Slide 1: Q4-17 and FY 17 Investor Presentation
Q4-17 and FY 17 Investor Presentation February 12, 2018 1 Chegg Inc. © 2005 - 2017. 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 and expand its services offerings; Chegg’s ability to develop new products and services on a cost- provisions of the Private Securities Litigation Reform Act of 199
Slide 3: Leading student-first connected learning platform to improve student outcomes
Leading student-first connected learning platform to improve student outcomes 3 Chegg Inc.Inc. Chegg © 2005 - 2017. © 2005 All All - 2017. Rights Reserved. Rights Reserved.
Slide 4: Q4-17 and FY17 Highlights
Q4-17 and FY17 Highlights Q4 1.4 million Chegg Services subscribers, up 47% y/y Chegg Services revenue of $60.5 million, up 37% y/y 169 million Chegg Study content views, up 79% y/y 2017 2.2 million Chegg Services subscribers, up 45% y/y Chegg Services revenue of $185.7 million, up 44% y/y
Slide 5: An Investment in Improving Student Outcomes
An Investment in Improving Student Outcomes Large Opportunity with Compelling Market Trends Leading Student-First Connected Learning Platform Focused on Student Outcomes Transitioned to an All Digital, High Growth, High Margin Model 5 Chegg Inc. © 2005 - 2017. All Rights Reserved.
Slide 6: Large Student Market Opportunity
Large Student Market Opportunity 11 million MIDDLE SCHOOL STUDENTS1 80%+ Aided Brand Awareness of 16 million HIGH SCHOOL STUDENTS 2 Chegg products and 5 services 20 million UNIVERSITY STUDENTS 6 Education comprises ~ 7 % of US GDP 3 or $ 1.3 trillion annually 4 1 Source: National Center for Educatio
Slide 7: Compelling Macro Trends
Compelling Macro Trends Introducing the class of 2020… Today’s Born the same into a world where on- and learning happens on students want year as Google… demand is the norm… their own schedule learning solutions that 62% are customized 1 use online tutorials for school and available 81% on-demand 1
Slide 8: Existing System Outpaced by Technology & Student Needs
Existing System Outpaced by Technology & Student Needs Chegg’s direct-to-student services are designed to improve student outcomes: online homework help, on-demand live tutoring writing Critical need for help, test prep, required materials for less, internships and more affordable, high-quality, lea
Slide 9: Chegg Solves Today's Students' Problems
Chegg Solves Today’s Students’ Problems Online On-demand Personalized Adaptive Affordable …and Backed by Human Help 9 Chegg Inc.Inc. Chegg © 2005 - 2017. © 2005 All Rights - 2017. Reserved. All Rights Reserved.
Slide 10: Integrated Platform of Connected Educational Services
Integrated Platform of Connected Educational Services Chegg Services Students subscribe to our learning services: Chegg’s connected Chegg Study learning platform for Chegg Writing Tools students reaches 1 Chegg Tutors ~10MM unique visitors monthly Required Materials Purchase or rent required c
Slide 11: On-Demand Learning Services Drive Rapid Growth
On-Demand Learning Services Drive Rapid Growth Chegg Services Subscribers quintupled over the past 4 years Fast Growing Chegg Services Revenue Chegg Services Subscribers (in millions) Revenue Growth ($ in millions)* FY'12 0.3 $242 Chegg Services FY’12 — FY’18 CAGR: 46% FY'13 0.5 $186 $129 FY'14 0.7
Slide 12: Well Positioned to Capture Big Market Opportunity
Well Positioned to Capture Big Market Opportunity Significant upside potential Chegg is an established 47million 2 brand in a students in middle school and above1 nascent market with a 2.2 million lot of Chegg Services subscribers in FY’17 greenfield Chegg’s Services subscribers represent ~ 5% of th
Slide 13: Supporting Every Step of the Educational Journey
We are increasing our organic guidance Supporting Every Step of the Educational Journey Middle School High School College Post-Graduate Uses “Chegg Writing Tools” Gets help from “Chegg Tutors” Utilizes “Chegg Test Prep” for college admissions Orders books or ebooks from “Chegg Required Materials” St
Slide 14: Chegg Study: A Powerful Learning Tool
Chegg Study: A Powerful Learning Tool 13 MM expert Q&As and 7 MM Chegg Study connects students to guided unique solution textbook solutions created by Chegg experts, sets. Library of 20 expanding their learning and improving MM total, which outcomes increased by 6 MM in 2017. (as of Q4-17) 28,000 44
Slide 15: Writing: Helping Students from Middle School Onwards
Writing: Helping Students from Middle School Onwards Imagine Easy Solutions (acquired May 2016) is a leading provider of online writing tools, relied upon by millions of students and teachers More than With nearly 25% of college freshmen required to take non- 500 MM new credit remedial writing cours
Slide 16: Tutors: On-Demand Personalized Instruction
Tutors: On-Demand Personalized Instruction Key subjects: Chegg Tutors is a simple, reliable and affordable Computer service which allows students to quickly match Science, with a human tutor to receive one-on-one help. Calculus, Statistics, Finance and Accounting Market Opportunity 50% of Chegg Tuto
Slide 17: Required Materials Drives Brand Awareness & Loyalty
Required Materials Drives Brand Awareness & Loyalty 1 ~$550 MM 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
We are increasing our organic guidance Business Outlook: 2018 Q4 2017 Q1 2018 Full Year 2018 Results Guidance Guidance Total Revenues $73.5m $73m - $75m $295m - $300m Chegg Services Revenue $60.5m $54m - $55.5m $240m - $243m Gross Margin % 74% 71% - 73% 72% - 74% Adjusted EBITDA* $21.1m $14m - $16m
Slide 19: Appendix
Appendix 19 Chegg Inc. © 2005 - 2017. All Rights Reserved.
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, 2017 2016 2017 2016 Net income (loss) $ 3,659 $ (1,489) $ (20,283) $ (42
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 Ended Ended March 31, December 31, 2018 2018 * * Net loss $ (2,300) $ (800) Interest expense, net
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 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) Three Months Ended December 31, 2017 Net cash provided by operating activities $ 21,701 Purchases of prop