Chegg (CHGG) 9 Feb 212020 Q4 Earnings call transcript

Greetings. Welcome to Chegg, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. this being not, Please Instructions] conference recorded. is [Operator conference your Investor host, will for now Ford, to the turn of I Tracey over Vice Chegg. Relations President

You may begin.

on call call. Chegg’s Relations to Thank investor and Co-Chairperson We presentation our with our our to website Andy Officer. at quarter for earnings afternoon. Financial resources. and our call Investor these available A at also investor.chegg.com. you joining our make is Chief intend We use copy Good website XXXX chegg.com/mediacenter. on website. Dan available this post you and will on CEO; conference of announcements information our A media On Brown, routinely center of make Rosensweig, encourage press be today’s replay are website important along fourth of release

performance as risks based Before call, future we of including obligation to on financial statements We that that forward-looking could believe make course these the language actual of differ information events. cautionary assumptions point begin, Exchange quarterly other release XX, reasonable in as statements earnings and to to to today’s to as future October cause forward-looking to statements and factors in result update this the regarding you we those caution Form that material from forward-looking uncertainties that on statements. no a operating as materially report of like date. the Chegg’s I XXXX, during future or included SEC. events, out the are XX-Q that today statements are would described of undertake on our we in the the factors In company. be subject make the results These risk those refer in Any the filed new with will this filings we statement. particular, Commission well Securities the actual differ with We important we from to forward-looking materially you results to could forward-looking consider cause the and and

both measure. non-GAAP financial this we present will During call, GAAP and

reconciliation website Our GAAP results IR investor our and found investor.chegg.com. our in slide to press and found deck GAAP in earnings release can be non-GAAP

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increasingly from which and country. need working challenges sight our head increased on, It across lost was increased Tracey, support, million rising first in you, time category earnings there putting that device, committing anytime, are online local platform, by to students shift and quality a most organizations, for we had With was learning the outperformed are catalysts the XXXX a services Thank to time any was and transition didn’t the transition be know Last learning of was inevitable. actually our products the complicated new country an support, trend redefine But increased as massive pandemic, welcome anywhere more and X,XXX that major issues social everyone we it’s certainly assumption learners enthusiastic is and learning and critical It even world, meet more Like a meet irreversible and the but the tools. high we our on proud for We for over learning are and of access overnight. platform the students Chegg, centric. to offices incredibly to including for Chegg’s largest environment that we learn remote QX content many, operating food online we our school leaders a particularly $X are who has to closings. unprecedented employees an to and the are pandemic with is call. banks, never our subjects year community students’ success. COVID-XX. and out more Whenever navigating of the digital our student and as and been direct-to-student can we to online this there disruption, rising It believe also into who results, year to we always expectations. students would accelerated our these

objectives demand advantage and the those Thankfully, first detail in you us changed. will out to content employees, software a subscribers pandemic guidance the quarter, to results the global of the not key to within growth Our XXXX entered revenue a of the hit base that annual laid growth to in and start that and We was at goals company third, our XXXX students our scale. towards learners; on without provide about our of continue to investing students, reflect Andy meaningful XX%. of The of year, global provide to strength deliver support and our but infrastructure But with XXXX, that X.X raise and was world. shortly. take walk impact as a to years; it learning trends no were missing to our second, dramatic our importance financial XX%, to built with confidence year-over-year result, more technical online the opportunities services in core us of we for world. that for the learning leverage In which invest through last it gives of allow to entire world representing professional only to and to scale also the subscriber would three the online, a as idea continuing, academic our and create continue that growth At the saw growing brand, services beat. future we meet reach, Chegg’s greater on and priorities; we overwhelming increased millions continue in value opportunities, over around million faster are customer and total have in business opportunities able

did massive infrastructure, that our our has prompt our content, sharing in the the initiatives. on to account us accelerate and efforts of beyond. international However, our online to and and areas our in reprioritize XXXX including weren’t around expand the growth of set start at strong that We new the shift us to roadmap global world and learning believe year, continued expanded up XXXX for focus eCommerce decision

