Slide 1: Q1-18 Investor Presentation
Q1-18 Investor Presentation April 26, 2018 1 Chegg Inc. © 2005 - 2018. All Rights Reserved.
Slide 2: Safe Harbor Statement
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 and expand its services offerings; Chegg’s ability to develop new pro
Slide 3: Leading student-first connected learning platform to improve student outcomes
Leading student-first connected learning platform to improve student outcomes 3 Chegg Inc.Inc. Chegg © 2005 - 2018. © 2005 All All - 2018. Rights Reserved. Rights Reserved.
Slide 4: Investment Highlights
Investment Highlights Leading Student-First Connected Learning Platform Large Addressable Market with Compelling Market Trends All Digital, High Growth, High Margin Model Competitive Moat Given Brand, Reach, Data and Proprietary Content 4 Chegg Inc. © 2005 - 2018. All Rights Reserved.
Slide 5: Chegg at a Glance
Chegg at a Glance 1 2.2 Million 45% 2+ Million CHEGG SERVICES CHEGG SERVICES SUBSCRIBER REQUIRED MATERIAL ANNUAL SUBSCRIBERS Y/Y GROWTH CUSTOMERS 44% 18.2% 440 Million CHEGG SERVICES ADJUSTED EBITDA CHEGG STUDY Y/Y REVENUE GROWTH MARGIN(2) CONTENT VIEWS 1. All amounts shows for FY17 and based on Com
Slide 6: Q1 – Highlights
Q1 – 18 Highlights • Chegg Services subscribers increased 44% y/y • Chegg Services revenue of $56.3 million, up 37% y/y • 158 million Chegg Study content views, up 59% y/y • Strengthened balance sheet with convertible debt offering of $345 million gross proceeds * • Increased 2018 guidance 6 * Close
Slide 7: Today's Students Face More Pressure Than Ever
Today’s Students Face More Pressure Than Ever It’s Harder to Be a Student They’re Faced with Mounting Costs They Don’t Get Support Up to 25 237% INCREASE IN IN-STATE TUITION AT PUBLIC 40% AVERAGE STUDENT AGE(1) COLLEGE SINCE 1997(3) OF STUDENTS IN REMEDIAL COURSES(5) 40% $37K DEBT OWED BY 2016 GRADU
Slide 8: Large Student Domestic Market Opportunity
Large Student Domestic Market Opportunity 16M 36 Million Total Planned 20M High School Expansion in University Students Can Benefit from Students(2) Students(1) International Markets 2.2 Million Chegg Services Subscribers in 2017 YoY growth of 45% 1. Source: National Center for Education Statistics
Slide 9: Chegg Aims to Provide Overwhelming Value to Solve Students' Problems
Chegg Aims to Provide Overwhelming Value to Solve Students’ Problems Online On-demand Personalized Adaptive Affordable …and Backed by Human Help Chegg Inc. © 2005 - 2018. All Rights Reserved.
Slide 10: Chegg is Well-Known Among Students
Chegg is Well-Known Among Students Percent Unaided Awareness (College)(1) 34% Amazon 33% 80%+ Quizlet 12% Google 11% Khan Academy 11% OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE(1) Barnes & Noble 8% Purdue OWL 8% EasyBib 8% 1. Hall and Partners Survey, Oct 2017, (College (n=1788)) 10 Chegg Inc
Slide 11: Integrated Platform of Connected Educational Services
Integrated Platform of Connected Educational Services Chegg Services Chegg Services represents Students subscribe to our learning services: 73% of total Chegg Study revenue(2) Chegg’s connected Chegg Writing learning platform reaches ~10M1 Chegg Tutors unique visitors in a Required Materials m
Slide 12: Rapid Growth of Chegg Services
Rapid Growth of Chegg Services Chegg Services Subscribers Chegg Services Revenue Annual Chegg Services Subscribers (in Revenue Growth ($ in millions)* millions) FY'12 0.3 $245 Chegg Services FY’12 — FY’18 CAGR: 46% $186 FY'13 0.5 45% y/y growth $129 for ‘17 FY'14 0.7 $94 $66 $68 $72 $70 $69 $57 $58
Slide 13: Chegg Study: A Powerful Learning Tool
Chegg Study: A Powerful Learning Tool Chegg Study is the largest non-required homework Library of 22M help service for students, which contains 15 million solution sets expert answered Q&As and 7 million step-by-step and expert textbook solution sets(2) answers (2) 30K textbook ISBNs 440 million con
Slide 14: Writing: Helping Students from Middle School Onwards
Writing: Helping Students from Middle School Onwards Chegg Writing is a leading provider of online writing tools, used by 30 million unique visitors per year(1) 500M new citations in With nearly 25% of college freshmen required to take remedial 2017(4) courses(2), Chegg has the opportunity to impact
Slide 15: Tutors: On-line On-demand Personalized Instruction
Tutors: On-line On-demand Personalized Instruction Key subjects: Computer Chegg Tutors is a simple, reliable and affordable service Science, which allows students to quickly match with a human tutor to receive one-on-one help. Calculus, Statistics, Finance and Accounting Market Opportunity 50% of Ch
Slide 16: Required Materials Drives Brand Awareness & Loyalty
Required Materials Drives Brand Awareness & Loyalty 1 ~$550 MM A comprehensive selection of textbooks and eBooks to rent or buy at savings for annual an affordable price students from 6 MM books delivered in 2015 Builds brand awareness, maintains the direct-to-student relationship and creates opport
Slide 17: We are increasing our organic guidance
We are increasing our organic guidance Business Outlook: 2018 Q1 2018 Q2 2018 Full Year 2018 Results Guidance Guidance Total Revenues $76.9m $69m - $71m $300m - $305m Chegg Services Revenue $56.3m $58m - $60m $243m - $246m Gross Margin % 74% 74% - 75% 72% - 74% Adjusted EBITDA* $16.7m $17m - $18.5m
Slide 18: Appendix
Appendix 18 Chegg Inc. © 2005 - 2018. All Rights Reserved.
Slide 19: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA CHEGG, INC. RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited) Three Months Ended March 31, 2018 2017 Net loss $ (2,617) $ (6,401) Interest expense, net 20 19 Provision for income taxes 541 647 Depreciation and
Slide 20: 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 June 30, December 31, 2018 2018 * * Net loss $ (6,250) $ (14,800) Interest expense, n
Slide 21: Reconciliation of Required Materials Net Revenues to Non-GAAP Required Materials Net Revenues
Reconciliation of Required Materials Net Revenues to Non-GAAP Required Materials Net Revenues CHEGG, INC. RECONCILIATION OF REQUIRED MATERIALS NET REVENUES TO NON-GAAP REQUIRED MATERIALS NET REVENUES (in thousands, except percentages) (unaudited) ` Year Ended December 31, 2016 2015 2014 2013 2012 Re