4 unchanged sentences
A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Indian Rupee.
−Removed: To date, we have not entered into derivatives or hedging strategies as our exposure to foreign currency
−Removed: exchange rates has not been material to our historical results of operations.
+Added: To date, we have not entered into derivatives or hedging strategies as our exposure to foreign currency exchange rates has not been material to our historical results of operations.
There were no significant foreign exchange gains or losses in the years ended December 31, 2020 and 2019.
Interest Rate Sensitivity
−Removed: We had cash and cash equivalents totaling $387.5 million and $374.7 million as of December 31, 2019 and 2018 , respectively, and held investments of $691.6 million and $109.4 million as of December 31, 2019 and 2018 , respectively.
−Removed: Our cash and cash equivalents consist of cash, money market accounts, and commercial paper and investments consist of commercial paper, corporate securities, U.S.
−Removed: treasury securities, and agency bonds.
+Added: We had cash and cash equivalents totaling $479.9 million and $387.5 million as of December 31, 2020 and 2019, respectively, and held investments of $1.2 billion and $691.6 million as of December 31, 2020 and 2019, respectively.
+Added: Our cash and cash equivalents consist of cash and money market accounts and investments consist of commercial paper, corporate debt securities, and agency bonds.
Our investment policy and strategy are focused on preservation of capital, supporting our liquidity requirements, and delivering competitive returns subject to prevailing market conditions.
3 unchanged sentences
Any realized gains or losses resulting from such hypothetical interest rate changes would only occur if we sold the investments prior to maturity.
−Removed: We were not exposed to material risks due to changes in market interest rates given the liquidity of the cash and money market accounts and investments in which we invested our cash.
+Added: We were not exposed to material risks due to changes in market interest rates given the liquidity of the cash, cash equivalents, and investments in which we invested our cash.
We carry our notes at face value less unamortized debt discount and debt issuance costs on our consolidated balance sheets.
−Removed: Because the 2025 notes and 2023 notes have a fixed annual interest rate of 0.125% and 0.25%, respectively, we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates.
+Added: Because the 2026 notes, 2025 notes and 2023 notes have a fixed annual interest rate of 0.0%, 0.125% and 0.25%, respectively, we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates.
The fair value of the notes, however, may fluctuate when interest rates and the market price of our stock changes.
See Note 10, “Convertible Senior Notes,” of the Notes to Consolidated Financial Statements of Part II, Item 8 of this Annual Report on Form 10-K for additional information.
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Consolidated Financial Statements
−Removed: Reports of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
−Removed: Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
+Added: Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
4 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
+Added: T a b l e o f C o n t e n t s
+Added: Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Chegg, Inc.
1 unchanged sentence
We have audited the accompanying consolidated balance sheets of Chegg, Inc.
−Removed: and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the years then ended, and the related notes and the schedule listed in the Index at Item 15.2 (collectively referred to as the "financial statements").
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2020 expressed an unqualified opinion on the Company's internal control over financial reporting.
+Added: and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15.2 (collectively, referred to as the “financial statements”).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
1 unchanged sentence
Our responsibility is to express an opinion on the Company’s financial statements based on our audits.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
+Added: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB.
4 unchanged sentences
We believe that our audits provide a reasonable basis for our opinion.
−Removed: Critical Audit Matters
−Removed: The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
−Removed: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.
+Added: Critical Audit Matter
+Added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Convertible Senior Notes—Refer to Notes 2, 5, and 10 to the financial statements
Critical Audit Matter Description
−Removed: During 2019, the Company issued $800 million in aggregate principal amount of convertible senior notes (“the notes”) due in 2025, which, if converted, may be settled in cash, shares of common stock or a combination thereof, at the Company’s election.
+Added: During 2020, the Company issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (the “notes”), which, if converted, may be settled in cash, shares of common stock, or a combination thereof, at the Company’s election.
The Company separated the notes into liability and equity components.
1 unchanged sentence
The carrying amount of the equity component representing the conversion option was determined by deducting the carrying amount of the liability component from the principal amount of the notes.
−Removed: Given the determination of the fair value of the liability component required management to make significant estimates and assumptions regarding the relevant valuation assumptions, auditing the valuation of the liability component required a high degree of auditor judgment and an increased extent of effort, including the need to involve professionals in our firm having expertise in the valuation of financial instruments, when performing audit procedures to evaluate management’s judgments and conclusions.
+Added: Given the determination of the fair value of the liability component required management to make significant estimates and assumptions regarding the relevant valuation assumptions, auditing the valuation of the liability component required a high degree of auditor judgment and an increased extent of effort, including the need to involve professionals in our firm having
+Added: T a b l e o f C o n t e n t s
+Added: expertise in the valuation of financial instruments, when performing audit procedures to evaluate management’s judgements and conclusions.
How the Critical Audit Matter was Addressed in the Audit
6 unchanged sentences
◦ Developed a range of independent estimates and compared those to the fair value of the liability component determined by management.
−Removed: Acquisitions - Thinkful Acquisition - Refer to Notes 2, 7, and 8 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company completed the acquisition of Thinkful, Inc.
−Removed: (“Thinkful”) on October 1, 2019.
−Removed: The total fair value of the purchase consideration was $79.2 million.
−Removed: The purchase price was allocated, on a preliminary basis, to the assets acquired and liabilities assumed based on their estimated fair values, including a content library intangible asset of $6.9 million (“content library”).
−Removed: The determination of the fair value of the content library required management to make significant estimates and assumptions related to future expected cash flows from acquired users, useful lives, and discount rates.
−Removed: Given the significant judgments made by management to estimate the fair value of the content library, performing audit procedures to evaluate the reasonableness of the forecasted revenues and cost of revenues used in the determination of future expected cash flows, especially considering Thinkful’s limited operating history, required a high degree of auditor judgment and an increased extent of effort.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to the forecasted revenues and cost of revenues for the content library intangible asset included the following, among others:
−Removed: 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.
−Removed: 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:
−Removed: Historical performance of Thinkful.
−Removed: Industry data and analyst reports.
−Removed: Internal communications to management and the Board of Directors.
−Removed: Forecasted information as well as analyst and industry reports for the Company and certain of its peer companies.
/s/ DELOITTE & TOUCHE LLP
2 unchanged sentences
We have served as the Company’s auditor since 2018.
−Removed: Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
+Added: T a b l e o f C o n t e n t s
+Added: Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Chegg, Inc.
Opinion on Internal Control over Financial Reporting
−Removed: We have audited the internal controls over financial reporting of Chegg, Inc.
+Added: We have audited the internal control over financial reporting of Chegg, Inc.
and subsidiaries (the “Company”) as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements of the Company as of and for the year ended December 31, 2019, and our report dated February 20, 2020 expressed an unqualified opinion on those financial statements.
−Removed: As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Thinkful, Inc., which was acquired on October 1, 2020 and whose financial statements constituted less than 1% of total assets as of December 31, 2019 and less than 1% of total net revenues for the year then ended.
−Removed: Accordingly, our audit did not include the internal control over financial reporting at Thinkful, Inc.
+Added: In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the Company and our report dated February 22, 2021, expressed an unqualified opinion on those financial statements.
+Added: As described in Management’s Annual Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Mathway, LLC, which was acquired on June 4, 2020, and whose financial statements constituted less than 1% of total assets and approximately 2% of total net revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2020.
+Added: Accordingly, our audit did not include the internal control over financial reporting at Mathway, LLC.
Basis for Opinion
5 unchanged sentences
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
−Removed: Our audit included obtaining an understanding of internal controls over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
+Added: Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.
9 unchanged sentences
February 22, 2021
−Removed: Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
−Removed: To the Stockholders and the Board of Directors of Chegg, Inc.
−Removed: Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows of Chegg, Inc.
−Removed: (the Company) for the year ended December 31, 2017, and the related notes and the financial statement schedules listed in the Index at Item 15.2 (collectively referred to as the “consolidated financial statements”).
−Removed: In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2017, in conformity with U.S.
−Removed: generally accepted accounting principles.
−Removed: Basis for Opinion
−Removed: These financial statements are the responsibility of the Company's management.
−Removed: Our responsibility is to express an opinion on the Company’s financial statements based on our audit.
−Removed: We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
−Removed: federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
−Removed: We conducted our audit in accordance with the standards of the PCAOB.
−Removed: Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
−Removed: Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
−Removed: Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
−Removed: Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
−Removed: We believe that our audit provides a reasonable basis for our opinion.
−Removed: /s/ Ernst & Young LLP
−Removed: We served as the Company’s auditor from 2009 to 2018.
−Removed: San Jose, California
−Removed: February 26, 2018
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED BALANCE SHEETS
(in thousands, except for number of shares and par value)
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
Current assets
1 unchanged sentence
Short-term investments 665,567 381,074
−Removed: Accounts receivable, net of allowance for doubtful accounts of $56 and $229 at December 31, 2019 and December 31, 2018, respectively
+Added: Accounts receivable, net of allowance of $ 153 and $ 56 at December 31, 2020 and December 31, 2019, respectively
+Added: 12,913 11,529
Prepaid expenses 12,776 10,538
2 unchanged sentences
Long-term investments 523,628 310,483
+Added: Textbook library, net 34,149 —
Property and equipment, net 125,807 87,359
+Added: Goodwill 285,214 214,513
Intangible assets, net 51,249 34,667
Right of use assets 24,226 15,931
+Added: Other assets 24,030 18,778
+Added: Total assets $ 2,251,258 $ 1,488,998
Liabilities and stockholders’ equity
17 unchanged sentences
Additional paid-in capital 1,030,577 916,095
−Removed: Accumulated other comprehensive loss
+Added: Accumulated other comprehensive income (loss) 1,530 ( 1,096 )
Accumulated deficit ( 422,601 ) ( 416,292 )
2 unchanged sentences
See Notes to Consolidated Financial Statements.
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED STATEMENTS OF OPERATIONS
1 unchanged sentence
Years Ended December 31,
+Added: 2020 2019 2018
+Added: Net revenues $ 644,338 $ 410,926 $ 321,084
Cost of revenues 205,417 92,182 79,996
+Added: Gross profit 438,921 318,744 241,088
Operating expenses:
3 unchanged sentences
Restructuring charges — 97 589
−Removed: Gain on liquidation of textbooks
Total operating expenses 382,168 300,927 247,308
6 unchanged sentences
Provision for income taxes 5,360 2,634 1,430
+Added: Net loss $ ( 6,221 ) $ ( 9,605 ) $ ( 14,888 )
Net loss per share, basic and diluted $ ( 0.05 ) $ ( 0.08 ) $ ( 0.13 )
1 unchanged sentence
See Notes to Consolidated Financial Statements.
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
1 unchanged sentence
Years Ended December 31,
−Removed: Other comprehensive loss:
−Removed: Change in unrealized gain (loss) on available for sale investments, net of tax
+Added: 2020 2019 2018
+Added: Net loss $ ( 6,221 ) $ ( 9,605 ) $ ( 14,888 )
+Added: Other comprehensive income (loss)
+Added: Change in unrealized gain on available for sale investments, net of tax 1,037 668 76
Change in foreign currency translation adjustments, net of tax 1,589 ( 745 ) ( 813 )
−Removed: Other comprehensive loss
+Added: Other comprehensive income (loss) 2,626 ( 77 ) ( 737 )
Total comprehensive loss $ ( 3,595 ) $ ( 9,682 ) $ ( 15,625 )
See Notes to Consolidated Financial Statements.
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
−Removed: Additional Paid-In
−Removed: Accumulated Other Comprehensive Loss
−Removed: Total Stockholders’ Equity
+Added: Value Additional Paid-In
+Added: Capital Accumulated Other Comprehensive Income (Loss) Accumulated
+Added: Deficit Total Stockholders’ Equity
Balances at December 31, 2017 109,668 $ 110 $ 782,845 $ ( 282 ) $ ( 391,611 ) $ 391,062
−Removed: Issuance of common stock in connection with follow-on offering, net of offering costs
+Added: Cumulative-effect adjustment to accumulated deficit related to adoption of ASUs — — — — ( 77 ) ( 77 )
+Added: Equity component of 2023 convertible senior notes, net of issuance costs — — 62,444 — — 62,444
+Added: Purchase of 2023 convertible senior notes capped call — — ( 39,227 ) — — ( 39,227 )
+Added: 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
3 unchanged sentences
Other comprehensive loss — — — ( 737 ) — ( 737 )
+Added: Net loss — — — — ( 14,888 ) ( 14,888 )
Balances at December 31, 2018 115,500 116 818,113 ( 1,019 ) ( 406,576 ) 410,634
−Removed: Cumulative-effect adjustment to accumulated deficit related to adoption of ASUs
+Added: Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02 — — — — ( 111 ) ( 111 )
Equity component of 2025 convertible senior notes, net of issuance costs — — 206,747 — — 206,747
3 unchanged sentences
Net share settlement of equity awards 3,248 3 ( 94,571 ) — — ( 94,568 )
−Removed: Warrant exercises
+Added: 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 )
+Added: Net loss — — — — ( 9,605 ) ( 9,605 )
Balances at December 31, 2019 121,584 122 916,095 ( 1,096 ) ( 416,292 ) 498,829
2 unchanged sentences
Purchase of 2026 convertible senior notes capped call — — ( 103,400 ) — — ( 103,400 )
−Removed: Repurchase of common stock
+Added: Equity component related to conversions of 2023 convertible senior notes — — ( 442,667 ) — — ( 442,667 )
+Added: Issuance of common stock upon conversion of 2023 convertible senior notes 4,182 4 327,137 — — 327,141
+Added: Proceeds from capped call related to conversions of 2023 convertible senior notes — — 77,095 — — 77,095
Issuance of common stock upon exercise of stock options and ESPP 1,154 1 15,480 — — 15,481
Net share settlement of equity awards 2,424 2 ( 80,680 ) — — ( 80,678 )
−Removed: Issuance of common stock in connection with prior acquisition
Share-based compensation expense — — 84,055 — — 84,055
−Removed: Other comprehensive loss
+Added: Other comprehensive income — — — 2,626 — 2,626
+Added: Net loss — — — — ( 6,221 ) ( 6,221 )
Balances at December 31, 2020 129,344 $ 129 $ 1,030,577 $ 1,530 $ ( 422,601 ) $ 609,635
See Notes to Consolidated Financial Statements.
+Added: T a b l e o f C o n t e n t s
CONSOLIDATED STATEMENTS OF CASH FLOWS
1 unchanged sentence
Years Ended December 31,
+Added: 2020 2019 2018
Cash flows from operating activities
+Added: Net loss $ ( 6,221 ) $ ( 9,605 ) $ ( 14,888 )
Adjustments to reconcile net loss to net cash provided by operating activities:
−Removed: Depreciation and amortization expense
+Added: Print textbook depreciation expense 15,397 — —
+Added: Other depreciation and amortization expense 47,018 30,247 22,805
Share-based compensation expense 84,055 64,909 52,030
−Removed: Gain on liquidation of textbooks
−Removed: Loss from write-offs of textbooks
−Removed: Loss from write-offs of property and equipment
−Removed: Interest accretion on deferred consideration
Amortization of debt discount and issuance costs 64,573 43,202 10,494
+Added: Repayment of convertible senior notes attributable to debt discount ( 20,433 ) — —
+Added: Loss on early extinguishments of debt 4,286 — —
+Added: Loss from write-offs of property and equipment 1,211 1,009 93
+Added: Loss from impairment of strategic equity investment 10,000 — —
+Added: Gain on textbook library, net ( 1,453 ) — —
Deferred income taxes ( 109 ) ( 39 ) ( 323 )
Operating lease expense, net of accretion 4,901 4,385 —
+Added: Other non-cash items ( 118 ) ( 416 ) 65
Change in assets and liabilities, net of effect of acquisition of businesses:
1 unchanged sentence
Prepaid expenses and other current assets 5,419 ( 12,930 ) ( 4,921 )
+Added: Other assets ( 4,214 ) ( 1,494 ) 48
Accounts payable 1,119 ( 2,395 ) 893
4 unchanged sentences
Cash flows from investing activities
−Removed: Proceeds from liquidations of textbooks
+Added: Purchases of property and equipment ( 81,317 ) ( 42,326 ) ( 31,223 )
+Added: Purchases of textbooks ( 58,567 ) — —
+Added: Proceeds from disposition of textbooks 7,569 — —
Purchases of investments ( 1,045,564 ) ( 959,911 ) ( 146,856 )
1 unchanged sentence
Maturities of investments 539,889 324,700 138,380
−Removed: Purchases of property and equipment
Acquisition of businesses, net of cash acquired ( 92,796 ) ( 79,149 ) ( 34,650 )
2 unchanged sentences
Cash flows from financing activities
−Removed: Common stock issued under stock plans, net
+Added: Proceeds from common stock issued under stock plans, net 15,483 35,100 29,116
Payment of taxes related to the net share settlement of equity awards ( 80,680 ) ( 94,571 ) ( 49,089 )
−Removed: Payment of deferred cash consideration related to acquisitions
−Removed: Proceeds from follow-on offering, net of offering costs
Proceeds from issuance of convertible senior notes, net of issuance costs 984,096 780,180 335,618
Purchase of convertible senior notes capped call ( 103,400 ) ( 97,200 ) ( 39,227 )
+Added: Repayment of convertible senior notes ( 303,967 ) — —
+Added: Proceeds from exercise of convertible senior notes capped call 77,095 — —
Repurchase of common stock — ( 20,000 ) ( 20,000 )
5 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
Supplemental cash flow data:
Cash paid during the period for:
+Added: Interest $ 1,766 $ 1,332 $ 605
+Added: Income taxes $ 3,436 $ 2,070 $ 2,097
Cash paid for amounts included in the measurement of lease liabilities:
4 unchanged sentences
Accrued purchases of long-lived assets $ 1,588 $ 10,036 $ 1,210
+Added: Accrued escrow related to acquisition $ 7,451 $ — $ —
+Added: Issuance of common stock related to repayment of convertible senior notes $ 327,141 $ — $ —
Issuance of common stock related to prior acquisition $ — $ 3,003 $ —
+Added: 2020 2019 2018
Reconciliation of cash, cash equivalents and restricted cash:
4 unchanged sentences
See Notes to Consolidated Financial Statements.
+Added: T a b l e o f C o n t e n t s
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2 unchanged sentences
(Chegg, the Company, we, us, or our), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005.
−Removed: Chegg is a Smarter Way to Student.
−Removed: As the leading direct-to-student learning platform, we strive to improve educational outcomes by putting the student first in all our decisions.
−Removed: We support students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials.
−Removed: Our services are available online, anytime and anywhere, so we can reach students when they need us most.
+Added: A Smarter Way to Student ® .
+Added: We strive to improve educational outcomes by putting the student first.
+Added: We support students on their journey from high school to college and into their careers with tools designed to help them learn their course materials, succeed in their classes, save money on required materials, and learn the most in-demand skills.
+Added: Our services are available online, anytime and anywhere.
Basis of Presentation
Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2020, December 31, 2019, and December 31, 2018 as 2020, 2019, and 2018, respectively.
−Removed: We have changed the captions on our consolidated statements of cash flows from “purchases of marketable securities” to “purchases of investments” and from “maturities of marketable securities” to “maturities of investments.” This change does not impact any current or previously reported results.
Significant Accounting Policies
Use of Estimates
−Removed: The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S.
−Removed: GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities;
+Added: The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities;
the disclosure of contingent liabilities at the date of the financial statements;
1 unchanged sentence
Significant estimates, assumptions, and judgments are used for, but not limited to:
−Removed: revenue recognition, recoverability of accounts receivable, restructuring charges, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, the valuation of our convertible senior notes, internal-use software and website development costs, and operating lease right of use (ROU) assets and operating lease liabilities.
+Added: revenue recognition, recoverability of accounts receivable, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives and salvage value assigned to our textbook library, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, the valuation of our convertible senior notes, internal-use software and website development costs, operating lease right of use (ROU) assets, and operating lease liabilities.
We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances.
7 unchanged sentences
We consider all highly liquid investments with an original maturity date of three months or less from the date of purchase to be cash equivalents.
−Removed: Our cash and cash equivalents consist of cash, money market accounts, and commercial paper at financial institutions, and are stated at cost, which approximates fair value.
+Added: Our cash and cash equivalents consist of cash and money market accounts at financial institutions, and are stated at cost, which approximates fair value.
We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.
−Removed: We hold investments in commercial paper, corporate securities, U.S.
−Removed: treasury securities, and agency bonds.
−Removed: We classify our investments as available-for-sale that are either short or long-term based on the nature of each security based on the contractual maturity of the investment when purchased.
−Removed: Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in other comprehensive loss on our consolidated statements of stockholders’ equity.
−Removed: Unrealized losses are charged against other income, net when a decline in fair value is determined to be other-than-temporary.
−Removed: We did not record any such impairment charges in the periods presented.
−Removed: We determined realized gains or losses on the sale of investments on a specific identification method, and recorded such gains or losses as other income, net.
+Added: T a b l e o f C o n t e n t s
+Added: We hold investments in commercial paper, corporate debt securities, and agency bonds.
+Added: We classify our investments as available-for-sale that are either short or long-term based on the nature of each security based on the remaining contractual maturity of the investment.
+Added: Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, unrelated to credit loss factors, net of taxes, included in other comprehensive income (loss) on our consolidated statements of stockholders’ equity.
+Added: Beginning in 2020, unrealized losses related to credit loss factors are now recorded through an allowance for credit losses in other income, net on our consolidated statements of operations, rather than as a reduction to the amortized costs basis in other comprehensive income (loss), when a decline in fair value has resulted from a credit loss.
+Added: We determine realized gains or losses on the sale of investments on a specific identification method, and record such gains or losses as other income, net.
For the years ended December 31, 2020, 2019 and 2018, the Company's gross realized gains and losses on investments were not significant.
−Removed: Accounts Receivable
+Added: Accounts Receivable, Net of Allowance
Accounts receivable are recorded at the invoiced amount and are non-interest bearing.
−Removed: We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers and marketing services customers, and maintain an allowance for doubtful accounts to account for potentially uncollectible receivables.
−Removed: Allowance for Doubtful Accounts
+Added: We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers and advertising customers.
+Added: We maintain an allowance to account for potentially uncollectible receivables.
We assess the creditworthiness of our customers based on multiple sources of information, and analyze such factors as our historical bad debt experience, industry and geographic concentrations of credit risk, economic trends, and customer payment history.
This assessment requires significant judgment.
−Removed: Because of this assessment, we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of certain customers to make all of their required payments.
+Added: Because of this assessment, we maintain an allowance for estimated losses resulting from the inability of certain customers to make all of their required payments.
In making this estimate, we analyze historical payment performance and current economic trends when evaluating the adequacy of the allowance for doubtful accounts.
−Removed: Accounts receivable are written off as a decrease to the allowance for doubtful accounts when all collection efforts have been exhausted and an account is deemed uncollectible.
+Added: Accounts receivable are written off as a decrease to the allowance when all collection efforts have been exhausted and an account is deemed uncollectible.
Concentration of Credit Risk
4 unchanged sentences
Our investments were held and managed by recognized financial institutions that followed our investment policy with the main objective of preserving capital and maintaining liquidity.
−Removed: C oncentrations of credit risk with respect to accounts receivables exist to the full extent of amounts presented in the financial statements.
−Removed: We had one customer, in each year, that represented 11 % of our net accounts receivable balance as of December 31, 2019 and 2018 .
+Added: Concentrations of credit risk with respect to accounts receivables exist to the full extent of amounts presented in the financial statements.
+Added: We had one customer, in each year, that represented 10 % and 11 % of our net accounts receivable balance as of December 31, 2020 and 2019, respectively.
No customers represented over 10% of net revenues during the years ended December 31, 2020, 2019 or 2018.
2 unchanged sentences
Depreciation and content amortization are computed using the straight-line method over the following estimated useful lives of the assets:
−Removed: Classification
−Removed: Computers and equipment
−Removed: Internal-use software and website development
−Removed: Furniture and fixtures
−Removed: Leasehold improvements
−Removed: Shorter of the remaining lease term or the estimated useful life of 5 years
−Removed: Shorter of the licensed content term or the estimated useful life of 5 years
−Removed: Depreciation and content amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories in our consolidated statements of operations.
−Removed: Depreciation and content amortization expense during the years ended December 31, 2019 , 2018 , and 2017 were approximately $ 24.2 million , $ 16.8 million , and $ 13.8 million , respectively.
+Added: Classification Useful Life
+Added: Content Shorter of the licensed content term or the estimated useful life of 5 years
+Added: Leasehold improvements Shorter of the remaining lease term or the estimated useful life of 5 years
+Added: Internal-use software and website development 3 years
+Added: Furniture and fixtures 5 years
+Added: Computers and equipment 3 years
+Added: T a b l e o f C o n t e n t s
+Added: Depreciation and content amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories on our consolidated statements of operations.
The cost of maintenance and repairs is expensed as incurred.
21 unchanged sentences
We completed our annual impairment test on October 1st of 2020 and 2019, each of which did not result in any impairment as our qualitative assessment did not indicate that it is more likely than not that the fair value of our reporting unit is less than the carrying amount.
−Removed: As of December 31, 2019 and 2018 , we had goodwill of $ 214.5 million and $ 149.5 million , respectively, and an indefinite lived intangible asset related to the internships.com trade name of $ 3.6 million .
Acquired Intangible Assets and Other Long-Lived Assets
−Removed: Acquired intangible assets with finite useful lives, which include developed technology, content library, customer lists, trade names and non-compete agreements, are amortized over their estimated useful lives.
+Added: Acquired intangible assets with finite useful lives, which include developed technology, content library, customer lists, trade names, domain names, and non-compete agreements, are amortized over their estimated useful lives.
We assess the impairment of acquired intangible assets and other long-lived assets when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
We determine if an arrangement is a lease at inception.
−Removed: Operating leases are included in operating lease ROU assets and operating lease liabilities within current liabilities and long-term liabilities on our consolidated balance sheet.
+Added: Operating leases are included in operating lease ROU assets and operating lease liabilities within current liabilities and long-term liabilities on our consolidated balance sheets.
Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.
1 unchanged sentence
Our incremental borrowing rate is estimated based on the estimated rate incurred to borrow, on a collateralized basis over a similar term as our leases, an amount equal to the lease payments in a similar economic environment.
−Removed: Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
+Added: T a b l e o f C o n t e n t s
+Added: terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
We do not record leases on our consolidated balance sheet with a term of one year or less.
3 unchanged sentences
Strategic Investments
−Removed: We have entered into strategic investments that are accounted for under the cost method and included in other assets on our consolidated balance sheets.
−Removed: We assess our strategic investments for impairment whenever events or changes in circumstances indicate that the strategic investments may be impaired.
+Added: We have entered into strategic investments that do not have readily determinable fair values and have elected to account for these investments at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, if any.
+Added: Strategic investments are included in other assets on our consolidated balance sheets.
+Added: We assess our strategic investments for impairment whenever events or changes in circumstances indicate that they may be impaired.
The factors we consider in our evaluation include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee or factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations or working capital deficiencies.
−Removed: Additionally, starting in 2018 as a result of our adoption of Accounting Standards Update (ASU) 2016-01, we consider whether there have been any observable price changes in orderly transactions for identical or similar investments.
−Removed: During the years ended December 31, 2019 , 2018 , and 2017 , we did not record any impairment charges in our strategic investments.
−Removed: There is a potential for charges in future periods if we determine that our strategic investments are impaired.
−Removed: During the years ended December 31, 2019 and 2018 , there were no observable price changes in orderly transactions for the identical or similar investments of the same issuers.
Convertible Senior Notes, net
+Added: In August 2020, we issued $ 1.0 billion in aggregate principal amount of 0 % convertible senior notes due in 2026 (2026 notes).
In March 2019, we issued $ 700 million in aggregate principal amount of 0.125 % convertible senior notes due in 2025 (2025 notes) and in April 2019, the initial purchasers fully exercised their option to purchase $ 100 million of additional 2025 notes for aggregate total gross proceeds of $ 800 million.
−Removed: In April 2018, we issued $ 345 million in aggregate principal amount
−Removed: of 0.25 % convertible senior notes due in 2023 (2023 notes).
−Removed: Collectively, the 2025 notes and the 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components.
+Added: In April 2018, we issued $ 345 million in aggregate principal amount of 0.25 % convertible senior notes due in 2023 (2023 notes).
+Added: Collectively, the 2026 notes, 2025 notes and the 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components, as the notes represent convertible instruments with a cash conversion feature.
The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature.
1 unchanged sentence
The difference represents the debt discount, recorded as a reduction of the convertible senior notes on our consolidated balance sheet, and is amortized to interest expense over the term of the notes using the effective interest rate method.
−Removed: The equity component is not remeasured as long as it continues to meet the conditions for equity classification.
+Added: The carrying amount of the liability component is classified as a long-term liability as we have the election to settle conversion requests in shares of our common stock.
+Added: The carrying amount of the equity component is not remeasured as long as it continues to meet the conditions for equity classification.
In accounting for the issuance costs related to the notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values.
1 unchanged sentence
The issuance costs attributable to the equity component are recorded as a reduction of the equity component within additional paid-in capital.
+Added: In accounting for extinguishment of the notes, we allocated the consideration transferred between the liability and equity components in a similar manner as upon issuance.
+Added: The liability component for extinguished notes is then compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other income, net on our consolidated statements of operations.
+Added: Textbook Library
+Added: Beginning in January 2020, we began our transition back to print textbook ownership by purchasing print textbooks to establish our textbook library.
+Added: We consider our print textbook library to be a long-term productive asset and, as such, classify it as a non-current asset on our consolidated balance sheets.
+Added: All print textbooks in our textbook library are stated at cost, which includes the purchase price less accumulated depreciation.
+Added: We write down textbooks on a book-by-book basis for lost, damaged, or excess print textbooks.
+Added: We depreciate our print textbooks, less an estimated salvage value, over an estimated useful life of four years using an accelerated method of depreciation, as we estimate this method most accurately reflects the actual pattern of decline in their economic value.
+Added: The salvage value considers the historical trend and projected proceeds for print textbooks.
+Added: The useful life is determined based on the estimated time period in which the print textbooks are held and rented.
+Added: We review the estimated salvage value and useful life of our print textbook library on an ongoing basis.
+Added: T a b l e o f C o n t e n t s
+Added: Write-downs for print textbooks, print textbook depreciation expense, the gain or loss on print textbooks liquidated, and the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis are recorded in cost of revenues on our consolidated statements of operations and classified as adjustments to cash flows from operating activities.
+Added: Cash outflows for the acquisition of print textbooks net of changes in related accounts payable and accrued liabilities, and cash inflows received from the proceeds from the disposition of print textbooks net of changes in related accounts receivable, are classified as cash flows from investing activities on our consolidated statements of cash flows.
Revenue Recognition and Deferred Revenue
−Removed: We recognize revenues from our Chegg Services and Required Materials offerings when control of the goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
+Added: We recognize revenues when the control of goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
+Added: Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data.
+Added: Customer refunds from cancellations and returns are recorded as a reduction to revenues.
We determine revenue recognition through the following steps:
4 unchanged sentences
• Recognition of revenue when, or as, we satisfy a performance obligation
−Removed: We generate revenues from our Chegg Services product line primarily through Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, and Thinkful .
−Removed: Chegg Services are offered to students primarily through weekly or monthly subscriptions, and we recognize revenues ratably over the respective subscription period.
−Removed: Revenues from Thinkful, our skills-based learning platform, are recognized either ratably over the term of the course, generally six months, or upon completion of the lessons, depending on the instruction type of the course.
−Removed: Revenues from our Required Materials product line includes a revenue share, upon fulfillment, on the total transactional amount of a rental and sale transaction for print textbooks .
−Removed: The revenue share on the rental and sale of print textbooks is recognized immediately when a book ships to the student.
−Removed: Shipping and handling activities are performed after we recognize revenues and we have elected to account for them as activities to fulfill a print textbook rental or sale order.
−Removed: Revenues from the rental of eTextbooks is recognized ratably over the contractual period, generally two to five months.
−Removed: Revenues from the sale of eTextbooks is recognized immediately when the eTextbook sale occurs.
−Removed: Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data.
−Removed: Customer refunds from cancellations and returns are recorded as a reduction to revenues.
+Added: We generate revenues from our Chegg Services product line which primarily includes Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Thinkful, and Mathway.
+Added: Revenues from Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, and Mathway are primarily recognized ratably over the respective weekly or monthly subscription period.
+Added: Revenues from Thinkful are recognized either ratably over the term of the course, generally six months , or upon completion of the lessons, depending on the instruction type of the course.
+Added: Revenues from our Required Materials product line includes revenues from print textbooks that we own or that are owned by a partner as well as revenues from eTextbooks.
+Added: Beginning in 2020, our Required Materials product line includes operating leases with students for the rental of print textbooks that we own.
+Added: Operating lease income is recognized as the total transaction amount, paid upon commencement of the lease, ratably over the lease term or rental term, generally a two - to five-month period.
+Added: Students generally have the option to extend the term of their rental or purchase the print textbook at the end of the term otherwise the print textbook is returned to our print textbook library for future rental.
+Added: If a student chooses to purchase or not return the print textbook at the end of their rental term, we charge the student for the book and recognize the revenues immediately.
+Added: Additionally, we provide students the ability to purchase print textbooks on a just-in-time basis and recognize revenues immediately upon shipment.
+Added: Revenues from print textbooks owned by a partner are recognized as a revenue share on the total transaction amount of a rental or sale transaction immediately when a print textbook ships to a student.
+Added: Shipping and handling activities are expensed as incurred.
+Added: Revenues from eTextbooks are recognized ratably over the contractual period, generally a two - to five-month period.
Some of our customer arrangements include multiple performance obligations.
We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract.
−Removed: For these arrangements that contain multiple performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (SSP) of each distinct performance obligation to the total value of the contract.
+Added: For these arrangements that contain multiple performance obligations, we allocate the transaction price based on the relative standalone selling price (SSP) method by comparing the SSP of each distinct performance obligation to the total value of the contract.
We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately.
1 unchanged sentence
Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations.
−Removed: Our agreements with print textbook partners may include an amount of variable consideration in addition to a fixed revenue share that we earn.
+Added: Some of our customer arrangements may include an amount of variable consideration in addition to a fixed revenue share that we earn.
This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration.
We estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period.
−Removed: For sales of third-party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third-
−Removed: party products.
+Added: T a b l e o f C o n t e n t s
+Added: For sales of third-party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third-party products.
Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer.
−Removed: In relation to print textbook rental and sale agreements with our partners, we recognize revenues on a net basis based on our role in the transaction as an agent as we have concluded that we do not control the use of the print textbooks, and therefore record only the revenue share we earn upon the shipment of a print textbook to a student.
−Removed: For the rental or sale of eTextbooks, we have concluded that we control the service, therefore we recognize revenues and cost of revenues on a gross basis ratably over the term the student has access to the eTextbook.
+Added: In relation to print textbooks owned by a partner, we recognize revenues on a net basis based on our role in the transaction as an agent as we have concluded that we do not control the use of the print textbooks, and therefore record only the net revenue share we earn.
+Added: We have concluded that we control our Chegg Services, print textbooks that we own for rental, purchase at the end of the rental term, or sale on a just-in-time basis, and eTextbook service and therefore we recognize revenues and cost of revenues on a gross basis.
Contract assets are contained within other current assets and other assets on our consolidated balance sheets.
−Removed: Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer.
+Added: Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer and primarily consist of the income sharing payment arrangements we offer to students for our Thinkful service.
Contract receivables are contained within accounts receivable, net on our consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time.
7 unchanged sentences
Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services.
−Removed: Cost of revenues primarily consists of publisher content fees for eTextbooks, content amortization expense related to content that we develop, license from publishers for which we pay one-time license fees, or acquire through acquisitions, payment processing costs, the payments made to tutors through our Chegg Tutors service, personnel costs and other direct costs related to providing content or services.
+Added: Cost of revenues primarily consists of content amortization expense related to content that we develop, license from publishers for which we pay one-time license fees, or acquire through acquisitions, payment processing costs, order fulfillment fees primarily related to outbound shipping and fulfillment as well as publisher content fees for eTextbooks, write-downs for print textbooks, the gain or loss on print textbooks liquidated, the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis, print textbook depreciation expense, personnel costs and other direct costs related to providing content or services.
In addition, cost of revenues includes allocated information technology and facilities costs.
1 unchanged sentence
Our research and development expenses consist of salaries, benefits, and share-based compensation expense for employees on our product, engineering, and technical teams who are responsible for maintaining our website, developing new products, and improving existing products.
−Removed: Research and development costs also include amortization of acquired intangible assets, depreciation expense, technology costs to support our research and development, outside services, and allocated information technology and facilities expenses.
+Added: Research and development costs also include depreciation expense, technology costs to support our research and development, outside services, and allocated information technology and facilities expenses.
We expense substantially all of our research and development expenses as they are incurred.
2 unchanged sentences
During the years ended December 31, 2020, 2019, and 2018, advertising costs were approximately $ 35.3 million, $ 24.4 million, and $ 17.9 million, respectively.
−Removed: Restructuring Charges
−Removed: Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments, and costs of facility consolidation and closure.
−Removed: Restructuring charges are recorded upon approval of a formal management plan and are included in the results of operations of the period in which such plan is approved and the expense becomes estimable.
−Removed: To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities.
−Removed: Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable.
−Removed: The rates used in determining severance accruals are based on our policies and practices and negotiated settlements.
−Removed: Restructuring charges for employee workforce reductions are recorded upon employee notification for employees whose required continuing service period is 60 days or less and ratably over the employee’s continuing service period for employees whose required continuing service period is greater than 60 days.
Share-based Compensation Expense
−Removed: Share-based compensation expense for stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of share-based compensation awards based on the grant-date fair value of the award.
−Removed: Share-based compensation expense for our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while RSUs and PSUs are measured based on the closing fair market value of the Company’s common stock on the date of grant.
+Added: Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs), and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of share-based compensation awards based on the grant-date fair value of the award.
+Added: Share-based compensation expense for our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while RSUs and PSUs are measured based on the closing fair market value of the Company’s common stock generally on the date of grant.
We recognize share-based compensation expense over the requisite service period, which is generally the vesting period, on a straight-line basis for ESPP and RSUs and on a graded basis for PSUs, contingent on the achievement of performance conditions.
−Removed: These amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
+Added: T a b l e o f C o n t e n t s
+Added: amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
8 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
+Added: Net loss $ ( 6,221 ) $ ( 9,605 ) $ ( 14,888 )
Weighted average shares used to compute net loss per share, basic and diluted 125,367 119,204 113,251
2 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
Options to purchase common stock 935 2,395 4,045
3 unchanged sentences
Total common stock equivalents 9,412 10,620 11,991
−Removed: Shares related to convertible senior notes represent the anti-dilutive impact of our issuance of $ 345 million in aggregate principal amount of our 2023 notes as the average price of our common stock during the year ended December 31, 2019 was higher than the conversion price of $ 26.95 .
−Removed: While these shares were anti-dilutive during the year ended December 31, 2019 , they may be dilutive in periods we report net income.
−Removed: However, as a result of the capped call transactions, there will be no economic dilution from the 2023 notes up to $ 40.68 , as exercise of the capped call instruments will reduce dilution from the 2023 notes that would have otherwise occurred when the average price of our common stock exceeds the conversion price.
−Removed: None of the shares related to our issuance of $ 800 million in aggregate principal amount of our 2025 notes were anti-dilutive during the year ended December 31, 2019 .
−Removed: The average price of our common stock during the year ended December 31, 2019 was lower than the conversion price of our 2025 notes of $ 51.56 .
−Removed: See Note 10, “Convertible Senior Notes”, for more information about our convertible senior notes.
+Added: Shares related to convertible senior notes during the year ended December 31, 2020 represents the anti-dilutive impact of our issuance of our 2023 notes and 2025 notes as the average price of our common stock was higher than the conversion price of $ 26.95 and $ 51.56 , respectively, and the conditions for conversion had been met.
+Added: Shares related to convertible senior notes during the year ended December 31, 2019 represents the anti-dilutive impact of our 2023 notes as the average price of our common stock was higher than the conversion price and the conditions for conversion had been met.
+Added: While these shares were anti-dilutive during the years ended December 31, 2020 and 2019, they may be dilutive in periods we report net income.
+Added: However, as a result of the capped call transactions, there will be no economic dilution from the 2023 notes and 2025 notes up to $ 40.68 and $ 79.32 , respectively, as exercise of the capped call instruments will reduce dilution that would have otherwise occurred when the average price of our common stock exceeds the conversion prices.
+Added: None of the shares related to our 2026
+Added: T a b l e o f C o n t e n t s
+Added: notes were dilutive or anti-dilutive during the year ended December 31, 2020 as a result of the conditions for conversion not being met.
+Added: For further information on the notes, see Note 10, “Convertible Senior Notes.”
Foreign Currency Translation
3 unchanged sentences
Revenues and expenses are translated at average exchange rates during the period.
−Removed: Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets.
+Added: Foreign currency translation gains or losses are included in accumulated other comprehensive income (loss) as a component of stockholders’ equity on the consolidated balance sheets.
Gains or losses resulting from foreign currency transactions, which are denominated in currencies other than the entity’s functional currency, are included in other income, net in the consolidated statements of operations and were not material during the years ended December 31, 2020, 2019 or 2018.
1 unchanged sentence
Recently Issued Accounting Pronouncements Not Yet Adopted
−Removed: In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740):
+Added: In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity .
+Added: ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options, by reducing the number of accounting separation models for convertible instruments, amends the guidance in ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity, for certain contracts in an entity's own equity that are currently accounted for as derivatives, and requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share (EPS) calculation.
+Added: The guidance allows for a modified retrospective method of transition with a cumulative-effect adjustment to the opening balance sheet of accumulated deficit in the period of adoption without restating prior periods.
+Added: The guidance is effective for fiscal years beginning after December 15, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020.
+Added: We will early adopt the guidance on January 1, 2021 under the modified retrospective method of transition.
+Added: Upon adoption, we expect to initially record a $ 107 million cumulative-effect adjustment to the opening balance of accumulated deficit on our consolidated balance sheet, largely due to the reduction in non-cash interest expense associated with the historical separation of debt and equity components for our notes.
+Added: Recently Adopted Accounting Pronouncements
+Added: In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting .
+Added: ASU 2020-04 provides temporary optional expedients and exceptions for applying reference rate reform to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
+Added: The guidance is required to be applied immediately and only applies to contract modifications made or hedging relationships entered into or evaluated before December 31, 2022.
+Added: We do not have any hedging relationships and currently do not have material contracts impacted by reference rate reform, however, we will continue to assess contracts through December 31, 2022.
+Added: In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):
Simplifying the Accounting for Income Taxes .
ASU 2019-12 key changes include hybrid tax regimes, intraperiod tax allocation exception, and interim-period accounting for enacted changes in tax law.
−Removed: Early adoption is permitted, including adoption in any interim period or annual reports for which financial statements have not yet been made available for issuance.
−Removed: The guidance is effective for annual periods beginning after December 15, 2020, and we are currently in the process of evaluating the impact of this guidance.
−Removed: The FASB issued four ASUs related to Accounting Standards Codification (ASC) 326.
+Added: We early adopted ASU 2019-12 during the second quarter of 2020 under the prospective method of adoption.
+Added: As a result of adoption, there was no modification required to the first quarter of 2020 results of operations as previously presented.
+Added: The FASB issued four ASUs related to ASC 326, Financial Instruments - Credit Losses .
In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses.
−Removed: ASU 2019-11 provides codification updates to ASU 2016-13.
In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326):
Targeted Transition Relief.
−Removed: ASU 2019-05 provides entities with an option to irrevocably elect the fair value option for eligible instruments.
In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.
−Removed: ASU 2019-04 provides codification updates to ASU 2016-01 and ASU 2016-13.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments— Credit Losses (Topic 326):
Measurement of Credit Losses on Financial Instruments.
−Removed: ASU 2016-13 replaces the existing incurred loss impairment model for trade receivables with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates.
−Removed: Additionally, the concept of other-than-temporary impairment for available-for-sale investments is eliminated and instead ASU 2016-13 requires an entity to focus on determining whether any impairment is a result of a credit loss or other factors.
−Removed: It also requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction to the amortized cost basis.
−Removed: These changes may result in earlier recognition of credit losses.
−Removed: These guidance updates require for a modified retrospective adoption, though a prospective method of adoption is required for available-for-sale debt securities for which an other-than-temporary impairment had been recognized before the effective date.
−Removed: We will adopt the guidance on January 1, 2020.
−Removed: We expect to record an immaterial cumulative-effect adjustment for trade receivables to the opening balance of accumulated deficit and we do not expect our adoption to have an ongoing material impact to our consolidated statements of operations.
−Removed: Beginning January 1, 2020, we will assess our available-for-sale debt securities for credit losses and recognize an allowance for credit losses with any improvements in estimated credit losses recognized immediately in earnings.
−Removed: These are preliminary estimates that are subject to change as we finalize our adoption.
+Added: On January 1, 2020, we adopted ASC 326, which replaces the existing incurred loss impairment model for financial assets, including trade receivables, with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates.
+Added: Additionally, the concept of other-than-temporary impairment for available-for-sale investments is eliminated and instead requires us to focus on determining whether any unrealized loss is a result of a credit loss or other factors.
+Added: We adopted ASC 326 under the modified retrospective method for all financial assets measured at amortized cost.
+Added: Results for reporting periods beginning after adoption are presented under ASC 326 while we have not changed previously disclosed amounts or provided additional disclosures for comparative periods.
+Added: We recorded an immaterial cumulative-effect adjustment to trade receivables to the opening balance of
+Added: T a b l e o f C o n t e n t s
+Added: accumulated deficit on our consolidated balance sheet.
+Added: We adopted ASC 326 under the prospective transition approach for available-for-sale investments which resulted in no change to amortized cost basis before and after adoption.
+Added: Credit losses related to available-for-sale investments will now be recorded through an allowance for credit losses with immediate recognition to our consolidated statement of operations rather than as a reduction to the amortized cost basis and recognition to our consolidated statements of comprehensive loss.
+Added: See above within Note 1, “Background and Basis of Presentation”, for updates to our significant accounting policies impacted by our adoption of ASC 326 as well as Note 4, “Cash and Cash Equivalents, and Investments” for more information.
In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):
1 unchanged sentence
ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance contained within subtopic 350-40 to develop or obtain internal-use software.
−Removed: We will adopt ASU 2018-15 on January 1, 2020 under the prospective method of adoption.
−Removed: We do not expect our adoption to have a material impact to our consolidated statements of operations and consolidated balance sheets.
−Removed: Recently Adopted Accounting Pronouncements
−Removed: The FASB issued four ASUs related to ASC 842.
−Removed: In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842):
−Removed: Codification Improvements.
−Removed: In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842):
−Removed: Targeted Improvements and ASU 2018-10, Codification Improvements to Topic 842, Leases .
−Removed: In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) .
−Removed: ASC 842 requires an entity to recognize a right of use (ROU) asset and lease liability for all leases with terms of more than 12 months.
−Removed: We adopted the guidance on January 1, 2019 under the optional transition method whereby we initially applied the new standard at the adoption date and recognized a cumulative-effect adjustment to the opening balance sheet of accumulated deficit in the period of adoption without restating prior periods.
−Removed: We recorded ROU assets of $ 17.2 million and lease liabilities of $ 21.1 million on our consolidated balance sheet.
−Removed: ASC 842 did not have a material impact to our consolidated statements of operations.
−Removed: Adoption of the new standard resulted in changes to our accounting policy for leases.
−Removed: See Note 11, “Leases”, for more information.
+Added: We adopted ASU 2018-15 on January 1, 2020 under the prospective method of adoption.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
−Removed: The majority of our revenues are recognized over time as services are performed, with certain revenues, most significantly the revenue share we earn from our print textbook partners, being recognized at the point in time when print textbooks are shipped to students.
+Added: The majority of our revenues are recognized over time as services are performed, with certain revenues being recognized at a point in time.
The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):
−Removed: Years Ended December 31,
−Removed: Change in 2019
−Removed: Change in 2018
+Added: Years Ended December 31, Change in 2020 Change in 2019
+Added: 2020 2019 2018 $ % $ %
Chegg Services $ 521,228 $ 332,221 $ 253,985 $ 189,007 57 % $ 78,236 31 %
1 unchanged sentence
Total net revenues $ 644,338 $ 410,926 $ 321,084 $ 233,412 57 $ 89,842 28
−Removed: During the year ended December 31, 2019 , we recognized $ 17.0 million of revenues that were included in our deferred revenue balance as of December 31, 2018 .
−Removed: During the year ended December 31, 2018 , we recognized $ 11.7 million of revenues that were included in our deferred revenue balance as of December 31, 2017 .
+Added: During the years ended December 31, 2020, 2019, and 2018, we recognized $ 18.3 million, $ 17.0 million and $ 11.7 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each respective fiscal year.
+Added: During the year ended December 31, 2020, we recognized an immaterial amount of previously deferred revenues recognized from performance obligation satisfied in previous periods.
During the year ended December 31, 2019, we recognized $ 3.4 million of previously deferred revenues recognized from performance obligations satisfied in previous periods related to variable consideration recognized from our agreement with our Required Materials print textbook partner.
During the year ended December 31, 2018, we recognized an immaterial amount of previously deferred revenues recognized from performance obligations satisfied in previous periods.
+Added: During the year ended December 31, 2020, we recognized $ 50.8 million of operating lease income from print textbook rentals that we own.
The aggregate amount of unsatisfied performance obligations is approximately $ 32.6 million as of December 31, 2020, which are expected to be recognized into revenues over the next year.
Contract Balances
−Removed: The following table presents our accounts receivable, net, deferred revenue, and contract asset balances (in thousands, except percentages):
+Added: The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages):
+Added: December 31, Change
+Added: 2020 2019 $ %
Accounts receivable, net $ 12,913 $ 11,529 $ 1,384 12 %
1 unchanged sentence
Contract assets 13,243 3,531 9,712 275
−Removed: _______________________________________
−Removed: n/m - not meaningful
−Removed: During the year ended December 31, 2019 , our accounts receivable, net balance decreased by $ 1.2 million , or 9 % , primarily due to timing of billings partially offset by an improvement in cash collections.
−Removed: During the year ended December 31, 2019 , our deferred revenue balance increased by $ 1.4 million , or 8 % , primarily due to increased bookings for our Chegg Study service and eTextbook rentals driven by the seasonality of our business.
−Removed: During the year ended December 31, 2019 , our contract assets balance increased by $ 3.2 million primarily due to variable consideration and payment arrangements for Thinkful.
+Added: During the year ended December 31, 2020, our accounts receivable, net balance increased by $ 1.4 million, or 12 %, primarily due to timing of billings.
+Added: During the year ended December 31, 2020, our deferred revenue balance increased by $ 13.8
+Added: T a b l e o f C o n t e n t s
+Added: million, or 74 %, primarily due to increased bookings driven by higher Chegg Services revenue and print textbooks that we own that are recognized ratably rather than immediately.
+Added: During the year ended December 31, 2020, our contract assets balance increased by $ 9.7 million or 275 %, primarily due to the income sharing payment arrangements we offer to students for our Thinkful service.
Cash and Cash Equivalents, and Investments
−Removed: The following table shows our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss and fair value as of December 31, 2019 and 2018 (in thousands):
+Added: The following tables show our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss and fair value as of December 31, 2020 and 2019 (in thousands):
December 31, 2020
−Removed: Unrealized Gain
−Removed: Unrealized Loss
+Added: Adjusted Cost Unrealized Gain Unrealized Loss Fair Value
Cash and cash equivalents:
+Added: Cash $ 15,054 $ — $ — $ 15,054
Money market funds 464,799 — — 464,799
2 unchanged sentences
Commercial paper $ 204,152 $ 24 $ ( 6 ) $ 204,170
−Removed: Corporate securities
−Removed: treasury securities
+Added: Corporate debt securities 459,967 1,478 ( 48 ) 461,397
Total short-term investments $ 664,119 $ 1,502 $ ( 54 ) $ 665,567
Long-term investments
−Removed: Corporate securities
+Added: Corporate debt securities $ 484,275 $ 605 $ ( 283 ) $ 484,597
+Added: Agency bonds 38,995 36 — 39,031
Total long-term investments $ 523,270 $ 641 $ ( 283 ) $ 523,628
December 31, 2019
−Removed: Unrealized Gain
−Removed: Unrealized Loss
+Added: Adjusted Cost Unrealized Gain Unrealized Loss Fair Value
Cash and cash equivalents:
+Added: Cash $ 241,355 $ — $ — $ 241,355
Money market funds 146,165 — — 146,165
−Removed: Commercial paper
Total cash and cash equivalents $ 387,520 $ — $ — $ 387,520
1 unchanged sentence
Commercial paper $ 7,489 $ — $ — $ 7,489
−Removed: Corporate securities
+Added: Corporate debt securities 318,946 425 ( 78 ) 319,293
treasury securities 44,251 39 ( 4 ) 44,286
+Added: Agency bonds 10,000 6 — 10,006
Total short-term investments $ 380,686 $ 470 $ ( 82 ) $ 381,074
1 unchanged sentence
Corporate securities $ 295,103 $ 533 $ ( 158 ) $ 295,478
−Removed: treasury securities
+Added: Agency bonds 14,999 6 — 15,005
Total long-term investments $ 310,102 $ 539 $ ( 158 ) $ 310,483
−Removed: The adjusted cost and fair value of investments as of December 31, 2019 by contractual maturity were as follows (in thousands):
+Added: T a b l e o f C o n t e n t s
+Added: The adjusted cost and fair value of our cash equivalents and investments as of December 31, 2020 by contractual maturity were as follows (in thousands):
December 31, 2020
+Added: Cost Fair Value
Due in 1 year or less $ 664,119 $ 665,567
1 unchanged sentence
Investments not due at a single maturity date 464,799 464,799
−Removed: Investments not due at a single maturity date in the preceding table consist of money market fund deposits.
−Removed: As of December 31, 2019 , we considered the declines in market value of our investment portfolio to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired.
−Removed: We typically invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of nine months, and our investment policy generally limits the amount of credit exposure to any one issuer or industry sector.
+Added: Total $ 1,652,188 $ 1,653,994
+Added: Investments not due at a single maturity date in the preceding table consist of money market funds.
+Added: As of December 31, 2020, we did not consider the declines in market value of our investment portfolio to be driven by credit related factors.
+Added: When evaluating whether an investment's unrealized losses are related to credit factors, we review factors such as the extent to which fair value is below its cost basis, any changes to the credit rating of the security, adverse conditions specifically related to the security, changes in market interest rates and our intent to sell, or whether it is more likely than not we will be required to sell, before recovery of cost basis.
+Added: We invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of less than twelve months , and our investment policy limits the amount of credit exposure to any one issuer or industry sector.
The policy requires investments generally to be investment grade, with the primary objective of preserving capital and maintaining liquidity.
Fair values were determined for each individual security in the investment portfolio.
−Removed: When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and our intent to sell, or whether it is more likely than not we will be required to sell, the investment before recovery of the investment’s cost basis.
−Removed: During the years ended December 31, 2019 , 2018 , and 2017 we did not recognize any other-than-impairment charges.
−Removed: Restricted Cash
−Removed: As of December 31, 2019 and 2018 , we had approximately $ 1.9 million and $ 1.3 million , respectively, of restricted cash that primarily consists of security deposits for our corporate offices.
−Removed: As of December 31, 2019 and 2018 , $ 0.1 million of restricted cash is classified in other current assets in our consolidated balance sheets.
−Removed: As of December 31, 2019 and 2018 , $ 1.8 million and $ 1.2 million , respectively, of restricted cash is classified in other assets in our consolidated balance sheets.
−Removed: These amounts are classified based upon the term of the remaining restrictions.
+Added: During the year ended December 31, 2020, we did not recognize any losses on our investments due to credit related factors.
+Added: During the years ended December 31, 2019 and 2018, we did not recognize any impairment charges.
Strategic Investments
−Removed: In October 2018, we completed an investment of $ 10.0 million in WayUp, Inc., a U.S.-based job site and mobile application for college students and recent graduates.
+Added: In March 2020, we completed an investment of $ 2.0 million in TAPD, Inc., also known as Frank, a U.S.-based service that helps students access financial aid.
+Added: In October 2018, we completed an investment of $ 10.0 million in WayUp, Inc.
+Added: (WayUp), a U.S.-based job site and mobile application for college students and recent graduates.
Additionally, we previously invested $ 3.0 million in a foreign entity to explore expanding our reach internationally.
−Removed: We did not record any impairment charges on our strategic investments during the
−Removed: years ended December 31, 2019 , 2018 , and 2017 , as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment.
−Removed: There were no observable price changes in orderly transactions for the identical or similar investments of the same issuers during the years ended December 31, 2019 and 2018 .
+Added: During the year ended December 31, 2020, we recorded a $ 10.0 million impairment charge on our investment in WayUp included within general and administrative expense on our consolidated statements of operations.
+Added: Our impairment assessment was the result of the uncertainty around WayUp's ability to raise additional funding to support their future operations.
+Added: We did not record any other impairment charges on our other strategic investments during the years ended December 31, 2020, 2019 and 2018, as there were no other significant identified events or changes in circumstances that would be considered an indicator for impairment.
+Added: We considered general market conditions as a result of the COVID-19 pandemic in our impairment analysis.
+Added: There were no observable price changes in orderly transactions for the identical or similar investments of the same issuers that resulted in an upward or downward adjustment on our strategic investments during the years ended December 31, 2020, 2019 and 2018.
Fair Value Measurement
5 unchanged sentences
A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
+Added: T a b l e o f C o n t e n t s
Financial instruments measured and recorded at fair value on a recurring basis as of December 31, 2020 and 2019 are classified based on the valuation technique level in the tables below (in thousands):
December 31, 2020
+Added: Total Level 1 Level 2
Cash equivalents:
2 unchanged sentences
Commercial paper 204,170 — 204,170
−Removed: Corporate securities
−Removed: treasury securities
+Added: Corporate debt securities 461,397 — 461,397
Long-term investments:
−Removed: Corporate securities
+Added: Corporate debt securities 484,597 — 484,597
+Added: Agency bonds 39,031 — 39,031
Total assets measured and recorded at fair value $ 1,653,994 $ 464,799 $ 1,189,195
December 31, 2019
+Added: Total Level 1 Level 2
Cash equivalents:
Money market funds $ 146,165 $ 146,165 $ —
−Removed: Commercial paper
Short-term investments:
2 unchanged sentences
treasury securities 44,286 44,286 —
+Added: Agency bonds 10,006 — 10,006
Long-term investments:
−Removed: Corporate securities
−Removed: U.S treasury securities
+Added: Corporate debt securities 295,478 — 295,478
+Added: Agency bonds 15,005 — 15,005
Total assets measured and recorded at fair value $ 837,722 $ 190,451 $ 647,271
−Removed: We value our financial instruments based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.
+Added: We value our investments based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value.
Other than our money market funds and U.S.
−Removed: treasury securities, we classify our financial instruments as having Level 2 inputs.
−Removed: The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques.
−Removed: We do not hold any financial instruments valued with a Level 3 input.
+Added: treasury securities, we classify our fixed income available-for-sale investments as having Level 2 inputs.
+Added: The valuation techniques used to measure the fair value of our investments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques.
+Added: We do not hold any investments valued with a Level 3 input.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.
5 unchanged sentences
For further information on the notes see Note 10, “Convertible Senior Notes.”
+Added: T a b l e o f C o n t e n t s
The carrying amounts and estimated fair values of the notes as of December 31, 2020 and 2019 are as follows (in thousands):
−Removed: December 31, 2019
−Removed: December 31, 2018
−Removed: Carrying Amount
−Removed: Estimated Fair Value
−Removed: Carrying Amount
−Removed: Estimated Fair Value
+Added: December 31, 2020 December 31, 2019
+Added: Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value
+Added: 2026 notes $ 761,930 $ 1,129,370 $ — $ —
+Added: 2025 notes 640,614 1,456,800 602,611 831,000
+Added: 2023 notes 104,378 376,949 297,692 523,538
Convertible senior notes, net $ 1,506,922 $ 2,963,119 $ 900,303 $ 1,354,538
+Added: The carrying amount of the 2026 notes, 2025 notes and 2023 notes as of December 31, 2020 was net of unamortized debt discount of $ 226.7 million, $ 149.1 million and $ 10.0 million, respectively, and unamortized issuance costs of $ 11.3 million $ 10.2 million and $ 1.2 million, respectively.
The carrying amount of the 2025 notes and 2023 notes as of December 31, 2019 was net of unamortized debt discount of $ 184.7 million and $ 42.3 million, respectively, and unamortized issuance costs of $ 12.7 million and $ 5.0 million, respectively.
−Removed: The carrying amount of the 2023 notes as of December 31, 2018 was net of unamortized debt discount of $ 54.8 million and unamortized issuance costs of $ 6.5 million .
Long-Lived Assets
+Added: Textbook Library, Net
+Added: Textbook library, net consisted of the following (in thousands):
+Added: December 31, 2020
+Added: Textbook library $ 47,293
+Added: Less accumulated depreciation ( 13,144 )
+Added: Textbook library, net $ 34,149
+Added: During the year ended December 31, 2020, print textbook depreciation expense was approximately $ 15.4 million and our net gain on textbook library was approximately $ 1.5 million.
Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
−Removed: Computer and equipment
+Added: Content $ 181,938 $ 122,670
+Added: Leasehold improvements 19,574 17,738
Internal-use software and website development 15,646 7,552
Furniture and fixtures 3,891 3,640
−Removed: Leasehold improvements
+Added: Computer and equipment 3,368 3,355
Property and equipment 224,417 154,955
1 unchanged sentence
Property and equipment, net $ 125,807 $ 87,359
+Added: Depreciation and content amortization expense during the years ended December 31, 2020, 2019, and 2018 were approximately $ 32.6 million, $ 24.2 million, and $ 16.8 million, respectively.
+Added: T a b l e o f C o n t e n t s
2020 Acquisition
+Added: On June 4, 2020, we completed our acquisition of Mathway, LLC (Mathway), an online, on-demand math problem solving company that provides a vast range of subject areas in mathematics, including pre-algebra, algebra, trigonometry, pre-calculus, calculus, and linear algebra, and related disciplines.
+Added: This acquisition helps to strengthen our existing Chegg Math Solver service with the addition of new subjects, languages, and international reach.
+Added: The total fair value of the purchase consideration was $ 101.0 million, of which $ 93.5 million was paid in cash on the acquisition date and $ 7.5 million, included within accrued liabilities, was held in escrow as security for general representations and warranties and potential post-closing adjustments.
+Added: Any remaining escrow amount will be released 15 months after the acquisition date.
+Added: The Mathway purchase agreement provides for additional payments of up to $ 15.0 million subject to the achievement of specified milestones and continued employment of the sellers.
+Added: These payments are not included in the fair value of the purchase consideration but rather are expensed ratably as acquisition-related compensation costs classified as research and development and general and administrative expenses, based on the seller's job function, on our consolidated statement of operations.
+Added: We have recorded approximately $ 2.9 million as of December 31, 2020, included within accrued liabilities on our consolidated balance sheet for these payments.
+Added: The following table presents the preliminary total allocation of purchase consideration recorded on our consolidated balance sheet as of the acquisition date (in thousands):
+Added: Accounts receivable 1,132
+Added: Other acquired assets 779
+Added: Acquired intangible assets 30,320
+Added: Total identifiable assets acquired 32,943
+Added: Deferred revenue ( 1,423 )
+Added: Liabilities assumed ( 727 )
+Added: Net identifiable assets acquired 30,793
+Added: Goodwill 70,167
+Added: Total fair value of purchase consideration $ 100,960
+Added: Goodwill is primarily attributable to the potential for enhancing our existing offerings and expanding our reach by providing additional mathematics support for students and helping them through their academic journey.
+Added: The amounts recorded for intangible assets and goodwill are deductible for tax purposes.
+Added: The following table presents the details of the allocation of purchase consideration to the acquired intangible assets (in thousands, except weighted-average amortization period):
+Added: Amount Weighted-Average Amortization Period (in months)
+Added: Trade name $ 520 18
+Added: Domain names 220 18
+Added: Customer lists 6,220 48
+Added: Developed technology 23,360 84
+Added: Total acquired intangible assets $ 30,320 75
+Added: During the year ended December 31, 2020, we incurred $ 3.1 million of acquisition-related expenses associated with our acquisition of Mathway, which have been included in general and administrative expense on our consolidated statement of operations.
+Added: We have recorded immaterial amounts of revenue and earnings from Mathway since the acquisition date.
+Added: T a b l e o f C o n t e n t s
+Added: The following unaudited supplemental pro forma net loss is for informational purposes only and presents our combined results as if the acquisition of Mathway had occurred on January 1, 2019.
+Added: The unaudited supplemental pro forma information includes the historical combined operating results adjusted for acquisition-related compensation costs, amortization of intangible assets, share-based compensation expense and acquisition-related expenses and does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of our future consolidated results.
+Added: During the years ended December 31, 2020 and 2019, our supplemental pro forma net loss would have been $ 6.1 million and $ 27.3 million, respectively.
+Added: Revenues from Mathway were immaterial during the years ended December 31, 2020 and 2019.
+Added: 2019 Acquisition
On October 1, 2019, we completed our acquisition of Thinkful, Inc.
−Removed: (Thinkful), a skills-based learning platform that offers professional courses in software engineering, data science, data analytics, product design, and product management directly to students across the United States to expand our existing offerings by adding affordable and high-quality courses focused on the most in-demand technology skills.
+Added: (Thinkful), our skills-based learning platform that offers professional courses in software engineering, UX/UI design, digital marketing, data science, product management, data analytics, product design, and technical project management directly to students across the United States to expand our existing offerings by adding affordable and high-quality courses focused on the most in-demand technology skills.
The total fair value of the purchase consideration was $ 79.2 million, which was paid in cash and included an escrow amount of $ 9.0 million for general representations and warranties and potential post-closing adjustments.
3 unchanged sentences
These payments may be settled by us, at our sole discretion, either in cash or shares of our common stock.
−Removed: We have recorded approximately $ 3.0 million as of December 31, 2019 included within accrued liabilities on our consolidated balance sheet for these payments.
+Added: During the year ended December 31, 2020, the terms of the purchase agreement were amended such that the retention incentive was reduced to $ 12.8 million, half of which remains subject to the achievement of specified milestones and payable in cash and half of which will be settled in equity grants, to adjust for employee departures.
+Added: As of December 31, 2020 and 2019, we have recorded approximately $ 5.7 million and $ 3.0 million, respectively, included within accrued liabilities on our consolidated balance sheet for the cash payments.
Goodwill is primarily attributable to the potential for expanding our existing offerings and reach by providing educational services for students and helping them through their professional journey.
The amounts recorded for intangible assets and goodwill are not deductible for tax purposes.
−Removed: The following table presents the preliminary total allocation of purchase consideration recorded in our consolidated balance sheet as of the acquisition date (in thousands):
+Added: The following table presents the total allocation of purchase consideration recorded on our consolidated balance sheet as of the acquisition date (in thousands):
Accounts receivable 547
5 unchanged sentences
Net identifiable assets acquired 14,307
+Added: Goodwill 64,893
Total fair value of purchase consideration $ 79,200
+Added: T a b l e o f C o n t e n t s
The following table presents the details of the allocation of purchase consideration to the acquired intangible assets (in thousands, except weighted-average amortization period):
−Removed: Weighted-Average Amortization
+Added: Amount Weighted-Average Amortization
+Added: Trade name $ 4,430 48
+Added: Domain names 330 48
Content library 6,940 60
1 unchanged sentence
Acquired intangible assets $ 16,360 50
−Removed: During the year ended December 31, 2019 , we incurred $ 1.0 million of acquisition-related expenses associated with our acquisition of Thinkful, which have been included in general and administrative expenses in our consolidated statement of operations.
−Removed: During the year ended December 31, 2019 , $ 8.6 million of our consolidated net loss was attributed by Thinkful and we have recorded an immaterial amount of revenues since the acquisition date.
+Added: During the year ended December 31, 2019, we incurred $ 1.0 million of acquisition-related expenses associated with our acquisition of Thinkful, which have been included in general and administrative expenses on our consolidated statement of operations.
+Added: During the year ended December 31, 2019, $ 8.6 million of our consolidated net loss was attributed to Thinkful and we have recorded an immaterial amount of revenues since the acquisition date.
The following unaudited supplemental pro forma net loss is for informational purposes only and presents our combined results as if the acquisition of Thinkful had occurred on January 1, 2018.
17 unchanged sentences
The amounts recorded for intangible assets and goodwill are not deductible for tax purposes.
−Removed: The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands):
+Added: T a b l e o f C o n t e n t s
+Added: The following table presents the total allocation of purchase consideration recorded on our consolidated balance sheets as of the acquisition date (in thousands):
+Added: StudyBlue WriteLab Total
+Added: Cash $ 152 $ 82 $ 234
Accounts receivable 288 194 482
4 unchanged sentences
Net identifiable assets acquired 6,382 3,829 10,211
+Added: Goodwill 13,996 10,677 24,673
Total fair value of purchase consideration $ 20,378 $ 14,506 $ 34,884
The following table presents the details of the allocation of purchase consideration to the acquired intangible assets (in thousands, except weighted-average amortization period):
−Removed: Weighted-Average Amortization
−Removed: Weighted-Average Amortization
−Removed: Weighted-Average Amortization
+Added: StudyBlue WriteLab Total
+Added: Amount Weighted-Average Amortization
+Added: (in months) Amount Weighted-Average Amortization
+Added: (in months) Amount Weighted-Average Amortization
+Added: Trade name $ 140 12 $ — 0 $ 140 12
+Added: Domain names 180 12 — 0 180 12
Non-compete agreements 220 36 — 0 220 36
2 unchanged sentences
Acquired intangible assets $ 7,100 57 $ 4,450 96 $ 11,550 72
−Removed: During the year ended December 31, 2018 , we incurred $ 1.0 million of acquisition-related expenses associated with the above 2018 acquisitions which have been included in general and administrative expenses in our consolidated statement of operations.
+Added: During the year ended December 31, 2018, we incurred $ 1.0 million of acquisition-related expenses associated with the above 2018 acquisitions which have been included in general and administrative expenses on our consolidated statement of operations.
We have not presented supplemental pro forma financial information as the revenues and earnings of these 2018 acquisitions were immaterial during the year ended December 31, 2018.
Further, we have recorded an immaterial amount of revenues and expenses since the acquisition dates during the year ended December 31, 2018.
−Removed: 2017 Acquisition
−Removed: In October 2017 , we acquired all of the outstanding interests of Cogeon GmbH (Cogeon), a provider of adaptive math technology and developer of the math application, Math 42.
−Removed: The total fair value of the purchase consideration was $ 15.0 million which included an escrow amount of $ 2.2 million for general representations and warranties and potential post-closing adjustments, which was released in October 2019.
−Removed: Included in the purchase agreement for the acquisition of Cogeon are additional payments of up to approximately $ 9.0 million subject to achievement of specified milestones and continued employment of the sellers.
−Removed: These payments are not included in the fair value of the purchase consideration and are expensed ratably as research and development expense on our consolidated statements of operations.
−Removed: These payments may be settled by us, at our sole discretion, either in cash or shares of our common stock.
−Removed: The terms of the purchase agreement were amended in 2019 such that the payments to the sellers were accelerated and we paid out a total of $ 7.5 million in cash to the sellers during the year ended December 31, 2019.
−Removed: Additionally, included in the purchase agreement are equity grants of up to approximately $ 3.8 million subject to achievement of the above specified milestones, continued employment of the sellers, and an adverse tax ruling on the additional payments from the German tax authority.
−Removed: In 2018, the sellers received an adverse tax ruling and during the year ended December 31, 2019, we issued $ 3.0 million of common stock in connection with the accelerated additional payments.
−Removed: Goodwill is primarily attributable to the potential for future product offerings as well as our expanded student reach.
−Removed: The amounts recorded for goodwill are expected to be deductible for tax purposes.
−Removed: The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands):
−Removed: Net tangible assets
−Removed: Acquired intangible assets:
−Removed: Non-compete agreements
−Removed: Developed technology
−Removed: Content Library
−Removed: Total acquired intangible assets
−Removed: Total identifiable assets acquired
−Removed: Total fair value of purchase consideration
−Removed: During the year ended December 31, 2017 , we incurred $ 0.7 million of acquisition-related expenses associated with the above 2017 acquisition which have been included in general and administrative expenses in our consolidated statements of operations.
Goodwill and Intangible Assets
4 unchanged sentences
Foreign currency translation adjustment 822 ( 192 )
+Added: Measurement period adjustments related to prior acquisition ( 288 ) —
Ending balance $ 285,214 $ 214,513
+Added: T a b l e o f C o n t e n t s
Intangible assets as of December 31, 2020 and December 31, 2019 consist of the following (in thousands, except weighted-average amortization period):
1 unchanged sentence
Weighted-Average Amortization
−Removed: Developed technologies and content library
+Added: (in months) Gross
+Added: Amount Accumulated
+Added: Amortization Net
+Added: Developed technologies 75 $ 54,398 $ ( 24,246 ) $ 30,152
+Added: Content library 60 12,230 ( 4,390 ) 7,840
Customer lists 47 16,190 ( 10,437 ) 5,753
6 unchanged sentences
Weighted-Average Amortization
−Removed: Developed technologies and content library
+Added: (in months) Gross
+Added: Amount Accumulated
+Added: Amortization Net
+Added: Developed technologies 68 $ 31,038 $ ( 16,451 ) $ 14,587
+Added: Content library 60 12,230 ( 1,944 ) 10,286
Customer lists 47 9,970 ( 8,210 ) 1,760
4 unchanged sentences
Total intangible assets 58 $ 69,331 $ ( 34,664 ) $ 34,667
+Added: The indefinite-lived trade name intangible asset of $ 3.6 million is related to the internships.com trade name.
During the years ended December 31, 2020, 2019 and 2018, amortization expense related to our acquired intangible assets totaled approximately $ 14.3 million, $ 7.5 million and $ 6.5 million, respectively.
As of December 31, 2020, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
+Added: 2021 $ 13,320
+Added: Thereafter 5,080
+Added: Total $ 47,649
+Added: T a b l e o f C o n t e n t s
Balance Sheet Details
−Removed: Other Current Assets
−Removed: Other current assets consist of the following (in thousands):
−Removed: Reimbursement from Required Materials partners (1)
−Removed: Other current assets
Accrued Liabilities
Accrued liabilities consist of the following (in thousands):
−Removed: Payable to Required Materials partners (2)
+Added: Order fulfillment fees $ 11,430 $ 6,939
Acquisition-related compensation 9,611 4,042
+Added: Accrued escrow related to acquisition 7,451 —
+Added: Accrued content related costs 6,273 1,907
Taxes payable 6,166 3,046
+Added: Payment processing fees 2,130 1,137
Accrued purchases of long-lived assets 1,588 10,036
+Added: Other 17,313 12,857
Accrued liabilities $ 61,962 $ 39,964
−Removed: _______________________________________
−Removed: (1) Reimbursement from Required Materials partners represents the cost of print textbooks sourced on their behalf.
−Removed: (2) Payable to Required Materials partners represents the amounts owed to our partners for the rental and sale of print textbooks.
Convertible Senior Notes
+Added: In August 2020, we issued $ 1.0 billion in aggregate principal amount of 0 % convertible senior notes due in 2026 (2026 notes).
+Added: The aggregate principal amount of the 2026 notes includes $ 100 million from the initial purchasers fully exercising their option to purchase additional notes.
In March 2019, we issued $ 700 million in aggregate principal amount of 0.125 % convertible senior notes due in 2025 (2025 notes) and in April 2019, the initial purchasers fully exercised their option to purchase $ 100 million of additional notes for aggregate total principal amount of $ 800 million.
−Removed: In April 2018 , we issued $ 345 million in aggregate principal amount of 0.25 % convertible senior notes due in 2023 (2023 notes).
−Removed: The aggregate principal amount of the 2023 notes includes $ 45 million from initial purchasers fully exercising their option to purchase additional notes.
−Removed: Collectively, the 2025 notes and 2023 notes are referred to as the “notes.” The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.
+Added: In April 2018, we issued $ 345 million in aggregate principal amount of 0.25 % convertible senior notes due in 2023 (the 2023 notes and together with the 2026 notes and the 2025 notes, the notes).
+Added: The aggregate principal amount of the 2023 notes includes $ 45 million from the initial purchasers fully exercising their option to purchase additional notes.
+Added: The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.
The total net proceeds from the notes are as follows (in thousands):
+Added: 2026 Notes 2025 Notes 2023 Notes
Principal amount $ 1,000,000 $ 800,000 $ 345,000
1 unchanged sentence
Less other issuance costs ( 904 ) ( 822 ) ( 757 )
+Added: Net proceeds $ 984,096 $ 780,180 $ 335,618
+Added: During the year ended December 31, 2020, in connection with our securities repurchase program, we extinguished $ 57.4 million aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $ 149.6 million, which was paid in cash.
+Added: Of the $ 149.6 million consideration, we allocated $ 52.6 million and $ 97.0 million to the liability and equity components of the extinguished 2023 notes, respectively.
+Added: The fair value of the liability component was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature.
+Added: The carrying amount of the liability component of the 2023 notes subject to the extinguishment was $ 51.6 million resulting in a $ 1.0 million loss on early extinguishment which was recorded in other income, net on our consolidated statements of operations.
+Added: Additionally, we terminated 2023 notes capped call transactions underlying 2,131,354 shares of our common stock and received cash proceeds of $ 19.7 million.
+Added: During the year ended December 31, 2020, in connection with our issuance of the 2026 notes, we exchanged $ 172.0 million aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $ 501.7 million, consisting of $ 174.6 million in cash and 4,182,320 shares of our common stock with a value of $ 327.1 million.
+Added: Of the $ 501.7 million consideration, we allocated $ 156.1 million and $ 345.6 million to the liability and equity components of the exchanged 2023 notes, respectively.
+Added: The fair value of the liability component was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature.
+Added: The carrying amount of the liability component of the 2023 notes subject to the exchange was $ 152.8 million resulting in a $ 3.3 million loss on early
+Added: T a b l e o f C o n t e n t s
+Added: extinguishment of debt which was recorded in other income, net on our consolidated statements of operations.
+Added: Additionally, we terminated 2023 notes capped call transactions underlying 6,380,815 shares of our common stock and received cash proceeds of $ 57.4 million.
+Added: As of December 31, 2020, $ 115.6 million of aggregate principal amount of the 2023 notes remain outstanding and 4,288,459 shares remain underlying the 2023 notes capped call transactions.
The notes are our senior, unsecured obligations and are governed by indenture agreements by and between us and Wells Fargo Bank, National Association, as Trustee (the indentures).
+Added: The 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
The 2025 notes bear interest of 0.125 % per year which is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019.
−Removed: The 2025 notes will mature on March 15, 2025 (the 2025 notes maturity date), unless repurchased, redeemed or converted in accordance with their terms prior to such date.
+Added: The 2025 notes will mature on March 15, 2025, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
The 2023 notes bear interest of 0.25 % per year which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2018.
−Removed: The 2023 notes will mature on May 15, 2023 (the 2023 notes maturity date), unless repurchased, redeemed or converted in accordance with their terms prior to such date.
+Added: The 2023 notes will mature on May 15, 2023, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock.
2 unchanged sentences
This is equivalent to an initial conversion price of approximately $ 51.56 per share, which is subject to adjustment in certain circumstances.
−Removed: Prior to the close of business on the business day immediately preceding December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes, the notes are convertible at the option of holders only upon satisfaction of the following circumstances:
−Removed: 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;
+Added: Each $1,000 principal amount of the 2023 notes will initially be convertible into 37.1051 shares of our common stock.
+Added: This is equivalent to an initial conversion price of approximately $ 26.95 per share, which is subject to adjustment in certain circumstances.
+Added: Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes, December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes, the notes are convertible at the option of holders only upon satisfaction of the following circumstances:
+Added: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 for the 2026 notes, 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;
1 unchanged sentence
• upon the occurrence of certain specified corporate events described in the indentures.
−Removed: On or after December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the foregoing circumstances.
+Added: On or after June 1, 2026 for the 2026 notes, December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the foregoing circumstances.
Upon conversion, the notes may be settled in shares of our common stock, cash or a combination of cash and shares of our common stock, at our election.
1 unchanged sentence
In addition, if specific corporate events, described in the indentures, occur prior to the respective maturity dates, we will also increase the conversion rate for a holder who elects to convert their notes in connection with such specified corporate events.
−Removed: During the year ended December 31, 2019 , the conditions allowing holders of the 2025 notes to convert had not been met and were therefore not convertible.
−Removed: During the year ended December 31, 2019 , the first circumstance allowing holders of the 2023 notes to convert had been met and are therefore convertible.
−Removed: None of the holders of the 2023 notes elected to convert their notes into shares of our common stock during the year ended December 31, 2019 .
−Removed: During the year ended December 31, 2018 , the conditions allowing holders of the 2023 notes to convert had not been met and were therefore not convertible.
−Removed: In accounting for the issuance of the notes, we separated the notes into liability and equity components.
−Removed: The carrying amount of the liability components for the 2025 notes and 2023 notes of approximately $ 588.0 million and $ 280.8 million , respectively, was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature.
−Removed: The carrying amount of the equity components for the 2025 notes and 2023 notes of approximately $ 212.0 million and $ 64.2 million , respectively, representing the conversion option, was determined by deducting the carrying amount of the liability components from the principal amount of the notes.
+Added: The conditions allowing holders of the 2026 notes to convert have not been met and therefore the 2026 notes are not convertible.
+Added: The first circumstance allowing holders of the 2025 notes to convert was met during the three months ended December 31, 2020 and September 30, 2020 and therefore, the 2025 notes are convertible starting October 1, 2020 through March 31, 2021.
+Added: During the year ended December 31, 2020, we received an immaterial request for conversion of the 2025 notes which we intend to settle in cash during the three months ended March 31, 2021.
+Added: The first circumstance allowing holders of the 2023 notes to convert was met during the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, June 30, 2019, and March 31, 2019 and therefore, the 2023 notes were and are convertible starting April 1, 2019 through September 30, 2019 and from January 1, 2020 through March 31, 2021.
+Added: During the year ended December 31, 2020, aside from the exchange of $ 172.0 million and extinguishments of $ 57.4 million aggregate principal
+Added: T a b l e o f C o n t e n t s
+Added: amount of the 2023 notes discussed above, we received immaterial requests for conversion of the 2023 notes which we settled in cash during the year ended December 31, 2020 and intend to settle during the three months ended March 31, 2021.
+Added: After December 31, 2020 and through the date of issuance of this Annual Report on Form 10-K, we received $ 24.7 million aggregate principal amount requests for conversion of the 2023 Notes, which we intend to settle through a combination of cash and shares of our common stock during the first half of 2021.
+Added: In accounting for their issuance, we separated the notes into liability and equity components.
+Added: The carrying amount of the liability components for the 2026 notes, 2025 notes and 2023 notes of approximately $ 758.7 million, $ 588.0 million and $ 280.8 million, respectively, was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature.
+Added: The carrying amount of the equity components for the 2026 notes, 2025 notes and 2023 notes of approximately $ 241.3 million, $ 212.0 million and $ 64.2 million, respectively, representing the conversion option, was determined by deducting the carrying amount of the liability components from the principal amount of the notes.
This difference between the principal amount of the notes and the liability components represents the debt discount, presented as a reduction to the notes on our consolidated balance sheets, and is amortized to interest expense using the effective interest method over the remaining term of the notes.
The equity components of the notes are included in additional paid-in capital on our consolidated balance sheets and are not remeasured as long as they continue to meet the conditions for equity classification.
−Removed: We incurred issuance costs related to the 2025 notes of approximately $ 19.8 million , consisting of the initial purchasers' discount of $ 19.0 million and other issuance costs of approximately $ 0.8 million .
−Removed: We incurred issuance costs related to the 2023 notes of approximately $ 9.4 million , consisting of the initial purchasers' discount of $ 8.6 million and other issuance costs of approximately $ 0.8 million .
+Added: We incurred issuance costs related to the 2026 notes, 2025 notes and 2023 notes of approximately $ 15.9 million, $ 19.8 million, and $ 9.4 million, respectively.
In accounting for the issuance costs, we allocated the total amount incurred to the liability and equity components using the same proportions determined above for the notes.
−Removed: Transaction costs attributable to the liability components for the 2025 notes and 2023 notes of approximately $ 14.6 million and $ 7.6 million , respectively, were recorded as debt issuance cost, presented as a reduction to the notes on our consolidated balance sheets, and are amortized to interest expense using the effective interest method over the term of the notes.
−Removed: The issuance costs attributable to the equity components
−Removed: for the 2025 notes and 2023 notes were approximately $ 5.3 million and $ 1.7 million , respectively, and were recorded as a reduction to the equity component included in additional paid-in capital.
+Added: Issuance costs attributable to the liability components for the 2026 notes, 2025 notes and 2023 notes of approximately $ 12.1 million, $ 14.6 million and $ 7.6 million, respectively, were recorded as debt issuance cost, presented as a reduction to the notes on our consolidated balance sheets, and are amortized to interest expense using the effective interest method over the term of the notes.
+Added: The issuance costs attributable to the equity components for the 2026 notes, 2025 notes and 2023 notes were approximately $ 3.8 million, $ 5.3 million and $ 1.7 million, respectively, and were recorded as a reduction to the equity component included in additional paid-in capital.
The net carrying amount of the liability component of the notes is as follows (in thousands):
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
+Added: 2026 Notes 2025 Notes 2023 Notes 2025 Notes 2023 Notes
Principal amount $ 1,000,000 $ 800,000 $ 115,576 $ 800,000 $ 345,000
3 unchanged sentences
The net carrying amount of the equity component of the notes is as follows (in thousands):
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: December 31, 2020 December 31, 2019
+Added: 2026 Notes 2025 Notes 2023 Notes 2025 Notes 2023 Notes
Debt discount for conversion option $ 241,300 $ 212,000 $ 21,505 $ 212,000 $ 64,193
Issuance costs ( 3,838 ) ( 5,253 ) ( 586 ) ( 5,253 ) ( 1,749 )
−Removed: Net carrying amount
−Removed: As of December 31, 2019 , the remaining life of the 2025 notes and the 2023 notes are approximately 5.2 years and 3.4 years , respectively, and are classified as long-term debt.
−Removed: Based on the closing price of our common stock of $ 37.91 on December 31, 2019 , the if-converted value of the 2025 notes was approximately $ 588.2 million , which is less than the principal amount of $ 800 million by approximately $ 211.8 million , and the if-converted value of the 2023 notes was approximately $ 485.3 million and exceeds the principal amount of $ 345 million by approximately $ 140.3 million .
−Removed: The effective interest rates of the liability components of the 2025 notes and 2023 notes are 5.40 % and 4.34 % , respectively, and each is based on the interest rate of similar debt instruments, at the time of our offering, that do not have associated convertible features.
+Added: Net carrying amount (equity) $ 237,462 $ 206,747 $ 20,919 $ 206,747 $ 62,444
+Added: As of December 31, 2020, the remaining lives of the 2026 notes, 2025 notes and 2023 notes were approximately 5.7 years, 4.2 years and 2.4 years, respectively.
+Added: Based on the closing price of our common stock of $ 90.33 on December 31, 2020, the if-converted value of the 2026 notes was approximately $ 839.9 million, which was less than the principal amount of $ 1.0 billion by approximately $ 160.1 million, the if-converted value of the 2025 notes was approximately $ 1,401.6 million, which exceeds the principal amount of $ 800 million by approximately $ 601.6 million, and the if-converted value of the 2023 notes was approximately $ 387.4 million, which exceeds the principal amount of $ 115.6 million by approximately $ 271.8 million.
+Added: T a b l e o f C o n t e n t s
+Added: The effective interest rates of the liability components for the 2026 notes, 2025 notes and 2023 notes are 4.63 % , 5.40 % and 4.34 %, respectively, and each is based on the interest rate of similar debt instruments, at the time of our offering, that do not have associated convertible features.
The following table sets forth the total interest expense recognized related to the notes (in thousands):
−Removed: December 31, 2019
−Removed: December 31, 2018
+Added: Years Ended December 31,
+Added: 2026 Notes 2025 Notes 2023 Notes 2025 Notes 2023 Notes
Contractual interest expense $ — $ 1,001 $ 691 $ 769 $ 862
3 unchanged sentences
Capped Call Transactions
−Removed: Concurrently with the offering of the 2025 notes and 2023 notes, we used $ 97.2 million and $ 39.2 million , respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to generally reduce or offset potential dilution to holders of our common stock upon conversion of the notes and/or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes.
−Removed: The capped call transactions automatically exercise upon conversion of the notes and cover 15,516,480 and 12,801,260 shares of our common stock for the 2025 notes and 2023 notes, respectively, and are intended to effectively increase the overall conversion price from $ 51.56 to $ 79.32 per share for the 2025 notes and $ 26.95 to $ 40.68 per share for the 2023 notes.
+Added: Concurrently with the offering of the 2026 notes, 2025 notes and 2023 notes, we used $ 103.4 million, $ 97.2 million and $ 39.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to generally reduce or offset potential dilution to holders of our common stock upon conversion of the notes and/or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes.
+Added: The capped call transactions automatically exercise upon conversion of the notes and cover 9,297,800 , 15,516,480 and 4,288,459 shares of our common stock for the 2026 notes, 2025 notes and 2023 notes, respectively, and are intended to effectively increase the overall conversion price from $ 107.55 to $ 156.44 per share for the 2026 notes, $ 51.56 to $ 79.32 per share for the 2025 notes and $ 26.95 to $ 40.68 per share for the 2023 notes.
The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted notes.
3 unchanged sentences
Impact to Earnings per Share
−Removed: The notes will have no impact to diluted earnings per share until the average price of our common stock exceeds the conversion price for the 2025 notes and 2023 notes of $ 51.56 and $ 26.95 per share, respectively, because we intend to settle the principal amount of the notes in cash upon conversion.
+Added: The shares underlying the notes have no impact to diluted earnings per share until the average price of our common stock during the period exceeds the conversion price for the 2026 notes, 2025 notes and 2023 notes of $ 107.55 , $ 51.56 and $ 26.95 per share, respectively, and the conversion circumstances have been met.
Under the treasury stock method, in periods we report net income, we are required to include the effect of additional shares that may be issued under the notes when the average price of our common stock exceeds each respective conversion price.
−Removed: However, as a result of the capped call transactions described above, there will be no economic dilution from the 2025 notes and 2023 notes up to $ 79.32 and $ 40.68 , respectively, as exercise of the capped call instruments will reduce any dilution from the notes that would have otherwise occurred when the average price of our common stock exceeds the conversion price.
−Removed: On January 1, 2019, we adopted the new leases guidance and recorded an immaterial decrease to our opening balance of accumulated deficit.
−Removed: Results for reporting periods beginning January 1, 2019 are presented under the new guidance, while prior period amounts were not adjusted and continue to be reported in accordance with the previous guidance.
−Removed: We initially recorded ROU assets of $ 17.2 million and lease liabilities of $ 21.1 million on our consolidated balance sheet.
−Removed: ASC 842 did not have a material impact to our consolidated statements of operations.
−Removed: We elected a package of transition practical expedients which included not reassessing whether any expired or existing contracts are or contained leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases.
−Removed: We also elected a practical expedient to not separate lease and non-lease components.
−Removed: We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets.
+Added: However, as a result of the capped call transactions described above, there will be no economic dilution from the 2026 notes, 2025 notes and 2023 notes up to $ 156.44 , $ 79.32 and $ 40.68 , respectively, as exercise of the capped call instruments will reduce any dilution from the notes that would have otherwise occurred when the average price of our common stock exceeds the conversion price.
We have operating leases for corporate offices worldwide, which expire at various dates through 2027.
1 unchanged sentence
We have additional offices in California, Oregon, and New York in the United States and internationally in India and Israel.
−Removed: As of December 31, 2019 , we had operating lease ROU assets of $ 15.9 million and operating lease liabilities of $ 19.8 million .
−Removed: During the year ended December 31, 2019 , we obtained $ 3.4 million of ROU assets in exchange for lease liabilities related to the reassessment of the lease term for two of our leases in India and commencing a lease for an additional office space in India.
−Removed: As of December 31, 2019 , we do not have finance leases recorded on our consolidated balance sheet.
−Removed: As of December 31, 2019 , our weighted average remaining lease term was 3.7 years .
−Removed: During the year ended December 31, 2019 , our weighted average discount rate was 4.7 % .
−Removed: Operating lease expense, net of immaterial sublease income, was approximately $ 5.0 million during the year ended December 31, 2019 .
−Removed: Variable lease cost and short term lease cost were immaterial during the year ended December 31, 2019 .
−Removed: The aggregate future minimum lease payments and reconciliation to lease liabilities as of December 31, 2019 , are as follows (in thousands):
+Added: As of December 31, 2020 and 2019, we had operating lease ROU assets of $ 24.2 million and $ 15.9 million, respectively, and operating lease liabilities of $ 25.9 million and $ 19.8 million, respectively.
+Added: During the year ended December 31, 2020, we obtained $ 13.7 million of ROU assets in exchange for lease liabilities related to commencing leases for additional office space in New York and internationally in India.
+Added: During the year ended December 31, 2019, we obtained $ 3.4 million of ROU assets in exchange for lease liabilities related to the reassessment of the lease term for two of our office spaces and commencing a lease for an additional office space internationally in India.
+Added: As of December 31, 2020 and 2019, we did not have finance leases recorded on our consolidated balance sheet, our weighted average remaining lease term was 4.6 years and 3.7 years, respectively, and our weighted average discount rate was 4.8 % and 4.7 %, respectively.
+Added: Operating lease expense, net of immaterial sublease income, was approximately $ 5.6 million and $ 5.0 million, respectively, during the years ended December 31, 2020 and 2019.
+Added: Variable lease cost and short term lease cost were immaterial during the years ended December 31, 2020 and 2019.
+Added: T a b l e o f C o n t e n t s
+Added: The aggregate future minimum lease payments and reconciliation to operating lease liabilities as of December 31, 2020, are as follows (in thousands):
December 31, 2020
+Added: Thereafter 3,618
Total future minimum lease payments 28,896
Less imputed interest ( 3,029 )
−Removed: Total lease liabilities
−Removed: The aggregate future minimum lease payments as of December 31, 2018, are as follows (in thousands):
−Removed: December 31, 2018
−Removed: During the year ended December 31, 2019 , we entered into a seven years lease for a corporate office in New York with future minimum lease payments of approximately $ 12.4 million .
−Removed: As of December 31, 2019 , this lease has not yet commenced and therefore these future minimum lease payments are not included in our future minimum lease payments in the above table.
+Added: Total operating lease liabilities $ 25,867
Commitments and Contingencies
5 unchanged sentences
Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.
−Removed: On September 27, 2018 a purported securities class action captioned Shah v.
−Removed: 3:18-cv-05956-CRB) was filed in the U.S.
−Removed: District Court for the Northern District of California against us and our CEO.
−Removed: The complaint was filed by a purported Company shareholder and alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5, based on allegedly misleading statements regarding the Company’s security measures to protect users’ data and related internal controls and procedures, as well as our second quarter 2018 financial results.
−Removed: The suit is purportedly brought on behalf of purchasers of our securities between July 30, 2018 and September 25, 2018.
−Removed: The complaint seeks unspecified compensatory damages, as well as interest, costs and attorneys’ fees.
−Removed: On November 15, 2018, a second purported securities class action captioned Kurland v.
−Removed: 3:18-cv-06714-CRB) was filed in the U.S.
−Removed: District Court for the Northern District of California against us, our CEO, and our CFO.
−Removed: The Shah and Kurland actions contain similar allegations, assert similar claims, and seek similar relief, and on January 24, 2019, the Court consolidated the two actions.
−Removed: On March 29, 2019, the Plaintiffs filed a Lead Plaintiff's Notice of Voluntary Dismissal Without Prejudice.
+Added: On December 1, 2020 we received notice that a class action lawsuit was filed against Chegg in New York alleging violations of the American with Disabilities Act.
+Added: The claim asserted that one of Chegg’s websites is not compatible with software used by vision-impaired individuals.
+Added: The claims seek an injunction and monetary relief.
+Added: We dispute these claims and filed an answer on January 28, 2021.
+Added: On August 18, 2020, we received notice that a class action lawsuit was filed against Chegg in California alleging violations of the Unruh Civil Rights Act.
+Added: The claim asserted that one of Chegg’s websites is not compatible with software used by vision-impaired individuals.
+Added: The claims seek an injunction and monetary relief.
+Added: We dispute these claims and are working with plaintiffs’ class counsel toward amicably dismissing/settling this claim.
+Added: On July 21, 2020, VitalSource Technologies LLC (VST), which is wholly owned by Ingram Industries Inc., filed a complaint against Chegg alleging that Chegg breached its contract with VST involving the development of an eTextbook reader and eTextbook reader platform.
+Added: The suit seeks damages uncertain, but the complaint alleges that they exceed $ 75,000 .
+Added: Chegg filed a motion to dismiss for lack of personal jurisdiction on August 11, 2020, which remains pending.
+Added: The case is currently in the discovery phase.
+Added: On June 18, 2020, we received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) to determine whether we may have violated Section 5 of the FTC Act or the Children's Online Privacy Protection Act (COPPA), as they relate to deceptive or unfair acts or practices related to consumer privacy and/or data security.
+Added: Pursuant to the CID, the FTC has requested responses to interrogatories and the production of documents pertaining to data breach incidents and our data security and privacy practices generally.
+Added: Efforts are currently underway to collect the documents and information requested after reaching an agreement with the FTC on the order and timing of our responses.
+Added: On May 12, 2020, we received notice that 15,107 arbitration demands were filed against us by individuals represented by the same legal counsel, each alleging to have suffered more than $ 25,000 in damages as a result of the 2018 Data Incident.
+Added: On July 1, 2020, an additional 1,007 arbitration demands were filed by the same counsel.
+Added: On August 12, 2020, an additional 577 arbitration demands were filed by the same counsel;
+Added: cases have been filed by the same counsel in Maryland and California.
+Added: We dispute that these claimants have a valid basis for seeking arbitration, assert that they have acted in bad faith and are working with the Maryland and California courts and plaintiffs’ counsel on resolution of these claims.
+Added: On March 3, 2020, Ingram Hosting Holdings LLC (IHH) filed a complaint in the U.S.
+Added: District Court for the Middle District of Tennessee alleging that Chegg breached its various contracts with IHH and other Ingram group entities, seeking
+Added: T a b l e o f C o n t e n t s
+Added: damages in the amount of $ 17 million.
+Added: An answer was filed on March 31, 2020.
+Added: Chegg and Ingram have now dismissed the litigation after reaching an amicable settlement of the dispute which includes an immaterial undisclosed payment from Ingram.
On November 5, 2018, NetSoc, LLC (NetSoc) filed a complaint against us in the U.S.
3 unchanged sentences
On January 13, 2020, the Court issued an order dismissing the case as to Chegg.
−Removed: On January 30, 2020, NetSoc appealed the dismissal and we are currently awaiting their filing of a brief with the court.
+Added: On January 30, 2020, NetSoc appealed the dismissal.
+Added: On April 21, 2020, the Court granted Chegg's motion to hold the appeal in abeyance pending outcome of an appeal in the litigation above.
+Added: On December 2, 2020, the United States Patent and Trademark Office determined that the patent is invalid based on two Inter Partes Review (IPR) proceedings and on January 4, 2021, NetSoc filed a notice of appeals appealing the IPR decision.
+Added: We have not recorded any amounts related to the above matters, as we do not believe that a loss is probable in these matters.
We are not aware of any other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows.
−Removed: However, our determination of whether a claim will proceed to litigation cannot be made with certainty, nor can the results of litigation be predicted with certainty.
+Added: However, our analysis of whether a claim will proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty.
Nevertheless, defending any of these actions, regardless of the outcome, may be costly, time consuming, distract management personnel, and have a negative effect on our business.
2 unchanged sentences
We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity.
−Removed: We may terminate the indemnification agreements with these
−Removed: persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination.
+Added: We may terminate the indemnification agreements with these persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination.
We have a directors’ and officers’ insurance policy that limits our potential exposure up to the limits of our insurance coverage.
3 unchanged sentences
We have not recorded any liabilities for these agreements as of December 31, 2020.
−Removed: We are authorized to issue 400 million shares of common stock, with a par value per share of $ 0.001 .
−Removed: As of December 31, 2019 , we have reserved the following shares of common stock for future issuance:
+Added: We are authorized to issue 400 million shares of our common stock, with a par value per share of $ 0.001 .
+Added: As of December 31, 2020, we have reserved the following shares of our common stock for future issuance:
December 31, 2020
4 unchanged sentences
Total common shares reserved for future issuance 43,289,612
+Added: T a b l e o f C o n t e n t s
2013 Equity Incentive Plan
15 unchanged sentences
Stockholders' Equity
+Added: Securities Repurchase Program
+Added: In June 2020, our board of directors approved a securities repurchase program authorizing our repurchase of up to $ 500.0 million of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements.
+Added: The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, and other factors.
+Added: During the year ended December 31, 2020, we repurchased $ 57.4 million of aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $ 149.6 million and have $ 350.4 million remaining under the repurchase program.
+Added: The repurchase program will end on December 31, 2021.
Share-based Compensation Expense
1 unchanged sentence
Years Ended December 31,
+Added: 2020 2019 2018
Cost of revenues $ 950 $ 426 $ 420
3 unchanged sentences
Total share-based compensation expense $ 84,055 $ 64,909 $ 52,030
+Added: T a b l e o f C o n t e n t s
+Added: During the year ended December 31, 2020, the Compensation Committee of the Board of Directors approved a modification accelerating the vesting of 42,982 restricted stock units (RSUs) and performance-based restricted stock units (PSUs) for three key employees resulting in approximately $ 2.4 million of incremental share-based compensation expense.
+Added: As of December 31, 2020, we had a total of approximately $ 110.3 million of unrecognized share-based compensation expense related to RSUs and PSUs that is expected to be recognized over the remaining weighted average period of 1.8 years.
Fair Value of 2013 ESPP
2 unchanged sentences
Expected Term.
−Removed: The expected term for rights to purchase shares under the 2013 ESPP is half a year.
+Added: The expected term for rights to purchase shares under the 2013 ESPP is six months .
Expected Volatility.
7 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
Expected term (years) 0.50 0.50 0.50
2 unchanged sentences
42.07 %- 44.97 %
−Removed: 38.15%-45.57%
Dividend yield — % — % — %
Risk-free interest rate 0.12 %- 0.15 %
+Added: 1.59 %- 2.43 %
+Added: 2.09 %- 2.50 %
Weighted-average grant-date fair value per share $ 20.52 $ 9.88 $ 7.14
−Removed: Fair Value of Restricted Stock Units (RSUs) and of Performance-Based Restricted Stock Units (PSUs)
−Removed: RSUs and PSUs are converted into shares of our common stock upon vesting on a one-for-one basis.
−Removed: Vesting of RSUs is subject to the employee’s continuing service to us, while vesting of PSUs is subject to our achievement of specified corporate financial performance objectives in addition to the employee's continuing service to us.
−Removed: RSUs are typically fully vested at the end of three or four years while PSUs vest subject to the achievement of performance objectives and if achieved, typically vest over two to three years .
−Removed: We assess the achievement of performance objectives on a quarterly basis and adjust our share-based payment expense as appropriate.
2013 ESPP Activity
1 unchanged sentence
There were 201,581 shares purchased under the 2013 ESPP for the year ended December 31, 2019 at an average price per share of $ 25.55 with cash proceeds from the issuance of shares of $ 5.1 million.
+Added: There were 253,301 shares purchased under the 2013 ESPP for the year ended December 31, 2018 at an average price per share of $ 15.77 with cash proceeds from the issuance of shares of $ 4.0 million.
+Added: Fair Value of RSUs and PSUs
+Added: RSUs and PSUs are converted into shares of our common stock upon vesting on a one-for-one basis.
+Added: Vesting of RSUs is subject to the employee’s continuing service to us, while vesting of PSUs is subject to our achievement of specified corporate financial performance objectives in addition to the employee's continuing service to us.
+Added: RSUs are typically fully vested at the end of three or four years while PSUs vest subject to the achievement of performance objectives and if achieved, typically vest over two to three years .
+Added: We assess the achievement of performance objectives on a quarterly basis and adjust our share-based compensation expense as appropriate.
+Added: T a b l e o f C o n t e n t s
Stock Option Activity
Options Outstanding
−Removed: Weighted-Average Remaining Contractual Term in Years
+Added: Outstanding Weighted-
+Added: Share Weighted-Average Remaining Contractual Term in Years Aggregate
Balance at December 31, 2019 1,611,385 $ 8.64 3.60 $ 47,171,160
+Added: Exercised ( 984,068 ) 9.13
Balance at December 31, 2020 627,317 $ 7.86 3.48 $ 51,733,285
−Removed: We did not grant any stock option awards during the years ended December 31, 2019 , 2018 , and 2017 .
+Added: We did no t grant any stock option awards during the years ended December 31, 2020, 2019, and 2018.
The total intrinsic value of options exercised during the years ended December 31, 2020, 2019 and 2018, was approximately $ 53.5 million, $ 90.8 million, and $ 57.2 million, respectively.
2 unchanged sentences
Number of RSUs and PSUs
+Added: Outstanding Weighted
Average Grant Date
Balance at December 31, 2019 6,909,530 $ 24.04
+Added: Granted 2,593,745 45.37
+Added: Released ( 4,098,742 ) 20.22
+Added: Canceled ( 588,533 ) 31.84
Balance at December 31, 2020 4,816,000 $ 37.82
1 unchanged sentence
The total fair value of RSUs and PSUs vested as of the vesting dates during the years ended December 31, 2020, 2019, and 2018 was $ 200.1 million, $ 222.3 million, and $ 120.9 million, respectively.
−Removed: As of December 31, 2019 , we had a total of approximately $ 91.2 million of unrecognized compensation costs related to RSUs and PSUs that is expected to be recognized over the remaining weighted average period of 1.6 years .
2020 PSU Grants
5 unchanged sentences
2019 PSU Grants
+Added: In March 2019, we granted PSUs under the 2013 Plan to certain of our key executives.
+Added: The PSUs entitle the executives to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2019.
+Added: Based on the achievement of the performance conditions for the March 2019 grants, the final settlement met the target threshold based on a specified objective formula approved by the Compensation Committee.
+Added: These PSUs will vest over a three-year period, with the initial vesting occurring in March 2020.
+Added: The number of shares underlying the March 2019 PSUs granted during the year ended December 31, 2019 totaled 436,042 shares and had a grant date fair value of $ 40.42 per share.
+Added: T a b l e o f C o n t e n t s
+Added: 2018 PSU Grants
In August 2018, in conjunction with our acquisition of StudyBlue, we granted PSUs under the 2013 Plan to certain employees.
The PSUs entitle the employees to receive a certain number of shares of our common stock based on our satisfaction of certain strategic performance targets during 2018 and 2019.
−Removed: Based on the achievement of the performance
−Removed: conditions for the August 2018 grant, the final settlement exceeded the target threshold based on a specified objective formula approved by the Compensation Committee.
+Added: Based on the achievement of the performance conditions for the August 2018 grant, the final settlement exceeded the target threshold based on a specified objective formula approved by the Compensation Committee.
These PSUs vest over a three-year period, with the initial vesting occurring in September 2019.
5 unchanged sentences
The number of shares underlying the March 2018 PSUs granted during the year ended December 31, 2018 totaled 845,934 shares and had a grant date fair value of $ 19.70 per share.
−Removed: 2017 PSU Grants
−Removed: In March 2017, we granted PSUs under the 2013 Plan to certain of our key executives.
−Removed: The PSUs entitle the executives to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2017.
−Removed: Based on the achievement of the performance conditions for the March 2017 grant, the final settlement met the maximum threshold based on a specified objective formula approved by the Compensation Committee.
−Removed: These PSUs vest over a three -year period, with the initial vesting occurring in March 2018.
−Removed: The number of shares underlying the PSUs granted during the year ended December 31, 2017 totaled 1,822,284 shares and had a grant date fair value of $ 8.91 per share.
−Removed: Stock Warrants
−Removed: As of December 31, 2018, we no longer had exercisable common stock warrants.
−Removed: During the year ended December 31, 2018, 100,000 common stock warrants were exercised at an exercise price of $ 12.00 .
−Removed: During the year ended December 31, 2017, 100,000 common stock warrants were exercised at an exercise price of $ 12.00 .
We recorded an income tax provision of approximately $ 5.4 million, $ 2.6 million and $ 1.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: The income tax provision for the years ended December 31, 2019 , 2018 and 2017 was primarily due to state and foreign income tax expense and federal and state tax expense related to tax amortization of acquired indefinite lived intangible assets.
+Added: The income tax provision for the years ended December 31, 2020, 2019 and 2018 was primarily due to state and foreign income tax expense.
Our income tax provision consisted of the following (in thousands):
Years Ended December 31,
+Added: 2020 2019 2018
Current income taxes:
+Added: Federal $ — $ ( 185 ) $ ( 91 )
+Added: State 459 264 ( 73 )
+Added: Foreign 5,010 2,594 1,374
Total current income taxes 5,469 2,673 1,210
Deferred income taxes:
+Added: Federal 187 ( 17 ) 155
+Added: State 255 42 76
+Added: Foreign ( 551 ) ( 64 ) ( 11 )
Total deferred income taxes ( 109 ) ( 39 ) 220
2 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
United States $ ( 10,369 ) $ ( 12,497 ) $ ( 18,617 )
+Added: Foreign 9,508 5,526 5,159
+Added: Total $ ( 861 ) $ ( 6,971 ) $ ( 13,458 )
+Added: T a b l e o f C o n t e n t s
The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages):
Years Ended December 31,
+Added: 2020 2019 2018
Income tax at U.S.
4 unchanged sentences
Non-deductible expenses ( 50.3 ) 0.4 ( 4.4 )
−Removed: Tax Cuts and Jobs Act impact
+Added: Tax credits 351.6 19.3 26.7
Acquisition related — 31.8 15.2
Convertible senior notes ( 5,854.8 ) ( 412.6 ) ( 0.3 )
+Added: Other 1.2 27.9 ( 1.8 )
Change in valuation allowance 2,462.7 ( 325.3 ) ( 257.5 )
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was signed into law, enacting significant changes to the U.S.
−Removed: Internal Revenue Code.
−Removed: The Tax Act made broad and complex changes to the U.S.
−Removed: On December 22, 2017, Staff Accounting Bulletin No.
−Removed: 118 (SAB 118) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act.
−Removed: In accordance with SAB 118, as of December 31, 2017, we had not yet completed our accounting for the tax effects of the enactment of the Act.
−Removed: Our provision for income
−Removed: taxes for the year ended December 31, 2017 was based in part on our best estimate of the effects of the transition tax and existing deferred tax balances with our understanding of the Tax Act and guidance available as of the date of filing.
−Removed: The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings which was a benefit of $ 0.1 million .
−Removed: We also provided withholding tax on the deemed repatriation of foreign earnings of $ 1.2 million .
−Removed: Under guidance in place at December 31, 2019 and December 31, 2018, no adjustments to our provisional effects of the Tax Act recorded at December 31, 2017 were necessary.
−Removed: As of December 22, 2018 we have completed our accounting for the income tax effects of the Tax Act.
−Removed: The Tax Act also included provisions for the GILTI tax inclusion, wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of foreign corporations.
−Removed: This income will effectively be taxed at a 10.5% tax rate in general.
−Removed: Under the U.S.
−Removed: generally accepted accounting principles companies are allowed to make an accounting policy election of either (i) account for GILTI as a component of tax expense in the period in which we are subject to the rules (the “period cost method”), or (ii) account for GILTI in our measurement of deferred taxes (the “deferred method”).
−Removed: We are electing the period-cost method for any tax as a result of the GILTI provisions.
+Added: Total ( 622.5 ) % ( 37.8 ) % ( 10.6 ) %
A summary of our deferred tax assets is as follows (in thousands):
−Removed: Years Ended December 31,
+Added: As of December 31,
Deferred tax assets:
3 unchanged sentences
Net operating loss carryforwards 190,904 162,320
−Removed: Property and equipment, textbooks and intangibles assets
+Added: Other items 5,734 3,438
Gross deferred tax assets 211,878 182,736
4 unchanged sentences
Convertible senior notes ( 51,607 ) ( 27,065 )
+Added: Other ( 5,890 ) ( 4,661 )
Total deferred tax liabilities ( 61,563 ) ( 35,837 )
Net deferred tax liability $ ( 1,510 ) $ ( 1,620 )
−Removed: At December 31, 2019 and 2018 the deferred tax liability is created by the tax amortization of acquired indefinite lived intangible assets.
+Added: At December 31, 2020 and 2019, the deferred tax liability is primarily created by the tax amortization of acquired indefinite lived intangible assets.
Under the accounting guidance this deferred tax liability can be used as a source of income for recognition of deferred tax assets when determining the amount of valuation allowance to be recorded.
+Added: As of December 31, 2020, we intend to permanently reinvest all 2020, 2019, and 2018 earnings from our foreign subsidiaries.
+Added: As such, we have not provided for any remaining tax effect, if any, of the outside basis difference of our foreign subsidiaries based upon plans of future reinvestment.
+Added: The determination of the future tax consequences of the remittance of these earnings is not practicable.
Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain.
Accordingly, the federal and state gross deferred tax assets have been fully offset by a valuation allowance.
−Removed: The valuation allowance increased by approximately $ 22.7 million during the year ended December 31, 2019 and increased by $ 34.7 million during the year ended December 31, 2018 .
+Added: T a b l e o f C o n t e n t s
+Added: valuation allowance increased by approximately $ 3.3 million during the year ended December 31, 2020 and increased by approximately $ 22.7 million during the year ended December 31, 2019.
As of December 31, 2020, we had net operating loss carryforwards for federal and state income tax purposes of approximately $ 674 million and $ 511 million, respectively, which will begin to expire in years beginning 2028 and 2021, respectively.
4 unchanged sentences
Such annual limitations could result in the expiration of the net operating losses and tax credit carryforwards before utilization.
−Removed: As described above, the Tax Act included a transition tax in 2017 that taxed any previously deferred foreign earnings and profits in 2017 at a reduced tax rate.
−Removed: As a result of this tax and the accrual of associated distribution tax, we have no unrecorded tax liabilities associated with unremitted foreign retained earnings as of December 31, 2017.
−Removed: As of December 31, 2019 , we intend to permanently reinvest all 2018 and 2019 earnings from our international subsidiaries.
−Removed: As such we have not provided for any remaining tax effect, if any, of limited outside basis difference of our foreign subsidiaries based upon plans of future reinvestment.
−Removed: As a result of the Tax Act this amount is anticipated to be insignificant.
−Removed: The determination of the future tax consequences of the remittance of these earnings is not practicable.
We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.
−Removed: During the years ended December 31, 2019 , 2018 and 2017 , we recognized an increase of $ 45 thousand , a decrease of $ 0.7 million and an increase of $ 0.2 million of interest and penalties, respectively.
−Removed: Accrued interest and penalties as of December 31, 2019 and 2018 were approximately $ 0.1 million and $ 73 thousand , respectively.
+Added: During the years ended December 31, 2020, 2019 and 2018, we recognized an increase of $ 0.1 million, an increase of $ 45 thousand and a decrease of $ 0.7 million of interest and penalties, respectively.
+Added: Accrued interest and penalties as of December 31, 2020 and 2019 were approximately $ 0.2 million and $ 0.1 million, respectively.
We file tax returns in U.S.
5 unchanged sentences
Years Ended December 31,
+Added: 2020 2019 2018
Beginning balance $ 10,993 $ 8,771 $ 5,772
10 unchanged sentences
We believe that the amount by which the unrecognized tax benefits may increase or decrease within the next 12 months is not estimable.
−Removed: Restructuring Charges
−Removed: 2017 Restructuring Plan
−Removed: In January 2017, we entered into a strategic partnership with the NRCCUA where they assumed responsibility for managing, renewing, and maintaining our existing university contracts and become the exclusive reseller of our digital marketing services for colleges and universities.
−Removed: As a result of this strategic partnership, approximately 55 employees in China and the United States supporting the sales and account support functions of our marketing services offerings were terminated.
−Removed: During the year ended December 31, 2019 , we recorded workforce reduction costs of $ 0.1 million and during the year ended December 31, 2018 , we recorded workforce reduction costs of $ 0.3 million and lease termination and other costs of $ 19 thousand .
−Removed: We expect remaining costs incurred to date related to this workforce reduction to be fully paid within two months .
−Removed: 2015 Restructuring Plan
−Removed: We recorded a reduction of $ 0.3 million to our 2015 Restructuring Plan liability related to our adoption of ASU 2016-02, Leases (Topic 842) during the three months ended March 31, 2019.
−Removed: Our 2015 Restructuring Plan is now complete.
−Removed: The following table summarizes the activity related to the accrual for restructuring charges (in thousands):
−Removed: 2017 Restructuring Plan
−Removed: 2015 Restructuring Plan
−Removed: Workforce Reduction Costs
−Removed: Lease Termination and Other Costs
−Removed: Lease Termination and Other Costs
−Removed: Balance at January 1, 2018
−Removed: Restructuring charges
−Removed: Cash payments
−Removed: Balance at December 31 2018
−Removed: Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02
−Removed: Restructuring charges
−Removed: Cash payments
−Removed: Balance at December 31, 2019
+Added: T a b l e o f C o n t e n t s
Related-Party Transactions
1 unchanged sentence
During the years ended December 31, 2020, 2019, and 2018, we purchased $ 1.7 million, $ 2.1 million and $ 3.3 million, respectively, of services from Adobe.
−Removed: We had $ 0.2 million in revenues during the year ended December 31, 2019 and $ 0.1 million in revenues during the years ended December 31, 2018 and 2017 from Adobe.
−Removed: We had $ 0.2 million and an immaterial amount in payables as of December 31, 2019 and 2018 , respectively, to Adobe.
+Added: We had $ 0.1 million, $ 0.2 million, and $ 0.1 million in revenues during the years ended December 31, 2020, 2019, and 2018, respectively, from Adobe.
+Added: We had $ 0.1 million and $ 0.2 million in payables as of December 31, 2020 and 2019, respectively, to Adobe.
We had no outstanding receivables as of December 31, 2020 and 2019 from Adobe.
−Removed: One of our board members was a member of the Board of Directors of Cengage Learning, Inc.
−Removed: (Cengage) until December 23, 2019.
−Removed: During the years ended December 31, 2019 , 2018 , and 2017 , we purchased $ 17.2 million , $ 15.1 million , and $ 11.5 million , respectively, of goods and services from Cengage.
−Removed: We had $ 3.0 million , $ 2.5 million , and $ 1.9 million in revenues during the years ended December 31, 2019 , 2018 , and 2017 , respectively, from Cengage.
−Removed: We had an immaterial amount and $ 0.1 million in payables as of December 31, 2019 and 2018 , respectively, to Cengage.
−Removed: We had an immaterial amount of outstanding receivables as of December 31, 2019 and 2018 , respectively, from Cengage.
One of our board members is also a member of the Board of Directors of Synack, Inc.
2 unchanged sentences
During the years ended December 31, 2020, 2019, and 2018, we incurred payment processing fees of $ 2.1 million, $ 1.6 million, and $ 1.3 million, respectively, to PayPal.
−Removed: One of our board members is the Chief Executive Officer of the San Francisco 49ers (49ers).
−Removed: During the year ended December 31, 2019 , we purchased $ 0.2 million of advertisements from the 49ers.
+Added: One of our board members is also a member of the Board of Directors of Zuora, Inc.
+Added: During the year ended December 31, 2020, we purchased $ 1.3 million of services from Zuora.
Employee Benefit Plan
8 unchanged sentences
We derive our revenues from our Chegg Services and Required Materials product lines.
−Removed: Our Chegg Services primarily include Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, and Thinkful .
−Removed: Required Materials include a revenue share, upon fulfillment, on the total transactional amount of a rental and sale transaction for print textbooks as well as revenues from eTextbooks .
+Added: Our Chegg Services primarily include Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Thinkful, and Mathway.
+Added: Our Required Materials product line includes revenues from print textbooks and eTextbooks.
The following table sets forth our total net revenues for the periods shown for our Chegg Services and Required Materials product lines (in thousands):
+Added: Years Ended December 31,
+Added: 2020 2019 2018
Chegg Services $ 521,228 $ 332,221 $ 253,985
5 unchanged sentences
Geographic revenues information is based on the location of the customer.
−Removed: In 2019 , 2018 , and 2017 , substantially all of our revenues and long-lived assets are located in the United States.
+Added: During the years ended December 31, 2020, 2019, and 2018, substantially all of our revenues and long-lived assets are located in the United States.
+Added: T a b l e o f C o n t e n t s
Selected Quarterly Financial Data (unaudited)
Three Months Ended
−Removed: March 31, 2019
−Removed: June 30, 2019
−Removed: September 30, 2019
−Removed: December 31, 2019
+Added: March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020
Total net revenues $ 131,590 $ 153,009 $ 154,018 $ 205,721
−Removed: (Loss) income from operations
+Added: Gross profit 89,200 109,485 91,648 148,588
+Added: Income (loss) from operations 3,276 22,061 ( 17,802 ) 49,218
Net (loss) income ( 5,713 ) 10,589 ( 37,140 ) 26,043
Weighted average shares used to compute net (loss) income per share:
+Added: Basic 122,428 123,842 126,194 128,955
+Added: Diluted 122,428 133,851 126,194 141,297
Net (loss) income per share:
+Added: Basic $ ( 0.05 ) $ 0.09 $ ( 0.29 ) $ 0.20
+Added: Diluted $ ( 0.05 ) $ 0.08 $ ( 0.29 ) $ 0.18
Three Months Ended
−Removed: March 31, 2018
−Removed: June 30, 2018
−Removed: September 30, 2018
−Removed: December 31, 2018
+Added: March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019
Total net revenues $ 97,409 $ 93,862 $ 94,151 $ 125,504
+Added: Gross profit 74,074 73,344 71,987 99,339
(Loss) income from operations ( 1,027 ) 6,815 ( 5,057 ) 17,086
1 unchanged sentence
Weighted average shares used to compute net (loss) income per share:
+Added: Basic 116,730 118,790 120,085 121,151
+Added: Diluted 116,730 118,790 120,085 129,150
Net (loss) income per share:
+Added: Basic $ ( 0.04 ) $ ( 0.02 ) $ ( 0.10 ) $ 0.07
+Added: Diluted $ ( 0.04 ) $ ( 0.02 ) $ ( 0.10 ) $ 0.06
Subsequent Event
−Removed: On January 29, 2020, we purchased $ 29.4 million of print textbooks to establish our initial print textbook library.
+Added: On February 17, 2021, we entered into an underwriting agreement pursuant to which we agreed to issue and sell 9,804,000 shares of our common stock at a public offering price of $ 102.00 per share and on February 18, 2021, the option to purchase up to an additional 1,470,600 shares of our common stock, consisting of 300,000 shares of common stock from the selling stockholder and 1,170,600 shares issued by us, was exercised (the “Offering”).
+Added: On February 22, 2021, we closed the Offering and issued the shares for estimated net proceeds of approximately $ 1,091.6 million, after deducting underwriting discounts and commissions and estimated Offering expenses payable by Chegg.
+Added: T a b l e o f C o n t e n t s
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.