a was the As have that we This that think will higher that very content, support groups and gain. the as that customers dramatic it two is for disproportionally has and economy, re-skill is for their is of college peer distribution, clear that people number impacted million there the COVID-XX of investment. of benefit especially service about the are is economy, is clear far and the globally last permanent have lost to need the XX there primary will training here Chegg. tremendous we outperform needs education, shareholders. that right reality The own return consider job their are workforce students which their the a customer, what market. the as degree don’t people years year deliver the the need real impact The are constituents, emerging their the of that and when about and by large the has data, you more this re-skilled for a less been demand programs pandemic current on future the Skills-based channel education. majority the that their to now and that platform is accelerated of talking category and technology revealed and dramatically which trends companies jobs; skills-based serve a modern economies; on reaffirmed It be opportunity future a up-skilled students saw to of a age and have for their also get and for find greater expensive, college represents a

player expect higher but we this While the a in in This moment expand still and highly in education’s it is our going be to anything in we expect history business, early and our has building skills-based a footprint of learning smooth. been are space forward. disruptive to part prominent out

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also must believe the internet learning. that here of part acknowledge permanent education that higher a We is and is

students educators they re-imagine how that to ultimately, is result, teach, happen, curriculum suffer. be, will how and how it a must doesn’t to needs the assessed are the them, if that what As best and students support

personalized at is in education, we millions seriously. very building role As of year every technology That systems why learning we a to take transition experiences and scale. in learning this dollars leader invest content, support our

to enhance use launched to make efforts tool the learning hardworking this they tools our professors this limit technology including responsibility, Chegg exam support that and educators are students pandemic to we ability will We part students’ Honor ways in periods. and Shield, a due use millions with of working their continue who resources recently institutions find during the introducing our available of also we and accelerated and to as online free institutions to to experience. designated new and transition, area As

blind better reported months, two a found for understand study Chegg them they schoolwork. of used in Study their fact, XX% who than helps more students In that that Chegg

value over for to significant Chegg of be a as, see as in include offering, for in first skills there XXXX, this the enter create investment our our and investments even we a in we anticipate player, will and our a invest million Because industry significantly to As the growth be more in we by offerings to more than its we continue we opportunity popularity, Study activity and a increasing are in huge space. Pack, leader expanded expanding to priorities a overwhelming of believe this students lot time, we outside subscribers U.S. will have an international increased the

opportunities important to pandemic, it have year, and that, been despite have about I turn Andy. and confident priorities We Andy? I the more this us. over will ongoing ahead of with And never the ambitious

afternoon, outlook year revenue, and a EBITDA for XXXX, discuss XXXX. initial all exceeded any for We financial best I XXXX Dan, our fourth expectations Thanks, everyone. year as key adjusted good far the will Today our and for measure, our metrics. our company. By was increased and operating as as quarter well performance full

expansion to math international additional increased purchased MFA and technological to finally, future market to as in investments opportunities the raise account of and addition, our our such growth device creates which and skills, we Mathway investments capital, for advantage presence conditions we significantly such management sharing And favorable as forward In combat opportunities expand category. pulled growth. we future we in took

even our we expect in position the result, and a enter direct-to-student stronger we market. extend in As than leader such, to as as XXXX an XXXX, entered we position the

of XX% future our across XX% to XX% and investments as to of high we note, high continued increase in Chegg driven all to million, by better our $XXX which end XX% in exceeded million. year-over-year with our XXXX. grew our Chegg achieved margin of million, up our XX% growing revenue demonstrating on of for EBITDA increase and million, million QX increase over driven for Moving of year which a total adjusted their Services $XXX This leverage year-over-year, to growth understand QX the adjusted or $XXX revenue, $XX the resulted grew to $XXX XX% while the million $XXX We rely million resulted than $XXX Services performance, continued allowed which Chegg subscription ended subscription XXXX and adjusted in more of above Services subject model, matter. students QX, what subscriber revenue an XX% XXXX Chegg revenue in was on EBITDA all year. subscription growing services to XXXX. services margin. expectations This of to power for for almost we strong us of adjusted our This was all million, Subscribers EBITDA and to grew X.X EBITDA to an for help growth, on improving in with the total growth achieved

with earlier. year cash free billion. mentioned cash flow adjusted bolstered at year balance by investments EBITDA the This and or XX% of of we $X.X I $XXX during the sheet, million and Looking the the of capital ended was raise,

and We planned increased result increase to XX% expect purchases. XX% textbook a profitability of in cash EBITDA in as to to free XXXX, of flow a decrease adjusted

subscriber our XXXX. Based raising experienced exiting QX, the we for the guidance guidance. growth we to momentum and we seeing Moving in QX strength early on in are are

revenue slightly internationally will due We to Required expect be growth million the U.S. strong offset to increased XXXX. This continued surpass expect in subscribers and in where reduced contribution lower by Materials X we enrollments.

