CHEGG, INC 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk, including changes to foreign currency exchange rates and interest rates. Foreign Currency Exchange Risk Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Indian Rupee, Euro, and British Pound Sterling, and changes in the relative value of the U.S. dollar to these currencies may have an impact. We have experienced and will continue to experience fluctuations in net (loss) income as a result of transaction gains or losses related to remeasuring certain amounts that are denominated in foreign currencies. We accept foreign currencies from our international customers and our international revenues were 15%, 13% and 14% of total net revenues during the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, a portion of our operating expenses are incurred outside of the United States and are denominated in foreign currencies. Unfavorable fluctuations in foreign currency exchange rates may have an adverse impact on our total net revenues or total operating expenses, however, we do not believe a hypothetical 10% strengthening or weakening of the U.S. dollar against foreign currencies would have a material impact on our results of operations. To date, we have not entered into derivatives or hedging strategies to mitigate risk related to changes in foreign currency exchange rates and continually monitor our foreign currency exchange exposure. Interest Rate Sensitivity 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. 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 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 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. 49 Table of Contents ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34 ) 51 Consolidated Balance Sheets 54 Consolidated Statements of Operations 55 Consolidated Statements of Comprehensive (Loss) Income 56 Consolidated Statements of Stockholders’ Equity 57 Consolidated Statements of Cash Flows 58 Notes to Consolidated Financial Statements 59 50 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Chegg, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Chegg, Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedules listed in the Index at Item 15.2 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 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, 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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Convertible Senior Notes — Refer to Notes 2 and 8 to the financial statements Critical Audit Matter Description 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 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. 51 Table of Contents How the Critical Audit Matter Was Addressed in the Audit 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 March 9, 2026 We have served as the Company’s auditor since 2018. 52 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Chegg, Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Chegg, Inc. and subsidiaries (the “Company”) 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 (COSO). 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, 2025, of the Company and our report dated March 9, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /S/ DELOITTE & TOUCHE LLP San Jose, California March 9, 2026 53 Table of Contents CHEGG, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except for number of shares and par value) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 31,146 $ 161,475 Short-term investments 41,674 154,249 Accounts receivable, net of allowance of $ 156 and $ 190 at December 31, 2025 and December 31, 2024, respectively 15,604 23,641 Prepaid expenses 16,331 17,100 Other current assets 16,857 81,094 Total current assets 121,612 437,559 Long-term investments 12,392 212,650 Property and equipment, net 115,168 170,648 Intangible assets, net 6,041 10,347 Right of use assets 13,188 22,256 Other assets 9,613 15,491 Total assets $ 278,014 $ 868,951 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 3,258 $ 15,159 Deferred revenue 29,675 39,217 Accrued liabilities 54,249 115,360 Current portion of convertible senior notes, net 53,765 358,605 Total current liabilities 140,947 528,341 Long-term liabilities Convertible senior notes, net — 127,344 Long-term operating lease liabilities 15,205 18,509 Other long-term liabilities 2,239 1,776 Total long-term liabilities 17,444 147,629 Total liabilities 158,391 675,970 Commitments and contingencies (Note 10) Stockholders’ equity: Preferred stock, $ 0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2025 and December 31, 2024 — — Common stock, $ 0.001 par value – 400,000,000 shares authorized; 110,985,562 and 104,880,048 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively 111 105 Additional paid-in capital 1,145,371 1,114,550 Accumulated other comprehensive loss ( 32,997 ) ( 32,233 ) Accumulated deficit ( 992,862 ) ( 889,441 ) Total stockholders’ equity 119,623 192,981 Total liabilities and stockholders’ equity $ 278,014 $ 868,951 See Notes to Consolidated Financial Statements. 54 Table of Contents CHEGG, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Years Ended December 31, 2025 2024 2023 Net revenues $ 376,908 $ 617,574 $ 716,295 Cost of revenues 152,151 180,927 225,941 Gross profit 224,757 436,647 490,354 Operating expenses: Research and development 93,453 170,431 191,705 Sales and marketing 68,754 108,329 126,591 General and administrative 177,406 217,756 236,183 Impairment expense 2,000 677,239 3,600 Total operating expenses 341,613 1,173,755 558,079 Loss from operations ( 116,856 ) ( 737,108 ) ( 67,725 ) Interest expense, net and other income, net Interest expense, net ( 590 ) ( 2,590 ) ( 3,773 ) Other income, net 17,304 51,332 121,810 Total interest expense, net and other income, net 16,714 48,742 118,037 (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 Net (loss) income per share Basic $ ( 0.96 ) $ ( 8.10 ) $ 0.16 Diluted $ ( 0.96 ) $ ( 8.10 ) $ ( 0.34 ) Weighted average shares used to compute net (loss) income per share Basic 107,484 103,300 116,504 Diluted 107,484 103,300 128,569 See Notes to Consolidated Financial Statements. 55 Table of Contents CHEGG, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Years Ended December 31, 2025 2024 2023 Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180 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 (loss) income ( 764 ) 2,506 22,749 Total comprehensive (loss) income $ ( 104,185 ) $ ( 834,562 ) $ 40,929 See Notes to Consolidated Financial Statements. 