Q2-21 Investor Presentation Aug 9, 2021 Chegg 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, beliefs, projections, future pla ...

Financial Data and Key Metrics Changes - Total revenue grew by 30% in Q2 2021, reaching $198 million, driven by a 38% increase in Chegg Services revenue to $174 million [22][27] - Adjusted EBITDA increased by 52% year-over-year to $84 million, nearly three times the amount achieved two years ago [23][27] - The company ended the quarter with cash and investments of approximately $2.5 billion, having redeemed $91 million in convertible notes, reducing total debt [25] Business Line Data and Key Metrics Changes - Chegg Services subscribers grew to 4.9 million in Q2 2021, with both revenue and subscribers more than doubling over the past two years [22][27] - The company added 7 million new solutions in Q2, with over 37% of questions asked by international subscribers [13] - The average revenue per user (ARPU) has substantially increased due to the successful launch of the bundle [46][49] Market Data and Key Metrics Changes - International growth is strong, with expectations to exceed 1 million international subscribers for the year [8][27] - The company is seeing similar behavior patterns between international and U.S. subscribers, indicating strong engagement across markets [68] Company Strategy and Development Direction - Chegg is focused on reducing account sharing and enhancing the student experience through new content and services [9][12] - The company is investing in both academic and professional skills-based content to help students transition from learning to earning [16] - Initiatives like Honor Shield and Uversity aim to protect academic integrity and expand content offerings [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in exceeding initial revenue and adjusted EBITDA guidance for the remainder of 2021 due to strong performance and engagement [21][26] - The company is optimistic about the upcoming academic year, with expectations of continued growth and improved margins [27][29] - Management noted that the Delta variant has not negatively impacted business, as student engagement remains strong regardless of study location [39] Other Important Information - Chegg serves over 30 million students monthly, emphasizing the importance of sustainability and community contributions [10][19] - The company has invested nearly $1 million towards paying off employees' student debt through its Equity for Education program [19] Q&A Session Summary Question: What is the traction of Uversity with faculty? - Management indicated strong demand from professors, with $700,000 earned so far, and noted that the platform has not yet been launched to students [30][31] Question: How is the Delta variant affecting fall enrollment? - Management stated that the variant does not negatively impact business, as students are performing similarly regardless of study mode [37][39] Question: How is the bundle performing against expectations? - Management reported that the bundle has exceeded expectations, with higher adoption rates and increased ARPU [46][48] Question: Can you provide more details on international business metrics? - Management refrained from breaking out specific metrics but confirmed that international subscribers exhibit similar behaviors to U.S. subscribers [66][68] Question: What are the new personalization efforts being implemented? - Management explained that the company is evolving the user experience to focus on course-specific content rather than just textbooks [71][89] Question: What has been learned from the Mathway acquisition? - Management expressed satisfaction with the acquisition, noting that it has exceeded expectations and integrated well with Chegg's existing systems [92][96]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) Provides Chegg's unaudited condensed consolidated financial statements and management's discussion and analysis for the periods ended June 30, 2021, and December 31, 2020 [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) Presents Chegg's unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and detailed notes for the periods ended June 30, 2021, and December 31, 2020 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Assets/Liabilities & Equity | June 30, 2021 | December 31, 2020 | | :-------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $840,056 | $479,853 | | Short-term investments | $1,221,666 | $665,567 | | Total current assets | $2,116,267 | $1,182,955 | | Total assets | $3,150,947 | $2,251,258 | | **Liabilities** | | | | Total current liabilities | $113,537 | $109,732 | | Convertible senior notes, net | $1,675,340 | $1,506,922 | | Total liabilities | $1,813,065 | $1,641,623 | | **Stockholders' Equity** | | | | Total stockholders' equity | $1,337,882 | $609,635 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net