What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2026-03-09 compared with 2025-02-24 · 337 added, 307 removed, 841 unchanged (43% of the section changed)

12 unchanged sentences

As of December 31, 2025 and 2024, we had cash and cash equivalents totaling $31.1 million and $161.5 million, respectively, and investments of $54.1 million and $366.9 million, respectively.

Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities and U.S.

treasury securities.

Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities.

Changes in U.S.

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.

A hypothetical 100 basis point increase or decrease in interest rates would result in an immaterial increase or decline in the fair value of our investments as of December 31, 2025.

Any realized gains or losses resulting from interest rate changes would only occur if we sold the investments prior to maturity.

We were not exposed to material risks due to changes in market interest rates given the liquidity of the cash, cash equivalents, and investments in which we invested our cash.

The 2026 notes and 2025 notes have a fixed annual interest rate of 0.0% and 0.125%, respectively, and therefore we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates.

The 2026 notes do not bear interest, and therefore we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates.

The fair value, however, may fluctuate when interest rates and the market price of our stock changes.

For more information, see Note 8, “Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

For more information, see “Note 8.

Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 9, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

14 unchanged sentences

Critical Audit Matter Description

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).

In March and December 2025, the Company extinguished $65.2 million and $8.9 million, respectively, of the principal amount of the convertible senior notes due in 2026 (2026 notes) for a reacquisition price of $57.6 million and $8.4 million, respectively.

The Company elected to reacquire and not cancel the partially extinguished 2026 notes and left the associated capped call transactions outstanding.

This resulted in a gain on extinguishment of $19.5 million during the year ended December 31, 2024.

This resulted in a total gain on early extinguishment of debt of $7.9 million recorded during the year ended December 31, 2025.

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

Our audit procedures related to evaluating the partial extinguishment of the 2026 convertible senior notes included the following, among others:

• We tested the operating effectiveness of the internal controls over the Company’s accounting for the partial extinguishment of the 2026 convertible senior notes.

• 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.

• We utilized more experienced professionals on our team when evaluating management’s assessment of the accounting for the partial extinguishment.

Our audit procedures related to evaluating the partial extinguishments of the 2026 notes included the following, among others:

• We tested the design, implementation, and operating effectiveness of the internal controls over the Company’s accounting for the partial extinguishments of the 2026 notes.

• Our testing included reading the underlying repurchase agreements and evaluating the Company’s accounting analysis underlying the accounting of the 2026 notes, evaluating the determination that the partial repurchases of the 2026 notes were a debt extinguishment, obtaining audit evidence of the repurchases and recalculating the gain on early extinguishment.

• We utilized more experienced professionals on our team when evaluating management’s assessment of the accounting for the partial extinguishments.

/S/ DELOITTE & TOUCHE LLP

San Jose, California

February 24, 2025

March 9, 2026

We have served as the Company’s auditor since 2018.

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 24, 2025, expressed an unqualified opinion on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 9, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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San Jose, California

February 24, 2025

March 9, 2026

CONSOLIDATED BALANCE SHEETS

10 unchanged sentences

Property and equipment, net 115,168 170,648

Goodwill, net — 631,995

Intangible assets, net 6,041 10,347

Right of use assets 13,188 22,256

Deferred tax assets, net 964 141,843

Other assets 9,613 15,491

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Total operating expenses 341,613 1,173,755 558,079

(Loss) income from operations ( 737,108 ) ( 67,725 ) 8,957

Loss from operations ( 116,856 ) ( 737,108 ) ( 67,725 )

Interest expense, net and other income, net

2 unchanged sentences

Total interest expense, net and other income, net 16,714 48,742 118,037

(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

(Loss) income before provision for income taxes ( 100,142 ) ( 688,366 ) 50,312

Provision for income taxes ( 3,279 ) ( 148,702 ) ( 32,132 )

Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180

11 unchanged sentences

Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180

Other comprehensive income (loss)

Change in net unrealized gain (loss) on investments, net of tax 585 5,534 ( 1,348 )

Other comprehensive (loss) income

Change in net unrealized (loss) gain on investments, net of tax ( 621 ) 585 5,534

Change in foreign currency translation adjustments, net of tax ( 143 ) 1,921 17,215

Other comprehensive income (loss) 2,506 22,749 ( 52,154 )

Other comprehensive (loss) income ( 764 ) 2,506 22,749

Total comprehensive (loss) income $ ( 104,185 ) $ ( 834,562 ) $ 40,929

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Repurchases of common stock ( 26,506 ) ( 26 ) ( 337,683 ) — — ( 337,709 )

Issuance of common stock upon exercise of stock options and ESPP 437 — 6,475 — — 6,475

Issuance of common stock upon exercise of stock options and under ESPP 512 1 4,162 — — 4,163

Net share settlement of equity awards 2,344 2 ( 16,440 ) — — ( 16,438 )

Share-based compensation expense — — 136,787 — — 136,787

Other comprehensive loss — — — ( 52,154 ) — ( 52,154 )

Net proceeds from capped call related to extinguishments of 2025 notes — — 297 — — 297

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 )

Issuance of common stock upon exercise of stock options and ESPP 512 1 4,162 — — 4,163

Issuance of common stock under 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

Net proceeds from capped call related to extinguishments of 2025 notes — — 297 — — 297

Other comprehensive income — — — 2,506 — 2,506

Net income — — — — 18,180 18,180

Net loss — — — — ( 837,068 ) ( 837,068 )

Balances at December 31, 2024 104,880 105 1,114,550 ( 32,233 ) ( 889,441 ) 192,981

Repurchases of common stock ( 2,116 ) ( 2 ) ( 16 ) — — ( 18 )

Issuance of common stock upon exercise of ESPP 859 1 2,632 — — 2,633

Issuance of common stock under ESPP 812 1 584 — — 585

Net share settlement of equity awards 5,294 5 ( 2,600 ) — — ( 2,595 )

Share-based compensation expense — — 32,837 — — 32,837

Other comprehensive income — — — 2,506 — 2,506

Other comprehensive loss — — — ( 764 ) — ( 764 )

Net loss — — — — ( 103,421 ) ( 103,421 )

11 unchanged sentences

Deferred tax assets 1,348 143,319 26,575

(Gain)/loss on early extinguishments of debt ( 19,515 ) ( 85,926 ) ( 93,519 )

Loss contingency accrual — 7,000 —

Gain on early extinguishments of debt ( 7,838 ) ( 19,515 ) ( 85,926 )

Loss contingency — — 7,000

Impairment expense 2,000 677,239 3,600

2 unchanged sentences

Operating lease expense, net of accretion 3,641 5,864 6,079

Realized loss on sale of investments 27 2,106 9,675

Gain on textbook library, net — — ( 4,976 )

Print textbook depreciation expense — — 1,610

Gain on foreign currency remeasurement of purchase consideration — — ( 4,628 )

Impairment on lease related assets 5,557 — 5,225

Realized (gain) loss on sale of investments ( 752 ) 27 2,106

Impairment of lease related assets 7,315 5,557 —

Impairment of equity investment 6,000 — —

Other non-cash items 1,423 656 ( 1,228 )

Change in assets and liabilities, net of effect of acquisition of business:

Change in assets and liabilities:

Accounts receivable 8,439 7,771 ( 7,799 )

8 unchanged sentences

Purchases of property and equipment ( 28,123 ) ( 74,953 ) ( 83,052 )

Purchases of textbooks — — ( 3,815 )

Proceeds from disposition of textbooks — — 9,787

2 unchanged sentences

Maturities of investments 130,055 171,671 597,197

Proceeds from sale of strategic equity investments 15,500 — —

Acquisition of business, net of cash acquired — — ( 401,125 )

Purchases of strategic equity investments — ( 11,853 ) ( 6,000 )

Proceeds from sale of equity investments — 15,500 —

Purchases of equity investments — — ( 11,853 )

Net cash provided by investing activities 282,297 11,345 268,673

Cash flows from financing activities

Proceeds from common stock issued under stock plans, net 2,636 4,165 6,477

Proceeds from common stock issued under stock plans 590 2,636 4,165

Payment of taxes related to the net share settlement of equity awards ( 2,600 ) ( 9,239 ) ( 16,440 )

5 unchanged sentences

Effect of exchange rate changes ( 256 ) ( 1,025 ) 21

Net increase (decrease) in cash, cash equivalents and restricted ca 26,383 ( 337,878 ) ( 380,039 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 130,948 ) 26,383 ( 337,878 )

Cash, cash equivalents and restricted cash, beginning of period 164,359 137,976 475,854

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Company and Background

(“we,” “us,” “our,” “Company” or “Chegg”), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005.