56 Table of Contents CHEGG, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands) Common Stock Shares Par Value Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity Balances at December 31, 2022 126,474 $ 126 $ 1,244,504 $ ( 57,488 ) $ ( 70,553 ) $ 1,116,589 Repurchases of common stock ( 26,506 ) ( 26 ) ( 337,683 ) — — ( 337,709 ) 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 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 Balances at December 31, 2023 102,824 103 1,031,627 ( 34,739 ) ( 52,373 ) 944,618 Repurchases of common stock ( 2,116 ) ( 2 ) ( 16 ) — — ( 18 ) 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 Other comprehensive income — — — 2,506 — 2,506 Net loss — — — — ( 837,068 ) ( 837,068 ) Balances at December 31, 2024 104,880 105 1,114,550 ( 32,233 ) ( 889,441 ) 192,981 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 loss — — — ( 764 ) — ( 764 ) Net loss — — — — ( 103,421 ) ( 103,421 ) Balances at December 31, 2025 110,986 $ 111 $ 1,145,371 $ ( 32,997 ) $ ( 992,862 ) $ 119,623 See Notes to Consolidated Financial Statements. 57 Table of Contents CHEGG, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 2025 2024 2023 Cash flows from operating activities Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Share-based compensation expense 31,864 84,614 133,502 Depreciation and amortization expense 78,637 78,344 129,718 Deferred tax assets 1,348 143,319 26,575 Gain on early extinguishments of debt ( 7,838 ) ( 19,515 ) ( 85,926 ) Loss contingency — — 7,000 Impairment expense 2,000 677,239 3,600 Loss from write-offs of property and equipment 1,959 5,795 4,137 Amortization of debt issuance costs 500 2,147 3,156 Operating lease expense, net of accretion 3,641 5,864 6,079 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: Accounts receivable 8,439 7,771 ( 7,799 ) Prepaid expenses and other current assets 66,370 ( 41,732 ) 3,476 Other assets 21 1,130 10,829 Accounts payable ( 9,660 ) ( 12,376 ) 13,057 Deferred revenue ( 10,677 ) ( 15,885 ) ( 1,585 ) Accrued liabilities ( 59,723 ) 47,103 ( 7,342 ) Other liabilities ( 1,956 ) ( 7,785 ) ( 11,337 ) Net cash provided by operating activities 15,490 125,205 246,198 Cash flows from investing activities Purchases of property and equipment ( 28,123 ) ( 74,953 ) ( 83,052 ) Proceeds from disposition of textbooks — — 9,787 Purchases of investments ( 793 ) ( 170,950 ) ( 637,939 ) Proceeds from sale of investments 181,158 70,077 394,533 Maturities of investments 130,055 171,671 597,197 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 590 2,636 4,165 Payment of taxes related to the net share settlement of equity awards ( 2,600 ) ( 9,239 ) ( 16,440 ) Repayment of convertible senior notes ( 424,848 ) ( 96,520 ) ( 505,986 ) Proceeds from exercise of convertible senior notes capped call — — 297 Payment of withholding tax ( 1,621 ) ( 3,450 ) — Repurchase of common stock — ( 2,569 ) ( 334,806 ) Net cash used in financing activities ( 428,479 ) ( 109,142 ) ( 852,770 ) Effect of exchange rate changes ( 256 ) ( 1,025 ) 21 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 Cash, cash equivalents and restricted cash, end of period $ 33,411 $ 164,359 $ 137,976 See Notes to Consolidated Financial Statements. Years Ended December 31, 2025 2024 2023 Supplemental cash flow data: Cash paid during the period for: Interest $ 224 $ 449 $ 741 Income taxes, net of refunds $ 4,589 $ 8,085 $ 11,074 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,964 $ 7,243 $ 9,042 Right of use assets obtained in exchange for lease obligations: Operating leases $ 1,636 $ 10,108 $ 12,407 Non-cash investing and financing activities: Accrued purchases of long-lived assets $ 185 $ 5,850 $ 9,650 December 31, 2025 2024 2023 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 31,146 $ 161,475 $ 135,757 Restricted cash included in other current assets 575 956 — Restricted cash included in other assets 1,690 1,928 2,219 Total cash, cash equivalents and restricted cash $ 33,411 $ 164,359 $ 137,976 See Notes to Consolidated Financial Statements. 58 Table of Contents CHEGG, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Background and Basis of Presentation Company and Background Chegg, Inc. (“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 Our fiscal year ends on December 31 and in this report, we refer to the year ended December 31, 2025, December 31, 2024, and December 31, 2023 as 2025, 2024, and 2023, respectively. Reclassification of Prior Period Presentation 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. Note 2. Significant Accounting Policies Use of Estimates 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, 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, 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. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations. Principles of Consolidation The consolidated financial statements include the accounts of Chegg and our wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. GAAP. Cash and Cash Equivalents and Restricted Cash We consider all highly liquid investments with a maturity date of three months or less from the date of purchase to be cash equivalents. Our cash and cash equivalents consist of cash and money market funds at financial institutions, and are stated at cost, which approximates fair value. We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions. Fair Value Measurements We account for certain assets and liabilities at fair value. We have established a fair value hierarchy used to determine the fair value of our financial instruments as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. 59 Table of Contents Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value; the inputs require significant management judgment or estimation. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. 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. Investments 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 (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. We invest in highly rated securities with a weighted average maturity of eighteen months or less. In addition, our investment policy limits the amount of our credit exposure to any one issuer or industry sector and requires investments to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. We determine realized gains or losses on the sale of investments on a specific identification method and record such gains or losses as other income, net. 