revenues | $198,478 | $153,009 | $396,856 | $284,599 | | Gross profit | $137,770 | $109,485 | $264,764 | $198,685 | | Income from operations | $34,770 | $22,061 | $51,549 | $25,337 | | Net income (loss) | $32,764 | $10,589 | $(32,415) | $4,876 | | Basic EPS | $0.23 | $0.09 | $(0.23) | $0.04 | | Diluted EPS | $0.20 | $0.08 | $(0.23) | $0.04 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $32,764 | $10,589 | $(32,415) | $4,876 | | Other comprehensive income (loss) | $268 | $7,212 | $(2,500) | $2,946 | | Total comprehensive income (loss) | $33,032 | $17,801 | $(34,915) | $7,822 | [Condensed Consolidated Statements of Stockholder's Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholder%27s%20Equity) Condensed Consolidated Statements of Stockholders' Equity (in thousands) - Six Months Ended June 30, 2021 | Metric | Common Shares | Stock Par Value | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Total Stockholders' Equity | | :------------------------------------------------------------------ | :------------ | :-------------- | :------------------------- | :-------------------------------------------- | :------------------ | :------------------------- | | Balances at December 31, 2020 | 129,344 | $129 | $1,030,577 | $1,530 | $(422,601) | $609,635 | | Cumulative-effect adjustment related to adoption of ASU 2020-06 | — | — | $(465,006) | — | $86,868 | $(378,138) | | Issuance of common stock in connection with equity offering, net | 10,975 | 11 | 1,091,455 | — | — | 1,091,466 | | Equity component on conversions of 2023 notes and 2025 notes | — | — | $(236,920) | — | — | $(236,920) | | Issuance of common stock upon conversion of 2023 notes | 2,983 | 3 | 235,518 | — | — | 235,521 | | Net proceeds from capped call related to conversions and extinguishments | — | — | 67,769 | — | — | 67,769 | | Issuance of common stock upon exercise of stock options and ESPP | 164 | — | 5,265 | — | — | 5,265 | | Net share settlement of equity awards | 1,155 | 2 | $(74,642) | — | — | $(74,640) | | Share-based compensation expense | — | — | 52,839 | — | — | 52,839 | | Other comprehensive loss | — | — | — | $(2,500) | — | $(2,500) | | Net loss | — | — | — | — | $(32,415) | $(32,415) | | Balances at June 30, 2021 | 144,621 | $145 | $1,706,855 | $(970) | $(368,148) | $1,337,882 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $144,501 | $122,205 | | Net cash used in investing activities | $(574,784) | $(178,482) | | Net cash provided by (used in) financing activities | $790,344 | $(46,065) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $360,061 | $(102,342) | | Cash, cash equivalents and restricted cash, end of period | $841,776 | $287,090 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, revenue, debt, equity, and legal matters [Note 1. Background and Basis of Presentation](index=11&type=section&id=Note%201.%20Background%20and%20Basis%20of%20Presentation) Chegg, an education technology company, adopted ASU 2020-06 for convertible instruments, impacting financial statement presentation and EPS calculations, and operates as a single segment - Chegg, Inc. was incorporated in Delaware in July 2005 and is headquartered in Santa Clara, California, aiming to improve educational outcomes by supporting students with online learning tools[38](index=38&type=chunk) - The company operates in a single segment and its fiscal year ends on December 31[40](index=40&type=chunk) - The company adopted ASU 2020-06 on January 1, 2021, under the modified retrospective method, resulting in a **$378.1 million increase to convertible senior notes** and a **$465.0 million decrease to additional paid-in capital**, eliminating the separation of embedded conversion features[42](index=42&type=chunk)[54](index=54&type=chunk) - Accumulated deficit decreased by **$86.9 million** due to reduced non-cash interest expense[42](index=42&type=chunk)[54](index=54&type=chunk) [Note 2. Revenues](index=14&type=section&id=Note%202.%20Revenues) Revenues are recognized based on transfer of control, with Chegg Services showing significant growth and Required Materials experiencing mixed changes in the current periods - The majority of revenues are recognized over time as services are performed, with some recognized at a point in time[57](index=57&type=chunk) Net Revenues by Product Line (in thousands, except percentages) | Product Line | Three Months Ended June 30, 2021 | Change ($) | Change (%) | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :----------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :--------- | :--------- | | Chegg Services | $173,513 | $47,509 | 38% | $335,864 | $109,501 | 48% | | Required Materials | $24,965 | $(2,040) | (8)% | $60,992 | $2,756 | 5% | | Total Net Revenues | $198,478 | $45,469 | 30% | $396,856 | $112,257 | 39% | Contract Balances (in thousands) | Balance | June 30, 2021 | December 31, 2020 | Change ($) | Change (%) | | :------------------------ | :------------ | :---------------- | :--------- | :--------- | | Accounts receivable, net | $10,091 | $12,913 | $(2,822) | (22)% | | Deferred revenue | $34,682 | $32,620 | $2,062 | 6% | | Contract assets | $16,398 | $13,243 | $3,155 | 24% | [Note 3. Net Income (Loss) Per Share](index=15&type=section&id=Note%203.