|
|
|
☒
|
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
|
|
|
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
|
|
•
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x
|
•
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
|
•
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
|
•
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
|
•
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large Accelerated Filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
|
|
•
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
|
•
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
|
•
|
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2019, the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing price of such stock on such date as reported by the New York Stock Exchange on such date, was approximately $4,479,899,092. Shares of Common Stock held by each executive officer and director have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
|
•
|
As of January 31, 2020, the Registrant had 121,890,028 outstanding shares of Common Stock.
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|||
|
|
|
|
|
|
|
|||
|
|
|||
|
|
Regulations related to the Program Participation Agreement of the U.S. Department of Education and other similar laws that regulate the recruitment of students to colleges and other institutions of higher learning.
|
•
|
execute on our evolving business model, including our transition back to the ownership of print textbooks;
|
•
|
transition fulfillment logistics from Ingram to FedEx;
|
•
|
develop new products and services, both independently and with developers or other third parties;
|
•
|
acquire complementary products and services to expand our offerings and enhance our learning platform;
|
•
|
attract and retain students and increase their engagement with our learning platform;
|
•
|
prevent students from stealing accounts, sharing accounts, and cheating with other students;
|
•
|
manage the growth of our business, including increasing or unforeseen expenses;
|
•
|
develop and scale a high-performance technology infrastructure to efficiently handle increased usage by students, especially during peak periods prior to each academic term;
|
•
|
maintain and manage relationships with strategic partners, including distributors, publishers, wholesalers, colleges, and brands;
|
•
|
ensure our platform remains secure and protects the information of students, tutors and other users;
|
•
|
attract and retain brands to our marketing services;
|
•
|
develop and pursue a profitable business model and pricing strategy;
|
•
|
compete with companies that offer similar services or products;
|
•
|
expand into adjacent markets;
|
•
|
enter into a highly regulated skills-based business;
|
•
|
navigate the ongoing evolution and uncertain application of regulatory requirements, such as privacy laws, to our business, including our new products and services;
|
•
|
integrate and realize synergies from businesses that we acquire; and
|
•
|
expand, operate, and compete in international markets.
|
•
|
our ability to attract and retain students and increase their engagement with our learning platform, particularly related to our Chegg Services subscribers;
|
•
|
changes to Internet search engines and application marketplaces that drive traffic to our platform;
|
•
|
the rate of adoption of our offerings;
|
•
|
our ability to successfully utilize the information gathered from our learning platform to enhance our Student Graph and target sales of complementary products and services to our students;
|
•
|
changes in demand and pricing for print textbooks and eTextbooks;
|
•
|
the ability of our logistics partners to manage fulfillment processes, including significant volume increases during peak periods and as a result of the potential growth in volume of transactions over time;
|
•
|
our transition from Ingram to FedEx for print textbook fulfillment;
|
•
|
our ability to integrate the Chegg and Thinkful businesses;
|
•
|
changes by our competitors to their product and service offerings;
|
•
|
price competition and our ability to react appropriately to such competition;
|
•
|
our ability and Ingram's ability to manage Ingram's textbook library and, commencing in 2020, our ability and FedEx's ability to manage our textbook library;
|
•
|
our ability to execute on our strategic partnerships with our logistics partners;
|
•
|
disruptions to our internal computer systems and our fulfillment information technology infrastructure, particularly during peak periods;
|
•
|
the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure;
|
•
|
our ability to successfully manage the integration of operations, technology and personnel resulting from our acquisitions;
|
•
|
government regulations, in particular regarding privacy and advertising and taxation policies; and
|
•
|
general macroeconomic conditions and economic conditions specific to higher education.
|
•
|
our ability to engage high school students with our Chegg Writing, Chegg Tutors, Chegg Math Solver, Chegg Prep (formerly Chegg Flashcards), and College Admissions and Scholarship Services;
|
•
|
our ability to produce compelling supplemental materials and services for students to improve their outcomes throughout their educational journey;
|
•
|
our ability to produce engaging mobile applications and websites for students to engage with our learning platform;
|
•
|
our ability and our fulfillment partner's ability to consistently provide students with a convenient, high quality experience for selecting, receiving, and returning print textbooks;
|
•
|
our ability to accurately forecast and respond to student demand for print textbooks;
|
•
|
the pricing of our physical textbooks and eTextbooks for rental or sale in relation to other alternatives, including the prices offered by publishers or by other competing textbook rental providers;
|
•
|
the quality and prices of our offerings compared to those of our competitors;
|
•
|
the rate of adoption of eTextbooks and our ability to capture a significant share of that market;
|
•
|
changes in student spending levels;
|
•
|
changes in the number of students attending college;
|
•
|
the effectiveness of our sales and marketing efforts, including our success in generating word-of-mouth referrals; and
|
•
|
our ability to introduce new products and services that are favorably received by students.
|
•
|
maintain our reputation as a trusted technology platform and source of content, services, and textbooks for students;
|
•
|
maintain the quality of and improve our existing products, services and, technologies;
|
•
|
introduce products and services that are favorably received;
|
•
|
adapt to changing technologies, including developing and enhancing compelling mobile offerings for our learning platform;
|
•
|
adapt to students’ rapidly changing tastes, preferences, behavior, and brand loyalties;
|
•
|
protect students’, tutors', and educators' data, such as passwords and personally identifiable information;
|
•
|
protect our trademarks and other intellectual property rights;
|
•
|
maintain and control the quality of our brand;
|
•
|
continue to expand our reach to students in high school, graduate school, and internationally;
|
•
|
ensure that the content posted to our website by students is reliable and does not infringe on third-party copyrights or violate other applicable laws, our terms of use, or the ethical codes of those students’ colleges;
|
•
|
adequately address students’ concerns with our products and services; and
|
•
|
convert and fully integrate the brands and students that we acquire, including Thinkful, WriteLab, StudyBlue, Cogeon, the developer of the math application Math 42, Imagine Easy Solutions and internships.com, into the Chegg brand and Chegg.com.
|
•
|
changes in student sentiment about the quality or usefulness of our learning platform and our products and services;
|
•
|
problems that prevent our logistics partners from delivering textbooks reliably or timely;
|
•
|
technical or other problems that prevent us from providing our products and services reliably or otherwise negatively affect the student experience on our learning platform;
|
•
|
concern from colleges about the ways students use our content offerings, such as our Expert Answers service;
|
•
|
brand conflict between acquired brands and the Chegg brand;
|
•
|
student concerns related to privacy and the way in which we use student data as part of our products and services;
|
•
|
the reputation or products and services of competitive companies; and
|
•
|
students’ misuse of our products and services in ways that violate our terms of services, applicable laws, or the code of conduct at their colleges.
|
•
|
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, including the increased likelihood of litigation.
|
•
|
we may not generate sufficient financial return to offset acquisition costs;
|
•
|
we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, services, operations, and personnel of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us;
|
•
|
an acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management;
|
•
|
an acquisition may delay adoption rates or reduce engagement rates for our products and services and those of the company acquired by us due to student uncertainty about continuity and effectiveness of service from either company;
|
•
|
we may encounter difficulties in, or may be unable to, successfully sell or otherwise monetize any acquired products and services;
|
•
|
an acquisition may not ultimately be complementary to our evolving business model; and
|
•
|
an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience.
|
•
|
integrate with third-party programmatic advertising platforms;
|
•
|
reduce the exposure of actions taken by platforms to limit our access to advertising audiences;
|
•
|
compete for advertising and marketing dollars from brands, online marketing, and media companies and advertisers;
|
•
|
penetrate the market for student-focused advertising;
|
•
|
develop a platform that can deliver advertising and marketing services across multiple channels, including print, email, Internet, mobile applications, and other connected devices;
|
•
|
improve our analytics and measurement solutions to demonstrate the value of our advertising and marketing services;
|
•
|
retain, grow, and engage our student user base;
|
•
|
strengthen our brand and increase our presence in media reports and with publicity companies that utilize online platforms for advertising and marketing purposes;
|
•
|
create new products that sustain or increase the value of our advertising and marketing services and other commercial content;
|
•
|
manage changes in the way online advertising and marketing services are priced;
|
•
|
weather the impact of macroeconomic conditions and conditions in the advertising industry and higher education in general; and
|
•
|
manage legal developments relating to data privacy, advertising or marketing services, legislation and regulation and litigation.
|
•
|
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;
|
•
|
the FTC has guidelines that impose responsibilities on companies with respect to communications with consumers 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 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. For example, some states, such as California, Illinois, and New York, have created do-not-call lists. Other states, such as Oregon and Washington, have enacted “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, states and through the availability of statutory damages and class action lawsuits for violations of the TCPA; and
|
•
|
the CCPA, which came into effect on January 1, 2020, requires 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 new cause of action for data breaches. The burdens imposed by the CCPA 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 in order to comply.
