SANTA CLARA, Calif.–(BUSINESS WIRE)–Chegg, Inc. (NYSE:CHGG), the main student-first linked studying platform, right now reported monetary outcomes for the three months ended March 31, 2022.
“We had a strong first quarter, and Chegg is executing nicely towards our strategic goals, regardless of continued trade headwinds,” stated Dan Rosensweig, CEO & President of Chegg, Inc. “We anticipate these challenges to be non permanent and after they subside, our working mannequin, steadiness sheet, and main model, put us in a robust place to speed up our progress.”
Q1 2022 Highlights:
- Complete Web Revenues of $202.2 million, a rise of two% year-over-year
- Chegg Providers Revenues grew 14% year-over-year to $184.Eight million, or 91% of whole web revenues, in comparison with 82% in Q1 2021
- Web Earnings was $5.7 million
- Non-GAAP Web Earnings was $50.1 million
- Adjusted EBITDA was $62.2 million
- 5.Four million: variety of Chegg Providers subscribers, a rise of 12% year-over-year, which incorporates 0.6 million subscribers from our newly acquired Busuu service
- In April 2022, we entered right into a partnership with an impartial ebook reseller to transition out of our print textbook library and achievement logistics tasks whereas permitting us to proceed providing print textbooks and eTextbooks to college students
Complete web revenues embody revenues from Chegg Providers and Required Supplies. Chegg Providers primarily consists of Chegg Examine, Chegg Writing, Chegg Math Solver, Chegg Examine Pack, Busuu, Mathway, and Thinkful. Required Supplies consists of print textbooks and eTextbooks.
For extra details about non-GAAP web revenue and adjusted EBITDA, and a reconciliation of non-GAAP web revenue to web revenue (loss), and adjusted EBITDA to web revenue (loss), see the sections of this press launch titled “Use of Non-GAAP Measures,” “Reconciliation of Web Earnings (Loss) to EBITDA and Adjusted EBITDA,” and “Reconciliation of GAAP to Non-GAAP Monetary Measures.”
Enterprise Outlook:
Second Quarter 2022
- Complete Web Revenues within the vary of $188 million to $192 million
- Chegg Providers Revenues within the vary of $183 million to $187 million
- Gross Margin between 76% and 77%
- Adjusted EBITDA within the vary of $66 million to $68 million
Full 12 months 2022
- Complete Web Revenues within the vary of $740 million to $770 million
- Chegg Providers Revenues within the vary of $710 million to $740 million
- Gross Margin between 73% and 74%
- Adjusted EBITDA within the vary of $220 million to $235 million
- Capital Expenditures within the vary of $120 million to $130 million
For extra details about the usage of forward-looking non-GAAP measures, a reconciliation of forward-looking web revenue (loss) to EBITDA and adjusted EBITDA for the second quarter 2022 and full yr 2022, see the under sections of the press launch titled “Use of Non-GAAP Measures,” and “Reconciliation of Ahead-Wanting Web Earnings (Loss) to EBITDA and Adjusted EBITDA.”
An up to date investor presentation and an investor knowledge sheet could be discovered on Chegg’s Investor Relations web site https://investor.chegg.com.
Ready Remarks – Dan Rosensweig, CEO Chegg, Inc.
Thanks, Tracey and welcome everybody to our Q1 2022 earnings name. We began the yr with a strong quarter; Chegg Providers grew 14% year-over-year with 5.Four million subscribers. As well as, we’re saying a brand new partnership with an impartial ebook reseller, enabling us to proceed to supply print and e-textbooks to college students, whereas our companion handles stock and achievement. We anticipate this deal to enhance our margins and progress charges over time.
As famous in our fourth quarter name, we entered the yr with momentum, nevertheless this pattern has not continued on the stage we anticipated. The problems of enrollment, the economic system, and now inflation have all impacted our trade. College students proceed to take fewer lessons and people they do take are sometimes much less rigorous, with fewer or extra restricted assignments. With larger wages and elevated value of residing, extra individuals are shifting their priorities in direction of incomes over studying, leading to a decrease course load, or delaying enrollment at school right now. Within the U.S. alone, now we have seen roughly 1 million college students forgo or postpone larger training over the past two years. The influence of those components is obvious within the diminished site visitors to larger training help providers. This has made forecasting right now difficult, and whereas we anticipate many of those developments to be non permanent, we’re lowering our steerage to higher mirror the present market situations, which Andy will stroll you thru.
That being stated we’re executing nicely towards these present situations and indications are that we’re outperforming our sector. With roughly 50% of the world inhabitants below the age of 30, and expertise impacting what we be taught, how we be taught, the place we be taught and after we be taught, the worldwide want for inexpensive, prime quality, reliable, tutorial help and skills-based studying will solely develop. Our purpose throughout this time is to achieve better market share and put money into future progress.
College students who’re utilizing paid help providers this semester are overwhelmingly selecting Chegg. We’re experiencing robust engagement, our highest take price for the Chegg Examine Pack, and excellent retention charges. Together with the elevated take price for the Chegg Examine Pack, our continued efforts within the enlargement, high quality, discoverability, and personalization of our content material drove robust retention, which elevated the ARPU of our enterprise.
These are highly effective endorsements of the crucial position Chegg performs within the lives of scholars. We stay bullish on the post-pandemic period, so we’re staying targeted on investments in our future; particularly, worldwide enlargement, language studying, expertise coaching, and supplemental help providers like tender expertise and monetary literacy. Our attain is increasing globally. And we’re enhancing each our content material library and expertise platform to extend college students’ capacity to find our greater than 100 million items of studying supplies, thereby enhancing scholar outcomes.
