What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-21 compared with 2022-02-22 · 72 added, 86 removed, 169 unchanged (48% of the section changed)

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Our mission is to improve learning and learning outcomes by putting students first.

We support life-long learners starting with their academic journey and extending into their careers.

The Chegg platform provides products and services to support learners to help them better understand their academic course materials, and also provides personal and professional development skills training, to help them achieve their learning goals.

Our product and service offerings fall into two categories:

Chegg Services, which encompasses our subscription services and which can be accessed internationally through our websites and on mobile devices, and Required Materials, which includes print textbooks and eTextbooks.

In 2021, approximately 7.8 million students subscribed to our Chegg Services, an increase of 18% year over year from 6.6 million in 2020.

Chegg Services subscribers include Chegg Study, Chegg Writing, Chegg Math Solver, Chegg Study Pack, Mathway, and Thinkful customers who have paid to access the service during the time period.

In 2021, we had 30 million monthly average visitors, an increase of 58% year over year from 19 million monthly average visitors in 2020.

Monthly average visitors represent the average of unique visitors for all Chegg properties.

Chegg Services

We support life-long learners all over the world, starting with their academic journey and extending through their careers.

The Chegg platform provides products and services to support learners with their academic course materials, as well as their career and personal skills developments.

Our service and product offerings fall into two categories:

Subscription Services, which encompasses our Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu offerings that can be accessed internationally through our websites and on mobile devices, and Skills and Other, which encompasses our Skills, advertising services, print textbooks and eTextbooks offerings.

In 2022, 8.2 million students subscribed to our Subscription Services, an increase of 5% year over year from 7.8 million in 2021.

Subscription Services

Chegg Study Pack.

Our Chegg Study Pack is a premium subscription bundle including our Chegg Study, Chegg Writing, and Chegg Math Solver services, which are described further below.

Our Chegg Study Pack is a premium subscription bundle including our Chegg Study, Chegg Writing, and Chegg Math services, which are described further below.

Chegg Study Pack creates an integrated platform of connected academic support services which have millions of pieces of educational learning content and enhanced features, such as concept video walkthroughs, flashcards and practice tests, that are ever-changing and evolving to increase our value proposition to students.

We plan to launch instructor-created materials from educators within our Uversity platform as part of the Chegg Study Pack in 2022.

Our Uversity platform was created to improve the quality and accessibility of learning materials provided to students around the world.

The platform allows educators and faculty to share their educational content, such as study notes, videos, and practice tests, to further support students’ learning and enhance their outcomes.

We launched instructor-created materials from educators within our Uversity platform as part of the Chegg Study Pack in 2022.

Our Chegg Study subscription service helps students master challenging concepts on their own through the use of “Expert Questions and Answers” and “Textbook Solutions.” Our Expert Questions and Answers service allows students to ask questions on our website and receive detailed explanations from subject matter experts.

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Chegg Writing.

Our Chegg Writing service consists of a free, ad-supported service and a premium paid subscription service providing students with a suite of tools, including plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation.

Our Chegg Writing subscription service consists of a premium paid subscription service providing students with a suite of tools, including plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation.

Students can create citations from over 7,000 citation styles including MLA, APA, and The Chicago Manual of Style.

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Chegg Writing also includes the popular website properties EasyBib, Citation Machine, BibMe, and CiteThisForMe.

Our Chegg Math subscription services, including Mathway, help students understand math by providing a step-by-step math problem solver and calculator that help students instantly receive guided instructional explanations to better understand the why and how for each step within a range of math topics.

In January 2022, we completed our acquisition of Busuu Online S.L.

(Busuu), an online language learning company that offers a comprehensive solution through a combination of self-paced lessons, live classes with expert tutors and the ability to learn and practice with members of the Busuu language learning community.

Our Chegg Math subscription service, including Mathway, helps students understand math by providing a step-by-step math problem solver and calculator that help students instantly receive guided instructional explanations to better understand the why and how for each step within a range of math topics.

Our Busuu language learning platform offers a comprehensive solution through a combination of self-paced lessons, live classes with expert tutors and the ability to learn and practice with members of the Busuu language learning community.

The Busuu methodology has been developed by leading experts in online language learning pedagogy and can bring students from novice to advanced speakers of a language rapidly and enjoyably.

When students want to learn a new language for work, study or personal interest, they can use our service to access comprehensive courses in 14 languages, connect with Busuu’s community of native speakers to practice their conversation and receive expert instruction from our highly qualified teachers.

Busuu will expand our existing offerings and global reach through language learning, allowing us to drive further into international markets.

Thinkful is our skills-based learning service that offers professional courses along with networking, interviewing, and career services.

