Slide 1: Q4-22 Investor Presentation
Q4-22 Investor Presentation Feb 6, 2023 © 2023 Chegg, Inc. / All Rights Reserved
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements build and expand its services offerings; Chegg’s ability to develop new products and services on a cost- This presentation contains forward-looking statements made pursuant to the safe harbor provisions of effective basis and to integrate acquired bus
Slide 3: We put learners first.
We put learners first. Our mission is to improve learning and learning outcomes by putting students first, in school and beyond. We strive to improve the overall return on investment in education by helping learners learn more in less time and at a lower cost. © 2023 Chegg, Inc. / All Rights Reserve
Slide 4: Investment Highlights
Investment Highlights Leading Direct-To-Student Connected Learning Platform Large Addressable Markets in Early Stages of Growth including International, Skills, Language Learning, and Non-Academic High Margin Model with Strong Free Cash Flow Generation Competitive Moat Given Brand, Reach, Da
Slide 5: Long-Term Strategic Focus
Long-Term Strategic Focus Grow Subscribers Overwhelming Value Extend Lifetime Value Increase local product-market fit Add content and services that Become more relevant more of the time by for new learners around the students find essential and extending the breadth and depth of our support, world e
Slide 6: 2023 Priorities
2023 Priorities Expand TAM Deliver new content and offerings that appeal to all learners, including non-academic services, and improve the quality and coverage of existing skills, language, and academic offerings International Invest in localized content, pricing, packaging, commerce, user experienc
Slide 7: Chegg at a Glance: Financial and KPI Highlights 2022
Chegg at a Glance: Financial and KPI Highlights 2022(1) 8.2 Million 10% 2.1 Million CHEGG SERVICES CHEGG SERVICES REVENUE INTERNATIONAL CHEGG SUBSCRIBERS Y/Y GROWTH SERVICES SUBSCRIBERS VOTED FORTUNE’S BEST Workplaces(3) 18 COMPARABLY AWARDS Including Best Company 5% 33% 15% Outlook and Best Global
Slide 8: Chegg at a Glance: Product and Business Highlights 2022
Chegg at a Glance: Product and Business Highlights 2022(1) Product Platform Launched first fully-localized native app experiences in Turkish Introduced Learn With Chegg, our enhanced learning platform and Spanish offering students an individualized experience based on their needs Added more va
Slide 9: Entering 2023 with New Subscriber/Acquisition Momentum
Entering 2023 with New Subscriber/Acquisition Momentum Macro headwinds weighed on Chegg Study and Study Pack new subscriber acquisitions, but trends improved in the second half of 2022, paving the way for improving revenue growth New Subscriber Growth & We believe that inflation, especially in Pro
Slide 10: Today's Learners Face More Pressure Than Ever
Today’s Learners Face More Pressure Than Ever It’s Harder to Be a They’re Faced with They Aren’t Prepared for Student Mounting Costs the Workplace 27% 38% Over 25 years old(1) Don’t graduate (2) 39.5% Of recent graduates are ~43% $36K underemployed (4) Average student loan balance Are employed (1) p
Slide 11: Chegg helps lighten students' heavy mental load
Chegg helps lighten students’ heavy mental load Over half of US College students say their emotional and mental health has negatively impacted their performance in school more than it has in the past.1 Chegg is proud to support students’ mental health in a variety of ways Academic Chegg Study helps
Slide 12: Delivering Services That Meet The Learning Needs of Students
Delivering Services That Meet The Learning Needs of Students Our years of experience and student engagement data help us understand how students learn. We then provide evidenced- based support to address students’ specific needs and desired learning outcomes, meeting students where they are. Student
Slide 13: Chegg's Integrated Platform of Connected Services
Chegg’s Integrated Platform of Connected Services Subscription Services Skills & Other Chegg Study Skills / Thinkful Learning service with a library of 91 High quality online skills-based courses in areas million step by step solutions (~84 million Chegg Study Pack such as Data Science, Data Analyti
Slide 14: Chegg's Overwhelming Value and Unique Competitive Advantages
Chegg’s Overwhelming Value and Unique Competitive Advantages Online On-demand Personalized Adaptive Affordable Backed by Expert Human Help © 2023 Chegg, Inc. / All Rights Reserved 14
Slide 15: Large Global Academic Market Opportunity
Large Global Academic Market Opportunity 18M CA, AU and UK Secondary and Tertiary Students(4) 100M Total students 48M 34M English Language US University(2) and High Instruction for Medium School Students(3) - Tertiary Students Outside the US, CA, AU, UK(1) 8.2M5 6.1M U.S. 2.1M International Chegg Se
Slide 16: Required Materials Transition
Required Materials Transition In April 2022, we entered into a partnership with an independent book reseller. This partnership allowed us to transition out of our textbook library and fulfillment logistics responsibilities while still offering print and eTextbooks to students. GT1 purchased our pr
Slide 17: Learn with Chegg
Learn with Chegg Enhanced Platform Delivering a Personalized Learning Experience Key Highlights: Immersive personalization for individualized learning experience Allows students to easily and intuitively discover relevant content Deeper integration of different content formats and learning tools Dra