|
•
|
our intellectual property and proprietary rights will provide competitive advantages to us;
|
•
|
our competitors or others will not design around our intellectual property or proprietary rights;
|
•
|
our ability to assert our intellectual property or proprietary rights against potential competitors or to settle current or future disputes will not be limited by our agreements with third parties;
|
•
|
our intellectual property and proprietary rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak;
|
•
|
we can acquire or maintain relevant domain names;
|
•
|
any of the patents, trademarks, copyrights, trade secrets or other intellectual property or proprietary rights that we presently employ in our business will not lapse or be invalidated, circumvented, challenged or abandoned; or
|
•
|
we will not lose the ability to assert our intellectual property or proprietary rights against or to license our intellectual property or proprietary rights to others and collect royalties or other payments.
|
•
|
recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices;
|
•
|
compliance with applicable foreign laws and regulations;
|
•
|
protecting and enforcing intellectual property rights abroad;
|
•
|
compliance with anti-bribery laws including, without limitation, the Foreign Corrupt Practices Act;
|
•
|
currency exchange rate fluctuations;
|
•
|
additional taxation of international costs and intercompany payments to our international subsidiaries associated with the U.S. Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act);
|
•
|
additional value added taxes on digital products that are purchased from our website by international customers;
|
•
|
political and economic instability; and
|
•
|
higher costs of doing business internationally.
|
•
|
actual or anticipated fluctuations in our financial condition and results of operations, including as a result of the seasonality in our business;
|
•
|
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, including as a result of difficulty forecasting seasonal variations in our financial condition and results of operations;
|
•
|
issuance of new or updated research or reports by securities analysts, including the publication of unfavorable reports or change in recommendation or downgrading of our common stock;
|
•
|
announcements by us or our competitors of significant products or features, technical innovations, 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 companies perceived by investors to be comparable to us;
|
•
|
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 in connection with acquisitions;
|
•
|
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;
|
•
|
political climate in the United States, with a focus on cutting or limiting budgets, higher education, and taxation;
|
•
|
terrorist attacks or natural disasters or other such events impacting countries where we have operations;
|
•
|
international stock market conditions; and
|
•
|
general economic and market conditions, such as recessions, unemployment rates, the limited availability of consumer credit, interest rate changes, and currency fluctuations.
|
•
|
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.
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total net revenues
|
$
|
410,926
|
|
|
$
|
321,084
|
|
|
$
|
255,066
|
|
|
$
|
254,090
|
|
|
$
|
301,373
|
|
Gross profit
|
318,744
|
|
|
241,088
|
|
|
174,891
|
|
|
134,489
|
|
|
111,524
|
|
|||||
Net loss
|
(9,605
|
)
|
|
(14,888
|
)
|
|
(20,283
|
)
|
|
(42,245
|
)
|
|
(59,210
|
)
|
|||||
Net loss per share, basic and diluted
|
$
|
(0.08
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.20
|
)
|
|
$
|
(0.47
|
)
|
|
$
|
(0.68
|
)
|
Weighted average shares used to compute net loss per share, basic and diluted
|
119,204
|
|
|
113,251
|
|
|
100,022
|
|
|
90,534
|
|
|
86,818
|
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheets Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,488,998
|
|
|
$
|
760,938
|
|
|
$
|
446,930
|
|
|
$
|
290,652
|
|
|
$
|
291,356
|
|
Deferred revenue
|
18,780
|
|
|
17,418
|
|
|
13,440
|
|
|
14,836
|
|
|
14,971
|
|
|||||
Convertible senior notes, net
|
900,303
|
|
|
283,668
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock and additional paid-in capital
|
916,217
|
|
|
818,229
|
|
|
782,955
|
|
|
593,443
|
|
|
560,330
|
|
|||||
Total stockholders' equity
|
498,829
|
|
|
410,634
|
|
|
391,062
|
|
|
221,939
|
|
|
231,075
|
|
|
Years Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
Net revenues
|
$
|
410,926
|
|
|
100
|
%
|
|
$
|
321,084
|
|
|
100
|
%
|
Cost of revenues(1)
|
92,182
|
|
|
22
|
|
|
79,996
|
|
|
25
|
|
||
Gross profit
|
318,744
|
|
|
78
|
|
|
241,088
|
|
|
75
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Research and development(1)
|
139,772
|
|
|
34
|
|
|
114,291
|
|
|
36
|
|
||
Sales and marketing(1)
|
63,569
|
|
|
15
|
|
|
54,714
|
|
|
17
|
|
||
General and administrative(1)
|
97,489
|
|
|
24
|
|
|
77,714
|
|
|
24
|
|
||
Restructuring charges
|
97
|
|
|
—
|
|
|
589
|
|
|
—
|
|
||
Total operating expenses
|
300,927
|
|
|
73
|
|
|
247,308
|
|
|
77
|
|
||
Income (loss) from operations
|
17,817
|
|
|
5
|
|
|
(6,220
|
)
|
|
(2
|
)
|
||
Total interest expense, net and other income, net
|
(24,788
|
)
|
|
(6
|
)
|
|
(7,238
|
)
|
|
(2
|
)
|
||
Loss before provision for income taxes
|
(6,971
|
)
|
|
(1
|
)
|
|
(13,458
|
)
|
|
(4
|
)
|
||
Provision for income taxes
|
2,634
|
|
|
(1
|
)
|
|
1,430
|
|
|
(1
|
)
|
||
Net loss
|
$
|
(9,605
|
)
|
|
(2
|
)%
|
|
$
|
(14,888
|
)
|
|
(5
|
)%
|
|
|
|
|
|
|
|
|
||||||
(1) Includes share-based compensation expense as follows:
|
|
|
|
|
|
|
|
||||||
Cost of revenues
|
$
|
426
|
|
|
|
|
$
|
420
|
|
|
|
||
Research and development
|
22,229
|
|
|
|
|
17,055
|
|
|
|
||||
Sales and marketing
|
7,380
|
|
|
|
|
6,703
|
|
|
|
||||
General and administrative
|
34,874
|
|
|
|
|
27,852
|
|
|
|
||||
Total share-based compensation expense
|
$
|
64,909
|
|
|
|
|
$
|
52,030
|
|
|
|
|
Years Ended December 31,
|
|
Change in 2019
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Chegg Services
|
$
|
332,221
|
|
|
$
|
253,985
|
|
|
$
|
78,236
|
|
|
31
|
%
|
Required Materials
|
78,705
|
|
|
67,099
|
|
|
11,606
|
|
|
17
|
|
|||
Total net revenues
|
$
|
410,926
|
|
|
$
|
321,084
|
|
|
$
|
89,842
|
|
|
28
|
|
|
Years Ended December 31,
|
|
Change in 2019
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Cost of revenues(1)
|
$
|
92,182
|
|
|
$
|
79,996
|
|
|
$
|
12,186
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes share-based compensation expense of:
|
$
|
426
|
|
|
$
|
420
|
|
|
$
|
6
|
|
|
1
|
%
|
|
Years Ended December 31,
|
|
Change in 2019
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Research and development(1)
|
$
|
139,772
|
|
|
$
|
114,291
|
|
|
$
|
25,481
|
|
|
22
|
%
|
Sales and marketing(1)
|
63,569
|
|
|
54,714
|
|
|
8,855
|
|
|
16
|
|
|||
General and administrative(1)
|
97,489
|
|
|
77,714
|
|
|
19,775
|
|
|
25
|
|
|||
Restructuring charges
|
97
|
|
|
589
|
|
|
(492
|
)
|
|
(84
|
)
|
|||
Total operating expenses
|
$
|
300,927
|
|
|
$
|
247,308
|
|
|
$
|
53,619
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes share-based compensation expense of:
|
|
|
|
|
|
|
|
|||||||
Research and development
|
$
|
22,229
|
|
|
$
|
17,055
|
|
|
$
|
5,174
|
|
|
30
|
%
|
Sales and marketing
|
7,380
|
|
|
6,703
|
|
|
677
|
|
|
10
|
|
|||
General and administrative
|
34,874
|
|
|
27,852
|
|
|
7,022
|
|
|
25
|
|
|||
Share-based compensation expense
|
$
|
64,483
|
|
|
$
|
51,610
|
|
|
$
|
12,873
|
|
|
25
|
|
|
Years Ended December 31,
|
|
Change in 2019
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Interest expense, net
|
$
|
(44,851
|
)
|
|
$
|
(11,225
|
)
|
|
$
|
(33,626
|
)
|
|
300
|
%
|
Other income, net
|
20,063
|
|
|
3,987
|
|
|
16,076
|
|
|
403
|
|
|||
Total interest expense, net and other income, net
|
$
|
(24,788
|
)
|
|
$
|
(7,238
|
)
|
|
$
|
(17,550
|
)
|
|
242
|
|
|
Years Ended December 31,
|
|
Change in 2019
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Provision for income taxes
|
$
|
2,634
|
|
|
$
|
1,430
|
|
|
$
|
1,204
|
|
|
84
|
%
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Consolidated Statements of Cash Flows Data:
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
113,403
|
|
|
$
|
75,113
|
|
Net cash used in investing activities
|
$
|
(703,425
|
)
|
|
$
|
(82,549
|
)
|
Net cash provided by financing activities
|
$
|
603,509
|
|
|
$
|
256,418
|
|
|
Less than
|
|
More than
|
||||||||||||||||
|
Total
|
|
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
5 Years
|
||||||||||
Convertible senior notes (1)
|
$
|
1,153,519
|
|
|
$
|
1,863
|
|
|
$
|
3,725
|
|
|
$
|
347,431
|
|
|
$
|
800,500
|
|
Purchase obligations (2)
|
43,787
|
|
|
27,639
|
|
|
9,788
|
|
|
5,966
|
|
|
394
|
|
|||||
Operating lease obligations (3)
|
21,638
|
|
|
6,094
|
|
|
11,026
|
|
|
4,518
|
|
|
—
|
|
|||||
Textbook purchase obligation (4)
|
29,404
|
|
|
29,404
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
1,248,348
|
|
|
$
|
65,000
|
|
|
$
|
24,539
|
|
|
$
|
357,915
|
|
|
$
|
800,894
|
|
|
Page
|
|
|
•
|
We tested the effectiveness of internal controls over the Company’s determination of the fair value of the liability component, including controls over the relevant valuation assumptions.