Chegg provides individualized learning support to students as they pursue their educational journeys.

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.

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.

(“we,” “us,” “our,” “Company” or “Chegg”), was incorporated as a Delaware corporation in July 2005.

Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed.

Focused on the large and growing skilling market, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning.

Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support.

Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world.

Basis of Presentation

1 unchanged sentence

Reclassification of Prior Period Presentation

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.

These changes in presentation do not affect previously reported results.

In order to conform with current period presentation, $ 1.0 million of deferred tax assets have been reclassified from deferred tax assets to other assets on our consolidated balance sheet as of December 31, 2024.

This change in presentation does not affect previously reported results.

Significant Accounting Policies

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The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S.

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;

and the reported amounts of revenues and expenses during the reporting periods.

GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent liabilities.

Significant estimates, assumptions, and judgments are used for, but not limited to:

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.

revenue recognition, share-based compensation expense, 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.

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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.

We hold investments in corporate debt securities and U.S.

treasury securities.

We hold investments in corporate debt 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.

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.

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 (loss) income on our consolidated statements of stockholders’ equity.

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 (loss) income, 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.

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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.

treasury securities, we classify our fixed income available-for-sale investments as having Level 2 inputs.

Other than our money market funds, we classify our fixed income available-for-sale investments as having Level 2 inputs.

The valuation techniques used to measure the fair value of our investments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data or quoted market prices for similar instruments.

1 unchanged sentence

Accounts Receivable, Net of Allowance

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.

Accounts receivable is recorded at the invoiced amount and is non-interest bearing.

We generally grant uncollateralized credit terms to our customers.

We maintain an estimated allowance provision to account for potentially uncollectible accounts receivable based upon expected credit losses for outstanding receivables.

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Our investment portfolio consists of investments diversified among security types, industries and issuers.

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.

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 receivable exist to the full extent of amounts presented in the financial statements.

No customers represented over 10% of our net accounts receivable balance as of December 31, 2025 and December 31, 2024.

4 unchanged sentences

Classification Useful Life

Shorter of the licensed content term or 5 years

Internal-use software and website development 3 years

2 unchanged sentences

Computers and equipment 3 years

We capitalize all costs associated with the development or acquisition of content that is utilized in our products and services.

We capitalize all costs associated with the development of content that is utilized in our products and services.

Content amortization is classified within cost of revenues on our consolidated statements of operations.

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Depreciation expense is classified within cost of revenues or operating expenses categories on our consolidated statements of operations.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and content amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in (loss) income from operations.

Business Combinations

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired through a business combination based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets acquired and liabilities assumed is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and, as a result, actual results may differ from estimates.

During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

When assets are abandoned prior to the end of their useful lives, we accelerate depreciation over the revised shortened useful life.

Accelerated depreciation expense is classified consistently with the initial depreciation expense.

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.

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We determine if an arrangement is a lease at inception.

Operating leases are included in operating lease right of use (ROU) assets and operating lease liabilities within current liabilities and long-term liabilities on our consolidated balance sheets.

Operating leases are included in operating lease right of use (ROU) assets, accrued liabilities, and long-term operating lease liabilities on our consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

2 unchanged sentences

Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.

We do not record leases on our consolidated balance sheet with a term of one year or less.

We do not record leases on our consolidated balance sheets with a term of one year or less.

We do not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets.

2 unchanged sentences

ROU assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Strategic Investments

Equity Investments

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.

Strategic investments are included in other assets on our consolidated balance sheets.

We assess our strategic investments for impairment whenever events or changes in circumstances indicate that they may be impaired.

Equity investments are included in other assets on our consolidated balance sheets.

We assess our equity investments for impairment whenever events or changes in circumstances indicate that they may be impaired.

The factors we consider in our evaluation include, but are not limited to, a significant deterioration in the earnings performance or business prospects of the investee or factors that raise significant concerns about the investee’s ability to continue as a going concern, such as negative cash flows from operations or working capital deficiencies.

5 unchanged sentences

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.

The fair value

of any derivative instruments related to the notes are determined utilizing Level 2 inputs.

The fair value 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.

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Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated and actual refunds, which are based on historical data.

Revenues from our Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu offerings are primarily recognized ratably over the monthly subscription period.

Revenues from Chegg Skills are recognized over the delivery period, adjusted for an estimate of non-redemption.

Revenues from advertising services are recognized upon fulfillment.

Revenues from print textbooks and eTextbooks are recognized immediately.

Revenues from our language learning platform and Academic Services are primarily recognized ratably over the monthly subscription period.

Revenues from our workforce skilling programs are recognized over the delivery period, adjusted for an estimate of non-redemption, or upon fulfillment.

Revenues from advertising services and content licensing are recognized upon fulfillment.

Some of our customer arrangements include multiple performance obligations.

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When deciding the most appropriate basis for presenting revenues or costs of revenues, both the legal form and substance of the agreement between us and our business partners are reviewed to determine each party’s respective role in the transaction.

We have concluded that we control our Subscription Services and therefore we recognize revenues and cost of revenues on a gross basis.

For print textbooks and eTextbooks, we have concluded that we do not control the service and therefore we recognize revenues on a net basis based on our role in the transaction as an agent.

Contract assets are contained within other current assets and other assets on our consolidated balance sheets.

Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer and primarily consist of the income sharing payment arrangements we offer to students for our Skills service.

Contract receivables are contained within accounts receivable, net on our consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time.

Contract liabilities are contained within deferred revenue on our consolidated

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.

Deferred revenue related to rental and subscription performance obligations is recognized as revenues ratably over the term for subscriptions or when the services are provided, and all other revenue recognition criteria have been met.

For all of our offerings, aside from print textbooks and eTextbooks which are no longer provided, we control our services and recognize revenues and cost of revenues on a gross basis.

Contract receivables are presented as accounts receivable, net on our consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time.

Contract assets are contained within other current assets and other assets on our consolidated balance sheets and represent the goods or services that we have transferred to a customer before invoicing the customer and primarily consist of the income sharing payment arrangements we offer to students for our workforce skilling programs.

Contract liabilities are presented as deferred revenue on our consolidated balance sheets and primarily consists of advanced payments from learners related to subscription performance obligations that have not been satisfied and estimated variable consideration.

Deferred revenue related to subscription performance obligations is recognized as revenues ratably over the term for subscriptions or when the services are provided, and all other revenue recognition criteria have been met.

