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Our growth strategy includes acquisitions, and we may not be able to execute on our acquisition strategy or integrate acquisitions successfully.

~~Revenues from Chegg Services, print textbooks~~

As part of our business strategy, we have made and intend to continue to make acquisitions to add specialized employees, complementary businesses, products, services, operations, or technologies. Our recent prior acquisitions include Busuu, Mathway, and Thinkful. To be successful, we must timely and efficiently integrate acquired companies, including their technologies, products, services, operations, and personnel. Acquired companies can be complex and time consuming to integrate and we may incur significant integration costs and we may not be able to offset our acquisition costs. Acquisitions involve many risks that ~~we own,~~may negatively impact our financial condition and ~~eTextbooks are primarily recognized ratably over~~results of operations, including the ~~term a student subscribes~~risks that the acquisitions may:

•require us to ~~our Chegg Services, rents a print textbook~~incur charges and substantial debt or ~~has access to an eTextbook. This has generally resulted~~liabilities;

•cause adverse tax consequences, substantial depreciation, or deferred compensation charges;

•result in ~~our highest revenues~~acquired in-process research and ~~profitability~~development expenses or in the ~~fourth quarter~~future may require the amortization, write-down, or impairment of amounts related to deferred compensation, goodwill, and other intangible assets; and

•give rise to various litigation and regulatory risks.

In addition:

•we may encounter difficulties or unforeseen expenditures to integrate an acquired company;

•an acquisition may disrupt our business, divert resources, increase expenses, and distract our management;

•an acquisition may reduce or delay adoption and engagement rates for our acquired products and services because of student uncertainty about continuity and effectiveness;

•an acquisition may subject us to laws and operational challenges in new jurisdictions with which we are unfamiliar;

•we may not successfully transition acquired users to the Chegg platform and therefore may not realize the potential benefits of these acquisitions;

•we may incur unforeseen costs as ~~it reflects more days of the academic year. As~~ a result of ~~this seasonality,~~the pre-acquisition activities of businesses and technologies we acquire;

•we may be required to honor the pre-existing contractual relationships of businesses we acquire, which ~~corresponds~~contracts may be on terms that we would not have otherwise accepted;

•it may be difficult to ~~the academic calendar,~~monetize any acquired products and services;

•an acquisition may not ultimately be complementary to our ~~revenues~~offerings; and

•an acquisition may ~~fluctuate significantly quarter to quarter depending upon the timing of~~involve entry into markets where we ~~are~~have little or no prior experience.

Our ability to acquire and integrate larger or more complex businesses, products, services, operations, or technologies in a successful manner is unproven. Our newer products and services, such as skills-based learning and language learning, may not be integrated effectively into our ~~“rush” cycle~~business, achieve or sustain profitability, or achieve market acceptance at levels sufficient to justify our investment. We may not be able to find suitable acquisition candidates, and ~~sequential quarter-over-quarter comparisons~~we may not be able to complete acquisitions on favorable terms, if at all. To finance any future acquisitions, we may issue equity or equity-linked securities, which could be dilutive, or debt, which could be costly, potentially dilutive, and impose substantial restrictions on the conduct of our ~~net revenues~~business. If we fail to successfully complete any acquisitions or integrate them into our company, or identify and ~~operating results are not likely to be meaningful. In addition, should~~address liabilities associated with the ~~current COVID-19 pandemic continue to worsen and colleges cannot withstand a prolonged shutdown, we may experience a shift or reduction in enrollments that could impact the seasonality of~~acquisition, our business, ~~and further make our~~ results of operations, ~~difficult to predict.~~

~~We depend on mobile app stores~~ and ~~operating systems to grow our student user base and their engagement with our learning platform.~~

There is no guarantee that students will use our mobile apps, such as the mobile version of our website, m.chegg.com, Chegg Prep, and Chegg Study, rather than competing products. We are dependent on the interoperability of our mobile apps with popular third-party mobile operating systems such as Google's Android and Apple's iOS, and their placement in popular app stores like the Google Play Store and the Apple App Store, and any changes in such systems that degrade our products’ functionality or give preferential treatment or app store placement to competitive products could adversely affect the access and usage of our applications on mobile devices. If it is more difficult for students to access and use our apps on their mobile devices, our student growth and engagement levelsfinancial condition could be ~~harmed.~~adversely affected. We have encountered and will continue to encounter these risks, and if we do not manage them successfully, our business, financial condition, results of operations, and prospects may be materially and 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, or the data required to effectively reach those audiences, our business could be harmed.

Our business strategy includes increasing our revenues from brand advertising. Brands may not do business with us, or may reduce their advertising spend with us, if we do not deliver ads, sponsorships, and other commercial content and marketing

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programs effectively, or if they do not believe that their investment will generate a competitive return relative to other alternatives. Additionally, if platforms such as Google Chrome, Safari, or Firefox, limit our access to or understanding of advertising and marketing audiences, they could reduce our advertising rates and ultimately reduce our revenues from brand advertising. For example, the release of iOS 14 on Apple devices brought with it a number of new changes, including the need for app users to opt in before their identifier for advertisers ~~(“IDFA”)~~(IDFA) can be accessed by an ~~app (which is currently expected to come into effect in 2021).~~app. Apple’s IDFA is a string of numbers and letters assigned to Apple devices which advertisers use to identify app users to deliver personalized and targeted advertising. As more users opt out of granting IDFA access, the ability of advertisers to accurately target and measure their advertising campaigns at the user level may become significantly limited and we may experience increased cost per registration. Our ability to grow the number of brands that use our brand advertising, and ultimately to generate advertising revenues, depends on a number of factors, some of which are outside of our control, such as the impact of macroeconomic conditions and legal developments relating to data privacy, advertising, legislation and regulation and litigation.

We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all.

Historically, investments in our business have substantially exceeded the cash we have generated from our operations. We have funded our operating losses and capital expenditures through proceeds from equity and debt financings, and cash flow from operations. Although we currently anticipate that our available funds and cash flow from operations will be sufficient to meet our cash needs for the foreseeable future, we may require additional financing. Additional financing may not be available to us on favorable terms when required or at all. If we raise additional funds through the issuance of equity, equity-linked, or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience substantial dilution.

Our core value of putting students first may conflict with the short-term interests of our business.

We believe that adhering to our core value of putting students first is essential to our success and in the best interests of our company and the long-term interests of our stockholders. In the past, we have forgone, and in the future, we may forgo, short-term revenue opportunities that we do not believe are in the best interests of students, even if our decision negatively impacts our results of operations in the short term. For example, we offer free services to students that require investment by us, such as our Chegg Internships service, to promote a more comprehensive solution. Our philosophy of putting students first may cause us to make decisions that could negatively impact our relationships with publishers, colleges, and brands, whose interests may not always be aligned with ours or those of our students. Our decisions may not result in the long-term benefits that we expect, in which case our level of student satisfaction and engagement, business, and results of operations could be harmed.

Adverse litigation judgments or settlements resulting from legal proceedings in which we are or may be involved could expose us to monetary damages or limit our ability to operate our business.

Currently, we are involved in various legal proceedings, including securities litigation, derivative suits, putative class actions, and other matters described elsewhere herein. We have in the past and may in the future become involved in other private actions, collective actions, investigations, and various other legal proceedings by subscribers, employees, suppliers, competitors, government agencies, stockholders, or others. The results of any such litigation, investigations, and other legal proceedings are inherently unpredictable and expensive. Any claims against us, whether meritorious or not, could be time consuming, result in costly litigation, damage our reputation, require significant amounts of management time, and divert significant resources. If any of these legal proceedings were to be determined adversely to us, or we were to enter into a settlement arrangement, we could be exposed to monetary damages or limits on our ability to operate our business in the way that it is currently operated, which could have an adverse effect on our business, financial condition, and operating results.

If we are ~~required~~not able to ~~discontinue certain~~manage the growth of our ~~current marketing activities,~~business both in terms of scale and complexity, our ~~ability to attract new students may~~business could be adversely affected.

~~Laws or regulations~~As we grow, the operations and technology infrastructure we use to manage and account for our operations will become more complex, and managing these aspects of our business will become more challenging. Acquisitions of new companies, products, and services create integration risk, while developing and enhancing products and services involves significant time, labor, and expense as well as other challenges, including managing the length of the development cycle, entering new markets, regulatory compliance, evolution of sales and marketing, and protecting proprietary rights. Any future expansion will likely place significant demand on our resources, capabilities and systems, and we may ~~be enacted which restrict or prohibit use~~need to develop new processes and procedures and expand our infrastructure to respond to these demands. If we are not able to manage the growth of ~~emails or similar marketing activities that~~our business, we ~~currently rely on. For example:~~

•the CAN-SPAM Act of 2003 and similar laws adopted by a number of states regulate unsolicited commercial emails, create criminal penalties for emails containing fraudulent headers, and control other abusive online marketing practices;may not

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•~~the FTC has guidelines that impose responsibilities on companies with respect~~be able to ~~communications with consumers~~maintain or increase our revenues as anticipated or recover any associated acquisition or development costs, and ~~impose fines and liability for failure to comply with rules with respect to advertising or marketing practices they may deem misleading or deceptive;~~

•the Telephone Consumer Protection Act of 1991 (the (TCPA) restricts telemarketing and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages, and SMS text messages. It also applies to unsolicited text messages advertising the commercial availability of goods or services. Additionally, a number of states have enacted statutes that address telemarketing, such as do-no call lists and “no rebuttal statutes” that require the telemarketer to end the call when the consumer indicates that he or she is not interested in the product being sold. Restrictions on telephone marketing, including calls and text messages, are enforced by the FTC, the Federal Communications Commission, state-level regulators and through the availability of statutory damages and class action lawsuits for violations of the TCPA; and

•the CCPA, which came into effect and became enforceable in 2020. Additionally, although not effective until January 1, 2023, the California Privacy Rights Act (the “CPRA”), which expands upon the CCPA, was passed in the recent election on November 3, 2020. The CCPA and CPRA require companies that process information on California residents to make new disclosures to consumers about their data collection, use and sharing practices, allows consumers to opt out of certain data sharing with third parties, and provides a private right of action for security breaches. The burdens imposed by the CCPA and CPRA and other similar laws that may be enacted at the federal and state level may require us to modify our ~~data processing practices and policies and how we advertise to our users and to incur substantial expenditure to comply.~~

Even if no relevant law or regulation is enacted, we may discontinue use or support of these activities if we become concerned that students or potential students deem them intrusive or they otherwise adversely affect our reputation, goodwill and brand. If our marketing activities are curtailed, our ability to attract new students maybusiness could be adversely affected.

Our business is seasonal, and ~~growth may suffer if we cannot hire~~disruptions during peak periods can make, and ~~retain key personnel.~~have made, our operating results difficult to predict.

Revenues from Subscription Services are primarily recognized ratably over the subscription term, which has generally resulted in our highest revenues and profitability in the fourth quarter as it reflects more days of the academic year. We ~~depend~~typically experience our greatest number of subscriber acquisitions during the last two weeks of August and first two weeks of September and to a lesser degree in January and February. The increased volume of subscribers during these limited periods of time means that any shortfalls or disruptions in our operations during these peak periods will have a disproportionately large impact on ~~the continued contributions~~our revenues. Additionally, our students could become dissatisfied with such delays and discontinue their use of our ~~senior management and other key personnel. In particular, we rely on the contributions~~service, which could adversely affect our results of our President, Chief Executive Officer, and Co-Chairperson, Dan Rosensweig. All of our executive officers and key employees are at-will employees, meaning they may terminate their employment relationship at any time. If we lose the services of one or more members of our senior management team or other key personnel, or if one or more of them decides to join a competitor or otherwise compete directly or indirectly with us, we may not be able to successfully manage our business or achieve our business objectives. Our future success also depends on our ability to identify, attract, and retain highly skilled personnel. Qualified individuals are in high demand, particularly in the San Francisco Bay Area where our executive offices are located, and if we cannot attract or retain the personnel we need to succeed, our business may suffer.operations.

WeAs a result of this seasonality, which corresponds to the academic calendar, our revenues may ~~need additional capital,~~fluctuate significantly quarter to quarter depending upon the timing of where we are in our “rush” cycle and ~~we cannot~~sequential quarter-over-quarter comparisons of our net revenues and operating results are not likely to be ~~sure that additional financing will be available on favorable terms, if at all.~~meaningful. In addition, shifting enrollments could impact the seasonality of our business and further make our results of operations difficult to predict.

Historically, investments in our business have substantially exceeded the cash we have generated from our operations. We have funded our operating losses and capital expenditures through proceeds from equity and debt financings, and cash flow from operations. Although we currently anticipate that our available funds and cash flow from operations will be sufficientRisks Related to meet our cash needs for the foreseeable future, we may require additional financing. Additional financing may not be available to us on favorable terms when required or at all. If we raise additional funds through the issuance of equity, equity-linked, or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience substantial dilution.Our Industry

Government regulation of education and student information is evolving, and unfavorable developments could have an adverse effect on our business, results of ~~operations.~~operations, and financial condition.

Our ability to deliver course content to students enrolled in ~~Thinkful~~Chegg Skills (formerly Thinkful) skills-based learning programs may be subject to state oversight including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business. ~~Thinkful's~~Chegg Skills' efforts to obtain necessary approvals and licenses began prior to our acquisition of the business and continues following the acquisition. We monitor changes to the state regulatory requirements applicable to our ~~Chegg’s~~ business activities, including ~~Thinkful;~~Chegg Skills; however, if we do not obtain the appropriate licenses or address evolving state requirements, it may result in governmental or regulatory proceedings or actions by private litigants, which could potentially harm our business, results of operations, and financial condition.

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Our business may also be subject to laws specific to students, such as the Family Educational Rights and Privacy Act, the Delaware Higher Education Privacy Act, and a California statute which restricts the access by postsecondary educational institutions of prospective students’ social media account information. Compliance ~~levels include~~requires, without limitation, making disclosures, obtaining ~~government licenses, disclosures,~~ consents, ~~transfer~~and restrictions ~~and notice and access provisions~~on transferring data for which we may in the future need to build further infrastructure to support. We cannot guarantee that we or our acquired companies ~~prior to our acquisition thereof~~ have been or will be fully compliant in every jurisdiction, due to lack of clarity concerning how existing laws and regulations governing educational institutions affect our business and lengthy governmental compliance process timelines.

Moreover, as the education industry continues to evolve, increasing regulation by federal, state, and foreign agencies becomes more likely. ~~Recently,~~For example, California adopted the Student Online Personal Information Protection Act which prohibits operators of online services used for K-12 school purposes from using or sharing student personal information, Illinois adopted the Student Online Personal Protection Act which went into effect on July 1, 2021 and regulates how we collect and process data, and Colorado adopted House Bill 16-1423 designed to protect the use of student personal data in elementary and secondary school. These acts do not apply to general audience Internet websites but it is unclear how these acts will be interpreted and the breadth of services that will be restricted by them. Other states may adopt similar statutes. Additionally, for-profit postsecondary institutions, many of which provide course offerings predominantly online, remain under intense regulatory and other scrutiny. Allegations of abuse of federal financial aid funds and other statutory violations against for-profit higher education companies, even if unfounded, could negatively impact our opportunity to succeed due to increased regulation or decreased demand for our offerings.

Certain ~~states~~jurisdictions have also adopted statutes, such as California Education Code § 66400, which prohibit the preparation or sale of material that should reasonably be known will be submitted for academic credit. These ~~statutes~~laws and regulations are directed at enterprises selling term papers, theses, dissertations, and the like, which we do not offer, and were not designed for services like ours which are designed to help students understand the relevant subject matter. Although we will continue to work with academic institutions to enforce our honor code and otherwise discourage students from misusing our services, other ~~states~~jurisdictions (including international jurisdictions) may adopt similar or broader versions of these types of ~~statutes,~~laws

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and regulations, or the interpretation of the existing or future ~~statutes~~laws and regulations may impact whether they are cited against us or where we can offer our services.

The adoption of any laws or regulations that adversely affect the popularity or growth in the use of the Internet particularly for educational services, including laws limiting the content and learning programs that we can offer, and the audiences that we can offer that content to, may decrease demand for our service offerings and increase our cost of doing business. Future regulations, or changes in laws and regulations or their existing interpretations or applications, could also hinder our operational flexibility, raise compliance costs, and result in additional historical or future liabilities for us, resulting in adverse impacts on our business and our results of operations.

