Chegg Reports 2024 Third Quarter Earnings
Chegg (NYSE:CHGG) reported Q3 2024 financial results with total net revenues of $136.6 million, down 13% year-over-year. Subscription Services revenues decreased 14% to $119.8 million, with subscriber count falling 13% to 3.8 million. The company posted a net loss of $212.6 million, while achieving non-GAAP net income of $9.8 million and adjusted EBITDA of $22.3 million. The Board approved a $300 million increase to its securities repurchase program. For Q4 2024, Chegg projects revenues between $141-143 million and adjusted EBITDA of $32-34 million.
Chegg (NYSE:CHGG) ha riportato i risultati finanziari per il terzo trimestre del 2024, con entrate nette totali di 136,6 milioni di dollari, in calo del 13% rispetto all'anno precedente. Le entrate dei Servizi in Abbonamento sono diminuite del 14%, attestandosi a 119,8 milioni di dollari, con il numero di abbonati in calo del 13%, raggiungendo 3,8 milioni. L'azienda ha registrato una perdita netta di 212,6 milioni di dollari, raggiungendo però un reddito netto non-GAAP di 9,8 milioni di dollari e un EBITDA rettificato di 22,3 milioni di dollari. Il Consiglio ha approvato un aumento di 300 milioni di dollari al suo programma di riacquisto di titoli. Per il quarto trimestre del 2024, Chegg prevede entrate comprese tra 141 e 143 milioni di dollari e un EBITDA rettificato tra 32 e 34 milioni di dollari.
Chegg (NYSE:CHGG) reportó los resultados financieros del tercer trimestre de 2024, con ingresos netos totales de 136,6 millones de dólares, una disminución del 13% en comparación con el año anterior. Los ingresos de Servicios de Suscripción cayeron un 14% a 119,8 millones de dólares, con la cantidad de suscriptores que disminuyó un 13% a 3,8 millones. La empresa registró una pérdida neta de 212,6 millones de dólares, mientras que logró un ingreso neto no-GAAP de 9,8 millones de dólares y un EBITDA ajustado de 22,3 millones de dólares. La Junta aprobó un aumento de 300 millones de dólares en su programa de recompra de valores. Para el cuarto trimestre de 2024, Chegg proyecta ingresos entre 141 y 143 millones de dólares y un EBITDA ajustado de entre 32 y 34 millones de dólares.
Chegg (NYSE:CHGG)는 2024년 3분기 재무 결과를 발표했으며, 총 순수익이 1억 3,660만 달러로 전년 대비 13% 감소했습니다. 구독 서비스 수익은 14% 감소하여 1억 1,980만 달러였으며, 구독자 수는 13% 줄어든 380만 명에 이릇습니다. 회사는 순손실 2억 1,260만 달러를 기록했으며, 비GAAP 기준 순이익은 980만 달러, 조정된 EBITDA는 2,230만 달러에 달했습니다. 이사회는 증권 재매입 프로그램에 3억 달러 증액을 승인했습니다. 2024년 4분기에는 1억 4,100만에서 1억 4,300만 달러 사이의 수익과 3,200만에서 3,400만 달러의 조정된 EBITDA를 예상하고 있습니다.
Chegg (NYSE:CHGG) a publié ses résultats financiers pour le troisième trimestre 2024, avec des revenus nets totaux de 136,6 millions de dollars, en baisse de 13 % par rapport à l'année précédente. Les revenus des services d'abonnement ont diminué de 14 % pour atteindre 119,8 millions de dollars, avec une baisse de 13 % du nombre d'abonnés, s'élevant à 3,8 millions. L'entreprise a affiché une perte nette de 212,6 millions de dollars, tout en atteignant un revenu net non-GAAP de 9,8 millions de dollars et un EBITDA ajusté de 22,3 millions de dollars. Le Conseil a approuvé une augmentation de 300 millions de dollars de son programme de rachat de titres. Pour le quatrième trimestre 2024, Chegg prévoit des revenus compris entre 141 et 143 millions de dollars et un EBITDA ajusté entre 32 et 34 millions de dollars.
Chegg (NYSE:CHGG) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit gesamt-netto Einnahmen von 136,6 Millionen Dollar, was einem Rückgang von 13 % im Vergleich zum Vorjahr entspricht. Die Einnahmen der Abonnementdienste sanken um 14 % auf 119,8 Millionen Dollar, und die Abonnentenzahl fiel um 13 % auf 3,8 Millionen. Das Unternehmen verzeichnete einen Nettoverlust von 212,6 Millionen Dollar, während es einen non-GAAP Nettogewinn von 9,8 Millionen Dollar und ein bereinigtes EBITDA von 22,3 Millionen Dollar erzielte. Der Vorstand genehmigte eine Erhöhung des Rückkaufprogramms um 300 Millionen Dollar. Für das 4. Quartal 2024 prognostiziert Chegg Einnahmen zwischen 141 und 143 Millionen Dollar sowie ein bereinigtes EBITDA von 32 bis 34 Millionen Dollar.
- Board approved $300 million increase to securities repurchase program
- 70% Non-GAAP Gross Margin maintained
- Better than expected revenue and adjusted EBITDA performance in Q3
- Total net revenues declined 13% year-over-year to $136.6 million
- Subscription Services revenues fell 14% to $119.8 million
- Subscriber base decreased 13% to 3.8 million users
- Net loss of $212.6 million
- Additional restructuring required due to AI headwinds
“While the global education industry continues to experience tremendous change, in Q3, we showed early progress against our strategic plan and delivered better-than-expected revenue and adjusted EBITDA. However, recent technology shifts and generative AI have created significant headwinds, and as a result, we are undertaking an additional restructuring,” said Nathan Schultz, Chief Executive Officer & President of Chegg, Inc. “There continues to be a market of students looking for the high-quality, proven, and differentiated learning expertise Chegg provides, and we believe our brand and product experience are resilient and will endure.”