|
•
|
With the assistance of our fair value specialists, we evaluated the appropriateness of the valuation methodology and the reasonableness of the valuation assumptions to determine the fair value of the liability component. Additionally, we:
|
–
|
Tested the source information underlying the valuation assumptions used in the model to determine fair value.
|
–
|
Tested the mathematical accuracy of the valuation model.
|
–
|
Developed a range of independent estimates and compared those to the fair value of the liability component determined by management.
|
•
|
We tested the effectiveness of controls over the valuation of the content library intangible asset, including management’s controls over forecasted revenues and cost of revenues.
|
•
|
We evaluated the reasonableness of management’s forecasted revenues and cost of revenues by comparing such forecasted amounts (or as applicable, the implied growth rates and margin assumptions) against various other sources, including:
|
–
|
Historical performance of Thinkful.
|
–
|
Industry data and analyst reports.
|
–
|
Internal communications to management and the Board of Directors.
|
–
|
Forecasted information as well as analyst and industry reports for the Company and certain of its peer companies.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
387,520
|
|
|
$
|
374,664
|
|
Short-term investments
|
381,074
|
|
|
93,345
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $56 and $229 at December 31, 2019 and December 31, 2018, respectively
|
11,529
|
|
|
12,733
|
|
||
Prepaid expenses
|
10,538
|
|
|
4,673
|
|
||
Other current assets
|
16,606
|
|
|
9,510
|
|
||
Total current assets
|
807,267
|
|
|
494,925
|
|
||
Long-term investments
|
310,483
|
|
|
16,052
|
|
||
Property and equipment, net
|
87,359
|
|
|
59,904
|
|
||
Goodwill
|
214,513
|
|
|
149,524
|
|
||
Intangible assets, net
|
34,667
|
|
|
25,915
|
|
||
Right of use assets
|
15,931
|
|
|
—
|
|
||
Other assets
|
18,778
|
|
|
14,618
|
|
||
Total assets
|
$
|
1,488,998
|
|
|
$
|
760,938
|
|
Liabilities and stockholders' equity
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
7,362
|
|
|
$
|
8,177
|
|
Deferred revenue
|
18,780
|
|
|
17,418
|
|
||
Current operating lease liabilities
|
5,283
|
|
|
—
|
|
||
Accrued liabilities
|
39,964
|
|
|
34,077
|
|
||
Total current liabilities
|
71,389
|
|
|
59,672
|
|
||
Long-term liabilities
|
|
|
|
||||
Convertible senior notes, net
|
900,303
|
|
|
283,668
|
|
||
Long-term operating lease liabilities
|
14,513
|
|
|
—
|
|
||
Other long-term liabilities
|
3,964
|
|
|
6,964
|
|
||
Total long-term liabilities
|
918,780
|
|
|
290,632
|
|
||
Total liabilities
|
990,169
|
|
|
350,304
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value – 400,000,000 shares authorized; 121,583,501 and 115,500,418 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively
|
122
|
|
|
116
|
|
||
Additional paid-in capital
|
916,095
|
|
|
818,113
|
|
||
Accumulated other comprehensive loss
|
(1,096
|
)
|
|
(1,019
|
)
|
||
Accumulated deficit
|
(416,292
|
)
|
|
(406,576
|
)
|
||
Total stockholders' equity
|
498,829
|
|
|
410,634
|
|
||
Total liabilities and stockholders' equity
|
$
|
1,488,998
|
|
|
$
|
760,938
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net revenues
|
$
|
410,926
|
|
|
$
|
321,084
|
|
|
$
|
255,066
|
|
Cost of revenues
|
92,182
|
|
|
79,996
|
|
|
80,175
|
|
|||
Gross profit
|
318,744
|
|
|
241,088
|
|
|
174,891
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
139,772
|
|
|
114,291
|
|
|
81,926
|
|
|||
Sales and marketing
|
63,569
|
|
|
54,714
|
|
|
51,240
|
|
|||
General and administrative
|
97,489
|
|
|
77,714
|
|
|
64,411
|
|
|||
Restructuring charges
|
97
|
|
|
589
|
|
|
1,047
|
|
|||
Gain on liquidation of textbooks
|
—
|
|
|
—
|
|
|
(4,766
|
)
|
|||
Total operating expenses
|
300,927
|
|
|
247,308
|
|
|
193,858
|
|
|||
Income (loss) from operations
|
17,817
|
|
|
(6,220
|
)
|
|
(18,967
|
)
|
|||
Interest expense, net and other income, net:
|
|
|
|
|
|
||||||
Interest expense, net
|
(44,851
|
)
|
|
(11,225
|
)
|
|
(74
|
)
|
|||
Other income, net
|
20,063
|
|
|
3,987
|
|
|
560
|
|
|||
Total interest expense, net and other income, net
|
(24,788
|
)
|
|
(7,238
|
)
|
|
486
|
|
|||
Loss before provision for income taxes
|
(6,971
|
)
|
|
(13,458
|
)
|
|
(18,481
|
)
|
|||
Provision for income taxes
|
2,634
|
|
|
1,430
|
|
|
1,802
|
|
|||
Net loss
|
$
|
(9,605
|
)
|
|
$
|
(14,888
|
)
|
|
$
|
(20,283
|
)
|
Net loss per share, basic and diluted
|
$
|
(0.08
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.20
|
)
|
Weighted average shares used to compute net loss per share, basic and diluted
|
119,204
|
|
|
113,251
|
|
|
100,022
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(9,605
|
)
|
|
$
|
(14,888
|
)
|
|
$
|
(20,283
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Change in unrealized gain (loss) on available for sale investments, net of tax
|
668
|
|
|
76
|
|
|
(187
|
)
|
|||
Change in foreign currency translation adjustments, net of tax
|
(745
|
)
|
|
(813
|
)
|
|
81
|
|
|||
Other comprehensive loss
|
(77
|
)
|
|
(737
|
)
|
|
(106
|
)
|
|||
Total comprehensive loss
|
$
|
(9,682
|
)
|
|
$
|
(15,625
|
)
|
|
$
|
(20,389
|
)
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Shares
|
|
Par
Value |
|
Additional Paid-In
Capital |
|
Accumulated Other Comprehensive Loss
|
|
Accumulated
Deficit |
|
Total Stockholders’ Equity
|
|||||||||||
Balances at December 31, 2016
|
91,709
|
|
|
$
|
92
|
|
|
$
|
593,351
|
|
|
$
|
(176
|
)
|
|
$
|
(371,328
|
)
|
|
$
|
221,939
|
|
Issuance of common stock in connection with follow-on offering, net of offering costs
|
11,500
|
|
|
12
|
|
|
147,597
|
|
|
—
|
|
|
—
|
|
|
147,609
|
|
|||||
Issuance of common stock upon exercise of stock options and ESPP
|
3,280
|
|
|
3
|
|
|
23,653
|
|
|
—
|
|
|
—
|
|
|
23,656
|
|
|||||
Net share settlement of equity awards
|
3,155
|
|
|
3
|
|
|
(20,115
|
)
|
|
—
|
|
|
—
|
|
|
(20,112
|
)
|
|||||
Warrant exercises
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
38,359
|
|
|
—
|
|
|
—
|
|
|
38,359
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(106
|
)
|
|
—
|
|
|
(106
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,283
|
)
|
|
(20,283
|
)
|
|||||
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 convertible senior notes, net of issuance costs
|
—
|
|
|
—
|
|
|
62,444
|
|
|
—
|
|
|
—
|
|
|
62,444
|
|
|||||
Purchase of convertible senior notes capped call
|
—
|
|
|
—
|
|
|
(39,227
|
)
|
|
—
|
|
|
—
|
|
|
(39,227
|
)
|
|||||
Repurchase of common stock
|
(983
|
)
|
|
(1
|
)
|
|
(19,999
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|||||
Issuance of common stock upon exercise of stock options and ESPP
|
3,459
|
|
|
4
|
|
|
29,109
|
|
|
—
|
|
|
—
|
|
|
29,113
|
|
|||||
Net share settlement of equity awards
|
3,322
|
|
|
3
|
|
|
(49,089
|
)
|
|
—
|
|
|
—
|
|
|
(49,086
|
)
|
|||||
Warrant exercises
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
52,030
|
|
|
—
|
|
|
—
|
|
|
52,030
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(737
|
)
|
|
—
|
|
|
(737
|
)
|
|||||
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 convertible senior notes, net of issuance costs
|
—
|
|
|
—
|
|
|
206,747
|
|
|
—
|
|
|
—
|
|
|
206,747