%20Net%20Income%20%28Loss%29%20Per%20Share) Adoption of ASU 2020-06 mandates the if-converted method for diluted EPS, impacting weighted-average shares for convertible instruments - ASU 2020-06, adopted on January 1, 2021, mandates the if-converted method for calculating diluted earnings per share for all convertible instruments, assuming conversion at the beginning of the period[63](index=63&type=chunk) Net Income (Loss) Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss), basic | $32,764 | $10,589 | $(32,415) | $4,876 | | Weighted average shares, basic | 143,112 | 123,842 | 138,756 | 123,135 | | Net income (loss) per share, basic | $0.23 | $0.09 | $(0.23) | $0.04 | | Net income (loss), diluted | $33,976 | $10,589 | $(32,415) | $4,876 | | Weighted average shares, diluted | 168,282 | 133,851 | 138,756 | 132,674 | | Net income (loss) per share, diluted | $0.20 | $0.08 | $(0.23) | $0.04 | [Note 4. Cash and Cash Equivalents, and Investments](index=16&type=section&id=Note%204.%20Cash%20and%20Cash%20Equivalents%2C%20and%20Investments) Cash, cash equivalents, and investments significantly increased, with a strategic equity investment sale generating a $5.3 million gain, while maintaining a highly rated portfolio for capital preservation Cash, Cash Equivalents, and Investments (in thousands) | Category | June 30, 2021 Fair Value | December 31, 2020 Fair Value | | :------------------------ | :----------------------- | :--------------------------- | | Cash and cash equivalents | $840,056 | $479,853 | | Short-term investments | $1,221,666 | $665,567 | | Long-term investments | $484,853 | $523,628 | | Total | $2,546,575 | $1,669,048 | - In March 2021, Chegg sold its strategic equity investment in a foreign entity for **$8.3 million**, realizing a **$5.3 million gain**[70](index=70&type=chunk) - The company also made a **$2.0 million investment** in TAPD, Inc. (Frank) in March 2020[70](index=70&type=chunk) [Note 5. Fair Value Measurement](index=17&type=section&id=Note%205.%20Fair%20Value%20Measurement) Financial instruments are classified using a fair value hierarchy, with most investments and convertible senior notes valued using Level 2 inputs - The fair value hierarchy categorizes inputs as Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs for similar assets/liabilities), and Level 3 (unobservable inputs requiring significant management judgment)[71](index=71&type=chunk)[72](index=72&type=chunk) Assets Measured at Fair Value (in thousands) as of June 30, 2021 | Asset Category | Total Fair Value | Level 1 | Level 2 | | :------------------------ | :--------------- | :-------- | :---------- | | Money market funds | $807,034 | $807,034 | — | | Commercial paper | $514,835 | — | $514,835 | | Corporate debt securities | $691,309 | — | $691,309 | | Agency bonds | $15,522 | — | $15,522 | | Long-term investments | $484,853 | — | $484,853 | | Total | $2,513,553 | $807,034 | $1,706,519 | - The estimated fair value of convertible senior notes is a Level 2 measurement due to limited trading activity[78](index=78&type=chunk) [Note 6. Acquisition](index=19&type=section&id=Note%206.%20Acquisition) Chegg acquired a company for $8.0 million in cash to enhance content creation, resulting in $3.3 million in developed technology and $5.8 million in goodwill - On February 22, 2021, Chegg acquired a company for **$8.0 million** in cash to enhance content creation, including **$3.3 million** in developed technology intangible assets and **$5.8 million** in goodwill[79](index=79&type=chunk) [Note 7. Convertible Senior Notes](index=19&type=section&id=Note%207.%20Convertible%20Senior%20Notes) Convertible senior notes are now a single liability under ASU 2020-06, with significant settlements and extinguishments of 2023 and 2025 notes resulting in a loss on early extinguishment - The company issued **$1.0 billion** of 0% convertible senior notes due 2026, **$800 million** of 0.125% notes due 2025, and **$345 million** of 0.25% notes due 2023[81](index=81&type=chunk) - During the six months ended June 30, 2021, Chegg settled **$115.6 million** of 2023 notes for **$351.1 million** (cash and common stock), and extinguished **$100.0 million** of 2025 notes for **$184.9 million** in cash[83](index=83&type=chunk)[84](index=84&type=chunk) - These transactions resulted in a **$78.2 million loss** on early extinguishment of debt[85](index=85&type=chunk) - Capped call transactions related to the 2026 and 2025 notes are expected to reduce or offset potential dilution, effectively increasing the conversion price, and are recorded in stockholders' equity[98](index=98&type=chunk) [Note 8. Commitments and Contingencies](index=22&type=section&id=Note%208.