Domestically, we proceed to be targeted on our key priorities together with the student-facing launch of Uversity this fall, which can improve the breadth and high quality of our content material, deepen {our relationships} with tutorial establishments, and broaden the variety of college students who can be taught from Chegg. To-date, professors have uploaded over 140,000 authorised items of tutorial content material and Uversity will quickly be rolling out to college within the UK and Canada.
Our worldwide enlargement continues to carry out nicely led by the adoption of Chegg Examine and the Chegg Examine Pack, and accelerated by the addition of Busuu. We proceed to develop our subscribers and take market share and we at the moment are providing native content material and consumer experiences in key markets. We’re presently accepting native currencies in 5 international locations and anticipate to broaden to not less than three new markets by the tip of this yr. As well as, we’re worth testing in eight international locations to find out the optimum price-to-value equation, and we’re excited to have lately launched our first totally localized app in Turkey. Our subsequent localized app can be in Spanish and that may improve our TAM in each the U.S. and different key international locations like Mexico in addition to rising Latin American markets.
We’re additionally constructing new B2B channels for each our expertise and language providers and are happy with their early success. Busuu has direct relationships with over 500 corporations, and our expertise distribution companion Guild now reaches over Four million front-line staff, which is a crucial channel for Chegg. We’re proud to have graduated our first Guild cohorts from our new packages in expertise fundamentals and superior packages, like cyber safety. With latest analysis exhibiting that 82% of worldwide staff polled plan to coach in new digital expertise within the subsequent 5 years, we imagine these sorts of packages symbolize a serious alternative for Chegg.
Past the tutorial {and professional} wants of scholars, there is a gigantic alternative to enhance scholar lives past the classroom. 83% of U.S. college students really feel they should be taught extra about cash and funds and half are fighting their psychological well being. Chegg is investing in serving these very important scholar wants and can regularly work to help them past teachers and expertise.
Given the present atmosphere, we’re very pleased with how the Chegg group continues to execute. We’ll handle by the volatility and anticipate to return to larger and extra predictable progress over time. By way of all of this, we are going to by no means lose sight of our mission: to place college students first around the globe.
And with that I’ll flip it over to Andy…
Ready Remarks – Andy Brown, CFO Chegg, Inc.
Thanks Dan and good afternoon everybody.
Q1 was a strong quarter for Chegg, with revenues coming in inside the steerage vary, whereas adjusted EBITDA continued to be robust and forward of our expectations regardless of the volatility from the pandemic and unfavorable training trade developments. These situations have made forecasting tougher within the close to time period and consequently, we’re lowering our full yr expectations. I’ll stroll you thru our up to date steerage shortly, together with the modifications to Required Supplies from our new partnership.
With that backdrop, let me stroll you thru the Q1 outcomes.
For Q1, whole income grew to $202 million. This was pushed by Chegg Providers progress of 14% to $185 million, as subscribers grew to five.Four million through the quarter, which included roughly 600,000 subscribers from our newly acquired Busuu service. Gross margin got here in barely larger than anticipated as we proceed to get advantages as we scale. All of this resulted in adjusted EBITDA margin of 31% or $62 million, exceeding our preliminary estimates, whilst we made vital investments for future progress.
Wanting on the steadiness sheet, we ended the quarter with $1.6 billion of money and investments. In the course of the quarter, we used $422 million to buy Busuu and $300 million for our accelerated share repurchase which was accomplished in April. We proceed to imagine the mixture of our working mannequin, steadiness sheet, and money flows are among the many strongest within the training trade and put us in a really perfect place to develop organically, and may alternatives turn out to be accessible, by acquisition.
In early April we entered into an settlement to promote our remaining textbook library and to supply each bodily and digital textbooks by a companion, the place we are going to obtain a single-digit proportion fee. Being student-first, now we have continued to supply textbooks even because it stopped contributing positively to our financials. This new relationship provides us the chance to proceed to serve college students and finally develop quicker with larger margins. Now we have supplied particulars in our earnings deck on the investor relations web site relating to the transition, together with the influence to each revenues and prices. Beginning in 2023 we anticipate this partnership will contribute roughly $7 – $10 million in annual income, which given its measurement, can be consolidated into Chegg Providers income, and as such, we are going to solely report a single income line.
Shifting on to steerage. As we proceed to navigate the evolving impacts of the economic system and the pandemic, the historic patterns of our enterprise, together with seasonality and intra-semester scholar habits have modified. Whereas these components have made forecasting extra sophisticated, we imagine over time it can return to better predictability.
In consequence, for 2022 we now anticipate:
- Complete income to be between $740 and $770 million,
- With Chegg Providers income between $710 and $740 million,
- Gross margin between 73% and 74%,
- And adjusted EBITDA between $220 and $235 million, or 30% adjusted EBITDA margin.
For Q2 we now anticipate:
- Complete income to be between $188 and $192 million,
- With Chegg Providers income between $183 and $187 million,
- Gross margin between 76% and 77%,
- And adjusted EBITDA between $66 and $68 million.
In closing, regardless of the turbulence within the trade we proceed to take a position prudently in progress resembling worldwide enlargement, Uversity, personalization, increasing our non-academic and expertise choices, and language studying with Busuu, all whereas delivering finest in school margins and producing vital money flows. Together with the energy of our steadiness sheet, we imagine this places us in pole place when these trade headwinds subside.
With that, I’ll flip the decision over to the operator for questions.