|
|
|||||
Purchase of convertible senior notes capped call
|
—
|
|
|
—
|
|
|
(97,200
|
)
|
|
—
|
|
|
—
|
|
|
(97,200
|
)
|
|||||
Repurchase of common stock
|
(504
|
)
|
|
(1
|
)
|
|
(19,999
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
|||||
Issuance of common stock upon exercise of stock options and ESPP
|
3,276
|
|
|
4
|
|
|
35,093
|
|
|
—
|
|
|
—
|
|
|
35,097
|
|
|||||
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
|
—
|
|
|
—
|
|
|
64,909
|
|
|
—
|
|
|
—
|
|
|
64,909
|
|
|||||
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
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net loss
|
$
|
(9,605
|
)
|
|
$
|
(14,888
|
)
|
|
$
|
(20,283
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization expense
|
30,247
|
|
|
22,805
|
|
|
19,337
|
|
|||
Share-based compensation expense
|
64,909
|
|
|
52,030
|
|
|
38,359
|
|
|||
Gain on liquidation of textbooks
|
—
|
|
|
—
|
|
|
(4,766
|
)
|
|||
Loss from write-offs of textbooks
|
—
|
|
|
—
|
|
|
314
|
|
|||
Loss from write-offs of property and equipment
|
1,009
|
|
|
93
|
|
|
1,368
|
|
|||
Interest accretion on deferred consideration
|
—
|
|
|
—
|
|
|
(626
|
)
|
|||
Amortization of debt discount and issuance costs
|
43,202
|
|
|
10,494
|
|
|
—
|
|
|||
Deferred income taxes
|
(39
|
)
|
|
(323
|
)
|
|
—
|
|
|||
Operating lease expense, net of accretion
|
4,385
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
(416
|
)
|
|
65
|
|
|
68
|
|
|||
Change in assets and liabilities net of effect of acquisition of businesses:
|
|
|
|
|
|
||||||
Accounts receivable
|
1,829
|
|
|
(1,538
|
)
|
|
(175
|
)
|
|||
Prepaid expenses and other current assets
|
(12,930
|
)
|
|
(4,921
|
)
|
|
13,550
|
|
|||
Other assets
|
(1,494
|
)
|
|
48
|
|
|
1,049
|
|
|||
Accounts payable
|
(2,395
|
)
|
|
893
|
|
|
2,649
|
|
|||
Deferred revenue
|
(1,682
|
)
|
|
3,978
|
|
|
(1,396
|
)
|
|||
Accrued liabilities
|
(206
|
)
|
|
3,838
|
|
|
2,087
|
|
|||
Other liabilities
|
(3,411
|
)
|
|
2,539
|
|
|
15
|
|
|||
Net cash provided by operating activities
|
113,403
|
|
|
75,113
|
|
|
51,550
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Proceeds from liquidations of textbooks
|
—
|
|
|
—
|
|
|
6,943
|
|
|||
Purchases of investments
|
(959,911
|
)
|
|
(146,856
|
)
|
|
(128,247
|
)
|
|||
Proceeds from sale of investments
|
53,261
|
|
|
1,800
|
|
|
16,393
|
|
|||
Maturities of investments
|
324,700
|
|
|
138,380
|
|
|
9,750
|
|
|||
Purchases of property and equipment
|
(42,326
|
)
|
|
(31,223
|
)
|
|
(26,142
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(79,149
|
)
|
|
(34,650
|
)
|
|
(14,931
|
)
|
|||
Purchases of strategic equity investment
|
—
|
|
|
(10,000
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(703,425
|
)
|
|
(82,549
|
)
|
|
(136,234
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Common stock issued under stock plans, net
|
35,100
|
|
|
29,116
|
|
|
23,659
|
|
|||
Payment of taxes related to the net share settlement of equity awards
|
(94,571
|
)
|
|
(49,089
|
)
|
|
(20,115
|
)
|
|||
Payment of deferred cash consideration related to acquisitions
|
—
|
|
|
—
|
|
|
(16,939
|
)
|
|||
Proceeds from follow-on offering, net of offering costs
|
—
|
|
|
—
|
|
|
147,609
|
|
|||
Proceeds from issuance of convertible senior notes, net of issuance costs
|
780,180
|
|
|
335,618
|
|
|
—
|
|
|||
Purchase of convertible senior notes capped call
|
(97,200
|
)
|
|
(39,227
|
)
|
|
—
|
|
|||
Repurchase of common stock
|
(20,000
|
)
|
|
(20,000
|
)
|
|
—
|
|
|||
Net cash provided by financing activities
|
603,509
|
|
|
256,418
|
|
|
134,214
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
13,487
|
|
|
248,982
|
|
|
49,530
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
375,945
|
|
|
126,963
|
|
|
77,433
|
|
|||
Cash, cash equivalents and restricted cash, end of period
|
$
|
389,432
|
|
|
$
|
375,945
|
|
|
$
|
126,963
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental cash flow data:
|
|
|
|
|
|
||||||
Cash paid during the period for:
|
|
|
|
|
|
||||||
Interest
|
$
|
1,332
|
|
|
$
|
605
|
|
|
$
|
85
|
|
Income taxes
|
$
|
2,070
|
|
|
$
|
2,097
|
|
|
$
|
1,790
|
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
|
|
||||||
Operating cash flows from operating leases
|
$
|
(5,297
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Right of use assets obtained in exchange for lease obligations:
|
|
|
|
|
|
||||||
Operating leases
|
$
|
3,364
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Accrued purchases of long-lived assets
|
$
|
10,036
|
|
|
$
|
1,210
|
|
|
$
|
3,573
|
|
Issuance of common stock related to prior acquisition
|
$
|
3,003
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
|
|
|
|
|
|
||||||
Reconciliation of cash, cash equivalents and restricted cash:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
387,520
|
|
|
$
|
374,664
|
|
|
$
|
126,457
|
|
Restricted cash included in other current assets
|
149
|
|
|
84
|
|
|
84
|
|
|||
Restricted cash included in other assets
|
1,763
|
|
|
1,197
|
|
|
422
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
389,432
|
|
|
$
|
375,945
|
|
|
$
|
126,963
|
|
Classification
|
|
Useful Life
|
Computers and equipment
|
|
3 years
|
Internal-use software and website development
|
|
3 years
|
Furniture and fixtures
|
|
5 years
|
Leasehold improvements
|
|
Shorter of the remaining lease term or the estimated useful life of 5 years
|
Content
|
|
Shorter of the licensed content term or the estimated useful life of 5 years
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(9,605
|
)
|
|
$
|
(14,888
|
)
|
|
$
|
(20,283
|
)
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares used to compute net loss per share, basic and diluted
|
119,204
|
|
|
113,251
|
|
|
100,022
|
|
|||
|
|
|
|
|
|
||||||
Net loss per share, basic and diluted
|
$
|
(0.08
|
)
|
|
$
|
(0.13
|
)
|
|
$
|
(0.20
|
)
|
|
Years Ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Options to purchase common stock
|
2,395
|
|
|
4,045
|
|
|
3,045
|
|
RSUs and PSUs
|
4,699
|
|
|
7,946
|
|
|
153
|
|
Shares related to convertible senior notes
|
3,526
|
|
|
—
|
|
|
—
|
|
Employee stock purchase plan
|
—
|
|
|
—
|
|
|
5
|
|
Total common stock equivalents
|
10,620
|
|
|
11,991
|
|
|
3,203
|
|
|
Years Ended December 31,
|
|
Change in 2019
|
|
Change in 2018
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
$
|
|
%
|
|
$
|
|
%
|
||||||||||||
Chegg Services
|
$
|
332,221
|
|
|
$
|
253,985
|
|
|
$
|
185,683
|
|
|
$
|
78,236
|
|
|
31
|
%
|
|
$
|
68,302
|
|
|
37
|
%
|
Required Materials
|
78,705
|
|
|
67,099
|
|
|
69,383
|
|
|
11,606
|
|
|
17
|
|
|
(2,284
|
)
|
|
(3
|
)
|
|||||
Total net revenues
|
$
|
410,926
|
|
|
$
|
321,084
|
|
|
$
|
255,066
|
|
|
$
|
89,842
|
|
|
28
|
|
|
$
|
66,018
|
|
|
26
|
|
|
December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Accounts receivable, net
|
$
|
11,529
|
|
|
$
|
12,733
|
|
|
$
|
(1,204
|
)
|
|
(9
|
)%
|
Deferred revenue
|
18,780
|
|
|
17,418
|
|
|
1,362
|
|
|
8
|
|
|||
Contract assets
|
3,531
|
|
|
337
|
|
|
3,194
|
|
|
n/m
|
|
|
December 31, 2019
|
||||||||||||||
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
241,355
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
241,355
|
|
Money market funds
|
146,165
|
|
|
—
|
|
|
—
|
|
|
146,165
|
|
