Slide 1: An Investment In Improving Student Outcomes
An Investment In Improving Student Outcomes August 1, 2016 1 Confidential Material – Chegg Inc. © 2005 - 2016. All Rights Reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements between Chegg and Ingram on Chegg’s results of operations; Chegg’s ability to effectively This presentation contains forward-looking statements made pursuant to the safe harbor control operating costs; changes in Chegg’s addressable market; changes in
Slide 3: Chegg at-a-Glance
Chegg at-a-Glance Chegg’s direct-to-student learning Chegg Services Students subscribe to our learning services: services reach over 40 MM1 unique Chegg Study visitors annually and 10 MM2 monthly, Chegg Tutors delivering services that are both popular Chegg Writing Tools and useful for student
Slide 4: An Investment in Improving Student Outcomes
An Investment in Improving Student Outcomes Higher Education Is at an Inflection Point Compelling Market Trends Support Our Belief that Chegg Offers a High Value Proposition A Market Leading Direct-to-Student Connected Learning Platform in Higher Education Expected to Complete Transition to All Digi
Slide 5: Sizable Student Market Opportunity
Sizable Student Market Opportunity In the fall of 2016, there are projected to be approximately:1 Approximately 15%1 of 11 million MIDDLE SCHOOL STUDENTS the entire U.S. population is a student in middle school and 16 million HIGH SCHOOL STUDENTS above and there are expected to be 5.2 million more 2
Slide 6: Compelling Macro Trends
Compelling Macro Trends Introducing the class of 2020… Born the same into a world where on- and learning happens on Today’s year as Google… demand is the norm… their own schedule students want learning 62% 1 solutions that use online tutorials for school are customized 81% 1 and available use a devi
Slide 7: Existing System Outpaced by Technology & Students
Existing System Outpaced by Technology & Students Chegg’s existing services and vision fills in the gaps for students, starting in middle school and staying with them into their early careers. Poor outcomes driving critical Direct-to-student services include writing help, test prep, college matching
Slide 8: On-Demand Learning Services Drive Rapid Growth
On-Demand Learning Services Drive Rapid Growth Chegg Services Subscribers have Fast Growing Chegg Services tripled in 3 Years Comprise >50% of Revenue 1 Chegg Services Subscriber (in millions) Non-GAAP Revenue Growth ($ in millions) $94 Chegg Services FY '12 0.3 FY ’12 — FY ‘15 CAGR: 56% $66 $68 $72
Slide 9: Well Positioned to Capture Big Market Opportunity
Well Positioned to Capture Big Market Opportunity Significant upside Chegg is an potential established 2 brand in a ~ 47 million nascent students in middle school and above 1 market with lots of 1 million+ greenfield Chegg Services subscribers Chegg’s Services subscribers represent ~ 2% of the total
Slide 10: Supporting Every Step of the Educational Journey
We are increasing our organic guidance Supporting Every Step of the Educational Journey High School Student College Student Post-Graduate Uses “Chegg Writing Tools ” Gets help from “Chegg Tutors” Utilizes “Chegg Test Prep” for college admissions ACT Orders books or ebooks from “Chegg Required Materi
Slide 11: Writing: Helping Students from Middle School On
Writing: Helping Students from Middle School On Online writing instruction from a human tutor, on-demand or as a subscription service Writing Tools Imagine Easy Solutions (acquired in 2016) is a leading that students provider of online writing tools, relied upon by millions of engage: Average studen
Slide 12: Tutors: On-Demand Personalized Instruction
Tutors: On-Demand Personalized Instruction Chegg Tutors allows students to instantly match with a human tutor and receive one-on-one help. Nearly 3x as many computer It’s simple, reliable and affordable; as low as $0.40/min. science students on Chegg Tutors In Q2 2016, Chegg tutoring minutes grew ov
Slide 13: Test Prep: Personalized, Adaptive and On-Demand
Test Prep: Personalized, Adaptive and On-Demand Chegg Test Prep gives students immediate access to Chegg’s high value online sample tests, adaptive courses and live human proposition: tutors, providing them the resources they need to personalized improve test scores course & human help as low as $29
Slide 14: Required Materials Drive Brand Awareness & Loyalty
Required Materials Drive Brand Awareness & Loyalty Chegg provides students with a comprehensive selection of 1 textbooks and ebooks to rent or buy in a stress-free way, at ~$550 MM an affordable price annual savings for students from 6 MM Steady business anticipated to generate $50-60M books deliver
Slide 15: Chegg Study: A Powerful Learning Tool for STEM
Chegg Study: A Powerful Learning Tool for STEM Chegg Study connects students to guided In H1 2016, textbook solutions created by Chegg experts, expanding their learning and improving students asked outcomes, particularly in science, technology, and accessed engineering and math (STEM) more Qs and As
Slide 16: Market Opportunities for Outcome Services
Market Opportunities for Outcome Services Brand Partnerships 8MM free samples/deals sent to students in 2015 Enrollment Services $4B1 Market Opportunity Careers $5B2 Market Opportunity 1 Source: http://www.alixpartners.com/en/LinkClick.aspx?fileticket=um2rId4ibDE%3D&tabid=2390, http://nces.ed.gov/fa
Slide 17: Business Outlook: 2016
We are increasing our organic guidance Business Outlook: 2016 Q2 2016 Q3 2016 Results Guidance Fiscal 2016 Guidance Total Net Revenue $53.0m $65m to $70m $240m to $255m Non-GAAP Revenue* $40.7m $48m to $52m $182m to $192m Chegg Services Revenue $29.9m $28m to $30m $124m to $132m Gross Margin %* 59.7
Slide 18: Evolving to Pure Digital, High Margin Model
We are increasing our organic guidance Evolving to Pure Digital, High Margin Model >60% We expect Chegg’s all- ~30% digital model to fuel >25% sustainable high- growth and profitability while 20% 30% better serving student needs Chegg Services (6%) and delivering Revenue Growth Gross Margin enhanced
Slide 19: An Investment in Improving Student Outcomes
An Investment in Improving Student Outcomes Higher Education Is at an Inflection Point Compelling Market Trends Support Our Belief that Chegg Offers a High Value Proposition A Market Leading Direct-to-Student Connected Learning Platform in Higher Education Expected to Complete Transition to All Digi
Slide 20: Appendix
Appendix 20 Confidential Material – Chegg Inc. © 2005 - 2016. All Rights Reserved.
Slide 21: A Driven, Experienced Executive Team
A Driven, Experienced Executive Team Dan Andy Brown Esther Lem Rosensweig Chief Financial Officer Chief Marketing Officer Chairman, President and Chief Executive Officer Nathan Schultz Chuck Geiger Chief Learning Officer Chief Product Officer Mike Osier Dave Borders Jr. Chief Outcomes Officer Genera
Slide 22: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures 22 Confidential Material – Chegg Inc. © 2005 - 2016. All Rights Reserved.
Slide 23: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures 23 Confidential Material – Chegg Inc. © 2005 - 2016. All Rights Reserved.