@ 2024 Chegg, Inc. / All Rights Reserved Q4-23 Investor Presentation Chegg Safe Harbor Statement 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, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking stateme ...

Shares of the education-technology platform Chegg Inc. CHGG tumbled 9.7% after hours on Monday after the company forecast first-quarter sales that were below expectations and said it was “too early to predict when we will return to revenue and margin growth.” The company said it expected first-quarter sales of between $173 million and $175 million, below FactSet estimates of $180.1 million. The company, whose technology is intended to help students study, is investing in developing an AI assistant, after e ...

SANTA CLARA, Calif.--(BUSINESS WIRE)--Chegg, Inc. (NYSE: CHGG), the leading student-first connected learning platform, today announced the appointment of David Longo as Chief Financial Officer, effective February 21. Mr. Longo currently serves as Vice President, Chief Accounting Officer, Corporate Controller, and Assistant Treasurer at Chegg. He will succeed Andrew Brown, who announced his retirement in the fall of last year, after more than 12 years at Chegg. “ David is the perfect candidate to take on t ...

Shares of Chegg (CHGG -2.19%) fell as much as 11.5% early Friday, then settled to close down 2.19% after a Goldman Sachs analyst downgraded shares of the online education platform.Goldman thinks AI will be a headwind for CheggIn a note to clients this morning, Goldman analyst Eric Sheridan lowered his rating on Chegg to sell from neutral, and also reduced his per-share price target on the stock to $8 from $10. To justify his relative bearishness, Sheridan said he's reducing his revenue estimates for Chegg g ...

Last year, tech stocks largely rebounded after the challenges of 2022, as evidenced by the fact that the tech-heavy Nasdaq Composite outperformed the two other major U.S. stock market indexes. Naturally, many tech stocks performed in line -- or even better -- than the Nasdaq, but others weren't so lucky.Google parent Alphabet (GOOG -0.09%) (GOOGL -0.14%) was one of those that did well, while the online learning specialist Chegg (CHGG 0.65%) wasn't so fortunate in 2023. Investors should expect more of the sa ...

Orchestrator routes questions based on the type and format of the question, as well as the subject matter Proprietary subject-specific models built with Scale AI Computational Engines, such as Mathway, optimized for education and STEM-B Additional Machine Learning models for image transcription, question understanding, and to help with Honor Code enforcement We built Orchestrator to be adaptable The advances in AI create opportunities for Chegg and we've pivoted the company to harness AI to better serve lea ...

Chegg, Inc. (NYSE:CHGG) Q3 2023 Earnings Conference Call October 30, 2023 4:30 PM ET Company Participants Tracey Ford - Vice President, Investor Relations and ESG Dan Rosensweig - Co-Chairperson and Chief Executive Officer Andy Brown - Chief Financial Officer Conference Call Participants Jeff Silber - BMO Capital Markets Kunal Madhukar - UBS Ryan MacDonald - Needham & Company Bryan Smilek - JPMorgan Josh Baer - Morgan Stanley Brent Thill - Jefferies Jason Celino - KeyBanc Capital Markets Alex Fuhrman - Crai ...

Note 10. Restructuring In June 2023, we announced a reduction in workforce to better position the Company to execute against its AI strategy and to create long-term, sustainable value for its students and investors. This resulted in a management approved restructuring plan that impacted approximately 90 employees primarily in the United States. During the nine months ended September 30, 2023, we recorded restructuring charges of $5.7 million related to one-time employee termination benefits classified on ou ...