%20Commitments%20and%20Contingencies) Chegg faces various legal proceedings, including class action lawsuits, a contract dispute, an FTC inquiry, and 16,114 arbitration demands related to a 2018 data incident - Chegg settled class action lawsuits related to ADA and Unruh Civil Rights Act violations for immaterial amounts during the six months ended June 30, 2021[100](index=100&type=chunk)[101](index=101&type=chunk) - The company received a Civil Investigative Demand from the FTC in July 2020 concerning consumer privacy and data security practices[103](index=103&type=chunk) - Chegg faces **16,114 arbitration demands** related to a 2018 data incident, for which a loss contingency accrual was recorded in March 2021, with a corresponding insurance loss recovery[105](index=105&type=chunk) [Note 9. Guarantees and Indemnifications](index=23&type=section&id=Note%209.%20Guarantees%20and%20Indemnifications) Chegg indemnifies directors, officers, and vendors, with the fair value of these agreements deemed immaterial and no liabilities recorded - Chegg indemnifies its directors and officers, and has other indemnification agreements with vendors, with the maximum potential future indemnification being unlimited, but the fair value is deemed immaterial[108](index=108&type=chunk)[109](index=109&type=chunk) [Note 10. Stockholders' Equity](index=24&type=section&id=Note%2010.%20Stockholders%27%20Equity) Chegg completed a $1,091.5 million equity offering, repurchased $100.0 million of 2025 notes, and saw increased share-based compensation from RSU and PSU grants - In February 2021, Chegg issued **10,974,600 shares** of common stock at **$102.00 per share**, generating net proceeds of **$1,091.5 million**[111](index=111&type=chunk) - The board approved a **$500.0 million** securities repurchase program in June 2020, under which **$100.0 million** of 2025 notes were repurchased for **$184.9 million** through June 30, 2021, with **$165.5 million** remaining[112](index=112&type=chunk) Total Share-based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of revenues | $419 | $213 | $781 | $382 | | Research and development | $9,100 | $7,620 | $17,059 | $14,611 | | Sales and marketing | $3,655 | $2,436 | $6,574 | $4,622 | | General and administrative | $15,371 | $9,277 | $27,231 | $18,265 | | Total | $28,545 | $19,546 | $51,645 | $37,880 | - In March 2021, PSUs with market-based conditions (up to **732,260 shares**) and PSUs with financial/strategic performance targets (**278,644 shares**) were granted to key employees and executives[115](index=115&type=chunk)[119](index=119&type=chunk) [Note 11. Related-Party Transactions](index=26&type=section&id=Note%2011.%20Related-Party%20Transactions) Chegg engaged in transactions with Adobe, PayPal, and Zuora, involving service purchases and payment processing fees, where board members have affiliations - Chegg purchased **$1.0 million** in services from Adobe and incurred **$1.4 million** in payment processing fees to PayPal during the six months ended June 30, 2021[123](index=123&type=chunk)[124](index=124&type=chunk) - An immaterial amount of services was purchased from Zuora[125](index=125&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses Chegg's financial condition and operational results, highlighting strong Chegg Services revenue growth, accounting change impacts, liquidity, seasonality, and factors influencing profitability [Overview](index=27&type=section&id=Overview) Chegg provides online learning tools, focusing on expanding Chegg Services for student engagement and operating margins, while navigating competition and COVID-19 risks - Chegg supports students with tools to learn course materials, succeed in classes, save money on materials, and acquire in-demand skills through online services[128](index=128&type=chunk) - The long-term strategy is centered on increasing student engagement with Chegg Services, investing in expansion, and driving increased operating margins to sustain profitability and positive cash flow[132](index=132&type=chunk) Net Revenues and Net Income (Loss) (in millions) | Metric | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2020 | | :-------------- | :------------------------------- | :----------------------------- | :------------------------------- | :----------------------------- | | Net Revenues | $198.5 | $396.9 | $153.0 | $284.6 | | Net Income (Loss)| $32.8 | $(32.4) | $10.6 | $4.9 | [Chegg Services](index=28&type=section&id=Chegg%20Services) Subscription-based Chegg Services, including Chegg Study and Mathway, comprised 87% and 85% of net revenues for the three and six months ended June 30, 2021, respectively - Chegg Services include Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Mathway, and