In November 2024, our Board of Directors approved a
Third Quarter 2024 Highlights
-
Total Net Revenues of
, a decrease of$136.6 million 13% year-over-year -
Subscription Services Revenues of
, a decrease of$119.8 million 14% year-over-year -
Gross Margin of
68% -
Non-GAAP Gross Margin of
70% -
Net Loss was
$212.6 million -
Non-GAAP Net Income was
$9.8 million -
Adjusted EBITDA was
$22.3 million -
3.8 million Subscription Services subscribers, a decrease of
13% year-over-year
Total net revenues include revenues from Subscription Services and Skills and Other. Subscription Services includes revenues from our Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu offerings. Skills and Other includes revenues from Chegg Skills, Advertising, and any other revenues not included in Subscription Services.
For more information about non-GAAP net income, non-GAAP gross margin and adjusted EBITDA, and a reconciliation of non-GAAP net income to net (loss) income, gross margin to non-GAAP gross margin and adjusted EBITDA to net (loss) income, see the sections of this press release titled, “Use of Non-GAAP Measures,” “Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA,” and “Reconciliation of GAAP to Non-GAAP Financial Measures.”
Business Outlook
Fourth Quarter 2024
-
Total Net Revenues in the range of
to$141 million $143 million -
Subscription Services Revenues in the range of
to$126 million $128 million -
Gross Margin between
67% and68% -
Adjusted EBITDA in the range of
to$32 million $34 million
For more information about the use of forward-looking non-GAAP measures, a reconciliation of forward-looking net loss to EBITDA and adjusted EBITDA for the fourth quarter 2024, see the below sections of the press release titled “Use of Non-GAAP Measures,” and “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA.”
An updated investor presentation and an investor data sheet can be found on Chegg’s Investor Relations website https://investor.chegg.com.
Prepared Remarks - Nathan Schultz, CEO & President Chegg, Inc.
Thank you, Tracey. Hello everyone and thank you for joining Chegg’s third-quarter earnings call. I’ll start today by walking you through our Q3 results, and then discuss important shifts in our competitive landscape and what they mean for our business going forward.
In Q3, while the global education industry continues to experience tremendous change, we have shown early progress against the strategic plan we outlined in June. As a result of this work, in Q3 we delivered better-than-expected revenue of
However, technology shifts have created headwinds for our industry and Chegg’s business specifically. Recent advancements in the AI search experience and the adoption of free and paid generative AI services by students, have resulted in challenges for Chegg. These factors are adversely affecting our business outlook and are requiring us to refocus and adjust the size of our business.
Even in the face of adversity, there continues to be a large market of students looking for the high-quality, proven learning experience that Chegg provides. We will continue to enthusiastically serve this audience, and I remain optimistic in the outlook for us to extend our brand, individualize our product and weather these challenges.
The first impact I’d like to discuss is Google’s broad rollout of its AI Overviews search experience, or AIO, which displays AI-generated content at the top of a search results page. This experience keeps users on Google’s search results page instead of leading them onto third-party sites such as Chegg. This rollout has been rapid, and while we’ve been monitoring the development of AIO all year, it was not until mid-August that this search experience significantly expanded. It’s our belief that the prevalence of AIO will only continue to increase, and that Google, in its attempt to maintain market share, is shifting from being a search origination point to the destination, disintermediating content sites like Chegg.
Second, across our industry, there has been a continued increase in the adoption of free and paid generative AI products. It has been widely reported and substantiated in industry research, that students are increasingly turning to generative AI for academic support, such as homework and exams. This issue impacts the education ecosystem at large, including universities and education technology companies broadly where students see generative AI products like Chat GPT as strong alternatives to vertically specialized solutions for education, such as Chegg.
These factors, the speed and scale of Google’s AIO rollout and student adoption of generative AI products, have negatively impacted our industry and our business. We have seen a sharp decline in overall traffic, and therefore, a decline in our outlook on revenue. Global non-subscriber traffic to Chegg declined year-over-year
We have taken all of this into account, and consequently, we do not expect to meet our 2025 goals of
Earlier this year, we undertook a strategic restructuring based on the environment in which we were operating. Since then, these new factors have come into play with immense speed and impact. As a result, we are undertaking an additional restructuring to further manage costs and align with the market.
Effective immediately, we are initiating a broad restructuring that will impact all groups across the company:
-
We will reduce headcount by an additional
21% . -
We anticipate that these actions, along with additional operating expense savings, will result in annualized non-GAAP cost savings of
in 2025.$60 -$70 million -
The cost savings from the restructuring announced in June, coupled with the restructuring announced today, will result in a combined non-GAAP savings of
in 2025.$100 -$120 million
Even with this, we remain optimistic that there is an audience for Chegg. While it’s clear that some students will favor generative AI options, we believe there is still a large market of students who care about learning and are seeking products that improve their competency and outcomes. In an August 2024 quantitative study, we found that over
This is what differentiates Chegg from other generative AI tools today and why millions of learners depend on Chegg to provide meaningful learning experiences with the highest quality content possible. Fifteen years of deep expertise in understanding students, applying advanced learning science to the subjects and topics students learn, providing an archive of 132 million high-quality solutions, and human-supported output has created deep trust and awareness for Chegg. That’s why students continue to come directly to Chegg, even as the competitive environment evolves.
We have taken steps towards the strategic plan we laid out in June. We remain committed to developing a verticalized and individualized experience for education and supporting students throughout their entire learning journey, starting with academic support and eventually functional support.
Let me acknowledge the progress we have made on our strategic plan in the third quarter:
- We launched our “Small steps, big wins” brand marketing campaign, which is showing early signs of progress, with year-over-year improvements in click-thru-rate and conversion rate across many of our paid marketing channels.
- We introduced a content quality and satisfaction guarantee differentiating our service against generative AI and building trust and loyalty with our subscribers. While it is still early, it is driving a lift in new subscriber conversion rate.
- We implemented an ‘AI Arena’ that allows us to evaluate and introduce new frontier AI models in real-time to deliver the most accurate solutions for students and integrate AI into the full learning journey.
