Chegg, Inc. · NYSE:CHGG
Chegg — Q2 2019 Earnings Presentation
23 slides from Chegg's earnings presentation, Jul 29, 2019
Slide 1: Q2-19 Investor Presentation
Q2-19 Investor Presentation July 29, 2019 1 Chegg Inc. © 2005 - 2019. All Rights Reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements Chegg’s ability to strategically take advantage of new opportunities to leverage the Student Graph; This presentation contains forward-looking statements made pursuant to the safe harbor competitive developments, including pricing pressures and other
Slide 3: Leading direct-to-student learning platform to improve educational outcomes
Leading direct-to-student learning platform to improve educational outcomes 3 Chegg Inc.Inc. Chegg © 2005 - 2019. © 2005 All All - 2019. Rights Reserved. Rights Reserved.
Slide 4: Investment Highlights
Investment Highlights Leading Direct-To-Student 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 - 2019. All Rights Reserved.
Slide 5: Chegg at a Glance
Chegg at a Glance (1) 3.1 Million 38% 2+ Million CHEGG SERVICES CHEGG SERVICES SUBSCRIBER REQUIRED MATERIAL SUBSCRIBERS Y/Y GROWTH CUSTOMERS 37% 26% 650 Million CHEGG SERVICES ADJUSTED EBITDA CHEGG STUDY Y/Y REVENUE GROWTH MARGIN(2) CONTENT VIEWS 1. All amounts shown for FY18 and based on Company in
Slide 6: Q2-19 Highlights
Q2 – 19 Highlights • 2.2 million Chegg Services subscribers, up 30% y/y(1) • Chegg Services revenue of $80.3 million, up 30% y/y • 198 million Chegg Study content views, up 25% y/y(1) • Increased FY2019 guidance 1. Based on Company internal data 6 Chegg Inc. © 2005 - 2019. All Rights Reserved.
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 25 243% 39% OF STUDENTS IN INCREASE IN IN-STATE TUITION AT PUBLIC AVERAGE STUDENT AGE(1) COLLEGE SINCE 1997(3) REMEDIAL COURSES(5) ~40% $30K DEBT OWED BY 2018 GRADUATES(
Slide 8: Large Student Domestic Market Opportunity
Large Student Domestic Market Opportunity 16M 36 Million Total Planned 20M High School Expansion in University Students Can Benefit from Students(2) Students(1) International Markets 3.1 Million(3) Chegg Services Subscribers in 2018 Y/Y growth of 38% 1. Source: National Center for Education Statisti
Slide 9: Chegg Aims to Provide Overwhelming Value to Solve Students' Problems
Chegg Aims to Provide Overwhelming Value to Solve Students’ Problems Online On-demand Personalized Adaptive Affordable …and Backed by Human Help Chegg Inc. © 2005 - 2019. All Rights Reserved.
Slide 10: Chegg is Well-Known Among Students
Chegg is Well-Known Among Students Percent Unaided Awareness (College)(1) 33% Amazon 28% 87% Quizlet 14% Google 10% Khan Academy 10% OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE(1) Purdue OWL 9% EasyBib 6% Barnes & Noble 5% 10 1. Hall and Partners Survey, Jan 2019, (College (n=1784)) Chegg Inc.
Slide 11: Integrated Platform of Connected Educational Services
Integrated Platform of Connected Educational Services Chegg Chegg Services Services Students subscribe to our learning services: represents 79% of total revenue(2) Chegg Study Chegg’s connected Chegg Writing learning platform Chegg Tutors Chegg Math Solver reaches ~11M1 unique visitors in a
Slide 12: Rapid Growth of Chegg Services
Rapid Growth of Chegg Services Chegg Services Subscribers Chegg Services Revenue Annual Chegg Services Subscribers (in Revenue Growth ($ in millions)* millions) FY'12 0.3 Chegg Services $331 FY'13 0.5 FY’12 — FY’19 CAGR: 45% 38% $254 FY'14 0.7 y/y growth for FY18 $186 FY'15 1.0 $129 $94 $66 $68 $72
Slide 13: Chegg Study: A Powerful Learning Tool
Chegg Study: A Powerful Learning Tool Chegg Study is the largest non-required homework Library of 30M help service for students, which contains 25 million solution sets and expert answered Q&As and 5 million step-by-step expert answers (1) textbook solution sets(1) 35K textbook ISBNs 198 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 500M With nearly 25% of college freshmen required to take remedial citations created courses(1), Chegg has the opportunity to impact this outcome in 2018(3) before students enroll and sav
Slide 15: Tutors: Online On-demand Personalized Instruction
Tutors: Online 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 ~ $5-7B (1
Slide 16: Math Solver: Step-by-step Problem Solver and Calculator
Math Solver: Step-by-step Problem Solver and Calculator Step-by-step math problem solver and calculator makes learning math easier. A.I.-driven math technology which provides guided explanations for each step in solving a problem. 64% of high school students are not prepared for college-level math.
Slide 17: Required Materials Drives Brand Awareness & Loyalty
Required Materials Drives Brand Awareness & Loyalty ~$550 MM 1 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 18: Business Outlook: 2019
We are increasing our organic guidance Business Outlook: 2019 Q2 2019 Q3 2019 Full Year 2019 Results Guidance Guidance Total Net Revenues $93.9m $88m - $90m $398m - $402m Chegg Services Revenue $80.3m $68m - $69m $330m - $332m Gross Margin % 78% 74% - 75% 76% - 77% Adjusted EBITDA* $31.1m $19m - $20
Slide 19: Appendix
Appendix 19 Chegg Inc. © 2005 - 2019. All Rights Reserved.
Slide 20: 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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net loss $ (2,029) $ (3,909) $ (6,347) $ (6,526) Interest expense, net 13
Slide 21: 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 September December 31, 2019 30, 2019 Net loss $ (18,600) $ (12,500) Interest expens
Slide 22: Reconciliation of Required Materials Net Revenues to Non-GAAP
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 23: 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