Deferred revenue related to variable consideration is recognized as revenues during each reporting period based on the estimated amount we believe we will earn over the life of the contract.

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Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services.

Cost of revenues primarily consists of content amortization expense related to content that we develop, license from publishers, or acquire through acquisitions, web hosting fees, customer support fees, payment processing costs, amortization of acquired intangible assets, employee-related expenses, which includes salaries, benefits and share-based compensation expense, and other direct costs related to providing content or services.

Cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services including content amortization expense, web hosting fees, customer support fees, payment processing costs, amortization of acquired intangible assets, employee-related expenses, which includes salaries, benefits and share-based compensation expense, contractor costs, and other direct costs related to providing content or services.

In addition, cost of revenues includes allocated information technology and facilities costs.

1 unchanged sentence

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.

Research and development expenses also include technology costs to support our research and development, and outside services.

Research and development expenses also include technology costs to support our research and development, web hosting fees, contractor costs, and outside services.

We expense substantially all of our research and development expenses as they are incurred.

Paid Marketing Expense

Paid marketing expenses are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures.

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.

Paid marketing expense is expensed as incurred and consist primarily of online advertising and marketing promotional expenditures.

During the years ended December 31, 2025, 2024, and 2023, paid marketing expense was $ 33.3 million, $ 55.4 million, and $ 57.4 million, respectively.

Share-based Compensation Expense

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RSUs and PSUs are converted into shares of our common stock upon vesting on a one -for-one basis.

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.

RSUs typically vest over one or three years , while PSUs with a market-based condition or 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.

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Under the treasury stock method, options, PSUs, and RSUs are assumed to be exercised or vested at the beginning of the period or at the time of issuance, if later, and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

Under the if-converted method, outstanding convertible senior notes are assumed to be converted into common stock at the beginning of the period or at the time of issuance, if later.

Under the if-converted method,

outstanding convertible senior notes are assumed to be converted into common stock at the beginning of the period or at the time of issuance, if later.

Foreign Currency Translation and Remeasurement

3 unchanged sentences

Revenues and expenses are translated at average exchange rates during the period.

Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets.

Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity and on the consolidated balance sheets.

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.

During the year ended December 31, 2025, net losses from remeasurement of foreign currency transactions were $ 1.4 million.

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.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options .

ASU 2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in Accounting Standards Codification (ASC) 470-20—Debt.

Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis.

In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-12, Codification Improvements .

ASU 2025-12 makes incremental improvements to the Accounting Standards Codification (ASC) and U.S.

Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to the beginning of the earliest comparative period presented.

The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual periods.

We did not early adopt ASU 2025-12 and we are currently in the process of evaluating the impact of this guidance.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting - Narrow Scope Improvements .

ASU 2025-11 improves the guidance in ASC 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable.

Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

We did not early adopt ASU 2025-11 and we are currently in the process of evaluating the impact of this guidance.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software .

ASU 2025-06 modernizes the accounting for software costs that are accounted for under ASC 350-40 and 350-50 by removing references to prescriptive and sequential software development stages and requiring capitalization of software costs to begin when management has authorized and committed to funding the project and it is probable that the project will be completed and used as intended.

Early adoption is permitted and the guidance may be applied on either a prospective, retrospective or modified basis.

The guidance is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods.

We did not early adopt ASU 2025-06 and we are currently in the process of evaluating the impact of this guidance.

In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures .

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses .

ASU 2025-05 introduces a practical expedient related to applying ASC 326-20 to current accounts receivable and contract assets.

Early adoption is permitted, and the guidance will be applied on a prospective basis.

The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods.

We did not early adopt ASU 2025-05 and do not believe its adoption will significantly impact our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options .

ASU 2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in ASC 470-20—Debt.

Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis.

The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods.

We did not early adopt ASU 2024-04 and do not believe its adoption will significantly impact our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures .

ASU 2024-03 requires disclosure of specified information about certain costs and expenses in the notes to financial statements.

Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively.

The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027.

The guidance is effective for annual periods beginning after December 15, 2026 and interim periods

beginning after December 15, 2027.

We did not early adopt ASU 2024-03 and we are currently in the process of evaluating the impact of this guidance.

Recently Adopted Accounting Pronouncements

In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements .

ASU 2024-02 removes various references to the FASB’s Concepts Statements from the FASB’s Accounting Standards Codification.

Early adoption is permitted, and the guidance will be applied prospectively with the option

to apply retrospectively.

ASU 2024-02 removes various references to the FASB’s Concepts Statements from the FASB’s ASC.

Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively.

The guidance is effective for annual periods beginning after December 15, 2024.

We did not early adopt ASU 2024-02 and do not believe it will have a significant impact on our financial statements.

We adopted ASU 2024-02 on January 1, 2025 under the prospective method and there was not a significant impact on our financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

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The guidance is effective for annual periods beginning after December 15, 2024.

We did not early adopt ASU 2023-09 and we are currently in the process of evaluating the impact of this guidance.

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.

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.

In 2024, we adopted ASU 2023-07 on a retrospective basis for annual periods starting with this Annual Report on Form 10-K.

For further information on the additional reportable segment disclosures, refer to “Note 18, Segment Information.”

We adopted ASU 2023-09 on January 1, 2025 under the prospective method and the adoption of this guidance did not have an effect on our financial position, results of operations or cash flows as the adoption only resulted in additional disclosures.

For further information on the additional disclosures refer to “Note 14.

Income Taxes”.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The majority of our revenues are recognized over time as services are performed, with certain revenues being recognized at a point in time.

The following table presents our total net revenues for the periods shown disaggregated for our Subscription Services and Skills and Other product lines (in thousands, except percentages):

We have changed our revenue disaggregation from Subscription Services and Skills and Other to Chegg Skilling and Academic Services to better reflect the nature of revenue and cash flows.

The following table presents our total net revenues for the periods shown disaggregated for our Chegg Skilling and Academic Services product lines (in thousands, except percentages):

Years Ended December 31, Change in 2025

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2025 2024 2023 $ % $ %

Subscription Services $ 549,211 $ 640,520 $ 671,968 $ ( 91,309 ) ( 14 ) % $ ( 31,448 ) ( 5 ) %

Skills and Other 68,363 75,775 94,929 ( 7,412 ) ( 10 ) ( 19,154 ) ( 20 )

Chegg Skilling $ 68,654 $ 73,959 $ 76,812 $ ( 5,305 ) ( 7 ) % $ ( 2,853 ) ( 4 ) %

Academic Services 308,254 543,615 639,483 ( 235,361 ) ( 43 ) ( 95,868 ) ( 15 )

Total net revenues $ 376,908 $ 617,574 $ 716,295 $ ( 240,666 ) ( 39 ) $ ( 98,721 ) ( 14 )

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.

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.

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.

During the years ended December 31, 2025, 2024, and 2023, we recognized revenues of $ 39.2 million, $ 53.5 million, and $ 54.5 million, respectively, that were included in our deferred revenue balance at the beginning of each respective fiscal year.

During the years ended December 31, 2025, 2024, and 2023, we recognized revenues from performance obligations satisfied in previous periods of an immaterial amount, $ 2.8 million, and an immaterial amount, respectively.

As of December 31, 2025 and 2024, the closing balance of deferred contract costs was $ 3.1 million and $ 2.8 million, respectively, and during the years ended December 31, 2025, 2024, and 2023, we recognized deferred contract cost amortization of $ 14.3 million, $ 16.1 million, and $ 15.8 million, respectively.

Contract Balances

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Deferred revenue 29,675 39,217 ( 9,542 ) ( 24 )

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.