- We upgraded our QnA experience to align with our drive towards providing an individualized and adaptive learning solution. This effort has already shown an improvement in user engagement and retention.
- We launched an app on Discord as well as an Extension on Chrome to reach students where they are already spending time. These efforts connect students' study activities across sites, engage them with our product, create new pathways for product-driven growth, which we expect will reduce our reliance on SEO.
- We moved to a new vendor-based commerce platform, which will reduce our costs, provide flexibility and allow us to move faster as we continue to evolve our pricing and packaging programs.
- And finally, we launched four direct-to-institution partnerships, providing access to Chegg Study paid for by the institutional partner. These pilots allow us to gather valuable insights on how Chegg can enhance classroom learning, supporting our goal to diversify our customer acquisition and revenue streams, while strengthening Chegg's role in improving student learning outcomes.
As we head into the spring semester, you will continue to see our commitment to building and generating momentum with our brand, traffic, and product capabilities:
- We will continue to raise brand awareness with a new spring brand campaign. Our creative strategy builds on Chegg's long legacy of empowering students and our unique caring approach. The plan will activate across the full funnel, which we believe will bring new users in, create strong consideration and connection, and ultimately drive conversion. Based on what we learned this fall from Small Steps Big Wins, we believe this strategy will bring both audience expansion and acquisition efficiency.
- On the product front, we will continue delivering individualized learning solutions, specifically focusing on expanding into two of the most highly relevant use cases: practice and solution comparison. These are durable needs and core learner behaviors that support learning.
While we acknowledge the significance of the headwinds we covered earlier, Chegg has a deep legacy of serving students and we believe our brand and product experiences are resilient. We remain optimistic and will continue to be there for the students who have grown to rely on us. As you’ve heard, we are already taking steps to strengthen our experience and increase efficiency across the business.
This is a multi-year plan that will require patience, and we will continue to manage our expenses prudently as the competitive landscape evolves. We will keep focused on doing the right thing for our investors, our team, and the students we serve.
Before I end, I want to thank our employees around the world for their hard work and dedication. Their efforts and talents have helped support students and bring learning to life, and while this is a trying time for us all, I am confident that we will get through it.
With that, I’ll turn it over to David.
Prepared Remarks - David Longo, CFO Chegg, Inc.
Thank you, Nathan and good afternoon.
Today, I will present our financial performance for the third quarter of 2024 and the company’s outlook for Q4.
We delivered a solid third quarter. During the quarter, we remained focused on executing our strategic plan to deliver our AI-driven experience to students around the world, while we continued to prudently manage our expenses. We exceeded our Q3 guidance on both revenue and adjusted EBITDA, and our balance sheet remains healthy.
In the third quarter, total revenue was
We had two notable items this quarter. First, we recorded an impairment charge against our goodwill. As a result of continued industry pressure and declines in our market capitalization, and as required by accounting rules, we completed an impairment test on our goodwill which resulted in a
Free cash flow was
Looking at the balance sheet, we ended the quarter with cash and investments of
Today, we announced that our Board of Directors has authorized an increase of
As Nathan discussed earlier, we are executing a restructuring plan to better align our cost structure with recent industry challenges and the negative impact on our business. While these difficult decisions are essential for Chegg's future, we recognize the unfortunate impact they may have on many of our employees and their families.
Our restructuring will impact 319 employees, or approximately
Moving on to Q4 guidance, we expect:
-
Total revenue between
and$141 , with Subscription Services revenue between$143 million and$126 ;$128 million - Gross margin to be in the range of 67 to 68 percent;
-
And adjusted EBITDA between
and$32 .$34 million
In closing, while our business outlook has significantly softened versus our prior expectations, and these numbers are not where we want them to be, like many companies in the ed-tech space, we are dealing with the challenges of a dynamically changing AI landscape. We are working to expand our best-in-class verticalized experience for students focused on improving their outcomes, however, it will take time to adjust to the new opportunity and see the benefits in our business results. In the meantime, we are committed to maintaining transparency about the industry and our business trends.
With that, I will turn the call over to the operator for your questions.
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Use of Investor Relations Website for Regulation FD Purposes
Chegg also uses its media center website, https://www.chegg.com/press, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor https://www.chegg.com/press, in addition to following press releases, Securities and Exchange Commission filings and public conference calls and webcasts.
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 based in
Use of Non-GAAP Measures
To supplement Chegg’s financial results presented in accordance with generally accepted accounting principles in
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Chegg defines (1) adjusted EBITDA as earnings before interest, taxes, depreciation and amortization or EBITDA, adjusted for share-based compensation expense, other income, net, acquisition-related compensation costs, impairment expense, restructuring charges, content and related assets charge and transitional logistic charges; (2) non-GAAP cost of revenues as cost of revenues excluding amortization of intangible assets, share-based compensation expense, acquisition-related compensation costs, restructuring charges, content and related assets charge, and transitional logistic charges; (3) non-GAAP gross profit as gross profit excluding amortization of intangible assets, share-based compensation expense, acquisition-related compensation costs, restructuring charges, content and related assets charge, and transitional logistic charges; (4) non-GAAP gross margin is defined as non-GAAP gross profit divided by net revenues, (5) non-GAAP operating expenses as operating expenses excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, restructuring charges, impairment expense, impairment of lease related assets, and loss contingency; (6) non-GAAP income from operations as loss from operations excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, restructuring charges, impairment expense, content and related assets charge, impairment of lease related assets, loss contingency, and transitional logistic charges; (7) non-GAAP net income as net (loss) income excluding share-based compensation expense, amortization of intangible assets, acquisition-related compensation costs, amortization of debt issuance costs, the income tax effect of non-GAAP adjustments, restructuring charges, impairment expense, content and related assets charge, impairment of lease related assets, gain on sale of strategic equity investment, gain on early extinguishment of debt, loss contingency and transitional logistic charges; (8) non-GAAP weighted average shares outstanding as weighted average shares outstanding adjusted for the effect of shares for stock plan activity and shares related to our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding; (9) non-GAAP net income per share is defined as non-GAAP net income divided by non-GAAP weighted average shares outstanding; and (10) free cash flow as net cash provided by operating activities adjusted for purchases of property and equipment. To the extent additional significant non-recurring items arise in the future, Chegg may consider whether to exclude such items in calculating the non-GAAP financial measures it uses.