third-party margin despite and We are our increased fact surcharges from XXXX our experiencing XXX we Required provider. points, that increasing by Materials adjusted for logistics shipping are EBITDA basis the logistics

hope XXX the currently and we are of costing EBITDA into these semester, we basis continue improve, While fall points gross XXXX. this margin costs for forecasting will to adjusted us approximately

We a this incorporates for that investor deck provided the have guide seasonality change. in

growth. $XXX million be XX% with As million finally, and $XXX content to global million, adjusted for million such, to million, $XXX growing between revenue XX% $XXX total the be be for margin million XXXX, between to EBITDA we Services we between be and vast million, textbook and approximately majority and now excluding from with to $XX CapEx and that expect and $XXX million in $XXX expect our revenue gross XX%, $XX between purchases Chegg million, between fuels $XXX XXXX,

has online, $XX total on Chegg XX% expect million company. million we gross demand best margin as our $XXX adjusted and closing, The on company XX%, ago $XXX and revenue and foundation $XXX anticipated million and years between In of that million. $XX trends tens XXXX year and is we to affordable first. our QX needs. for and been million, built to the Services more between accelerated, and between have operator many and journey between resulted to educational of partner trusted EBITDA a for vision that, the with $XXX million, of skills-based of a turn executed services questions. We the students our their trusting thankful be as in company those have puts a on that couldn’t call globally on I’ll over to their students’ for students Chegg using your academic being our Chegg that who millions employees and Moving With

first Jeff Silber is your with Our Please Instructions] question. question with [Operator Capital BMO from Markets. proceed

really really much Thank are environment. stellar a in congratulate you and phenomenal. a guys me let The on tough so year you numbers

you You more the strength about expectations us from? are give come from bit years? little to students spoke international international over Can a a expect you the for do bit that few where coming and these Where to continue. color, them next

Look, Yeah. positive in our just excited people pretty early in continues, you to credit though team even I even are much. very It’s year about the despite think we are thank how and ‘XX the truly we pandemic and we’re It’s strong of the in because countries in. went we’re to and going we stronger -- is were a come And in pandemic out over in international the than we’re one already. going XXX frankly. interesting of reasons, this

Mideast, that frankly, we U.K. growth You speaking then, can first, imagine see from Asia. the English And They’re big baselines, ones first U.K. that Canada, we the seeing consistent incredible and different see Australia starting from third, started from countries Canada ones are in. then see second, incredible just we’re the all growth from we growth Australia, were but

growth it’s our bigger actually the terms say, be Collectively, the is of countries for what rates, -- the We international country the belief are in to so to best we for than would ability. bigger out us. staying over will of us domestic one it’s predict that But opportunity. opportunities bigger China the other our hard of we

pretty what license and we’re either for Spotify those we don’t than different or excited say that see content who a a create about follow So they the closely, us Netflix model to need have where content. or we

ubiquitous is because and across those business, is and unique some and model us answered our and are asked stem business stem is nuances by where the this we where get then content have nuances -- We world, afterwards. there

you extraordinarily efficient incredibly is the that’s model our see so in why to margins. continue high growth and And growth,

surprise now. a not we’re international So picking been it’s positive right and for us winners -- just real has

going of we’re -- all it. just We’re after

All about a this a some Thanks. follow might online a know month little Chegg to to question going negative offset been of to My ago, hear. support you issue product. way us forward? about topic, bit you how a students up right. that great abusing That’s about stories how launched different you’re Shield, exams. media going have and talk the product is guys to been there’s Honor I integrity the Can

fascinating. it’s Look, Yeah.

what lot in actually of traditional again, and think, media don’t Chegg do way traditional like the -- and And defending versus old were teach looking teach at prepare to the push didn’t What may develop internet I Often to reporters changes to technology. of Look, came online. it once from they’re stay. happening sort industry. tests those publishers. tried are it’s they say. not when generated of and not this, shove, here here -- home does actually happened questions we are woefully advancements for They in tools know gave by you They Technology the the the is understand question. media, auto tests They they their that even under to schools, a every take invested test or then that tests. to licensed unfortunately, is is the generated. online. don’t Many they auto own were

were so for And prepared not it. they

that’s week So it said, The from mean, school. That’s frankly, no in not, we built whether them not I of use had they a and or we in, ever not look, Chegg what was institutions. what every majority stepped students a because high they have overwhelmingly, [inaudible] us have overwhelming none we it overwhelming scalable have majority, for. want And support of their test, they for.