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.

During the year ended December 31, 2025, our accounts receivable, net balance decreased by $ 8.0 million, or 34 %, primarily due to lower bookings and higher cash collections.

During the year ended December 31, 2025, our contract assets balance decreased by $ 0.5 million or 7 %, primarily due to cash collections.

During the year ended December 31, 2025, our deferred revenue balance decreased by $ 9.5 million, or 24 %, primarily due to lower bookings.

Net (Loss) Income Per Share

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— — ( 61,694 )

Net (loss) income, diluted

Net loss, diluted

$ ( 103,421 ) $ ( 837,068 ) $ ( 43,514 )

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107,484 103,300 116,504

Shares related to stock plan activity — — 968

Shares related to convertible senior notes — — 12,065

Weighted average shares used to compute net (loss) income per share, diluted

103,300 128,569 149,859

Net (loss) income per share, diluted

Weighted average shares used to compute net loss per share, diluted 107,484 103,300 128,569

Net loss per share, diluted

$ ( 0.96 ) $ ( 8.10 ) $ ( 0.34 )

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):

The following table presents potential weighted-average shares of common stock outstanding that were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):

Years Ended December 31,

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Cash and Cash Equivalents, and Investments and Fair Value Measurements

The following tables present our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value as of December 31, 2024 and 2023 (in thousands):

The following tables present our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value (in thousands):

December 31, 2025

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Corporate debt securities Level 2 $ 41,549 $ 125 $ — $ 41,674

treasury securities Level 1 40,162 — ( 9 ) 40,153

Total short-term investments $ 154,130 $ 157 $ ( 38 ) $ 154,249

Long-term investments:

Corporate debt securities Level 2 $ 12,290 $ 102 $ — $ 12,392

treasury securities Level 1 78,405 97 ( 26 ) 78,476

Total long-term investments $ 211,921 $ 833 $ ( 104 ) $ 212,650

December 31, 2024

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treasury securities Level 1 40,162 — ( 9 ) 40,153

25,734 — ( 114 ) 25,620

Agency bonds Level 2 99,505 — ( 246 ) 99,259

Total short-term investments $ 154,130 $ 157 $ ( 38 ) $ 154,249

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Total long-term investments $ 211,921 $ 833 $ ( 104 ) $ 212,650

As of December 31, 2024, we determined that the declines in the market value of our investment portfolio were not driven by credit related factors.

During the years ended December 31, 2025, 2024 and 2023, we did not recognize any losses on our investments due to credit related factors.

The following table presents the realized gain and loss related to our investments (in thousands):

The following table presents the realized gain and loss related to the sale of our investments (in thousands):

Years Ended December 31,

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Realized loss ( 61 ) ( 43 ) ( 2,452 )

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):

Total realized gain (loss) $ 752 $ ( 27 ) $ ( 2,106 )

The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity (in thousands):

December 31, 2025

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Investments not due at a single maturity date in the preceding table consisted of money market funds.

Strategic Investments

In May 2023, we entered into a $ 15.0 million commitment to invest in Sound Ventures AI Fund, L.P.

(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.

As of December 31, 2023, the carrying amount of our investment was $ 11.7 million.

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.

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.

Equity Investment

In July 2022, we completed an equity investment of $ 6.0 million in Knack Technologies, Inc.

(Knack), a privately held U.S.

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We do not have the ability to exercise significant influence over Knack's operating and financial policies and have elected to account for our investment at cost as it does not have a readily determinable fair value.

We did not record any impairment charges on our strategic investments during the years ended December 31, 2024, 2023 and 2022, as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment.

There were no observable price changes in orderly transactions for the identical or similar investments of the same issuers during the years ended December 31, 2024, 2023 and 2022.

During the year ended December 31, 2025, we recorded a $ 6.0 million impairment charge on our investment in Knack included within general and administrative expense on our consolidated statements of operations.

Our impairment assessment was the result of changes in our rights as an investor and uncertainty around Knack's ability to support their future operations.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the 2026 notes.

The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period.

We consider the fair value of the notes to be a Level 2 measurement due to the limited trading activity.

The estimated fair value of the 2026 notes as of December 31, 2024 and 2023 was $ 105.8 million and $ 202.9 million, respectively.

The estimated fair value was determined based on the trading price as of the last day of trading for the period and we consider it to be a Level 2 measurement due to the limited trading activity.

The estimated fair value of the 2026 notes as of December 31, 2025 and 2024 was $ 45.0 million and $ 105.8 million, respectively.

For further information on the notes refer to Note 8, “Convertible Senior Notes.”

For further information on the 2026 notes refer to "Note 8.

Convertible Senior Notes.”

Property and Equipment, Net

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Property and equipment, net $ 115,168 $ 170,648

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.

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.

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.

For further information on the November 2024 and June 2024 restructurings, see Note 15, “Restructuring Charges.”

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.

For further information on the intangible assets impairment analysis, see Note 7, “Goodwill and Intangible Assets.”

In connection with the design and build of our new generative AI experience in August 2023, we streamlined our product experiences.

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.

All of which were classified as cost of revenues on our consolidated statements of operations.

Depreciation expense during the years ended December 31, 2025, 2024, and 2023 was $ 74.3 million, $ 68.3 million, and $ 105.3 million, respectively.

During the year ended December 31, 2025, we streamlined our product experiences.

As a result, we elected to abandon certain content and internal-use software assets and recorded charges of $ 18.2 million, consisting of $ 16.2 million of accelerated depreciation expense classified as cost of revenues on our consolidated statements of operations and $ 2.0 million of impairment of in-progress internal-use software assets classified as impairment expense on our consolidated statements of operations.

Goodwill and Intangible Assets

The following table presents the changes in the carrying amount of our goodwill balances (in thousands):

The following table presents the changes in the carrying amount of our goodwill balance (in thousands):

Beginning balance $ 631,995

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Ending balance $ —

As of December 31, 2024, the carrying amount of goodwill was fully impaired.

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.

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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.

We did not record goodwill impairment expense during the years ended December 31, 2023, and 2022.

Intangible Assets

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During the years ended December 31, 2025, 2024 and 2023, intangible assets amortization expense was $ 4.3 million, $ 10.0 million and $ 24.4 million, respectively.

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.

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.

In conjunction with our goodwill impairment analysis in June 2024, we determined that there were indicators of impairment for our Busuu intangible assets and a recoverability test was necessary.

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.

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.

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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.

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.

The following table presents the estimated future intangible assets amortization expense (in thousands):

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In August 2020, we issued $ 1.0 billion in aggregate principal amount of 0 % convertible senior notes due in 2026 (2026 notes).

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).

The 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

The 2025 notes bear interest of 0.125 % per year which is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019.

The 2025 notes will mature on March 15, 2025, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

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.

This is equivalent to an initial conversion price of approximately $ 107.55 per share, which is subject to adjustment in certain circumstances.

As of December 31, 2025, the total principal amount of 2026 notes outstanding was $ 53.9 million and 9,297,800 shares remained underlying the 2026 notes.

In March/April 2019, we issued $ 800 million in aggregate principal amount of 0.125 % convertible senior notes due in 2025 (2025 notes).

The 2025 notes matured on March 15, 2025 and we paid $ 358.9 million to repay the outstanding 2025 notes which was classified as a financing activity on our consolidated statements of cash flows.

Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock.

This is equivalent to an initial conversion price of approximately $ 107.55 per share, which is subject to adjustment in certain circumstances.

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.

Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes, the notes are convertible at the option of holders only upon satisfaction of certain circumstances.