Financial Data and Key Metrics Changes - Total revenue for Q2 was $183 million, driven by subscription services revenue of $166 million, with approximately 4.8 million subscribers on the platform [48][49] - Adjusted EBITDA was $60 million, representing a 33% margin, exceeding guidance [49] - Free cash flow was $56 million, attributed to strong operating performance and higher interest rates, with interest income contributing $10.7 million [49] - The company ended the quarter with $808 million in cash and investments, and total convertible debt outstanding was $773 million, resulting in $35 million of net cash [51] Business Line Data and Key Metrics Changes - Subscription services revenue was $166 million, while sales and other revenue was $17 million, driven by strong growth in skills [49] - The gross margin was 74%, slightly higher than expected, contributing to the adjusted EBITDA beat [49] Market Data and Key Metrics Changes - The company noted that new account growth had improved, with a significant increase in engagement and retention rates observed in Q2 [72][120] - The U.S. market remains the primary focus, with summer school being predominantly a U.S. experience [86] Company Strategy and Development Direction - The company is rapidly pivoting to leverage AI advancements, believing that strong brand loyalty and valuable data sets can drive growth [72][73] - Chegg plans to build its own large language models (LLMs) to create a differentiated learning experience, utilizing proprietary data and subject matter experts [52][77] - The new Chegg experience will roll out over the next two semesters, combining generative AI with Chegg's proprietary solutions [76][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth, with positive trends in customer acquisition and retention [31][120] - The company anticipates that the impact of new AI capabilities will enhance its competitive position and improve margins over time [55][95] Other Important Information - The company repurchased $427 million of its outstanding convertible debt and used some savings to retire 3.4 million shares of common stock for approximately $35 million [51] - The company expects Q3 total revenue to be between $151 million and $153 million, with subscription services revenue between $135 million and $137 million [53] Q&A Session Summary Question: How will the new AI experience differ from CheggMate? - The new AI experience will be integrated into Chegg's existing platform, enhancing user experience with personalized learning based on extensive data [60][62] Question: Are there different trends in subscribers between the U.S. and overseas markets? - Most data is U.S.-based, but international testing has shown similar positive engagement trends [86] Question: What are the implications of the new strategy on costs and investments? - The new strategy is expected to be more cost-effective, potentially increasing margins and reducing capital expenditures over time [95][96] Question: What is the timeline for the rollout of new payment capabilities? - The new payment capability is set to launch this month, which is expected to positively impact subscriber growth [108] Question: What is the outlook for subscriber counts moving forward? - While Q2 subscriber counts were lighter than expected, improvements in retention and new account growth are anticipated as the year progresses [149][150]

Revenue Performance - Subscription Services revenues decreased by $9.6 million, or 5%, and $14.2 million, or 4%, during the three and six months ended June 30, 2023, respectively, compared to the same periods in 2022[104] - For the three months ended June 30, 2023, net revenues were $182.9 million, a decrease of 6% from $194.7 million in the same period of 2022[122] - Skills and Other revenues decreased by 12% to $17.0 million in Q2 2023, primarily due to lower revenues from print textbooks and eTextbooks[131] - Subscription Services accounted for 91% and 90% of net revenues during the three and six months ended June 30, 2023, respectively, compared to 90% and 88% during the same periods in 2022[104] - Subscription Services revenues accounted for 91% of net revenues in Q2 2023, compared to 90% in Q2 2022[124] Operating Expenses - Total operating expenses increased by $12.4 million, or 9%, during the three months ended June 30, 2023, compared to the same period in 2022[108] - Total operating expenses increased by 30% to $21.2 million in Q2 2023, driven by higher employee-related expenses and restructuring charges[137] - General and administrative expenses as a percentage of net revenues rose to 38% in Q2 2023, up from 28% in Q2 2022[137] Research and Development - Research and development expenses increased by $0.4 million, or 1%, during the three months ended June 30, 2023, with R&D expenses as a percentage of net revenues at 29%[109] - Research and development expenses increased to $11.97 million in Q2 2023, compared to $10.01 million in Q2 2022[119] Cash Flow and Financing - Net cash provided by operating activities for the six months ended June 30, 2023, was $135.9 million, down from $143.8 million in the same period of 2022[147] - Net cash used in investing activities for the six months ended June 30, 2022, was $293.8 million, primarily due to business acquisition of $401.1 million and investments of $356.6 million[148] - Net cash used in financing activities for the six months ended June 30, 2023, was $563.8 million, mainly for repayment of notes totaling $369.8 million and stock repurchases of $186.4 million[149] Shareholder Actions - The company repurchased 3,433,157 shares of common stock for $34.5 million in June 2023[117] - The company has reserved 12,000,000 shares for issuance under the 2023 Equity Incentive Plan, effective June 7, 2023[115] - As of June 30, 2023, the company had $89.4 million remaining under its $2.0 billion securities repurchase program[142] Subscriber Metrics - The company experienced a 9% and 5% decrease in subscribers during the three months ended June 30, 2023, and March 31, 2023, respectively, compared to the same periods in 2022[104] Profitability Outlook - The company anticipates that investments in artificial intelligence will help sustain profitability and remain cash-flow positive in the long term[97] Restructuring and Charges - The company recorded restructuring charges of $5.7 million in Q2 2023, impacting approximately 90 employees, with expected completion by the end of fiscal 2023[119] Market Risk and Controls - There were no material changes in market risk during the six months ended June 30, 2023, compared to the previous disclosures[174] - The company conducted an evaluation of the effectiveness of its disclosure controls and procedures as of the end of the reporting period[175]