Chegg believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Chegg’s performance by excluding items that may not be indicative of Chegg’s core business, operating results or future outlook. Chegg management uses these non-GAAP financial measures in assessing Chegg’s operating results, as well as when planning, forecasting and analyzing future periods and believes that such measures enhance investors’ overall understanding of our current financial performance. These non-GAAP financial measures also facilitate comparisons of Chegg’s performance to prior periods.
As presented in the “Reconciliation of Net (Loss) Income to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA,” and “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow,” tables below, each of the non-GAAP financial measures excludes or includes one or more of the following items:
Share-based compensation expense.
Share-based compensation expense is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Chegg's control. As a result, management excludes this item from Chegg's internal operating forecasts and models. Management believes that non-GAAP measures adjusted for share-based compensation expense provide investors with a basis to measure Chegg's core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.
Amortization of intangible assets.
Chegg amortizes intangible assets, including those that contribute to generating revenues, that it acquires in conjunction with acquisitions, which results in non‑cash expenses that may not otherwise have been incurred. Chegg believes excluding the expense associated with intangible assets from non-GAAP measures allows for a more accurate assessment of its ongoing operations and provides investors with a better comparison of period-over-period operating results. No corresponding adjustments have been made related to revenues generated from acquired intangible assets.
Acquisition-related compensation costs.
Acquisition-related compensation costs include compensation expense resulting from the employment retention of certain key employees established in accordance with the terms of the acquisitions. In most cases, these acquisition-related compensation costs are not factored into management's evaluation of potential acquisitions or Chegg's performance after completion of acquisitions, because they are not related to Chegg's core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related compensation costs from non-GAAP measures provides investors with a basis to compare Chegg’s results against those of other companies without the variability caused by purchase accounting.
Amortization of debt issuance costs.
The difference between the effective interest expense and the contractual interest expense are excluded from management's assessment of our operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. Chegg believes that the exclusion of the non-cash interest expense provides investors with a better comparison of period-over-period operating results.
Income tax effect of non-GAAP adjustments.
We utilize a non-GAAP effective tax rate for evaluating our operating results, which is based on our current mid-term projections. This non-GAAP tax rate could change for various reasons including, but not limited to, significant changes resulting from tax legislation, changes to our corporate structure and other significant events. Chegg believes that the inclusion of the income tax effect of non-GAAP adjustments provides investors with a better comparison of period-over-period operating results.
Restructuring charges.
Restructuring charges represent expenses incurred in conjunction with a reduction in workforce. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because they are nonrecurring and the result of an event that is not considered a core-operating activity. Chegg believes that it is appropriate to exclude the restructuring charges from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.
Impairment expense.
Impairment expense represents the impairment of goodwill, intangible assets, and property and equipment. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities and are not indicative of our ongoing operating performance. Chegg believes that it is appropriate to exclude the impairment expense from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.
To conform with current quarter presentation,
Impairment of lease related assets.
The impairment of lease related assets represents impairment charge recorded on the ROU asset and leasehold improvements associated with the closure of our offices. The impairment of lease related assets is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.
Content and related assets charge.
The content and related assets charge represents a write off of certain content and related assets. The content and related assets charge is excluded from non-GAAP financial measures because it is the result of a discrete event that is not considered core-operating activities. Chegg believes that it is appropriate to exclude the content and related assets charge from non-GAAP financial measures because it enables the comparison of period-over-period operating results.
Gain on sale of strategic equity investment.
The gain on sale of strategic equity investment represents a one-time event to record the sale of our equity investment in Sound Ventures. We believe that it is appropriate to exclude the gain from non-GAAP financial measure because it is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.
Gain on early extinguishment of debt.
The difference between the carrying amount of early extinguished debt and the reacquisition price is excluded from management's assessment of our operating performance because management believes that these non-cash gains are not indicative of ongoing operating performance. Chegg believes that the exclusion of the gain on early extinguishment of debt provides investors with a better comparison of period-over-period operating results.
Loss contingency.
We record a contingent liability for a loss contingency related to legal matters when a loss is both probable and reasonably estimable. The loss contingency is excluded from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities. Chegg believes that it is appropriate to exclude the loss contingency from non-GAAP financial measures because it enables the comparison of period-over-period operating results.
Transitional logistics charges.
The transitional logistics charges represent incremental expenses incurred as we transition our print textbooks to a third party. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because it is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.
Effect of shares for stock plan activity.
The effect of shares for stock plan activity represents the dilutive impact of outstanding stock options, RSUs, and PSUs calculated under the treasury stock method.
Effect of shares related to convertible senior notes.
The effect of shares related to convertible senior notes represents the dilutive impact of our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding as they were antidilutive on a GAAP basis.
Free cash flow.
Free cash flow represents net cash provided by operating activities adjusted for purchases of property and equipment. Chegg considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property and equipment, which can then be used to, among other things, invest in Chegg's business and make strategic acquisitions. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in Chegg's cash balance for the period.