As of December 31, 2025, the circumstances allowing holders of the 2026 notes to convert were not met.

On or after June 1, 2026 until the close of business on the second scheduled trading day immediately preceding the maturity dates, holders may convert their notes at any time, regardless of the 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.

As of December 31, 2024, the 2026 notes are not convertible and have been classified as a long-term liability.

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.

We expect to settle any 2025 Notes conversion requests in shares of our common stock.

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.

As of December 31, 2025, the 2026 notes were classified as a current liability on our consolidated balance sheets as they will be convertible at the option of the holders at any time beginning June 1, 2026 and will mature on September 1, 2026, both of which are within the next twelve months.

In December 2025, in connection with our securities repurchase program, we extinguished $ 8.9 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $ 8.3 million, which was paid to the holders in cash.

We also incurred an immaterial amount of fees resulting in a total reacquisition price of $ 8.4 million.

The carrying amount of the extinguished notes was $ 8.8 million resulting in a $ 0.5 million gain on early extinguishment of debt.

We elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding.

In March 2025, in connection with our securities repurchase program, we extinguished $ 65.2 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $ 57.4 million, which was paid to the holders in cash.

We also incurred approximately $ 0.2 million in fees resulting in a total reacquisition price of $ 57.6 million.

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Years Ended December 31,

2025 2024 2023

Contractual interest expense

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Capped Call Transactions

Concurrently with the offering of the 2026 notes and 2025 notes, we used $ 103.4 million and $ 97.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to reduce or offset potential dilution to holders of our common stock upon conversion of the notes or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes.

The capped call transactions automatically exercise upon conversion of the notes and as of December 31, 2024, cover 9,297,800 and 6,961,352 shares of our common stock for the 2026 notes and 2025 notes, respectively.

These are intended to effectively increase the overall conversion price from $ 107.55 to $ 156.44 per share for the 2026 notes and $ 51.56 to $ 79.32 per share for the 2025 notes.

Concurrently with the offering of the 2026 notes, we used $ 103.4 million of the net proceeds to enter into privately negotiated capped call transactions which are expected to reduce or offset potential dilution to holders of our common stock upon conversion of the notes or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes.

The capped call transactions automatically exercise upon conversion of the notes and as of December 31, 2025, cover 9,297,800 shares of our common stock for the 2026 notes.

These are intended to effectively increase the overall conversion price from $ 107.55 to $ 156.44 per share for the 2026 notes.

The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted notes.

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The cost of the capped call is not expected to be deductible for tax purposes.

Our primary operating lease commitments as of December 31, 2024 are related to our corporate headquarters and offices in the United States and internationally.

Our operating lease commitments are related to our corporate offices.

As of December 31, 2025 and 2024, we had operating lease ROU assets of $ 13.2 million and $ 22.3 million, respectively, and operating lease liabilities of $ 19.5 million and $ 24.1 million, respectively.

As of December 31, 2025 and 2024, our weighted average remaining lease term in years was 5.9 and 6.3 , respectively, and our weighted average discount rate was 6.0 % and 5.6 %, respectively.

In connection with the November 2024 and June 2024 restructuring actions, we announced the closure of our New York office and two international offices.

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.

Our intent and ability to sublease the office as well as the local market conditions were factored in when measuring the amount of impairment.

For further information on the November 2024 and June 2024 restructuring actions, see Note 15, “Restructuring Charges.”

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.

In connection with the May 2025 and October 2025 restructuring plans, we announced the closure of our Santa Clara and Portland offices.

As a result, during the year ended December 31, 2025, we recorded a full impairment of $ 7.3 million, consisting of $ 6.4 million impairment of ROU assets and $ 0.9 million impairment of leasehold improvements, which was classified as general and administrative expense on our consolidated statements of operations.

Our intent and ability to sublease the offices as well as the local market conditions were factored in when measuring the amount of impairment.

For further information on the May 2025 and October 2025 restructuring plans, see “ Note 15.

Restructuring Charges.”

During the year ended December 31, 2025, we obtained $ 1.6 million of ROU assets in exchange for lease liabilities primarily due to the commencement of a two year operating lease for a corporate office space in the United Kingdom.

During the years ended December 31, 2025, 2024 and 2023, operating lease expense, net of immaterial sublease income, was $ 4.9 million, $ 7.5 million and $ 7.6 million, respectively.

During the years ended December 31, 2025, 2024 and 2023, variable lease cost and short-term lease cost were immaterial.

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Commitments and Contingencies

We may from time to time be subject to certain legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights;

We may from time to time be involved in certain legal proceedings and regulatory compliance matters in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights;

employment claims;

and general contract or other claims.

We may also, from time to time, be subject to various legal or government claims, demands, disputes, investigations, or requests for information.

and contractual and related disputes brought through private actions, class actions, administrative proceedings, regulatory actions or other litigation.

We may also, from time to time, be involved in various legal or government claims, demands, disputes, investigations, or requests for information.

Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.

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2023-0244-NAC) asserting breach of fiduciary duty, unjust enrichment, and waste of corporate asset claims against members of Chegg’s Board and certain Chegg officers.

The matter is stayed.

The Company disputes these claims and intends to vigorously defend itself in this matter.

On February 14, 2023, Plaintiff Brian Stansell, individually and on behalf of other similarly situated stockholders of Chegg, filed a putative class action complaint in the Court of Chancery of the State of Delaware (Case No.

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.

The Court dismissed this matter pursuant to the Company's motion to dismiss and the matter is concluded.

On January 20, 2026, the Court entered an Order dismissing this matter without prejudice pursuant to a stipulation of the parties.

On December 22, 2022, JPMorgan Chase Bank, N.A.

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JPMC has alleged fraud on the part of certain former Frank executives regarding the quantity and quality of its customer accounts.

The Company is not at fault, however is pursuing a settlement agreement with JPMC.

Although the Company is not alleged to have made or participated in any of the allegedly false or fraudulent statements, it is pursuing resolution with JPMC of JPMC's claims related to the Support Agreement.

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.

On February 22, 2023, Plaintiff filed an Amended Shareholder Derivative Complaint.

This matter has been consolidated with Choi, below, and both matters are stayed.

The Company disputes these claims and intends to vigorously defend itself in this matter.

This matter has been consolidated with Choi, below.

Effective March 4, 2026, Chegg entered into a Settlement Agreement with the Plaintiffs (including Robinson and Choi).

Pursuant to the Settlement Agreement, Plaintiffs released their claims, and Chegg agreed to certain governance changes and that Chegg or our insurance carrier will pay the fees of Plaintiffs’ counsel.

Chegg’s insurance carrier agreed that it will make the payment to Plaintiffs.

On January 12, 2022, Rak Joon Choi, 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, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets.

On February 22, 2023, Plaintiff filed an Amended Shareholder Derivative Complaint.

This matter has been consolidated with Robinson, above, and both matters are stayed.

The Company disputes these claims and intends to vigorously defend itself in this matter.

This matter has been consolidated with Robinson, above.

Effective March 4, 2026, Chegg entered into a Settlement Agreement with the Plaintiffs (including Robinson and Choi).

Chegg’s insurance carrier agreed that it will make the payment to Plaintiffs.

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,

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On November 6, 2024, Plaintiffs filed a motion for preliminary approval of the settlement.

The Court preliminarily approved the settlement on December 19, 2024.

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.

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.

(Pearson) filed a complaint captioned Pearson Education, Inc.

