September 17, 2014 8:23 PM ET

Diversified Consumer Services

Company Overview of Chegg, Inc.

Company Overview

Chegg, Inc. operates student-first connected learning platform that empowers students to take control of their education to save time, save money, and get smarter. The company, through its Student Hub, rents and sells print textbooks; and provides eTextbooks, supplemental materials, Chegg Study service, textbook buyback, courses, internships, and college admissions and scholarship services, as well as offers enrollment marketing and brand advertising services. Chegg, Inc. has a strategic alliance with Ingram Content Group Inc. The company was founded in 2005 and is headquartered in Santa Clara, California.

3990 Freedom Circle

Santa Clara, CA 95054

United States

Founded in 2005

639 Employees

Phone:

408-855-5700

Key Executives for Chegg, Inc.

Chairman
Age: 52
Total Annual Compensation: $603.1K
Chief Financial Officer
Age: 54
Total Annual Compensation: $389.4K
Chief Content Officer
Age: 37
Total Annual Compensation: $305.9K
Chief Technology Officer
Age: 47
Total Annual Compensation: $381.0K
Chief Information Officer
Age: 51
Total Annual Compensation: $312.1K
Compensation as of Fiscal Year 2013.

Chegg, Inc. Key Developments

Chegg, Inc. and Ingram Content Group Inc. Form Strategic Alliance

Chegg, The Student Hub announced a significant strategic alliance with Ingram Content Group Inc. Key elements of the alliance include Chegg continuing to own the customer experience, including catalog, end-user pricing, marketing, customer support, ongoing student relationships and data. In addition, Chegg and its brand partners will continue to deliver surprise and delight to students with the products found inside of Chegg-branded boxes, which Ingram will use to fulfill orders. Ingram will be responsible for the sourcing, warehousing, fulfillment, shipping and rental returns of their inventory and Chegg will receive a commission for textbooks rented or sold through its web and mobile sites, recording such commissions as digital revenue. Chegg has already begun transferring ownership of a combination of current and new inventory to Ingram in anticipation of textbook volume for the upcoming fall semester. Chegg expects this will result in a substantial reduction in net cash expenditures on textbooks in Third Quarter 2014 and in the second half of 2014. Chegg and Ingram expect to continue migrating inventory ownership over the next several academic semesters, further reducing Chegg's use of cash on print textbooks. Chegg expects this to strengthen its balance sheet and cash flow.

Chegg, Inc. Reports Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2014; Provides Earnings Guidance for the Third Quarter 2014 and Fiscal Year 2014

Chegg, Inc. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2014. For the quarter, the company reported net revenues of $64,492,000 compared to $55,857,000 a year ago. Loss from operations was $9,642,000 compared to $1,467,000 a year ago. Loss before benefit from income taxes was $9,613,000 compared to $3,201,000 a year ago. Net loss was $8,246,000 or $0.10 per basic and diluted share compared to $3,353,000 or $0.27 per basic and diluted share a year ago. Adjusted EBITDA was $1,556,000 compared to $5,118,000 a year ago. Non-GAAP operating income was $50,000 compared to $3,650,000 a year ago. Non-GAAP net loss was $180,000 or $0.00 per basic and diluted share compared to income of $1,764,000 or $0.03 per diluted share a year ago. For the six months period, the company reported net revenues of $138,885,000 compared to $116,872,000 a year ago. Loss from operations was $35,243,000 compared to $17,637,000 a year ago. Loss before benefit from income taxes was $35,155,000 compared to $20,841,000 a year ago. Net loss was $34,005,000 or $0.41 per basic and diluted share compared to $21,178,000 or $1.72 per basic and diluted share a year ago. Net cash provided by operating activities was $22,598,000 compared to $22,485,000 a year ago. Purchases of property and equipment were $2,496,000 compared to $3,188,000 a year ago. Adjusted LBITDA was $15,026,000 compared to $3,978,000 a year ago. Non-GAAP operating loss was $17,966,000 compared to $6,880,000 a year ago. Non-GAAP net loss was $18,354,000 or $0.22 per basic and diluted share compared to $10,421,000 or $0.85 per basic and diluted share a year ago. The company provided earnings guidance for the third quarter 2014 and fiscal year 2014. For the quarter, the company expects revenue in the range of $75 million to $80 million; total gross margin on both a GAAP and non-GAAP basis of approximately 12%; and adjusted LBITDA in the range of $22 million to $18 million. Adjusted EBITDA guidance for the third quarter includes approximately $17.6 million. For the fiscal year 2014, the company expects revenues in the range of $305 million to $315 million; total gross margin on both a GAAP and non-GAAP basis to be approximately 29%; adjusted LBITDA in the range of $18 million to $14 million; and free cash flow between $5 million and $10 million. Adjusted EBITDA guidance for the fiscal year includes approximately $74.5 million.

Chegg Announces Partnership with Ingram Content Group to Warehouse and Handle the Millions of Textbooks

Chegg announced a new partnership with Ingram Content Group to warehouse and handle the millions of textbooks that college students order and return to the Santa Clara company, ridding itself of one of a labor-intensive function that required a great deal of cash changing hands, but also costing it a big chunk of its revenue stream. Chegg will receive 20% of the revenues from what was its main function as a company, though those sales will now be recorded as "digital" instead of "print" revenues, making them more attractive to investors who believe print to be a dying industry.

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