Similarly, the adoption of any laws or regulations affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments may materially adversely affect our business, financial condition and results of operations. Legislation or regulation regarding the foregoing, or changes to existing legislation or regulation governing subscription payments, are being considered in many U.S. States. We have been in the past, and may be in the future, subject to claims under such laws or regulations.

As the regulatory framework for machine learning, artificial intelligence, and automated decision making evolves, our business, financial condition, and results of operations may be adversely affected by related laws or regulations. It is possible that new laws and regulations will be adopted in the U.S. (at the federal or state level) or in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our business, including our learning platform and the ways in which we use artificial intelligence and machine learning technology. We may not always be able to anticipate how regulators will apply existing laws to AI, predict how new legal frameworks will develop to address AI, or otherwise respond to these frameworks as they are still rapidly evolving.

While we expect and plan for new laws, regulations, and standards to be adopted over time that will be directly applicable to the Internet and to our student-focused activities, any existing or new legislation applicable to our business could expose us to substantial liability, including significant expenses necessary to comply with such laws and regulations and potential penalties or fees for non-compliance, and could negatively impact the growth in the use of the Internet for educational purposes and for our services in particular. We may also run the risk of retroactive application of new laws to our business practices that could result in liability or losses. Due to the global nature of the Internet, it is possible that the governments of other states and foreign countries might attempt to change previous regulatory schemes or choose to regulate transmissions or prosecute us for violations of their laws. We might unintentionally violate such laws, such laws may be modified, and new laws may be enacted in the future. Any such developments could harm our business, results of operations, and financial condition.

~~Our business depends on general economic conditions and their effect on spending behavior by students and advertising budgets.~~

Our business is dependent on, among other factors, general economic conditions, which affect student spending and brand advertising. Prior to the COVID-19 pandemic, state and federal funding levels at colleges across the United States remained below historic levels, which led to increased tuition and decreased amounts of financial aid offered to students. The COVID-19 pandemic has adversely affected federal and state budgets for education and caused significant economic volatility. To the extent that these trends continue or the economy stagnates or worsens, students may elect to not attend colleges and universities and reduce the amount they spend on educational content and textbooks. In addition to decreased spending by students, colleges and brands may reduce their spend on our advertising services. Any of the foregoing may have an adverse effect on our business.

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Colleges and certain governments may restrict online access or access to 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.

The growth of our business and our brand depends on the ability of students to access the Internet and the products and services available on our website, in particular in non-U.S. countries. Colleges that provide students with access to the Internet either through on-campus computer terminals or Internet access points on campus could block or restrict access to our website, content, or services or the Internet generally for a number of reasons, including security, confidentiality, regulatory concerns, or if they believe our products or services contradict or violate their policies. If governments or colleges modify their laws or policies, or choose to apply laws or policies, in ways that are detrimental to the growth of our student user base or in ways that make it harder for students to use our website, the overall growth in our student user base would slow, student engagement would decrease and we would lose revenues. Any reduction in the number of students directed to our website would harm our business and results of operations.

If we are required to discontinue certain of our current marketing activities, our ability to attract new students may be adversely affected.

Laws or regulations may be enacted which restrict or prohibit use of emails or similar marketing activities that we currently rely on. For example: CAN-SPAM regulates unsolicited commercial emails and imposes civil and criminal penalties for abusive practices; the FTC imposes penalties on companies for misleading and deceptive marketing practices; TCPA restricts telemarketing and the use of automated telephone equipment; and CCPA requires us to make certain disclosures regarding our marketing practices, allows consumers to opt-out of certain data sharing practices. Newly enacted laws such CDPA and CPA will place additional restrictions on our marketing practices.

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Notwithstanding existing laws, we may discontinue use or support of these activities if we become concerned that students or potential students deem them intrusive, or they otherwise adversely affect our reputation, goodwill and brand. If our marketing activities are curtailed, our ability to attract new students may be adversely affected.

We are subject to U.S. trade control laws that may restrict growth prospects and impose liability if we are non-compliant.

As a U.S. company with U.S. origin software applications, we are required to comply with U.S. trade controls. Our activities are subject to U.S. economic sanctions laws and regulations administered by the Department of the Treasury, Office of Foreign Assets Control (OFAC), which prohibit most transactions with embargoed jurisdictions or prohibited parties without a specific or general license from OFAC. Additionally, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) administers the Export Administration Regulations (EAR), which restrict exports of software subject to the EAR to embargoed countries and prohibited parties. Although we have taken precautions to prevent our platform, services and software applications from being provided in embargoed jurisdictions and to prohibited parties, and we continue to enhance our policies and procedures relating to sanctions and export compliance, we may not be able to prevent all transactions that are noncompliant with U.S. trade controls. Sanctions and export violations can result in significant fines or penalties, as well as reputational harm and loss of business.

Our customers outside of the United States generated approximately 14% of our net revenues during the year ended December 31, 2023, and our growth strategy includes further expanding our operations and customer base across all major global markets. An escalation in sanctions or export controls against regions where we operate, or the issuance of new sanctions designations or export restrictions against individuals and entities located in various regions, could result in decreased ability to provide our platform, services and software applications to existing or potential customers. Any limitation on our ability to operate in various global markets could adversely affect our business performance and growth prospects.

Risks Related to Taxes and Accounting Matters

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 are subject to regular review and audit by both U.S. federal and state and foreign tax authorities and such jurisdictions may assess additional taxes against us. Although we believe our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different from our historical tax provisions and accruals and could have a negative effect on our financial position and results of operations. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing and allocating income from our intercompany transactions, which could increase our worldwide effective income tax rate. We collect sales taxes in all U.S. states with a sales tax and most local jurisdictions on our sales, rentals, and digital services sold through our commerce system including sales and rentals on behalf of our third-party publishers. In June 2018, the U.S. Supreme Court in South Dakota v. Wayfair, Inc. et al ruled that a state can require an online retailer with no in-state property or personnel to collect and remit sales and use tax on sales made to the state’s residents. It is possible that such taxes could be assessed by certain states retroactively for periods before the Wayfair decision on acquired products that are not sold through our commerce system. Any successful action by federal, state, foreign or other authorities to impose or collect additional income tax or compel us to collect and remit additional sales, use, value-added or similar taxes, either retroactively, prospectively or both, could harm our business, financial condition, and results of operations.

~~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.~~

At December 31, 2020, we had federal and state net operating loss carryforwards due to prior period losses of approximately $674 million and $511 million, respectively, which if not utilized will begin to expire in 2028 and 2021 for federal and state purposes, respectively. An immaterial portion of the state net operating loss carryforwards expired in 2020. At December 31, 2020, we also had federal tax credit carryforwards of approximately $19.1 million, which if not utilized will begin to expire in 2030, and state tax credit carryforwards of approximately $14.8 million, which do not expire. These net operating loss and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could adversely affect our profitability. For example, we have net operating loss carryforwards of $26 million related to our previous operations in Kentucky that will expire unused unless we have similar operations in Kentucky. Additionally, in response to the COVID-19 pandemic, California’s Legislature passed Assembly Bill 85 (A.B. 85), which suspends the use of net operating losses for tax years beginning in 2020, 2021, and 2022 for taxpayers with taxable income of $1.0 million or more before an application of net operating loss. A.B. 85 includes an extended carryover period for the suspended net operating losses with an additional year carryforward for each year of suspension. A.B. 85 also limits the utilization of business incentive tax credits for taxable years 2020, 2021, and 2022, requiring that taxpayers can only claim a maximum of $5.0 million in tax credit on an aggregate basis.

The 2017 Tax Act changed both the federal deferred tax value of the net operating loss carryforwards and the rules of utilization of federal net operating loss carryforwards. The 2017 Tax Act lowered the corporate tax rate from 35% to 21% effective for our 2018 financial year. For net operating loss carryforwards generated in years prior to 2018, there is no annual limitation on the utilization and the carryforward period remains at 20 years; net operating loss carryforwards generated in years after 2017 will only be available to offset 80% of future taxable income in any single year but will not expire. However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act temporarily repealed the 80% taxable income limitation for tax years beginning before January 1, 2021; net operating loss carried forward from 2018 or later to taxable years beginning after December 31, 2020 will be subject to the 80% limitation. Also, under the CARES Act, net operating loss arising in 2018, 2019 and 2020 can be carried back five years.

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In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the Code), our ability to utilize net operating loss carryforwards or other tax attributes, such as tax credits, in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. As a result of prior equity issuances and other transactions in our stock and the stock of acquired companies, we have previously experienced “ownership changes” under Section 382 and comparable state tax laws. We may experience ownership changes in the future as a result of future issuances and other transactions of our stock. It is possible that any future ownership change could have a material effect on the use of our net operating loss carryforwards or other tax attributes, which could adversely affect our profitability.

Our effective tax rate may fluctuate as a result of new ~~tax~~ U.S. and worldwide tax laws and our interpretations of those new tax laws, ~~and final guidance on 2017 Tax Act,~~ which are subject to significant judgments and estimates. The ongoing effects of the new tax laws ~~2017 Tax Act’s final guidance,~~ and the refinement of provisional estimates could make our results difficult to predict.

Our effective tax rate may fluctuate in the future as a result of new tax ~~laws and final guidance on 2017 Tax Act. The new tax laws and 2017 Tax Act’s final guidance will have a meaningful impact on our provision for income taxes once we release our valuation allowance.~~laws. Due to the complexities involved in applying the provisions of new tax legislation, ~~and 2017 Tax Act’s final guidance,~~ we may make reasonable estimates of the effects in our financial statements. As we collect and prepare necessary data and interpret the new tax legislation, ~~as well as final guidance on 2017 Tax Act,~~ we may make adjustments that could affect our financial position and results of operations as well as our effective tax rate in the period in which the adjustments are made. The 2020 Finance Bill was passed by the Parliament of India as Financial Act with amendments. The 2020 Finance Bill replaced the Dividend Distribution Tax on our distributing India entity with the withholding tax imposed on the U.S. recipient shareholders. As a result of the 2020 Finance Bill, we released $0.3 million of our withholding tax deferred tax liability related to deemed distributions from our entity in India.

Our international operations, and the expansion thereof, subject us to increased challenges, risks, and costs, which could adversely affect our business, financial condition, and results of operations.

We have employees in Germany, Israel, and India and we own a minority stake in a learning platform for high school and college students in Brazil. Although today our international operations represent less than 10% of our total consolidated operating expenses, we expect to continue to expand our international operations, and to make our products and services available in more international markets. However, we have a limited operating history in international jurisdictions and expanding our international operations will require considerable management attention and resources to attract talented employees and users. International operations are subject to particular challenges and risks, some of which we may not currently face, including multiple languages, cultures, customs, tax systems, legal systems, alternative dispute systems, regulatory systems, and commercial infrastructures. Further, such operations may exacerbate existing risks, including risks associated with employees, compliance with applicable foreign laws and regulations, protecting and enforcing intellectual property rights, and complying with anti-bribery laws. New international markets may also have educational systems, technology, and online industries that are different, more regulated, or less well developed than those in the United States, and if we cannot address these challenges, it could have an adverse effect on our business, results of operations, and financial conditions. Our ability to gain market acceptance in any particular market is uncertain and the distraction of our senior management team could have an adverse effect on our business, results of operations, and financial condition.

Our earnings are affected by the application of accounting standards and our critical accounting policies, which involve subjective judgments and estimates formulated by our management. Our actual results could differ from the estimates and assumptions used to prepare our consolidated financial statements.

The accounting standards that we use in preparing our financial statements are often complex and require us to make significant estimates and assumptions in interpreting and applying those standards. These estimates and assumptions affect the

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reported values of assets, liabilities, revenues and expenses, and the disclosure of contingent liabilities. We make critical estimates and assumptions involving accounting matters including ~~with respect to textbook library,~~ revenue recognition ~~valuation~~and deferred revenue, impairment of acquired intangible assets and other long-lived assets, goodwill and ~~goodwill, income taxes, and~~indefinite lived intangible assets, share-based compensation ~~expense.~~expense, and (provision for) benefit from income taxes. These estimates and assumptions involve matters that are inherently uncertain and require us to make subjective and complex judgments. Although we believe we have the experience and processes to enable us to formulate appropriate assumptions and produce reasonably dependable estimates, these assumptions and estimates may change significantly in the future and could result in the reversal of previously recognized ~~revenues and profit.~~amounts. If we used different estimates and assumptions or used different methods to determine these estimates, our financial results could differ, which could have a material negative impact on our financial condition and reported results of operations. For more information about our critical accounting policies and use of estimates,

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see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies, Significant Judgments and Estimates.”

Risks Related to ~~Growth and Expansion~~Intellectual Property

~~We intend~~Failure to ~~offer new products~~protect or enforce our intellectual property and ~~services to students to grow our business. If our efforts are not successful,~~other proprietary rights could adversely affect our business, financial condition, and results of operations.

Our success and ability to compete depends in part on our intellectual property and our other proprietary business information. We rely and expect to continue to rely on a combination of trademark, copyright, patent, and trade secret protection laws, as well as confidentiality and license agreements with our employees, consultants, and third parties with whom we have relationships to protect our intellectual property and proprietary rights. However, we may be unable to secure intellectual property protection for all of our technology and methodologies or the steps we take to enforce our intellectual property rights may be inadequate. If the protection of our intellectual property and proprietary rights is inadequate to prevent use or misappropriation by third parties, the value of our brand and other intangible assets may be diminished, competitors may be able to more effectively mimic our service and methods of operations, the perception of our business and ~~financial condition could~~service to customers and potential customers may become confused in the marketplace, and our ability to attract customers may be adversely affected.

Our ability to attract and retain students and increase their engagement with our learning platform depends on our ability to connect them with appropriate products, people, or services. Part of our strategy is to offer students new products and services in an increasingly relevant and personalized way. WeThird parties may ~~develop such products and services independently, by acquisition, or in conjunction with third parties. In the future, we may invest in new products and services~~challenge any patents, copyrights, trademarks, and other ~~initiatives, but there is no guarantee these approaches will be successful. The markets for new products~~intellectual property and ~~services~~proprietary rights owned or held by us. Third parties may ~~be unproven,~~knowingly or unknowingly infringe, misappropriate, or otherwise violate our patents, copyrights, trademarks, and these products may include technologies and business models with which we have little or no prior experience or may significantly change our existing products and services. In addition, we may be unable to obtain long-term licenses from third-party content providers and/or government regulatory approvals and licenses necessary to allow a new or existing product or service to function. If our new or enhanced products and services do not engage our students or attract new students, or if we cannot obtain desirable third party content, we may not grow our student base or generate sufficient revenues, operating margin, or other ~~value to justify our investments, and our business could be adversely affected.~~

~~If we are not able to manage the growth of our business both in terms of scale and complexity, our business could be adversely affected.~~

As we grow, the operations and technology infrastructure we use to manage and account for our operations will become more complex, and managing these aspects of our business will become more challenging. Acquisitions of new companies, products, and services create integration risk, while developing and enhancing products and services involves significant time, labor, and expense as well as other challenges, including managing the length of the development cycle, entering new markets, regulatory compliance, evolution of sales and marketing, and protecting proprietary rights. Any future expansion will likely place significant demand on our resources, capabilities and systems, and we may need to develop new processes and procedures and expand our infrastructure to respond to these demands. If we are not able to manage the growth of our business, we may not be able to maintain or increase our revenues as anticipated or recover any associated acquisition or development costs, and our business could be adversely affected.

~~Our growth strategy includes acquisitions,~~rights and we may not be able to ~~execute on~~prevent infringement, misappropriation, or other violations. Any attempt by us to prevent or address such violations may involve substantial expense to us. Additionally, if we fail to protect our ~~acquisition strategy~~domain names, it could adversely affect our reputation and brand and make it more difficult for students to find our website, our content, and our services. If we pursue litigation to assert our intellectual property or ~~integrate acquisitions successfully.~~proprietary rights, an adverse decision could limit our ability to assert our intellectual property or proprietary rights, limit the value of our intellectual property or proprietary rights, or otherwise negatively impact our business, financial condition, and results of operations.

~~As part~~We are a party to a number of third-party intellectual property license agreements. For example, we have entered into agreements with textbook publishers that provide access to textbook questions and other content for our Chegg Study subscription service. We cannot guarantee that the third-party intellectual property we license will not be licensed to our competitors or others in our industry. In the future, we may want or need to obtain additional licenses or renew existing license agreements. We cannot predict whether other license agreements can be obtained or renewed on acceptable terms, or at all. For example, our license agreements with multiple textbook publishers, including Pearson Education, Inc. expired or terminated without renewal. Any failure to obtain or renew such third-party intellectual property license agreements on commercially competitive terms could adversely affect our business and results of operations.

