Company profile

Ticker
CHGG
Exchange
CEO
Daniel L. Rosensweig
Employees
Incorporated in
Location
Fiscal year end
Former names
Chegg Inc
SEC CIK
IRS number
203237489

CHGG stock data

(
)

Calendar

29 Jul 19
14 Oct 19
31 Dec 19

News

Company financial data Financial data

Quarter (USD) Jun 19 Mar 19 Dec 18 Sep 18
Revenue 93.86M 97.41M 95.68M 74.24M
Net income -2.03M -4.32M 5.35M -13.71M
Diluted EPS -0.02 -0.04 0.04 -0.12
Net profit margin -2.16% -4.43% 5.59% -18.47%
Operating income 6.82M -1.03M 7.54M -10.43M
Net change in cash -358.71M 539.84M -4.36M -5.91M
Cash on hand 555.79M 914.5M 374.66M 379.02M
Cost of revenue 20.52M 23.34M 22.07M 19.92M
Annual (USD) Dec 18 Dec 17 Dec 16 Dec 15
Revenue 321.08M 255.07M 254.09M 301.37M
Net income -14.89M -20.28M -42.25M -59.21M
Diluted EPS -0.13 -0.2 -0.47 -0.68
Net profit margin -4.64% -7.95% -16.63% -19.65%
Operating income -6.22M -18.97M -40.07M -57.7M
Net change in cash 248.21M 49.13M 10.3M 10.91M
Cash on hand 374.66M 126.46M 77.33M 67.03M
Cost of revenue 80M 80.18M 119.6M 189.85M

