Slide 1: Q3-20 Investor Presentation
Q3-20 Investor Presentation October 26, 2020 Confidential Material / © 2020 Chegg, Inc. / All Rights Reserved 1 Chegg Inc. © 2005 - 2020. All Rights Reserved. Confidential Material / © 2020 Chegg, Inc. / 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 anticipated growth of Chegg Services; Chegg’s ability to build and expand its services offerings; Chegg’s the Private Securities Litigation Reform Act
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.
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.
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
Slide 6: Q3-20 Highlights
Q3 – 20 Highlights • 3.7 million Chegg Services subscribers, up 69% y/y(1) • Chegg total revenue of $154 million, up 64% y/y(1) • 252 million Chegg Study content views (1)) 6 1. Based on Company internal data Chegg Inc. © 2005 - 2020. All Rights Reserved.
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
Slide 8: Large and Expanding Global Market Opportunity
Large and Expanding Global Market Opportunity Current Market Opportunity Total Potential Opportunity 102 Million Total Students Can Benefit from 18M 36M 36M CA, AU and UK Secondary and 48M US University(1) and High School Tertiary English Language Students (2) US University(1) and Students(3) Instru
Slide 9: Overwhelming Value is Critically Apparent Today
Today Globally, More Than Ever, Chegg’s Overwhelming Value is Critically Apparent Online On-demand Personalized Adaptive Affordable …and Backed by Human Help 9 Chegg CheggInc. Inc.©©2005 2005- -2020. 2020.All All Rights Rights Reserved. Reserved.
Slide 10: Chegg is Well-Known Among College Students
Chegg is Well-Known Among College Students Chegg scores highest in unaided awareness among college students(1) 87% Amazon Quizlet OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE (1) Khan Academy Google 1. H&P Annual Survey, October 2019 (College n=1737). Based on the question: “What companies, web
Slide 11: Chegg Services are Used by Students Across Several Fields of Study
Chegg Services are Used by Students Across Several Fields of Study Primary Field of Study for Chegg Services Subscribers* 19% STEM Business 21% 61% Humanities/Social Studies/Other 11 * = Hall & Partners Brand Tracker October 2019 (College n=1737). Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 12: Integrated Platform of Connected Services
Integrated Platform of Connected Services Chegg Services Academic Skills Chegg Study Homework help learning service with a library 46 million pieces of content (~40 million expert answered Q&As and ~6 million textbook solutions)* Chegg Study Pack Thinkful Three-in-one package High quality on-line sk
Slide 13: Chegg is Delivering Strong Outcomes for Students
Chegg is Delivering Strong Outcomes for Students 92% 90% Chegg Study helps me Chegg Study helps me better get better grades(1) understand my schoolwork(1) 85% Thinkful placement rate(2) 1 = Source: H&P Blind Customer Survey, October 2019. Bases (College Chegg Study product payers who paid for servic
Slide 14: 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: 40% 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
Slide 15: Business Outlook
We are increasing our organic guidance Business Outlook Q3 2020 Q4 2020 Full Year 2020 Results Guidance Guidance Total Net Revenues $154.0m $188m - $190m $626m - $628m Chegg Services Revenue $118.9m $162m - $164m $507m - $509m Gross Margin % 60% 72% - 73% 68% - 69% Adjusted EBITDA* $31.9m $82m - $84
Slide 16: Business Outlook: Full Year 2021
We are increasing our organic guidance Business Outlook: Full Year 2021 Total Revenue ~$775m Chegg Services Revenue ~$655m Year over Year Growth ~29% Gross Margin ~70% Adjusted EBITDA* ~$260m Adjusted EBITDA Margin ~34% * Non-GAAP financial measure. Reconciliation of 1) forward looking net income (l
Slide 17: Appendix
Appendix 17 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 18: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA 18 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 19: Reconciliation of Forward-Looking Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Forward-Looking Net Income (Loss) to EBITDA and Adjusted EBITDA * Interest expense, net guidance for the year ending December 31, 2021 represents the impact of the early adoption of Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in a
Slide 20: 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
Slide 21: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA 21 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 22: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow 22 Chegg Inc. © 2005 - 2020. All Rights Reserved.