SANTA CLARA, Calif. — Nov. 1, 2022 — Chegg, Inc. (NYSE: CHGG), the leading student-first connected learning platform, today reported financial results for the three months ended September 30, 2022.

“Our results reflect excellent execution and show the inherent profitability of our model while we continue to invest for future growth,” said Dan Rosensweig, CEO & President of Chegg, Inc.

Third Quarter 2022 Highlights

• • Total Net Revenues of $164.7 million, a decrease of 4% year-over-year
  • Chegg Services Revenues grew 8% year-over-year to $159.3 million, or 97% of total net revenues, compared to 85% in Q3 2021
  • Net Income was $251.6 million primarily driven by the one time tax benefit related to release of valuation allowance of $174.6 million and gain on early extinguishment of debt of $93.5 million
  • Non-GAAP Net Income was $30.4 million
  • Adjusted EBITDA was $50.0 million
  • 4.8 million: number of Chegg Services subscribers, an increase of 9% year-over-year

Total net revenues include revenues from Chegg Services and Required Materials. Chegg Services primarily includes Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Busuu, Mathway, and Thinkful. Required Materials includes print textbooks and eTextbooks.

For more information about non-GAAP net income and adjusted EBITDA, and a reconciliation of non-GAAP net income to net income (loss), and adjusted EBITDA to net income (loss), see the sections of this press release titled, “Use of Non-GAAP Measures,” “Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA,” and “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Business Outlook

Fourth Quarter 2022

• • Total Net Revenues in the range of $200 million to $203 million
  • Chegg Services Revenues in the range of $197 million to $200 million
  • Gross Margin between 74% and 76%
  • Adjusted EBITDA in the range of $71 million to $74 million

Full Year 2022

• • Total Net Revenues in the range of $762 million to $765 million
  • Chegg Services Revenues in the range of $730 million to $733 million
  • Gross Margin between 73% and 74%
  • Adjusted EBITDA in the range of $252 million to $255 million
  • Free Cash Flow in the range of 50% to 60% of Adjusted EBITDA
  • Capital Expenditures in the range of $100 million to $110 million

For more information about the use of forward-looking non-GAAP measures, a reconciliation of forward-looking net income to EBITDA and adjusted EBITDA for the fourth quarter 2022 and full year 2022, see the below sections of the press release titled “Use of Non-GAAP Measures,” and “Reconciliation of Forward-Looking Net Income to EBITDA and Adjusted EBITDA.”

An updated investor presentation and an investor data sheet can be found on Chegg’s Investor Relations website https://investor.chegg.com.