Thinkful is offered directly through our website and through partners that connect employers with top learning providers to provide employees with upskilling opportunities.

Other Services.

We also provide students with other services, such as Chegg Life, Chegg Prep and Chegg Internships.

Required Materials

Print Textbooks and eTextbooks.

For students looking to save on the cost of required materials, we rent and sell both print textbooks and eTextbooks.

Most of the print textbook transactions are rentals, although we also offer both new and used textbooks for sale at a slight markup to our acquisition cost.

We work with a third party logistic provider to provide warehousing and logistic services for our print textbooks.

We have also entered into agreements with other partners to provide their textbooks for rental or sale.

In participation with certain publishers, we also offer “Instant Access” to eTextbooks as a one-week free trial of our eTextbook service, and allow students access while the print copy is in transit.

eTextbooks obtained from Chegg can be accessed anytime and anywhere and are viewed through our eTextbook reader that enables fast and easy navigation, keyword search, text highlighting, note taking and further preserves those notes in an online notepad with the ability to view highlighting and notes across platforms.

Skills and Other

Our skills-based learning service offers professional courses along with networking, interviewing, and career services and is offered directly through our website, through partners that connect employers with top learning providers to provide employees with upskilling opportunities, and directly to large employers committed to investing in their workforce skills training needs.

Advertising Services.

We work with leading brands and programmatic partners to deliver advertising across our platforms.

We provide other educational offerings to help students with their coursework.

Technology and Platform Integration

Our technology is designed to create a direct-to-student learning platform that will continue to enable our growth at scale.

Our technology is designed to create a learning platform that will continue to enable our growth at scale.

We employ technological innovations whenever possible to increase efficiency and scale in our business.

Our products rely upon and leverage the information underlying our “Student Graph” and “Content Graph Technology” discussed in more detail below.

For example, we utilize various artificial intelligence (AI) technologies such as large language models, generative AI, and a symbolic math solver engine in our products and services.

Our products and services rely upon and leverage the information underlying our “Student Graph” and “Content Graph Technology” discussed in more detail below.

We will continue to invest in building technologies around our data, search and solutions.

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Student Graph .

Our Student Graph is the accumulation of the collective activity of students in our learning platform.

Our Student Graph is the accumulation of the collective activity of students on our learning platform.

Students generate valuable information each time they engage with our learning platform.

Our Student Graph also includes information we access from public and private sources such as textbook information, information about colleges and scholarship data.

We can collect, organize and process this information to algorithmically create a personalized experience for each student on our network.

Search is an easy on-ramp for students to discover all of our services.

Students can search by book, ISBN, author’s name or course.

Many students come to us for textbook rentals, and in our search results we not only provide the relevant textbook, but also begin to build awareness of our other services.

For instance, when a student searches for a textbook, we can show relevant Chegg Study solutions or Flashcard decks.

Data Sourcing and Content Graph Technology

Not all information relevant to students on our platform is made available by service, product, list or user-input.

Therefore, we have developed proprietary technologies to collect disparate, distributed sets of data.

For example, we access data from public and private sources to integrate into our platform to inform our decisions about our textbook catalog and pricing.

Mobile Solutions

We have mobile applications on Apple iOS and Google Android.

Our mobile apps are built as hybrid applications leveraging the Chegg application programming interface (API).

Taking advantage of capabilities unique to the mobile platform, we offer some functionality on mobile that is not available on our website, such as textbook barcode scanning for price comparisons and Chegg Prep.

Real-time Sourcing and Pricing Technologies

We have internally developed proprietary pricing and sourcing systems that consider market price, content selection and availability, and other factors, in determining price and origin of content and services we offer to students.

Programmatic Advertising

Our programmatic advertising technology includes a combination of a deep understanding of programmatic technology trends with data science, engineering and machine learning.

The result is an online advertising platform that maximizes the value of the digital impressions we serve.

Our Student Graph also includes information we access from public and private sources such as information about colleges and scholarship data.

We collect, organize and process this information to algorithmically create a personalized experience for each student on our network.

Search is an easy on-ramp for students to discover all of our products and services.

Students often find us within a search engine results page as they seek explanations for academic problems or concepts.

Once they discover that we have step-by-step solutions, we can also build awareness of our other services, such as our Math, Writing and Textbook offerings, or our bundle, Chegg Study Pack.

Infrastructure and Applications

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Information Security .

Our platform includes encryption, antivirus, firewall, intrusion prevention, and patch-management technologies to help protect our systems distributed across cloud-hosting providers and our business offices.