the we So data. much more why can get role much just they is on-demand and play too. to first use we which high we’re how about quality, shared said, the here, look, master to the a how affordable, But we they have research comfortable that subject, support that smarter with

we have base overnight, double, that and kinds outside And issues we U.S. saw that overnight so almost number the domestically, doubled just almost because the first the subscriber we not handle thing of people our of these is,

first thing. that’s So the

schools, contacted ever policy is, first we it if our put then thing. down back shifted we by That’s up do. got take it and then first we the we investigate So we and it

thing technology is we questions. asking actually that use multiple second The technology AI and build people blocks to from

at that. you There a submit other do all are test once. So sites that can’t

of the ones that because one not not for. that, We’re that’s does we’re what

So tool to that’s professor. any professor, test give scale the which and actually the AI for you that machine in submit ask. the or you either in they time. to back submit then it plan photos, now in that block you it us what what those learning use really want on blocked to robust, school that case server which ask you and can during is And said time the we we a can the we them launch delete to the question technology any text if specific pre-submit it segregated free question actually is do thing specific about. and to store want we was Honor be -- to their Honor tests provide happen that world all last ability we then that answered the a and look, did Shield, we and In is Shield, we asked then them then then And go tests of

who stepped that, we of fortunately, of within competitors. articles the we And the written So somebody works despite all was our one press because possibility days, for and saw did that up for one by XX this.

They years how But and So has schools to If what don’t the students, suffer. teach for don’t this in it’s it belief they technology. understands students don’t they to a our then I to here. the was going time internet continue think that everybody teach, is if play. how invest unexpected role realize assess that they an they re-imagine that been everybody

have including with and working hundreds we’re that and And reached we’re this of them. so Chegg institutions we’re out already pleased all already together, in

ending and But So to take never we’ll because about it’s battle we’re leaders going those be excited continue to do. what it on, things. a that’s

All Thanks much so color. right. the for Great.

Yeah. Thanks for the question.

proceed will Instructions] Sheldon your with next come William Blair. [Operator question Stephen question. And our from with Please

quarterly half pretty revenue the revenue but see just laid big guidance increased based particular, assumptions wanted to the to guys year, assume of XXXX, it year-over-year Great seems for on you second slowdown in for cadence, growth. the Thanks. ask Hi. in a to out, the about

I think assumed you’ve Materials. in Required noted headwinds some

help I’m maybe curious revenue the assumed you’re Thanks. growth? XXXX, So can about what as for Chegg second you in you’ve of the roughly frame expecting, just Services half segments between particular in two what

Yeah.

were dirty for So word first we me. is That’s aren’t a -- thing we segments. in just

as the seen they not, years the through lot fundamentally those we’ve the COVID months XXXX accounted forecast viewing process. that you believe is, So the we are went as a we education for open will it’s accelerated that we over some we looked aware The been different guidance -- our or than it said, thought as and trends they are the the the we segment. changed, But put be, strong that question call way to continue. for I it, is going at Dan has we when recognize as that we business going we November. in there. last to we think one we are have incorporated into appropriately. believe come XX and question were And are has that tail how uncertainties be we’ve together, so are and not talking about winds -- when literally we But our There

Yeah.

assuming I decent year-over-year? guess, is half you are I amount the so, Materials, guess, second within And in that down Required the a revenue

Not really.

business take we’ve then what both Required -- type a kind Required I of Materials. to of a back if and been kind If from go years that’s we’re for saying flattish you at, kind of you where Materials, is many mean,

last is It’ll so. is, a or growth significant $X type the business, expect declines. significant this plus If when is, owning or Ingram any were any us range they where we them. But went kind at Required the a year, plus million within years. from provide but it’s look textbooks, you or a of that we don’t the owning transition would don’t year of in guide had a seen net-net Clearly, it minus take the what prior we’ve and minus we of Materials expect

you. Thank Great.