Misuse of our ~~business strategy, we have made~~platform and ~~intend to~~content, including digital piracy and improper sharing and misappropriation of user credentials, may continue to ~~make acquisitions~~adversely affect our business, financial condition, and results of operation.

A substantial portion of our revenue comes from our Subscription Services and the distribution of our educational content to ~~add specialized employees, complementary businesses,~~our paid subscribers through our learning platform. Our content has been subject to unauthorized copying and widespread digital dissemination without an economic return to us. Some students may misuse our products and services ~~operations,~~in ways that violate our Terms of Use, our Honor Code, other company policies, applicable laws, or ~~technologies. To be successful, we must timely~~the code of conduct at their educational institutions. We have experienced improper sharing and ~~efficiently integrate acquired companies, including their technologies, products,~~misappropriation of user credentials, allowing for parties to access content and services ~~operations,~~that they have not paid for. Through such misuse of our platform and ~~personnel. Acquired companies can be complex and time consuming to integrate and we~~content, students may ~~incur significant integration costs and we may not~~ be able to ~~offset~~access our ~~acquisition costs. Acquisitions involve many~~offerings for free or at a reduced cost relative to our paid subscription, which has and may continue to negatively impact our ability to attract students to, and retain students on, our platform. The impact of misuse of our platform and content on our revenues and subscriptions is hard to quantify, but we believe that illegal copying and dissemination of our content, improper sharing and misappropriation of user credentials, and other forms of unauthorized activity have had a substantial

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negative impact on our revenues and subscriptions. Also, despite the potential benefits of AI technology, the advancement of AI may increase certain risks and adverse impacts associated with misuse of our content, including the development of AI applications that may ~~negatively impact~~facilitate piracy and new forms of intellectual property infringement through the unauthorized reproduction of copyrighted content to “train” AI applications and to create unauthorized derivative works.

If we fail to obtain appropriate relief through the judicial process or the complete enforcement of judicial decisions issued in our favor (or if judicial decisions are not in our favor) or fail to develop effective means of protecting our content and enforcing our intellectual property rights, our business, financial condition, and results of operations ~~including the risks that the acquisitions may:~~

•~~require us to incur charges and substantial debt or liabilities;~~

•~~cause adverse tax consequences, substantial depreciation, or deferred compensation charges;~~

•result in acquired in-process research and development expenses or in the future may require the amortization, write-down, or impairment of amounts related to deferred compensation, goodwill, and other intangible assets; and

•~~give rise to various litigation and regulatory risks.~~

~~In addition:~~

•~~we may encounter difficulties or unforeseen expenditures to integrate an acquired company;~~

•~~an acquisition may disrupt our business, divert resources, increase expenses, and distract our management;~~

•~~an acquisition may reduce or delay adoption and engagement rates for our acquired products and services because of student uncertainty about continuity and effectiveness;~~

•~~we may not successfully transition acquired users to the Chegg platform and therefore may not realize the potential benefits of these acquisitions;~~

•it may be ~~difficult to monetize any acquired products and services;~~

•~~an acquisition may not ultimately be complementary to our offerings; and~~

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•~~an acquisition may involve the entry into markets where we have little or no prior experience.~~

Our ability to acquire and integrate larger or more complex businesses, products, services, operations, or technologies in a successful manner is unproven. We may not be able to find suitable acquisition candidates, and we may not be able to complete acquisitions on favorable terms, if at all. To finance any future acquisitions, we may issue equity or equity-linked securities, which could be dilutive, or debt, which could be costly, potentially dilutive, and impose substantial restrictions on the conduct of our business. If we fail to successfully complete any acquisitions or integrate them into our company, or identify and address liabilities associated with the acquisition, our business, results of operations, and financial condition could be adversely affected.

~~Risks Related to Intellectual Property~~negatively impacted.

If we become subject to liability for the Internet content that we publish or that is uploaded to our websites by students or other users, our results of operations could be adversely affected.

As a publisher and distributor of online content, including content uploaded by both by Chegg itself and by our users, we face potential liability for ~~negligence,~~claims related to intellectual property rights including copyright orand trademark infringement, rights of publicity or privacy, defamation, personal injury torts, laws regulating hate speech or other types of content, online safety, consumer protection, or other claims based on the nature and content of materials that we publish or distribute. ~~We also may face liability for content uploaded~~In addition, the applicability and scope of these and other laws and regulations, as interpreted by ~~students~~the courts, remain uncertain and could be interpreted in ~~connection with~~ways that harm our ~~community-related content. If we become liable, third parties may initiate litigation against us and our business may suffer.~~business. For example, we rely on statutory safe harbors, like those set forth in ~~June 2017,~~ the ~~Examinations Institute~~Digital Millennium Copyright Act and Section 230 of the ~~American Chemical Society filed a complaint against us~~Communications Decency Act in the U.S. ~~District Court~~and the E-Commerce Directive in Europe, to protect against liability. Legislation or court rulings affecting these safe harbors may adversely affect us and may impose significant operational challenges. There are legislative proposals and pending litigation in the U.S. (such as Gonzalez v. Google), EU, and around the world that could diminish or eliminate safe harbor protection for ~~the Northern District of California claiming, among other things, that we infringed their copyrights by answering~~websites and ~~displaying questions uploaded by our users to our Q&A service. Others may send us communications that make allegations without initiating litigation.~~ online platforms.

We have in the past and may in the future receive ~~such~~ communications containing allegations of infringement, which we assess on a case-by-case basis. We may elect not to respond to the communication if we believe it is without merit or we may try to resolve disputes out-of-court by removing content or services we offer or paying licensing or other fees. If we ~~cannot~~fail to resolve such disputes, litigation may result. For example, on September 13, 2021, Pearson Education, Inc. (Pearson) filed a complaint captioned Pearson Education, Inc. v. Chegg, Inc. (Pearson Complaint) in the United States District Court for the District of New Jersey against the Company (Case 2:21-cv-16866), alleging infringement of Pearson’s registered copyrights and exclusive rights under copyright in violation of the United States Copyright Act. Litigation to defend these claims could be costly, divert our technical and management personnel, render us unable to use our current website or to market our service or sell our products and therefore harm our results of operations. We may not be adequately insured to cover claims of these types or indemnified for all liability that may be imposed on us. Any adverse publicity resulting from actual or potential litigation may also materially and adversely affect our reputation, which in turn could adversely affect our results of operations.

We maintain content usage review systems that, through a combination of manual and automated blocks, monitor for and make us aware of potentially infringing content on our platform. Nevertheless, claims may continue to be brought and threatened against us for negligence, intellectual property infringement, or other theories and there is no guarantee that we will be able to resolve any such claims quickly and without damage to our business, our reputation or our operations. From time to time, we have been subject to copyright infringement claims, some of which we have settled. While these settlements have not had a material impact on our financial condition, we may be subject to similar lawsuits in the future and the outcome of any such lawsuits may not be favorable to us and could have a material adverse effect on our financial condition.

Changes in or our failure to comply with the requirements for eligibility for the Digital Millennium Copyright Act (DMCA) safe harbors could harm our business.

The DMCA has provisions that limit, but do not necessarily eliminate, our liability for caching or hosting or for listing or linking to, content or third-party websites that include materials or other content that infringe copyrights, ~~or other intellectual property or proprietary rights,~~ provided we comply with the strict statutory requirements of the DMCA. The applications and interpretations of the statutory requirements of the DMCA are ~~constantly being~~evolving and may be modified by court rulings and industry practice. Accordingly, if we fail to comply with such statutory requirements or if the interpretations of the DMCA change, we may be subject to potential liability for caching or hosting, or for listing or linking to, content or third-party websites that include materials or other content that infringe ~~copyrights or~~copyrights. The safe harbors available under the DMCA can limit liability for copyright infringement in the U.S., but they do not limit our liability for infringement of other intellectual property or proprietary ~~rights.~~

~~Failure to protect~~rights, they do not apply outside the U.S., and they do not prevent or ~~enforce our intellectual property and other proprietary rights~~address requests for injunctive relief. Any determination in litigation that a DMCA safe harbor does not shield us from liability could ~~adversely affect our business, financial condition, and results of operations.~~

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be able to more effectively mimic our service and methods of operations, the perception of our business and service to customers and potential customers may become confused in the marketplace, and our ability to attract customers may be adversely affected.

Third parties may challenge any patents, copyrights, trademarks, and other intellectual property and proprietary rights owned or held by us. Third parties may knowingly or unknowingly infringe, misappropriate, or otherwise violate our patents, copyrights, trademarks, and other proprietary rights and we may not be able to prevent infringement, misappropriation, or other violation without substantial expense to us. Additionally, if we fail to protect our domain names, it could adversely affect our reputation and brand and make it more difficult for students to find our website, our content, and our services. If we pursue litigation to assert our intellectual property or proprietary rights, an adverse decision could limit our ability to assert our intellectual property or proprietary rights, limit the value of our intellectual property or proprietary rights, or otherwise negatively impact our business, financial condition, and results of operations.

~~We are a party to a number~~

Table of third-party intellectual property license agreements. For example, we have entered into agreements with textbook publishers that provide access to textbook questions and other content for our Chegg Study subscription service. We cannot guarantee that the third-party intellectual property we license will not be licensed to our competitors or others in our industry. In the future, we may need to obtain additional licenses or renew existing license agreements. We cannot predict whether these license agreements can be obtained or renewed on acceptable terms, or at all. Any failure to obtain or renew such third-party intellectual property license agreements on commercially competitive terms could adversely affect our business and results of operations.Contents

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.

From time to time, third parties have alleged and are likely to allege in the future that we or our business infringes, misappropriates, or otherwise violates their intellectual property or proprietary ~~rights.~~rights beyond those circumstances discussed in other risk factors contained in this Section, “Risks Relating to Our Intellectual Property.” Many companies, including various “non-practicing entities” or “patent trolls,” devote significant resources to developing or acquiring patents that could affect aspects of our business. Our patent portfolio may provide little or no deterrence in any litigation involving non-practicing entities or other adverse patent owners that have no relevant solution revenue, as we would not be able to assert our patents against such entities or individuals. For instance, on November 5, 2018, a non-practicing entity (NPE) filed an action against us in the U.S. District Court for the Southern District of New York captioned NetSoc, LLC v. Chegg, Inc., Civil Action No. 1:18-CV-10262-RAC (the NetSoc Action). For further information on this action, see Note 12, “Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

~~In addition, the publishing industry has been~~While we intend to vigorously defend any intellectual property claims, our technologies may not be able to withstand all third-party claims or rights against their use. The costs of supporting such litigation and disputes are considerable, and there can be no assurances that a favorable outcome will ~~continue to~~ be ~~the target of counterfeiting and piracy.~~obtained. We have in the past received and expect to continue to receive, communications alleging that physical textbooks sold or rented by us are counterfeit. While our fulfillment partner has systems for inspecting the physical textbooks in our catalog of textbooks, many of the textbooks sold or rented to students are shipped directly from our suppliers, and, despite inspection, unauthorized or counterfeit textbooks may inadvertently be included in the catalog of textbooks we offer andalso may be ~~without our knowledge~~required to settle such litigation and disputes on terms that ~~they~~ are ~~unauthorized~~unfavorable to us. The terms of any settlement or ~~counterfeit, subsequently sold or rented by us to students, and we~~judgment may ~~be subject to allegations of civil or criminal liability. We may implement additional measures in an effort to protect against these potential liabilities that could~~ require us to ~~spend~~cease some or all of our operations and/or pay substantial ~~resources. Any costs incurred~~amounts to the other party.

Additionally, because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover our technology and there is also a risk that we could adopt a technology without knowledge of a pending patent application, which technology would infringe a third-party patent once that patent is issued.

Moreover, in a patent infringement claim against us, we may assert, as a ~~result~~defense, that we do not infringe the relevant patent claims, that the patent is invalid or both. The strength of ~~liability~~ our defenses will depend on the patents asserted, the interpretation of these patents, and our ability to invalidate the asserted patents. However, we could be unsuccessful in advancing non-infringement and/or ~~asserted liability relating to sales~~invalidity arguments in our defense. In the United States, issued patents enjoy a presumption of ~~unauthorized or counterfeit textbooks could harm our business, reputation,~~validity, and ~~financial condition.~~the party challenging the validity of a patent claim must present clear and convincing evidence of invalidity, which is a high burden of proof. Conversely, the patent owner need only prove infringement by a preponderance of the evidence, which is a lower burden of proof.

Some aspects of our technology include ~~open source~~open-source software, and any failure to comply with the terms of one or more of these ~~open source~~open-source licenses could harm our business.

We use open source software in connection with certain of our products and services. Companies that incorporate open source software into their products have, from time to time, faced claims challenging the ownership of open source software and/or compliance with open source license terms. As a result, we could be subject to suits by parties claiming ownership of what we believe to be open source software or noncompliance with open source licensing terms. Some open source software licenses require users who distribute or use open source software as part of their software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code on unfavorable terms or at no cost. Any requirement to disclose our proprietary source code or pay damages for breach of contract could have a material adverse effect on our business, financial condition and results of operations.

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Risks Related to Data Privacy

~~Computer~~The compromise of our information technology systems or data, including through computer malware, viruses, hacking, phishing attacks, spamming and ~~spamming~~other security incidents, could harm our business and results of operations.

We process personal data regarding various individuals, including students, tutors, educators, and our employees, as well as other sensitive data, including intellectual property and confidential and proprietary business information. We, and our service providers and other third parties upon which we rely, are subject to a variety of evolving security threats. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. For example, severe ransomware attacks are becoming increasingly prevalent. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Additionally, nation-state actors are expected to continue to engage in cyber-attacks for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we, our service providers and other third parties

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upon which we rely, may be vulnerable to a heightened risk of these attacks. Furthermore, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees, as well as employees of our service providers and other third parties on which we rely, utilize network connections, computers and devices outside our premises or network, including while working at home, while in transit and in public locations.

Future or past business transactions (such as acquisitions or integrations) could also expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Moreover, we rely heavily on SaaS enterprise resource planning systems to conduct our e-commerce and financial transactions and reporting. In addition, we utilize third-party cloud computing services in connection with our business operations. Our reliance on these and other third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts and to otherwise assist in the operation of our business increases our risk exposure as our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.

If our data or security measures, or ~~those~~the security measures of our service providers, other third parties upon which we may rely or companies we may acquire, are compromised, disrupted or breached or are perceived to have been compromised, disrupted or breached, including as a result of any of the aforementioned threats or other cyberattacks, online or offline fraud, other intentional misconduct by computer hackers, employee error or malfeasance, social-engineering attacks, credential harvesting, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or ~~otherwise,~~hardware failures, loss of data or ~~if third parties obtain unauthorized access to our data, including sensitive customer data, personal~~other information ~~intellectual property and~~technology assets, adware, telecommunications failures, earthquakes, fires, floods or other ~~confidential business information,~~similar threats or activities (including those Chegg has experienced in the past, as discussed below), we could face a variety of adverse consequences. For example, we could be required to expend significant capital and other resources to address the ~~problem. Any such events~~problem and could ~~harm our business, increase our costs, including due~~face or be subject to litigation (including class action litigation such as those matters identified below) and enforcement actions, investigations, audits, additional reporting requirements and/or oversight, data processing restrictions, indemnity obligations, damages, penalties and costs for remediation, ~~and~~ damage our reputation or ~~brand. Cyberattacks~~brand, interruptions in our operations (including availability of data), and similar harms. Security incidents, including those Chegg has experienced in the past, as identified below, and attendant consequences may cause customers to stop using our services, deter new customers from using our services, and negatively impact our ability to grow and operate our business. Additionally, applicable data privacy and security ~~threats~~obligations may require us to notify relevant stakeholders, including regulators and impacted individuals, of security incidents. Such disclosures are ~~constantly evolving, making it increasingly difficult~~costly, and the disclosure or the failure to ~~successfully defend against them~~comply with such requirements could lead to additional adverse consequences. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or ~~implement~~claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage will be adequate ~~preventative measures.~~or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.