||||
Total cash and cash equivalents
|
$
|
387,520
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
387,520
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
7,489
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,489
|
|
Corporate securities
|
318,946
|
|
|
425
|
|
|
(78
|
)
|
|
319,293
|
|
||||
U.S. treasury securities
|
44,251
|
|
|
39
|
|
|
(4
|
)
|
|
44,286
|
|
||||
Agency bond
|
10,000
|
|
|
6
|
|
|
—
|
|
|
10,006
|
|
||||
Total short-term investments
|
$
|
380,686
|
|
|
$
|
470
|
|
|
$
|
(82
|
)
|
|
$
|
381,074
|
|
Long-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
295,103
|
|
|
$
|
533
|
|
|
$
|
(158
|
)
|
|
$
|
295,478
|
|
Agency bond
|
14,999
|
|
|
6
|
|
|
—
|
|
|
15,005
|
|
||||
Total long-term investments
|
$
|
310,102
|
|
|
$
|
539
|
|
|
$
|
(158
|
)
|
|
$
|
310,483
|
|
|
December 31, 2018
|
||||||||||||||
|
Cost
|
|
Unrealized Gain
|
|
Unrealized Loss
|
|
Fair Value
|
||||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Cash
|
$
|
351,345
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
351,345
|
|
Money market funds
|
5,052
|
|
|
—
|
|
|
—
|
|
|
5,052
|
|
||||
Commercial paper
|
18,267
|
|
|
—
|
|
|
—
|
|
|
18,267
|
|
||||
Total cash and cash equivalents
|
$
|
374,664
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
374,664
|
|
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
40,500
|
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
40,488
|
|
Corporate securities
|
38,616
|
|
|
—
|
|
|
(87
|
)
|
|
38,529
|
|
||||
U.S. treasury securities
|
14,333
|
|
|
—
|
|
|
(5
|
)
|
|
14,328
|
|
||||
Total short-term investments
|
$
|
93,449
|
|
|
$
|
—
|
|
|
$
|
(104
|
)
|
|
$
|
93,345
|
|
Long-term investments
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
14,429
|
|
|
$
|
9
|
|
|
$
|
(14
|
)
|
|
$
|
14,424
|
|
U.S. treasury securities
|
1,630
|
|
|
—
|
|
|
(2
|
)
|
|
1,628
|
|
||||
Total long-term investments
|
$
|
16,059
|
|
|
$
|
9
|
|
|
$
|
(16
|
)
|
|
$
|
16,052
|
|
|
December 31, 2019
|
||||||
|
Cost
|
|
Fair Value
|
||||
Due in 1 year or less
|
$
|
380,686
|
|
|
$
|
381,074
|
|
Due in 1-2 years
|
310,102
|
|
|
310,483
|
|
||
Investments not due at a single maturity date
|
146,165
|
|
|
146,165
|
|
||
Total
|
$
|
836,953
|
|
|
$
|
837,722
|
|
|
December 31, 2019
|
||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
||||||
Assets:
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
146,165
|
|
|
$
|
146,165
|
|
|
$
|
—
|
|
Short-term investments:
|
|
|
|
|
|
||||||
Commercial paper
|
7,489
|
|
|
—
|
|
|
7,489
|
|
|||
Corporate securities
|
319,293
|
|
|
—
|
|
|
319,293
|
|
|||
U.S. treasury securities
|
44,286
|
|
|
44,286
|
|
|
—
|
|
|||
Agency bonds
|
10,006
|
|
|
—
|
|
|
10,006
|
|
|||
Long-term investments:
|
|
|
|
|
|
||||||
Corporate securities
|
295,478
|
|
|
—
|
|
|
295,478
|
|
|||
Agency bonds
|
15,005
|
|
|
—
|
|
|
15,005
|
|
|||
Total assets measured and recorded at fair value
|
$
|
837,722
|
|
|
$
|
190,451
|
|
|
$
|
647,271
|
|
|
December 31, 2018
|
||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
||||||
Assets:
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
||||||
Money market funds
|
$
|
5,052
|
|
|
$
|
5,052
|
|
|
$
|
—
|
|
Commercial paper
|
18,267
|
|
|
—
|
|
|
18,267
|
|
|||
Short-term investments:
|
|
|
|
|
|
||||||
Commercial paper
|
40,488
|
|
|
—
|
|
|
40,488
|
|
|||
Corporate securities
|
38,529
|
|
|
—
|
|
|
38,529
|
|
|||
U.S. treasury securities
|
14,328
|
|
|
14,328
|
|
|
—
|
|
|||
Long-term investments:
|
|
|
|
|
|
||||||
Corporate securities
|
14,424
|
|
|
—
|
|
|
14,424
|
|
|||
U.S treasury securities
|
1,628
|
|
|
1,628
|
|
|
—
|
|
|||
Total assets measured and recorded at fair value
|
$
|
132,716
|
|
|
$
|
21,008
|
|
|
$
|
111,708
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying Amount
|
|
Estimated Fair Value
|
|
Carrying Amount
|
|
Estimated Fair Value
|
||||||||
2025 notes
|
$
|
602,611
|
|
|
$
|
831,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2023 notes
|
297,692
|
|
|
523,538
|
|
|
283,668
|
|
|
416,156
|
|
||||
Convertible senior notes, net
|
$
|
900,303
|
|
|
$
|
1,354,538
|
|
|
$
|
283,668
|
|
|
$
|
416,156
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Computer and equipment
|
$
|
3,355
|
|
|
$
|
3,140
|
|
Internal-use software and website development
|
7,552
|
|
|
4,043
|
|
||
Furniture and fixtures
|
3,640
|
|
|
2,912
|
|
||
Leasehold improvements
|
17,738
|
|
|
14,167
|
|
||
Content
|
122,670
|
|
|
90,816
|
|
||
Property and equipment
|
154,955
|
|
|
115,078
|
|
||
Less accumulated depreciation and amortization
|
(67,596
|
)
|
|
(55,174
|
)
|
||
Property and equipment, net
|
$
|
87,359
|
|
|
$
|
59,904
|
|
|
Thinkful
|
||
Cash
|
$
|
51
|
|
Accounts receivable
|
547
|
|
|
Other acquired assets
|
1,710
|
|
|
Acquired intangible assets
|
16,360
|
|
|
Total identifiable assets acquired
|
18,668
|
|
|
Deferred revenue
|
(3,044
|
)
|
|
Liabilities assumed
|
(1,605
|
)
|
|
Net identifiable assets acquired
|
14,019
|
|
|
Goodwill
|
65,181
|
|
|
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
|
|
|
—
|
|
|
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
|
|
|
StudyBlue
|
|
WriteLab
|
|
Total
|
||||||||||||
|
Amount
|
|
Weighted-Average Amortization
Period (in months) |
|
Amount
|
|
Weighted-Average Amortization
Period (in months) |
|
Amount
|
|
Weighted-Average Amortization
Period (in months) |
||||||
Trade name
|
$
|
140
|
|
|
12
|
|
$
|
—
|
|
|
0
|
|
$
|
140
|
|
|
12
|
Domain names
|
180
|
|
|
12
|
|
—
|
|
|
0
|
|
180
|
|
|
12
|
|||
Non-compete agreements
|
220
|
|
|
36
|
|
—
|
|
|
0
|
|
220
|
|
|
36
|
|||
Developed technology
|
1,340
|
|
|
60
|
|
4,450
|
|
|
96
|
|
5,790
|
|
|
88
|
|||
Content library
|
5,220
|
|
|
60
|
|
—
|
|
|
0
|
|
5,220
|
|
|
60
|
|||
Acquired intangible assets
|
$
|
7,100
|
|
|
57
|
|
$
|
4,450
|
|
|
96
|
|
$
|
11,550
|
|
|
72
|
Net tangible assets
|
$
|
60
|
|
Acquired intangible assets:
|
|
||
Trade name
|
50
|
|
|
Domain names
|
230
|
|
|
Non-compete agreements
|
70
|
|
|
Developed technology
|
5,510
|
|
|
Content Library
|
70
|
|
|
Total acquired intangible assets
|
5,930
|
|
|
Total identifiable assets acquired
|
5,990
|
|
|
Goodwill
|
9,024
|
|
|
Total fair value of purchase consideration
|
$
|
15,014
|
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
149,524
|
|
|
$
|
125,272
|
|
Additions due to acquisitions
|
65,181
|
|
|
24,673
|
|
||
Foreign currency translation adjustment
|
(192
|
)
|
|
(421
|
)
|
||
Ending balance
|
$
|
214,513
|
|
|
$
|
149,524
|
|
|
December 31, 2019
|
|||||||||||||
|
Weighted-Average Amortization
Period
(in months)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||
Developed technologies and content library
|
66
|
|
|
$
|
43,268
|
|
|
$
|
(18,395
|
)
|
|
$
|
24,873
|
|
Customer lists
|
47
|
|
|
9,970
|
|
|
(8,210
|
)
|
|
1,760
|
|
|||
Trade and domain names
|
46
|
|
|
10,873
|
|
|
(6,169
|
)
|
|
4,704
|
|
|||
Non-compete agreements
|
31
|
|
|
2,018
|
|
|
(1,890
|
)
|
|
128
|
|
|||
Indefinite-lived trade name
|
—
|
|
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
(398
|
)
|
|
—
|
|
|
(398
|
)
|
|||
Total intangible assets
|
58
|
|
|
$
|
69,331
|
|
|
$
|
(34,664
|
)
|
|
$
|
34,667
|
|
|
December 31, 2018
|
|||||||||||||
|
Weighted-Average Amortization
Period