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, 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. We do not hold any investments valued with a Level 3 input. Accounts Receivable, Net of Allowance 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. Our estimate is derived using a variety of factors including historical collection and loss patterns, the current aging of accounts receivable, geographic and other customer-specific credit risk factors, and reasonable and supportable forecasts of future economic conditions which inform adjustments to historical loss patterns. The estimated allowance provision is classified as general and administrative operating expenses on our consolidated statements of operations. Accounts receivable that are deemed to be uncollectible are written off, net of expected or actual recoveries. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, and investments in accordance with our investment policy. We place the majority of our cash and cash equivalents with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments. Certain of our cash balances held with a financial institution are in excess of Federal Deposit Insurance Corporation limits. Our investment portfolio consists of investments diversified among security types, industries and issuers. Our investments were held and managed by recognized financial institutions that followed our 60 Table of Contents 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. No customers represented over 10% of net revenues during the years ended December 31, 2025, 2024 or 2023. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and content amortization. Depreciation and content amortization are computed using the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Content 5 years Internal-use software and website development 3 years Leasehold improvements Shorter of the remaining lease term or 5 years Furniture and fixtures 5 years Computers and equipment 3 years 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. We capitalize certain costs associated with software developed or obtained for internal use and website development. We capitalize costs when preliminary development efforts are successfully completed, management has authorized and committed project funding and it is probable that the project will be completed, and the software will be used as intended. Costs incurred prior to meeting these criteria, together with costs incurred for training and maintenance, are expensed as incurred. Costs incurred for enhancements that are expected to result in additional material functionality are capitalized and amortized over the estimated useful life of the upgrades. 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 from operations. 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 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. Goodwill is not amortized but rather tested for impairment at least annually, or more frequently if certain events or indicators of impairment occur between annual impairment tests. We first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. In our qualitative assessment, we consider factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events. If our qualitative assessment concludes that it is more likely than not that the fair value is less than the carrying amount, a quantitative assessment of impairment is performed. In the quantitative test, we compare fair value, estimated utilizing the income approach, based on present value techniques, to the carrying value. If the carrying value exceeds the fair value, an impairment loss is recognized in an amount equal to the excess, limited to the remaining balance of goodwill. Intangible Assets Intangible assets are amortized over their estimated useful lives. Intangible assets are tested for impairment at the asset group level at least annually or when events or changes in circumstances indicate that the carrying amount of such asset groups may not be recoverable. 61 Table of Contents Leases We determine if an arrangement is a lease at inception. 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. Lease agreements typically do not provide an implicit rate and therefore we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future minimum lease payments. Our incremental borrowing rate is estimated based on the estimated rate incurred to borrow, on a collateralized basis over a similar term as our leases, an amount equal to the lease payments in a similar economic environment. 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 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. Some of our leases include payments that are dependent on an index, such as the Consumer Price Index (CPI), and our minimum lease payments include payments based on the index at inception with any future changes in such indices recognized as an expense in the period of change. Where leases contain escalation clauses, rent abatement, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line operating lease cost over the lease term. ROU assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. 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. 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. Convertible Senior Notes, net Convertible senior notes, including the embedded conversion features, are accounted for under the traditional convertible debt accounting model entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets or the holders have the option to convert the notes at any time within twelve months after the reporting date; otherwise, we classify it as a long-term liability as we retain the election to settle conversion requests in shares of our common stock. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative; 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. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. In accounting for conversions of the notes, the carrying amount of the converted notes is reduced by the total consideration paid or issued for the respective converted notes and the difference is recorded to additional paid-in capital on our consolidated balance sheets. In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other income, net on our consolidated statements of operations. Revenue Recognition and Deferred Revenue We recognize revenues when the control of goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, we satisfy a performance obligation 62 Table of Contents 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 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. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract. For these arrangements that contain multiple performance obligations, we allocate the transaction price based on the relative standalone selling price (SSP) method by comparing the SSP of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions, and information about the customer. Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations. Some of our customer arrangements may include an amount of variable consideration in addition to a fixed revenue share that we earn. This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration. We estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period. For sales of third-party products, we evaluate whether we are acting as a principal or an agent. Where our role in a transaction is that of principal, revenues are recognized on a gross basis. This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as a cost of revenues. Where our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. 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. 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. Deferred contract costs are contained within other current assets on our consolidated balance sheets and are recognized if we expect to receive a future benefit from such costs. Deferred contract cost amortization expense is recognized consistent with the pattern of revenue recognition as cost of revenues on our consolidated statements of operations. Cost of Revenues 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. 63 Table of Contents Research and Development Expense 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, 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 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 Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs) with either a market-based condition or financial and strategic performance targets, and employee stock purchase plan (ESPP) is accounted for under the fair value method based on the grant-date fair value of the award. Share-based compensation expense for RSUs and PSUs with financial and strategic performance targets is measured based on the closing fair market value of our common stock, PSUs with a market-based condition are estimated using a Monte Carlo simulation model, and ESPP is estimated using the Black-Scholes-Merton option pricing model. We recognize share-based compensation expense on a straight-line basis for RSUs and ESPP and on a graded basis for PSUs. Share-based compensation expense is reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Vesting for all awards is subject to continued service over the requisite service period, which is generally the vesting period. Vesting of PSUs with a market-based condition is also subject to the achievement of certain per share price of our common stock targets and vesting of PSUs with financial and strategic performance targets is also subject to our achievement of specified financial and strategic performance targets. 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 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. We assess the achievement of financial and strategic performance targets on a quarterly basis and adjust our share-based compensation expense as appropriate. Income Taxes We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the tax benefit as the largest amount that is cumulative more than 50% likely to be realized upon ultimate settlement with the related tax authority. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Net (Loss) Income Per Share Basic net (loss) income per share is computed by dividing net (loss) income by the weighted-average number of shares of common stock outstanding during the period. Diluted net (loss) income per share is computed by adjusting net (loss) income for all related convertible senior notes activity, net of tax, and adjusting the weighted-average number of shares of common stock outstanding for all potential shares of common stock, including stock options, PSUs, RSUs, and shares related to convertible senior notes, to the extent dilutive. This assumes that all stock options and dilutive convertible shares were exercised or converted and is computed by applying the treasury stock method for outstanding stock options, PSUs, and RSUs, and the if-converted method for outstanding convertible senior notes. 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, 64 Table of Contents 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 The functional currency of our foreign subsidiaries is the local currency, and our reporting currency is the U.S. Dollar. Adjustments resulting from the translation of foreign currencies into U.S. Dollars for balance sheet amounts are based on the exchange rates as of the consolidated balance sheet date. 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 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. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted 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. GAAP. 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 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 65 Table of Contents 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 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 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 . ASU 2023-09 requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid that meet a quantitative threshold. 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 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”. Note 3. Revenues Revenue Recognition 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 Change in 2024 2025 2024 2023 $ % $ % 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, 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 The following table presents our accounts receivable, net, contract assets, and deferred revenue balances (in thousands, except percentages): December 31, Change 2025 2024 $ % Accounts receivable, net $ 15,604 $ 23,641 $ ( 8,037 ) ( 34 ) % Contract assets 6,536 7,027 ( 491 ) ( 7 ) Deferred revenue 29,675 39,217 ( 9,542 ) ( 24 ) 66 Table of Contents 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. Note 4. Net (Loss) Income Per Share The following table presents the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts): Years Ended December 31, 2025 2024 2023 Basic Numerator: Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180 Denominator: Weighted average shares used to compute net (loss) income per share, basic 107,484 103,300 116,504 Net (loss) income per share, basic $ ( 0.96 ) $ ( 8.10 ) $ 0.16 Diluted Numerator: Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180 Convertible senior notes activity, net of tax — — ( 61,694 ) Net loss, diluted $ ( 103,421 ) $ ( 837,068 ) $ ( 43,514 ) Denominator: Weighted average shares used to compute net (loss) income per share, basic 107,484 103,300 116,504 Shares related to convertible senior notes — — 12,065 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 per share because including them would have been anti-dilutive (in thousands): Years Ended December 31, 2025 2024 2023 Shares related to stock plan activity 3,786 7,206 8,442 Shares related to convertible senior notes 2,069 9,234 — Total common stock equivalents 5,855 16,440 8,442 67 Table of Contents Note 5. 