We may expend significant resources or modify our business activities to try to protect against threats to our security or systems. However, while we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We have not always been able in the past and may be unable in the future to detect vulnerabilities in our information technology systems because such threats and techniques change frequently, are often sophisticated in nature, and may not be detected until after a security incident has occurred. We have experienced security incidents in the past. For ~~instance,~~example, in April 2018, an unauthorized ~~party~~individual gained access to and exfiltrated user data for approximately 40 million users of chegg.com and certain ofother services in our family of brands, ~~such as~~including EasyBib, (the ~~2018~~“2018 Data ~~Incident)~~Incident”). The types of information that may have been obtained ~~could include~~by the threat actor included a Chegg user’s name, email address, shipping address, Chegg username, and ~~hashed~~ Chegg password. ~~To date,~~For a small percentage of the impacted users who had entered details into our scholarship search service, the incident also exposed information about additional personal characteristics, including dates of birth, parents’ income range, sexual orientation, religious denomination, heritage and information concerning disabilities.

Following the 2018 Data Incident, a purported securities class action captioned Shah v. Chegg, Inc. et. al. (Case No. 3:18-cv-05956-CRB) was filed in the U.S. District Court for the Northern District of California against us and our CEO. The complaint was filed by a purported Chegg stockholder and alleged claims under Sections 10(b) and 20(a) of the Exchange Act, as amended, based on allegedly misleading statements regarding our security measures to protect users’ data and related internal controls and procedures, as well as our second quarter 2018 financial results. This case was voluntarily dismissed without prejudice in March 2019. Moreover, following the 2018 Data Incident, we received notices that an aggregate of 16,691 arbitration demands were filed against us by individuals alleging that they had suffered damages in connection with the 2018 Data Incident. All such arbitral demands have been resolved.

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In October 2022, without any admission of liability, we entered into an agreement with the FTC containing a proposed consent order that will significantly impact our data security and privacy practices. The FTC consent order was finalized in January 2023. The FTC consent order requires us to establish, implement and maintain a comprehensive information security program, provide multi-factor authentication methods as an option or requirement for consumers, document and adhere to a detailed information retention schedule and provide consumers with online tools they can use to request access to or the deletion of their personal information. The consent order also requires us to obtain initial and biennial assessments of our Information Security and Governance Program ("ISP") from an independent third-party assessor and comply with detailed reporting requirements for the 20 year-duration of the order. We have completed our first such independent assessment of our ISP with no ~~social~~material findings. Any violations of the proposed order could expose us to significant civil penalties, further injunctions and other adverse consequences.

Additionally, after the FTC’s preliminary approval of the consent order was publicly announced, a putative class action captioned Keller v. Chegg, Inc. (Case No. 22-cv-6986-JD) was filed in November 2022 in the U.S. District Court for the Northern District of California. The complaint was filed by a purported Chegg user and alleges various claims based on Chegg’s failure to take reasonable security ~~numbers or financial information~~measures. The plaintiff asserts claims under negligence; negligence per se; the California Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq.; the California Consumer Privacy Act, Cal. Civ. Code § 1798.150; and the Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq. The Plaintiff seeks relief that certifies a class, damages, a declaratory judgment, injunctive relief, and attorneys’ fees and costs. On August 15, 2023, the Company received an order granting its motion to compel arbitration, and the case will be stayed and administratively closed pending the conclusion of arbitration.

Actions and investigations such as ~~users’ credit card numbers~~the foregoing, and any similar or ~~bank account information were obtained. Additionally, Thinkful,~~other actions, claims, litigation, investigations or events, whether arising from prior or future incidents, may harm our business and cause us to suffer adverse consequences.

Furthermore, prior to our acquisition of ~~it,~~Thinkful and Mathway, each discovered that an unauthorized party may have gained access to certain Thinkful company credentials (the Thinkful Data Incident). If we, or companies that we acquire, experience security compromises that result in website performance or availability problems, the complete shutdown of our websites, or the actual or perceived loss or unauthorized disclosure or use of confidential information ~~such as credit card~~or personal information ~~users may be harmed or lose trust and confidence in us, and decrease the use~~ of our services or stop using our services in their entirety, and we would suffer reputational and financial harm, in addition to increased regulatory scrutiny, litigation, fines, and governmental enforcement actions.users.

~~As part of our regular cybersecurity efforts, including~~While we have made enhancements to our cybersecurity controls, ~~made following~~as discussed in detail in Part I, Item 1C, “Cybersecurity” of this Annual Report on Form 10-K and considered in our ~~discovery of these prior events, we have implemented physical, technical, and administrative safeguards designed to protect~~ independent assessment. our ~~systems. However,~~ efforts to prevent hackers and others from entering our computer systems ~~are expensive to implement, may limit the functionality of~~or accessing our services, and we may need to expend significant additional resources to further enhance our safeguards and protection against security breaches or to redress problems caused by security breaches and such effortsdata may not be fully ~~effective. Additionally, our network security business disruption insurance may~~effective and we cannot guarantee that future events will not ~~be sufficient to cover significant expenses and losses related to direct attacks~~occur that have a material impact on our website or systems we use. Any failure to maintain performance, reliability, security, and availability of our products and services and technical infrastructure, or the actual or perceived loss or unauthorized disclosure or use of the data we collect and develop may lead our users to lose trust and confidence in us or otherwise harm our reputation, brand, and our ability to attract students to our website or may lead them to decrease the use of our services or applications or stop using our services in their entirety. Any significant disruption to our website or computer systems we use could result in a loss of students or advertisers and, particularly if disruptions occur during the peak periods at the beginning of each academic term, could adversely affect our business and results of operations.business.

Additionally, ~~depending on the nature of the information compromised, in the event of a security breach or other privacy or security related incident,~~ we may also have obligations to notify affected individuals and regulators about the incident, and we may need to provide some form of remedy, such as a subscription to credit monitoring services, payment of significant fines, or payment of compensation in connection with a class-action settlement (including under the new private right of action under the CCPA). Such breach notification laws continue to evolve and may be inconsistent from one jurisdiction to another. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises our, our users’, our employees’, or other confidential or personal information.

Any significant disruption, including those related to cybersecurity or arising from cyberattacks, 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.

We rely on computer systems ~~housed in six facilities, three located on the East Coast and three located on the West Coast,~~globally to manage our operations. We have experienced and expect to continue to experience periodic service interruptions and delays involving our systems. While we maintain a fail-over capability to switch our operations from one facility to another in the event of a service outage, that process would still result in service interruptions that could be significant in duration. Such interruptions could have a disproportionate effect on our operations if they were to occur during one of our peak periods or if multiple of our service facilities experiences outages at the same time. Our facilities are also vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunications failures, and similar ~~events.~~

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~~Our facilities and information systems,~~events as well as ~~those of our third-party service providers, are also subject to break-ins, sabotage, intentional acts of vandalism, cybersecurity~~the cyber-attacks and security risks ~~including cyberattacks such as computer viruses~~ and denial of service attacks, the failure of physical, administrative, and technical security measures, terrorist acts, natural disasters, human error, the financial insolvency of our third-party vendors, and other unanticipated problems or events. These information systems have periodically experienced and will continue to experience both directed attacks and loss of, misuse of, or theft of data. Moreover, due to the current COVID-19 pandemic, there is an increased risk that we may experience cybersecurity related incidents as a result of our employees, service providers, and third parties working remotely on less secure systems. While we have implemented physical, technical, and administrative safeguards designed to help protect our systems, in the event of a system interruption or a security exposure or breach, they may not be as effective as intended and we may not have adequate insurance coverage to compensate for related losses. To date, unauthorized users have not had a material effect on our company; however, there can be no assurance that attacks will not be successful in the future or that any loss will not be material. In addition, our information systems must be constantly updated, patched, and upgraded to optimize performance and protect against known vulnerabilities, material disruptions, or slowdown. The access by unauthorized persons to, or the improper disclosure by us of, confidential information regarding our customers or our own proprietary information, software, methodologies, and business secrets could result in significant legal and financial exposure, damage to our reputation, or a loss of confidence in the security of our systems, products, and services, which could have a material adverse effect on our business, financial condition, or results of operations.

We also rely on Internet systems and infrastructure to operate our business. The information systems used by our third-party service providers and the Internet generally are vulnerable to these risks as well. In particular, we rely heavily on SaaS enterprise resource planning systems to conduct our e-commerce and financial transactions and reporting. In addition, we utilize third-party cloud computing services in connection with our business operations. Problems faced by us or our third-party hosting and cloud-computing providers, or interruptions in our own systems or in the infrastructure of the Internet, including technological or business-related disruptions, as well as cybersecurity threats could hinder our ability to operate our business, damage our reputation or brand and result in a loss of students or brands which could harm our business, results of operations, and financial condition.discussed above.

We collect, process, store and use personal information and other sensitive data, which subjects us to stringent and evolving U.S. and foreign laws, governmental regulation, contractual obligations, policies and other legal ~~obligations related to privacy and our actual or perceived failure to comply with such obligations could harm our business.~~obligations.

In the ordinary course of business, we collect, receive, process, store, disclose, make accessible and otherwise use personal information and other sensitive data, ~~supplied by~~including proprietary and confidential business data and intellectual property, from various parties, including students, tutors, educators and ~~tutors.~~employees. We may enable students and others to share their personal information with each other and with third parties and to communicate and share information into and across our platform. ~~If we were~~Our data processing activities may subject us to ~~disclose~~numerous data ~~about our student users in a manner that was objectionable to them, our business reputation~~privacy and ~~brand could be adversely affected, and we could face legal claims that could impact our results of operations. In addition, there are numerous~~security obligations, including foreign, federal, state, and local laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations regarding privacy and the collection, storing, sharing, using, processing, disclosing and protecting of personal information and other user data, including from minors under the age of 18, the scope of which are changing, subject to differing interpretations, and which may be costly to comply with and may be inconsistent between countries and jurisdictions or conflict with other rules.

~~We strive to comply with all applicable laws, policies, legal obligations,~~In the United States, federal, state, and ~~industry codes of conduct relating to~~local governments have enacted numerous data privacy and security laws, including data ~~protection. However,~~breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, the California Consumer Privacy Act of 2018 (“CCPA”) requires businesses to provide specific disclosures in privacy notices and honor requests of California residents

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to exercise certain privacy rights. The California Privacy Rights Act of 2020 (“CPRA”), which became operative January 1, 2023, expands the CCPA’s requirements, including applying to personal information of business representatives and employees. Thirteen other states have now passed comprehensive privacy laws, and similar state laws are being considered, as well as laws at the federal and local levels. These developments further complicate compliance efforts and may increase legal risk and compliance costs for us and the third parties upon whom we rely.

Students who use some of our services, including high school students who use our Chegg Writing and Chegg Prep services, may be under the age of 18. Accordingly, our business is subject to certain laws covering the protection of minors. For example, various U.S. ~~federal, U.S. state,~~ and international laws restrict the distribution of materials considered harmful to minors and ~~regulations regarding~~impose additional restrictions on the ability of online services to collect information from minors. Although our policy is to avoid knowingly collecting personal information from children under the age of 13 and we do not believe that our websites or online services are directed to children under the age of 13, regulators or private plaintiffs could disagree with this assessment and challenge our compliance with the federal Children’s Online Privacy Protection Act and its implementing rules (“COPPA”) which impose enhanced notice, verifiable parental consent, data minimization, security and other data privacy requirements on child-directed sites and ~~data protection, including the CCPA and CPRA,~~online services that our services are ~~rapidly evolving and~~not designed to support.

Additionally, we may be ~~inconsistent~~subject to certain marketing laws that govern our use of personal information. For example, the Controlling the Assault of Non-Solicited Pornography and ~~we could be deemed out~~Marketing Act of ~~compliance as such~~2003 ("CAN-SPAM”) and the Telephone Consumer Protection Act of 1991 (“TCPA”) impose specific requirements on communications with customers. For example, the TCPA imposes various consumer consent requirements and other restrictions on certain telemarketing activity and other communications with consumers by phone, fax or text message. Furthermore, under various other privacy laws and ~~their interpretation change. In addition, foreign~~other obligations, we may be required to obtain certain consents to process personal data.

Foreign privacy, data protection, and other laws and regulations, particularly in Europe, ~~and including the General Data Protection Regulation (the GDPR), which became effective in May 2018,~~ are often at least as restrictive as, if not more restrictive than, those in the United States. ~~The costs of compliance with,~~For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Brazil’s General Data Protection Law (Lei Geral de Proteção de Dados Pessoais, or “LGPD”) (Law No. 13,709/2018), and ~~other burdens imposed by, such laws and regulations that are applicable to our business operations may limit the use and adoption of our services and reduce overall demand~~China’s Personal Information Protection Law (“PIPL”) impose strict requirements for ~~them.~~processing personal data.

Furthermore, foreign court judgments or regulatory actions could impact our ability to transfer, process, and/or receive transnational data, including data relating to students or partners outside the United States, or alter our ability to use cookies to deliver advertising and other products to users. Such judgments or actions could affect the manner in which we provide our services or adversely affect our financial results if foreign students and partners are not able to lawfully transfer data to us. In addition, some countries (including Europe) and states are considering or have passed legislation implementing requirements with respect to cross-border transfers of data ~~protection requirements~~ or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services. ~~Any changes~~For example, in the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries. In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it believes are inadequate. Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses (“SCCs”), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States. Additionally, the SCCs impose additional compliance burdens, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data. In addition, Switzerland similarly restricts personal data transfers outside of those jurisdictions to countries that do not provide an adequate level of personal data protection.

Furthermore, European legislative proposals and present laws and regulations – other than the EU and UK GDPR – apply to cookies and similar tracking technologies, electronic communications, and marketing and regulators are increasingly focusing on compliance with requirements related to the behavioral, interest-based, or tailored advertising ecosystem. It is anticipated that the ePrivacy Regulation and national implementing laws will replace the current national laws implementing the ePrivacy Directive. Compliance with these laws may require us to make significant operational changes, limit the effectiveness of our marketing activities, divert the attention of our technology personnel, adversely affect our margins, and subject us to liabilities.

Outside of Europe, other laws further regulate behavioral, interest-based, or tailored advertising, making certain online advertising activities more difficult and subject to additional scrutiny. For example, the CCPA grants California residents the right to opt-out of a ~~change~~company’s sharing of personal data for advertising purposes in exchange for money or ~~differing interpretation or application~~other valuable consideration. As individuals become increasingly aware of and resistant to the collection, use, and sharing of personal information in connection with advertising, some users have opted out of our ~~business~~processing of the existing laws and regulations, including the GDPR, could also hinder our operational flexibility, raise compliance costs and, particularly if our compliance efforts are deemed to be insufficient, result in additional historical or future liabilities and regulatory scrutinypersonal data for ~~us, resulting in adverse impacts on our business and our results of operations.~~advertising

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purposes, which has negatively impacted our ability to collect certain user data and our advertising partners’ ability to deliver relevant content, and more may do so in the future.

In addition to data privacy and security laws, we may be or may become subject to industry standards adopted by industry groups. For example, we may rely on vendors to process payment card data, and we, or those vendors, may be subject to the Payment Card Industry Data Security Standard (“PCI DSS”), which requires companies to adopt certain measures to ensure the security of cardholder information, including using and maintaining firewalls, adopting proper password protections for certain devices and software, and restricting data access. We also have internal and publicly posted policies regarding, and are bound by contractual commitments with respect to, our collection, processing, use, disclosure, deletion and security of information. The publication of our privacy policies, our contracts and other documentation that provide commitments about data privacy and security can subject us to potential actions and other adverse consequences.

Public scrutiny of Internet privacy issues and actual or perceived failure to comply with our obligations with respect to privacy and data security could harm our business, including by damaging our reputation and relationships with students and educators.

We strive to comply with all applicable laws, policies, contractual obligations, and industry codes of conduct relating to privacy and data protection. However, U.S. federal, state and local, and international laws and regulations regarding privacy and data protection are rapidly evolving and may be inconsistent and we could be deemed out of compliance as such laws and their interpretations change. Our business model materially depends on our ability to process personal data, so we are particularly exposed to the risks associated with the rapidly changing legal landscape. Practices regarding the collection, use, storage, display, processing, transmission and security of personal information by companies, particularly those offering online services, have recently come under increased public scrutiny.

Any failure or perceived failure by us, our personnel, or third parties on which we rely or with which we work to comply with the aforementioned privacy obligations or any compromise of security that results in the unauthorized release or transfer of sensitive information, which may include personal information or other data, may result in significant consequences, including governmental enforcement actions, litigation, additional reporting requirements and/or oversight, bans on processing personal information, orders to destroy or not to use personal information, or public statements against us by consumer advocacy groups or others and could cause students, tutors, educators, partners and others to lose trust in us, which could have an adverse effect on our business. Additionally, such events could lead to loss of customers; interruptions or stoppages in our business operations; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; adverse publicity; or substantial changes to our business model or operations.