Our learning platform includes encryption, antivirus, firewall, intrusion prevention, and patch-management technologies to help protect our systems distributed across cloud-hosting providers and our offices.

Our existing products and services undergo periodic security assessment.

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We rely on third-party technology solutions and products as well as internally developed and proprietary systems, in which we have made substantial investment, to provide rapid, high-quality customer service, internal communication, software development, deployment, and maintenance.

In 2021, 8.9 million customers paid for our products and services, up from 8.2 million and 5.8 million in 2020 and 2019, respectively.

Mobile Solutions

We have mobile applications on Apple iOS and Google Android.

Our mobile apps are built as hybrid applications leveraging the Chegg application programming interface (API).

Taking advantage of capabilities unique to the mobile platform, we offer some functionality on mobile that is not available on our website.

Programmatic Advertising

Our programmatic advertising technology includes a combination of a deep understanding of programmatic technology trends with data science, engineering and machine learning.

The result is an online advertising platform that maximizes the value of the digital impressions we serve.

Data Sourcing and Content Graph Technology

Not all information relevant to students on our platform is made available by service, product, list or user-input.

Therefore, we have developed proprietary technologies to collect disparate, distributed sets of data.

In 2022, 2021 and 2020, 8.2 million, 7.8 million, and 6.6 million customers subscribed to our Subscription Services, respectively.

Subscription Services customers include Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu customers who have paid to access the service during the time period.

Sales and Marketing

Our direct to consumer marketing strategy focuses on brand and performance marketing.

Brand marketing increases awareness of the Chegg brand and its services while performance marketing drives traffic to our site.

We use several major direct marketing channels to reach students.

We deploy search engine optimization (SEO) techniques designed to increase the visibility of Chegg.com content in organic, unpaid search engine result listings.

We supplement our SEO efforts through search engine marketing using keyword simulation and bid management tools to analyze and categorize search keywords, optimize bidding, increase impressions and drive conversion.

We also drive brand awareness with streaming radio and display advertising on major online and mobile advertising networks, such as Spotify and Google Display Network.

We integrate our textbook services on affiliates’ websites and work with a large advertising network that recruits individual online affiliates in exchange for predetermined revenue share or commissions.

The strength of our content flywheel drives significant organic traffic to Chegg.

Our lifecycle marketing focuses on increasing activation, engagement and retention.

We utilize three types of email marketing campaigns:

onboarding programs to drive activation and retention, personalized cross-sell campaigns to deepen engagement, and promotional campaigns to drive sales and interests.

We use social media to manage organic and paid programs across top websites, including Facebook, Instagram, TikTok, and YouTube.

We also acquire and engage students through content generated by student bloggers, syndicated through partners, around key student concerns and interests such as admissions, transition to college, picking a major, and resume preparation.

Through our campus activation programs, we partner with brands and influencers to bring entertainment events, such as concerts, trial promotions, and product giveaways to students.

We secure contracts with brands through direct sales by our field sales organization, which sells brand advertising services to large brand advertisers seeking to reach and engage college and high school students.

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Student Advocacy

We are committed to providing a high level of customer service to our students and to our brand promise of putting students first.

We are committed to providing a high level of customer service to our students and to fulfilling our brand promise of putting students first.

We trust our students, understand the critical role our products and services have in their learning journey, and strive to resolve all problems quickly and thoroughly.

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While we do not have any competitors that compete with us across our business in its entirety, we face significant global competition in each of our product and service offerings.

Our Chegg Services face competition from different businesses depending on the offering.

For Chegg Study, our competitors primarily include platforms that provide study materials and online instructional systems, such as Course Hero, Quizlet, Khan Academy, Bartleby, and Brainly.

For Chegg Writing, we primarily face competition from other citation generating and grammar and plagiarism services, such as Grammarly.

For Chegg Math Solver and Mathway, we face competition from other equation solver services, such as Photomath and Symbolab.

For Chegg Math, we face competition from other equation solver services, such as Photomath, Gauthmath, and Symbolab.

For Busuu, our competitors primarily include language learning platforms, such as Duolingo and Babbel.

For Thinkful, we face competition from other online learning platforms and online “skills accelerator” courses both in the direct-to-consumer category, including General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc., as well as white-label and co-branded providers who compete for adult learners through third party institutions, including 2U, Inc., Simplilearn, and Kenzie Academy.

Additionally, the market for textbooks is intensely competitive and subject to rapid change.

We face competition from college bookstores, some of which are operated by Follett and Barnes & Noble Education, online marketplaces such as Amazon.com, providers of eTextbooks, as well as various private textbook rental websites.