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include, without limitation, that there continues to be a large market of students looking for the high-quality, proven, and differentiated learning expertise and experience that Chegg provides, that we will continue to enthusiastically serve this audience, our ability to extend our brand, individualize our product and weather current and future business challenges, that our brand and product experience will endure, our intention to implement a program to purchase up to
CHEGG, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands, except for number of shares and par value) |
|||||||
(unaudited) |
|||||||
|
September 30,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
152,073 |
|
|
$ |
135,757 |
|
Short-term investments |
|
209,003 |
|
|
|
194,257 |
|
Accounts receivable, net of allowance of |
|
23,749 |
|
|
|
31,404 |
|
Prepaid expenses |
|
24,706 |
|
|
|
20,980 |
|
Other current assets |
|
86,980 |
|
|
|
32,437 |
|
Total current assets |
|
496,511 |
|
|
|
414,835 |
|
Long-term investments |
|
270,161 |
|
|
|
249,547 |
|
Property and equipment, net |
|
177,882 |
|
|
|
183,073 |
|
Goodwill, net |
|
— |
|
|
|
631,995 |
|
Intangible assets, net |
|
11,424 |
|
|
|
52,430 |
|
Right of use assets |
|
29,071 |
|
|
|
25,130 |
|
Deferred tax assets, net |
|
2,308 |
|
|
|
141,843 |
|
Other assets |
|
15,315 |
|
|
|
28,382 |
|
Total assets |
$ |
1,002,672 |
|
|
$ |
1,727,235 |
|
Liabilities and stockholders' equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
18,124 |
|
|
$ |
28,184 |
|
Deferred revenue |
|
44,355 |
|
|
|
55,336 |
|
Accrued liabilities |
|
125,138 |
|
|
|
77,863 |
|
Current portion of convertible senior notes, net |
|
358,222 |
|
|
|
357,079 |
|
Total current liabilities |
|
545,839 |
|
|
|
518,462 |
|
Long-term liabilities |
|
|
|
||||
Convertible senior notes, net |
|
243,242 |
|
|
|
242,758 |
|
Long-term operating lease liabilities |
|
23,665 |
|
|
|
18,063 |
|
Other long-term liabilities |
|
4,945 |
|
|
|
3,334 |
|
Total long-term liabilities |
|
271,852 |
|
|
|
264,155 |
|
Total liabilities |
|
817,691 |
|
|
|
782,617 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders' equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
104 |
|
|
|
103 |
|
Additional paid-in capital |
|
1,098,242 |
|
|
|
1,031,627 |
|
Accumulated other comprehensive loss |
|
(30,049 |
) |
|
|
(34,739 |
) |
Accumulated deficit |
|
(883,316 |
) |
|
|
(52,373 |
) |
Total stockholders' equity |
|
184,981 |
|
|
|
944,618 |
|
Total liabilities and stockholders' equity |
$ |
1,002,672 |
|
|
$ |
1,727,235 |
|
CHEGG, INC. |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(in thousands, except per share amounts) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net revenues |
$ |
136,593 |
|
|
$ |
157,854 |
|
|
$ |
474,090 |
|
|
$ |
528,308 |
|
Cost of revenues(1) |
|
43,420 |
|
|
|
83,575 |
|
|
|
135,328 |
|
|
|
180,137 |
|
Gross profit |
|
93,173 |
|
|
|
74,279 |
|
|
|
338,762 |
|
|
|
348,171 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Research and development(1) |
|
41,337 |
|
|
|
46,202 |
|
|
|
129,423 |
|
|
|
145,981 |
|
Sales and marketing(1) |
|
26,508 |
|
|
|
28,872 |
|
|
|
80,428 |
|
|
|
96,845 |
|
General and administrative(1) |
|
51,910 |
|
|
|
53,475 |
|
|
|
161,460 |
|
|
|
182,757 |
|
Impairment expense |
|
195,708 |
|
|
|
3,600 |
|
|
|
677,239 |
|
|
|
3,600 |
|
Total operating expenses |
|
315,463 |
|
|
|
132,149 |
|
|
|
1,048,550 |
|
|
|
429,183 |
|
Loss from operations |
|
(222,290 |
) |
|
|
(57,870 |
) |
|
|
(709,788 |
) |
|
|
(81,012 |
) |
Interest expense and other income, net: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(658 |
) |
|
|
(733 |
) |
|
|
(1,959 |
) |
|
|
(3,115 |
) |
Other income, net |
|
7,586 |
|
|
|
40,492 |
|
|
|
25,485 |
|
|
|
116,671 |
|
Total interest expense and other income, net |
|
6,928 |
|
|
|
39,759 |
|
|
|
23,526 |
|
|
|
113,556 |
|
(Loss) income before benefit from (provision for) income taxes |
|
(215,362 |
) |
|
|
(18,111 |
) |
|
|
(686,262 |
) |
|
|
32,544 |
|
Benefit from (provision for) income taxes |
|
2,723 |
|
|
|
(172 |
) |
|
|
(144,681 |
) |
|
|
(24,029 |
) |
Net (loss) income |
$ |
(212,639 |
) |
|
$ |
(18,283 |
) |
|
$ |
(830,943 |
) |
|
$ |
8,515 |
|
Net (loss) income per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(2.05 |
) |
|
$ |
(0.16 |
) |
|
$ |
(8.08 |
) |
|
$ |
0.07 |
|
Diluted |
$ |
(2.05 |
) |
|
$ |
(0.16 |
) |
|
$ |
(8.08 |
) |
|
$ |
(0.24 |
) |
Weighted average shares used to compute net (loss) income per share |
|
|
|
|
|
|
|
||||||||
Basic |
|
103,723 |
|
|
|
115,407 |
|
|
|
102,893 |
|
|
|
119,001 |
|
Diluted |
|
103,723 |
|
|