Convention Name and Webcast Info
To entry the decision, please dial 1-877-407-4018, or outdoors the U.S. +1-201-689-8471, 5 minutes previous to 1:30 p.m. Pacific Daylight Time (or 4:30 p.m. Japanese Daylight Time). A dwell webcast of the decision may also be accessible at https://investor.chegg.com below the Occasions & Displays menu. An audio replay can be accessible starting at 4:30 p.m. Pacific Daylight Time (or 7:30 p.m. Japanese Daylight Time) on Could 2, 2022, till 8:59 p.m. Pacific Daylight Time (or 11:59 p.m. Japanese Daylight Time) on Could 9, 2022, by calling 1-844-512-2921, or outdoors the U.S. +1-412-317-6671, with Convention ID 13729217. An audio archive of the decision may also be accessible at https://investor.chegg.com.
Use of Investor Relations Web site for Regulation FD Functions
Chegg additionally makes use of its media heart web site, https://www.chegg.com/press, as a way of exposing materials private info and for complying with its disclosure obligations below Regulation FD. Accordingly, buyers ought to monitor https://www.chegg.com/press, along with following press releases, Securities and Trade Fee filings and public convention calls and webcasts.
About Chegg
Hundreds of thousands of individuals all around the globe Be taught with Chegg. Our mission is to enhance studying and studying outcomes by placing college students first. We help life-long learners beginning with their tutorial journey and lengthening into their careers. The Chegg platform gives services to help learners to assist them higher perceive their tutorial course supplies, and in addition gives private {and professional} growth expertise coaching, to assist them obtain their studying targets. Chegg is a publicly held firm primarily based in Santa Clara, California and trades on the NYSE below the image CHGG. For extra info, go to www.chegg.com.
Use of Non-GAAP Measures
To complement Chegg’s monetary outcomes offered in accordance with typically accepted accounting ideas in the USA (GAAP), this press launch and the accompanying tables and the associated earnings convention name comprise non-GAAP monetary measures, together with adjusted EBITDA, non-GAAP working bills, non-GAAP revenue from operations, non-GAAP web revenue, non-GAAP weighted common shares, non-GAAP web revenue per share, and free money circulation. For reconciliations of those non-GAAP monetary measures to probably the most straight comparable GAAP monetary measures, please see the part of the accompanying tables titled, “Reconciliation of Web Earnings (Loss) to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Monetary Measures,” “Reconciliation of Web Money Supplied by Working Actions to Free Money Stream,” and “Reconciliation of Ahead-Wanting Web Earnings (Loss) to EBITDA and Adjusted EBITDA.”
The presentation of those non-GAAP monetary measures will not be supposed to be thought-about in isolation from, as an alternative to, or superior to, the monetary info ready and offered in accordance with GAAP, and could also be totally different from non-GAAP monetary measures utilized by different corporations. Chegg defines (1) adjusted EBITDA as earnings earlier than curiosity, taxes, depreciation and amortization, or EBITDA, adjusted for print textbook depreciation expense and to exclude share-based compensation expense, different revenue (expense), web, acquisition-related compensation prices, transitional logistic costs and restructuring costs; (2) non-GAAP working bills as working bills excluding share-based compensation expense, amortization of intangible belongings, and acquisition-related compensation prices; (3) non-GAAP revenue from operations as (loss) revenue from operations excluding share-based compensation expense, amortization of intangible belongings, acquisition-related compensation prices, and transitional logistic costs; (4) non-GAAP web revenue as web revenue (loss) excluding share-based compensation expense, amortization of intangible belongings, acquisition-related compensation prices, amortization of debt low cost and issuance prices, transitional logistic costs, the loss on early extinguishment of debt, the web loss on change in truthful worth of spinoff devices, and the achieve on sale of strategic fairness investments; (5) non-GAAP weighted common shares excellent as weighted common shares excellent adjusted for the impact of excellent inventory choices, RSUs, PSUs, and shares associated to our convertible senior notes, to the extent such shares usually are not already included in our weighted common shares excellent; (6) non-GAAP web revenue per share is outlined as non-GAAP web revenue divided by non-GAAP weighted common shares excellent; and (7) free money circulation as web money supplied by working actions adjusted for purchases of property and gear, purchases of textbooks and proceeds from disposition of textbooks. To the extent further vital non-recurring objects come up sooner or later, Chegg might think about whether or not to exclude such objects in calculating the non-GAAP monetary measures it makes use of.
Chegg believes that these non-GAAP monetary measures, when taken along with the corresponding GAAP monetary measures, present significant supplemental info relating to Chegg’s efficiency by excluding objects that might not be indicative of Chegg’s core enterprise, working outcomes or future outlook. Chegg administration makes use of these non-GAAP monetary measures in assessing Chegg’s working outcomes, in addition to when planning, forecasting and analyzing future durations and believes that such measures improve buyers’ general understanding of our present monetary efficiency. These non-GAAP monetary measures additionally facilitate comparisons of Chegg’s efficiency to prior durations.
As offered within the “Reconciliation of Web Earnings (Loss) to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Monetary Measures,” “Reconciliation of Ahead-Wanting Web Earnings (Loss) to EBITDA and Adjusted EBITDA,” and “Reconciliation of Web Money Supplied by Working Actions to Free Money Stream” tables under, every of the non-GAAP monetary measures excludes a number of of the next objects:
Share-based compensation expense.