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 (in thousands): December 31, 2025 Fair Value Level Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 16,942 $ — $ — $ 16,942 Money market funds Level 1 14,204 — — 14,204 Total cash and cash equivalents $ 31,146 $ — $ — $ 31,146 Short-term investments: Corporate debt securities Level 2 $ 41,549 $ 125 $ — $ 41,674 Long-term investments: Corporate debt securities Level 2 $ 12,290 $ 102 $ — $ 12,392 December 31, 2024 Fair Value Level Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 28,716 $ — $ — $ 28,716 Money market funds Level 1 132,759 — — 132,759 Total cash and cash equivalents $ 161,475 $ — $ — $ 161,475 Short-term investments: Corporate debt securities Level 2 $ 113,968 $ 157 $ ( 29 ) $ 114,096 U.S. 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 $ 133,516 $ 736 $ ( 78 ) $ 134,174 U.S. treasury securities Level 1 78,405 97 ( 26 ) 78,476 Total long-term investments $ 211,921 $ 833 $ ( 104 ) $ 212,650 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 the sale of our investments (in thousands): Years Ended December 31, 2025 2024 2023 Realized gain $ 813 $ 16 $ 346 Realized loss ( 61 ) ( 43 ) ( 2,452 ) Total realized gain (loss) $ 752 $ ( 27 ) $ ( 2,106 ) 68 Table of Contents The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity (in thousands): December 31, 2025 Adjusted Cost Fair Value Due within one year $ 41,549 $ 41,674 Due after one year through three years 12,290 12,392 Investments not due at a single maturity date 14,204 14,204 Total $ 68,043 $ 68,270 Investments not due at a single maturity date in the preceding table consisted of money market funds. Equity Investment In July 2022, we completed an equity investment of $ 6.0 million in Knack Technologies, Inc. (Knack), a privately held U.S. based peer-to-peer tutoring platform for higher education institutions. 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. 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 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 2026 notes refer to "Note 8. Convertible Senior Notes.” Note 6. Property and Equipment, Net The following table presents our property and equipment, net balances (in thousands): December 31, 2025 2024 Content $ 351,416 $ 381,629 Internal-use software and website development 42,677 67,612 Leasehold improvements 2,827 8,207 Furniture and fixtures 1,127 3,346 Computer and equipment 1,949 2,953 Property and equipment 399,996 463,747 Less accumulated depreciation ( 284,828 ) ( 293,099 ) Property and equipment, net $ 115,168 $ 170,648 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. 69 Table of Contents Note 7. Goodwill and Intangible Assets Goodwill The following table presents the changes in the carrying amount of our goodwill balance (in thousands): December 31, 2024 Beginning balance $ 631,995 Impairment expense ( 635,391 ) Foreign currency translation adjustment 3,396 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. Accordingly, we determined that there were indicators of impairment and a quantitative assessment was necessary. In the quantitative assessment, we estimated the fair value of our reporting unit utilizing an income approach, based on the present value of future discounted cash flows, which is classified as Level 3 in the fair value hierarchy. Significant estimates used to determine fair value include the weighted average cost of capital, growth rates, and amount and timing of expected future cash flows. As a result of the quantitative assessment, we determined that goodwill was impaired as the fair value of our reporting unit was less than the carrying value. 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. Intangible Assets The following table presents our intangible assets balances (in thousands, except weighted-average amortization period): December 31, 2025 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Accumulated Impairment Foreign Currency Translation Adjustment Net Carrying Amount Developed technologies 80 $ 106,703 $ ( 67,335 ) $ ( 29,369 ) $ ( 3,958 ) $ 6,041 Content libraries 60 12,230 ( 12,230 ) — — — Customer lists 35 34,190 ( 32,892 ) — ( 1,298 ) — Trade and domain names 52 16,213 ( 13,343 ) ( 2,493 ) ( 377 ) — Total intangible assets 67 $ 169,336 $ ( 125,800 ) $ ( 31,862 ) $ ( 5,633 ) $ 6,041 December 31, 2024 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Accumulated Impairment Foreign Currency Translation Adjustment Net Carrying Amount Developed technologies 80 $ 106,703 $ ( 63,029 ) $ ( 29,369 ) $ ( 3,958 ) $ 10,347 Content libraries 60 12,230 ( 12,230 ) — — — Customer lists 35 34,190 ( 32,892 ) — ( 1,298 ) — Trade and domain names 52 16,213 ( 13,343 ) ( 2,493 ) ( 377 ) — Total intangible assets 67 $ 169,336 $ ( 121,494 ) $ ( 31,862 ) $ ( 5,633 ) $ 10,347 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 intangible assets and a recoverability test was necessary. In the recoverability test, we determined 70 Table of Contents 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. Significant estimates used to determine fair value include the growth rates and amount and timing of expected future cash flows. 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. The following table presents the estimated future intangible assets amortization expense (in thousands): December 31, 2025 2026 3,831 2027 1,776 2028 407 2029 27 Total $ 6,041 Note 8. Convertible Senior Notes In August 2020, we issued $ 1.0 billion in aggregate principal amount of 0 % convertible senior notes due in 2026 (2026 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. 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, 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, 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. The carrying amount of the extinguished notes was $ 64.9 million resulting in a $ 7.4 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. 