Noncompliance with certain privacy and data security laws we may be subject to could subject us to particularly significant penalties. For example, TCPA violations can result in penalties or criminal fines imposed by the Federal Communications Commission or statutory damages awards of up to $1,500 per violation imposed through private litigation or fines by state authorities. Additionally, the CCPA provides for civil penalties of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Furthermore, under the EU GDPR, companies may face temporary or definitive bans on data processing, fines of up to 20 million Euros or 4% of annual global revenue (whichever is greater), audits and inspections, private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests, among other penalties.

Inability to comply with applicable data transfer restrictions may also present unique risks. If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data (including data regarding foreign students) and work with partners, vendors and other third parties, injunctions against our processing or transferring of personal data necessary to operate our business, among other consequences.

We have in the past and may in the future be subject to regulatory investigations and actions or litigation in connection with any noncompliance with our privacy obligations or a security breach or related issue, and we could also be liable to third parties for these types of ~~breaches.~~incidents. For instance, ~~following the 2018 Data Incident,~~we have been subject to litigation and investigations as a ~~purported securities class action captioned~~ ~~Shah v. Chegg, Inc. et. al.~~ ~~(Case No. 3:18-cv-05956-CRB) was filed~~result of past security incidents, as further described in the ~~U.S. District Court for the Northern District~~risk factor titled “The compromise of ~~California against us and~~ our CEO. The complaint was filed by a purported Chegg stockholder and alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, based on allegedly misleading statements regarding our security measures to protect users’information technology systems or data, and related internal controls and procedures, as well as our second quarter 2018 financial results. Such litigation, regulatory investigations, and our technical activities intended to prevent future security breaches are likely to require additional management resources and expenditures.

~~Additionally, the CCPA provides for a private right of action for security breaches that is expected to increase security breach litigation that could lead to some form of remedy~~ including ~~regulatory scrutiny, fines, private right of action settlements,~~through computer malware, viruses, hacking, phishing attacks, spamming and other ~~consequences. If our~~ security measures fail to protect personal information and data supplied by students and tutors adequately, we could be liable to our students and tutors for their losses, we could face regulatory action, and our students and tutors could end their relationships with us, any of whichincidents, could harm our business and ~~financial results. Further, on June 18, 2020, we received~~results of operations,” and a ~~CID from~~consent order has been finally approved and entered by the FTC ~~to determine whether we may have violated Section 5 of the FTC Act or the COPPA, as they relate to deceptive or unfair acts or practices~~ related to ~~consumer privacy and/or data security. Also,~~the

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same, as ~~of October 2020, we have received notices that an aggregate of 16,691 arbitration demands were filed against us by individuals alleging to have suffered damages~~further described in ~~connection with the 2018 Data Incident. For further information on such actions, see~~ Note ~~12,~~10, “Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. We could face similar actions, or other actions related to our privacy and data security practices, in the future.

~~Any failure~~We are subject to privacy and cybersecurity laws across multiple jurisdictions which are highly complex, overlapping, and which create compliance challenges that may expose us to substantial costs, liabilities, or loss of customer trust. Our actual or perceived failure ~~by us~~ to comply with our privacy policies, our privacy or data-protection obligations to students or other third parties, our privacy or data-protection legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which may include personal information or other data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others andthese laws could cause students to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as colleges and brands, violate applicable laws or our policies, such violations may also put our student users’ information at risk and could in turn have an adverse effect onharm our business.

~~Public scrutiny of Internet privacy issues may result in increased regulation~~We have internal and ~~different industry standards, which could deter or prevent us from providing~~publicly posted policies regarding our ~~current products and services to students, thereby harming our business.~~

~~The regulatory framework for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the~~ collection, processing, use, ~~storage, display, processing, transmission~~disclosure, deletion and security of ~~personal information by companies offering online services have recently come under increased public scrutiny.~~information. Although we endeavor to comply with our policies and documentation, we may at times fail to do so or be accused of having failed to do so. The ~~U.S. government, including the White House, the FTC~~publication of our privacy policies and the U.S. Department of Commerce, have reviewed the need for greater regulation of the collection and use of information concerning consumer behavior with respect to online services, including regulation aimed at restricting certain targeted advertising practices. The FTC in particular has approved consent decrees resolving complaints and their resulting investigations into theother documentation that provide commitments about data privacy and security can subject us to potential actions if they are found to be deceptive, unfair, or otherwise misrepresent our actual practices, ~~of a number of online,~~which could materially and social media companies. On June 18, 2020, we received a CID from the FTC to determine whether we may have violated Section 5 of the FTC Act or the COPPA, as they relate to deceptive or unfair acts or practices related to consumer privacy and/or data security, as further described in Note 12, “Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Similar actions may also impact us directly, particularly because of the current subject of the CID and because high school students who use our Chegg Writing and Chegg Prep services, may be under the age of 18, which subjectsadversely affect our business, tofinancial condition and results of operations. In addition, compliance with inconsistent or new privacy and cybersecurity laws covering the protection of minors. For example, various U.S. and international laws restrict the distribution of materials considered harmful to children and impose additional restrictions on the ability of online services to collect information from minors. Althoughcould impact our ~~services are not primarily directed to children under 13, our Chegg Writing service or our Chegg Prep service, in particular, could be used by students as early as in middle school,~~business strategies and the ~~FTC could decide that~~availability of previously useful data, increase our ~~site now or~~potential liability, increase our compliance costs, require changes in ~~the future has taken inadequate precautions to prevent children under 13 from accessing~~business practices and policies and adversely impact our ~~site and providing us information.~~business.

Our business, including our ability to operate internationally, could be adversely affected if new legislation or regulations are adopted ~~interpreted~~ or ~~implemented~~due to changes in ~~a manner that is inconsistent with our~~interpretations or implementations of current ~~business practices~~legislation and ~~that require changes to these practices, the design of our websites, mobile applications, products, features~~regulations.

Any new or ~~our privacy policy. Any~~ significant change to applicable laws, regulations or industry standards or practices regarding the use, disclosure or ~~disclosure~~other processing of personal data ~~that students choose to share with us or regarding the manner in which the express or implied consent of consumers for such use and disclosure is obtained~~could adversely affect our business, including insofar as it may require us to modify our products and services ~~possibly in a material manner,~~ and ~~may~~ limit our ability to develop new products and ~~services that make use of the data that we collect about our student users.~~

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services.

~~Our reputation and relationships with students, tutors, and educators would be harmed if~~For example, proposed or recently adopted EU laws could significantly affect our ~~users’ data, particularly billing data, were to be accessed by unauthorized persons.~~

~~We maintain personal data regarding students, tutors, and educators, who use our platform through our Thinkful service, including names and, in many cases, mailing addresses, and,~~business in the ~~case~~future. For example, the Digital Services Act or “DSA”, effective in February of ~~tutors~~2024, imposes new restrictions and ~~educators, information necessary~~requirements for ~~payment~~our products and ~~tax filings. We take measures~~services, such as a prohibition on targeted advertising to ~~protect against unauthorized intrusion into~~minors in the EEA, and may significantly increase our ~~users’ data. However, despite these measures, if we~~compliance costs. The European Commission's proposed Artificial Intelligence (AI) Act could also impose new obligations or our payment processing services experience any unauthorized intrusion into our users’ data, current and potential users may become unwilling to provide the information to us necessary for them to engage with our platform, we could face legal claims andlimitations affecting our business, if and ~~reputation~~when it enters into force. The legal landscape with respect to privacy and data security in the U.S. and elsewhere is similarly in flux with a number of pending legislative and regulatory proposals that could ~~be adversely affected.~~have significant impacts on our business, if effected.

Risks Related to Ownership of Our Common Stock

Our stock price has been and will likely continue to be volatile.

The trading price of our common stock has been, and is likely to continue to be, volatile. In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among others:

•our announcement of actual results for a fiscal period that are higher or lower than projected results or our announcement of revenues or earnings guidance that is higher or lower than expected;

•issuance of new or updated research or reports by securities analysts, including unfavorable reports or change in recommendation or downgrading of our common stock;

•announcements by us, or our competitors, or other parties of significant products or features, technologies (including AI-related developments), acquisitions, strategic relationships and partnerships, joint ventures, or capital commitments;

•actual or anticipated changes in our growth rate relative to our competitors;

•changes in the economic performance or market valuations of actual or perceived comparable companies;

•future sales of our common stock by our officers, directors, and existing stockholders or the anticipation of such sales;

•issuances of additional shares of our common stock or convertible instruments in connection with acquisitions and capital raising transactions;

•share price and volume fluctuations attributable to inconsistent trading volume levels of our shares, including any common stock issued upon conversion of the notes;

•lawsuits threatened or filed against us;

•regulatory developments in our target markets affecting us, students, colleges, brands, publishers, or our competitors;

•the U.S. political climate, with a focus on cutting budgets, higher education, and taxation;

•terrorist attacks or natural disasters or similar events impacting countries where we operate; and

•general economic and market conditions.

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Furthermore, both domestic and international stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of companies in general and technology companies in particular. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. Technology companies have been particularly susceptible to stock price volatility. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We have been and may continue to be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business and results of operations.

We may be subject to ~~short selling~~short-selling strategies that may drive down the market price of our common stock.

Short selling occurs when an investor borrows a security and sells it on the open market, with the intention of buying identical securities at a later date to return to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares. Because it is in the short seller’s best interests for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, its business prospects, and similar matters calculated to or which may create negative market momentum. Short sellers can publicly attack a company’s reputation and business on a broader scale via online postings. In the past, the publication of such commentary about us by a disclosed short seller has precipitated a decline in the market price of our common stock, and future similar efforts by other short sellers may have similar effects.

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In addition, if we are subject to unfavorable allegations promoted by short sellers, even if untrue, we may have to expend a significant amount of resources to investigate such allegations and defend ourselves from possible shareholder suits prompted by such allegations, which could adversely impact our business, results of operations, and financial condition.

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.

Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our restated certificate of incorporation and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following:

•our board of directors is classified into three classes of directors with staggered three-year terms and directors can only be removed from office for cause and by the approval of the holders of at least two-thirds of our outstanding common stock;

•subject to certain limitations, our board of directors has the sole right to set the number of directors and to fill a vacancy resulting from any cause or created by the expansion of our board of directors, which prevents stockholders from being able to fill vacancies on our board of directors;

•only our board of directors is authorized to call a special meeting of stockholders;

•our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of common stock;

•advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders;

•our stockholders cannot act by written consent;

•our restated bylaws can only be amended by our board of directors or by the approval of the holders of at least two-thirds of our outstanding common stock; and

•certain provisions of our restated certificate of incorporation can only be amended by the approval of the holders of at least two-thirds of our outstanding common stock.

In addition, our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, our restated certificate of incorporation, or our bylaws, or any action asserting a claim against us that is governed by the internal affairs doctrine. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. This exclusive forum provision will not apply to claims that are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of

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Chancery of the State of Delaware does not have subject matter jurisdiction. For instance, the provision would not preclude the filing of claims brought to enforce any liability or duty created by the Exchange Act or Securities Act of 1933, as amended (Securities Act) or the rules and regulations thereunder in federal court.

Our securities repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

In ~~June 2020,~~August 2023, our ~~board~~Board of ~~directors~~Directors approved a $200.0 million increase to our existing securities repurchase program authorizing ~~our~~the repurchase of up to ~~$500.0 million~~$2.2 billion of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, and other factors. ~~Through~~As of December 31, ~~2020,~~2023, we ~~have repurchased $57.4 million of aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $149.6 million and have $350.4~~had $3.7 million remaining under the ~~repurchase program. The~~securities repurchase program, which has no expiration date and will ~~end on December 31, 2021.~~continue until otherwise suspended, terminated or modified at any time for any reason by our board of directors.

Repurchases pursuant to our securities repurchase program could affect the price of our common stock and increase its volatility. The existence of our securities repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our common stock. Additionally, repurchases under our securities repurchase program will diminish our cash reserves, which could impact our ability to further develop our business and service our indebtedness. There can be no assurance that any repurchases will enhance stockholder

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value because the market price of our common stock may decline below the levels at which we repurchased such shares. Any failure to repurchase securities after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price. Although our securities repurchase program is intended to enhance long-term stockholder value, short-term price fluctuations could reduce the program’s effectiveness.

Risks Related to Our Convertible Senior Notes

Servicing our convertible senior notes requires a significant amount of cash, and we may not have sufficient cash flow or cash on hand to repay them, settle conversions in cash or to repurchase them upon a fundamental change, and any future debt may contain limitations on our ability to pay cash upon conversion or repurchase.

In August 2020, we issued $1.0 billion in aggregate principal amount of ~~our 0.0%~~0% convertible senior notes due in 2026 ~~(the 2026~~(2026 notes). In March/April 2019, we issued $800 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 ~~(the 2025 notes). In April 2018, we issued $345 million in aggregate principal amount of our 0.25% convertible senior~~(2025 notes, ~~due 2023 (the 2023 notes and~~ together with the 2026 notes, the notes). The aggregate principal amounts of both the 2026 notes and ~~the~~ 2025 notes include $100 million from the ~~notes).~~initial purchasers fully exercising their option to purchase additional notes. As of December 31, 2023, the outstanding principal amount of our 2026 notes and 2025 notes was $244 million and $359 million, respectively.

The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act. Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the notes, depends on our future performance, which is subject to many factors, including, economic, financial, competitive and other, beyond our control. We may not be able to generate cash flow from operations, in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance the notes which, ~~may not be redeemed prior to~~as of September 2023 for the 2026 notes and March 2022 for the 2025 notes, ~~and May 2021 for the 2023 notes~~may be redeemable subject to certain conditions related to the price of our common stock, will depend on the capital markets and our financial condition at such time. Given the volume of our repurchases of the notes to date, our future repurchases may be restrained by the quantity available for sale on the capital markets. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations, and limit our flexibility in planning for and reacting to changes in our business.

Holders of the notes will have the right to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. In addition, upon conversion of the notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered ~~therefor~~therefore or pay cash with respect to notes being converted. If we elect to deliver shares of our common stock to settle such conversion, the issuance of our common stock may cause immediate and significant dilution.

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In addition, our ability to repurchase the notes or to pay cash upon conversions of notes may be limited by law, regulatory authority or agreements governing any future indebtedness. Our failure to repurchase the notes at a time when the repurchase is required by the indenture or to pay cash upon conversions of notes as required by the indenture would constitute a default under the indenture. A default under the indenture or the fundamental change itself could also lead to a default under agreements governing any future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or to pay cash upon conversions of notes.

General Risk Factor

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.~~crises. If these or other natural or man-made disasters were to occur, our business and results of operations would be adversely affected.

Our business and operations could be materially adversely affected in the event of earthquakes, blackouts, or other power losses, floods, fires, telecommunications failures, break-ins, acts of terrorism, wars, including the war in Ukraine and the Israel-Hamas war, public health crises, ~~including the current COVID-19 pandemic,~~ inclement weather, shelving accidents, or similar events. Our executive offices are located in the San Francisco Bay Area, an earthquake-sensitive area and susceptible to wildfires. If floods, fire, inclement weather including extreme rain, wind, heat, or cold, or accidents due to human error were to occur and cause damage to our properties ~~or textbook library,~~ or our distribution partners’ ability to fulfill orders for print textbook rentals and sales, our results of operations would suffer, especially if such events were to occur during peak periods. We may not be able to effectively shift our operations due to disruptions arising from the occurrence of such events, and our business and results of operations could be affected adversely as a result. Moreover, damage to or total destruction of our executive offices resulting from earthquakes may not be covered in whole or in part by any insurance we may have.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Chegg and its Board of Directors (the “Board”) recognize the critical importance of maintaining the trust and confidence of our students, business partners, and employees. We have established an Information Security and Governance Program (“ISP") utilizing the National Institute of Standards and Technology Cybersecurity Framework as an authoritative source of cybersecurity standards and framework for measurement. The ISP is comprised of the following components: (i) policies which describe the core requirements and design aspects of the program, (ii) standards that provide quantifiable and prescriptive requirements to meet the program's design, (iii) processes that provide operational requirements to meet the ISP's policies and standards consistently, and (iv) implementation playbooks which are created, maintained, and used by the respective team responsible for implementation.