Slide 18: Structured Q&A
Structured Q&A Our new Structured Q&A tools enable our experts to create better, more complete, and clearer learning content and solutions for students Regular Q&A Students tell us that they Step-by-step solution prefer this format and believe it is more helpful to Structured Q&A understand the to
Slide 19: Chegg is Well-Known Among U.S. College Students
Chegg is Well-Known Among U.S. College Students Unaided Brand Awareness Aided Brand Awareness Chegg Quizlet 86% Amazon Grammarly KhanAcademy Google Of college students have heard of a Chegg service CourseHero YouTube Photomath Q: What companies, websites, and resources can you think of that provide
Slide 20: Chegg Serves Students of Diverse Backgrounds
Chegg Serves Students of Diverse Backgrounds 26% First generation 21% Family income <$20k 48% Minorities 56% Female 27% Over 25 years old 13% Work full-time / 30% work part-time Source: Chegg Consumer Insights, Oct. 2022 Quarterly Marketing Tracker: *Chegg Services users in the past 3 months (Colleg
Slide 21: Majority of U.S. College Students are taking STEM-B Courses
Majority of U.S. College Students are taking STEM-B Courses 22% Not STEM-B Major but taking STEM-B Courses 59% STEM-B Major 19% No STEM-B STEM-B = Science, Tech, Engineering, Math, or Business Chegg Consumer Insights, conducted by Peerless Research Group, September 2022. Base: Panel Sample US Colleg
Slide 22: Chegg Delivers Positive Learner Outcomes
Chegg Delivers Positive Learner Outcomes Learn & Better Grades More Efficient Help When You Understand Need It 90% 91% 91% 92% Say that Chegg helps Say they get better Say that they work Say that Chegg helps them better grades when they use more efficiently when them figure it out if understand the
Slide 23: Chegg's Approach to ESG: Our Six Pillars
Chegg’s Approach to ESG: Our Six Pillars Public We foster an environment We help learners succeed by Recognition centered on respect, where providing the type of help they diversity and inclusion are Focus on need, when they need it, in the celebrated, and employees can Help Learners format they wan
Slide 24: Chegg's ESG Journey
Chegg's ESG Journey In 2021, Chegg conducted our first materiality assessment to identify important ESG categories and to align our strategy with what is most material to our stakeholders and society. Please see below for some recent examples of our work to enhance programs, policies, and disclosure
Slide 25: New Revenue Disaggregation
New Revenue Disaggregation We are changing the way we disaggregate revenue to better represent Chegg’s current business. We believe this new revenue breakout will allow our investors to better monitor and evaluate our business trends. Subscription Services Skills & Other Chegg Revenue(1) Chegg Subsc
Slide 26: Growth of Chegg Subscription Services
Growth of Chegg Subscription Services Chegg Subscribers Chegg Subscription Services Revenue Annual Chegg Subscribers (in millions) ($ in millions) 26% FY'18 3.1 Chegg Subscription $672 $683 Services $617 FY18 – FY23 CAGR FY'19 3.9 28% $461 Chegg Subscribers FY18 – FY22 CAGR FY'20 6.6 $287 $216 FY'21
Slide 27: Maintaining Margin and Strong Profit Profile while Investing for Growth
Maintaining Margin and Strong Profit Profile while Investing for Growth Chegg’s business model supports operating Adjusted EBITDA leverage Chegg Adj. EBITDA ($million) & Margin (%) $266 $255 $245 Proven history of expanding adjusted EBITDA 42% $207 margin while investing in profitable future Adj.
Slide 28: Strong FCF generation
Strong FCF generation Chegg continues to deliver free cash flow Free Cash Flow growth and margin expansion Chegg FCF ($million) & Conversion (from $190 Adjusted EBITDA) $177 Healthy free cash flow conversion from $155 adjusted EBITDA (has been 50%-70%, 34% FCF CAGR and expecting ~80% in 2023) FY16
Slide 29: Business Outlook
Business Outlook Q4 2022 Results Q1 2023 Guidance Full Year 2023 Guidance Total Net Revenue $205m $184m - $186m $745m- $760m Subscription Services $178m $166m - $168m $675m- $690m Revenue Gross Margin % 75% 72%-73% 71%-73% Adjusted EBTIDA1 $74m $53m - $55m $240m - $250m CapEx $20m $80m-$85m Free Cas
Slide 30: Business Outlook: 2023 Revenue and Adjusted EBITDA Seasonality
Business Outlook: 2023 Revenue and Adjusted EBITDA Seasonality 1Q23 2Q23 3Q23 4Q23 Subscription Services ~24% ~26% ~22% ~28% Revenue Skills and Other Revenue ~27% ~25% ~24% ~24% Adjusted EBTIDA* ~22% ~27% ~17% ~34% *Non-GAAP financial measure Note: 2023 quarterly contribution percentages are based o
Slide 31: Appendix
Appendix © 2023 Chegg, Inc. / All Rights Reserved
Slide 32: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA © 2023 Chegg, Inc. / All Rights Reserved 32
Slide 33: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA © 2023 Chegg, Inc. / All Rights Reserved 33
Slide 34: Reconciliation of Forward-Looking Net (Loss) Income to EBITDA and Adjusted EBITDA
Reconciliation of Forward-Looking Net (Loss) Income to EBITDA and Adjusted EBITDA © 2023 Chegg, Inc. / All Rights Reserved 34
Slide 35: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow © 2023 Chegg, Inc. / All Rights Reserved 35
Slide 36: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow © 2023 Chegg, Inc. / All Rights Reserved 36
Slide 37: Reconciliation of Forward-Looking Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Forward-Looking Net Cash Provided by Operating Activities to Free Cash Flow © 2023 Chegg, Inc. / All Rights Reserved 37