71 Table of Contents The following table presents the net carrying amount of the notes (in thousands): December 31, 2025 December 31, 2024 2026 Notes 2025 Notes 2026 Notes 2025 Notes Principal amount $ 53,860 $ — $ 127,906 $ 358,914 Unamortized issuance costs ( 95 ) — ( 562 ) ( 309 ) Net carrying amount $ 53,765 $ — $ 127,344 $ 358,605 The following table presents the total interest expense recognized related to the notes (in thousands): Years Ended December 31, 2025 2024 2023 2026 notes: Contractual interest expense $ — $ — $ — Amortization of issuance costs 192 620 1,035 Total 2026 notes interest expense $ 192 $ 620 $ 1,035 2025 notes: Contractual interest expense $ 90 $ 443 $ 621 Amortization of issuance costs 308 1,527 2,121 Total 2025 notes interest expense $ 398 $ 1,970 $ 2,742 Capped Call Transactions 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. As these transactions meet certain accounting criteria, they are recorded in stockholders’ equity as a reduction of additional paid-in capital on our consolidated balance sheets and are not accounted for as derivatives. The fair value of the capped call instrument is not remeasured each reporting period. The cost of the capped call is not expected to be deductible for tax purposes. Note 9. Leases 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 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. 72 Table of Contents The following table presents the future minimum lease payments and reconciliation to total operating lease liabilities (in thousands): December 31, 2025 2026 $ 4,795 2027 4,393 2028 3,439 2029 1,867 2030 2,163 Thereafter 5,854 Total future minimum lease payments 22,511 Less imputed interest ( 3,027 ) Total operating lease liabilities $ 19,484 Note 10. Commitments and Contingencies 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 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. On March 1, 2023, Plaintiff Shiva Stein, derivatively on behalf of Chegg, filed a stockholder derivative complaint in the Court of Chancery of the State of Delaware (Case No. 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. 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. (JPMC) asserted a demand for repayment by the Company of certain investment proceeds received by the Company in its capacity as an investor in TAPD, Inc. (more commonly known as “Frank”). JPMC seeks such repayment pursuant to certain provisions in the existing Support Agreement between JPMC and the Company that was entered into in connection with JPMC's acquisition of Frank. JPMC has alleged fraud on the part of certain former Frank executives regarding the quantity and quality of its customer accounts. 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. 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. 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 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, 73 Table of Contents inclusive, against Chegg and certain of its current and former officers in the United States District Court for the Northern District of California (Case No. 5:21-cv-09953), alleging that Chegg and several of its officers made materially false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as amended (the Exchange Act). On September 7, 2022, KBC Asset Management and The Pompano Beach Police & Firefighters Retirement System were appointed as lead plaintiff in the case. On December 8, 2022, Plaintiff filed his Amended Complaint seeking unspecified compensatory damages, costs, and expenses, including counsel and expert fees. On September 26, 2024, the parties participated in an in-person mediation and reached a settlement in principle to pay $ 55.0 million wherein the Company denies any and all allegations of fault, liability, wrongdoing, or damages. On November 6, 2024, Plaintiffs filed a motion for preliminary approval of the settlement. 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. Additionally, we record an insurance loss recovery up to the recognized loss contingency when realization is probable. Related to the above matters, as of December 31, 2025, the net impact of contingent liabilities less the related insurance loss recovery is $ 7.0 million. For those matters upon which we have sufficient insurance coverage, we have recorded contingent liabilities within accrued liabilities and the loss recovery from insurance within other current assets on our consolidated balance sheets. We are not aware of any other pending legal matters or claims, individually or in the aggregate, which are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. Our analysis of whether a claim will proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty. Nevertheless, defending any of these actions, regardless of the outcome, may be costly, time consuming, distract management personnel and have a negative effect on our business. In the ordinary course of business and for certain of the above matters, we are actively pursuing all avenues and strategies to resolve these matters, including available legal remedies, remediation and settlement negotiations with the parties. An adverse outcome in any of these actions, including a judgment or settlement, may cause a material adverse effect on our future business, operating results or financial condition. Note 11. Guarantees and Indemnifications We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. We have a directors’ and officers’ insurance policy that covers our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited. We believe the fair value of these indemnification agreements is immaterial. We have not recorded any liabilities for these agreements as of December 31, 2025 and 2024. 74 Table of Contents Note 12. Common Stock We are authorized to issue 400 million shares of our common stock, with a par value per share of $ 0.001 . The following table presents the shares of our common stock we have reserved for future issuance: December 31, 2025 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 Shares available for grant under the 2023 Equity Inducement Plan 1,575,489 Outstanding stock options 58,175 Total common shares reserved for future issuance 20,477,377 Stock Plans 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. On June 6, 2023, the date on which the 2013 Plan expired, all remaining shares available for grant under the 2013 Plan were cancelled, and we will not make any additional grants under the 2013 Plan. 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. 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 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. The A&R ESPP is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. 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 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. 75 Table of Contents Note 13. 