Slide 1: Q2-20 Investor Presentation
Q2-20 Investor Presentation August 3, 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 the competitive developments, including pricing pressures and other services targeting students; Chegg’s Private Securities Litigation Reform Act of 1
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: Q2-20 Highlights
Q2 – 20 Highlights • 3.7 million Chegg Services subscribers, up 67% y/y, Mathway added 9pts of growth (1)) • Chegg total revenue of $153 million, up 63% y/y(1) • 375 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 Market Opportunity
Large and Expanding 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 Tertiary English Language School US University Instruction as a (1) and High Students(3) St
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.
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.
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 43 million pieces of content (~37 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: 39% 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 Q2 2020 Q3 2020 Full Year 2020 Results Guidance Guidance Total Net Revenues $153.0m $140m - $145m $605m - $615m Chegg Services Revenue $126.0m $110m - $115m $490m - $500m Gross Margin % 72% 56% - 57% 68% - 69% Adjusted EBITDA* $55.5m $21m - $23
Slide 16: Appendix
Appendix 16 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 17: 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 Gross Consignment Commission Commission Commissi
Slide 18: Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
Reconciliation of Net Income (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 19 Chegg Inc. © 2005 - 2020. All Rights Reserved.
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.
Slide 23: Sources: Large and Expanding Market Opportunity
Sources: Large and Expanding Market Opportunity 5. = Turkey: http://www.macrothink.org/journal/index.php/elr/article/view/11438/9108 Turkey: https://wenr.wes.org/2017/04/education-in-turkey Korea: https://www.universityworldnews.com/post.php?story=20110715171111979, https://cpb-us- w2.wpmucdn.com/bl