For Skills, we face competition from other online learning platforms and online “skills accelerator” courses both in the direct-to-consumer category, including General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc., as well as white-label and co-branded providers who compete for adult learners through third party institutions, including 2U, Inc., Simplilearn, and Kenzie Academy.

We believe that we have competitive strengths that position us favorably in each aspect of our business.

However, the education industry is evolving rapidly and is increasingly competitive.

A variety of business models are being pursued or may be considered for the provision of digital learning tools, print textbooks and eTextbooks, some of which may be more profitable or successful than our business model.

However, the education industry is evolving rapidly, including the utilization of artificial intelligence and machine learning, and is increasingly competitive.

A variety of business models are being pursued or may be considered for the provision of digital learning tools, some of which may be more profitable or successful than our business model.

Intellectual Property

We use proprietary technology to operate our business, and our success depends, in part, on our ability to protect our technology and intellectual property.

We rely on a combination of patent, copyright, trademark and trade secret laws, as well as contractual restrictions, to establish and protect our intellectual property.

We rely on a combination of patent, copyright, trademark and trade secret laws, as well as

contractual restrictions, to establish and protect our intellectual property.

We maintain a policy requiring our employees, contractors, consultants and other third parties to enter into confidentiality and proprietary rights agreements to control access to our proprietary information.

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As of December 31, 2022, we had 42 issued patents that will expire between 2031 and 2040 and 16 patent applications pending in the United States.

As of December 31, 2021, we also owned four U.S.

As of December 31, 2022, we also owned six U.S.

copyrights registrations and had unregistered copyrights in our software documentation, marketing materials, and website content that we develop, owned over 900 registered domain names, and owned 22 U.S.

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We own the registered U.S.

trademarks Chegg, Chegg.com, Chegg Study, internships.com, Research Ready, EasyBib, the Chegg “C” logo, Busuu and Thinkful, among others, as well as a variety of service marks.

trademarks Chegg, Chegg.com, Chegg Study, EasyBib, the Chegg “C” logo, Busuu and Thinkful, among others, as well as a variety of service marks.

We also have a number of pending trademark applications in the United States and unregistered marks that we use to promote our brand.

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The manner in which existing laws and regulations will be applied to the Internet and students in general and how they will relate to our business in particular, are often unclear.

For example, we often cannot be certain how existing laws will apply in the e-commerce and online context, including with respect to such topics as privacy, cybersecurity, defamation, pricing, credit card fraud, advertising, taxation, sweepstakes, promotions, content regulation, financial aid, scholarships, student matriculation and recruitment, quality of products and services, and intellectual property ownership and

infringement.

In addition, we may be subject to state oversight for Thinkful's skills-based learning programs, including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business.

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PPL provides for both civil and criminal penalties with a maximum financial penalty of ILS 25,000 and additional fines if the violation is on-going, and a maximum criminal penalty of imprisonment for up to five years.

The Skills and Post-16 Education Act 2022 established the government’s skills and training strategy for the United Kingdom.

Chapter 1 of Part 4 of the Act includes new criminal offenses relating to completing assignments on behalf of students.

It contains two new criminal offenses, specifically an offense of providing or arranging a paid-for relevant service in commercial circumstances, and an offense of advertising a relevant service to students.

For both offenses, a body corporate and/or director (and equivalents) guilty of an offense is liable on summary conviction to a fine.

The Tertiary Education Quality and Standards Agency Act 2011, or TEQSA Act, established the Tertiary Education Quality and Standards Agency (TEQSA) in 2011 and a new national regulatory and quality assurance environment for Australian higher education.

The Act contains requirements relating to registered higher education providers and regulated entities.

Section 114 (A) makes it an offense for a person to provide, offer to provide, or arrange for a third-party person to provide, academic cheating services to a student.

Section 114 (B) makes it an offense for a person to advertise academic cheating services to students.

TEQSA may apply under section 127A to the Federal Court for an injunction requiring carriage service providers to take steps to disable access to websites found to contravene or facilitate a contravention of sections 114A or 114B of the TEQSA Act, and the Act also provides for other financial or custodial penalties where an offense is proven.

Human Capital

As of December 31, 2021, we had 1,736 employees, of which 1,613 were full-time and 123 were part-time.

Additionally, 851 were located outside the United States.

None of our workforce is covered under a collective bargaining agreement.

As of December 31, 2022, we had 2,071 employees, of which 1,953 were full-time and 118 were part-time, with 1,120 located outside the United States.

With our recent acquisition of Busuu, a small part of our international workforce is now covered under a collective bargaining agreement, however, the majority of our workforce is still not covered by any collective bargaining agreement.

We appreciate that our employees are our greatest asset and place a premium on the importance of their retention, growth, and development.