(in months)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|||||||
Developed technologies and content library
|
71
|
|
|
$
|
31,667
|
|
|
$
|
(13,737
|
)
|
|
$
|
17,930
|
|
Customer lists
|
47
|
|
|
9,970
|
|
|
(6,847
|
)
|
|
3,123
|
|
|||
Trade and domain names
|
44
|
|
|
6,113
|
|
|
(4,863
|
)
|
|
1,250
|
|
|||
Non-compete agreements
|
31
|
|
|
2,018
|
|
|
(1,735
|
)
|
|
283
|
|
|||
Indefinite-lived trade name
|
—
|
|
|
3,600
|
|
|
—
|
|
|
3,600
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
(271
|
)
|
|
—
|
|
|
(271
|
)
|
|||
Total intangible assets
|
61
|
|
|
$
|
53,097
|
|
|
$
|
(27,182
|
)
|
|
$
|
25,915
|
|
2020
|
$
|
8,947
|
|
2021
|
7,554
|
|
|
2022
|
6,686
|
|
|
2023
|
4,557
|
|
|
2024
|
2,411
|
|
|
Thereafter
|
912
|
|
|
Total
|
$
|
31,067
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Reimbursement from Required Materials partners (1)
|
$
|
6,552
|
|
|
$
|
3,785
|
|
Other
|
10,054
|
|
|
5,725
|
|
||
Other current assets
|
$
|
16,606
|
|
|
$
|
9,510
|
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
Payable to Required Materials partners (2)
|
$
|
4,898
|
|
|
$
|
6,420
|
|
Acquisition-related compensation
|
4,042
|
|
|
8,536
|
|
||
Taxes payable
|
3,046
|
|
|
3,864
|
|
||
Accrued purchases of long-lived assets
|
10,036
|
|
|
1,210
|
|
||
Other
|
17,942
|
|
|
14,047
|
|
||
Accrued liabilities
|
$
|
39,964
|
|
|
$
|
34,077
|
|
|
2025 Notes
|
|
2023 Notes
|
||||
Principal amount
|
$
|
800,000
|
|
|
$
|
345,000
|
|
Less initial purchasers’ discount
|
(18,998
|
)
|
|
(8,625
|
)
|
||
Less other issuance costs
|
(822
|
)
|
|
(757
|
)
|
||
Net proceeds
|
$
|
780,180
|
|
|
$
|
335,618
|
|
•
|
during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 for the 2025 notes and June 30, 2018 for the 2023 notes, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the respective conversion price for the notes on each applicable trading day;
|
•
|
during the five-business day period after any 10 consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
|
•
|
if we call any or all of the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
|
•
|
upon the occurrence of certain specified corporate events described in the indentures.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
2025 Notes
|
|
2023 Notes
|
|
2023 Notes
|
||||||
Principal amount
|
$
|
800,000
|
|
|
$
|
345,000
|
|
|
$
|
345,000
|
|
Unamortized debt discount
|
(184,698
|
)
|
|
(42,280
|
)
|
|
(54,817
|
)
|
|||
Unamortized issuance costs
|
(12,691
|
)
|
|
(5,028
|
)
|
|
(6,515
|
)
|
|||
Net carrying amount (liability)
|
$
|
602,611
|
|
|
$
|
297,692
|
|
|
$
|
283,668
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
2025 Notes
|
|
2023 Notes
|
|
2023 Notes
|
||||||
Debt discount for conversion option
|
$
|
212,000
|
|
|
$
|
64,193
|
|
|
$
|
64,193
|
|
Issuance costs
|
(5,253
|
)
|
|
(1,749
|
)
|
|
(1,749
|
)
|
|||
Net carrying amount
|
$
|
206,747
|
|
|
$
|
62,444
|
|
|
$
|
62,444
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||
|
2025 Notes
|
|
2023 Notes
|
|
2023 Notes
|
||||||
Contractual interest expense
|
$
|
769
|
|
|
$
|
862
|
|
|
$
|
645
|
|
Amortization of debt discount
|
27,302
|
|
|
12,536
|
|
|
9,377
|
|
|||
Amortization of issuance costs
|
1,876
|
|
|
1,488
|
|
|
1,117
|
|
|||
Total interest expense
|
$
|
29,947
|
|
|
$
|
14,886
|
|
|
$
|
11,139
|
|
|
December 31, 2019
|
||
2020
|
$
|
6,094
|
|
2021
|
5,622
|
|
|
2022
|
5,404
|
|
|
2023
|
3,738
|
|
|
2024
|
780
|
|
|
Total future minimum lease payments
|
21,638
|
|
|
Less imputed interest
|
(1,842
|
)
|
|
Total lease liabilities
|
$
|
19,796
|
|
|
December 31, 2018
|
||
2019
|
$
|
5,222
|
|
2020
|
5,251
|
|
|
2021
|
4,775
|
|
|
2022
|
3,999
|
|
|
2023
|
3,421
|
|
|
Thereafter
|
788
|
|
|
Total
|
$
|
23,456
|
|
|
December 31, 2019
|
|
Outstanding stock options
|
1,611,385
|
|
Outstanding RSUs and PSUs
|
6,909,530
|
|
Shares available for grant under the 2013 Plan
|
23,405,023
|
|
Shares available for issuance under the 2013 ESPP
|
7,646,784
|
|
Total common shares reserved for future issuance
|
39,572,722
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of revenues
|
$
|
426
|
|
|
$
|
420
|
|
|
$
|
316
|
|
Research and development
|
22,229
|
|
|
17,055
|
|
|
14,333
|
|
|||
Sales and marketing
|
7,380
|
|
|
6,703
|
|
|
5,007
|
|
|||
General and administrative
|
34,874
|
|
|
27,852
|
|
|
18,703
|
|
|||
Total share-based compensation expense
|
$
|
64,909
|
|
|
$
|
52,030
|
|
|
$
|
38,359
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Expected term (years)
|
0.50
|
|
|
0.50
|
|
|
0.50
|
|
|||
Expected volatility
|
40.51%-41.81%
|
|
|
42.07%-44.97%
|
|
|
38.15%-45.57%
|
|
|||
Dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
Risk-free interest rate
|
1.59%-2.43%
|
|
|
2.09%-2.50%
|
|
|
1.04%-1.42%
|
|
|||
Weighted-average grant-date fair value per share
|
$
|
9.88
|
|
|
$
|
7.14
|
|
|
$
|
3.55
|
|
|
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, 2018
|
4,776,481
|
|
|
$
|
9.40
|
|
|
4.25
|
|
$
|
90,848,450
|
|
Exercised
|
(3,165,096
|
)
|
|
9.79
|
|
|
|
|
|
|||
Balance at December 31, 2019
|
1,611,385
|
|
|
$
|
8.64
|
|
|
3.60
|
|
$
|
47,171,160
|
|
|
RSUs and PSUs Outstanding
|
|||||
|
Number of RSUs and PSUs
Outstanding
|
|
Weighted
Average Grant Date
Fair Value
|
|||
Balance at December 31, 2018
|
10,804,808
|
|
|
$
|
11.87
|
|
Granted
|
2,910,400
|
|
|
37.56
|
|
|
Released
|
(5,628,938
|
)
|
|
10.15
|
|
|
Canceled
|
(1,176,740
|
)
|
|
12.20
|
|
|
Balance at December 31, 2019
|
6,909,530
|
|
|
$
|
24.04
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Current income taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
(185
|
)
|
|
$
|
(91
|
)
|
|
$
|
(103
|
)
|
State
|
264
|
|
|
(73
|
)
|
|
100
|
|
|||
Foreign
|
2,594
|
|
|
1,374
|
|
|
1,523
|
|
|||
Total current income taxes
|
2,673
|
|
|
1,210
|
|
|
1,520
|
|
|||
|
|
|
|
|
|
||||||
Deferred income taxes:
|
|
|
|
|
|
||||||
Federal
|
(17
|
)
|
|
155
|
|
|
(992
|
)
|
|||
State
|
42
|
|
|
76
|
|
|
75
|
|
|||
Foreign
|
(64
|
)
|
|
(11
|
)
|
|
1,199
|
|
|||
Total deferred income taxes
|
(39
|
)
|
|
220
|
|
|
282
|
|
|||
Total income tax provision
|
$
|
2,634
|
|
|
$
|
1,430
|
|
|
$
|
1,802
|
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
(12,497
|
)
|
|
$
|
(18,617
|
)
|
|
$
|
(20,983
|
)
|
Foreign
|
5,526
|
|
|
5,159
|
|
|
2,502
|
|
|||
Total
|
$
|
(6,971
|
)
|
|
$
|
(13,458
|
)
|
|
$
|
(18,481
|
)
|
|
Years Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued expenses and reserves
|
$
|
3,978
|
|
|
$
|
1,661
|
|
Share-based compensation
|
12,003
|
|
|
13,083
|
|
||
Accrued compensation
|
997
|
|
|
2,075
|
|
||
Net operating loss carryforwards
|
162,320
|
|
|
106,659
|
|
||
Property and equipment, textbooks and intangibles assets
|
—
|
|
|
3,745
|
|
||
Other items
|
3,438
|
|
|
2,951
|
|
||
Gross deferred tax assets
|
182,736
|
|
|
130,174
|
|
||
Valuation allowance
|
(148,519
|
)
|
|
(125,844
|
)
|
||
Total deferred tax assets
|
34,217
|
|
|
4,330
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Property and equipment, textbooks and intangibles assets
|
(4,111
|
)
|
|
—
|
|
||
Convertible senior notes
|
(27,065
|
)
|
|
(46
|
)
|
||
Other
|
(4,661
|
)
|
|
(5,943
|
)
|
||
Total deferred tax liabilities
|
(35,837
|
)
|
|
(5,989
|