|
115,407 |
|
|
|
102,893 |
|
|
|
121,876 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes share-based compensation expense and restructuring charges as follows: |
|
|
|
|
|
|
|
||||||||
............................................................................................................. |
|
|
|
|
|
|
|
||||||||
Share-based compensation expense: |
|
|
|
|
|
|
|
||||||||
Cost of revenues |
$ |
471 |
|
|
$ |
598 |
|
|
$ |
1,450 |
|
|
$ |
1,685 |
|
Research and development |
|
7,492 |
|
|
|
11,027 |
|
|
|
23,824 |
|
|
|
33,909 |
|
Sales and marketing |
|
2,100 |
|
|
|
2,435 |
|
|
|
5,966 |
|
|
|
7,116 |
|
General and administrative |
|
11,868 |
|
|
|
17,870 |
|
|
|
38,027 |
|
|
|
58,886 |
|
Total share-based compensation expense |
$ |
21,931 |
|
|
$ |
31,930 |
|
|
$ |
69,267 |
|
|
$ |
101,596 |
|
............................................................................................................. |
|
|
|
|
|
|
|
||||||||
Restructuring charges: |
|
|
|
|
|
|
|
||||||||
Cost of revenues |
$ |
12 |
|
|
$ |
— |
|
|
$ |
203 |
|
|
$ |
12 |
|
Research and development |
|
827 |
|
|
|
— |
|
|
|
2,909 |
|
|
|
1,692 |
|
Sales and marketing |
|
— |
|
|
|
— |
|
|
|
906 |
|
|
|
1,228 |
|
General and administrative |
|
1,273 |
|
|
|
— |
|
|
|
4,822 |
|
|
|
2,772 |
|
Total restructuring charges |
$ |
2,112 |
|
|
$ |
— |
|
|
$ |
8,840 |
|
|
$ |
5,704 |
|
CHEGG, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities |
|
|
|
||||
Net (loss) income |
$ |
(830,943 |
) |
|
$ |
8,515 |
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
||||
Share-based compensation expense |
|
69,267 |
|
|
|
101,596 |
|
Depreciation and amortization expense |
|
58,966 |
|
|
|
108,945 |
|
Deferred income taxes |
|
141,103 |
|
|
|
20,929 |
|
Operating lease expense, net |
|
4,647 |
|
|
|
4,535 |
|
Amortization of debt issuance costs |
|
1,628 |
|
|
|
2,610 |
|
Loss from write-off of property and equipment |
|
2,024 |
|
|
|
3,578 |
|
Impairment expense |
|
677,239 |
|
|
|
3,600 |
|
Gain on early extinguishment of debt |
|
— |
|
|
|
(85,926 |
) |
Loss contingency |
|
5,100 |
|
|
|
7,000 |
|
Impairment on lease related assets |
|
2,189 |
|
|
|
— |
|
Other non-cash items |
|
222 |
|
|
|
(389 |
) |
Change in assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
8,019 |
|
|
|
(6,908 |
) |
Prepaid expenses and other current assets |
|
(55,725 |
) |
|
|
558 |
|
Other assets |
|
(469 |
) |
|
|
8,671 |
|
Accounts payable |
|
(8,308 |
) |
|
|
4,820 |
|
Deferred revenue |
|
(11,763 |
) |
|
|
2,539 |
|
Accrued liabilities |
|
46,849 |
|
|
|
(6,149 |
) |
Other liabilities |
|
(2,968 |
) |
|
|
(9,810 |
) |
Net cash provided by operating activities |
|
107,077 |
|
|
|
168,714 |
|
Cash flows from investing activities |
|
|
|
||||
Purchases of property and equipment |
|
(61,659 |
) |
|
|
(57,298 |
) |
Proceeds from disposition of textbooks |
|
— |
|
|
|
9,787 |
|
Purchases of investments |
|
(134,213 |
) |
|
|
(585,275 |
) |
Maturities of investments |
|
96,907 |
|
|
|
561,197 |
|
Proceeds from sale of investments |
|
— |
|
|
|
238,681 |
|
Proceeds from sale of strategic equity investment |
|
15,500 |
|
|
|
— |
|
Purchase of strategic equity investment |
|
— |
|
|
|
(11,853 |
) |
Net cash (used in) provided by investing activities |
|
(83,465 |
) |
|
|
155,239 |
|
Cash flows from financing activities |
|
|
|
||||
Proceeds from common stock issued under stock plans, net |
|
2,191 |
|
|
|
3,108 |
|
Payment of taxes related to the net share settlement of equity awards |
|
(8,648 |
) |
|
|
(13,857 |
) |
Repurchase of common stock |
|
— |
|
|
|
(186,368 |
) |
Repayment of convertible senior notes |
|
— |
|
|
|
(505,986 |
) |
Proceeds from exercise of convertible senior notes capped call |
|
— |
|
|
|
297 |
|
Net cash used in financing activities |
|
(6,457 |
) |
|
|
(702,806 |
) |
Effect of exchange rate changes |
|
(149 |
) |
|
|
(379 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
17,006 |
|
|
|
(379,232 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
137,976 |
|
|
|
475,854 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
154,982 |
|
|
$ |
96,622 |
|
|
Nine Months Ended September 30, |
||||
|
2024 |
|
2023 |
||
Supplemental cash flow data: |
|
|
|
||
Cash paid during the period for: |
|
|
|
||
Interest |
$ |
449 |
|
$ |
741 |
Income taxes, net of refunds |
$ |
3,531 |
|
$ |
8,368 |
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
||
Operating cash flows from operating leases |
$ |
6,329 |
|
$ |
7,037 |
Right of use assets obtained in exchange for lease obligations: |
|
|
|
||
Operating leases |
$ |
9,686 |
|
$ |
12,407 |
Non-cash investing and financing activities: |
|
|
|
||
