4 unchanged sentences
dollar to these currencies may have an impact.
−Removed: We have experienced and will continue to experience fluctuations in net income (loss) as a result of transaction gains or losses related to remeasuring certain amounts that are denominated in foreign currencies.
+Added: We have experienced and will continue to experience fluctuations in net (loss) income as a result of transaction gains or losses related to remeasuring certain amounts that are denominated in foreign currencies.
We accept foreign currencies from our international customers and our international revenues were 13%, 14% and 15% of total net revenues during the years ended December 31, 2024, 2023 and 2022, respectively.
4 unchanged sentences
Interest Rate Sensitivity
−Removed: We had cash and cash equivalents totaling $135.8 million and $473.7 million as of December 31, 2023 and 2022, respectively, and investments of $443.8 million and $800.2 million as of December 31, 2023 and 2022, respectively.
−Removed: Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities, U.S.
−Removed: treasury securities and agency bonds.
+Added: As of December 31, 2024 and 2023, we had cash and cash equivalents totaling $161.5 million and $135.8 million, respectively, and investments of $366.9 million and $443.8 million, respectively.
+Added: Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities and U.S.
+Added: treasury securities.
Changes in U.S.
−Removed: interest rates, such as those that have occurred in 2023, affect the interest earned on our cash and cash equivalents and the market value of our investments.
+Added: interest rates, affect the interest earned on our cash and cash equivalents and the market value of our investments.
A hypothetical 100 basis point increase or decrease in interest rates would result in a $4.3 million increase or decline in the fair value of our investments as of December 31, 2024.
9 unchanged sentences
Consolidated Statements of Operations
−Removed: Consolidated Statements of Comprehensive Income (Loss)
+Added: Consolidated Statements of Comprehensive (Loss) Income
Consolidated Statements of Stockholders’ Equity
5 unchanged sentences
We have audited the accompanying consolidated balance sheets of Chegg, Inc.
−Removed: and subsidiaries (the "Company") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2023, and the related notes and the schedules listed in the Index at Item 15.2 (collectively referred to as the "financial statements").
+Added: and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedules listed in the Index at Item 15.2 (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
11 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 separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
−Removed: Goodwill — Refer to Notes 2 and 7 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company tests goodwill for impairment at least annually or whenever events or changes in circumstances indicate that their carrying values may not be recoverable.
−Removed: During the year ended December 31, 2023, the Company performed a quantitative assessment of goodwill of its single reporting unit.
−Removed: This assessment utilized significant estimates and assumptions including but not limited to, discount rate and forecasts of future revenue and operating margin, used to calculate projected future cash flows, as well as the determination of appropriate market comparable companies, metrics and multiples.
−Removed: Changes in these assumptions could have a significant impact on either the fair value of the Company’s single reporting unit, the amount of goodwill impairment charge, if any, or both.
−Removed: As of the year ended December 31, 2023 the fair value of the reporting unit exceeded the carrying value, and therefore, no impairment was recorded.
−Removed: The goodwill balance was $632.0 million as of December 31, 2023.
−Removed: We identified goodwill for the Company’s single reporting unit as a critical audit matter because of the significant judgments made by management to estimate the fair value of the Company’s single reporting unit.
−Removed: This required a high degree of auditor
−Removed: judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to selection of the discount rate and forecasts of future revenue and operating margin.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to the discount rate and forecasts of future revenue and operating margin, used by management to estimate the fair value of the Company’s single reporting unit, included the following, among others:
−Removed: • We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the Company’s single reporting unit, such as controls related to management’s selection of the discount rate and forecasts of future revenue and operating margin.
−Removed: • We evaluated management’s ability to accurately forecast future revenues and operating margins by comparing actual results to management’s historical forecasts.
−Removed: • We evaluated the reasonableness of management's revenue and operating margin forecasts by comparing the forecasts to:
−Removed: ◦ historical results,
−Removed: ◦ internal communications to management and the Board of Directors, and
−Removed: ◦ forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.
−Removed: • With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:
−Removed: ◦ Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
−Removed: ◦ Developing a range of independent estimates and comparing those to the discount rate selected by management.
+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 and 8 to the financial statements
Critical Audit Matter Description
−Removed: In May 2023, the Company extinguished $85.8 million and $341.1 million principal amount of the 2026 and 2025 Notes, respectively, which had an aggregate carrying value of $423.5 million for a total reacquisition price of $369.8 million (including $1.2 million in fees).
−Removed: Further, in August 2023, the Company extinguished an additional $169.7 million principal amount of the 2026 Notes, which had a carrying value of $168.3 million for a total reacquisition price of $136.2 million (including $0.4 million in fees).
−Removed: The Company elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding.
−Removed: This resulted in a total gain on extinguishment of $85.9 million during the year ended December 31, 2023.
+Added: In November 2024, the Company extinguished $116.6 million principal amount of the 2026 Notes, for a total reacquisition price of $96.5 million (including $0.3 million in fees).
+Added: The Company elected to reacquire and not cancel the partially extinguished 2026 notes and left the associated capped call transactions outstanding.
+Added: This resulted in a gain on extinguishment of $19.5 million during the year ended December 31, 2024.
Auditing the following elements involved a higher degree of auditor judgment and an increased extent of effort due to the nature and extent of specialized skill and knowledge required of the Company’s accounting assessment of the settlement including the conclusion that the settlement should be accounted for as an extinguishment.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures related to evaluating the extinguishment of the convertible senior notes included the following, among others:
−Removed: • We tested the operating effectiveness of the controls over the Company’s accounting for the extinguishment of the 2026 and 2025 convertible senior notes.
−Removed: • Our testing included reading the underlying agreements and evaluating the Company’s accounting analysis underlying the accounting of the convertible senior notes, including the determination of the balance sheet classification of each transaction, identification of any derivatives included in the arrangements, and determination that the 2026 and 2025 convertible senior notes was a debt extinguishment.
−Removed: • We utilized more experienced professionals on our team when evaluating management’s assessment of the accounting for the extinguishment.
+Added: Our audit procedures related to evaluating the partial extinguishment of the 2026 convertible senior notes included the following, among others:
+Added: • We tested the operating effectiveness of the internal controls over the Company’s accounting for the partial extinguishment of the 2026 convertible senior notes.
+Added: • Our testing included reading the underlying repurchase agreements and evaluating the Company’s accounting analysis underlying the accounting of the convertible senior notes, evaluating the determination that the partial repurchase of the 2026 convertible senior notes was a debt extinguishment, obtaining audit evidence of the repurchases and recalculating the gain on extinguishment.
+Added: • We utilized more experienced professionals on our team when evaluating management’s assessment of the accounting for the partial extinguishment.
/s/ DELOITTE & TOUCHE LLP
40 unchanged sentences
Property and equipment, net 170,648 183,073
−Removed: Goodwill 631,995 615,093
+Added: Goodwill, net — 631,995
Intangible assets, net 10,347 52,430
Right of use assets 22,256 25,130
−Removed: Deferred tax assets 141,843 167,524
+Added: Deferred tax assets, net 964 141,843
Other assets 14,527 28,382
13 unchanged sentences
Total liabilities 675,970 782,617
−Removed: Commitments and contingencies
+Added: Commitments and contingencies (Note 10)
Stockholders’ equity:
19 unchanged sentences
General and administrative 217,756 236,183 216,247
+Added: Impairment expense 677,239 3,600 —
Total operating expenses 1,173,755 558,079 560,544
(Loss) income from operations ( 737,108 ) ( 67,725 ) 8,957
−Removed: Interest expense, net and other income (expense), net
+Added: Interest expense, net and other income, net
Interest expense, net ( 2,590 ) ( 3,773 ) ( 6,040 )
−Removed: Other income (expense), net 121,810 101,029 ( 65,472 )
−Removed: Total interest expense, net and other income (expense), net 118,037 94,989 ( 72,368 )
−Removed: Income before (provision for) benefit from income taxes 50,312 103,946 5,739
+Added: Other income, net 51,332 121,810 101,029
+Added: Total interest expense, net and other income, net 48,742 118,037 94,989
+Added: (Loss) income before (provision for) benefit from income taxes ( 688,366 ) 50,312 103,946
(Provision for) benefit from income taxes ( 148,702 ) ( 32,132 ) 162,692
−Removed: Net income (loss) $ 18,180 $ 266,638 $ ( 1,458 )
−Removed: Net income (loss) per share
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
+Added: Net (loss) income per share
Basic $ ( 8.10 ) $ 0.16 $ 2.09
Diluted $ ( 8.10 ) $ ( 0.34 ) $ 1.34
−Removed: Weighted average shares used to compute net income (loss) per share
+Added: Weighted average shares used to compute net (loss) income per share
Basic 103,300 116,504 127,557
1 unchanged sentence
See Notes to Consolidated Financial Statements.
−Removed: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
+Added: CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands)
1 unchanged sentence
2024 2023 2022
−Removed: Net income (loss) $ 18,180 $ 266,638 $ ( 1,458 )
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
Other comprehensive income (loss)
2 unchanged sentences
Other comprehensive income (loss) 2,506 22,749 ( 52,154 )
−Removed: Total comprehensive income (loss) $ 40,929 $ 214,484 $ ( 8,322 )
+Added: Total comprehensive (loss) income $ ( 834,562 ) $ 40,929 $ 214,484
See Notes to Consolidated Financial Statements.