)
|
||
|
|
|
|
||||
Net deferred tax liability
|
$
|
(1,620
|
)
|
|
$
|
(1,659
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Beginning balance
|
$
|
8,771
|
|
|
$
|
5,772
|
|
|
$
|
4,882
|
|
Increase in tax positions for prior years
|
221
|
|
|
758
|
|
|
280
|
|
|||
Decrease in tax positions for prior years
|
(1,550
|
)
|
|
(569
|
)
|
|
(101
|
)
|
|||
Decrease in tax positions for prior year settlement
|
—
|
|
|
(149
|
)
|
|
(172
|
)
|
|||
Decrease in tax positions for prior years due to statutes lapsing
|
(164
|
)
|
|
(103
|
)
|
|
(169
|
)
|
|||
Increase in tax positions for current year
|
3,722
|
|
|
3,112
|
|
|
978
|
|
|||
Change due to translation of foreign currencies
|
(7
|
)
|
|
(50
|
)
|
|
74
|
|
|||
Ending balance
|
$
|
10,993
|
|
|
$
|
8,771
|
|
|
$
|
5,772
|
|
|
2017 Restructuring Plan
|
|
2015 Restructuring Plan
|
|
|
||||||||||
|
Workforce Reduction Costs
|
|
Lease Termination and Other Costs
|
|
Lease Termination and Other Costs
|
|
Total
|
||||||||
Balance at January 1, 2018
|
$
|
44
|
|
|
$
|
—
|
|
|
$
|
221
|
|
|
$
|
265
|
|
Restructuring charges
|
253
|
|
|
19
|
|
|
317
|
|
|
589
|
|
||||
Cash payments
|
(151
|
)
|
|
(19
|
)
|
|
(218
|
)
|
|
(388
|
)
|
||||
Write-offs
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
||||
Balance at December 31 2018
|
146
|
|
|
—
|
|
|
302
|
|
|
448
|
|
||||
Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02
|
—
|
|
|
—
|
|
|
(302
|
)
|
|
(302
|
)
|
||||
Restructuring charges
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||
Cash payments
|
(221
|
)
|
|
—
|
|
|
—
|
|
|
(221
|
)
|
||||
Write-offs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at December 31, 2019
|
$
|
22
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Chegg Services
|
$
|
332,221
|
|
|
$
|
253,985
|
|
|
$
|
185,683
|
|
Required Materials
|
78,705
|
|
|
67,099
|
|
|
69,383
|
|
|||
Total net revenues
|
$
|
410,926
|
|
|
$
|
321,084
|
|
|
$
|
255,066
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2019
|
|
June 30, 2019
|
|
September 30, 2019
|
|
December 31, 2019
|
||||||||
Total net revenues
|
$
|
97,409
|
|
|
$
|
93,862
|
|
|
$
|
94,151
|
|
|
$
|
125,504
|
|
Gross profit
|
74,074
|
|
|
73,344
|
|
|
71,987
|
|
|
99,339
|
|
||||
(Loss) income from operations
|
(1,027
|
)
|
|
6,815
|
|
|
(5,057
|
)
|
|
17,086
|
|
||||
Net (loss) income
|
(4,318
|
)
|
|
(2,029
|
)
|
|
(11,477
|
)
|
|
8,219
|
|
||||
Weighted average shares used to compute net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
116,730
|
|
|
118,790
|
|
|
120,085
|
|
|
121,151
|
|
||||
Diluted
|
116,730
|
|
|
118,790
|
|
|
120,085
|
|
|
129,150
|
|
||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.04
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.07
|
|
Diluted
|
$
|
(0.04
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
0.06
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2018
|
|
June 30, 2018
|
|
September 30, 2018
|
|
December 31, 2018
|
||||||||
Total net revenues
|
$
|
76,949
|
|
|
$
|
74,222
|
|
|
$
|
74,237
|
|
|
$
|
95,676
|
|
Gross profit
|
56,725
|
|
|
56,438
|
|
|
54,319
|
|
|
73,606
|
|
||||
(Loss) income from operations
|
(2,620
|
)
|
|
(711
|
)
|
|
(10,433
|
)
|
|
7,544
|
|
||||
Net (loss) income
|
(2,617
|
)
|
|
(3,909
|
)
|
|
(13,709
|
)
|
|
5,347
|
|
||||
Weighted average shares used to compute net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
110,904
|
|
|
112,738
|
|
|
114,184
|
|
|
115,123
|
|
||||
Diluted
|
110,904
|
|
|
112,738
|
|
|
114,184
|
|
|
125,610
|
|
||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.05
|
|
Diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
0.04
|
|
(a)
|
Evaluation of Disclosure Controls and Procedures
|
(b)
|
Management's Annual Report on Internal Control Over Financial Reporting
|
(c)
|
Changes in Internal Control over Financial Reporting
|
|
Years Ended December 31, 2019, 2018, and 2017
|
||||||||||||||
|
Balance at
Beginning of Year |
|
(Release) Provision for Bad Debts
|
|
Net Write-offs
|
|
Balance at
End of Year |
||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
||||||||
2019
|
$
|
229
|
|
|
$
|
(79
|
)
|
|
$
|
(94
|
)
|
|
$
|
56
|
|
2018
|
259
|
|
|
142
|
|
|
(172
|
)
|
|
229
|
|
||||
2017
|
436
|
|
|
47
|
|
|
(224
|
)
|
|
259
|
|
|
Years Ended December 31, 2019, 2018, and 2017
|
||||||||||||||
|
Balance at
Beginning of Year |
|
Provision for Refunds
|
|
Refunds Issued
|
|
Balance at
End of Year |
||||||||
Refund Reserve
|
|
|
|
|
|
|
|
||||||||
2019
|
$
|
396
|
|
|
$
|
24,987
|
|
|
$
|
(24,829
|
)
|
|
$
|
554
|
|
2018
|
282
|
|
|
21,240
|
|
|
(21,126
|
)
|
|
396
|
|
||||
2017
|
487
|
|
|
22,446
|
|
|
(22,651
|
)
|
|
282
|
|
|
|
|
|
Incorporated by Reference
|
||||||||
Exhibit
No.
|
|
Exhibit
|
|
Form
|
|
File No.
|
|
Filing Date
|
|
Exhibit No.
|
|
Filed
Herewith
|
|
|
10-K
|
|
001-36180
|
|
3/4/16
|
|
3.01
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
9/20/18
|
|
3.1
|
|
|
||
|
|
S-1/A
|
|
333-190616
|
|
10/01/13
|
|
4.01
|
|
|
|
|
8-K
|
|
001-36180
|
|
4/3/18
|
|
4.1
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
3/26/19
|
|
4.1
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
S-1/A
|
|
333-190616
|
|
10/01/13
|
|
10.01
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.02
|
|
|
||
|
|
S-1/A
|
|
333-190616
|
|
10/25/13
|
|
10.04
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.05
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.06
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.07
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
3/6/14
|
|
10.07
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
3/6/14
|
|
10.08
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
8/14/13
|
|
10.09
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
2/23/17
|
|
10.09
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
1/13/20
|
|
99.01
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
2/26/18
|
|
10.11
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
8/14/13
|
|
10.08
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.14
|
|
|
||
|
|
S-1
|
|
333-190616
|
|
08/14/13
|
|
10.15
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
6/5/18
|
|
99.1
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
2/26/18
|
|
10.17
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
5/2/16
|
|
99.03
|
|
|
||
|
|
10-K
|
|
001-36180
|
|
2/26/18
|
|
10.20
|
|
|
|
|
10-K
|
|
001-36180
|
|
2/26/18
|
|
10.21
|
|
|
||
|
|
10-Q
|
|
001-3618
|
|
7/29/19
|
|
10.02
|
|
|
||
|
|
10-Q
|
|
001-36180
|
|
7/29/19
|
|
10.03
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
04/3/18
|
|
99.1
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
04/3/18
|
|
99.2
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
3/26/19
|
|
99.1
|
|
|
||
|
|
8-K
|
|
001-36180
|
|
4/5/19
|
|
99.1
|
|
|
||
|
|
8-K
|
|
00-36180
|
|
3/12/18
|
|
16.01
|
|
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
|
|
|
|
|
|
|
|
|
|
X
|
||
101.INS
|
|
XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Labels
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition
|
|
|
|
|
|
|
|
|
|
X
|
104
|
|
Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit)
|
|
|
|
|
|
|
|
|
|
X
|
†
|
Confidential treatment has been granted for portions of this exhibit by the SEC.