Accrued purchases of long-lived assets |
$ |
4,771 |
|
$ |
5,879 |
|
September 30, |
||||
|
2024 |
|
2023 |
||
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
||
Cash and cash equivalents |
$ |
152,073 |
|
$ |
94,419 |
Restricted cash included in other current assets |
|
454 |
|
|
60 |
Restricted cash included in other assets |
|
2,455 |
|
|
2,143 |
Total cash, cash equivalents and restricted cash |
$ |
154,982 |
|
$ |
96,622 |
CHEGG, INC. |
|||||||||||||||
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA |
|||||||||||||||
(in thousands) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net (loss) income |
$ |
(212,639 |
) |
|
$ |
(18,283 |
) |
|
$ |
(830,943 |
) |
|
$ |
8,515 |
|
Interest expense |
|
658 |
|
|
|
733 |
|
|
|
1,959 |
|
|
|
3,115 |
|
Provision for income taxes |
|
(2,723 |
) |
|
|
172 |
|
|
|
144,681 |
|
|
|
24,029 |
|
Depreciation and amortization expense |
|
19,573 |
|
|
|
56,918 |
|
|
|
58,966 |
|
|
|
108,945 |
|
EBITDA |
|
(195,131 |
) |
|
|
39,540 |
|
|
|
(625,337 |
) |
|
|
144,604 |
|
Share-based compensation expense |
|
21,931 |
|
|
|
31,930 |
|
|
|
69,267 |
|
|
|
101,596 |
|
Other income, net |
|
(7,586 |
) |
|
|
(40,492 |
) |
|
|
(25,485 |
) |
|
|
(116,671 |
) |
Acquisition-related compensation costs |
|
132 |
|
|
|
209 |
|
|
|
560 |
|
|
|
6,086 |
|
Restructuring charges |
|
2,112 |
|
|
|
— |
|
|
|
8,840 |
|
|
|
5,704 |
|
Impairment expense |
|
195,708 |
|
|
|
3,600 |
|
|
|
677,239 |
|
|
|
3,600 |
|
Impairment of lease related assets |
|
— |
|
|
|
— |
|
|
|
2,189 |
|
|
|
— |
|
Content and related assets charge |
|
— |
|
|
|
4,047 |
|
|
|
729 |
|
|
|
4,047 |
|
Loss contingency |
|
5,100 |
|
|
|
— |
|
|
|
5,100 |
|
|
|
7,000 |
|
Transitional logistics charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
Adjusted EBITDA |
$ |
22,266 |
|
|
$ |
38,834 |
|
|
$ |
113,102 |
|
|
$ |
156,219 |
|
CHEGG, INC. |
|||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES |
|||||||||||||||
(in thousands, except percentages and per share amounts) |
|||||||||||||||
(unaudited) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cost of revenues |
$ |
43,420 |
|
|
$ |
83,575 |
|
|
$ |
135,328 |
|
|
$ |
180,137 |
|
Amortization of intangible assets |
|
(1,423 |
) |
|
|
(3,138 |
) |
|
|
(7,636 |
) |
|
|
(9,859 |
) |
Share-based compensation expense |
|
(471 |
) |
|
|
(598 |
) |
|
|
(1,450 |
) |
|
|
(1,685 |
) |
Acquisition-related compensation costs |
|
(5 |
) |
|
|
(5 |
) |
|
|
(16 |
) |
|
|
(17 |
) |
Restructuring charges |
|
(12 |
) |
|
|
— |
|
|
|
(203 |
) |
|
|
(12 |
) |
Content and related assets charge |
|
— |
|
|
|
(38,242 |
) |
|
|
(729 |
) |
|
|
(38,242 |
) |
Transitional logistics charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(253 |
) |
Non-GAAP cost of revenues |
$ |
41,509 |
|
|
$ |
41,592 |
|
|
$ |
125,294 |
|
|
$ |
130,069 |
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
$ |
93,173 |
|
|
$ |
74,279 |
|
|
$ |
338,762 |
|
|
$ |
348,171 |
|
Amortization of intangible assets |
|
1,423 |
|
|
|
3,138 |
|
|
|
7,636 |
|
|
|
9,859 |
|
Share-based compensation expense |
|
471 |
|
|
|
598 |
|
|
|
1,450 |
|
|
|
1,685 |
|
Acquisition-related compensation costs |
|
5 |
|
|
|
5 |
|
|
|
16 |
|
|
|
17 |
|
Restructuring charges |
|
12 |
|
|
|
— |
|
|
|
203 |
|
|
|
12 |
|
Content and related assets charge |
|
— |
|
|
|
38,242 |
|
|
|
729 |
|
|
|
38,242 |
|
Transitional logistics charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
Non-GAAP gross profit |
$ |
95,084 |
|
|
$ |
116,262 |
|
|
$ |
348,796 |
|
|
$ |
398,239 |
|
|
|
|
|
|
|
|
|
||||||||
Gross margin % |
|
68 |
% |
|
|
47 |
% |
|
|
71 |
% |
|
|
66 |
% |
Non-GAAP gross margin % |
|
70 |
% |
|
|
74 |
% |
|
|
74 |
% |
|
|
75 |
% |
|
|
|
|
|
|
|
|
||||||||
Operating expenses |
$ |
315,463 |
|
|
$ |
132,149 |
|
|
$ |
1,048,550 |
|
|
$ |
429,183 |
|
Share-based compensation expense |
|
(21,460 |
) |
|
|
(31,332 |
) |
|
|
(67,817 |
) |
|
|
(99,911 |
) |
Amortization of intangible assets |
|
— |
|
|
|
(2,935 |
) |
|
|
(1,291 |
) |
|
|
(8,823 |
) |
Acquisition-related compensation costs |
|
(127 |
) |
|
|
(204 |
) |
|
|
(544 |
) |
|
|
(6,069 |
) |
Restructuring charges |
|
(2,100 |
) |
|
|
— |
|
|
|
(8,637 |
) |
|
|
(5,692 |
) |
Impairment expense |
|
(195,708 |
) |
|
|
(3,600 |
) |
|
|
(677,239 |
) |
|
|
(3,600 |
) |
Impairment of lease related assets |
|
— |
|
|
|
— |
|
|
|
(2,189 |
) |
|
|
— |
|
Loss contingency |
|
(5,100 |
) |
|
|
— |
|
|
|
(5,100 |
) |
|
|
(7,000 |
) |
Non-GAAP operating expenses |
$ |
90,968 |
|
|
$ |
94,078 |
|
|
$ |
285,733 |
|
|
$ |
298,088 |
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations |
$ |
(222,290 |
) |
|
$ |
(57,870 |
) |
|
$ |
(709,788 |
) |
|
$ |