Thinkful, primarily accessed on a monthly subscription basis[129](index=129&type=chunk)[134](index=134&type=chunk) - Chegg Services revenues accounted for **87%** and **85%** of total net revenues during the three and six months ended June 30, 2021, respectively, up from 82% and 80% in the prior year periods[135](index=135&type=chunk) [Required Materials](index=28&type=section&id=Required%20Materials) Required Materials, including print and eTextbooks, recognizes revenue ratably or upon shipment, with its revenue contribution decreasing to 13% and 15% of net revenues - Required Materials includes print textbooks (primarily for rent, also for sale) and eTextbooks, with revenues recognized ratably over the rental term or contractual period, or immediately for partner-owned textbooks[130](index=130&type=chunk)[136](index=136&type=chunk) - Required Materials revenues represented **13%** and **15%** of net revenues during the three and six months ended June 30, 2021, respectively, a decrease from 18% and 20% in the prior year periods[137](index=137&type=chunk) [Seasonality of Our Business](index=28&type=section&id=Seasonality%20of%20Our%20Business) Chegg's business is seasonal, with highest revenues and profitability in Q4, and variable expenses peaking in Q1 and Q3, affecting sequential comparisons - Revenues from Chegg Services, print textbooks, and eTextbooks are recognized ratably over the term, resulting in highest revenues and profitability in the fourth quarter[138](index=138&type=chunk) - Variable expenses for cost of revenues and marketing are highest in the first and third quarters, making sequential quarterly comparisons less insightful[138](index=138&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Chegg saw significant revenue growth driven by Chegg Services, but gross margins decreased, operating expenses rose, and a six-month net loss resulted from debt extinguishment and derivative instrument charges Summary of Condensed Consolidated Statements of Operations (in thousands, except percentages) | Metric | Three Months Ended June 30, 2021 | % of Net Rev | Three Months Ended June 30, 2020 | % of Net Rev | Six Months Ended June 30, 2021 | % of Net Rev | Six Months Ended June 30, 2020 | % of Net Rev | | :------------------------------------ | :------------------------------- | :----------- | :------------------------------- | :----------- | :----------------------------- | :----------- | :----------------------------- | :----------- | | Net revenues | $198,478 | 100% | $153,009 | 100% | $396,856 | 100% | $284,599 | 100% |\ | Cost of revenues | $60,708 | 31% | $43,524 | 28% | $132,092 | 33% | $85,914 | 30% |\ | Gross profit | $137,770 | 69% | $109,485 | 72% | $264,764 | 67% | $198,685 | 70% |\ | Total operating expenses | $103,000 | 51% | $87,424 | 57% | $213,215 | 54% | $173,348 | 61% |\ | Income from operations | $34,770 | 18% | $22,061 | 15% | $51,549 | 13% | $25,337 | 9% |\ | Total interest expense, net and other income (expense), net | $219 | 0% | $(10,185) | (7)% | $(78,918) | (20)% | $(18,652) | (7)% |\ | Net income (loss) | $32,764 | 17% | $10,589 | 7% | $(32,415) | (8)% | $4,876 | 1% | [Net Revenues](index=30&type=section&id=Net%20Revenues) Net revenues increased by 30% and 39% for the three and six months, respectively, driven by Chegg Services growth from reduced account sharing, global penetration, and enhanced offerings Net Revenues by Product Line (in thousands, except percentages) | Product Line | Three Months Ended June 30, 2021 | Change ($) | Change (%) | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :----------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :--------- | :--------- | | Chegg Services | $173,513 | $47,509 | 38% | $335,864 | $109,501 | 48% | | Required Materials | $24,965 | $(2,040) | (8)% | $60,992 | $2,756 | 5% | | Total Net Revenues | $198,478 | $45,469 | 30% | $396,856 | $112,257 | 39% | - Chegg Services revenue growth was primarily due to efforts to reduce account sharing, increased global awareness and penetration, and the introduction of enhanced offerings, including the acquisition of Mathway[143](index=143&type=chunk) [Cost of Revenues](index=30&type=section&id=Cost%20of%20Revenues) Cost of revenues increased by 39% and 54%, leading to decreased gross margins due to higher depreciation, logistics, web hosting, fulfillment, and employee-related expenses Cost of Revenues (in thousands, except percentages) | Metric | Three Months Ended June 30, 2021 | Change ($) | Change (%) | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :--------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :--------- | :--------- | | Cost of revenues | $60,708 | $17,184 | 39% | $132,092 | $46,178 | 54% | | Share-based comp | $419 | $206 | 97% | $781 | $399 | 104% | - Gross margins decreased to **69%** (3 months) and **67%** (6 months) in 2021, from 72% and 70% in 