Financial data from Chegg earnings reports

Financial report summary

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Risks
  • Our limited operating history and evolving digital offerings make it difficult to evaluate our current business and future prospects.
  • Our operating results are expected to be difficult to predict based on a number of factors.
  • If our efforts to attract new students to use our products and services and increase student engagement with our learning platform are not successful, our business will be adversely affected.
  • Our future revenues depend on our ability to continue to attract new students from a high school and college student population that has an inherently high rate of turnover primarily due to graduation, requiring us to invest continuously in marketing to the student population to build brand awareness and loyalty, which we may not be able to accomplish on a cost-effective basis or at all.
  • If Internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, student engagement with our website could decline, which may harm our business and operating results.
  • If our efforts to build a strong brand are not successful, we may not be able to grow our student user base, which could adversely affect our operating results.
  • Any significant disruption, including those related to cybersecurity or arising from cyber-attacks, to our computer systems, especially during peak periods, could result in a loss of students, colleges and/or brands which could harm our business, results of operations and financial condition.
  • We have a history of losses and we may not achieve or sustain profitability in the future.
  • We intend to offer new products and services to students to grow our business. If our efforts are not successful, our business and financial results would be adversely affected.
  • We may not realize the anticipated benefits of acquisitions, which could disrupt our business and harm our financial condition and results of operations.
  • We operate in a rapidly changing market and if we do not successfully adapt to known or unforeseen market developments, our business may be harmed.
  • If we are not able to manage the growth of our business both in terms of scale and complexity, our operating results and financial condition could be adversely affected.
  • Difficulties that could arise from our partnership with Ingram and other partners may have an adverse effect on our business and results of operations.
  • Ingram purchases, and we price, textbooks based on anticipated levels of demand and other factors that we estimate based on historical experience and various other assumptions. If actual results differ materially from our estimates, our gross margins may decline.
  • If Ingram's relationships with the shipping providers that deliver textbooks directly to our students are terminated or impaired, if shipping costs increase or if these vendors are unable to timely deliver textbooks to our students, our business and results of operations could be substantially harmed.
  • We rely on third-party software and service providers, including Amazon Web Services (AWS), to provide systems, storage and services for our website. Any failure or interruption experienced by such third parties could result in the inability of students to use our products and services, result in a loss of revenues and harm our reputation.
  • Increased activity during peak periods places substantially increased strain on our operations and any failure to deliver our products and services during these periods will have an adverse effect on student satisfaction and our revenues.
  • Computer malware, viruses, hacking, phishing attacks and spamming could harm our business and results of operations.
  • Our reputation and relationships with students and tutors would be harmed if our users’ data, particularly billing data, were to be accessed by unauthorized persons.
  • We rely heavily on our proprietary technology to process deliveries and returns of the textbooks and to manage other aspects of our operations. The failure of this technology to operate effectively, particularly during peak periods, could adversely affect our ability to retain and attract student users.
  • We may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our learning platform is accessible and delivers a satisfactory user experience to students.
  • Our wide variety of accepted payment methods subjects us to third-party payment processing-related risks.
  • We face significant competition in each aspect of our business, and we expect such competition to increase.
  • Our business is seasonal and we have increased risk from disruption during peak periods which makes our operating results difficult to predict.
  • Growing our student user base and their engagement with our learning platform through mobile devices depends upon the effective operation of our mobile applications with mobile operating systems, networks and standards that we do not control.
  • If the third-party eTextbook Reader that we utilize does not remain compatible with third-party operating systems, demand for our eTextbooks may decline and could have an adverse effect on our revenues.
  • If the transition from print textbooks to eTextbooks does not proceed as we expect, our business and financial condition will be adversely affected.
  • If publishers refuse to grant us distribution rights to digital content on acceptable terms or terminate their agreements with us, or if we are unable to adequately protect their digital content rights, our business could be adversely affected.
  • If we fail to convince brands of the benefits of advertising on our platform or to use our marketing services, our business could be harmed.
  • Our core value of putting students first may conflict with the short-term interests of our business.
  • If we are required to discontinue certain of our current marketing activities, our ability to attract new students may be adversely affected.
  • Our business and growth may suffer if we are unable to hire and retain key personnel.
  • We may need additional capital, and we cannot be sure that additional financing will be available or on favorable terms.
  • Government regulation of education and student information is evolving, and unfavorable developments could have an adverse effect on our operating results.
  • We collect, process, store and use personal information and data, which subjects us to governmental regulation and other legal obligations related to privacy and our actual or perceived failure to comply with such obligations could harm our business.
  • Public scrutiny of Internet privacy issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and services to students, thereby harming our business.
  • If we become subject to liability for the Internet content that we publish or that is uploaded to our websites by students, our results of operations could be adversely affected.
  • Failure to protect or enforce our intellectual property and other proprietary rights could adversely affect our business and financial condition and results of operations.
  • We are, and may in the future be, subject to intellectual property claims, which are costly to defend and could harm our business, financial condition and operating results.
  • Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and proprietary information.
  • Our business depends on general economic conditions and their effect on funding levels of colleges, spending behavior by students and advertising budgets.
  • Our international operations are subject to increased challenges and risks.
  • Colleges and certain governments may restrict access to the Internet or our website, which could lead to the loss of or slowing of growth in our student user base and their level of engagement with our platform.
  • Our operations are susceptible to earthquakes, floods, rolling blackouts and other types of power loss. If these or other natural or man-made disasters were to occur, our operations and operating results would be adversely affected.
  • If we are unable to implement and maintain effective internal control over financial reporting in the future, the accuracy, and timeliness of our financial reporting may be adversely affected.
  • We may be subject to greater than anticipated liabilities for income, property, sales and other taxes, and any successful action by federal, state, foreign or other authorities to collect additional taxes could adversely harm our business.
  • We may not be able to utilize a significant portion of our net operating loss or tax credit carryforwards, which could adversely affect our profitability.
  • U.S. federal income tax reform could adversely affect us.
  • Our effective tax rate may fluctuate as a result of new tax laws and our interpretations of those new tax laws, which are subject to significant judgments and estimates. The ongoing effects of the new tax laws and the refinement of provisional estimates could make our results difficult to predict.
  • Our reported financial results may be harmed by changes in the accounting principles generally accepted in the United States.
  • Our stock price has been and will likely continue to be volatile.
  • Our management, with the oversight of the board of directors, has broad discretion as to the use of the proceeds from previous and future sales of securities and we may not use the proceeds effectively.
  • If securities or industry analysts do not publish research reports about our business or publish inaccurate or unfavorable research about our business, our stock price could decline.
  • We do not intend to pay dividends for the foreseeable future.
  • Delaware law and provisions in our restated certificate of incorporation and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.
  • Servicing our 0.125% convertible senior notes due 2025 (the “2025 notes”) and 0.25% convertible senior notes due 2023 (the “2023 notes”) requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.
Management Discussion
  • ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  • You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See the “Note about Forward-Looking Statements” for additional information. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, “Risk Factors.”
  • Chegg is a smarter way to student. As the leading direct-to-student learning platform, we strive to improve educational outcomes by putting the student first in all our decisions. We support students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials. Our services are available online, anytime and anywhere, so we can reach students when they need us most.
Content analysis ?
Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability
H.S. junior Good
New words: advice, attached, award, billion, Brandemuehl, Brown, COBRA, committee, consultant, Cook, death, disability, eligible, employee, Exhibit, formally, Fredric, hereto, irrevocably, Lem, lump, Motion, Osier, peer, prorated, radio, resignation, Schultz, staying, streaming, substitute, successor, sum, supersede, thereunder, unvested, whichever
Removed: cooperated, Kaplan, month, partnered, registrant, transitioning