(Pearson Complaint) in the United States District Court for the District of New Jersey against the Company (Case 2:21-cv-16866), alleging infringement of Pearson’s registered copyrights and exclusive rights under copyright in violation of the United States Copyright Act.

Pearson is seeking injunctive relief, monetary damages, costs, and attorneys’ fees.

The Company filed its answer to the Pearson Complaint on November 19, 2021.

Pearson’s June 29, 2022 Motion for Leave to File Amended Complaint seeking to add Bedford, Freeman & Worth Publishing Group, LLC d/b/a Macmillan Learning as a plaintiff was denied.

Pearson filed an Amended Complaint on May 10, 2023, and the Company filed an amended answer on June 7, 2023.

Chegg and Pearson have resolved this litigation.

Pursuant to the terms of the parties' confidential settlement, the Court dismissed the case with prejudice on December 20, 2024.

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.

On October 31, 2022, the FTC published the parties’ agreed-upon consent order regarding Chegg’s privacy and data security practices.

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.

We are currently cooperating with the FTC on an investigation as to whether we have violated certain terms of the Final Order.

The Court held a final approval hearing on April 24, 2025 and issued its final order approving of the settlement on May 21, 2025.

The Court entered its Final Judgment and Order of Dismissal on June 20, 2025.

This matter was fully concluded with entry of a Court order on November 18, 2025 to disburse final funds.

As such, as of December 31, 2025, we have relieved the $ 55.0 million contingent liability previously included within accrued liabilities on our consolidated balance sheets and expected insurance loss recoveries, previously included within other current assets on our consolidated balance sheets.

We also cooperated with the FTC with respect to another CID (the "ROSCA CID") relating to our compliance with the Federal Trade Commission Act and the ROSCA.

The investigation concerned certain of our practices related to online transactions and consumer cancellation options.

On September 28, 2025 a federal district court entered a settlement agreement between us and the FTC in connection with the ROSCA CID that contains injunctive provisions and a monetary component of $ 7.5 million, which we have paid.

The Court entered its Order approving the parties Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief on September 18, 2025 and resolving the matter.

As such, we recognized a loss contingency of $ 7.5 million within general and administrative expense on our consolidated statements of operations during the year ended December 31, 2025.

We record a contingent liability for loss contingencies related to legal matters when a loss is both probable and reasonably estimable.

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December 31, 2025

Shares available for grant under the 2023 Equity Incentive Plan 10,340,723

Outstanding RSUs and PSUs 10,041,008

Shares available for grant under the Amended 2023 Equity Incentive Plan 6,606,932

Shares available for issuance under the Amended and Restated 2013 Employee Stock Purchase Plan 2,195,773

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Total common shares reserved for future issuance 20,477,377

2023 Equity Inducement Plan

On October 11, 2023, our Board of Directors approved and adopted our 2023 Equity Inducement Plan (the “2023 EINP”).

On the effective date of the 2023 EINP, 2,000,000 shares of our common stock were reserved for issuance and as of December 31, 2024, there were 1,171,016 shares of common stock available for future issuance.

The 2023 EINP permits the granting of non-qualified stock options and restricted stock unit awards.

The 2023 EINP terminates on the later of (i) October 11, 2033 or (ii) ten years from the last date that additional shares are added to the EINP by the Compensation Committee of our Board of Directors.

2023 Equity Incentive Plan

On April 7, 2023, our Board of Directors adopted our 2023 Equity Incentive Plan (the “2023 EIP”), which was subsequently approved by our stockholders and became effective on June 7, 2023, replacing our 2013 Equity Incentive Plan (the “2013 Plan”).

Amended 2023 Equity Incentive Plan

On April 7, 2023, our Board adopted our 2023 Equity Incentive Plan (the “2023 EIP”), which was subsequently approved by our stockholders and became effective on June 7, 2023, replacing our 2013 Equity Incentive Plan (the “2013 Plan”).

On the effective date of the 2023 EIP, 12,000,000 shares of our common stock were reserved for issuance.

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In addition, any shares subject to awards, including shares subject to awards granted under the 2013 Plan that were outstanding on June 7, 2023, that are cancelled, forfeited, repurchased, expire by their terms without shares being issued, are used to pay the exercise price of an option or stock appreciation right or withheld to satisfy the tax withholding obligations related to any award, will be returned to the pool of shares available for grant and issuance under the 2023 EIP.

As of December 31, 2024, there were 10,340,723 shares available for grant under the 2023 EIP.

On April 17, 2025, our Board adopted an amendment to the 2023 EIP, which was subsequently approved by our stockholders and became effective on June 4, 2025.

The amendment to the 2023 EIP increased our common stock reserved for issuance under the Plan by 5,000,000 shares.

The 2023 EIP permits the granting of incentive stock options, non-qualified stock options, RSUs, restricted stock awards, stock bonus awards, stock appreciation rights and performance awards.

The 2023 EIP terminates on April 7, 2033.

As of December 31, 2025, there were 6,606,932 shares available for grant under the 2023 EIP.

Amended and Restated 2013 Employee Stock Purchase Plan

On April 7, 2023, our Board of Directors adopted our Amended and Restated 2013 Employee Stock Purchase Plan (the “A&R ESPP”), which was subsequently approved by our stockholders and became effective on June 7, 2023.

On April 7, 2023, our Board adopted our Amended and Restated 2013 Employee Stock Purchase Plan (the “A&R ESPP”), which was subsequently approved by our stockholders and became effective on June 7, 2023.

The A&R ESPP permits eligible employees to purchase shares of our common stock by accumulating funds through periodic payroll deductions.

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Under the A&R ESPP, eligible employees will be granted an option to purchase shares of our common stock at a 15 % discount to the lesser of the fair market value of our common stock on (i) the first trading day of the applicable offering period or (ii) the last day of each purchase period in the applicable offering period.

The Compensation Committee of our Board of Directors shall determine the duration and commencement date of each offering period, provided that an offering period shall in no event be longer than twenty-seven ( 27 ) months, except as otherwise provided by an applicable sub-plan.

The Compensation Committee of our Board shall determine the duration and commencement date of each offering period, provided that an offering period shall in no event be longer than twenty-seven ( 27 ) months, except as otherwise provided by an applicable sub-plan.

Upon approval of the A&R ESPP, the available share pool under our existing 2013 Employee Stock Purchase Plan was reduced, and we have reserved 4,000,000 shares of our common stock under the A&R ESPP.

As of December 31, 2025, there were 2,195,773 shares of common stock available for future issuance under the A&R ESPP.

2023 Equity Inducement Plan

On October 11, 2023, our Board approved and adopted our 2023 Equity Inducement Plan (the “2023 EINP”).

On the effective date of the 2023 EINP, 2,000,000 shares of our common stock were reserved for issuance and as of December 31, 2025, there were 1,575,489 shares of common stock available for future issuance.

The 2023 EINP permits the granting of non-qualified stock options and restricted stock unit awards.

The 2023 EINP terminates on the later of (i) October 11, 2033 or (ii) ten years from the last date that additional shares are added to the EINP by the Compensation Committee of our Board.

Stockholders' Equity

Share Repurchases

During the year ended December 31, 2025, we had no cash repurchases of our common stock.

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.

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.

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.

Share-based Compensation Expense

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During the years ended December 31, 2025, 2024 and 2023, we capitalized share-based compensation expense of $ 1.0 million, $ 4.9 million, and $ 3.3 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

In June 2024, March 2023, and March 2022, we granted PSUs to certain of our key executives.

As of December 31, 2025, we had a total of approximately $ 10.6 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 1.44 .

PSUs with Financial and Strategic Performance Targets

In June 2024 and March 2023 we granted PSUs to certain executives.