|
*
|
Indicates a management contract or compensatory plan.
|
**
|
This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
|
|
CHEGG, INC.
|
||
February 20, 2020
|
By:
|
|
/S/ DAN ROSENSWEIG
|
|
|
|
Dan Rosensweig
|
|
|
|
President, Chief Executive Officer and Co-Chairperson
|
Name
|
Title
|
Date
|
|
|
|
/S/ DAN ROSENSWEIG
|
President, Chief Executive Officer and Co-Chairperson
|
February 20, 2020
|
Dan Rosensweig
|
(Principal Executive Officer)
|
|
|
|
|
/S/ ANDREW BROWN
|
Chief Financial Officer
|
February 20, 2020
|
Andrew Brown
|
(Principal Financial Officer)
|
|
|
|
|
/S/ ROBIN TOMASELLO
|
Vice President, Corporate Controller and Assistant Treasurer
|
February 20, 2020
|
Robin Tomasello
|
(Principal Accounting Officer)
|
|
|
|
|
/S/ RENEE BUDIG
|
Director
|
February 20, 2020
|
Renee Budig
|
|
|
|
|
|
/S/ PAUL LEBLANC
|
Director
|
February 20, 2020
|
Paul LeBlanc
|
|
|
|
|
|
/S/ MARNE LEVINE
|
Director
|
February 20, 2020
|
Marne Levine
|
|
|
|
|
|
/S/ RICHARD SARNOFF
|
Director and Co-Chairperson
|
February 20, 2020
|
Richard Sarnoff
|
|
|
|
|
|
/S/ TED SCHLEIN
|
Director
|
February 20, 2020
|
Ted Schlein
|
|
|
|
|
|
/S/ MELANIE WHELAN
|
Director
|
February 20, 2020
|
Melanie Whelan
|
|
|
|
|
|
/S/ JOHN YORK
|
Director
|
February 20, 2020
|
John York
|
|
|
•
|
before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans in some instances, but not the outstanding voting stock owned by the interested stockholder; or
|
•
|
at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
•
|
any merger or consolidation involving the corporation and the interested stockholder;
|
•
|
any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
|
•
|
subject to exceptions, any transaction that results in the issuance of transfer by the corporation of any stock of the corporation to the interested stockholder;
|
•
|
subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
|
•
|
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.
|
•
|
Board of Directors Vacancies. Our restated certificate of incorporation and restated bylaws authorize only our board of directors to fill vacant directorships resulting from any cause or created by the expansion of our board of directors. In addition, the number of directors constituting our board of directors may be set only by resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.
|
•
|
Classified Board. Our restated certificate of incorporation and restated bylaws provide that our board of directors is classified into three classes of directors. The existence of a classified board could delay a successful tender offeror from obtaining majority control of our board of directors, and the prospect of that delay might deter a potential offeror.
|
•
|
Stockholder Action. Our restated certificate of incorporation provides that our stockholders may not take action by written consent, but may only take action at annual or special meetings of our stockholders. Stockholders are not permitted to cumulate their votes for the election of directors. Our restated bylaws further provide that special meetings of our stockholders may be called only by a majority of our entire board of directors. Our restated bylaws also limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.
|
•
|
Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our restated bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders or to nominate candidates for election as directors at our annual meeting of stockholders. Our restated bylaws also specify certain requirements regarding the form and content of a stockholder’s notice. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.
|
•
|
Amendment to Certificate of Incorporation and Bylaws. Certain amendments to our certificate of incorporation require approval by the holders of at least two-thirds of our outstanding common stock. An amendment to our bylaws requires the approval of a majority of our entire board of directors or approval by the holders of at least two-thirds of our outstanding common stock.
|
•
|
Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock enables our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.
|
1.
|
Start Date and Place of Employment: Your first day of employment (“Start Date”) at the Company will be June 10, 2013. You will be working at Chegg’s headquarter offices, located at 3990 Freedom Circle, Santa Clara, CA 95054.
|
2.
|
Base Compensation: The Company will pay you a starting base salary at the rate of $225,000 per year, payable in accordance with the Company’s standard payroll schedule, currently paid on the 15th and 30th of every month.
|
3.
|
Employment Benefits: As a regular employee of the Company, you will be eligible to participate in a number of Company-sponsored benefits. You will be eligible to participate in Chegg’s Health Insurance Program beginning July 1, 2013. The terms and conditions of specific benefits, such as health insurance, are governed by the plan documents.
|
4.
|
Stock Options: Subject to the approval of the Company’s Board of Directors (“Board”) or an authorized Committee delegated by the Board, you will be granted an option to purchase 90,000 shares of the Company’s Common Stock. At the option of the Board, the stock options granted to you will be either incentive stock options and/or nonqualified stock options. Incentive stock options will be granted only up to the maximum permitted by the applicable tax code, laws and/or regulations. Options granted in excess of the maximum incentive stock option amount will be nonqualified stock options. Employees hired outside the United States will receive only nonqualified stock options. The exercise price per share will be equal to the fair market value per share on the date the option is granted. The option will be subject to the terms and conditions granted under the Company’s Amended and Restated 2005 Stock Incentive Plan (the “Plan”), as described in the Plan, the applicable Notice of Stock Option Grant and Stock Option Agreement. You will vest in 25% of the option shares after 12 months of continuous service after the vesting start date, and an additional 1/48th of the option shares upon the completion of each full month of continuous service thereafter, as described in the applicable Notice of Stock Option Grant.
|
5.
|
Confidentiality and Intellectual Property Rights Agreements: Like all Company employees, you will be required, as a condition of your employment with the Company, to sign the Chegg, Inc. Confidentiality Agreement and the Chegg, Inc. Intellectual Property Rights Agreement, copies of which are attached hereto.
|
6.
|
Employment Relationship: Employment with the Company is for no specified period of time. Your employment with the Company will be “at will,” meaning that either you or the Company may terminate your employment at any time and for any reason, with or without cause or notice. Any contrary representations that may have been made to you are superseded by this letter agreement. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Company’s CEO.
|
7.
|
Withholding Taxes: All forms of compensation referred to in this letter agreement are subject to reduction to reflect applicable withholding and payroll taxes and other deductions required by law.
|
Chegg®, Inc. www.chegg.com
|
3990 Freedom Circle, Santa Clara 95054
CONFIDENTAL INFORMATION
|
408.855.5700
|
Dated:
|
May 12, 2013
|
Chegg®, Inc. www.chegg.com
|
3990 Freedom Circle, Santa Clara 95054
CONFIDENTAL INFORMATION
|
408.855.5700
|
Name of Subsidiary
|
Jurisdiction of Incorporation or Organization
|
Cramster Inc.
|
California
|
Cramster Holding Corp.
|
California
|
Chegg India Private Limited
|
India
|
Good Ascent Corporation Limited
|
Hong Kong
|
Chegg M.E. Ltd.
|
Israel
|
Imagine Easy Solutions, LLC
|
Delaware
|
Imagine Easy Technology Solutions GmbH
|
Germany
|
Thinkful, Inc.
|
Delaware
|
Thinkful SPV LLC
|
Delaware
|
(1)
|
Registration Statement (Form S-3 No. 333-219592) of Chegg, Inc., and
|
(2)
|
Registration Statements (Form S-8 Nos. 333-229854, 333-223227, 333-216185, 333-209945, 333-202571, 333-194365 and 333-192332) pertaining to the Chegg, Inc. 2013 Equity Incentive Plan, the 2013 Employee Stock Purchase Plan, the 2005 Stock Incentive Plan, as amended, the Zinch, Inc. 2007 Stock Plan, as amended, the Zinch, Inc. 2009 Stock Incentive Plan, as amended, the Non-plan stock Options Granted by Zinch, Inc., and the Cramster, Inc. 2008 Stock Plan, as amended;
|
1.
|
I have reviewed this Annual Report on Form 10-K of Chegg, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ DAN ROSENSWEIG
|
Dan Rosensweig
|
President, Chief Executive Officer and Co-Chairperson
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Chegg, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ ANDREW BROWN
|
Andrew Brown
|
Chief Financial Officer
|
(Principal Financial Officer)
|
(1)
|
The Report, to which this certification is attached as Exhibit 32.01, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
/S/ DAN ROSENSWEIG
|
|
/S/ ANDREW BROWN
|
Dan Rosensweig
|
|
Andrew Brown
|
President, Chief Executive Officer and Co-Chairperson
|
|
Chief Financial Officer
|