privacy (e.g., CCPA, GDPR) and education-specific laws, which could increase compliance costs and liability[333](index=333&type=chunk)[336](index=336&type=chunk) - Servicing the company's significant convertible senior note debt requires substantial cash, and there is a risk of not having sufficient funds to settle conversions or repurchase notes upon a fundamental change[406](index=406&type=chunk)[408](index=408&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In August 2020, Chegg issued **$1.0 billion** in aggregate principal amount of its 2026 convertible senior notes in a private placement under Rule 144A, and while the board approved a **$500.0 million** securities repurchase program in June 2020, no shares were repurchased under this program during the three months ended September 30, 2020 - In August 2020, the company issued **$1.0 billion** of convertible senior notes due 2026 in a private placement to qualified institutional buyers[416](index=416&type=chunk) Share Repurchase Activity (Q3 2020) | Period | Total Number of Shares Repurchased | Average Price Paid Per Share | Maximum Dollar Amount Remaining for Repurchase | | :--- | :--- | :--- | :--- | | July 2020 | — | $ — | $500,000,000 | | August 2020 | — | $ — | $500,000,000 | | September 2020 | — | $ — | $500,000,000 | [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the indenture for the 2026 notes, forms of capped call and exchange agreements, and officer certifications as required by the Sarbanes-Oxley Act

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 001-36180 CHEGG, INC. (Exact name of registrant as specified in its charter) Delaware 20-3237489 (State or other ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Chegg's unaudited condensed consolidated financial statements, reporting a **$5.7 million net loss** on **$131.6 million revenues** for Q1 2020 Condensed Consolidated Balance Sheet Highlights | Account | March 31, 2020 ($ thousands) | December 31, 2019 ($ thousands) | | :--- | :--- | :--- | | **Total Assets** | **$1,495,004** | **$1,488,998** | | Cash and cash equivalents | $359,101 | $387,520 | | Total current assets | $807,768 | $807,267 | | Goodwill | $214,323 | $214,513 | | **Total Liabilities** | **$1,032,077** | **$990,169** | | Convertible senior notes, net | $913,249 | $900,303 | | **Total Stockholders' Equity** | **$462,927** | **$498,829** | Condensed Consolidated Statement of Operations Highlights | Account | Three Months Ended Mar 31, 2020 ($ thousands) | Three Months Ended Mar 31, 2019 ($ thousands) | | :--- | :--- | :--- | | Net revenues | $131,590 | $97,409 | | Gross profit | $89,200 | $74,074 | | Income (loss) from operations | $3,276 | $(1,027) | | **Net loss** | **$(5,713)** | **$(4,318)** | | Net loss per share, basic and diluted | $(0.05) | $(0.04) | Condensed Consolidated Statement of Cash Flows Highlights | Cash Flow Activity | Three Months Ended Mar 31, 2020 ($ thousands) | Three Months Ended Mar 31, 2019 ($ thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $62,967 | $17,941 | | Net cash (used in) provided by investing activities | $(47,262) | $13,173 | | Net cash (used in) provided by financing activities | $(44,169) | $508,482 | | **Net (decrease) increase in cash** | **$(28,464)** | **$539,596** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies, revenue recognition, convertible notes, and ongoing legal matters, including the transition to print textbook ownership - Beginning in **January 2020**, Chegg began transitioning back to owning its print textbook library, classified as a non-current asset and depreciated over an estimated **four-year useful life** using an accelerated method[32](index=32&type=chunk)[33](index=33&type=chunk) Net Revenues by Product Line | Product Line | Q1 2020 ($ thousands) | Q1 2019 ($ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Chegg Services | $100,359 | $75,292 | $25,067 | 33% | | Required Materials | $31,231 | $22,117 | $9,114 | 41% | | **Total net revenues** | **$131,590** | **$97,409** | **$34,181** | **35%** | - The company has two series of convertible senior notes outstanding: **$800 million** aggregate principal of **0.125%** notes due in **2025** and **$345 million** aggregate principal of **0.25%** notes due in **2023**[74](index=74&type=chunk) - The company is involved in a legal dispute with Ingram Hosting Holdings LLC, which is seeking **$17 million** in damages for alleged breach of contract[85](index=85&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 financial performance, noting a **35% revenue increase** to **$131.6 million** and a **$5.7 million net loss**, with expected positive COVID-19 impact in Q2 Q1 2020 vs Q1 2019 Revenue Breakdown | Product Line | Q1 2020 ($ thousands) | Q1 2019 ($ thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Chegg Services | $100,359 | $75,292 | $25,067 | 33% | | Required Materials | $31,231 | $22,117 | $9,114 | 41% | | **Total net revenues** | **$131,590** | **$97,409** | **$34,181** | **35%** | - The **41% increase** in Required Materials revenue was primarily due to the transition to owning print textbooks, recognized at the total transaction amount rather than as a revenue share[109](index=109&type=chunk) - Gross margin decreased to **68%** in Q1 2020 from **76%** in Q1 2019, mainly due to higher order fulfillment fees, depreciation of the new print textbook library, and higher content amortization[110](index=110&type=chunk) - As of **March 31, 2020**, the company's principal sources of liquidity were cash, cash equivalents, and investments totaling **$1.0 billion**[118](index=118&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk were reported for the quarter ended March 31, 2020, compared to prior disclosures - **No material changes** in market risk were reported for the quarter compared to the year-end 2019 disclosures[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal controls - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are **effective** at a reasonable assurance level[142](index=142&type=chunk) - There were **no changes** in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[144](index=144&type=chunk) [PART II - OTHER INFORMATION](index=31&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) This section details two legal proceedings: a **$17 million breach of contract claim** by IHH and an appealed patent infringement lawsuit by NetSoc - Ingram Hosting Holdings LLC (IHH) filed a complaint against Chegg alleging breach of contract and seeking **$17 million** in damages as part of the wind-down of their business relationship[146](index=146&type=chunk) - NetSoc, LLC filed a **patent infringement** complaint regarding the Chegg Tutors service; the case was **dismissed** by the court, but NetSoc **appealed** the dismissal in January 2020[147](index=147&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including COVID-19 impacts, intense competition, cybersecurity threats, and business seasonality - The full effect of the COVID-19 pandemic is **uncertain** and could **materially and adversely affect** business and operations due to factors like school closures, disruptions to partners, and employee health[150](index=150&type=chunk) - The business faces **significant competition** from various online platforms (Course Hero, Quizlet), college bookstores, and eTextbook providers, with competition primarily based on **price**[209](index=209&type=chunk) - The company is subject to risks from **cybersecurity attacks** and **data breaches**, citing a **2018 incident** where an unauthorized party gained access to user data for chegg.com and other brands[197](index=197&type=chunk) - The business is **highly seasonal**, with **peak activity** concentrated at the beginning of academic terms, making operations susceptible to disruption during these periods and financial results difficult to predict[211](index=211&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the current quarterly period - There were **no unregistered sales** of equity securities during the quarter[292](index=292&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including SOX certifications and Inline XBRL data files - The exhibits filed with the report include **CEO and CFO certifications** pursuant to the **Sarbanes-Oxley Act of 2002** and various **Inline XBRL documents**[294](index=294&type=chunk)