Company profile

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

CHGG stock data

(
)

Investment data

Data from SEC filings
Securities sold
Number of investors

Calendar

4 May 20
10 Jul 20
31 Dec 20

News

Company financial data Financial data

Quarter (USD) Mar 20 Dec 19 Sep 19 Jun 19
Revenue 131.59M 125.5M 94.15M 93.86M
Net income -5.71M 8.22M -11.48M -2.03M
Diluted EPS -0.05 0.06 -0.1 -0.02
Net profit margin -4.34% 6.55% -12.19% -2.16%
Operating income 3.28M 17.09M -5.06M 6.82M
Net change in cash -28.42M -62.94M -105.34M -358.71M
Cash on hand 359.1M 387.52M 450.46M 555.79M
Cost of revenue 42.39M 26.17M 22.16M 20.52M
Annual (USD) Dec 19 Dec 18 Dec 17 Dec 16
Revenue 410.93M 321.08M 255.07M 254.09M
Net income -9.61M -14.89M -20.28M -42.25M
Diluted EPS -0.08 -0.13 -0.2 -0.47
Net profit margin -2.34% -4.64% -7.95% -16.63%
Operating income 17.82M -6.22M -18.97M -40.07M
Net change in cash 12.86M 248.21M 49.13M 10.3M
Cash on hand 387.52M 374.66M 126.46M 77.33M
Cost of revenue 92.18M 80M 80.18M 119.6M

Financial data from Chegg earnings reports

Date Owner Security Transaction Code 10b5-1 $Price #Shares $Value #Remaining
7 Jul 20 Daniel Rosensweig Common Stock Sell Dispose S Yes 70.83 28,000 1.98M 2,091,179
1 Jul 20 York John E. Director Stock Option Common Stock Option exercise Dispose M Yes 7.04 9,417 66.3K 0
1 Jul 20 York John E. Common Stock Option exercise Aquire M Yes 7.65 583 4.46K 17,375
1 Jul 20 York John E. Common Stock Sell Dispose S Yes 68.02 9,417 640.54K 16,792
1 Jul 20 York John E. Common Stock Option exercise Aquire M Yes 7.04 9,417 66.3K 26,209
1 Jul 20 York John E. Director Stock Option Common Stock Option exercise Dispose M Yes 7.65 583 4.46K 40,781
1 Jul 20 York John E. Common Stock Sell Dispose S Yes 68.06 583 39.68K 16,792
29 Jun 20 Daniel Rosensweig Common Stock Sell Dispose S Yes 64.84 28,000 1.82M 2,119,179
22 Jun 20 Nathan J. Schultz Common Stock Sell Dispose S Yes 70.19 35,083 2.46M 233,603
22 Jun 20 Nathan J. Schultz Common Stock Option exercise Aquire M Yes 12.5 35,083 438.54K 268,686
13F holders
Current Prev Q Change
Total holders 278 284 -2.1%
Opened positions 53 63 -15.9%
Closed positions 59 44 +34.1%
Increased positions 91 87 +4.6%
Reduced positions 99 91 +8.8%
13F shares
Current Prev Q Change
Total value 51.58B 58.92B -12.5%
Total shares 127.64M 127.1M +0.4%
Total puts 481.47K 356K +35.2%
Total calls 1.39M 1.15M +20.8%
Total put/call ratio 0.3 0.3 +11.9%
Largest owners
Shares Value Change
Baillie Gifford & Co 14.42M $516M -0.5%
Vanguard 10.67M $381.93M +1.8%
BLK BlackRock 10.55M $377.58M +16.4%
Fred Alger Management 6.15M $220.19M +45.8%
Wellington Management 4.63M $165.73M +119.4%
Alliancebernstein 3.83M $136.87M -16.0%
Primecap Management 3.35M $119.86M -42.9%
BAC Bank of America 3.17M $113.34M +18.5%
Sylebra Capital 3.16M $113.13M -7.4%
Artisan Partners Limited Partnership 3.03M $108.24M -0.2%
Largest transactions
Shares Bought/sold Change
Wellington Management 4.63M +2.52M +119.4%
Gilder Gagnon Howe & Co 1.68M -2.51M -60.0%
Primecap Management 3.35M -2.51M -42.9%
Fred Alger Management 6.15M +1.93M +45.8%
American Century Companies 2.48M +1.65M +197.2%
BLK BlackRock 10.55M +1.49M +16.4%
Norges Bank 0 -1.35M EXIT
Lord, Abbett & Co. 2.17M +1.2M +122.3%
N Price T Rowe Associates 162.47K -1.14M -87.5%
POLR Polar Capital 0 -1.05M EXIT

Financial report summary

?
Risks
  • The full effect of the COVID-19 pandemic is uncertain and cannot be predicted. The COVID-19 pandemic could worsen, or its effects may be prolonged, which could lead to a materially adverse effect on our business and results of operations.
  • We are unable to determine when colleges will resume in-person classes, whether they will successfully transition to online education, or how well they will overcome the impacts of the COVID-19 pandemic. Ongoing uncertainty or worsening of the COVID-19 pandemic could cause colleges to suffer financial decline or warrant them taking more drastic actions with regard to campus shut downs which could lead to a materially adverse impact on our business and results of operations.
  • Our limited operating history and evolving digital offerings make it difficult to evaluate our current business and future prospects.
  • Our results of operations are expected to be difficult to predict based on a number of factors.
  • We have a history of losses and we may not achieve or sustain profitability in the future.
  • 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 and results of operations will be adversely affected. Our future revenues depend on our ability to attract new students, 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 cost-effectively or at all.
  • 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 and/or brands which could harm our business, results of operations, and financial condition.
  • 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 results of operations.
  • 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 results of operations.
  • If our efforts to build strong brands are not successful, we may not be able to grow our student user base, which could adversely affect our results of operations.
  • We intend to offer new products and services to students and expand into international markets to grow our business. If our efforts are not successful or we are not able to manage the growth of our business both in terms of scale and complexity, our business, results of operations, and financial condition 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 and financial condition could be materially and adversely affected.
  • We purchase and 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.
  • Wind-down and reconciliation activities associated with ending our relationship with Ingram may not proceed as planned, may require a long time to complete, or may require us to incur greater costs than anticipated.
  • Delays in shipping, increased costs, and other difficulties that could arise with our distribution partners may have an adverse effect on our business and results of operations.
  • 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.
  • Computer malware, viruses, hacking, phishing attacks, and spamming could harm our business and results of operations.
  • Our reputation and relationships with students, tutors, and educators 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 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 competition in aspects 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 learning platform, or if platforms such as Google Chrome, Safari, or Firefox limit our access to advertising and marketing audiences, 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 results of operations.
  • 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 results of operations.
  • 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 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, and public health crises, including the current COVID-19 pandemic. If these or other natural or man-made disasters were to occur, our business and results of operations 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 and new tax laws could adversely affect us.
  • Our effective tax rate may fluctuate as a result of new tax U.S. and worldwide 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 report about our business or publish inaccurate or unfavorable research about our business, our stock price could decline.
  • We may be subject to short selling strategies that may drive down the market price of our common stock.
  • 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 section titled “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
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