The ISP has three core functions underlying its design, which are intended to provide Chegg with appropriate oversight and governance to execute, monitor, measure and report on the performance of the program in a consistent manner:

•management (control owners) have a responsibility to own and manage risks associated with day-to-day operations, including the design, implementation, and ongoing operation of controls;

•compliance and cybersecurity teams enable the identification of emerging risks in daily operation of our business, providing compliance and oversight in the form of frameworks, policies, tools, and techniques to support management; and

•independent assessors provide objective evaluation by assessing whether the first and second functions above are operating successfully, providing assurance that controls are effective in both design and operation.

The Audit Committee of the Board (the “Audit Committee”) provides independent oversight of the ISP. As a component of the ISP, the Audit Committee receives a report on the health and performance of the ISP on at least an annual basis. The Audit Committee provides guidance and oversight to help ensure the ISP meets the needs of all interested parties and fulfills its core functions.

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Our Trust and Security organization (“T&S”) is responsible for implementing the ISP. T&S is led by our Chief Information Security Officer (“CISO”), John Heasman, who reports to our Chief Technology Officer (“CTO”), Chuck Geiger. T&S is made up of three sub-teams, each led by a director who reports to the CISO:

•Information Security, which is responsible for implementing all aspects of the ISP and is structured around the following pillars: (i) Application Security, (ii) Infrastructure (Cloud) Security, (iii) Corporate IT Security, (iv) Security Operations, and (v) Governance and Risk Management.

•Compliance and Privacy, which is responsible for assessing and preparing internal teams for regulatory compliance pertaining to information security, secured financial reporting, and privacy and is structured around the following pillars: (i) Privacy, (ii) Compliance, (iii) Vendor Risk Management, and (iv) Security Awareness.

•Operations and Analytics, which is responsible for identifying and measuring consumer fraud and abuse of our customer-facing services, implementing manual and automated operations to ensure these are within acceptable bounds, and working with our product and engineering teams to design and implement longer term solutions.

T&S also partners with a dedicated engineering team, Security and Fraud Engineering, which reports to our CTO and is responsible for building libraries, services, and integrations that interface with both backend and vendor systems to support the objectives of T&S.

Mr. Heasman has served as our CISO for over four years and has served in various roles in information technology and information security for over 20 years, including serving as the Deputy CISO of a large public company prior to joining Chegg. Mr. Heasman holds undergraduate and graduate degrees in engineering and computer science. Mr. Geiger holds an undergraduate degree in computer science and has served in various roles in information technology for over 30 years, including serving as either the CTO or Executive Vice President of Technology of four companies prior to joining Chegg. Our CEO, CFO and General Counsel each hold degrees in their respective fields, and each have over 20 years of experience managing risks at Chegg and other companies, including risks arising from cybersecurity threats.

For discussion of our risk factors relating to cybersecurity and data privacy, see the “Risks Related to Data Privacy” section included in Part I, Item 1A, “Risk factors” of this Annual Report on Form 10-K.

ITEM 2. PROPERTIES

Our corporate headquarters are located in Santa Clara, California and consist of approximately ~~67,500~~45,000 square feet of space under a lease that expires in November ~~2023.~~2028. We have additional offices in ~~California,~~ Oregon and New York in the United States and internationally in the United Kingdom, India, and ~~Israel, under~~Israel. Our corporate office leases ~~that~~ expire at varying times between ~~2021~~2024 and ~~2027.~~2028. We believe our facilities are adequate for our current needs and for the foreseeable ~~future; however, we will continue to seek additional space as needed to accommodate our growth.~~future.

ITEM 3. LEGAL PROCEEDINGS

~~From time to time, third parties may assert patent infringement claims against us in the form of letters, litigation, or other forms of communication. In addition, we~~We may from time to time be subject to ~~other~~certain legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, demands, disputes, investigations, or ~~investigations.~~requests for information. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters. For further information on our legal proceedings, see Note ~~12,~~10, “Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is listed on the New York Stock Exchange under the symbol “CHGG.”

Stockholders of Record

As of January 31, ~~2021~~2024, there were 2726 stockholders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.

Dividends

We do not intend to declare or pay any cash dividends in the foreseeable future.

~~Unregistered Sales of~~ Securities Authorized for Issuance under Equity Compensation Plans

~~In August 2020, we issued $1.0 billion in aggregate principal amount~~See Part III, Item 12, “Security Ownership of 2026 notes, in a private placement to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. The notes are convertible into shares of our common stock on the terms set forth in the indenture governing the notes. Information relating to the issuance of the notes was provided in a Current Report on Form 8-K filed with the SecuritiesCertain Beneficial Owners and ~~Exchange Commission on August 24, 2020. See Note 10, “Convertible Senior Notes,” of our consolidated financial statements~~Management and ~~related notes included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data”~~Related Stockholder Matters” of this Annual Report on Form 10-K for more ~~information.~~information regarding securities authorized for issuance.

Unregistered Sales of Securities

We had no unregistered sales of our securities during the three months ended December 31, 2023.

Securities Repurchase Program

In ~~June 2020,~~August 2023, our ~~board~~Board of ~~directors~~Directors approved a $200.0 million increase to our existing securities repurchase program authorizing ~~our~~the repurchase of up to ~~$500.0 million~~$2.2 billion of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, and other factors. ~~During the three months ended~~As of December 31, ~~2020,~~2023, we ~~repurchased $57.4 million of aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $149.6 million and have $350.4~~had $3.7 million remaining under the ~~repurchase program. The~~securities repurchase program, which has no expiration date and will ~~end on December 31, 2021.~~continue until otherwise suspended, terminated or modified at any time for any reason by our board of directors.

Purchases of Securities by the Registrant and Affiliated Purchasers

~~We did not~~The following table presents the securities repurchase ~~any of our securities~~activity during the three months ended December 31, ~~2020, other than~~2023 (in thousands, except average price paid per security and total number of securities repurchased):


Period	Total Number of Securities Repurchased	Average Price Paid Per Security		Total Number of Securities Purchased Pursuant to Publicly Announced Plan	Total Dollar Amount Purchased Pursuant to Publicly Announced Plan		Maximum Dollar Amount Remaining Available for Repurchase Pursuant to Publicly Announced Plan
October 1 - October 31	—	$	—	—	$	—	$	153,665
November 1 - November 30(1)	13,498,313	—		13,498,313	150,000		3,665
December 1 - December 31	—	—		—	—		3,665

(1) On November 14, 2023, in connection with ~~the forfeiture~~our securities repurchase program, we entered into an accelerated share repurchase (ASR) agreement with a financial institution to repurchase $150.0 million of our outstanding common ~~stock by holders of restricted stock units in~~stock. In exchange for ~~payments by~~an upfront payment of $150.0 million, we received an initial delivery of 13,498,313 shares of our common stock. The average price paid per security is not applicable as final settlement did not occur during the ~~Company~~three months ended December 31, 2023.

Table of ~~statutory tax withholding amounts on behalf of the holders arising as a result of the vesting of restricted stock units.~~Contents

Stock Performance Graph

This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Chegg under the Securities Act or the Exchange Act.

The following graph ~~shows~~presents a comparison from December 31, ~~2015~~2018, through December 31, ~~2020~~2023, of the cumulative total return for our common stock, the Standard & Poor’s 500 Stock Index (S&P 500) and the NASDAQ Composite Index (NASDAQ Composite). The graph assumes that $100 was invested at the market close on December 31, ~~2015~~2018, in the common stock of Chegg, Inc., the S&P 500 and the NASDAQ Composite and data for the S&P 500 and the NASDAQ Composite assumes reinvestment of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.

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ITEM 6. ~~SELECTED FINANCIAL DATA~~

The selected financial data set forth below should be read together with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of our results in any future period.

Years Ended December 31,
2020 2019 2018 2017 2016
(in thousands, except per share amounts)
Consolidated Statements of Operations Data:
Net revenues $ 644,338 $ 410,926 $ 321,084 $ 255,066 $ 254,090
Gross profit 438,921 318,744 241,088 174,891 134,489
Net loss (6,221) (9,605) (14,888) (20,283) (42,245)
Net loss per share, basic and diluted $ (0.05) $ (0.08) $ (0.13) $ (0.20) $ (0.47)
Weighted average shares used to compute net loss per share, basic and diluted 125,367 119,204 113,251 100,022 90,534

As of December 31,
2020 2019 2018 2017 2016
(in thousands)
Consolidated Balance Sheets Data:
Total assets $ 2,251,258 $ 1,488,998 $ 760,938 $ 446,930 $ 290,652
Deferred revenue 32,620 18,780 17,418 13,440 14,836
Convertible senior notes, net 1,506,922 900,303 283,668 — —
Common stock and additional paid-in capital 1,030,706 916,217 818,229 782,955 593,443
Total stockholders’ equity 609,635 498,829 410,634 391,062 221,939
[RESERVED]

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ITEM 7. 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 audited consolidated financial statements and the related notes included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Aside from net revenues during the year ended December 31, 2019 compared to the same period in 2018 as discussed in the Results of Operations section of Part I, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, weWe have omitted discussion of the earliest of the three years of financial condition and results of operations and this information can be found in Part I, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019,~~2022, filed with the SEC on February ~~20, 2020,~~21, 2023, which is available free of charge on the SEC's website at sec.gov and on our website at investor.chegg.com. 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 Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.”

Overview

~~Chegg: A Smarter Way~~Millions of people all around the world learn with Chegg. No matter the goal, level, or style, Chegg helps learners learn with confidence. We provide 24/7 on-demand support, and our personalized learning assistant leverages the power of artificial intelligence (“AI”), more than a hundred million pieces of proprietary content, as well as a decade of learning insights. Our platform also helps learners build essential life and job skills to ~~Student~~®~~. We strive~~accelerate their path from learning to ~~improve educational outcomes by putting the student first. We support students on their journey from high school~~earning, and we work with companies to college and into their careers with tools designed to help them learn their course materials, succeed in their classes, save money on required materials, and learn the most in-demand skills. Our services are available online, anytime and anywhere.

Students subscribe to our subscription services, which we collectively refer to as Chegg Services. Our primary Chegg Services include Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Thinkful, and Mathway. Our Chegg Study subscription service provides “Expert Questions and Answers” and step-by-step “Textbook Solutions,” helping students with their course work. When students need writing help, including plagiarism detection scans and creating citationsoffer learning programs for their papers, they can use our Chegg Writing service. Our Chegg Math Solver subscription service helps students understand math by providing a step-by-step math solver and calculator and we expect to incorporate Mathway into Chegg Math Solver. We also offer our Chegg Study Pack as a premium subscription bundle of our Chegg Study, Chegg Writing, and Chegg Math Solver services. Our Thinkful skills-based learning platform offers professional courses focused on the most in-demand technology skills.

Required Materials includes our print textbook and eTextbook offerings, which help students save money compared to the cost of buying new. We offer an extensive print textbook library primarily for rent and also for sale both on our own and through our print textbook partners. We partner with a variety of third parties to source print textbooks and eTextbooks directly or indirectly from publishers in the United States, including Cengage Learning, Pearson, McGraw Hill, Sage Publications, and John Wiley & Sons, Inc.

In June 2020, we completed our acquisition of Mathway, an online, on-demand math problem solving company that covers a vast range of subject areas in mathematics, including pre-algebra, algebra, trigonometry, pre-calculus, calculus, and linear algebra and related disciplines.

During the years ended December 31, 2020, and 2019, we generated net revenues of $644.3 million and $410.9 million, respectively, and in the same periods had net losses of $6.2 million and $9.6 million, respectively. During the year ended December 31, 2020, the COVID-19 pandemic had a positive impact to our business and results of operations as we saw an increase in the acceleration of subscriber growth and engagement with our learning platform. However, the COVID-19 pandemic also subjects our business to numerous risks and uncertainties, most of which are beyond our control and cannot be predicted, including when colleges will resume in-person classes or how well they will overcome the impacts of the COVID-19 pandemic.employees.

Our long-term strategy is centered upon our ability to utilize ~~Chegg~~Subscription Services to increase student engagement with our learning platform. We ~~plan to~~ continue to invest in the expansion of our ~~Chegg Services~~offerings and technology platform to provide a more compelling and personalized solution and deepen engagement with students. ~~In addition,~~As AI technologies continue to advance, we are taking advantage of the increased opportunities by leveraging new tools to better serve our students. We realigned our investments and resources around AI early in 2023, and have redesigned our user experience, developed our own large language models, launched automated answering and built proprietary algorithms to optimize the quality and accuracy of our content to build our personalized learning assistant. We remain focused on rolling out the next phase of our personalized learning assistant, including integrating pathways for students with assessments and other tools. We believe ~~that~~ the investments we have made ~~to achieve our current scale~~ will allow us to ~~drive increased~~maintain strong operating margins ~~over time that, together with increased contributions of Chegg Services, will~~and cash flows and enable us to ~~become profitable and remain cash-flow positive in the long-term.~~return to revenue growth over time. Our ability to achieve these long-term objectives is subject to numerous risks and uncertainties, ~~including our ability to attract, retain, and increasingly engage the student population, intense competition in our markets, the ability to achieve sufficient contributions to~~

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~~revenue from Chegg Services, uncertainty around online learning and potential restrictions imposed by traditional institutions, and other factors. These risks and uncertainties~~which are described in greater detail in Part I, Item 1A, “Risk Factors.”

During the years ended December 31, 2023, and 2022, we generated net revenues of $716.3 million and $766.9 million, respectively, and in the same periods had net income of $18.2 million and $266.6 million, respectively.

We have presented revenues for our two product lines, ~~Chegg~~Subscription Services and ~~Required Materials,~~Skills and Other, based on how students view us and the utilization of our products by them. More detail on our two product lines is discussed in the next two sections titled ~~“Chegg~~“Subscription Services” and ~~“Required Materials.~~“Skills and Other.”

~~Chegg~~Subscription Services

Our Subscription Services can be accessed internationally through our websites and on mobile devices and include Chegg ~~Services product line for students primarily includes~~Study Pack, Chegg Study, Chegg Writing, Chegg Math, ~~Solver, Chegg Study Pack, Thinkful,~~ and ~~Mathway.~~Busuu. Students typically pay to access ~~Chegg~~Subscription Services on a monthly basis. Our Chegg Study subscription service provides access to personalized, step-by-step learning support powered by AI, computational engines, andsubject matter experts. When students need writing help, including plagiarism detection scans and creating citations for their papers, they can use our Chegg Writing subscription service. Our Chegg Math subscription service, including Mathway, helps students understand math by providing a step-by-step math solver and calculator. We also ~~work~~offer our Chegg Study Pack as a premium subscription bundle of our Chegg Study, Chegg Writing, and Chegg Math services. Subscribers to Busuu have access to a premium learning language platform that offers comprehensive support through self-paced lessons, live classes with ~~leading brands~~expert tutors and a huge community of members to ~~provide students with discounts, promotions, and other products that, based on student feedback, delight them.~~practice alongside.

~~In the aggregate, Chegg~~Subscription Services revenues were ~~81%~~89% and 88% of net revenues during ~~each of~~ the years ended December 31, ~~2020~~2023 and ~~2019.~~2022, respectively.

~~Required Materials~~

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Skills and Other

Our ~~Required Materials~~Skills and Other product line includes revenues from Skills, advertising services, print textbooks and eTextbooks. ~~Revenues from~~Our skills-based learning platform offers learning experiences focused on the latest technology skills. We work with leading brands and programmatic partners to deliver advertising across our platforms. We also provide a platform for students to rent or buy print textbooks that we own are recognized as the total transaction amount ratably over the rental term, generally a two- to five-month period. Revenues from print textbooks owned by a partner are recognized as a revenue share on the total transactional amount of a rental or sale transaction immediately when a print textbook ships to a student. Additionally, Required Materials includes revenues fromand eTextbooks, which ~~are recognized ratably over~~helps students save money compared to the ~~contractual period, generally a two-to five-month period.~~cost of buying new.

~~In the aggregate, Required Materials~~Skills and Other revenues were ~~19%~~11% and 12% of net revenues during ~~each of~~ the years ended December 31, ~~2020~~2023 and ~~2019.~~2022, respectively.

Seasonality of Our Business

Revenues from ~~Chegg~~Subscription Services ~~print textbooks that we own, and eTextbooks~~ are primarily recognized ratably over the subscription term, ~~a student subscribes to our Chegg Services, rents a print textbook or has access to an eTextbook. This~~which has generally resulted in our highest revenues and profitability in the fourth quarter as it reflects more days of the academic year. ~~Our~~Certain variable expenses, ~~related to cost of revenues and~~such as marketing ~~activities~~expenses, remain highest in the first and third quarters such that our profitability may not provide meaningful insight on a sequential basis.