(81,012 |
) |
Share-based compensation expense |
|
21,931 |
|
|
|
31,930 |
|
|
|
69,267 |
|
|
|
101,596 |
|
Amortization of intangible assets |
|
1,423 |
|
|
|
6,073 |
|
|
|
8,927 |
|
|
|
18,682 |
|
Acquisition-related compensation costs |
|
132 |
|
|
|
209 |
|
|
|
560 |
|
|
|
6,086 |
|
Restructuring charges |
|
2,112 |
|
|
|
— |
|
|
|
8,840 |
|
|
|
5,704 |
|
Impairment expense |
|
195,708 |
|
|
|
3,600 |
|
|
|
677,239 |
|
|
|
3,600 |
|
Impairment of lease related assets |
|
— |
|
|
|
— |
|
|
|
2,189 |
|
|
|
— |
|
Content and related assets charge |
|
— |
|
|
|
38,242 |
|
|
|
729 |
|
|
|
38,242 |
|
Transitional logistics charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
Loss contingency |
|
5,100 |
|
|
|
— |
|
|
|
5,100 |
|
|
|
7,000 |
|
Non-GAAP income from operations |
$ |
4,116 |
|
|
$ |
22,184 |
|
|
$ |
63,063 |
|
|
$ |
100,151 |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net (loss) income |
$ |
(212,639 |
) |
|
$ |
(18,283 |
) |
|
$ |
(830,943 |
) |
|
$ |
8,515 |
|
Share-based compensation expense |
|
21,931 |
|
|
|
31,930 |
|
|
|
69,267 |
|
|
|
101,596 |
|
Amortization of intangible assets |
|
1,423 |
|
|
|
6,073 |
|
|
|
8,927 |
|
|
|
18,682 |
|
Acquisition-related compensation costs |
|
132 |
|
|
|
209 |
|
|
|
560 |
|
|
|
6,086 |
|
Amortization of debt issuance costs |
|
547 |
|
|
|
622 |
|
|
|
1,628 |
|
|
|
2,610 |
|
Income tax effect of non-GAAP adjustments |
|
(4,468 |
) |
|
|
(7,081 |
) |
|
|
126,182 |
|
|
|
(7,265 |
) |
Restructuring charges |
|
2,112 |
|
|
|
— |
|
|
|
8,840 |
|
|
|
5,704 |
|
Impairment expense |
|
195,708 |
|
|
|
3,600 |
|
|
|
677,239 |
|
|
|
3,600 |
|
Impairment of lease related assets |
|
— |
|
|
|
— |
|
|
|
2,189 |
|
|
|
— |
|
Content and related assets charge |
|
— |
|
|
|
38,242 |
|
|
|
729 |
|
|
|
38,242 |
|
Gain on sale of strategic equity investment |
|
— |
|
|
|
— |
|
|
|
(3,783 |
) |
|
|
— |
|
Gain on early extinguishment of debt |
|
— |
|
|
|
(32,149 |
) |
|
|
— |
|
|
|
(85,926 |
) |
Loss contingency |
|
5,100 |
|
|
|
— |
|
|
|
5,100 |
|
|
|
7,000 |
|
Transitional logistics charges |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
253 |
|
Non-GAAP net income |
$ |
9,846 |
|
|
$ |
23,163 |
|
|
$ |
65,935 |
|
|
$ |
99,097 |
|
............................................................................................................. |
|
|
|
|
|
|
|
||||||||
Weighted average shares used to compute net (loss) income per share, diluted |
|
103,723 |
|
|
|
115,407 |
|
|
|
102,893 |
|
|
|
121,876 |
|
Effect of shares for stock plan activity |
|
67 |
|
|
|
198 |
|
|
|
885 |
|
|
|
424 |
|
Effect of shares related to convertible senior notes |
|
9,234 |
|
|
|
10,280 |
|
|
|
9,234 |
|
|
|
10,378 |
|
Non-GAAP weighted average shares used to compute non-GAAP net income per share, diluted |
|
113,024 |
|
|
|
125,885 |
|
|
|
113,012 |
|
|
|
132,678 |
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share, diluted |
$ |
(2.05 |
) |
|
$ |
(0.16 |
) |
|
$ |
(8.08 |
) |
|
$ |
(0.24 |
) |
Adjustments |
|
2.14 |
|
|
|
0.34 |
|
|
|
8.66 |
|
|
|
0.99 |
|
Non-GAAP net income per share, diluted |
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.58 |
|
|
$ |
0.75 |
|
CHEGG, INC. |
|||||||
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW |
|||||||
(in thousands) |
|||||||
(unaudited) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
2024 |
|
2023 |
||||
Net cash provided by operating activities |
$ |
107,077 |
|
|
$ |
168,714 |
|
Purchases of property and equipment |
|
(61,659 |
) |
|
|
(57,298 |
) |
Proceeds from disposition of textbooks |
|
— |
|
|
|
9,787 |
|
Free cash flow |
$ |
45,418 |
|
|
$ |
121,203 |
|
CHEGG, INC. |
|||
RECONCILIATION OF FORWARD-LOOKING NET LOSS TO EBITDA AND ADJUSTED EBITDA |
|||
(in thousands) |
|||
(unaudited) |
|||
|
Three Months Ending December 31, 2024 |
||
Net loss |
$ |
(16,600 |
) |
Interest expense, net |
|
500 |
|
Provision for income taxes |
|
(1,700 |
) |
Depreciation and amortization expense |
|
19,200 |
|
EBITDA |
|
1,400 |
|
Share-based compensation expense |
|
15,100 |
|
Other income, net |
|
(7,200 |
) |
Acquisition-related compensation costs |
|
200 |
|
Restructuring charges |
|
18,100 |
|
Impairment of lease related assets |
|
3,800 |
|
Content and related assets charge |
|
1,600 |
|
Adjusted EBITDA |
$ |
33,000 |
|
* Adjusted EBITDA guidance for the three months ending December 31, 2024 represent the midpoint of the range of
View source version on businesswire.com: https://www.businesswire.com/news/home/20241111756755/en/
Media Contact: Candace Sue, press@chegg.com
Investor Contact: Tracey Ford, IR@chegg.com
Source: Chegg
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