2020, respectively[144](index=144&type=chunk)[146](index=146&type=chunk) - Key drivers for increased cost of revenues include higher depreciation and amortization (**$5.9 million** for 3 months, **$11.0 million** for 6 months), transitional logistics charges (**$4.2 million**), web hosting fees (**$2.5 million** for 3 months, **$2.7 million** for 6 months), and order fulfillment fees (**$1.8 million** for 3 months, **$7.1 million** for 6 months)[144](index=144&type=chunk)[146](index=146&type=chunk) [Operating Expenses](index=31&type=section&id=Operating%20Expenses) Total operating expenses increased by 18% and 23%, primarily due to higher sales and marketing and general and administrative expenses from increased employee costs and global marketing Total Operating Expenses (in thousands, except percentages) | Metric | Three Months Ended June 30, 2021 | Change ($) | Change (%) | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :--------- | :--------- | | Research and development | $41,595 | $1,221 | 3% | $87,726 | $7,811 | 10% | | Sales and marketing | $21,686 | $5,928 | 38% | $47,900 | $11,904 | 33% | | General and administrative | $39,719 | $8,427 | 27% | $77,589 | $20,152 | 35% | | Total operating expenses | $103,000 | $15,576 | 18% | $213,215 | $39,867 | 23% | [Research and Development](index=31&type=section&id=Research%20and%20Development) R&D expenses were flat for three months but increased 10% for six months due to higher employee-related costs, decreasing as a percentage of net revenues - R&D expenses increased by **$7.8 million (10%)** for the six months ended June 30, 2021, primarily due to higher employee-related expenses, including share-based compensation[149](index=149&type=chunk) - R&D expenses as a percentage of net revenues decreased to **20%** (3 months) and **22%** (6 months) in 2021, from 26% and 28% in 2020, respectively[148](index=148&type=chunk)[149](index=149&type=chunk) [Sales and Marketing](index=32&type=section&id=Sales%20and%20Marketing) Sales and marketing expenses increased by 38% and 33% due to higher global marketing and employee-related costs, remaining stable as a percentage of net revenues - Sales and marketing expenses increased by **$5.9 million (38%)** for the three months and **$11.9 million (33%)** for the six months ended June 30, 2021[151](index=151&type=chunk)[152](index=152&type=chunk) - The increase was primarily attributable to increased global marketing spend (**$3.5 million** for 3 months, **$5.9 million** for 6 months) and higher employee-related expenses, including share-based compensation (**$2.2 million** for 3 months, **$4.1 million** for 6 months)[151](index=151&type=chunk)[152](index=152&type=chunk) [General and Administrative](index=32&type=section&id=General%20and%20Administrative) General and administrative expenses increased by 27% and 35% due to higher employee-related costs and professional fees, remaining consistent as a percentage of net revenues - General and administrative expenses increased by **$8.4 million (27%)** for the three months and **$20.2 million (35%)** for the six months ended June 30, 2021[153](index=153&type=chunk)[154](index=154&type=chunk) - The increase was primarily due to higher employee-related expenses, including share-based compensation (**$6.5 million** for 3 months, **$11.9 million** for 6 months), and higher professional fees (**$3.2 million** for 6 months)[153](index=153&type=chunk)[154](index=154&type=chunk) [Interest Expense and Other Income (Expense), Net](index=32&type=section&id=Interest%20Expense%20and%20Other%20Income%20%28Expense%29%2C%20Net) Interest expense decreased due to ASU 2020-06, but other income (expense) declined significantly from a $78.2 million debt extinguishment loss and derivative losses Interest Expense and Other Income (Expense), Net (in thousands) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest expense, net | $(1,701) | $(13,425) | $(3,630) | $(26,852) | | Other income (expense), net | $1,920 | $3,240 | $(75,288) | $8,200 | | Total interest expense, net and other income (expense), net | $219 | $(10,185) | $(78,918) | $(18,652) | - Interest expense, net, decreased by **$11.7 million** (3 months) and **$23.2 million** (6 months) due to the reduction in non-cash interest expense from ASU 2020-06 adoption[155](index=155&type=chunk) - Other income (expense), net, decreased by **$83.5 million** for the six months, primarily due to a **$78.2 million loss** on early extinguishment of debt, **$7.1 million net loss** on derivative instruments, and lower interest income, partially offset by a **$5.3 million gain** on strategic equity investment sale[156](index=156&type=chunk) [Provision for Income Taxes](index=33&type=section&id=Provision%20for%20Income%20Taxes) Income tax provision increased by 73% and 179% due to higher foreign profits and withholding taxes from a strategic equity investment sale