Share-based compensation expense is a non-cash expense that varies in quantity from interval to interval and relies on market forces which are typically past Chegg’s management. In consequence, administration excludes this merchandise from Chegg’s inside working forecasts and fashions. Administration believes that non-GAAP measures adjusted for share-based compensation expense present buyers with a foundation to measure Chegg’s core efficiency towards the efficiency of different corporations with out the variability created by share-based compensation because of the number of fairness awards utilized by different corporations and the various methodologies and assumptions used.
Amortization of intangible belongings.
Chegg amortizes intangible belongings, together with those who contribute to producing revenues, that it acquires along side acquisitions, which ends up in non-cash bills that won’t in any other case have been incurred. Chegg believes excluding the expense related to intangible belongings from non-GAAP measures permits for a extra correct evaluation of its ongoing operations and gives buyers with a greater comparability of period-over-period working outcomes. No corresponding changes have been made associated to revenues generated from acquired intangible belongings.
Acquisition-related compensation prices.
Acquisition-related compensation prices embody compensation expense ensuing from the employment retention of sure key staff established in accordance with the phrases of the acquisitions. Normally, these acquisition-related compensation prices usually are not factored into administration’s analysis of potential acquisitions or Chegg’s efficiency after completion of acquisitions, as a result of they aren’t associated to Chegg’s core working efficiency. As well as, the frequency and quantity of such costs can fluctuate considerably primarily based on the scale and timing of acquisitions and the maturities of the companies being acquired. Excluding acquisition-related compensation prices from non-GAAP measures gives buyers with a foundation to match Chegg’s outcomes towards these of different corporations with out the variability attributable to buy accounting.
Amortization of debt issuance prices.
The distinction between the efficient curiosity expense and the contractual curiosity expense are excluded from administration’s evaluation of our working efficiency as a result of administration believes that these non-cash bills usually are not indicative of ongoing working efficiency. Chegg believes that the exclusion of the non-cash curiosity expense gives buyers with a greater comparability of period-over-period working outcomes.
Loss on early extinguishment of debt.
The loss on early extinguishment of debt will not be thought-about a core-operating exercise and we imagine its exclusion gives buyers with a greater comparability of period-over-period working outcomes.
Loss on change in truthful worth of spinoff devices, web.
Our convertible senior notes embedded conversion choices and associated capped name devices meet sure situations for exclusion as spinoff devices and as a substitute meet situations to be categorised in fairness. The embedded conversion options and capped name transactions usually are not remeasured so long as they proceed to fulfill the situations for fairness classification, in any other case they’re categorised as spinoff devices and recorded at truthful worth with modifications in truthful worth recorded in different (expense) revenue, web. The loss on change in truthful worth of spinoff devices will not be thought-about a core-operating exercise and we imagine its exclusion gives buyers with a greater comparability of period-over-period working outcomes.
Acquire on sale of strategic fairness funding.
The achieve on sale of strategic fairness funding represents a one-time occasion to document a achieve on our strategic fairness funding that was acquired. The achieve on sale of strategic fairness funding is a one-time occasion and we imagine its exclusion gives buyers with a greater comparability of period-over-period working outcomes.
Transitional logistics costs.
The transitional logistics costs symbolize incremental bills incurred as we transition our print textbooks to a brand new third celebration logistics supplier. Chegg believes that it’s acceptable to exclude them from non-GAAP monetary measures as a result of it’s the results of an occasion that’s not thought-about a core-operating exercise and we imagine its exclusion gives buyers with a greater comparability of period-over-period working outcomes.
Impact of shares for inventory plan exercise.
The impact of shares for inventory plan exercise represents the dilutive influence of excellent inventory choices, RSUs, and PSUs calculated below the treasury inventory technique.
Impact of shares associated to convertible senior notes.
The impact of shares associated to convertible senior notes represents the dilutive influence of our convertible senior notes, to the extent such shares usually are not already included in our weighted common shares excellent as they had been antidilutive on a GAAP foundation.
Free money circulation.
Free money circulation represents web money supplied by working actions adjusted for purchases of property and gear and purchases of textbooks and together with proceeds from the disposition of textbooks. Chegg considers free money circulation to be a liquidity measure that gives helpful info to administration and buyers about the amount of money generated by the enterprise after the purchases of property and gear and textbooks, which might then be used to, amongst different issues, put money into Chegg’s enterprise and make strategic acquisitions. A limitation of the utility of free money circulation as a measure of monetary efficiency is that it doesn’t symbolize the full improve or lower in Chegg’s money steadiness for the interval.