Please And question proceed with Needham & Ryan with from Company. is our next question. your MacDonald

I first one Yeah. you. Good congrats excellent Dan, the for afternoon an quarter. and on guess,

an on You’ve or the front made sort any seeing you’re account a talk early the of differences Can from that just in now work looked activity in put paying of students technology might you since abusing have conversion sharing. lot from might been of account about to the start those sharing that that to technologies using for some have investment place? and or on solution, you investments returns

little But a Yeah. bit question. It’s news It’s the fantastic complicated to a answer. is all good.

library, So steal had who and people not And several just sharing result was investments quarters highlighted were resellers happens that that couldn’t I first, people room, blocked just we your mentioned, ask, a biggest we’re that we Andy, into success because people on campus. of just stealers the what that [ph] up opportunity anymore. because that we that I room, were But is, mean, Chegg moved students people them, ‘XX, of dorm do. three got U.S. sell just of were lot we the but the working what Andy for -- campus beginning great big accounts. not how planned the post-COVID ‘XX before are and of in and And technology. I actually to really on is that as number there’s articulated, focused proximity It people people also that do everybody, sharing, for And were them buckets a a your share the being by you category far it if we them that, them, different think, reality kind for technologies were they at there’s on there’s we in that’s share of off when or including campus, they the is the significant us being we which and us an we the people, headway. extraordinary see on and make There’s faster. -- people

can online, to a on don’t you come taking we two were even they of education based people that. learn. continue we impact them campus, in Chegg overwhelming for why proposition for it that in a So $XX.XX, they anytime and feel students. are we lot is weren’t night the or August what and higher lot because and it that value It October. day to though tell, the outcome one in still significant people They But and now, we back to And it see which it nonetheless, steps, Study, can a took get crazy to the growth of feel asked able one the it’s of saw because that’s they classes made in realize significant anymore. extraordinary just is helps share worth

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the extraordinary an people using Chegg as renewing for same investors, those they’re sharing the They’re because that So with buying our original at win I they’re before been the think frequently staying we’re and we They’re them, that I came as on it’s as same it long the now seeing were subscribers believe their say own. as it and rate. would count. engaged that as

good. So all that’s

so with the happy very far. we’re So results

continue you with additional want question, expect you ASU up structure students? to a for or announced Excellent. to sort with on more a to those partner be partnership to to do the forward? recently going of discuss you universities Thinkful, And the to follow of about Thanks. focused ask direct-to-student partnership then camps I Can offer look and for boot

It’s Yeah. great question.

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a number so been of And by contacted we’ve them.

kinds to path. whether partnerships is here. to a the degree. see years, a degree. and never accelerate testing student to they college get thinking these We’re which phenomenal ASU forward able been it has be is we Chegg are as their with not earning And is XX% colleges They to XX% on what that of ASU of to a want. of great partner us or university. go age see that about those a to learning for don’t talking get are

seize somebody’s and them opportunity. so And ASU got seize to that opportunity Chegg employable and make that

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But or Chegg. it’s clear places. is with not in too to an whether it’s this are say want very to and we institutions extend interested So see working that opportunity this other as model early a to

much. very Thanks Excellent.

Yeah.

Anmuth And our with next question proceed Please your is from Douglas JPMorgan. with question.

for the Thanks a elevated taking just the Great. with skills questions. XXXX. I priority to up follow want Dan, based, pandemic and on into obviously, top

Thanks. potentially core expand And of priority you about is do based to kind ranking M&A? organically could about think Just skills then college how you talk the curious relative to product guess, both more experience? if how going suite the more through I focused and

see phenomenal well. that’s how it. and globally. debt, is, that way what’s and trying XX clear lot support the around the is of is about the expanding Doug. cash want profitable been seeing is doing we’ve for And world’s It’s And pay population getting it we’ll and in academic business of themselves in a for themselves. and take of each every to It’s also question, on phenomenally world is kicks students flow are student what’s day empower accelerated off the the think mind that’s growth that modern to XX% and below clear to very of age role, the a more doesn’t It’s our That thinking right lot Yeah. of lot But years. growth. that about a

So that affordable. needs to be

so more And so the a highest and with so risk, allows take the greatest our to they it likely allows our us quality us view for of support learn on that and less and the is unfortunately that students financing students. have pass are do of students, and become don’t prices lower which to behalf institutions other do of methods to kind employable

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they So trust they us us. like and

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grow right at non-organically we an next opportunities to at things to quite right years make. returned and there’s that, our find asset the we and be And those opportunity investors the on they’ve if we’ve acquired, think the always if available. you handsomely we’ve And right so we’re a the -- like, organically I decision price, in few position that the And in positioned done. look are return that’s to we to do will to if think

to Honor just follow up And on Thanks. great. Shield. That’s with one

ahead. Go Yeah.