Provision for Income Taxes (in thousands, except percentages) | Metric | Three Months Ended June 30, 2021 | Change ($) | Change (%) | Six Months Ended June 30, 2021 | Change ($) | Change (%) | | :----------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :--------- | :--------- | | Provision for income taxes | $2,225 | $938 | 73% | $5,046 | $3,237 | 179% | - The increase in tax provision was primarily due to an increase in foreign profits and withholding taxes related to the March 2021 sale of a strategic equity investment[159](index=159&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Chegg holds $2.5 billion in liquidity, raised $1,091.5 million from an equity offering, and generated $144.5 million from operations, while using $574.8 million in investing and providing $790.3 million in financing - As of June 30, 2021, Chegg's principal sources of liquidity were cash, cash equivalents, and investments totaling **$2.5 billion**[160](index=160&type=chunk) - In February 2021, the company completed an equity offering, raising net proceeds of **$1,091.5 million**[162](index=162&type=chunk) Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $144,501 | $122,205 | | Net cash used in investing activities | $(574,784) | $(178,482) | | Net cash provided by (used in) financing activities | $790,344 | $(46,065) | [Contractual Obligations and Other Commitments](index=35&type=section&id=Contractual%20Obligations%20and%20Other%20Commitments) Chegg extinguished $100.0 million of 2025 notes and settled $115.6 million of 2023 notes, with no other material changes to contractual obligations - During the six months ended June 30, 2021, Chegg extinguished **$100.0 million** aggregate principal amount of 2025 notes and settled **$115.6 million** of 2023 notes[175](index=175&type=chunk) - There were no other material changes in contractual obligations compared to the Annual Report on Form 10-K for the year ended December 31, 2020[176](index=176&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2021, Chegg had no off-balance sheet arrangements with unconsolidated organizations or financial partnerships - As of June 30, 2021, Chegg had no relationships with unconsolidated organizations or financial partnerships for off-balance sheet arrangements[177](index=177&type=chunk) [Critical Accounting Policies, Significant Judgments and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%2C%20Significant%20Judgments%20and%20Estimates) Financial statement preparation requires significant management estimates and judgments, particularly for share-based compensation expense, which can materially impact reported figures - The preparation of financial statements requires management to make estimates and assumptions, which are evaluated on an ongoing basis, and actual results may differ materially from these estimates[178](index=178&type=chunk) - Share-based compensation expense is measured and recognized for all awards based on estimated fair values, with forfeiture rates estimated based on historical data and management expectations[180](index=180&type=chunk)[181](index=181&type=chunk) - Share-based compensation for PSUs with financial and strategic performance targets requires significant management judgment in determining the current level of attainment, which can lead to volatility in recognized expense[184](index=184&type=chunk) [Recent Accounting Pronouncements](index=37&type=section&id=Recent%20Accounting%20Pronouncements) Information on recent accounting pronouncements is available in Note 1, 'Background and Basis of Presentation,' within the financial statements - Refer to Note 1, 'Background and Basis of Presentation,' for information on recent accounting pronouncements[186](index=186&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in Chegg's market risk occurred during the six months ended June 30, 2021, compared to the Annual Report on Form 10-K disclosures - No material changes in market risk occurred during the six months ended June 30, 2021, compared to the Annual Report on Form 10-K[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded Chegg's disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control over financial reporting despite remote work - Management concluded that disclosure controls and procedures were effective as of June 30, 2021, providing reasonable assurance for timely and accurate reporting[189](index=189&type=chunk)[191](index=191&type=chunk) - No material changes in internal control over financial reporting were identified during the three and six months ended June 30, 2021, despite remote work due to the COVID-19 pandemic[192](index=192&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Provides additional information including legal proceedings, risk factors, equity sales, exhibits, and official signatures [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Chegg is involved in various