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, all of which were retired immediately. Share-based Compensation Expense The following table presents total share-based compensation expense recorded (in thousands): Years Ended December 31, 2025 2024 2023 Cost of revenues $ 503 $ 1,786 $ 2,256 Research and development 6,812 28,044 44,103 Sales and marketing 2,174 7,466 9,524 General and administrative 22,375 47,318 77,619 Total share-based compensation expense $ 31,864 $ 84,614 $ 133,502 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, 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 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. 76 Table of Contents 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. Fair Value of 2025 PSUs with Market-Based Conditions We estimate the fair value of the PSUs using a Monte Carlo simulation approach, which utilizes the fair value of our common stock based on an active market and requires input on the following subjective assumptions: Expected Term . The expected term is from the grant date to the end of the performance period. Expected Volatility . The expected volatility is based on the historical average volatility of our stock price over the expected term. Expected Dividends . The dividend assumption is based on our historical experience. To date we have not paid any dividends on our common stock. Risk-Free Interest Rate . The risk-free interest rate used in the valuation method is the implied yield on the U.S. treasury zero-coupon issues, with a remaining term equal to the expected term. The following table presents the key assumptions used to determine the fair value of the awards: Expected term (years) 2.95 Expected volatility 80.62 % Expected dividends — % Risk-free interest rate 3.57 % Weighted-average grant-date fair value per share $ 0.62 Fair Value of ESPP Under the ESPP, rights to purchase shares are granted during the second and fourth quarter of each year. We estimate the fair value of each right to purchase shares using the Black-Scholes-Merton option-pricing model, which utilizes the fair value of our common stock based on active market and requires input on the following subjective assumptions: Expected Term . The expected term for rights to purchase shares is six months . Expected Volatility . The expected volatility is based on the average volatility of our stock price over the expected term. Expected Dividends . The dividend assumption is based on our historical experience. To date we have not paid any dividends on our common stock. Risk-Free Interest Rate . The risk-free interest rate used in the valuation method is the implied yield on the United States treasury zero-coupon issues, with a remaining term equal to the expected term. 77 Table of Contents The following table presents the key assumptions used to determine the fair value of rights granted under the ESPP: Years Ended December 31, 2025 2024 2023 Expected term (years) 0.50 0.50 0.50 Expected volatility 105.68 % - 122.96 % 60.95 % - 85.39 % 55.79 % - 109.39 % Dividend yield 0.00 % 0.00 % 0.00 % Risk-free interest rate 3.81 % - 4.29 % 4.44 % - 5.40 % 5.24 % - 5.41 % Weighted-average grant-date fair value per share $ 0.44 $ 0.90 $ 3.62 Stockholder's Equity Activity RSU and PSU Activity Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value Balance at December 31, 2024 7,386,965 $ 10.58 Granted 13,335,528 1.11 Released ( 7,931,184 ) 5.47 Forfeited ( 2,750,301 ) 12.06 Balance at December 31, 2025 10,041,008 $ 1.56 The weighted-average grant-date fair value of RSUs and PSUs granted during the years ended December 31, 2025, 2024, and 2023 was $ 1.11 , $ 4.24 , and $ 14.58 , respectively. The total fair value of RSUs and PSUs vested as of the vesting dates during the years ended December 31, 2025, 2024, and 2023 was $ 7.9 million, $ 26.1 million, and $ 45.3 million, respectively. ESPP Activity There were 811,545 , 859,302 and 454,533 shares purchased during the years ended December 31, 2025, 2024 and 2023, respectively, at an average price per share of $ 0.72 , $ 3.05 and $ 8.10 , respectively, with cash proceeds from the issuance of shares of $ 0.6 million, $ 2.6 million and $ 3.7 million, respectively. Share-based compensation expense related to ESPP was $ 0.4 million, $ 1.5 million, and $ 2.5 million during the years ended December 31, 2025, 2024 and 2023, respectively. Stock Option Activity Number of Stock Options Outstanding Weighted-Average Exercise Price per Share Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance at December 31, 2024 182,076 $ 5.74 1.17 $ — Forfeited ( 123,901 ) 6.09 Balance at December 31, 2025 58,175 $ 5.00 0.42 $ — 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 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 . 78 Table of Contents Note 14. Income Taxes 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, 2025 2024 2023 Current income taxes: Federal $ 372 $ ( 234 ) $ ( 2,460 ) State 257 ( 1,128 ) ( 3,064 ) Foreign ( 2,560 ) ( 4,021 ) ( 33 ) Total current provision for income taxes ( 1,931 ) ( 5,383 ) ( 5,557 ) Deferred income taxes: Federal — ( 122,057 ) ( 26,210 ) State — ( 17,558 ) ( 1,634 ) Foreign ( 1,348 ) ( 3,704 ) 1,269 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, 2025 2024 2023 United States $ ( 91,155 ) $ ( 297,183 ) $ 61,152 Foreign ( 8,987 ) ( 391,183 ) ( 10,840 ) Total (loss) income before provision for income taxes $ ( 100,142 ) $ ( 688,366 ) $ 50,312 79 Table of Contents 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 U.S. federal statutory tax rate $ 21,031 21.0 % State and local income taxes, net of federal income tax effect (1) 304 0.3 Foreign tax effects India 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. 80 Table of Contents 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, 2024 2023 Income tax at U.S. statutory rate 21.0 % 21.0 % State, net of federal benefit 2.9 11.6 Taxes on foreign earnings 1.7 0.7 Share-based compensation ( 2.5 ) 39.3 Non-deductible expenses — ( 2.5 ) Effect of flow-through entities 12.5 — Goodwill impairment ( 17.1 ) — Tax credits — 0.8 Change in valuation allowance ( 40.1 ) 4.2 Settlement of unrecognized tax benefits — ( 8.0 ) Foreign-derived intangible income 0.1 ( 5.2 ) Other ( 0.1 ) 2.0 Total ( 21.6 ) % 63.9 % 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 Federal $ — State 95 Foreign India 3,201 Spain 1,317 Other foreign jurisdictions ( 24 ) Total cash paid for income taxes, net of refunds $ 4,589 81 Table of Contents The following table presents a summary of our deferred tax assets and liabilities (in thousands): December 31, 2025 2024 Deferred tax assets: Research and experimental expenditures capitalization $ 82,418 $ 102,382 Net operating loss and credits carryforwards 112,376 80,413 Accrued expenses and reserves 31,973 25,039 Share-based compensation 455 3,414 Convertible senior notes 161 1,790 Goodwill 81,814 89,583 Property and equipment and intangible assets 26,193 15,947 Gross deferred tax assets 335,390 318,568 Valuation allowance ( 325,401 ) ( 307,985 ) Total deferred tax assets $ 9,989 $ 10,583 Deferred tax liabilities: Other $ ( 10,235 ) $ ( 11,396 ) 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. 