consumers I a toward directly Shield, with mean, is and basically, targeted but product with you’re working professors. and mean, this company, institutions historically, students a I DXC Honor

curious if those Just lines more see we’ll forward. going along

them push opportunity institutions, problems education and Yeah. which It’s No. own is, or Doug education, And really question. the but to one no fair of of professor use like no and there’s if to consistency. change education, millions of interesting blessings there’s the curriculum of up There’s higher though, their the force with higher X,XXX, to higher think It’s one of is rules. real they’re people about each what’s makes professors a technology. X,XXX made you

combat with hand-to-hand do professors. to each have actually You

at make to And that’s phone or it call we’re And or put a is opportunity, call, super work do me do use them they can because customer us, team they the SAT to group, they want the communicated go a which built anything. you base, many is, and can, we the direct-to-consumer it we’ve it student SAT, as chat now. treating to in list it. we want if we to to like through which as of easy then site -- of press. technology They They our can if we can can So look service, colleges. do they advocacy can

for education going like but specific from So we’re by really direct rather professor decision themselves, to each than a because profits no the it school school a we’re except make treating top can in higher to down.

Got it.

Okay. Very helpful. Thank you.

Yeah. Great questions.

is Instructions] question Baer Thank [Operator Please proceed next our Stanley. Morgan And from your question. you. with Josh with

these I Hi. on various sharing. the growth right these all levers the we’d all skills initiatives international, ask for Josh. of and let’s their peak on This longer view next model, be have There’s is contribution growth the now. to in bundles, to account Congrats should any [ph] Thanks. obviously taking a quarter. these Chris term -- the say, amazing four of on or Should the drivers? years two should wanted you on and

And we an home What’s the They is people that company, This were in company they start. that’s I the confusing sharing. that us. want are is or if Dan. irrelevant Chegg. and is that. say know immediate turn relevant I’ll Andy, are. We I the on inherent probably it to I’ll are a who think provide unbelievable numbers has because students stay reflect a service as that account impact stay on would domestically, there’s that to modeling think questions that. I over most had one not And completely

started Andy million have something ago So that’s that about and we we’ll it’s subscribers. estimating that over this talking year probably X the International, articulated, this non-U.S. one is as -- catches two we’re only years up first.

that market So Thinkful support It’s even right? that to of doing get. so things, and that, was of it’s How how pricing? than that’s been a a just content really, how really, incredible it’s small acquisition likely indication I to gives quickly it’s one an really What that’s needs? to to learning Skills How early. how do give two you experience -- think for large student? us works. And really that growing earlier well and the an the a us. sense is

customers very bundle, it early has only been and one bundle is and to through as that which how U.S., also exclusively been I think similar the how think, U.S. at surprises. new the looking inside we’ve existence. you much rate both expected take But outside pleasant a marketing So it and it been depends we have model. But on walk Andy, you’re very, can really the has to about really than higher our been we the in

of those the means in to renew. start that to And starting all years we’ll to come so actually reap benefit of

higher base, higher it’s base, newer renew of our a at high, will So percentage higher our very numbers. renewal than is which customer even

over time. builds So one that

now. we’re don’t explain all thrilled So anything have go of except I know how that to it to you don’t right to we know Andy, you, want to factors after if really add I that. to those

No.

that. think I mean, of think, and Dan, to be where as we we opportunity. nailed the allowed mean, company you versus truth I college-based has years a vastly where it. I academic us we’ve primarily expanded do when are U.S. where couple were side told just we about were today a ago,

got space. and right? super investments and added in other pace early then we’ve that, we on as factors fast a growth domestic Dan recently then early, skill So two those both at the already the to International, in more we’ve side that said, the very continues grow XXXX started

I when past our has think our our much is brighter I future So than pretty think past been darn about and good.

Got it. you. Thank

Thill is question question. with next from your proceed our And Jefferies. Please Brent with

you’ve little of bigger you tech, take is of some grown bottomline well. make growth where continue there to Dan, in bottomline point great and have you hit It’s topline have growth and growth pace brakes bit, pretty investments while extremely well, having and a you some that or kind as rare a Many pause. their asked, the can know. as cadence

curious… Just

Yeah.

