Chegg Announces Repurchase of 0% Convertible Senior Notes Due 2026

Rhea-AI Summary

Chegg has announced plans to repurchase approximately $116.6 million of its outstanding 0% Convertible Senior Notes due 2026 through privately negotiated agreements. The company will pay an aggregate cash price of approximately $96.2 million for these repurchases. The transactions are part of Chegg's previously announced securities repurchase program and are expected to close on December 3, 2024. After completion, $127.9 million in Notes will remain outstanding, with $207.5 million still available under the repurchase program.

Positive

• Debt reduction of $116.6 million through note repurchases
• Favorable repurchase price at $96.2 million, representing a discount to face value
• Strong cash position enabling significant debt repurchase
• $207.5 million remaining available under repurchase program

Negative

• $127.9 million in convertible notes still remaining outstanding

Insights

Financial Analyst

The $96.2 million debt repurchase at a significant discount demonstrates strong capital management. Buying back the notes at approximately 82.5% of face value creates immediate value for shareholders by reducing outstanding debt while preserving cash. This transaction will strengthen the balance sheet by decreasing total debt by $116.6 million, improving financial flexibility.

The remaining $207.5 million available under the repurchase program provides substantial capacity for additional value-creating transactions. With $127.9 million of notes still outstanding, management maintains optionality for future repurchases if market conditions remain favorable. The discount capture effectively reduces the company's debt burden while optimizing capital allocation in the current high-interest-rate environment.

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Chegg, Inc. (NYSE:CHGG), a leading student-first connected learning platform, today announced that it has entered into individual, privately negotiated repurchase agreements with certain holders of its outstanding 0% Convertible Senior Notes due 2026 (the “Notes”) to repurchase approximately $116.6 million in aggregate principal amount of the Notes for an aggregate cash repurchase price of approximately $96.2 million (the “note repurchase transactions”). The note repurchase transactions were entered into in connection with Chegg’s previously announced securities repurchase program and are expected to close on December 3, 2024, subject to the satisfaction of customary closing conditions. Following the closing, approximately $127.9 million aggregate principal amount of the Notes will remain outstanding and approximately $207.5 million will remain available under Chegg’s securities repurchase program.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any offer or sale of these securities in any state or jurisdiction in which the offer, solicitation, or sale would be unlawful prior to the registration or qualification thereof under the securities laws of any such state or jurisdiction.

About Chegg

Chegg provides individualized learning support to students as they pursue their educational journeys. Available on demand 24/7 and powered by over a decade of learning insights, the Chegg platform offers students AI-powered academic support thoughtfully designed for education coupled with access to a vast network of subject matter experts who ensure quality. No matter the goal, level, or style, Chegg helps millions of students around the world learn with confidence by helping them build essential academic, life, and job skills to achieve success. Chegg is a publicly held company and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.

Forward-Looking Statements

This press release contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us on the date of this press release. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, regarding the amount of the Notes to be repurchased, the amount of the Notes to remain outstanding following completion of the note repurchase transactions, the amount to remain under our securities repurchase program following completion of the note repurchase transactions, the ability to complete the note repurchase transactions on the timeline described herein or at all and the final aggregate cash repurchase price for the note repurchase transactions. Among the factors that could cause actual results to differ materially from those indicated in the forward-looking statements are: changes in the price of the common stock and changes in the convertible note and other capital markets. All information provided in this release is as of the date hereof, and Chegg undertakes no duty to update this information except as required by law. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Chegg’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 20, 2024 and Chegg's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 filed with the Securities and Exchange Commission on November 12, 2024, and could cause actual results to differ materially from expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241125687867/en/

Media Contact: Candace Sue, press@chegg.com

Investor Contact: Tracey Ford, IR@chegg.com

Source: Chegg

FAQ

How much convertible debt is Chegg (CHGG) repurchasing in December 2024?

Chegg is repurchasing approximately $116.6 million in aggregate principal amount of its 0% Convertible Senior Notes due 2026.

What is the cash price Chegg (CHGG) is paying for the note repurchase?

Chegg is paying approximately $96.2 million in cash for the note repurchase transactions.

How much will remain available under Chegg's (CHGG) securities repurchase program after this transaction?

Approximately $207.5 million will remain available under Chegg's securities repurchase program after the transaction.

What is the remaining outstanding amount of Chegg's (CHGG) 2026 convertible notes after this repurchase?

Approximately $127.9 million aggregate principal amount of the Notes will remain outstanding after the repurchase.