Chegg, Inc. · NYSE:CHGG

Chegg — Q4 2019 Earnings Presentation

21 slides from Chegg's earnings presentation, Feb 10, 2020

  1. Slide 1: Q4-19 and Full Year 2019 Investor Presentation

    Q4-19 and Full Year 2019 Investor Presentation February 10, 2020 1 Chegg Inc. © 2005 - 2020. All Rights Reserved.

  2. Slide 2: Safe Harbor Statement

    Safe Harbor Statement Forward-Looking Statements growth of Chegg Services; Chegg’s ability to build and expand its services offerings; Chegg’s ability to This presentation contains forward-looking statements made pursuant to the safe harbor provisions of develop new products and services on a cost-e

  3. Slide 3: Leading direct-to-student learning platform to improve outcomes

    Leading direct-to-student learning platform to improve outcomes 3 Chegg Inc.Inc. Chegg © 2005 - 2020. © 2005 All All - 2020. Rights Reserved. Rights Reserved.

  4. Slide 4: Investment Highlights

    Investment Highlights Leading Direct-To-Student Connected Learning Platform Large Addressable Market with Compelling Market Trends High Growth and High Margin Model Competitive Moat Given Brand, Reach, Data and Proprietary Content 4 Chegg Inc. © 2005 - 2020. All Rights Reserved.

  5. Slide 5: Chegg at a Glance

    Chegg at a Glance (1) 3.9 Million 29% ~15 Million CHEGG SERVICES CHEGG SERVICES SUBSCRIBERS CHEGG PLATFORM UNIQUE VISITORS IN AN SUBSCRIBERS Y/Y GROWTH AVERAGE MONTH 31% 30% VOTED FORTUNE’S BEST Small and Medium Workplaces CHEGG SERVICES ADJUSTED EBITDA Y/Y REVENUE GROWTH MARGIN(2) Workplaces in Tec

  6. Slide 6: Q4-19 Highlights

    Q4 – 19 Highlights • 2.5 million Chegg Services subscribers, up 32% y/y (1)) • Chegg total revenue of $126 million, up 31% • 271 million Chegg Study content views (1)) • Increased FY2020 guidance 1. Based on Company internal data 6 Chegg Inc. © 2005 - 2020. All Rights Reserved.

  7. Slide 7: Today's Learners Face More Pressure Than Ever

    Today’s Learners Face More Pressure Than Ever It’s Harder to Be a Student They’re Faced with Mounting Costs They Aren’t Prepared for the Workplace 25 37% AVERAGE STUDENT AGE(1) DON’T GRADUATE(3) 41% OF RECENT GRADUATES ARE UNDEREMPLOYED (5) ~40% $30K DEBT OWED BY 2018 GRADUATES(4) ARE EMPLOYED(2) Ne

  8. Slide 8: Large and Expanding Market Opportunity

    Large and Expanding Market Opportunity Initial Expansion in 18M CA, AU and UK International 36M 54 Million Total Markets Secondary and US University Tertiary Students(3) (1) and High Students Can Benefit from School Students (2) 3.9 Million(4) Chegg Services Subscribers in 2019 Y/Y growth of 29% 1.

  9. Slide 9: Chegg Aims to Provide Overwhelming Value to Solve Learner's Problems

    Chegg Aims to Provide Overwhelming Value to Solve Learner’s Problems Online On-demand Personalized Adaptive Affordable …and Backed by Human Help Chegg Inc. © 2005 - 2020. All Rights Reserved.

  10. Slide 10: Chegg is Well-Known Among College Students

    Chegg is Well-Known Among College Students Percent Unaided Awareness (College)(1) 37% 87% Amazon 26% Quizlet 20% OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE (1) Khan Academy 12% Google 9% 10 1. H&P Annual Survey, October 2019 (College n=1737) Chegg Inc. © 2005 - 2020. All Rights Reserved.

  11. Slide 11: Integrated Platform of Connected Services

    Integrated Platform of Connected Services Chegg Services Required Materials Academic Chegg Study Textbooks Homework help learning service with a library 35 million pieces of content Rent or buy print textbooks or eTextbooks (~30 million expert answered Q&As and 5 million textbook solutions)* Chegg W

  12. Slide 12: Chegg is Delivering Strong Outcomes for Students

    Chegg is Delivering Strong Outcomes for Students Chegg Study helps me better Chegg Study helps me get understand my school work better grades 90% 92% * Source: H&P Blind Customer Survey, October 2019. Bases (College Chegg Study product payers who paid for 12 services and used Chegg Study for at leas

  13. Slide 13: 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'15 1.0 Chegg Services FY’15 — FY’20 CAGR: 36% FY'16 1.5 29% y/y growth for ‘19 FY'17 2.2 FY'18 3.1 FY'19 3.9 * Prior to FY 2017, Require

  14. Slide 14: Business Outlook: 2020

    We are increasing our organic guidance Business Outlook: 2020 Q4 2019 Q1 2020 Full Year 2020 Results Guidance Guidance Total Net Revenues $125.5m $122m - $125m $522m - $527m Chegg Services Revenue $107.3m $99m - $100m $435m - $437m Gross Margin % 79% 67% - 68% 71% - 72% Adjusted EBITDA* $47.0m $27.5

  15. Slide 15: Appendix

    Appendix 15 Chegg Inc. © 2005 - 2020. All Rights Reserved.

  16. Slide 16: Required Materials - FedEx Agreement

    Required Materials - FedEx Agreement* Revenue Recognition ~$550 MM 1 2019 2020 2021 annual savings for Print Rental Commission Commission/Gross (ratable) Grossstudents (ratable) from 6 MM books delivered in 2015 Print Sales Commission Commission Gross Consignment Commission Commission Commission e-T

  17. Slide 17: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

    Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA CHEGG, INC. RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited) Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Net income (loss) $ 8,219 $ 5,347 $ (9,605) $ (14,888

  18. Slide 18: 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 Ending Ending March 31, December 31, 2020 2020 Net loss $ (13,600) $ (9,400) Interest expense, ne

  19. Slide 19: 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

  20. Slide 20: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

    Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA CHEGG, INC. RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited) Three Months Ended December 31, Years Ended December 31, 2018 2017 2018 2017 Net income (loss) $ 5,347 $ 3,659 $ (14,888) $ (20,2

  21. Slide 21: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow

    Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow CHEGG, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (in thousands) (unaudited) Year Ended December 31, 2019 2018 Net cash provided by operating activities $ 113,403 $ 75,113 Purchases

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