As a result of these factors, the most concentrated periods for our revenues and expenses do not necessarily coincide, and comparisons of our historical quarterly results of operations on a sequential basis may not provide meaningful insight into our overall financial performance.

Components of Results of Operations

Net Revenues

We recognize revenues ~~from our Chegg Services and Required Materials product lines,~~ net of allowances for refunds or charge backs from our payment processors who process payments from credit cards, debit cards, and PayPal.

Revenues from ~~our~~ Chegg ~~Services product line primarily includes~~Study Pack, Chegg Study, Chegg Writing, Chegg Math, ~~Solver, Chegg Study Pack, Thinkful,~~ and ~~Mathway. Revenues from Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, and Mathway~~Busuu are primarily recognized ratably over the ~~respective weekly or~~ monthly subscription period. Revenues from ~~Thinkful~~Chegg Skills are recognized ~~either ratably~~ over the ~~term~~delivery period, adjusted for an estimate of ~~the course, generally six months, or upon completion of the lessons, depending on the instruction type of the course.~~non-redemption. Revenues from ~~our~~advertising services are recognized upon fulfillment. Required Materials product line includes revenues from print textbooks that we own or that are owned by a partner as well as revenues from eTextbooks. Beginning in 2020, our Required Materials product line includes operating leases with students for the rental of print textbooks that we own. Operating lease income is recognized as the total transaction amount, paid upon commencement of the lease, ratably over the lease term or rental term, generally a two- to five-month period. Additionally, we provide students the ability to purchase print textbooks and recognize revenues immediately upon shipment. Revenues from print textbooks ~~owned by a partner are recognized as a revenue share on the total transaction amount of a rental or sale transaction immediately when a print textbook ships to a~~

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~~student. Shipping~~ and ~~handling activities are expensed as incurred. Revenues from~~ eTextbooks are recognized ~~ratably over the contractual period, generally a two- to five-month period.~~

immediately.

When deciding the most appropriate basis for presenting revenues or costs of revenues, both the legal form and substance of the agreement between us and our business partners are reviewed to determine each party’s respective role in the transaction. Where our role in a transaction is that of principal, revenues are recognized on a gross basis. This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as a cost of revenues. Where our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned. We have concluded that we control our Chegg Services, print textbooks that we own for rental, purchase at the end of the rental term, or sale on a just-in-time basis, and eTextbook service and therefore we recognize revenues and cost of revenues on a gross basis. In relation to print textbook rental and sale agreements with our partners, we recognize revenues on a net basis based on our role in the transaction as an agent.

Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Cost of revenues primarily consists of content amortization expense related to content that we develop, license from publishers, ~~for which we pay one-time license fees,~~ or acquire through acquisitions, web hosting fees, customer support fees, payment processing costs, ~~order fulfillment fees primarily related to outbound shipping~~amortization of acquired intangible assets, employee-related expenses, which includes salaries, benefits and fulfillment as well as publisher content fees for eTextbooks, write-downs for print textbooks, the gain or loss on print textbooks liquidated, the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis, print textbook depreciationshare-based compensation expense, ~~personnel costs~~ and other direct costs related to providing content or services. In addition, cost of revenues includes allocated information technology and facilities costs.

Operating Expenses

We classify our operating expenses into three categories: research and development, sales and marketing, and general and administrative. One of the most significant components of our operating expenses is employee-related ~~costs,~~expenses, which include salaries, benefits, and share-based compensation ~~expenses.~~expense. We expect to continue to hire new employees in order to support our ~~current and anticipated growth.~~business. In any particular period, the timing of additional hires could materially affect our operating expenses, both in absolute dollars and as a percentage of revenues. Our operating expenses also contain information technology expenses such as technology costs to support our research and development, sales and marketing expenses, depreciation expenses, amortization of acquired intangible assets, ~~except content libraries,~~ and outside services. We allocate certain costs to each expense category, primarily based on the headcount in each group at the end of a period. As our business grows, our operating expenses may increase over time to expand capacity and sustain our workforce.

Research and Development

Our research and development expenses consist of employee-related expenses, which includes salaries, benefits, and share-based compensation expense for employees on our product, engineering, and technical teams who are responsible for maintaining our website, developing new products, and improving existing products. Research and development costs also include ~~depreciation expense,~~ technology costs to support our research and development, and outside ~~services, and allocated information technology and facilities expenses.~~services. We expense substantially all of our research and development expenses as they are incurred. ~~In the past three years, our~~Our research and development expenses ~~have increased~~continue to support new products and services as well as to expand our infrastructure capabilities to support back-end processes associated with our

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revenue transactions and internal systems. We intend to continue making significant investments in developing new products and services and enhancing the functionality of existing products and services.

Sales and Marketing

Our sales and marketing expenses consist of user and advertiser-facing marketing and promotional expenditures through a number of targeted online marketing channels, sponsored search, display advertising, ~~email marketing~~social media campaigns, and other initiatives. We incur employee-related expenses, which includes salaries, benefits and share-based compensation expenses for our employees engaged in marketing, business development and sales and sales support functions, and amortization of acquired intangible ~~assets, and allocated information technology, and facilities costs.~~assets. Our marketing expenses are largely variable and to the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these ~~channels~~channels' shifts, we could see a corresponding change in our sales and marketing expenses.

T a b l e o f C o n t e n t s

General and Administrative

Our general and administrative expenses consist of employee-related expenses, which includes salaries, benefits and share-based compensation expense for certain executives as well as our finance, legal, human resources and other administrative employees. In addition, general and administrative expenses include outside services, legal and accounting services, and depreciation ~~expense, and allocated information technology and facilities costs.~~expense.

Interest Expense, Net and Other Income (Expense), Net

Interest expense, net consists primarily of interest expense on the amortization of debt ~~discount and~~ issuance costs related to the convertible senior notes. Other income (expense), net consists primarily of interest income, ~~on our cash and cash equivalents and investment balances and losses~~gains on early extinguishment of the convertible senior ~~notes.~~notes, realized gains/losses on the sale of our investments, and foreign currency gain on purchase consideration.

(Provision ~~for~~For) Benefit From Income Taxes

(Provision ~~for~~for) benefit from income taxes consists primarily of federal and state income taxes in the United States and income taxes in foreign jurisdictions in which we conduct business. Due to the uncertainty as to the realization of the benefits of our domestic deferred tax assets, we have recorded a full valuation allowance against such assets. We intend to continue to maintain a full valuation allowance on our domestic deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances.States.

Table of Contents

Results of Operations

The following table ~~summarizes~~presents our historical consolidated statements of operations (in thousands, except percentage of total net revenues):




		Years Ended December 31,								Years Ended December 31,
			2020	2019

Net revenues	Net revenues			$	644,338	100	%	$	410,926		100	%

Net revenues

Net revenues

Cost of revenues(1)

Cost of revenues(1)

Cost of revenues(1)	Cost of revenues(1)			205,417		32		92,182			22
Gross profit	Gross profit			438,921		68		318,744			78
Gross profit
Gross profit
Operating expenses:
Operating expenses:
Operating expenses:	Operating expenses:
Research and development(1)	Research and development(1)			170,905		26		139,772			34
Research and development(1)
Research and development(1)
Sales and marketing(1)
Sales and marketing(1)
Sales and marketing(1)	Sales and marketing(1)			81,914		13		63,569			15
General and administrative(1)	General and administrative(1)			129,349		20		97,489			24
Restructuring charges				—		—		97			—
General and administrative(1)
General and administrative(1)

Total operating expenses	Total operating expenses			382,168		59		300,927			73
Income from operations				56,753		9		17,817			5
Total interest expense, net and other income, net				(57,614)		(9)		(24,788)			(6)
Loss before provision for income taxes				(861)		—		(6,971)			(1)
Provision for income taxes				5,360		(1)		2,634			(1)
Net loss				$	(6,221)	(1)	%	$	(9,605)		(2)	%

Total operating expenses

Total operating expenses
(Loss) income from operations
(Loss) income from operations
(Loss) income from operations
Total interest expense, net and other income (expense), net
Total interest expense, net and other income (expense), net
Total interest expense, net and other income (expense), net
Income before (provision for) benefit from income taxes
Income before (provision for) benefit from income taxes
Income before (provision for) benefit from income taxes
(Provision for) benefit from income taxes
(Provision for) benefit from income taxes
(Provision for) benefit from income taxes
Net income
Net income
Net income

(1) Includes share-based compensation expense as follows:

(1) Includes share-based compensation expense as follows:

(1) Includes share-based compensation expense as follows:	(1) Includes share-based compensation expense as follows:
Cost of revenues	Cost of revenues			$	950			$	426
Cost of revenues
Cost of revenues
Research and development
Research and development
Research and development	Research and development			31,588				22,229
Sales and marketing	Sales and marketing			9,606				7,380
Sales and marketing
Sales and marketing
General and administrative
General and administrative
General and administrative	General and administrative			41,911				34,874
Total share-based compensation expense	Total share-based compensation expense			$	84,055			$	64,909
Total share-based compensation expense
Total share-based compensation expense

3642

T a b l e o f C o n t e n t sTable of Contents

Years Ended December 31, ~~2020, 2019,~~2023 and ~~2018~~2022

Net Revenues

~~Net revenues during the year ended December 31, 2020 increased $233.4 million, or 57%, compared to the same period in 2019.~~

~~Net revenues during the year ended December 31, 2019, increased $89.8 million, or 28%, compared to the same period in 2018.~~

The following table ~~sets forth~~presents our total net revenues for the periods shown for our ~~Chegg~~Subscription Services and ~~Required Materials~~Skills and Other product lines (in thousands, except percentages):

Years Ended December 31, Change in 2020 Change in 2019
2020 2019 2018 $ % $ %
Chegg Services $ 521,228 $ 332,221 $ 253,985 $ 189,007 57 % $ 78,236 31 %
Required Materials 123,110 78,705 67,099 44,405 56 11,606 17
Total net revenues $ 644,338 $ 410,926 $ 321,084 $ 233,412 57 $ 89,842 28


	Years Ended December 31,				Change in 2023
	2023		2022			$		%
Subscription Services	$	640,520	$	671,968		$	(31,448)	(5)	%
Skills and Other	75,775		94,929			(19,154)		(20)
Total net revenues	$	716,295	$	766,897		$	(50,602)	(7)

~~Chegg~~Subscription Services revenues ~~increased~~decreased by ~~$189.0~~$31.4 million, or ~~57%~~5%, during the year ended December 31, ~~2020,~~2023, compared to the same period in ~~2019,~~2022. The decrease was primarily due to a ~~67% increase~~6% decrease in ~~subscriber growth driven by increased global penetration,~~subscribers who have paid to access our efforts to reduce account sharing, the widespread transition to remote learning as a result of the COVID-19 pandemic, and subscribers from our recent acquisitions. We currently expect to continue to see growth in Chegg Services revenues in the near term as a result of the aforementioned drivers in subscriber growth, most significantly from the contribution of international subscribers, however, we expect such drivers to become less pronounced. Cheggservices. Subscription Services revenues represented ~~81% of net revenues during each of the years ended December 31, 2020~~89% and 2019. Required Materials revenues increased by $44.4 million, or 56%, during the year ended December 31, 2020 compared to the same period in 2019, primarily due to revenues from print textbooks that we own which are recognized as the total transaction amount ratably over the lease term as opposed to a revenue share on the total transaction amount of a rental or sale transaction immediately when a print textbook ships to a student. Required Materials revenues represented 19% of net revenues during each of the years ended December 31, 2020 and 2019. We currently expect the contribution of Required Materials revenues as a percentage of net revenues to decline in the near term as Chegg Services revenues continue to grow.

Chegg Services revenues increased by $78.2 million, or 31%, during the year ended December 31, 2019, compared to the same period in 2018 primarily due to a 29% increase in subscriber growth as more students turned to our services and we expanded the subject matter content that drives our offerings. Chegg Services revenues represented 81% and 79%88% of net revenues during the years ended December 31, ~~2019~~2023 and ~~2018,~~2022, respectively. ~~Required Materials~~Skills and Other revenues ~~increased~~decreased by ~~$11.6~~$19.2 million, or ~~17%~~20%, during the year ended December 31, ~~2019~~2023 compared to the same period in ~~2018,~~2022. The decrease was primarily due to ~~better performance~~lower revenues of $26.5 million from print textbooks and eTextbooks as a result of recognizing revenue on a net basis from our ~~Required Materials print textbook partners as well as recognition~~partnership with GT Marketplace, LLC that began in April 2022, offset by growth in our Chegg Skills offering of ~~deferred variable consideration. Required Materials~~$13.0 million. Skills and Other revenues represented ~~19%~~11% and ~~21%~~12% of net revenues during the years ended December 31, ~~2019~~2023 and ~~2018,~~2022, respectively.

~~Years Ended December 31, 2020 and 2019~~

Cost of Revenues

The following table ~~sets forth~~presents our cost of revenues for the periods shown (in thousands, except percentages):






		Years Ended December 31,				Change in 2020
		2020		2019			$		%
Cost of revenues(1)	Cost of revenues(1)	$	205,417	$	92,182		$	113,235	123	%
Cost of revenues(1)
Cost of revenues(1)

(1) Includes share-based compensation expense of:	(1) Includes share-based compensation expense of:	$	950	$	426		$	524	123	%

(1) Includes share-based compensation expense of:

(1) Includes share-based compensation expense of:


Delaware						20-3237489
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	CHGG	The New York Stock Exchange


Large Accelerated Filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


	Years Ended December 31,				Change in 2023
	2023		2022			$		%
Research and development(1)	$	191,705	$	196,637		$	(4,932)	(3)	%
Sales and marketing(1)	126,591		147,660			(21,069)		(14)
General and administrative(1)	239,783		216,247			23,536		11


Total operating expenses	$	558,079	$	560,544		$	(2,465)	0

(1) Includes share-based compensation expense of:
Research and development	$	44,103	$	41,335		$	2,768	7	%
Sales and marketing	9,524		13,857			(4,333)		(31)
General and administrative	77,619		75,780			1,839		2
Share-based compensation expense	$	131,246	$	130,972		$	274	0


	Years Ended December 31,				Change in 2020
	2020		2019			$		%
Interest expense, net	$	(66,297)	$	(44,851)		$	(21,446)	48	%
Other income, net	8,683		20,063			(11,380)		(57)
Total interest expense, net and other income, net	$	(57,614)	$	(24,788)		$	(32,826)	132


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	As of December 31,
	2020		2019		2018		2017		2016
	(in thousands)
Consolidated Balance Sheets Data:
Total assets	$	2,251,258	$	1,488,998	$	760,938	$	446,930	$	290,652
Deferred revenue	32,620		18,780		17,418		13,440		14,836
Convertible senior notes, net	1,506,922		900,303		283,668		—		—
Common stock and additional paid-in capital	1,030,706		916,217		818,229		782,955		593,443
Total stockholders’ equity	609,635		498,829		410,634		391,062		221,939


	Years Ended December 31,						Change in 2020				Change in 2019
	2020		2019		2018		$		%		$		%
Chegg Services	$	521,228	$	332,221	$	253,985	$	189,007	57	%	$	78,236	31	%
Required Materials	123,110		78,705		67,099		44,405		56		11,606		17
Total net revenues	$	644,338	$	410,926	$	321,084	$	233,412	57		$	89,842	28


		Less than								More than
		Total		1 Year		1-3 Years		3-5 Years		5 Years
	Total											Total	Next 12 Months	Beyond 12 Months
Convertible senior notes (1)	Convertible senior notes (1)	$	1,920,798	$	1,289	$	118,009	$	801,500	$	1,000,000
Purchase obligations (2)	Purchase obligations (2)	48,949		28,903		16,669		3,377		—
Operating lease obligations (3)	Operating lease obligations (3)	28,896		7,702		13,194		4,382		3,618
Total contractual obligations	Total contractual obligations	$	1,998,643	$	37,894	$	147,872	$	809,259	$	1,003,618


			Page

~~Reports~~Report of Independent Registered Public Accounting Firm(PCAOB ID No. 34)			4652

Consolidated Balance Sheets			4956
Consolidated Statements of Operations			5057
Consolidated Statements of Comprehensive ~~Loss~~Income (Loss)			5158
Consolidated Statements of Stockholders’ Equity			5259
Consolidated Statements of Cash Flows			5360
Notes to Consolidated Financial Statements			5461


