Slide 1: Q1-20 Investor Presentation
Q1-20 Investor Presentation May 4, 2020 1 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements new opportunities; competitive developments, including pricing pressures and other services targeting This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the students; Chegg’s anticipated growth of Cheg
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: Q1-20 Highlights
Q1 – 20 Highlights • 2.9 million Chegg Services subscribers, up 35% y/y (1)) • Chegg total revenue of $131.6 million, up 35% y/y(1) • 235 million Chegg Study content views (1)) 6 1. Based on Company internal data Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 7: Supporting our employees, students and community
Supporting our employees, students and community Employees Students and Communities We set up our teams to work remotely and were able We are helping underserved students, in partnership with to seamlessly continue providing Chegg products and Verizon, by providing free Chegg Study Pack subscription
Slide 8: 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% $30K DEBT OWED BY 2018 GRADUATES(4) ARE EMPLOYED(2) Ne
Slide 9: Large and Expanding Market Opportunity
Large and Expanding Market Opportunity Initial Expansion in 18M CA, AU and UK International 36M 54 Million Total Markets Secondary and US University Tertiary Students(3) (1) and High Students Can Benefit from School Students (2) 3.9 Million(4) Chegg Services Subscribers in 2019 Y/Y growth of 29% 1.
Slide 10: Chegg Aims to Provide Overwhelming Value to Solve Learner's Problems
Chegg Aims to Provide Overwhelming Value to Solve Learner’s Problems Online On-demand Personalized Adaptive Affordable …and Backed by Human Help Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 11: Chegg is Well-Known Among College Students
Chegg is Well-Known Among College Students Percent Unaided Awareness (College)(1) 37% 87% Amazon 26% Quizlet 20% OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE (1) Khan Academy 12% Google 9% 11 1. H&P Annual Survey, October 2019 (College n=1737) Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 12: Integrated Platform of Connected Services
Integrated Platform of Connected Services Chegg Services Required Materials Academic Chegg Study Textbooks Homework help learning service with a library 37 million pieces of content Rent or buy print textbooks or eTextbooks (~31 million expert answered Q&As and ~6 million textbook solutions)* Chegg
Slide 13: Chegg is Delivering Strong Outcomes for Students
Chegg is Delivering Strong Outcomes for Students Chegg Study helps me better Chegg Study helps me get understand my school work better grades 90% 92% * Source: H&P Blind Customer Survey, October 2019. Bases (College Chegg Study product payers who paid for 13 services and used Chegg Study for at leas
Slide 14: Rapid Growth of Chegg Services
Rapid Growth of Chegg Services Chegg Services Subscribers Chegg Services Revenue Annual Chegg Services Subscribers (in Revenue Growth ($ in millions)* millions) FY'15 1.0 Chegg Services FY’15 — FY’19 CAGR: 37% 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 Q1 2020 Q2 2020 Results Guidance Total Net Revenues $131.6m $135m - $137m Chegg Services Revenue $100.4m $115m - $117m Gross Margin % 68% 74% - 75% Adjusted EBITDA* $31.8 $48m - $50m CapEx $54.6 While we are comfortable providing guidance for Q
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 Consignment Commission Commission Commission e-T
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 to EBITDA and Adjusted EBITDA
Reconciliation of Forward Looking Net Income to EBITDA and Adjusted EBITDA 19 Chegg Inc. © 2005 - 2020. All Rights Reserved.
Slide 20: 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 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.