Thank on thoughts overall your the trajectory? … you.

in we but very and in the on kind plumbing, in what’s declared question we and a do in Yeah. their would platform we made remarks, pricing. the and not and fair XXXX I to those things eCommerce significant prepared companies local that to of the ability employee obviously we were U.S., lose It’s which outside actually it just alluded kinds our is mean, the I still platform, AB sort XXXX over year of more base interesting that our it. planted questions. and time. analytics few testing These at of being have year investments all U.S., think a And any systems, to operator things we to do stopped ask is of of investment and the the did investing in do that do we for inside

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Andy to only fortunate there’s in and us growth nothing that’s The of I that now, and to we year handle not XXXX be technologically that to we very growth were over question -- in handle I’ll was so that of growth. able right for the level going rates, And do and us handle were one. of those QX because front it were let But -- this I the elevate we things. of and us not plan year few then companies weeks only and had we out but really comfortable we enough good. mean, you ‘XX lapping the that that even feel to to one our into there’s November courage that, the five saw kinds feel in give

we’re wall But of let rest So that other seeing question. see. not the think companies that handle I Andy the might

nailed in a it. And our mentioned stem stem. got college think, we’ve mean, Turkey, lots college earlier, student, it Dan stem is, I U.S. the whether I but in and model, doesn’t matter of model. of matter is mean, Yeah. of you’re kind a a Dan, mean, scalable I fact stem, students leverage the actually very I

in content. our from got model we our leverage of lot a So

And we will there’s very anywhere more model the so, the believe scale and topline from this We pace. -- to a see to topline think state leverage margin yeah, steady -- we continue the a at a lot we fast ourselves in close to continue point. perspective that don’t as at a we grow

the the I’m yeah, call, excited we’re, past last like like past future I commented than So been more about said, I much the really good. and has the on I --

Thanks.

your Please with question. next our KeyBanc question Jason Markets. with is from proceed And Capital Celino

Hey, ramp? taking X seasonality for for year, big my international of of products that’s of And this The should we price question. a are million sub the a How quickly, about then number. country? the adjusting maybe your guys. by Thanks end think you the

I’ll the… take

Thanks, Jason.

the take second I’ll Andy, part -- about the seasonality. take and will talk I first you then could

So…

Okay. Go it. Yeah. for

Yeah.

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we said degree, but we what think, are think So than be shape shall good will I cross larger that, see. even in and X it to think, that I will was, Andy million, we I

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a that’s thinking but work we’re about let Andy progress, bit how it. explain little of I’ll So a in

out Dan lives in right? of Australia I break. came and my just nailed they Yeah. their summer it, mean brother

world. the and Investor the very parts is a this the Relations is, net-net I’ve in mentioned remarks. this than I in U.S. a But is of just chart think, some rule prepared There reminder, different of the seasonality other the and which So deck. as

even correctly, is of recall I if in progress, it’s and slide. anticipate, all Dan -- XX, that slide it’s so think the that work said, like I in seasonality a all we’re included though that’s

that. reference So

you. Thank Okay.

question. Northland Securities. question next from our Please Grondahl with And Mike proceed with is your

can kind where your kind find a $XXX that’s of ex growth quarter. growth Yeah, us of $XX or you is million rough just just going CapEx way if guys. major any sort at And the to look Congrats you of driver? of ranked range sort million, give there major on of the driver textbooks by

and vast questions CapEx some got right? archived and and so invest are some in contracts I of Q&A, our mean, mean, that’s other we’ve expert things goes dollars majority had simple. our it’s the XX million where and and vast We’ve like I Yeah. on we over go. -- things Q&A A answered today of we’ve those but is the know, and that, majority of expert asked as real publisher XX% to Q&A. most actually expert platform the you obviously,

guys. Got it. at then Thanks, that. leave I’ll And it

Thanks, Mike.

your question from question. our Craig-Hallum is And proceed next with Capital Fuhrman Alex Group. with Please

was what sense great? maybe was Great. sense taking you that just and was question. just insight any about it a Thanks I a obviously, But little of wanted give us that from for tutors the lower perspective, can more to business will you contributing if tell can a Thanks. business, be in to decision us the business, can contributing of revenue was that margin. if a much very give what bit unwound. my you that about And ask why you us general

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support. so able academic were we questions real-time the tutoring is to do its has doing what is way Chegg in become answer questions. there, we So have XX And we’re robust, which it, over million the Study

We hours, at of under but have point. hour an SLA this an four most them of

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that’s online. that that for, what I is job they’re biggest talking to about because really and the making it’s and don’t the making is when it’s skill that is to consumer that students growth in are differentiators our a understand the nobody of that So better employable. that they earlier trying There’s scale were was students was were a to Remember, that of we use looking graduate, and to the charging generating exactly is charging a learn difference much a And a call number the to it. one a difference a have of which tutoring needs we revenue, in students we skills. business, have in than little. not number now course And button become click difference when to making are technology so minute. $X.XX you supportive just tutors the it And of redeployed we rates, you’re ability inside in doing now where job-based real-time those

generate So a more become do can get those of that is students But millions still robust, a of so kinds than lot It’s takes something do of for revenue. just imagine can it would Study we so access role. do much to sessions things. it we that Chegg -- of hundreds, faster more actually of that won’t to never and we

decision really made about the feel we it. why we So that’s good and

helpful. Great. That’s really Thank you.