	December 31,								December 31,
		December 31, 2020		December 31, 2019			2023	2022
Assets	Assets
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents	Cash and cash equivalents	$	479,853	$	387,520
Short-term investments	Short-term investments	665,567		381,074
Accounts receivable, net of allowance of $153 and $56 at December 31, 2020 and December 31, 2019, respectively		12,913		11,529
Accounts receivable, net of allowance of $376 and $394 at December 31, 2023 and December 31, 2022, respectively
Prepaid expenses	Prepaid expenses	12,776		10,538
Other current assets	Other current assets	11,846		16,606
Total current assets	Total current assets	1,182,955		807,267
Long-term investments	Long-term investments	523,628		310,483
Textbook library, net		34,149		0

Property and equipment, net
Property and equipment, net
Property and equipment, net	Property and equipment, net	125,807		87,359
Goodwill	Goodwill	285,214		214,513
Intangible assets, net	Intangible assets, net	51,249		34,667
Right of use assets	Right of use assets	24,226		15,931
Deferred tax assets
Other assets	Other assets	24,030		18,778
Total assets	Total assets	$	2,251,258	$	1,488,998
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity					Liabilities and stockholders’ equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	8,547	$	7,362
Deferred revenue	Deferred revenue	32,620		18,780
Current operating lease liabilities		6,603		5,283
Accrued liabilities	Accrued liabilities	61,962		39,964
Current portion of convertible senior notes, net
Total current liabilities	Total current liabilities	109,732		71,389
Long-term liabilities	Long-term liabilities					Long-term liabilities
Convertible senior notes, net	Convertible senior notes, net	1,506,922		900,303
Long-term operating lease liabilities	Long-term operating lease liabilities	19,264		14,513
Other long-term liabilities	Other long-term liabilities	5,705		3,964
Total long-term liabilities	Total long-term liabilities	1,531,891		918,780
Total liabilities	Total liabilities	1,641,623		990,169
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $0.001 par value – 10,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2020 and December 31, 2019		0		0
Common stock, $0.001 par value – 400,000,000 shares authorized; 129,343,524 and 121,583,501 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively		129		122
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2023 and December 31, 2022
Common stock, $0.001 par value – 400,000,000 shares authorized; 102,823,700 and 126,473,827 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively
Additional paid-in capital	Additional paid-in capital	1,030,577		916,095
Accumulated other comprehensive income (loss)		1,530		(1,096)
Accumulated other comprehensive loss
Accumulated deficit	Accumulated deficit	(422,601)		(416,292)
Total stockholders’ equity	Total stockholders’ equity	609,635		498,829
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	2,251,258	$	1,488,998


		Common Stock
		Common Stock
		Common Stock
			Shares
			Shares
			Shares											Par Value	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total Stockholders’ Equity

		Common Stock
			Shares	Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity

Balances at December 31, 2017			109,668	$	110	$	782,845	$	(282)	$	(391,611)	$	391,062
Cumulative-effect adjustment to accumulated deficit related to adoption of ASUs			—	—		—		—		(77)		(77)
Equity component of 2023 convertible senior notes, net of issuance costs			—	—		62,444		—		—		62,444
Purchase of 2023 convertible senior notes capped call			—	—		(39,227)		—		—		(39,227)
Repurchase of common stock			(983)	(1)		(19,999)		—		—		(20,000)

Balances at December 31, 2020

Balances at December 31, 2020

Balances at December 31, 2020
Cumulative-effect adjustment related to adoption of ASU 2020-06
Issuance of common stock in connection with equity offering, net of offering costs
Equity component on conversions of 2023 notes and 2025 notes
Issuance of common stock upon conversion of 2023 notes
Net proceeds from capped call related to conversions and extinguishments of 2023 notes and 2025 notes
Issuance of common stock upon exercise of stock options and ESPP	Issuance of common stock upon exercise of stock options and ESPP		3,459	4		29,109		—		—		29,113
Net share settlement of equity awards	Net share settlement of equity awards		3,322	3		(49,089)		—		—		(49,086)
Warrant exercises			34	—		0		—		—		0
Repurchase of common stock

Share-based compensation expense
Share-based compensation expense
Share-based compensation expense	Share-based compensation expense		—	—		52,030		—		—		52,030
Other comprehensive loss	Other comprehensive loss		—	—		—		(737)		—		(737)
Net loss	Net loss		—	—		—		—		(14,888)		(14,888)
Balances at December 31, 2018			115,500	116		818,113		(1,019)		(406,576)		410,634
Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02			—	—		—		—		(111)		(111)
Equity component of 2025 convertible senior notes, net of issuance costs			—	—		206,747		—		—		206,747
Purchase of 2025 convertible senior notes capped call			—	—		(97,200)		—		—		(97,200)
Repurchase of common stock			(504)	(1)		(19,999)		—		—		(20,000)
Balances at December 31, 2021
Repurchases of common stock
Issuance of common stock upon exercise of stock options and ESPP	Issuance of common stock upon exercise of stock options and ESPP		3,276	4		35,093		—		—		35,097
Net share settlement of equity awards	Net share settlement of equity awards		3,248	3		(94,571)		—		—		(94,568)
Issuance of common stock in connection with prior acquisition			64	—		3,003		—		—		3,003
Share-based compensation expense	Share-based compensation expense		—	—		64,909		—		—		64,909
Other comprehensive loss	Other comprehensive loss		—	—		—		(77)		—		(77)
Net loss			—	—		—		—		(9,605)		(9,605)
Balances at December 31, 2019			121,584	122		916,095		(1,096)		(416,292)		498,829
Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-13			—	—		—		—		(88)		(88)
Equity component of 2026 convertible senior notes, net of issuance costs			—	—		237,462		—		—		237,462
Purchase of 2026 convertible senior notes capped call			—	—		(103,400)		—		—		(103,400)
Equity component related to conversions of 2023 convertible senior notes			—	—		(442,667)		—		—		(442,667)
Issuance of common stock upon conversion of 2023 convertible senior notes			4,182	4		327,137		—		—		327,141
Proceeds from capped call related to conversions of 2023 convertible senior notes			—	—		77,095		—		—		77,095
Net income
Balances at December 31, 2022
Repurchases of common stock
Issuance of common stock upon exercise of stock options and ESPP	Issuance of common stock upon exercise of stock options and ESPP		1,154	1		15,480		—		—		15,481
Net share settlement of equity awards	Net share settlement of equity awards		2,424	2		(80,680)		—		—		(80,678)

Share-based compensation expense	Share-based compensation expense		—	—		84,055		—		—		84,055
Net proceeds from capped call related to extinguishments of 2025 notes
Other comprehensive income	Other comprehensive income		—	—		—		2,626		—		2,626
Net loss			—	—		—		—		(6,221)		(6,221)
Balances at December 31, 2020			129,344	$	129	$	1,030,577	$	1,530	$	(422,601)	$	609,635
Net income
Balances at December 31, 2023


Classification						Useful Life
Content						Shorter of the licensed content term or ~~the estimated useful life of~~ 5 years
~~Leasehold improvements~~						~~Shorter of the remaining lease term or the estimated useful life of 5 years~~

Internal-use software and website development						3 years
Leasehold improvements						Shorter of the remaining lease term or 5 years
Furniture and fixtures						5 years
Computers and equipment						3 years


	Years Ended December 31,						Change in 2023				Change in 2022
	2023		2022		2021		$		%		$		%
Subscription Services	$	640,520	$	671,968	$	616,817	$	(31,448)	(5)	%	$	55,151	9	%
Skills and Other	75,775		94,929		159,448		(19,154)		(20)		(64,519)		(40)
Total net revenues	$	716,295	$	766,897	$	776,265	$	(50,602)	(7)		$	(9,368)	(1)


		December 31,				Change					December 31,						Change
		2020		2019		$		%			2023			2022				$			%
Accounts receivable, net	Accounts receivable, net	$	12,913	$	11,529	$	1,384	12	%	Accounts receivable, net	$	31,404	$	$	23,515	$		$	7,889	34		34	%
Contract assets
Deferred revenue	Deferred revenue	32,620		18,780		13,840		74
Contract assets		13,243		3,531		9,712		275


	December 31, 2020
	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash	$	15,054	$	0	$	0	$	15,054

Money market funds	464,799		0		0		464,799
Total cash and cash equivalents	$	479,853	$	0	$	0	$	479,853
Short-term investments:
Commercial paper	$	204,152	$	24	$	(6)	$	204,170
Corporate debt securities	459,967		1,478		(48)		461,397
Total short-term investments	$	664,119	$	1,502	$	(54)	$	665,567
Long-term investments
Corporate debt securities	$	484,275	$	605	$	(283)	$	484,597
Agency bonds	38,995		36		0		39,031
Total long-term investments	$	523,270	$	641	$	(283)	$	523,628


	December 31, 2023
	Fair Value Level	Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value
Cash and cash equivalents:
Cash		$	45,050	$	—	$	—	$	45,050
Money market funds	Level 1	90,707		—		—		90,707
Total cash and cash equivalents		$	135,757	$	—	$	—	$	135,757
Short-term investments:

Corporate debt securities	Level 2	$	69,548	$	—	$	(170)	$	69,378
U.S. treasury securities	Level 1	25,734		—		(114)		25,620
Agency bonds	Level 2	99,505		—		(246)		99,259
Total short-term investments		$	194,787	$	—	$	(530)	$	194,257
Long-term investments:
Corporate debt securities	Level 2	$	191,467	$	898	$	(213)	$	192,152

U.S. treasury securities	Level 1	57,287		165		(57)		57,395
Total long-term investments		$	248,754	$	1,063	$	(270)	$	249,547


		December 31, 2019									December 31, 2022
		Adjusted Cost		Unrealized Gain		Unrealized Loss		Fair Value			Fair Value Level	Adjusted Cost	Unrealized Gain	Unrealized Loss	Fair Value
Cash and cash equivalents:	Cash and cash equivalents:									Cash and cash equivalents:
Cash	Cash	$	241,355	$	0	$	0	$	241,355
Money market funds	Money market funds	146,165		0		0		146,165

Total cash and cash equivalents	Total cash and cash equivalents	$	387,520	$	0	$	0	$	387,520

Total cash and cash equivalents

Total cash and cash equivalents
Short-term investments:	Short-term investments:									Short-term investments:
Commercial paper	Commercial paper	$	7,489	$	0	$	0	$	7,489
Corporate debt securities	Corporate debt securities	318,946		425		(78)		319,293
U.S. treasury securities	U.S. treasury securities	44,251		39		(4)		44,286
Agency bonds		10,000		6		0		10,006

Total short-term investments	Total short-term investments	$	380,686	$	470	$	(82)	$	381,074
Long-term investments
Corporate securities		$	295,103	$	533	$	(158)	$	295,478
Total short-term investments
Total short-term investments
Long-term investments:
Corporate debt securities
Corporate debt securities
Corporate debt securities
U.S. treasury securities
Agency bonds	Agency bonds	14,999		6		0		15,005
Total long-term investments	Total long-term investments	$	310,102	$	539	$	(158)	$	310,483


	December 31, 2020				December 31, 2019
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
2026 notes	$	761,930	$	1,129,370	$	0	$	0
2025 notes	640,614		1,456,800		602,611		831,000
2023 notes	104,378		376,949		297,692		523,538
Convertible senior notes, net	$	1,506,922	$	2,963,119	$	900,303	$	1,354,538



	~~December 31, 2020~~
~~Textbook library~~	$	~~47,293~~
~~Less accumulated depreciation~~	~~(13,144)~~
~~Textbook library, net~~	$	~~34,149~~


	Classification		~~Mathway~~Year Ended December 31, 2023
Accelerated depreciation of content and software	~~Cash~~Cost of revenues		$	~~712~~34,195
Impairment of in-progress software	~~Accounts receivable~~Cost of revenues		~~1,132~~2,616
Other ~~acquired assets~~costs	Cost of revenues		~~779~~1,431
Total cost of revenues			~~Acquired intangible assets~~38,242
Impairment of indefinite-lived trade name	~~30,320~~ General and administrative		3,600

Total ~~identifiable~~content and related assets ~~acquired~~charge	~~32,943~~
~~Deferred revenue~~	~~(1,423)~~
~~Liabilities assumed~~	~~(727)~~
~~Net identifiable assets acquired~~	~~30,793~~
~~Goodwill~~	~~70,167~~
~~Total fair value of purchase consideration~~	$	~~100,960~~41,842


	Mathway
	Amount		Weighted-Average Amortization Period (in months)
Trade name	$	520	18
Domain names	220		18
Customer lists	6,220		48
Developed technology	23,360		84
Total acquired intangible assets	$	30,320	75


	~~Thinkful~~
~~Cash~~	$	51
~~Accounts receivable~~	~~547~~
~~Other acquired assets~~	~~1,710~~







~~Acquired intangible assets~~	~~16,360~~
~~Total identifiable assets acquired~~	~~18,668~~
~~Deferred revenue~~	~~(2,455)~~
~~Liabilities assumed~~	~~(1,906)~~
~~Net identifiable assets acquired~~	~~14,307~~
~~Goodwill~~	~~64,893~~
~~Total fair value of purchase consideration~~	$	~~79,200~~


	Thinkful
	Amount		Weighted-Average Amortization Period (in months)
Trade name	$	4,430	48
Domain names	330		48
Content library	6,940		60
Developed technology	4,660		36
Acquired intangible assets	$	16,360	50


	StudyBlue		WriteLab		Total
Cash	$	152	$	82	$	234
Accounts receivable	288		194		482
Other acquired assets	151		0		151






Acquired intangible assets	7,100		4,450		11,550
Total identifiable assets acquired	7,691		4,726		12,417
Liabilities assumed	(1,309)		(897)		(2,206)
Net identifiable assets acquired	6,382		3,829		10,211
Goodwill	13,996		10,677		24,673
Total fair value of purchase consideration	$	20,378	$	14,506	$	34,884



2021	$	13,320
2022	10,889
2023	8,760
2024	5,707
2025	3,893
Thereafter	5,080
Total	$	47,649


	December 31, 2023
2024	$	13,637
2025	11,532
2026	11,185
2027	9,029
2028	6,954
Thereafter	93
Total	$	52,430


	2026 Notes		2025 Notes
Principal amount	$	1,000,000	$	800,000
Less initial purchasers’ discount	(15,000)		(18,998)
Less other issuance costs	(904)		(822)
Net proceeds	$	984,096	$	780,180


			December 31, ~~2020~~2023

Outstanding stock options			~~627,317~~232,327
Outstanding RSUs and PSUs			~~4,816,000~~10,065,783
Shares available for grant under the ~~2013~~2023 Equity Inducement Plan			~~29,158,085~~1,756,098
Shares available for grant under the 2023 Equity Incentive Plan			11,877,920
Shares available for issuance under the Amended and Restated 2013 ~~ESPP~~Employee Stock Purchase Plan			~~8,688,210~~3,866,559
Total common shares reserved for future issuance			~~43,289,612~~27,798,687


Expected term (years)	3.00
Expected volatility	49.04	%
Expected dividends	—	%
Risk-free interest rate	0.27	%


	RSUs and PSUs Outstanding
	Number of RSUs and PSUs Outstanding	Weighted Average Grant Date Fair Value
Balance at December 31, 2022	9,155,680	$	36.03
Granted	6,283,841	14.58
Released	(3,637,801)	35.32
Forfeited	(1,735,937)	31.79
Balance at December 31, 2023	10,065,783	$	23.63


	Options Outstanding
	Number of Options Outstanding	Weighted- Average Exercise Price per Share		Weighted-Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Balance at December 31, 2019	1,611,385	$	8.64	3.60	$	47,171,160

Exercised	(984,068)	9.13

Balance at December 31, 2020	627,317	$	7.86	3.48	$	51,733,285


	Stock Options Outstanding
	Number of Stock Options Outstanding	Weighted-Average Exercise Price per Share		Weighted-Average Remaining Contractual Term in Years	Aggregate Intrinsic Value
Balance at December 31, 2022	326,258	$	7.02	2.15	$	5,954,714

Exercised	(72,049)
Forfeited	(21,882)
Balance at December 31, 2023	232,327	$	6.02	1.81	$	1,240,014


	RSUs and PSUs Outstanding
	Number of RSUs and PSUs Outstanding	Weighted Average Grant Date Fair Value
Balance at December 31, 2019	6,909,530	$	24.04
Granted	2,593,745	45.37
Released	(4,098,742)	20.22
Canceled	(588,533)	31.84
Balance at December 31, 2020	4,816,000	$	37.82