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. In performing our assessment, we consider both positive and negative evidence related to the likelihood of realizing our deferred tax assets. 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, 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. The state credits do not expire. Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitations due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions. Such annual limitations could result in the expiration of the net operating losses and tax credit carryforwards before utilization. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense. As of December 31, 2025, there are no accrued interest and penalties related to uncertain tax positions. 82 Table of Contents We file tax returns in U.S. federal, state, and certain foreign jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryforwards, all of the tax years since inception through tax year 2025 remain subject to examination by the U.S. federal and some state authorities. Foreign jurisdictions remain subject to examination up to approximately five years from the filing date, depending on the jurisdiction. United Kingdom income tax remains subject to examination by the HM Revenue & Custom for all tax years due to net operating loss and credits carryforwards. The following table presents the reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties (in thousands): Years Ended December 31, 2025 2024 2023 Beginning balance $ 12,708 $ 12,400 $ 16,953 Increase in tax positions for prior years — 13 — Decrease in tax positions for prior years ( 130 ) — ( 131 ) Decrease in tax positions for prior year settlement — — ( 4,703 ) Increase in tax positions for current year 164 295 281 Ending balance $ 12,742 $ 12,708 $ 12,400 As of December 31, 2025, the unrecognized tax benefits of $ 12.7 million would not affect the effective tax rate, if recognized. The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement. We believe that the amount by which the unrecognized tax benefits may increase or decrease within the next 12 months is not estimable. Note 15. 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. 83 Table of Contents 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 30,184 Restructuring payments ( 23,921 ) Ending balance $ 6,263 November 2024 Restructuring Plan In November 2024, we announced a workforce reduction that resulted in a management approved restructuring plan. 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. 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): Year Ended December 31, 2025 Beginning balance $ 3,915 Restructuring charges 2,458 Restructuring payments ( 6,235 ) Ending balance $ 138 June 2024 Restructuring Plan In June 2024, we announced a workforce reduction that resulted in a management approved restructuring plan. 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 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): Year Ended December 31, 2025 Beginning balance $ 3,395 Restructuring charges 1,026 Restructuring payments ( 3,964 ) Ending balance $ 457 84 Table of Contents Note 16. Consolidated Balance Sheets Details Other Current Assets Other current assets consist of the following (in thousands): December 31, 2025 2024 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): December 31, 2025 2024 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 Note 17. Consolidated Statements of Operations Details The following table presents the details of other income, net (in thousands): Years Ended December 31, 2025 2024 2023 Gain on early extinguishment of debt (1) $ 7,838 $ 19,515 $ 85,926 Interest income 8,815 28,050 37,411 Realized gain (loss) on sale of investments (2) 752 ( 27 ) ( 2,106 ) Gain on sale of equity investment — 3,783 — Other ( 101 ) 11 579 Total other income, net $ 17,304 $ 51,332 $ 121,810 _____________________________________________________ (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.” Note 18. Employee Benefit Plan We sponsor a 401(k) savings plan for eligible employees and their beneficiaries. Contributions by us are discretionary and participants may contribute, on a pretax basis, a percentage of their annual compensation, not to exceed a maximum contribution amount pursuant to Section 401(k) of the IRC. During the years ended December 31, 2025, 2024, and 2023, matching contributions totaled $ 2.7 million, $ 4.6 million and $ 4.9 million, respectively. 85 Table of Contents Note 19. Segment Information Our chief operating decision maker is our Chief Executive Officer who makes resource allocation decisions and reviews financial information presented on a consolidated basis. Accordingly, we have determined that we have a single operating and reportable segment and operating unit structure. 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): Years Ended December 31, 2025 2024 2023 Net revenues $ 376,908 $ 617,574 $ 716,295 Less: Cost of revenues 152,151 180,927 225,941 Research and development 93,453 170,431 191,705 Paid marketing expenses (1) 33,275 55,381 57,351 Other sales and marketing (2) 35,479 52,948 69,240 General and administrative 177,406 217,756 236,183 Impairment expense 2,000 677,239 3,600 Total segment expenses 493,764 1,354,682 784,020 Other segment items (3) 13,435 ( 99,960 ) 85,905 Net (loss) income $ ( 103,421 ) $ ( 837,068 ) $ 18,180 _____________________________________________________ (1) Paid marketing expenses consist primarily of online advertising and marketing promotional expenditures. (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 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 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 The following table presents our total net revenues by geographic area (in thousands): Years Ended December 31, 2025 2024 2023 United States $ 320,291 $ 537,605 $ 616,359 International 56,617 79,969 99,936 Total net revenues $ 376,908 $ 617,574 $ 716,295 86 Table of Contents The following table presents our long-lived assets by geographic area (in thousands): December 31, 2025 2024 United States $ 106,918 $ 172,483 India 12,907 16,274 Other international 8,531 4,147 Total long-lived assets $ 128,356 $ 192,904 Note 20. 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. 87 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.