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.

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.

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.

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

In March 2021, we granted PSUs with market-based conditions to certain of our key employees.

The number of shares of our common stock that may be issued to settle these PSUs range from 50 % at the threshold level to 150 % at the maximum level of the 100 % target level of the award depending on the maximum average market value of the per share price of our common stock, for a period of 60 consecutive trading days, over a three-year performance period ending on the third anniversary of the date of grant.

No payout will be made for performance below the 50 % threshold level.

The market value of the per share price of our common stock must reach $ 123.81 , $ 148.58 , or $ 173.34 at the threshold, target, or maximum levels, respectively, for achievement of the award, which could result in issuance of 244,086 , 488,173 , or 732,260 shares of our common stock at each respective payout level.

These PSUs vest over a four-year period, subject to continued service over the requisite period, with the initial vesting of 50 % of the award occurring in March 2024.

The number of PSUs granted totaled 732,260 shares, which represents the maximum number of shares, and had a grant date fair value of $ 68.55 per share, determined under the Monte Carlo simulation approach described further below.

Based on the achievement of the performance conditions for the June 2024 and March 2023 PSUs, the final settlement partially met the target threshold, based on a specified objective formula approved by the Compensation Committee of the Board.

The June 2024 and March 2023 PSUs vest over either a one-year or three-year period.

During the years ended December 31, 2024 and 2023, the number of shares underlying the June 2024 and March 2023 PSUs totaled 693,750 and 565,341 , respectively, and each had a grant date fair value per share of $ 3.61 and $ 15.89 , respectively.

2025 PSUs with Market-Based Conditions

In November 2025, we granted PSUs with market-based conditions to our CEO and CFO.

The number of PSUs granted totaled 4,350,000 shares and had a weighted average grant date fair value of $ 0.62 per share.

There are four tranches for the PSUs with 1,087,500 shares underlying each tranche.

Each tranche requires the volume-weighted average per share price of our common stock for a period of 60 consecutive trading days to reach $ 1.88 , $ 2.19 , $ 2.50 or $ 2.81 , respectively, for achievement.

No payout will be made for performance below the first performance goal of $ 1.88 .

These PSUs have a performance period of three years and will vest based on achievement of the performance goals underlying each tranche with the initial vesting to occur in April 2027 for any of the tranches achieved at that date and final vesting occurring in October 2028 for any of the tranches not previously achieved, subject to continued service over the requisite period.

As of December 31, 2025, the market-based conditions have not been met.

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Expected Term .

The expected term for the awards is the performance period of three years .

The expected term is from the grant date to the end of the performance period.

Expected Volatility .

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Risk-free interest rate 3.57 %

Weighted-average grant-date fair value per share $ 0.62

Fair Value of ESPP

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Stockholder's Equity Activity

RSUs and PSUs Activity

RSU and PSU Activity

Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value

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We did no t grant any stock options during the years ended December 31, 2025, 2024, and 2023.

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.

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.

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.

federal and state deferred tax assets.

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.

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.

and state deferred tax assets.

The following table presents our (provision for) benefit from income taxes (in thousands):

There were no stock options exercised during the years ended December 31, 2025 and 2024 and the total intrinsic value of stock options exercised during the year ended December 31, 2023 was $ 0.2 million .

During the years ended December 31, 2025, 2024, and 2023, we recorded a provision for income taxes of $ 3.3 million, $ 148.7 million, and $ 32.1 million, respectively.

The provision for income taxes during the years ended December 31, 2025, 2024, and 2023 was primarily due to the foreign income taxes, the establishment of a valuation allowance against our United States federal and state deferred tax assets, and the federal and state income taxes in the United States largely driven by shortfall associated with equity compensation, respectively.

The following table presents our provision for income taxes (in thousands):

Years Ended December 31,

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Foreign ( 1,348 ) ( 3,704 ) 1,269

Total deferred benefit from income taxes ( 143,319 ) ( 26,575 ) 168,679

Total (provision for) benefit from income taxes $ ( 148,702 ) $ ( 32,132 ) $ 162,692

The following table presents our (loss) income before (provision for) benefit from income taxes (in thousands):

Total deferred provision for income taxes ( 1,348 ) ( 143,319 ) ( 26,575 )

Total provision for income taxes $ ( 3,279 ) $ ( 148,702 ) $ ( 32,132 )

The following table presents our (loss) income before provision for income taxes (in thousands):

Years Ended December 31,

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Foreign ( 8,987 ) ( 391,183 ) ( 10,840 )

Total (loss) income before (provision for) benefit from income taxes $ ( 688,366 ) $ 50,312 $ 103,946

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,

Total (loss) income before provision for income taxes $ ( 100,142 ) $ ( 688,366 ) $ 50,312

We adopted ASU 2023-09 on January 1, 2025 under the prospective method.

The following table presents the required disclosures subsequent to our adoption for the differences between our provision for 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 and amount of (loss) income before provision for income taxes (in thousands, except percentages):

Year Ended December 31, 2025

Dollars Percent

federal statutory tax rate $ 21,031 21.0 %

State and local income taxes, net of federal income tax effect (1)

Foreign tax effects

Withholding tax ( 1,641 ) ( 1.6 )

United Kingdom

Change in valuation allowance ( 3,391 ) ( 3.4 )

Other ( 357 ) ( 0.4 )

Other foreign jurisdictions ( 2,083 ) ( 2.1 )

Effect of changes in tax laws or rates enacted in the current period — —

Effect of cross-border tax laws

Foreign branch loss 3,934 3.9

Tax credits — —

Change in valuation allowance ( 12,937 ) ( 12.9 )

Nontaxable or nondeductible Items

Share-based payment awards ( 8,414 ) ( 8.4 )

Other 275 0.3

Change in unrecognized tax benefits — —

Other adjustments — —

Effective tax rate $ ( 3,279 ) ( 3.3 ) %

_____________________________________________________

(1) State taxes in Texas made up the majority (greater than 50 percent) of the tax effect in this category.

The following table presents the required disclosures prior to our adoption of ASU 2023-09 and presents the differences between our provision for 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 income taxes (in percentages):

Years Ended December 31,

Income tax at U.S.

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Foreign-derived intangible income 0.1 ( 5.2 )

Convertible senior notes — — 15.0

Other ( 0.1 ) 2.0

Total ( 21.6 ) % 63.9 %

The following table presents a summary of our deferred tax assets (in thousands):

The following table presents the required disclosures subsequent to our adoption of ASU 2023-09 for cash paid for income taxes, net of refunds received, by jurisdiction (in thousands):

Year Ended December 31, 2025

Other foreign jurisdictions ( 24 )

Total cash paid for income taxes, net of refunds $ 4,589

The following table presents a summary of our deferred tax assets and liabilities (in thousands):

Deferred tax assets:

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Property and equipment and intangible assets 26,193 15,947

Other items — 6,133

Gross deferred tax assets 335,390 318,568

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Deferred tax liabilities:

Property and equipment and intangibles assets $ — $ ( 2,621 )

Other $ ( 10,235 ) $ ( 11,396 )

Total deferred tax liabilities $ ( 11,396 ) $ ( 15,755 )

Net deferred tax (liability) asset

$ ( 812 ) $ 139,088

As of December 31, 2024, we have determined our earnings in India are not permanently reinvested.

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.

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.

For our remaining foreign subsidiaries, to the extent we can repatriate cash with no significant tax cost, we have determined those earnings are not permanently reinvested.

All other earnings have been determined to be permanently reinvested.