Ahead-Wanting Statements
This press launch comprises forward-looking statements made pursuant to the secure harbor provisions of the Non-public Securities Litigation Reform Act of 1995, which embody, with out limitation statements relating to the influence of the continuing coronavirus (COVID-19) pandemic on Chegg’s monetary situation and outcomes of operations, the expectations relating to Chegg’s execution towards its strategic goals, outperformance of our sector, the positioning of Chegg to speed up progress, the Required Supplies transition, together with margin enhancements, income progress or contribution, the operational elements of the transition, the anticipated timing and advantages of the transition, and prices financial savings, amongst others, the non permanent nature of trade headwinds, together with sure developments in employment and wages, scholar habits, our trade, and the economic system, our income progress, margins, retention charges and money circulation technology, the expansion within the want for tutorial help and skills-based studying, our enlargement into new markets, our targets and expectations to achieve market share and put money into future progress, together with in worldwide enlargement, language studying, expertise coaching, and supplemental help providers, our capacity to forecast our outcomes, our future income presentation, the anticipated student-facing launch of Uversity and its anticipated advantages, the assumption that Chegg will handle by volatility and the expectation of returning to larger and extra predictable progress, the monetary steerage, in addition to these included within the investor presentation referenced above, these included within the “Ready Remarks” sections above, and all statements about Chegg’s outlook below “Enterprise Outlook.” The phrases “anticipate,” “imagine,” “estimate,” “anticipate,” “intend,” “mission,” “endeavor,” “will,” “ought to,” “future,” “transition,” “outlook” and related expressions, as they relate to Chegg, are supposed to establish forward-looking statements. These statements usually are not ensures of future efficiency, and are primarily based on administration’s expectations as of the date of this press launch and assumptions which are inherently topic to uncertainties, dangers and modifications in circumstances which are tough to foretell. Ahead-looking statements contain recognized and unknown dangers, uncertainties and different components which will trigger precise outcomes, efficiency or achievements to vary materially from any future outcomes, efficiency or achievements. Vital components that might trigger precise outcomes to vary materially from these expressed or implied by these forward-looking statements embody the next: the consequences of the COVID-19 pandemic on Chegg’s enterprise and the economic system typically; Chegg’s capacity to draw new, and retain present, college students, to extend scholar engagement, and to extend monetization; modifications in employment and wages and the uncertainty surrounding the evolving instructional panorama, enrollment and scholar habits; modifications in search engine methodologies that modify Chegg’s search outcome web page rankings, leading to decreased scholar engagement on Chegg’s web site; competitors in elements of Chegg’s enterprise, and Chegg’s expectation that such competitors will improve; Chegg’s capacity to keep up its providers and programs with out interruption, together with because of technical points, cybersecurity threats, or cyber-attacks; third-party fee processing dangers; adoption of presidency regulation of training unfavorable to Chegg; the speed of adoption of Chegg’s choices; cell app shops and cell working programs making Chegg’s apps and cell web site accessible to college students and to develop Chegg’s consumer base and improve their engagement; Chegg’s capacity to broaden internationally; schools and governments limiting on-line entry or entry to Chegg’s web site; Chegg’s capacity to strategically benefit from new alternatives; aggressive developments, together with pricing pressures and different providers concentrating on college students; Chegg’s capacity to construct and broaden its providers choices; Chegg’s capacity to develop new services on a cheap foundation and to combine acquired companies and belongings; the influence of seasonality and scholar habits on the enterprise; Chegg’s model and repute; the end result of any present litigation and investigations; the profitable transition of Required Supplies; Chegg’s capacity to successfully management working prices; modifications in Chegg’s addressable market; regulatory modifications, specifically regarding privateness and advertising; modifications within the training market, together with because of COVID-19; and basic financial, political and trade situations, together with inflation and warfare. All info supplied on this launch and within the convention name is as of the date hereof, and Chegg undertakes no responsibility to replace this info besides as required by legislation. These and different essential threat components are described extra totally in paperwork filed with the Securities and Trade Fee, together with Chegg’s Annual Report on Kind 10-Ok for the yr ended December 31, 2021 filed with the Securities and Trade Fee on February 22, 2022, and will trigger precise outcomes to vary materially from expectations.
|
CHEGG, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in hundreds, apart from variety of shares and par worth) (unaudited) |
||||||||
|
|
March 31, 2022 |
|
December 31, 2021 |
|||||
|
Belongings |
|
|
|
|||||
|
Present belongings |
|
|
|
|||||
|
Money and money equivalents |
$ |
267,731 |
|
|
$ |
854,078 |
|
|
|
Quick-term investments |
|
915,431 |
|
|
|
691,781 |
|
|
|
Accounts receivable, web of allowance of $156 and $153 at March 31, 2022 and December 31, 2021, respectively |
|
19,918 |
|
|
|
17,850 |
|
|
|
Pay as you go bills |
|
28,882 |
|
|
|
35,093 |
|
|
|
Different present belongings |
|
14,671 |
|
|
|
23,846 |
|
|
|
Complete present belongings |
|
1,246,633 |
|
|
|
1,622,648 |
|
|
|
Lengthy-term investments |
|
435,413 |
|
|
|
745,993 |
|
|
|
Textbook library, web |
|
10,651 |
|
|
|
11,241 |
|
|
|
Property and gear, web |
|
187,743 |
|
|
|
169,938 |
|
|
|
Goodwill |
|
641,284 |
|
|
|
289,763 |
|
|
|
Intangible belongings, web |
|
102,685 |
|
|
|
40,566 |
|
|
|
Proper of use belongings |
|
18,879 |
|
|
|
18,062 |
|
|
|
Different belongings |
|
19,182 |
|
|
|
21,035 |
|
|
|
Complete belongings |
$ |
2,662,470 |
|
|
$ |
2,919,246 |
|
|
|
Liabilities and stockholders’ fairness |
|
|
|
|||||
|
Present liabilities |
|
|
|
|||||
|
Accounts payable |
$ |
9,549 |
|
|
$ |
11,992 |
|
|
|
Deferred income |
|
60,458 |
|
|
|
35,143 |
|
|
|
Accrued liabilities |
|
85,424 |
|
|
|
67,209 |
|
|
|
Complete present liabilities |
|
155,431 |
|
|
|
114,344 |
|
|
|
Lengthy-term liabilities |
|
|
|
|||||
|
Convertible senior notes, web |
|
1,679,534 |
|
|
|
1,678,155 |
|
|
|
Lengthy-term working lease liabilities |
|
12,456 |
|
|
|
12,447 |
|
|
|
Different long-term liabilities |
|
6,528 |
|
|
|
7,383 |
|
|
|
Complete long-term liabilities |
|
1,698,518 |
|
|
|
1,697,985 |
|
|
|
Complete liabilities |
|
1,853,949 |
|
|
|
1,812,329 |
|
|
|
Commitments and contingencies |
|
|
|
|||||
|
Stockholders’ fairness: |
|
|
|
|||||
|
Most popular inventory, $0.001 par worth per share, 10,000,000 shares licensed, no shares issued and excellent |
|
— |
|
|
|
— |
|
|
|
Frequent inventory, $0.001 par worth per share: 400,000,000 shares licensed; 126,681,972 and 136,951,956 shares issued and excellent at March 31, 2022 and December 31, 2021, respectively |
|
127 |
|
|
|
137 |
|
|
|
Further paid-in capital |
|
1,176,765 |
|
|
|
1,449,305 |
|
|
|
Collected different complete loss |
|
(36,922 |
) |
|
|
(5,334 |
) |
|
|
Collected deficit |
|
(331,449 |
) |
|
|
(337,191 |
) |
|
|
Complete stockholders’ fairness |
|
808,521 |
|
|
|
1,106,917 |
|
|
|
Complete liabilities and stockholders’ fairness |
$ |
2,662,470 |
|
|
$ |
2,919,246 |
|
|
|
CHEGG, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in hundreds, besides per share quantities) (unaudited) |
||||||||
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Web revenues |
$ |
202,244 |
|
|
$ |
198,378 |
|
|
|
Value of revenues(1) |
|
55,085 |
|
|
|
71,384 |
|
|
|
Gross revenue |
|
147,159 |
|
|
|
126,994 |
|
|
|
Working bills: |
|
|
|
|||||
|
Analysis and growth(1) |
|
52,415 |
|
|
|
46,131 |
|
|
|
Gross sales and advertising(1) |
|
42,498 |
|
|
|
26,214 |
|
|
|
Common and administrative(1) |
|
46,870 |
|
|
|
37,870 |
|
|
|
Complete working bills |
|
141,783 |
|
|
|
110,215 |
|
|
|
Earnings from operations |
|
5,376 |
|
|
|
16,779 |
|
|
|
Curiosity expense, web and different revenue (expense), web: |
|
|
|
|||||
|
Curiosity expense, web |
|
(1,597 |
) |
|
|
(1,929 |
) |
|
|
Different revenue (expense), web |
|
6,180 |
|
|
|
(77,208 |
) |
|
|
Complete curiosity expense, web and different revenue (expense), web |
|
4,583 |
|
|
|
(79,137 |
) |
|
|
Earnings (loss) earlier than provision for revenue taxes |
|
9,959 |
|
|
|
(62,358 |
) |
|
|
Provision for revenue taxes |
|
(4,217 |
) |
|
|
(2,821 |
) |
|
|
Web revenue (loss) |
$ |
5,742 |
|
|
$ |
(65,179 |
) |
|
|
Web revenue (loss) per share |
|
|
|
|||||
|
Fundamental |
$ |
0.04 |
|
|
$ |
(0.49 |
) |
|
|
Diluted |
$ |
0.04 |
|
|
$ |
(0.49 |
) |
|
|
Weighted common shares used to compute web revenue (loss) per share |
|
|
|
|||||
|
Fundamental |
|
132,162 |
|
|
|
134,352 |
|
|
|
Diluted |
|
133,270 |
|
|
|
134,352 |
|
|
|
|
|
|
|
|||||
|
(1) Consists of share-based compensation expense as follows: |
|
|
|
|||||
|
Value of revenues |
$ |
623 |
|
|
$ |
362 |
|
|
|
Analysis and growth |
|
11,776 |
|
|
|
7,959 |
|
|
|
Gross sales and advertising |
|
4,386 |
|
|
|
2,919 |
|
|
|
Common and administrative |
|
16,299 |
|
|
|
11,860 |
|
|
|
Complete share-based compensation expense |
$ |
33,084 |
|
|
$ |
23,100 |
|
|
|
CHEGG, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in hundreds) (unaudited) |
||||||||
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Money flows from working actions |
|
|
|
|||||
|
Web revenue (loss) |
$ |
5,742 |
|
|
$ |
(65,179 |
) |
|
|
Changes to reconcile web revenue (loss) to web money supplied by working actions: |
|
|
|
|||||
|
Print textbook depreciation expense |
|
1,521 |
|
|
|
3,760 |
|
|
|
Different depreciation and amortization expense |
|
20,285 |
|
|
|
14,846 |
|
|
|
Share-based compensation expense |
|
33,084 |
|
|
|
23,100 |
|
|
|
Amortization of debt issuance prices |
|
1,382 |
|
|
|
1,626 |
|
|
|
Acquire on international forex remeasurement of buy consideration |
|
(4,628 |
) |
|
|
— |
|
|
|
Loss on early extinguishment of debt |
|
— |
|
|
|
78,152 |
|
|
|
Loss on change in truthful worth of spinoff devices, web |
|
— |
|
|
|
7,148 |
|
|
|
Loss from write-off of property and gear |
|
626 |
|
|
|
757 |
|
|
|
Acquire on sale of strategic fairness funding |
|
— |
|
|
|
(5,338 |
) |
|
|
(Acquire) loss on textbook library, web |
|
(610 |
) |
|
|
4,028 |
|
|
|
Working lease expense, web of accretion |
|
1,640 |
|
|
|
1,589 |
|
|
|
Different non-cash objects |
|
(737 |
) |
|
|
87 |
|
|
|
Change in belongings and liabilities, web of impact of acquisition of companies: |
|
|
|
|||||
|
Accounts receivable |
|
292 |
|
|
|
2,240 |
|
|
|
Pay as you go bills and different present belongings |
|
21,722 |
|
|
|
(25,075 |
) |
|
|
Different belongings |
|
8,342 |
|
|
|
1,058 |
|
|
|
Accounts payable |
|
(7,534 |
) |
|
|
6,597 |
|
|
|
Deferred income |
|
8,554 |
|
|
|
15,988 |
|
|
|
Accrued liabilities |
|
(7,555 |
) |
|
|
9,386 |
|
|
|
Different liabilities |
|
(2,091 |
) |
|
|
(1,197 |
) |
|
|
Web money supplied by working actions |
|
80,035 |
|
|
|
73,573 |
|
|
|
Money flows from investing actions |
|
|
|
|||||
|
Purchases of property and gear |
|
(29,533 |
) |
|
|
(18,984 |
) |
|
|
Purchases of textbooks |
|
(3,692 |
) |
|
|
(4,527 |
) |
|
|
Proceeds from disposition of textbooks |
|
2,499 |
|
|
|
4,038 |
|
|
|
Purchases of investments |
|
(273,280 |
) |
|
|
(925,748 |
) |
|
|
Maturities of investments |
|
342,059 |
|
|
|
181,315 |
|
|
|
Proceeds from sale of strategic fairness funding |
|
— |
|
|
|
6,845 |
|
|
|
Acquisition of companies, web of money acquired |
|
(401,125 |
) |
|
|
(7,891 |
) |
|
|
Web money utilized in investing actions |
|
(363,072 |
) |
|
|
(764,952 |
) |
|
|
Money flows from financing actions |
|
|
|
|||||
|
Proceeds from frequent inventory issued below inventory plans, web |
|
456 |
|
|
|
347 |
|
|
|
Cost of taxes associated to the web share settlement of fairness awards |
|
(7,467 |
) |
|
|
(59,176 |
) |
|
|
Proceeds from fairness providing, web of providing prices |
|
— |
|
|
|
1,091,466 |
|
|
|
Reimbursement of convertible senior notes |
|
— |
|
|
|
(189,849 |
) |
|
|
Proceeds from train of convertible senior notes capped name |
|
— |
|
|
|
24,812 |
|
|
|
Repurchases of frequent inventory |
|
(300,450 |
) |
|
|
— |
|
|
|
Web money (utilized in) supplied by financing actions |
|
(307,461 |
) |
|
|
867,600 |
|
|
|
Impact of trade price modifications |
|
4,628 |
|
|
|
— |
|
|
|
Web (lower) improve in money, money equivalents and restricted money |
|
(585,870 |
) |
|
|
176,221 |
|
|
|
Money, money equivalents and restricted money, starting of interval |
|
855,893 |
|
|
|
481,715 |
|
|
|
Money, money equivalents and restricted money, finish of interval |
$ |
270,023 |
|
|
$ |
657,936 |
|
|
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Supplemental money circulation knowledge: |
|
|
|
|||||
|
Money paid through the interval for: |
|
|
|
|||||
|
Curiosity |
$ |
437 |
|
|
$ |
502 |
|
|
|
Earnings taxes, web of refunds |
$ |
1,101 |
|
|
$ |
3,063 |
|
|
|
Money paid for quantities included within the measurement of lease liabilities: |
|
|
|
|||||
|
Working money flows from working leases |
$ |
1,852 |
|
|
$ |
1,998 |
|
|
|
Proper of use belongings obtained in trade for lease obligations: |
|
|
|
|||||
|
Working leases |
$ |
2,715 |
|
|
$ |
— |
|
|
|
Non-cash investing and financing actions: |
|
|
|
|||||
|
Accrued purchases of long-lived belongings |
$ |
5,778 |
|
|
$ |
904 |
|
|
|
Issuance of frequent inventory associated to compensation of convertible senior notes |
$ |
— |
|
|
$ |
11,237 |
|
|
|
|
March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Reconciliation of money, money equivalents and restricted money: |
|
|
|
|||||
|
Money and money equivalents |
$ |
267,731 |
|
|
$ |
656,168 |
|
|
|
Restricted money included in different present belongings |
|
70 |
|
|
|
38 |
|
|
|
Restricted money included in different belongings |
|
2,222 |
|
|
|
1,730 |
|
|
|
Complete money, money equivalents and restricted money |
$ |
270,023 |
|
|
$ |
657,936 |
|
|
|
CHEGG, INC. RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (in hundreds) (unaudited) |
||||||||
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Web revenue (loss) |
$ |
5,742 |
|
|
$ |
(65,179 |
) |
|
|
Curiosity expense, web |
|
1,597 |
|
|
|
1,929 |
|
|
|
Provision for revenue taxes |
|
4,217 |
|
|
|
2,821 |
|
|
|
Print textbook depreciation expense |
|
1,521 |
|
|
|
3,760 |
|
|
|
Different depreciation and amortization expense |
|
20,285 |
|
|
|
14,846 |
|
|
|
EBITDA |
|
33,362 |
|
|
|
(41,823 |
) |
|
|
Print textbook depreciation expense |
|
(1,521 |
) |
|
|
(3,760 |
) |
|
|
Share-based compensation expense |
|
33,084 |
|
|
|
23,100 |
|
|
|
Different revenue (expense), web |
|
(6,180 |
) |
|
|
77,208 |
|
|
|
Acquisition-related compensation prices |
|
3,079 |
|
|
|
2,421 |
|
|
|
Transitional logistics costs |
|
348 |
|
|
|
— |
|
|
|
Adjusted EBITDA |
$ |
62,172 |
|
|
$ |
57,146 |
|
|
|
CHEGG, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in hundreds, besides percentages and per share quantities) (unaudited) |
||||||||
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Working bills |
$ |
141,783 |
|
|
$ |
110,215 |
|
|
|
Share-based compensation expense |
|
(32,461 |
) |
|
|
(22,738 |
) |
|
|
Amortization of intangible belongings |
|
(2,801 |
) |
|
|
(2,335 |
) |
|
|
Acquisition-related compensation prices |
|
(3,069 |
) |
|
|
(2,421 |
) |
|
|
Non-GAAP working bills |
$ |
103,452 |
|
|
$ |
82,721 |
|
|
|
|
|
|
|
|||||
|
Earnings from operations |
$ |
5,376 |
|
|
$ |
16,779 |
|
|
|
Share-based compensation expense |
|
33,084 |
|
|
|
23,100 |
|
|
|
Amortization of intangible belongings |
|
6,442 |
|
|
|
4,449 |
|
|
|
Acquisition-related compensation prices |
|
3,079 |
|
|
|
2,421 |
|
|
|
Transitional logistics costs |
|
348 |
|
|
|
— |
|
|
|
Non-GAAP revenue from operations |
$ |
48,329 |
|
|
$ |
46,749 |
|
|
|
|
|
|
|
|||||
|
Web revenue (loss) |
$ |
5,742 |
|
|
$ |
(65,179 |
) |
|
|
Share-based compensation expense |
|
33,084 |
|
|
|
23,100 |
|
|
|
Amortization of intangible belongings |
|
6,442 |
|
|
|
4,449 |
|
|
|
Acquisition-related compensation prices |
|
3,079 |
|
|
|
2,421 |
|
|
|
Amortization of debt issuance prices |
|
1,382 |
|
|
|
1,626 |
|
|
|
Transitional logistics costs |
|
348 |
|
|
|
— |
|
|
|
Loss on early extinguishment of debt |
|
— |
|
|
|
78,152 |
|
|
|
Loss on change in truthful worth of spinoff devices, web |
|
— |
|
|
|
7,148 |
|
|
|
Acquire on sale of strategic fairness investments |
|
— |
|
|
|
(5,338 |
) |
|
|
Non-GAAP web revenue |
$ |
50,077 |
|
|
$ |
46,379 |
|
|
|
|
|
|
|
|||||
|
Weighted common shares used to compute web revenue (loss) per share, diluted |
|
133,270 |
|
|
|
134,352 |
|
|
|
Impact of shares for inventory plan exercise |
|
— |
|
|
|
3,563 |
|
|
|
Impact of shares associated to convertible senior notes |
|
22,875 |
|
|
|
28,818 |
|
|
|
Non-GAAP weighted common shares used to compute non-GAAP web revenue per share, diluted |
|
156,145 |
|
|
|
166,733 |
|
|
|
|
|
|
|
|||||
|
Web revenue (loss) per share, diluted |
$ |
0.04 |
|
|
$ |
(0.49 |
) |
|
|
Changes |
|
0.28 |
|
|
|
0.77 |
|
|
|
Non-GAAP web revenue per share, diluted |
$ |
0.32 |
|
|
$ |
0.28 |
|
|
|
CHEGG, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (in hundreds) (unaudited) |
||||||||
|
|
Three Months Ended March 31, |
|||||||
|
|
2022 |
|
2021 |
|||||
|
Web money supplied by working actions |
$ |
80,035 |
|
|
$ |
73,573 |
|
|
|
Purchases of property and gear |
|
(29,533 |
) |
|
|
(18,984 |
) |
|
|
Purchases of textbooks |
|
(3,692 |
) |
|
|
(4,527 |
) |
|
|
Proceeds from disposition of textbooks |
|
2,499 |
|
|
|
4,038 |
|
|
|
Free money circulation |
$ |
49,309 |
|
|
$ |
54,100 |
|
|
|
CHEGG, INC. RECONCILIATION OF FORWARD-LOOKING NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (in hundreds) (unaudited) |
||||||||
|
|
Three Months Ending June 30, 2022 |
|
12 months Ending December 31, 2022 |
|||||
|
Web revenue (loss) |
$ |
1,000 |
|
|
$ |
(31,100 |
) |
|
|
Curiosity expense, web |
|
1,600 |
|
|
|
6,500 |
|
|
|
Provision for revenue taxes |
|
1,900 |
|
|
|
8,500 |
|
|
|
Textbook library depreciation expense |
|
— |
|
|
|
1,500 |
|
|
|
Different depreciation and amortization expense |
|
21,700 |
|
|
|
90,300 |
|
|
|
EBITDA |
|
26,200 |
|
|
|
75,700 |
|
|
|
Textbook library depreciation expense |
|
— |
|
|
|
(1,500 |
) |
|
|
Share-based compensation expense |
|
36,000 |
|
|
|
145,000 |
|
|
|
Different revenue, web |
|
(500 |
) |
|
|
(7,600 |
) |
|
|
Acquisition-related compensation prices |
|
3,300 |
|
|
|
13,000 |
|
|
|
Transitional logistics costs |
|
2,000 |
|
|
|
2,900 |
|
|
|
Adjusted EBITDA* |
$ |
67,000 |
|
|
$ |
227,500 |
|
|
* Adjusted EBITDA steerage for the three months ending June 30, 2022 and yr ending December 31, 2022 symbolize the midpoint of the ranges of $66 million to $68 million and $220 million to $235 million, respectively.