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We believe that a diverse workforce makes us a stronger company and helps us better serve the needs of our customers.

We are focused on understanding our culture, belonging and diversity strengths and opportunities and defining and executing on a strategy to support further progress.

We are focused on understanding our culture, belonging and inclusion strengths and opportunities and defining and executing on a strategy to support further progress.

We have employee-driven resource groups that are aligned around creating a culture of belonging and awareness for our diverse workforce.

These groups are centered around gender, ethnicity, sexual orientation or other shared attributes, which we believe help build

community and enable opportunities for both personal and professional development.

These groups are centered around gender, ethnicity, sexual orientation or other shared attributes, which we believe help build community and enable opportunities for both personal and professional development.

We continue to focus on building a strong talent pipeline to create more opportunities for workplace diversity, support greater representation within the organization, and build a company that is truly reflective of the diverse audience we serve.

Please see the Environmental, Social, and Corporate Governance (ESG) section of our investor relations website (www.investor.chegg.com/esg) for relevant metrics and to learn more about Chegg’s efforts around culture, belonging, diversity, and inclusion.

As a result of the COVID-19 pandemic, the majority of our global employee population continues to work remotely.

This comes with many challenges for our employees which provided us with the opportunity to increase our support programs.

To support our employees, we decided to continue our childcare reimbursement program into 2022, provide benefits related to substance abuse issues for employees, and continue to provide flexible time off for employees to deal with the difficulties of an extended remote work environment.

We also increased our all employee communications as well as updated our onboarding programs to help employees feel connected in a new virtual world.

In 2022, in order to continue to attract and retain a highly engaged workforce, we expanded our employee benefits, including fertility care and additional retirement savings for all 401(k) savings plan participants.

Additionally, with the reopening of our physical offices, we increased our employee training offerings to include workshops in effectively managing and working in a hybrid environment along with award winning health and welfare benefits to support our full time employees as they navigate the lingering difficulties of a fully remote environment.

Environmental, Social, and Corporate Governance (ESG)

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Just like our approach with students, we take the same level of care to engage with our stakeholders to help prioritize our ESG efforts, which we categorize into six pillars, as outlined below.

This approach is informed by the materiality assessment we conducted in 2021, in which we engaged both internal and external stakeholders to identify the ESG topics that are most relevant to our business and to society.

This approach is informed by the materiality assessment we conducted in late 2021, in which we engaged both internal and external stakeholders to identify the ESG topics that are most relevant to our business and to society.

Focus on People

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To do our part, we are focused on sustainable operations and we are committed to finding ways to help reduce our environmental impact.

We’ve taken several actions to assess potential risks of climate change and opportunities for our business to address those risks.

In 2021, we disclosed our baseline scope 1 and scope 2 emissions and are currently beginning the process of calculating our scope 3 GHG emissions.

These assessments will inform future reduction opportunities and decarbonization goals.

We know that we owe it to our customers, employees, and society to use environmentally sound practices and to find ways to limit our contribution to global climate change.

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We hired our current Chief Executive Officer in 2010, who implemented our current business strategy to create the leading direct-to-student learning platform for students to help them improve their outcomes.

Beginning in 2010, we made a series of strategic acquisitions to expand our Chegg Services, including Cramster in 2010 to add Chegg Study, internships.com in 2014 to add to Chegg Internships, Imagine Easy Solutions in 2016 to add Chegg Writing and programmatic advertising, Cogeon GmbH in 2017 to add Chegg Math Solver, WriteLab in 2018 to add enhanced features to Chegg Writing, StudyBlue in 2018 to add Chegg Prep, Thinkful in 2019 to add our skills-based learning platform, Mathway in 2020 to strengthen our Chegg Math Solver, and Busuu in 2022 to add a language learning service.

Beginning in 2010, we made a series of strategic acquisitions to expand our service offerings, including Cramster in 2010 to add Chegg Study, internships.com in 2014 to add to Chegg Internships, Imagine Easy Solutions in 2016 to add Chegg Writing and programmatic advertising, Cogeon GmbH in 2017 to add Chegg Math, WriteLab in 2018 to add enhanced features to Chegg Writing, StudyBlue in 2018 to add our flashcards offering, Thinkful in 2019 to add our skills-based learning platform, Mathway in 2020 to strengthen our Chegg Math offering, and Busuu in 2022 to add a language learning service.

We completed our initial public offering (IPO) in November 2013, a follow-on offering in August 2017, issued convertible senior notes in April 2018, March/April 2019, and August 2020, and completed an equity offering in February 2021.

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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.

What changed 10-K

Item 1. Business