Net deferred tax liability $ ( 246 ) $ ( 812 )

Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain.

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.

During the years ended December 31, 2025, 2024, and 2023, the valuation allowance increased by $ 17.4 million, $ 267.8 million, and $ 4.0 million, respectively.

We regularly assess the need for a valuation allowance against our deferred tax assets.

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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.

Our earnings in India continue to not be permanently reinvested and we've recorded cumulative tax liabilities that would be incurred upon repatriation of such earnings of $ 6.2 million through December 31, 2025.

During the years ended December 31, 2025 and 2024, our subsidiary in India distributed $ 10.8 million and $ 23.0 million, respectively, to the United States, resulting in a remittance in withholding tax of $ 1.6 million and $ 3.5 million, respectively, which was included within cash flows from financing activities on our consolidated statements of cash flows.

As of December 31, 2025, the net tax expense accrued related to future repatriation of earnings is $ 1.1 million.

The determination of the future tax consequences of the remittance of these earnings is not practicable.

For our remaining foreign subsidiaries, to the extent we can repatriate cash with no significant tax cost, we have determined those earnings are not permanently reinvested.

All other earnings have been determined to be permanently reinvested.

As of December 31, 2025, we had net operating loss carryforwards for federal and state income tax purposes of approximately $ 243 million and $ 288 million, respectively, which will begin to expire in years beginning 2030 and 2026, respectively.

We also had net operating loss carryforwards for United Kingdom income tax purposes of approximately $ 144 million, which do not expire.

As of December 31, 2024, we had tax credit carryforwards for federal and state income tax purposes of approximately $ 12.7 million and $ 17.8 million, respectively.

As of December 31, 2025, we had tax credit carryforwards for federal and state income tax purposes of $ 13.6 million and $ 18.1 million, respectively.

The federal credits expire in various years beginning in 2038.

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Decrease in tax positions for prior year settlement — — ( 4,703 )

Decrease in tax positions for prior years due to statutes lapsing — — —

Increase in tax positions for current year 164 295 281

Change due to translation of foreign currencies — — ( 443 )

Ending balance $ 12,742 $ 12,708 $ 12,400

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Restructuring Charges

October 2025 Restructuring Plan

In October 2025, we announced a workforce reduction that resulted in a management approved restructuring plan.

As of December 31, 2025, we recorded $ 17.9 million of cumulative restructuring charges , primarily related to one-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statements of operations based on employees' job function, and facility exit costs related to the closure of our Santa Clara office, which were classified general and administrative operating expenses on our consolidated statements of operations.

The restructuring liability is primarily included within accrued liabilities on our consolidated balance sheets.

We estimate we will incur between $ 2 million and $ 3 million of additional restructuring charges over the next fiscal quarter and we expect the plan to be substantially completed by the end of fiscal year 2028.

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

Year Ended December 31, 2025

One-Time Termination Benefits Facility Exit Costs Total

Beginning balance

Restructuring charges

16,129 1,742 17,871

Restructuring payments

( 7,931 ) ( 48 ) ( 7,979 )

Ending balance

$ 8,198 $ 1,694 $ 9,892

May 2025 Restructuring Plan

In May 2025, we announced a workforce reduction that resulted in a management approved restructuring plan.

As of December 31, 2025, we recorded $ 30.2 million of cumulative restructuring charges , primarily related to one-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statement of operations based on employees' job function.

The restructuring liability is included within accrued liabilities on our consolidated balance sheets.

The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the second quarter of the fiscal year 2026.

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

Year Ended December 31, 2025

Beginning balance

Restructuring charges

Restructuring payments

Ending balance

November 2024 Restructuring Plan

In November 2024, we announced a workforce reduction that resulted in a management approved restructuring plan.

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.

As of December 31, 2025, we recorded $ 17.1 million of cumulative restructuring charges , primarily related to one-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statement of operations based on employees' job function.

The restructuring liability is included within accrued liabilities on our consolidated balance sheets.

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.

The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the by the first quarter of the fiscal year 2026.

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

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In June 2024, we announced a workforce reduction that resulted in a management approved restructuring plan.

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.

As of December 31, 2025, we recorded $ 11.0 million of restructuring charges, primarily related to one-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statement of operations based on employees' job function.

The restructuring liability is included within accrued liabilities on our consolidated balance sheets.

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.

The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the end of fiscal year 2026.

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

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Ending balance

Consolidated Balance Sheets Details

Other Current Assets

Other current assets consist of the following (in thousands):

Insurance loss recovery $ 1,190 $ 55,000

Restricted cash 575 956

Other 15,092 25,138

Other current assets $ 16,857 $ 81,094

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

Restructuring liability $ 15,592 $ 7,310

Taxes payable 11,331 11,319

Loss contingency 8,190 62,000

Current operating lease liabilities 4,279 5,625

Other 14,857 29,106

Accrued liabilities $ 54,249 $ 115,360

Consolidated Statements of Operations Details

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Interest income 8,815 28,050 37,411

Realized loss on sale of investments (2)

Realized gain (loss) on sale of investments (2)

752 ( 27 ) ( 2,106 )

Gain on sale of strategic equity investment (2)

Foreign currency impact on purchase consideration

Gain on sale of equity investment — 3,783 —

Other ( 101 ) 11 579

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_____________________________________________________

(1) For further information, see Note 8, “Convertible Senior Notes.”

(2) For further information, see Note 5, “Cash and Cash Equivalents, and Investments and Fair Value Measurements.”

(1) For further information, see “Note 8.

Convertible Senior Notes.”

(2) For further information, see “Note 5.

Cash and Cash Equivalents, and Investments and Fair Value Measurements.”

Employee Benefit Plan

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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.

Asset information is not regularly provided to our chief operating decision maker.

The following table presents information about our significant segment expenses and includes a reconciliation to net (loss) income (in thousands):

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(2) Other sales and marketing primarily consists of employee-related expenses, including share-based compensation expense, and depreciation and amortization expenses.

(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.

Our Skills and Other product line includes revenues from Chegg Skills, advertising services, print textbooks and eTextbooks.

The following table presents our total net revenues for our Subscription Services and Skills and Other product lines (in thousands):

(3) Other segment items consist of all interest expense, other income, and provision for income taxes.

The following table presents our total net revenues for our Chegg Skilling and Academic Services product lines (in thousands):

Years Ended December 31,

2025 2024 2023

Subscription Services $ 549,211 $ 640,520 $ 671,968

Skills and Other 68,363 75,775 94,929

Chegg Skilling $ 68,654 $ 73,959 $ 76,812

Academic Services 308,254 543,615 639,483

Total net revenues $ 376,908 $ 617,574 $ 716,295

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United States $ 106,918 $ 172,483

International 20,421 22,060

India 12,907 16,274

Other international 8,531 4,147

Total long-lived assets $ 128,356 $ 192,904

Subsequent Event

On February 13, 2026, we entered into an individual, privately negotiated repurchase agreement with a holder of our outstanding 2026 notes to repurchase $ 20.0 million in aggregate principal amount of the 2026 notes for an aggregate cash repurchase price of $ 19.4 million (the “Notes Repurchase Transaction”).

The Notes Repurchase Transaction was entered into in connection with our previously announced securities repurchase program and closed on February 20, 2026.

Following the closing, $ 33.9 million aggregate principal amount of the 2026 notes remain outstanding and $ 122.4 million remain available under our securities repurchase program.

The accounting for the Notes Repurchase Transaction is in process as of the issuance date of our consolidated financial statements and therefore we are unable to make any additional disclosures.

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.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk