Chegg, Inc. · NYSE:CHGG

Chegg — Raymond James 38th Annual Institutional Investors Conference (March 2017)

19 slides from Chegg's conference presentation, Mar 6, 2017

  1. Slide 1: Andy Brown, CFO

    Andy Brown, CFO March 6, 2017 1 Confidential Material – Chegg Inc. © 2005 – 2017. All Rights Reserved.

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement Forward-Looking Statements This presentation contains forward-looking statements made pursuant to the safe harbor cost-effective basis and to integrate acquired businesses and assets; the impact of provisions of the Private Securities Litigation Reform Act of 1995. Forward-look

  3. Slide 3: Agenda

    Agenda • Who We Are • Why We Matter • Our Results 3

  4. Slide 4: The leading student-first connected learning platform

    The leading student-first connected learning platform…focused on improving student outcomes 4 4

  5. Slide 5: A proprietary student platform

    A proprietary student platform OUR CORE SERVICES SUBSCRIBER GROWTH Learning Services: Chegg Study FY 2012 300K Chegg Tutors Chegg Writing Tools FY 2013 500K Chegg Test Prep FY 2014 700K Outcome Services: FY 2015 1,000K Brand Partnership Careers FY 2016 *Projected 1,500K Enrollment Required Materials

  6. Slide 6: Transition to a Digital Business – Essentials of the Ingram Agreement

    Transition to a Digital Business – Essentials of the Ingram Agreement   • 5-year agreement started May 2015 • Ingram owns textbook purchases: $100M annual reduction in textbooks spend  • Chegg receives ~20% commission on physical textbook transactions • Chegg maintains the customer relationship 

  7. Slide 7: The Revenue Transition

    The Revenue Transition $305 $301 $256 $254 $230 $199 $166 $134 $99 2013 2014 2015 2016 2017* Revenue (M) Non-GAAP Revenue (M) 7 * Represents guidance issued on 2.13.17

  8. Slide 8: Chegg is nearly universally known

    Chegg is nearly universally known PERCENT UNAIDED AWARENESS (COLLEGE)1 AMAZON 26% CHEGG 21% OF THOSE WHO USE CHEGG, GOOGLE 9% PLAN TO RECOMMEND US1 QUIZLET 6% KHAN ACADEMY 6% BARNES & NOBLE 6% WIKIPEDIA 3% KAPLAN TEST PREP 3% OF STUDENTS HAVE HEARD OF A CHEGG SERVICE1 8 1Hall and Partners Survey, Oc

  9. Slide 9: Students face more pressure than ever

    Students face more pressure than ever 296% 26 $35K INCREASE IN IN- AVERAGE STUDENT DEBT FOR THE AVERAGE STATE TUITION AT AGE2 STUDENT WHEN THEY PUBLIC COLLEGE GRADUATE4 SINCE 19951 40% WORK AT LEAST 30 HOURS PER WEEK3 1National Center for Education Statistics and US Census Bureau, 2015 2Hall and Par

  10. Slide 10: Education is a massive industry

    Education is a massive industry % $ % ARE STUDENTS1 TRILLION2 OF THE US GDP3 1National Center for Education Statistics and US Census Bureau, 2015 2https://www.federalreserve.gov/releases/g19/Current/#fn11b 10 3www.data.worldbank.org/indication/NY.GD.MKTP.CD?location +US

  11. Slide 11: A proprietary student platform

    A proprietary student platform UVs (12 MONTHS)1 SUBSCRIBERS CHEGG STUDY MONTHY 2016 RENEWAL RATE UVs (ONE MONTH)2 EXPERT Q&As ISBNs 1comScore U.S. Annual Unique Visitors (Custom Analytics), Oct 2015 - Sep 2016 11 2comScore U.S. Media Metrix Multi-Platform, Audience Duplication, Sep 2016

  12. Slide 12: Revenue Transition to a Services Platform

    Revenue Transition to a Services Platform Millions 12 1FY’17 (E) represents management’s guidance provided on the 2/13/17 earnings call

  13. Slide 13: Interconnected platform drives profit growth

    Interconnected platform drives profit growth ADJUSTED EBITDA ($M)1 $ 35 $ 21 $ 5 2012 2013 2014 2015 2016 20172 $ (4) $ (16) $ (13) 1Non-GAAP metric. See Appendix for reconciliation to GAAP. 2Represents FY17 business outlook for approximately $35M for Adjusted EBITDA issued on 2.13.17 13

  14. Slide 14: High-growth, profitable, cash provider

    High-growth, profitable, cash provider 2012 2017 ESTIMATE2 CHEGG SERVICES REVENUE 25M $ ~$172M GROSS MARGIN % 32% >60% ADJUSTED EBITDA $(16M) 1 ~$35M CAPEX (INCLUDES TEXTBOOKS) $120M ~$20-25M FREE CASH FLOW $( 31M) ~$ 15-20M 1Non-GAAP metric. See Appendix for reconciliation to GAAP 14 2 Guidance iss

  15. Slide 15: Q&A

    Q&A 15 Confidential Material – Chegg Inc. © 2005 – 2017. All Rights Reserved.

  16. Slide 16: Appendix

    Appendix 16 Confidential Material – Chegg Inc. © 2005 - 2017. All Rights Reserved.

  17. Slide 17: Reconciliation of GAAP to Non-GAAP Financial Measures

    Reconciliation of GAAP to Non-GAAP Financial Measures CHEGG, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages) (unaudited) ` Three Months Ended December 31, Year Ended December 31, 2016 2015 2016 2015 Total net revenues $ 63,057 $ 68,154 $ 254,090 $ 301,37

  18. Slide 18: Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA

    Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA CHEGG, INC. RECONCILIATION OF GAAP NET LOSS TO EBITDA AND ADJUSTED EBITDA (in thousands, except percentages) (unaudited) 2011 2012 2013 2014 2015 2016 Adjusted EBITDA GAAP Net loss: $ (37,602) $ (49,043) $ (55,850) $ (64,758) $ (59,210) $

  19. Slide 19: Reconciliation of Forward Looking Net Loss to EBITDA and Adjusted EBITDA

    Reconciliation of Forward Looking Net Loss to EBITDA and Adjusted EBITDA CHEGG, INC. RECONCILIATION OF FORWARD LOOKING NET LOSS TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited) Three Months Year Ended Ended March 31, December 31, 2017 2017 * Net loss $ (10,300) $ (29,900) Interest expense, n

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