legal proceedings and claims, with further details provided in Note 8, 'Commitments and Contingencies,' of the financial statements - Chegg is subject to various legal proceedings, including patent infringement, intellectual property, employment, and contract claims[194](index=194&type=chunk) - Further details on legal proceedings are provided in Note 8, 'Commitments and Contingencies,' of the financial statements[194](index=194&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes in Chegg's risk factors were identified from the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - No material changes in risk factors were identified from the Annual Report on Form 10-K for the fiscal year ended December 31, 2020[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - There were no unregistered sales of equity securities during the period[196](index=196&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (31.01, 31.02, 32.01) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[198](index=198&type=chunk) [Signatures](index=41&type=section&id=Signatures) The Form 10-Q was signed by Andrew Brown, Chief Financial Officer, on August 9, 2021 - The report was signed by Andrew Brown, Chief Financial Officer, on August 9, 2021[201](index=201&type=chunk)

Q1-21 Investor Presentation May 3, 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, beliefs ...

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 ...

Financial Data and Key Metrics Changes - Total revenue grew 57% year-over-year to $644 million, driven by a nearly $200 million increase in Chegg Services revenue, which reached $521 million [29][30] - Adjusted EBITDA margin improved to 32%, amounting to $207 million, a 66% increase year-over-year [30][32] - The company ended the year with cash and investments totaling $1.7 billion, supported by free cash flow of $104 million [32] Business Line Data and Key Metrics Changes - Chegg Services revenue grew to $176 million in Q4, representing a 64% increase, with subscriber growth of 74% in the same quarter [30][31] - The total number of subscribers reached 6.6 million, reflecting a 67% year-over-year growth [13][29] Market Data and Key Metrics Changes - The company anticipates surpassing 1 million international subscribers in 2021, indicating significant growth potential outside the U.S. [25][33] - The pandemic has accelerated the shift to online learning, which is expected to have a lasting impact on the education sector [11][21] Company Strategy and Development Direction - Chegg plans to invest in international growth and skills-based learning, aiming to become a prominent player in these areas [25][20] - The company is focusing on enhancing its eCommerce infrastructure and expanding international content [16][25] - Chegg is committed to supporting educational institutions in their transition to online learning, including the introduction of tools like Honor Shield to maintain academic integrity [24][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing the ongoing demand for online learning and the need for skills-based training [18][20] - The pandemic has highlighted the necessity for educational institutions to invest in technology and adapt to new learning environments [21][22] Other Important Information - Chegg has made significant investments in technology to combat account sharing and enhance user experience [26][68] - The company has launched Honor Shield, a tool designed to support the integrity of online exams [24][55] Q&A Session Summary Question: International Subscriber Growth - Management noted that international growth is strong, particularly in English-speaking countries and regions like the Middle East and Asia, with a belief that international opportunities may surpass domestic ones [40][42] Question: Honor Shield and Academic Integrity - Management discussed the launch of Honor Shield as a response to concerns about academic integrity, emphasizing their commitment to supporting students and institutions [45][56] Question: Revenue Guidance and Required Materials - Management clarified that they expect Required Materials revenue to remain stable, with no significant growth or decline anticipated [62][63] Question: Account Sharing Technology Investments - Management reported positive early returns from investments aimed at reducing account sharing, noting that many users who previously shared accounts are now converting to paid subscriptions [66][72] Question: Skills-Based Learning Expansion - Management highlighted the importance of skills-based training and indicated plans for organic and potential acquisition-driven growth in this area [81][89] Question: Future Partnerships with Universities - Management confirmed ongoing interest in partnerships with universities while maintaining a focus on direct-to-student offerings [75][77]

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 ...