5 unchanged sentences
Balances at December 31, 2021 136,952 $ 137 $ 1,449,305 $ ( 5,334 ) $ ( 337,191 ) $ 1,106,917
−Removed: Cumulative-effect adjustment related to adoption of ASU 2020-06 — — ( 465,006 ) — 86,868 ( 378,138 )
−Removed: Issuance of common stock in connection with equity offering, net of offering costs 10,975 11 1,091,455 — — 1,091,466
−Removed: Equity component on conversions of 2023 notes and 2025 notes — — ( 236,921 ) — — ( 236,921 )
−Removed: Issuance of common stock upon conversion of 2023 notes 2,983 3 235,518 — — 235,521
−Removed: Net proceeds from capped call related to conversions and extinguishments of 2023 notes and 2025 notes — — 67,770 — — 67,770
+Added: Repurchases of common stock ( 12,709 ) ( 13 ) ( 323,515 ) — — ( 323,528 )
Issuance of common stock upon exercise of stock options and ESPP 437 — 6,475 — — 6,475
Net share settlement of equity awards 1,794 2 ( 26,549 ) — — ( 26,547 )
−Removed: Repurchase of common stock ( 8,403 ) ( 8 ) ( 299,992 ) — — ( 300,000 )
Share-based compensation expense — — 138,788 — — 138,788
Other comprehensive loss — — — ( 52,154 ) — ( 52,154 )
−Removed: Net loss — — — — ( 1,458 ) ( 1,458 )
+Added: Net income — — — — 266,638 266,638
Balances at December 31, 2022 126,474 126 1,244,504 ( 57,488 ) ( 70,553 ) 1,116,589
3 unchanged sentences
Share-based compensation expense — — 136,787 — — 136,787
−Removed: Other comprehensive loss — — — ( 52,154 ) — ( 52,154 )
+Added: Net proceeds from capped call related to extinguishments of 2025 notes — — 297 — — 297
+Added: Other comprehensive income — — — 22,749 — 22,749
Net income — — — — 18,180 18,180
1 unchanged sentence
Repurchases of common stock ( 2,116 ) ( 2 ) ( 16 ) — — ( 18 )
−Removed: Issuance of common stock upon exercise of stock options and ESPP 512 1 4,162 — — 4,163
+Added: Issuance of common stock upon exercise of ESPP 859 1 2,632 — — 2,633
Net share settlement of equity awards 3,313 3 ( 9,239 ) — — ( 9,236 )
Share-based compensation expense — — 89,546 — — 89,546
−Removed: Net proceeds from capped call related to extinguishments of 2025 notes — — 297 — — 297
Other comprehensive income — — — 2,506 — 2,506
−Removed: Net income — — — — 18,180 18,180
+Added: Net loss — — — — ( 837,068 ) ( 837,068 )
Balances at December 31, 2024 104,880 $ 105 $ 1,114,550 $ ( 32,233 ) $ ( 889,441 ) $ 192,981
5 unchanged sentences
Cash flows from operating activities
−Removed: Net income (loss) $ 18,180 $ 266,638 $ ( 1,458 )
−Removed: Adjustments to reconcile net income (loss) to net cash provided by operating activities:
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
+Added: Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Share-based compensation expense 84,614 133,502 133,456
−Removed: Other depreciation and amortization expense 129,718 89,997 63,274
+Added: Depreciation and amortization expense 78,344 129,718 89,997
Deferred tax assets 143,319 26,575 ( 168,679 )
1 unchanged sentence
Loss contingency accrual — 7,000 —
−Removed: Impairment of intangible asset 3,600 — —
+Added: Impairment expense 677,239 3,600 —
Loss from write-offs of property and equipment 5,795 4,137 3,549
2 unchanged sentences
Realized loss on sale of investments 27 2,106 9,675
−Removed: (Gain)/loss on textbook library, net — ( 4,976 ) 10,956
+Added: Gain on textbook library, net — — ( 4,976 )
Print textbook depreciation expense — — 1,610
1 unchanged sentence
Impairment on lease related assets 5,557 — 5,225
−Removed: Gain on sale of strategic equity investments — — ( 12,496 )
−Removed: Loss on change in fair value of derivative instruments, net — — 7,148
Other non-cash items 656 ( 1,228 ) 378
−Removed: Change in assets and liabilities, net of effect of acquisition of businesses:
+Added: Change in assets and liabilities, net of effect of acquisition of business:
Accounts receivable 7,771 ( 7,799 ) ( 3,752 )
14 unchanged sentences
Proceeds from sale of strategic equity investments 15,500 — —
−Removed: Acquisition of businesses, net of cash acquired — ( 401,125 ) ( 7,891 )
+Added: Acquisition of business, net of cash acquired — — ( 401,125 )
Purchases of strategic equity investments — ( 11,853 ) ( 6,000 )
−Removed: Net cash provided by (used in) investing activities 268,673 104,891 ( 365,768 )
+Added: Net cash provided by investing activities 11,345 268,673 104,891
Cash flows from financing activities
1 unchanged sentence
Payment of taxes related to the net share settlement of equity awards ( 9,239 ) ( 16,440 ) ( 26,549 )
−Removed: Proceeds from equity offering, net of offering costs — — 1,091,466
Repayment of convertible senior notes ( 96,520 ) ( 505,986 ) ( 401,203 )
Proceeds from exercise of convertible senior notes capped call — 297 —
−Removed: Payment of escrow related to acquisition — — ( 7,451 )
+Added: Payment of withholding tax ( 3,450 ) — —
Repurchase of common stock ( 2,569 ) ( 334,806 ) ( 323,528 )
−Removed: Net cash (used in) provided by financing activities ( 852,770 ) ( 744,803 ) 466,722
+Added: Net cash used in financing activities ( 109,142 ) ( 852,770 ) ( 744,803 )
Effect of exchange rate changes ( 1,025 ) 21 4,137
−Removed: Net (decrease) increase in cash, cash equivalents and restricted cash ( 337,878 ) ( 380,039 ) 374,178
+Added: Net increase (decrease) in cash, cash equivalents and restricted ca 26,383 ( 337,878 ) ( 380,039 )
Cash, cash equivalents and restricted cash, beginning of period 137,976 475,854 855,893
13 unchanged sentences
Accrued purchases of long-lived assets $ 5,850 $ 9,650 $ 4,927
−Removed: Issuance of common stock related to repayment of convertible senior notes $ — $ — $ 235,521
2024 2023 2022
9 unchanged sentences
(“we,” “us,” “our,” “Company” or “Chegg”), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005.
−Removed: Millions of people all around the world learn with Chegg.
−Removed: No matter the goal, level, or style, Chegg helps learners learn with confidence.
−Removed: We provide 24/7 on-demand support, and our personalized learning assistant leverages the power of artificial intelligence (“AI”), more than a hundred million pieces of proprietary content, as well as a decade of learning insights.
−Removed: Our platform also helps learners build essential life and job skills to accelerate their path from learning to earning, and we work with companies to offer learning programs for their employees.
+Added: Chegg provides individualized learning support to students as they pursue their educational journeys.
+Added: Available on demand 24/7 and powered by over a decade of learning insights, the Chegg platform offers students artificial intelligence (“AI”)-powered academic support thoughtfully designed for education coupled with access to a vast network of subject matter experts who help ensure quality and accuracy.
+Added: No matter the goal, level, or style, Chegg helps millions of students around the world learn with confidence by helping them build essential academic, life, and job skills to achieve success.
Basis of Presentation
Our fiscal year ends on December 31 and in this report, we refer to the year ended December 31, 2024, December 31, 2023, and December 31, 2022 as 2024, 2023, and 2022, respectively.
+Added: Reclassification of Prior Period Presentation
+Added: In order to conform with current period presentation, $ 3.6 million of impairment of intangible assets has been reclassified from general and administrative expense to impairment expense on our consolidated statements of operations during the year ended December 31, 2023 as well as from impairment of intangible asset to impairment expense on our consolidated statements of cash flows during the year ended December 31, 2023.
+Added: These changes in presentation do not affect 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 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 (U.S.
+Added: GAAP) 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, share-based compensation expense including grant-date fair value of PSUs with a market-based condition and 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, and internal-use software and website development costs.
+Added: revenue recognition, 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, intangible assets and long-lived assets, and internal-use software and website development costs.
We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances.
6 unchanged sentences
Cash and Cash Equivalents and Restricted Cash
−Removed: 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.
+Added: We consider all highly liquid investments with a maturity date of three months or less from the date of purchase to be cash equivalents.
Our cash and cash equivalents consist of cash and money market funds at financial institutions, and are stated at cost, which approximates fair value.
10 unchanged sentences
Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
−Removed: We hold investments in corporate debt securities, U.S.
−Removed: treasury securities and agency bonds.
+Added: We hold investments in corporate debt securities and U.S.
+Added: treasury securities.
We classify our investments as available-for-sale that are either short or long-term based on the remaining contractual maturity of the investment.
Our 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.
−Removed: Unrealized losses related to credit loss factors are recorded through an allowance for credit losses in other income (expense), net on our consolidated statements of operations, rather than as a reduction to other comprehensive income (loss), when a decline in fair value has resulted from a credit loss.
+Added: Unrealized losses related to credit loss factors are recorded through an allowance for credit losses in other income, net on our consolidated statements of operations, rather than as a reduction to other comprehensive income (loss), when a decline in fair value has resulted from a credit loss.
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.
2 unchanged sentences
Fair values were determined for each individual security in the investment portfolio.
−Removed: 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 (expense), net.
−Removed: The estimated fair value of our investments are 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 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.
+Added: The estimated fair value of our investments is 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.
3 unchanged sentences
Accounts Receivable, Net of Allowance
−Removed: Accounts receivable are recorded at the invoiced amount and are non-interest bearing.
+Added: Accounts receivable is recorded at the invoiced amount and are non-interest bearing.
We generally grant uncollateralized credit terms to our customers, which include partners and advertising customers.
−Removed: We maintain an allowance to account for potentially uncollectible receivables.
−Removed: 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.
−Removed: This assessment requires significant judgment.
−Removed: 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.
−Removed: 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 when all collection efforts have been exhausted and an account is deemed uncollectible.
+Added: We maintain an estimated allowance provision to account for potentially uncollectible accounts receivable based upon expected credit losses for outstanding receivables.
+Added: Our estimate is derived using a variety of factors including historical collection and loss patterns, the current aging of accounts receivable, geographic and other customer-specific credit risk factors, and reasonable and supportable forecasts of future economic conditions which inform adjustments to historical loss patterns.
+Added: The estimated allowance provision is classified as general and administrative operating expenses on our consolidated statements of operations.
+Added: Accounts receivable that are deemed to be uncollectible are written off, net of expected or actual recoveries.
Concentration of Credit Risk
−Removed: Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and investments in highly liquid instruments in accordance with our investment policy.
−Removed: We place the majority of our cash and cash equivalents and restricted cash with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments.
+Added: Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, and investments in accordance with our investment policy.
+Added: We place the majority of our cash and cash equivalents with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments.
Certain of our cash balances held with a financial institution are in excess of Federal Deposit Insurance Corporation limits.
Our investment portfolio consists of investments diversified among security types, industries and issuers.
−Removed: Our investments were held and managed by recognized financial institutions that followed our investment policy with the main objective of preserving capital,
−Removed: generating a competitive return, and maintaining liquidity.
+Added: Our investments were held and managed by recognized financial institutions that followed our investment policy with the main objective of preserving capital, generating a competitive return, and maintaining liquidity.
Concentrations of credit risk with respect to accounts receivables exist to the full extent of amounts presented in the financial statements.
−Removed: We had no customers that represented over 10% of our net accounts receivable balance as of December 31, 2023 and one customer that represented over 10% of our net accounts receivable balance as of December 31, 2022.
+Added: No customers represented over 10% of our net accounts receivable balance as of December 31, 2024 and December 31, 2023.
No customers represented over 10% of net revenues during the years ended December 31, 2024, 2023 or 2022.
10 unchanged sentences
Content amortization is classified within cost of revenues on our consolidated statements of operations.
−Removed: We capitalize certain costs associated with software developed or obtained for internal use and website and application development.
+Added: We capitalize certain costs associated with software developed or obtained for internal use and website development.
We capitalize costs when preliminary development efforts are successfully completed, management has authorized and committed project funding and it is probable that the project will be completed, and the software will be used as intended.
11 unchanged sentences
Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.
−Removed: Goodwill and Indefinite-Lived Intangible Asset
Goodwill represents the excess of the fair value of purchase consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business combination.
−Removed: Our indefinite-lived intangible asset represented the internships.com trade name.
−Removed: These assets are not amortized but rather tested for impairment at least annually, or more frequently if certain events or indicators of impairment occur between annual impairment tests.
+Added: Goodwill is not amortized but rather tested for impairment at least annually, or more frequently if certain events or indicators of impairment occur between annual impairment tests.
We first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test.
1 unchanged sentence
If our qualitative assessment concludes that it is more likely than not that the fair value is less than the carrying amount, a quantitative assessment of impairment is performed.
−Removed: In the quantitative test, we compare fair value, estimated utilizing both the income approach, based on present value techniques, and the market approach, based on the guideline transaction method and guideline public company method, to the carrying value.
−Removed: If the carrying value exceeds the fair value, an impairment loss is recognized in an amount equal to the excess.
−Removed: Acquired Intangible Assets and Other Long-Lived Assets
−Removed: Acquired intangible assets with finite useful lives, which include developed technology, content library, customer lists, and trade and domain names, are amortized over their estimated useful lives.
−Removed: We assess the impairment of acquired intangible assets and other long-lived assets at least annually, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
+Added: In the quantitative test, we compare fair value, estimated utilizing the income approach, based on present value techniques, to the carrying value.
+Added: If the carrying value exceeds the fair value, an impairment loss is recognized in an amount equal to the excess, limited to the remaining balance of goodwill.
+Added: Intangible Assets
+Added: Intangible assets are amortized over their estimated useful lives.
+Added: Intangible assets are tested for impairment at the asset group level at least annually or when events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable.
We determine if an arrangement is a lease at inception.
1 unchanged sentence
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.
−Removed: Our leases do not provide an implicit rate and therefore we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future minimum lease payments.
+Added: Lease agreements typically do not provide an implicit rate and therefore we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future minimum lease payments.
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.
6 unchanged sentences
Strategic Investments
−Removed: Investments in partnerships where we have the ability to exercise significant influence, but not control, over the investee are accounted for under the equity method of accounting.
−Removed: Equity method investments are initially recorded at cost and adjusted for our share of the investees' earnings or losses, based on our percentage ownership, recognized on a one-quarter lag basis within other income (expense), net on our consolidated statements of operations.
Investments in entities where we do not have the ability to exercise significant influence and which do not have readily determinable fair values are accounted for at cost, 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.
3 unchanged sentences
Convertible Senior Notes, net
−Removed: In August 2020, we issued $ 1.0 billion in aggregate principal amount of 0 % convertible senior notes due in 2026 (2026 notes).
−Removed: In March/April 2019, we issued $ 800 million in aggregate principal amount of 0.125 % convertible senior notes due in 2025 (2025 notes, together with the 2026 notes, the notes).
−Removed: The aggregate principal amounts of both the 2026 notes and 2025 notes include $ 100 million from the initial purchasers fully exercising their option to purchase additional notes.
−Removed: The notes, including the embedded conversion features, are accounted for under the traditional convertible debt accounting model entirely as a liability net of unamortized issuance costs.
+Added: Convertible senior notes, including the embedded conversion features, are accounted for under the traditional convertible debt accounting model entirely as a liability net of unamortized issuance costs.
The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets or the holders have the option to convert the notes at any time within twelve months after the reporting date;
1 unchanged sentence
The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative;
−Removed: otherwise, they are classified as derivative instruments and recorded at fair value with changes in fair value recorded in other income (expense), net on our consolidated statements of operations.
−Removed: The fair value of any derivative instruments related to the notes are determined utilizing Level 2 inputs.
+Added: otherwise, they are classified as derivative instruments and recorded at fair value with changes in fair value recorded in other income, net on our consolidated statements of operations.
+Added: The fair value
+Added: of any derivative instruments related to the notes are determined utilizing Level 2 inputs.
Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes.
In accounting for conversions of the notes, the carrying amount of the converted notes is reduced by the total consideration paid or issued for the respective converted notes and the difference is recorded to additional paid-in capital on our consolidated balance sheets.
−Removed: In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other income (expense), net on our consolidated statements of operations.
+Added: In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is 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.
Revenue Recognition and Deferred Revenue
23 unchanged sentences
This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as a cost of revenues.
−Removed: our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned.
+Added: Where our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned.
Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer.
5 unchanged sentences
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.
−Removed: Contract liabilities are contained within deferred revenue on our consolidated balance sheets.
+Added: Contract liabilities are contained within deferred revenue on our consolidated
+Added: balance sheets.
Deferred revenue primarily consists of advanced payments from students related to subscription performance obligations that have not been satisfied and estimated variable consideration.
7 unchanged sentences
In addition, cost of revenues includes allocated information technology and facilities costs.
−Removed: Research and Development Costs
−Removed: Our research and development expenses consist of employee-related expenses, which includes 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 technology costs to support our research and development, and outside services.
+Added: Research and Development Expense
+Added: Research and development expenses consist of employee-related expenses, which includes 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.
+Added: Research and development expenses also include technology costs to support our research and development, and outside services.
We expense substantially all of our research and development expenses as they are incurred.
−Removed: Advertising Costs
−Removed: Advertising costs are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures.
−Removed: During the years ended December 31, 2023, 2022, and 2021, advertising costs were approximately $ 57.4 million, $ 62.0 million and $ 45.1 million, respectively.
+Added: Paid Marketing Expense
+Added: Paid marketing expenses are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures.
+Added: During the years ended December 31, 2024, 2023, and 2022, paid marketing expenses were approximately $ 55.4 million, $ 57.4 million and $ 62.0 million, respectively.
Share-based Compensation Expense
−Removed: Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs) with either a market-based condition or financial and strategic performance targets, and the employee stock purchase plan (ESPP) is accounted for under the fair value method based on the grant-date fair value of the award.
+Added: Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs) with either a market-based condition or financial and strategic performance targets, and employee stock purchase plan (ESPP) is accounted for under the fair value method based on the grant-date fair value of the award.
Share-based compensation expense for RSUs and PSUs with financial and strategic performance targets is measured based on the closing fair market value of our common stock, PSUs with a market-based condition are estimated using a Monte Carlo simulation model, and ESPP is estimated using the Black-Scholes-Merton option pricing model.
We recognize share-based compensation expense on a straight-line basis for RSUs and ESPP and on a graded basis for PSUs.
+Added: Share-based compensation expense is 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.
Vesting for all awards is subject to continued service over the requisite service period, which is generally the vesting period.
1 unchanged sentence
RSUs and PSUs are converted into shares of our common stock upon vesting on a one -for-one basis.
−Removed: RSUs typically vest over three or four years , while PSUs with a market-based condition typically vest over a four-year period and PSUs with financial and strategic performance targets typically vest over a three-year period.
+Added: RSUs typically vest over one or three years , while PSUs with a market-based condition typically vest over a four-year period and PSUs with financial and strategic performance targets typically vest over a three-year period.
Share-based compensation expense for PSUs with a market-based condition is recognized regardless of whether the market condition is satisfied whereas share-based compensation expense for PSUs with financial performance targets is recognized upon estimated or actual achievement of such targets.
We assess the achievement of financial and strategic performance targets on a quarterly basis and adjust our share-based compensation expense as appropriate.
−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.
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.
2 unchanged sentences
Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense.
−Removed: Net Income (Loss) Per Share
−Removed: Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period.
−Removed: Diluted net income (loss) per share is computed by adjusting net income (loss) for all related interest expense and gains and losses recognized during the period, net of tax, and giving effect to all potential shares of common stock, including stock options, PSUs, RSUs, and shares related to convertible senior notes, to the extent dilutive.
+Added: Net (Loss) Income Per Share
+Added: Basic net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the period.
+Added: Diluted net (loss) income per share is computed by adjusting net (loss) income for all related convertible senior notes activity, net of tax, and adjusting the weighted-average number of shares of common stock outstanding for all potential shares of common stock, including stock options, PSUs, RSUs, and shares related to convertible senior notes, to the extent dilutive.
This assumes that all stock options and dilutive convertible shares were exercised or converted and is computed by applying the treasury stock method for outstanding stock options, PSUs, and RSUs, and the if-converted method for outstanding convertible senior notes.
8 unchanged sentences
Gains or losses resulting from the remeasurement of foreign currency transactions, which are denominated in currencies other than the functional currency, are included in general and administrative expense on the consolidated statements of operations.
−Removed: During the years ended December 31, 2023 and 2021, the net gains from remeasurement of foreign currency transactions were not material.
+Added: During the years ended December 31, 2024 and 2023, the gains and losses from remeasurement of foreign currency transactions were not material.
During the year ended December 31, 2022, net gains from remeasurement of foreign currency transactions were $ 3.7 million.
1 unchanged sentence
Recently Issued Accounting Pronouncements Not Yet Adopted
−Removed: In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Improvements to Income Tax Disclosures .
+Added: In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options .
+Added: ASU 2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in Accounting Standards Codification (ASC) 470-20—Debt.
+Added: Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis.
+Added: The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods.
+Added: We did not early adopt ASU 2024-04 and we are currently in the process of evaluating the impact of this guidance.
+Added: In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures .
+Added: ASU 2024-03 requires disclosure of specified information about certain costs and expenses in the notes to financial statements.
+Added: Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively.
+Added: The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027.
+Added: We did not early adopt ASU 2024-03 and we are currently in the process of evaluating the impact of this guidance.
+Added: In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements .
+Added: ASU 2024-02 removes various references to the FASB’s Concepts Statements from the FASB’s Accounting Standards Codification.
+Added: Early adoption is permitted, and the guidance will be applied prospectively with the option
+Added: to apply retrospectively.
+Added: The guidance is effective for annual periods beginning after December 15, 2024.
+Added: We did not early adopt ASU 2024-02 and do not believe it will have a significant impact on our financial statements.
+Added: In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .
ASU 2023-09 requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid that meet a quantitative threshold.
2 unchanged sentences
We did not early adopt ASU 2023-09 and we are currently in the process of evaluating the impact of this guidance.
+Added: Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures .
ASU 2023-07 enhances current interim and annual reportable segment disclosures and requires additional disclosures about significant segment expenses.
−Removed: Early adoption is permitted, and we are required to adopt the changes on a retrospective basis.
−Removed: The guidance is effective for annual periods beginning after December 15, 2023 and for interim periods beginning December 15, 2024.
−Removed: We did not early adopt ASU 2023-07 and we are currently in the process of evaluating the impact of this guidance.
−Removed: Recently Adopted Accounting Pronouncements
−Removed: We did not adopt any accounting pronouncements during the year ended December 31, 2023 that had a material impact on our financial statements.
+Added: Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280—Segment Reporting on an interim and annual basis.
+Added: In 2024, we adopted ASU 2023-07 on a retrospective basis for annual periods starting with this Annual Report on Form 10-K.
+Added: For further information on the additional reportable segment disclosures, refer to “Note 18, Segment Information.”
Revenue Recognition
2 unchanged sentences
The following table presents our total net revenues for the periods shown disaggregated for our Subscription Services and Skills and Other product lines (in thousands, except percentages):
−Removed: Years Ended December 31, Change in 2023 Change in 2022
+Added: Years Ended December 31, Change in 2024
+Added: Change in 2023
2024 2023 2022 $ % $ %
3 unchanged sentences
During the years ended December 31, 2024, 2023, and 2022, we recognized $ 53.5 million, $ 54.5 million and $ 33.9 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each respective fiscal year.
−Removed: During the years ended December 31, 2023, and 2022, we recognized an immaterial amount of revenues from performance obligations satisfied in previous periods.
−Removed: During the year ended December 31, 2021, we recognized a reduction of revenues of $ 4.9 million from performance obligations satisfied in previous periods, primarily related to our Skills offering.
−Removed: As of December 31, 2023, the closing balance of deferred contract costs was $ 6.0 million, and we recognized $ 15.8 million of deferred contract cost amortization during the year ended December 31, 2023.
+Added: During the year ended December 31, 2024, we recognized revenues of $ 2.8 million from performance obligations satisfied in previous periods and during the years ended December 31, 2023, and 2022, we recognized an immaterial amount of revenues from performance obligations satisfied in previous periods.
+Added: As of December 31, 2024 and 2023, the closing balance of deferred contract costs was $ 2.8 million and $ 6.0 million, respectively, and we recognized $ 16.1 million and $ 15.8 million of deferred contract cost amortization during the years ended December 31, 2024 and 2023, respectively.
Contract Balances
5 unchanged sentences
Deferred revenue 39,217 55,336 ( 16,119 ) ( 29 )
−Removed: During the year ended December 31, 2023, our accounts receivable, net balance increased by $ 7.9 million, or 34 %, primarily due to timing of billings and seasonality of our business.
+Added: During the year ended December 31, 2024, our accounts receivable, net balance decreased by $ 7.8 million, or 25 %, primarily due to lower bookings from Chegg Skills.
During the year ended December 31, 2024, our contract assets balance decreased by $ 1.6 million or 18 %, primarily due to our Skills offering.
−Removed: During the year ended December 31, 2023, our deferred revenue balance decreased by $ 0.9 million, or 2 %, primarily due to timing of bookings and seasonality of our business.
−Removed: Net Income (Loss) Per Share
−Removed: The following table presents the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts):
+Added: During the year ended December 31, 2024, our deferred revenue balance decreased by $ 16.1 million, or 29 %, primarily due to lower bookings from Subscription Services and Chegg Skills.
+Added: Net (Loss) Income Per Share
+Added: The following table presents the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts):
Years Ended December 31,
2024 2023 2022
−Removed: Net income (loss) $ 18,180 $ 266,638 $ ( 1,458 )
−Removed: Weighted average shares used to compute net income (loss) per share, basic
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
+Added: Weighted average shares used to compute net (loss) income per share, basic
103,300 116,504 127,557
−Removed: Net income (loss) per share, basic
+Added: Net (loss) income per share, basic
$ ( 8.10 ) $ 0.16 $ 2.09
−Removed: Net income (loss) $ 18,180 $ 266,638 $ ( 1,458 )
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
Convertible senior notes activity, net of tax
— ( 61,694 ) ( 65,444 )
−Removed: Net income (loss), diluted
+Added: Net (loss) income, diluted
$ ( 837,068 ) $ ( 43,514 ) $ 201,194
−Removed: Weighted average shares used to compute net income (loss) per share, basic
+Added: Weighted average shares used to compute net (loss) income per share, basic
103,300 116,504 127,557
1 unchanged sentence
Shares related to convertible senior notes — 12,065 21,334
−Removed: Weighted average shares used to compute net income (loss) per share, diluted
+Added: Weighted average shares used to compute net (loss) income per share, diluted
103,300 128,569 149,859
−Removed: Net income (loss) per share, diluted
+Added: Net (loss) income per share, diluted
$ ( 8.10 ) $ ( 0.34 ) $ 1.34
−Removed: (1) Primarily includes the gain on early extinguishment on our notes, net of tax.
−Removed: For further information, see Note 8, “Convertible Senior Notes.”
−Removed: The following table presents potential weighted-average shares of common stock outstanding that were excluded from the computation of diluted net income (loss) per share because including them would have been anti-dilutive (in thousands):
+Added: The following table presents potential weighted-average shares of common stock outstanding that were excluded from the computation of diluted net (loss) income per share because including them would have been anti-dilutive (in thousands):
Years Ended December 31,
14 unchanged sentences
treasury securities Level 1 40,162 — ( 9 ) 40,153
−Removed: Agency bonds Level 2
−Removed: 99,505 — ( 246 ) 99,259
Total short-term investments $ 154,130 $ 157 $ ( 38 ) $ 154,249
10 unchanged sentences
Short-term investments:
−Removed: Commercial paper Level 2 $ 11,744 $ — $ ( 29 ) $ 11,715
Corporate debt securities Level 2 $ 69,548 $ — $ ( 170 ) $ 69,378
1 unchanged sentence
25,734 — ( 114 ) 25,620
+Added: Agency bonds Level 2 99,505 — ( 246 ) 99,259
Total short-term investments $ 194,787 $ — $ ( 530 ) $ 194,257
2 unchanged sentences
treasury securities Level 1 57,287 165 ( 57 ) 57,395
−Removed: Agency bonds Level 2 60,635 — ( 141 ) 60,494
Total long-term investments $ 248,754 $ 1,063 $ ( 270 ) $ 249,547
1 unchanged sentence
During the years ended December 31, 2024, 2023 and 2022, we did not recognize any losses on our investments due to credit related factors.
−Removed: The following table presents the gross realized gain and loss related to our investments (in thousands):
+Added: The following table presents the realized gain and loss related to our investments (in thousands):
Years Ended December 31,
2 unchanged sentences
Realized loss ( 43 ) ( 2,452 ) ( 9,739 )
−Removed: Realized (loss)/gain on sale of investments $ ( 2,106 ) $ ( 9,675 ) $ ( 178 )
+Added: Realized loss on sale of investments $ ( 27 ) $ ( 2,106 ) $ ( 9,675 )
The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of December 31, 2024 (in thousands):
December 31, 2024
−Removed: Cost Fair Value
+Added: Adjusted Cost Fair Value
Due within one year $ 154,130 $ 154,249
5 unchanged sentences
In May 2023, we entered into a $ 15.0 million commitment to invest in Sound Ventures AI Fund, L.P.
−Removed: (Sound Ventures), a limited partnership that invests in AI companies, for an approximate 6 % ownership.
+Added: (Sound Ventures), a limited partnership that invests in artificial intelligence companies, for an approximate 6 % ownership.
We accounted for our investment under the equity method of accounting.
−Removed: During the year ended December 31, 2023, we funded $ 11.8 million of our investment commitment.
−Removed: As of December 31, 2023, we had an unfunded investment commitment of $ 3.2 million.
−Removed: On January 1, 2024, we sold our partnership interest in Sound Ventures, along with all rights, duties and obligations, including the obligation to fund the remaining balance of our capital commitment, for $ 15.5 million.
−Removed: The initial accounting for the sale is in process as of the issuance date of our financial statements and therefore we are unable to make any additional disclosures.
+Added: As of December 31, 2023, the carrying amount of our investment was $ 11.7 million.
+Added: On January 1, 2024, we sold our investment for a total cash consideration of $ 15.5 million, resulting in a gain of $ 3.8 million.
+Added: The cash payment received was included within cash flows from investing activities on our consolidated statements of cash flows and the gain was included within other income, net on our consolidated statements of operations.
In July 2022, we completed an investment of $ 6.0 million in Knack Technologies, Inc.
19 unchanged sentences
Property and equipment 463,747 417,564
−Removed: Less accumulated depreciation and content amortization ( 234,491 ) ( 200,051 )
+Added: Less accumulated depreciation ( 293,099 ) ( 234,491 )
Property and equipment, net $ 170,648 $ 183,073
−Removed: Depreciation and content amortization expense during the years ended December 31, 2023, 2022, and 2021 was approximately $ 105.3 million, which included the $ 34.2 million accelerated depreciation discussed below, $ 64.1 million, and $ 49.6 million, respectively.
−Removed: As part of the design and build of our new generative AI experience, in August 2023, we streamlined our product experiences.
−Removed: As a result, we elected to abandon certain content and software assets and accelerated depreciation over shortened useful lives for completed assets as well as impaired in-progress software assets prior to their completion.
−Removed: We also recognized other costs associated with abandoning these content and software assets.
−Removed: Additionally, we impaired our internships.com trade name and adjusted the carrying value to zero.
−Removed: The total content and related assets charge has been recorded during the year ended December 31, 2023.
−Removed: The following table presents the consolidated statements of operations classification and total content and related assets charge (in thousands):
−Removed: Classification
−Removed: Year Ended December 31, 2023
−Removed: Accelerated depreciation of content and software
−Removed: Cost of revenues $ 34,195
−Removed: Impairment of in-progress software
−Removed: Cost of revenues 2,616
−Removed: Cost of revenues 1,431
−Removed: Total cost of revenues
−Removed: Impairment of indefinite-lived trade name
−Removed: General and administrative 3,600
−Removed: Total content and related assets charge $ 41,842
+Added: Depreciation expense during the years ended December 31, 2024, 2023, and 2022 was $ 68.3 million, $ 105.3 million, which included the $ 34.2 million accelerated depreciation discussed below, and $ 64.1 million, respectively.
+Added: In connection with the November 2024 restructuring, we streamlined our product experiences and in connection with the June 2024 restructuring, we announced that we will no longer offer Chegg Skills directly to customers.
+Added: As a result, we impaired internal-use software and content assets and accelerated depreciation of certain content assets of $ 6.1 million during the year ended December 31, 2024, which were classified as cost of revenues on our consolidated statements of operations.
+Added: For further information on the November 2024 and June 2024 restructurings, see Note 15, “Restructuring Charges.”
+Added: In connection with the intangible assets impairment analysis performed in June 2024, we also recorded an impairment of $ 10.0 million related to property and equipment, consisting of $ 6.6 million of content assets and $ 3.4 million of internal-use software assets, during the year ended December 31, 2024, which was classified as impairment expense on our consolidated statements of operations.
+Added: For further information on the intangible assets impairment analysis, see Note 7, “Goodwill and Intangible Assets.”
+Added: In connection with the design and build of our new generative AI experience in August 2023, we streamlined our product experiences.
+Added: As a result, during the year ended December 31, 2023, we elected to abandon certain content and internal-use software assets and recorded charges of $ 38.2 million, consisting of $ 34.2 million of accelerated depreciation over shortened useful lives for completed assets, impaired internal-use software assets of $ 2.6 million, and $ 1.4 million in other costs recognized in association with abandoning these assets.
+Added: All of which were classified as cost of revenues on our consolidated statements of operations.
Goodwill and Intangible Assets
−Removed: The following table presents our goodwill balances (in thousands):
−Removed: Years Ended December 31,
+Added: The following table presents the changes in the carrying amount of our goodwill balances (in thousands):
Beginning balance $ 631,995 $ 615,093
−Removed: Additions due to acquisition
+Added: Impairment expense ( 635,391 ) —
Foreign currency translation adjustment 3,396 16,902
−Removed: Measurement period adjustments related to prior acquisition
Ending balance $ — $ 631,995
−Removed: Based on our evaluation of qualitative factors considered for our goodwill impairment test performed in 2023, we determined a quantitative assessment was necessary and concluded that the fair value of our single reporting unit exceeded the carrying value.
−Removed: As a result, we did not recognize a goodwill impairment charge during the year ended December 31, 2023.
−Removed: We have not recognized any goodwill impairment charges since our inception.
−Removed: The following table presents our intangible assets balances as of December 31, 2023 and December 31, 2022 (in thousands, except weighted-average amortization period):
+Added: In September 2024 and June 2024, in consideration of the sustained decline in our stock price, industry developments, and our financial performance, we evaluated our current operating performance.
+Added: Accordingly, we determined that there were indicators of impairment and a quantitative assessment was necessary.
+Added: In the quantitative assessment, we estimated the fair value of our reporting unit utilizing an income approach, based on the present value of future discounted cash flows, which is classified as Level 3 in the fair value hierarchy.
+Added: Significant estimates used to determine fair value include the weighted average cost of capital, growth rates, and amount and timing of expected future cash flows.
+Added: As a result of the quantitative assessment, we determined that goodwill was impaired as the fair value of our reporting unit was less than the carrying value.
+Added: As such, during the year ended December 31, 2024, we recorded impairment expense of $ 635.4 million equal to the excess of the carrying value of our reporting unit over the estimated fair value, limited to the remaining balance of goodwill, which was classified as impairment expense on our consolidated statements of operations.
+Added: We did not record goodwill impairment expense during the years ended December 31, 2023, and 2022.
+Added: Intangible Assets
+Added: The following table presents our intangible assets balances (in thousands, except weighted-average amortization period):
December 31, 2024
2 unchanged sentences
Amount Accumulated
−Removed: Amortization Foreign Currency Translation Adjustment Net Carrying Amount
+Added: Amortization Accumulated Impairment Foreign Currency Translation Adjustment Net Carrying Amount
Developed technologies 80 $ 106,703 $ ( 63,029 ) $ ( 29,369 ) $ ( 3,958 ) $ 10,347
7 unchanged sentences
Amount Accumulated
−Removed: Amortization Foreign Currency Translation Adjustment Net
+Added: Amortization Accumulated Impairment Foreign Currency Translation Adjustment Net
Developed technologies 80 $ 106,703 $ ( 55,651 ) $ — $ ( 3,757 ) $ 47,295
2 unchanged sentences
Trade and domain names 52 16,213 ( 12,817 ) — ( 358 ) 3,038
−Removed: Indefinite-lived trade name — 3,600 — — 3,600
Total intangible assets 67 $ 169,336 $ ( 111,493 ) $ — $ ( 5,413 ) $ 52,430
−Removed: During the years ended December 31, 2023, 2022 and 2021, amortization expense related to our intangible assets totaled approximately $ 24.4 million, $ 25.9 million and $ 13.7 million, respectively.
+Added: During the years ended December 31, 2024, 2023 and 2022, intangible assets amortization expense was $ 10.0 million, $ 24.4 million and $ 25.9 million, respectively.
+Added: In conjunction with our goodwill impairment analysis in June 2024, we determined that there were indicators of impairment for our Busuu assets and a recoverability test was necessary.
+Added: In the recoverability test, we determined that the expected future undiscounted cash flows for the asset group were not sufficient to recover the carrying value.
+Added: We then proceeded in estimating the fair value of the asset group utilizing the income approach, based on a present value of future discounted cash flows, which is classified as Level 3 in the fair value hierarchy.
+Added: Significant estimates used to determine fair value include the growth rates and amount and timing of expected future cash flows.
+Added: As a result of the impairment test, we determined the asset group was impaired and recorded a $ 31.9 million impairment expense related to the intangible assets during the year ended December 31, 2024, which was classified as impairment expense on our consolidated statements of operations.
+Added: In connection with the design and build of our new generative AI experience in August 2023, we streamlined our product experiences.
During the year ended December 31, 2023, we recognized an impairment charge on our indefinite-lived intangible asset of $ 3.6 million.
−Removed: For further information, see “Note 6, Property and Equipment, Net.” We did not recognize any impairment charges on any of our other intangible assets during the years ended December 31, 2023, 2022 and 2021.
−Removed: The following table presents the estimated future amortization expense related to our intangible assets as of December 31, 2023 (in thousands):
+Added: The following table presents the estimated future intangible assets amortization expense (in thousands):
December 31, 2024
−Removed: 2024 $ 13,637
−Removed: Thereafter 93
Total $ 10,347
2 unchanged sentences
In March/April 2019, we issued $ 800 million in aggregate principal amount of 0.125 % convertible senior notes due in 2025 (2025 notes, together with the 2026 notes, the notes).
−Removed: The aggregate principal amounts of both the 2026 notes and 2025 notes include $ 100 million from the initial purchasers fully exercising their option to purchase additional notes.
−Removed: The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.
−Removed: The following table presents the total net proceeds from the notes (in thousands):
−Removed: 2026 Notes 2025 Notes
−Removed: Principal amount $ 1,000,000 $ 800,000
−Removed: Less initial purchasers’ discount ( 15,000 ) ( 18,998 )
−Removed: Less other issuance costs ( 904 ) ( 822 )
−Removed: Net proceeds $ 984,096 $ 780,180
−Removed: The notes are our senior, unsecured obligations and are governed by indenture agreements by and between us and Computershare Trust Company, National Association (as successor to Wells Fargo Bank, National Association), as Trustee (the indentures).
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.
1 unchanged sentence
The 2025 notes will mature on March 15, 2025, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
+Added: As of December 31, 2024, 9,297,800 and 6,961,352 shares remained underlying the 2026 notes and 2025 notes, respectively.
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 June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 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 December 31, 2020 for the 2026 notes and June 30, 2019 for the 2025 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;
−Removed: • 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;
−Removed: • if we call any or all of the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date;
−Removed: • upon the occurrence of certain specified corporate events described in the indentures.
+Added: Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 notes, the notes are convertible at the option of holders only upon satisfaction of certain circumstances.
On or after June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 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.
−Removed: If we undergo a fundamental change, as defined in the indentures, prior to the respective maturity dates, subject to certain conditions, holders of the notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100 % of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
−Removed: 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: In August 2023, in connection with our securities repurchase program, we extinguished $ 169.7 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $ 135.8 million, which was paid to the holders in cash.
+Added: As of December 31, 2024, the 2026 notes are not convertible and have been classified as a long-term liability.
+Added: As of December 31, 2024, the 2025 notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding their maturity date and have been classified as a current liability.
+Added: We expect to settle any 2025 Notes conversion requests in shares of our common stock.
+Added: In November 2024, in connection with our securities repurchase program, we extinguished $ 116.6 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $ 96.2 million, which was paid to the holders in cash.
We also incurred approximately $ 0.3 million in fees resulting in a total reacquisition price of $ 96.5 million.
The carrying amount of the extinguished notes was $ 116.0 million resulting in a $ 19.5 million gain on early extinguishment of debt.
−Removed: We elected to reacquire and not cancel the extinguished 2026 notes.
−Removed: In May 2023, in connection with our securities repurchase program, we extinguished $ 85.8 million and $ 341.1 million aggregate principal amount of the 2026 notes and 2025 notes, respectively, in privately-negotiated transactions for a total consideration of $ 368.6 million, which was paid to the holders in cash.
−Removed: We also incurred approximately $ 1.2 million in fees
−Removed: resulting in a total reacquisition price of $ 369.8 million.
−Removed: The carrying amount of the extinguished notes was $ 423.5 million resulting in a $ 53.8 million gain on early extinguishment of debt.
−Removed: We elected to reacquire and not cancel the extinguished 2026 notes and the 2025 notes were canceled with the trustee.
−Removed: Additionally, we terminated 2025 notes capped call transactions underlying 6,615,161 shares of our common stock and received aggregate cash proceeds of $ 0.3 million.
−Removed: As of December 31, 2023, we had 9,297,800 and 6,961,352 shares remaining underlying the 2026 notes and 2025 notes, respectively.
−Removed: During the year ended December 31, 2023, the conditions allowing holders of the 2026 notes and 2025 notes to convert were not met and therefore the 2026 notes and 2025 notes are not convertible.
−Removed: As of December 31, 2023, holders may convert the 2025 notes at any time within twelve months after the reporting date.
−Removed: As a result, we have classified the remaining net carrying amount of 2025 notes as a current liability.
+Added: We elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding.
The following table presents the net carrying amount of the notes (in thousands):
20 unchanged sentences
The cost of the capped call is not expected to be deductible for tax purposes.
−Removed: Our primary operating lease commitments at December 31, 2023 are related to our corporate headquarters and offices in the United States and internationally.
+Added: Our primary operating lease commitments as of December 31, 2024 are related to our corporate headquarters and offices in the United States and internationally.
As of December 31, 2024 and 2023, we had operating lease ROU assets of $ 22.3 million and $ 25.1 million, respectively, and operating lease liabilities of $ 24.1 million and $ 24.9 million, respectively.
−Removed: As of December 31, 2023 and 2022, our weighted average remaining lease term was 3.9 years and 4.0 years, respectively, and our weighted average discount rate was 5.8 % and 5.2 %, respectively.
−Removed: During the year ended December 31, 2023, we extended our existing lease agreement related to our corporate headquarters in Santa Clara and reassessed lease terms related to office spaces internationally in India, resulting in the recording of $ 12.4 million of right of use assets in exchange for lease liabilities.
+Added: As of December 31, 2024 and 2023, our weighted average remaining lease term in years was 6.3 and 3.9 , respectively, and our weighted average discount rate was 5.6 % and 5.8 %, respectively.
+Added: In connection with the November 2024 and June 2024 restructuring actions, we announced the closure of our New York office and two international offices.
+Added: As a result, during the year ended December 31, 2024, we recorded a full impairment of $ 5.6 million, consisting of $ 4.1 million impairment of ROU assets and $ 1.5 million impairment of leasehold improvements, which was classified as general and administrative expense on our consolidated statement of operations.
+Added: Our intent and ability to sublease the office as well as the local market conditions were factored in when measuring the amount of impairment.
+Added: For further information on the November 2024 and June 2024 restructuring actions, see Note 15, “Restructuring Charges.”
+Added: During the year ended December 31, 2024, we obtained $ 10.1 million of ROU assets in exchange for lease liabilities primarily as we entered into an amendment related to our offices in India that modifies our existing lease payments, increases the square footage, and extends the lease term.
During the years ended December 31, 2024, 2023 and 2022, operating lease expense, net of immaterial sublease income, was approximately $ 7.5 million, $ 7.6 million and $ 7.3 million, respectively.
During the years ended December 31, 2024, 2023 and 2022, variable lease cost and short-term lease cost were immaterial.
−Removed: The following table presents the aggregate future minimum lease payments and reconciliation to operating lease liabilities as of December 31, 2023 (in thousands):
+Added: The following table presents the future minimum lease payments and reconciliation to total operating lease liabilities (in thousands):
December 31, 2024
+Added: Thereafter 8,414
Total future minimum lease payments 29,165
13 unchanged sentences
2023-0180) on behalf of all Chegg stockholders who were eligible to vote at Chegg's 2022 Annual Stockholders' Meeting, asserting breach of fiduciary duty claims against the members of Chegg's Board.
−Removed: The Company has filed a motion to dismiss the case, which is pending before the Court.
−Removed: The Company disputes these claims and intends to vigorously defend itself in this matter.
+Added: The Court dismissed this matter pursuant to the Company's motion to dismiss and the matter is concluded.
On December 22, 2022, JPMorgan Chase Bank, N.A.
4 unchanged sentences
The Company is not at fault, however is pursuing a settlement agreement with JPMC.
−Removed: As of December 31, 2023, we believe a loss is probable and reasonably estimable, and we have recognized an estimated loss contingency accrual of $ 7.0 million within general and administrative expense on our consolidated statements of operations during the year ended December 31, 2023.
−Removed: On November 9, 2022, Plaintiff Joshua Keller, individually and on behalf of all others similarly situated, filed a putative class action in the United States District Court for the Northern District of California (Case No.
−Removed: 22-cv-06986) on behalf of individuals whose data was allegedly impacted by past data breaches.
−Removed: On August 15, 2023, the Company received an order granting its motion to compel arbitration, and the case will be stayed and administratively closed pending the conclusion of arbitration.
On March 30, 2022, Joseph Robinson, derivatively on behalf of Chegg, filed a shareholder derivative complaint against Chegg and certain of its current and former directors and officers in the United States District Court for the Northern District of California, alleging violations of securities laws and breaches of fiduciary duties.
6 unchanged sentences
The Company disputes these claims and intends to vigorously defend itself in this matter.
−Removed: On December 22, 2021, Steven Leventhal, individually and on behalf of all others similarly situated, filed a purported securities fraud class action on behalf of all purchasers of Chegg common stock between May 5, 2020 and November 1, 2021, inclusive, against Chegg and certain of its current and former officers in the United States District Court for the Northern District of California (Case No.
−Removed: 5:21-cv-09953), alleging that Chegg and several of its officers made materially false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
+Added: On December 22, 2021, Steven Leventhal, individually and on behalf of all others similarly situated, filed a purported securities fraud class action on behalf of all purchasers of Chegg common stock between May 5, 2020 and November 1, 2021,
+Added: inclusive, against Chegg and certain of its current and former officers in the United States District Court for the Northern District of California (Case No.
+Added: 5:21-cv-09953), alleging that Chegg and several of its officers made materially false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as amended (the Exchange Act).
On September 7, 2022, KBC Asset Management and The Pompano Beach Police & Firefighters Retirement System were appointed as lead plaintiff in the case.
−Removed: On December 8, 2022, Plaintiff filed his Amended Complaint and seeks unspecified compensatory damages, costs, and expenses, including counsel and expert fees.
−Removed: The Company has filed a motion to dismiss the case, which is pending before the Court.
−Removed: The Company disputes these claims and intends to vigorously defend itself in this matter.
+Added: On December 8, 2022, Plaintiff filed his Amended Complaint seeking unspecified compensatory damages, costs, and expenses, including counsel and expert fees.
+Added: On September 26, 2024, the parties participated in an in-person mediation and reached a settlement in principle to pay $ 55.0 million wherein the Company denies any and all allegations of fault, liability, wrongdoing, or damages.
+Added: On November 6, 2024, Plaintiffs filed a motion for preliminary approval of the settlement.
+Added: The Court preliminarily approved the settlement on December 19, 2024.
+Added: The estimated contingent liability for the loss contingency recorded was $ 55.0 million as of September 30, 2024 and was included within accrued liabilities on our consolidated balance sheets.
+Added: The same amount was recorded for expected insurance loss recoveries, which is included within other current assets on our consolidated balance sheets.
On September 13, 2021, Pearson Education, Inc.
5 unchanged sentences
Pearson filed an Amended Complaint on May 10, 2023, and the Company filed an amended answer on June 7, 2023.
−Removed: The Company disputes these claims and intends to vigorously defend itself in this matter.
+Added: Chegg and Pearson have resolved this litigation.
+Added: Pursuant to the terms of the parties' confidential settlement, the Court dismissed the case with prejudice on December 20, 2024.
+Added: While the terms of the settlement are confidential, Chegg’s decision to settle the lawsuit was driven by the expense, burden and uncertainty of ongoing protracted litigation.
On June 18, 2020, we received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) regarding certain alleged deceptive or unfair acts or practices related to consumer privacy and/or data security.
1 unchanged sentence
On January 27, 2023, the FTC finalized its order ("Final Order") requiring Chegg to implement a comprehensive information security program, limit the data the Company can collect and retain, offer users multi factor authentication to secure their accounts, and allow users to request access to and delete their data.
−Removed: No monetary penalties or fines were included in the Final Order.
−Removed: Aside from the loss contingency accrual recorded related to the Frank matter, we have not recorded any contingent liabilities related to the above matters as we do not believe that a loss is probable and reasonably estimable in these matters.
+Added: We are currently cooperating with the FTC on an investigation as to whether we have violated certain terms of the Final Order.
+Added: We record a contingent liability for loss contingencies related to legal matters when a loss is both probable and reasonably estimable.
+Added: Additionally, we record an insurance loss recovery up to the recognized loss contingency when realization is probable.
+Added: Related to the above matters, as of December 31, 2024, the net impact of contingent liabilities less the related insurance loss recovery is $ 7.0 million.
+Added: For those matters upon which we have sufficient insurance coverage, we have recorded contingent liabilities within accrued liabilities and the loss recovery from insurance within other current assets on our consolidated balance sheets.
We are not aware of any other pending legal matters or claims, individually or in the aggregate, which are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows.
−Removed: 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.
+Added: 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.
+Added: In the ordinary course of business and for certain of the above matters, we are actively pursuing all avenues and strategies to resolve these matters, including available legal remedies, remediation and settlement negotiations with the parties.
An adverse outcome in any of these actions, including a judgment or settlement, may cause a material adverse effect on our future business, operating results or financial condition.
8 unchanged sentences
We are authorized to issue 400 million shares of our common stock, with a par value per share of $ 0.001 .
−Removed: The following table presents the shares of our common stock we have reserved for future issuance as of December 31, 2023:
+Added: The following table presents the shares of our common stock we have reserved for future issuance:
December 31, 2024
−Removed: Outstanding stock options 232,327
−Removed: Outstanding RSUs and PSUs 10,065,783
−Removed: Shares available for grant under the 2023 Equity Inducement Plan 1,756,098
Shares available for grant under the 2023 Equity Incentive Plan 10,340,723
+Added: Outstanding RSUs and PSUs 7,386,965
Shares available for issuance under the Amended and Restated 2013 Employee Stock Purchase Plan 3,007,257
+Added: Shares available for grant under the 2023 Equity Inducement Plan 1,171,016
+Added: Outstanding stock options 182,076
Total common shares reserved for future issuance 22,088,037
22 unchanged sentences
Share Repurchases
−Removed: In November 2023 and February 2023, we entered into accelerated share repurchase (ASR) agreements with financial institutions.
−Removed: Upon execution, we paid a fixed amount of $ 150.0 million for each ASR and received an initial delivery of shares of our common stock that represented 80 percent of the fixed amount for each ASR.
−Removed: We accounted for each ASR as two separate transactions, a repurchase of our common stock and an equity-linked contract indexed to our common stock that met certain accounting criteria for classification in stockholders' equity.
−Removed: Each ASR, along with $ 3.2 million in associated costs, primarily consisting of an estimated 1 % excise tax, was recorded as a reduction to additional paid in capital on our consolidated statements of stockholders’ equity.
−Removed: The November 2023 ASR did not settle during 2023.
−Removed: The February 2023 ASR settled, and we were not required to make any additional cash payments or delivery of common stock to the financial institution upon settlement.
−Removed: During the year ended December 31, 2023, we received a total of 23,072,822 shares of our common stock under the ASR transactions, which were retired immediately.
−Removed: In June 2023, we repurchased 3,433,157 shares of our common stock in open market transactions for $ 34.5 million.
+Added: During the year ended December 31, 2024, we received a total of 2,115,952 shares of our common stock related to the final delivery of our November 2023 accelerated share repurchase (ASR) agreement, which were retired immediately.
+Added: The November 2023 ASR settled, and we were not required to make any additional cash payments or delivery of common stock to the financial institution upon settlement.
+Added: During the year ended December 31, 2023, we repurchased a total of 26,505,979 shares of our common stock, which included the initial delivery of 13,498,313 shares from our November 2023 ASR, 3,433,157 shares from open market transactions in June 2023, and the total delivery of 9,574,509 shares from our February 2023 ASR, which were retired immediately.
During the year ended December 31, 2022, we received a total of 12,709,278 shares of our common stock from prior ASR and open market transactions, which were retired immediately.
−Removed: Securities Repurchase Program
−Removed: In August 2023, our Board of Directors approved a $ 200.0 million increase to our existing securities repurchase program authorizing the repurchase of up to $ 2.2 billion 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.
−Removed: 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.
−Removed: As of December 31, 2023, we had $ 3.7 million remaining under the securities repurchase program, which has no expiration date and will continue until otherwise suspended, terminated or modified at any time for any reason by our board of directors.
Share-based Compensation Expense
7 unchanged sentences
Total share-based compensation expense $ 84,614 $ 133,502 $ 133,456
−Removed: During the years ended December 31, 2023, 2022 and 2021, we capitalized share-based compensation expense of $ 3.3 million, $ 5.3 million, and $ 2.6 million, respectively.
+Added: During the years ended December 31, 2024, 2023 and 2022, we capitalized share-based compensation expense of $ 4.9 million, $ 3.3 million, and $ 5.3 million, respectively, which is included within property and equipment, net on our consolidated balance sheets.
As of December 31, 2024, we had a total of approximately $ 40.7 million of unrecognized share-based compensation expense, related to unvested RSUs and PSUs, that is expected to be recognized over the remaining weighted average period of 1.2 years.
PSU Grants with Financial and Strategic Performance Targets
−Removed: In March 2023, 2022, and 2021, we granted PSUs 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 the years ended December 31, 2023, 2022, and 2021, respectively.
−Removed: Based on the achievement of the performance conditions for the March 2023, 2022 and 2021 PSUs, the final settlement partially met the target threshold, based on a specified objective formula approved by the Compensation Committee of the Board of Directors.
−Removed: The March 2023 PSUs vest over either a one-year or three-year period, with initial vesting occurring one year after the grant date.
−Removed: The March 2022 and March 2021 PSUs vest over a three-year period, with the initial vesting occurring one year after the grant date.
−Removed: During the years ended
−Removed: December 31, 2023, 2022, and 2021, the number of shares underlying the March 2023, March 2022, and March 2021 PSUs totaled 565,341 , 614,177 , and 278,644 , respectively, and each had a grant date fair value per share of $ 15.89 , $ 35.82 , and $ 99.05 , respectively.
+Added: In June 2024, March 2023, and March 2022, we granted PSUs 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.
+Added: Based on the achievement of the performance conditions for the June 2024, March 2023, and March 2022 PSUs, the final settlement partially met the target threshold, based on a specified objective formula approved by the Compensation Committee of the Board of Directors.
+Added: The June 2024 and March 2023 PSUs vest over either a one-year or three-year period and the March 2022 PSUs vest over a three-year period.
+Added: During the years ended December 31, 2024, 2023, and 2022, the number of shares underlying the June 2024, March 2023, and March 2022 PSUs totaled 693,750 , 565,341 , and 614,177 , respectively, and each had a grant date fair value per share of $ 3.61 , $ 15.89 , and $ 35.82 , respectively.
2021 PSU Grants with Market-Based Conditions
23 unchanged sentences
Risk-free interest rate 0.27 %
−Removed: RSUs and PSUs Activity
−Removed: RSUs and PSUs Outstanding
−Removed: Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value
−Removed: Balance at December 31, 2022 9,155,680 $ 36.03
−Removed: Granted 6,283,841 14.58
−Removed: Released ( 3,637,801 ) 35.32
−Removed: Forfeited ( 1,735,937 ) 31.79
−Removed: Balance at December 31, 2023 10,065,783 $ 23.63
−Removed: The weighted-average grant-date fair value of RSUs and PSUs granted during the years ended December 31, 2023, 2022, and 2021 was $ 14.58 , $ 27.68 , and $ 47.95 , respectively.
−Removed: The total fair value of RSUs and PSUs vested as of the vesting dates during the years ended December 31, 2023, 2022, and 2021 was $ 45.3 million, $ 74.2 million, and $ 232.0 million, respectively.
Fair Value of ESPP
22 unchanged sentences
Weighted-average grant-date fair value per share $ 0.90 $ 3.62 $ 8.71
+Added: Stockholder's Equity Activity
+Added: RSUs and PSUs Activity
+Added: Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value
+Added: Balance at December 31, 2023 10,065,783 $ 23.63
+Added: Granted 5,853,240 4.24
+Added: Released ( 5,069,408 ) 21.02
+Added: Forfeited ( 3,462,650 ) 22.50
+Added: Balance at December 31, 2024 7,386,965 $ 10.58
+Added: The weighted-average grant-date fair value of RSUs and PSUs granted during the years ended December 31, 2024, 2023, and 2022 was $ 4.24 , $ 14.58 , and $ 27.68 , respectively.
+Added: The total fair value of RSUs and PSUs vested as of the vesting dates during the years ended December 31, 2024, 2023, and 2022 was $ 26.1 million, $ 45.3 million, and $ 74.2 million, respectively.
ESPP Activity
2 unchanged sentences
Stock Option Activity
−Removed: Stock Options Outstanding
Number of Stock Options Outstanding
1 unchanged sentence
Balance at December 31, 2023 232,327 $ 6.02 1.81 $ 1,240,014
−Removed: Exercised ( 72,049 )
Forfeited ( 50,251 )
1 unchanged sentence
We did no t grant any stock options during the years ended December 31, 2024, 2023, and 2022.
−Removed: The total intrinsic value of stock options exercised during the years ended December 31, 2023, 2022 and 2021, was approximately $ 0.2 million, $ 1.3 million and $ 10.7 million, respectively.
−Removed: We recorded a provision for income taxes of $ 32.1 million during the year ended December 31, 2023, a benefit from income taxes of $ 162.7 million during the year ended December 31, 2022 and a provision for income taxes of $ 7.2 million during the year ended December 31, 2021.
−Removed: The provision for income taxes during the year ended December 31, 2023 was primarily due to federal and state income taxes in the United States largely driven by a shortfall associated with equity
−Removed: compensation.
−Removed: The benefit from income taxes during the year ended December 31, 2022 was primarily due to the release of the valuation allowance on certain U.S.
+Added: There were no stock options exercised during the year ended December 31, 2024 and the total intrinsic value of stock options exercised during the years ended December 31, 2023 and 2022, was $ 0.2 million and $ 1.3 million, respectively.
+Added: We recorded a provision for income taxes of $ 148.7 million during the year ended December 31, 2024, a provision for income taxes of $ 32.1 million during the year ended December 31, 2023 and a benefit from income taxes of $ 162.7 million during the year ended December 31, 2022.
+Added: The provision for income taxes during the year ended December 31, 2024 was primarily due to the establishment of a valuation allowance against our U.S.
+Added: federal and state deferred tax assets.
+Added: The provision for income taxes during the year ended December 31, 2023 was primarily due to the federal and state income taxes in the United States largely driven by shortfall associated with equity compensation.
+Added: The benefit from income taxes during the year
+Added: ended December 31, 2022 was primarily due to the release of the valuation allowance on certain U.S.
and state deferred tax assets.
−Removed: The provision for income taxes during the year ended December 31, 2021 was primarily due to state and foreign income tax expenses and the withholding taxes related to the sale of our strategic equity investment.
The following table presents our (provision for) benefit from income taxes (in thousands):
12 unchanged sentences
Total (provision for) benefit from income taxes $ ( 148,702 ) $ ( 32,132 ) $ 162,692
−Removed: The following table presents our income before (provision for) benefit from income taxes (in thousands):
+Added: The following table presents our (loss) income before (provision for) benefit from income taxes (in thousands):
Years Ended December 31,
2 unchanged sentences
Foreign ( 391,183 ) ( 10,840 ) ( 19,323 )
−Removed: Total income before (provision for) benefit from income taxes $ 50,312 $ 103,946 $ 5,739
−Removed: The following table presents the differences between our (provision for) benefit from income taxes as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate as a percentage of income before (provision for) benefit from income taxes (in percentages):
+Added: Total (loss) income before (provision for) benefit from income taxes $ ( 688,366 ) $ 50,312 $ 103,946
+Added: The following table presents the differences between our (provision for) benefit from income taxes as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate as a percentage of (loss) income before (provision for) benefit from income taxes (in percentages):
Years Ended December 31,
6 unchanged sentences
Non-deductible expenses — ( 2.5 ) 1.6
+Added: Effect of flow-through entities 12.5 — —
+Added: Goodwill impairment ( 17.1 ) — —
Tax credits — 0.8 ( 0.7 )
2 unchanged sentences
Foreign-derived intangible income 0.1 ( 5.2 ) —
−Removed: Other 2.0 1.3 0.5
Convertible senior notes — — 15.0
−Removed: Acquisition related 0.0 0.0 17.2
+Added: Other ( 0.1 ) 2.0 1.3
Total ( 21.6 ) % 63.9 % ( 156.5 ) %
1 unchanged sentence
Deferred tax assets:
+Added: Research and experimental expenditures capitalization $ 102,382 $ 69,362
+Added: Net operating loss and credits carryforwards 80,413 92,302
Accrued expenses and reserves 25,039 10,442
Share-based compensation 3,414 11,200
−Removed: Net operating loss and credits carryforwards 92,302 147,465
Convertible senior notes 1,790 5,566
−Removed: Research and experimental expenditures capitalization 69,362 37,719
+Added: Goodwill 89,583 —
+Added: Property and equipment and intangible assets 15,947 —
Other items — 6,133
3 unchanged sentences
Deferred tax liabilities:
−Removed: Property and equipment, textbooks and intangibles assets $ ( 2,621 ) $ ( 14,766 )
+Added: Property and equipment and intangibles assets $ — $ ( 2,621 )
Other ( 11,396 ) ( 13,134 )
Total deferred tax liabilities $ ( 11,396 ) $ ( 15,755 )
−Removed: Net deferred tax asset (liability) $ 139,088 $ 165,719
+Added: Net deferred tax (liability) asset
+Added: $ ( 812 ) $ 139,088
As of December 31, 2024, we have determined our earnings in India are not permanently reinvested.
−Removed: As such, a tax liability of $ 2.8 million has been accrued for taxes that would be incurred upon repatriation of such earnings.
+Added: As such, a cumulative net tax liability of $ 1.7 million has been accrued for taxes that would be incurred upon future repatriation of such earnings.
+Added: During the year ended December 31, 2024, our subsidiary in India distributed $ 23.0 million to the United States, resulting in a remittance of $ 3.5 million in withholding tax, which was included within cash flows from financing activities on our consolidated statements of cash flows.
The determination of the future tax consequences of the remittance of these earnings is not practicable.
2 unchanged sentences
Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain.
−Removed: The valuation allowance increased by approximately $ 4.0 million during the year ended December 31, 2023 and decreased by approximately $ 202.2 million during the year ended December 31, 2022.
−Removed: Previously, we maintained a valuation allowance against our deferred tax assets until we expected that it would be more-likely-than not that they would be realized.
−Removed: The release of the valuation allowance in 2022 is the result of our expectation that our domestic operations will continue to be profitable and is based on a detailed evaluation of all available evidence.
−Removed: The principal indicator leading to the release is the recent cumulative earnings of U.S.
−Removed: and certain state jurisdictions and the forecasted earnings in these jurisdictions.
−Removed: We continue to maintain a valuation allowance against our California deferred tax assets and our anticipated capital loss temporary differences.
−Removed: We will continue to quarterly assess the need for such valuation allowance.
+Added: The valuation allowance increased by approximately $ 267.8 million during the year ended December 31, 2024 and increased by approximately $ 4.0 million during the year ended December 31, 2023.
+Added: We regularly assess the need for a valuation allowance against our deferred tax assets.
+Added: In performing our assessment, we consider both positive and negative evidence related to the likelihood of realizing our deferred tax assets.
+Added: During the second quarter of 2024, we determined that it is more likely than not that the deferred tax benefit will not be realized due to the available negative evidence outweighing the positive evidence, primarily resulting from the cumulative loss influenced by the impairment expense recorded.
As of December 31, 2024, we had net operating loss carryforwards for federal and state income tax purposes of approximately $ 125 million and $ 207 million, respectively, which will begin to expire in years beginning 2030 and 2025, respectively.
6 unchanged sentences
We recognize interest and penalties related to uncertain tax positions as a component of income tax expense.
−Removed: During the years ended December 31, 2023, 2022 and 2021, we recognized a decrease of $ 0.3 million and an increase of $ 26 thousand and
−Removed: $ 0.1 million of interest and penalties, respectively.
As of December 31, 2024, there are no accrued interest and penalties related to uncertain tax positions.
−Removed: As of December 31, 2022, accrued interest and penalties were approximately $ 0.3 million.
We file tax returns in U.S.
2 unchanged sentences
federal and some state authorities.
−Removed: Foreign jurisdictions remain subject to examination up to approximately seven years from the filing date, depending on the jurisdiction.
−Removed: United Kingdom income tax remains subject to examination by the HM Revenue & Custom for certain tax years due to net operating loss and credits carryforwards.
+Added: Foreign jurisdictions remain subject to examination up to approximately five years from the filing date, depending on the jurisdiction.
+Added: United Kingdom income tax remains subject to examination by the HM Revenue & Custom for all tax years due to net operating loss and credits carryforwards.
The following table presents the reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties (in thousands):
9 unchanged sentences
Ending balance $ 12,708 $ 12,400 $ 16,953
−Removed: The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $ 6.8 million for the year ended December 31, 2023.
−Removed: One or more of these unrecognized tax benefits could be subject to a valuation allowance if, and when recognized in a future period, which could impact the timing of any related effective tax rate benefit.
+Added: As of December 31, 2024, the unrecognized tax benefits of $ 12.7 million would not affect the effective tax rate, if recognized.
The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement.
1 unchanged sentence
Restructuring Charges
−Removed: In June 2023, we announced a reduction in workforce to better position us to execute against our AI strategy and to create long-term, sustainable value for students and investors.
−Removed: This resulted in a management approved restructuring plan that impacted approximately 90 employees primarily in the United States.
−Removed: During the year ended December 31, 2023, we recorded restructuring charges of $ 5.7 million related to one-time employee termination benefits, classified on our consolidated statements of operations based on the employees' job function, and made payments of $ 5.2 million.
−Removed: As of December 31, 2023 the $ 0.5 million liability is included within accrued liabilities on our consolidated balance sheets.
−Removed: The total cost of the restructuring plan of $ 5.7 million has been recorded and we expect it to be substantially completed by the end of the first quarter 2024.
−Removed: We expect cost savings from the restructuring plan to be reinvested in future growth opportunities.
+Added: November 2024 Restructuring Plan
+Added: In November 2024, we announced a workforce reduction that resulted in a management approved restructuring plan.
+Added: During the year ended December 31, 2024, we recorded $ 14.6 million of restructuring charges , primarily related to one-time employee termination benefits, which were classified on our consolidated statement of operations based on employees' job function.
+Added: The restructuring liability is included within accrued liabilities on our consolidated balance sheets.
+Added: We estimate we will incur between $ 3 million and $ 4 million of additional restructuring charges over the next two fiscal quarters and we expect the plan to be substantially completed by the end of the third quarter of fiscal 2025.
+Added: The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):
+Added: Year Ended December 31, 2024
+Added: Beginning balance
+Added: Restructuring charges
+Added: Restructuring payments
+Added: Ending balance
+Added: June 2024 Restructuring Plan
+Added: In June 2024, we announced a workforce reduction that resulted in a management approved restructuring plan.
+Added: During the year ended December 31, 2024, we recorded $ 10.0 million of restructuring charges, primarily related to one-time employee termination benefits, which was classified on our consolidated statement of operations based on employees' job function.
+Added: The restructuring liability is included within accrued liabilities on our consolidated balance sheets.
+Added: The total amount of restructuring charges have been recorded and we expect the plan to be substantially completed by the end of the first quarter of fiscal 2025.
+Added: The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):
+Added: Year Ended December 31, 2024
+Added: Beginning balance
+Added: Restructuring charges
+Added: Restructuring payments
+Added: Ending balance
Consolidated Statements of Operations Details
−Removed: The following table presents our other income (expense), net (in thousands):
+Added: The following table presents the details of other income, net (in thousands):
Years Ended December 31,
2024 2023 2022
−Removed: Gain/(loss) on early extinguishment of debt (1)
+Added: Gain on early extinguishment of debt (1)
$ 19,515 $ 85,926 $ 93,519
2 unchanged sentences
( 27 ) ( 2,106 ) ( 9,675 )
+Added: Gain on sale of strategic equity investment (2)
Foreign currency impact on purchase consideration
−Removed: Loss on change in fair value of derivative instruments, net
−Removed: — — ( 7,148 )
−Removed: Gain on sale of strategic equity investments
Other 11 579 126
−Removed: Total other income (expense), net $ 121,810 $ 101,029 $ ( 65,472 )
+Added: Total other income, net
$ 51,332 $ 121,810 $ 101,029
+Added: _____________________________________________________
(1) For further information, see Note 8, “Convertible Senior Notes.”
3 unchanged sentences
Contributions by us are discretionary and participants may contribute, on a pretax basis, a percentage of their annual compensation, not to exceed a maximum contribution amount pursuant to Section 401(k) of the IRC.
−Removed: During the years ended December 31, 2023, 2022, and 2021, matching contributions totaled approximately $ 4.9 million, $ 4.4 million and $ 2.6 million, respectively.
+Added: During the years ended December 31, 2024, 2023, and 2022, matching contributions totaled $ 4.6 million, $ 4.9 million and $ 4.4 million, respectively.
Segment Information
1 unchanged sentence
Accordingly, we have determined that we have a single operating and reportable segment and operating unit structure.
−Removed: Product Information
+Added: Our chief operating decision maker uses net (loss) income in assessing performance and determining how to allocate resources and is regularly provided with cost of revenues, paid marketing expenses, and consolidated operating expenses when reviewing financial information as part of the annual budgeting and forecasting process as well as the review over quarterly budget to actual variances.
+Added: The following table presents information about our significant segment expenses and includes a reconciliation to net (loss) income (in thousands):
+Added: Years Ended December 31,
+Added: 2024 2023 2022
+Added: Net revenues $ 617,574 $ 716,295 $ 766,897
+Added: Cost of revenues 180,927 225,941 197,396
+Added: Research and development 170,431 191,705 196,637
+Added: Paid marketing expenses (1)
+Added: 55,381 57,351 62,008
+Added: Other sales and marketing (2)
+Added: 52,948 69,240 85,652
+Added: General and administrative 217,756 236,183 216,247
+Added: Impairment expense 677,239 3,600 —
+Added: Total segment expenses 1,354,682 784,020 757,940
+Added: Other segment items (3)
+Added: ( 99,960 ) 85,905 257,681
+Added: Net (loss) income $ ( 837,068 ) $ 18,180 $ 266,638
+Added: _____________________________________________________
+Added: (1) Paid marketing expenses consist primarily of online advertising and marketing promotional expenditures.
+Added: (2) Other sales and marketing primarily consists of employee related expenses, including share-based compensation expense, and depreciation and amortization expenses.
+Added: (3) Other segment items consist of all interest expense, other income, and (provision for) benefit from income taxes.
We derive our revenues from our Subscription Services and Skills and Other product lines.
Our Subscription Services include Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu.
−Removed: Our Skills and Other product line includes revenues from Skills, advertising services, print textbooks and eTextbooks.
−Removed: The following table presents our total net revenues for the periods shown for our Subscription Services and Skills and Other product lines (in thousands):
+Added: Our Skills and Other product line includes revenues from Chegg Skills, advertising services, print textbooks and eTextbooks.
+Added: The following table presents our total net revenues for our Subscription Services and Skills and Other product lines (in thousands):
Years Ended December 31,
9 unchanged sentences
Total net revenues $ 617,574 $ 716,295 $ 766,897
−Removed: The following table presents our long-lived assets by geographic area of December 31, 2023 (in thousands):
−Removed: December 31, 2023
+Added: The following table presents our long-lived assets by geographic area (in thousands):
United States $ 172,483 $ 186,143
1 unchanged sentence
Total long-lived assets $ 192,904 $ 208,203
−Removed: As of December 31, 2022, substantially all of our long-lived assets were located in the United States.
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.