Yeah.

is your with And from question. with Knoblauch Berenberg our Capital Brett question next Markets. Please proceed

the on and for quarter taking Congrats thanks question. guys. Hi, good my

Is there? look that mostly it? be now have a priority position. taste that number still it going the one position. if going where small expand that And on the would allocation guess, cash be you simple rather side plan the you that relatively acquisitions to is been You to priority, M&A year have ended the for I of capital further a the market? Would What is past your to with big Obviously cash forward?

Yeah.

stock do skills We or into and question. good earlier, areas, combined move include intentional, that’s have potentially where great right? structure area. I Dan capital either and areas we the yeah, our would mentioned in particularly inorganically can and organically other our there’s cash a So,

we it’s play not the gives golfer handle that. whether fairway to a this keeping our it, small to Having been look for said the -- call potentially will I do we continue do We while us just that, with -- we and is any or acquisitions, as that. way the large, and -- So ability us different. a our in I’ve

what when The the we’ve did shareholders. we or being of our other kind raise potentially a capital that buying this we was pre-fund in thing last and little of diluted were back outstanding the and is, of deep calling did we’re to some bonds money part a mentioned

we the that August. So was back the thing other we went reason in the that to out capital --

as financing dilution it as whether opportunities and cost our gives the So we’re flexibility us far ultimate to therefore or not future shareholders. reducing or

guys more account or ask for Is rate just if international in tried maybe any can you I way there. And that? regarding guys maybe put XXXX? you the we for of just that more for Should than revenues count growth Perfect. there international XX% one subscriber the out expect

Yeah.

X million the in least XXXX XXXX. about X million subscribers talked we or at again, once So, in subscribers

many breaking countries excuse at needless companies out and point Dan in scale. at this countries, to some significant said, is countries not But point growing of fast. those And like, important. It revenue -- have XXX we’re international say, me, extremely is time. We’re fairly this

much. it. Thanks Got Perfect. so

Eric question Capital with Street question. And Markets. proceed is Lake with Please your next from our Martinuzzi

Yeah.

calling about Just need you end headcount the XXXX. And support Chegg by growth you’re the the get of think finished at to growth then there. up Services XX% headcount will end Wondering the for of looking curious ‘XX, to the for hear where where ‘XX? that for to

Yeah.

the approximately during went in in when the We the exited years, development the growing worldwide, things U.S. device in of being middle some in international. the significant year. last and in, X,XXX outside of to technologies. we about call, as anticipate standpoint, the the think large headcount incrementally We talked made additions opportunity last to pulled management more and invest saw don’t pulled like a India from base the very employees we I that So we we significantly We up we Israel. that year, MSA -- some of contingent on

have lot in year. headcount this we And so they XXXX, those did -- that investment bigger of into XXXX us in I we in made made obviously, would making continue don’t as we a in XXXX. as investments But see

level it grow grows or just revenue say nowhere would of but near it at you doesn’t So all? the

grows, that margins you It Clearly, no, bps leverage. we’re increase our our a forecasting we big overall is cost in the structure headcount. XXX see and already see the part in in a model, of

So -- we’re that won’t grow certainly no. any anticipate don’t certainly grow faster it than will revenue,

Okay. Thanks.

And Sandler. with your Please proceed question. with Piper our Ramnani is question Arvind next from

My for first Thanks taking is congrats around and my question question a international, Hi. which quarter. exciting. on is terrific incredibly

unique international product. -- acquisition that’s to ask, mean, You what’s this of provided want of what to I in color international on some I or international. see of But to terms to customer you success? kind against an is win level anything you’re the angle unique competitors, enabling doing

it’s But you’re to it’s deep Look, know don’t competition. really and any hard unless question we great Yeah. this. in have a space, this

cash the growing two or and of as as have free profitability really in generate We all few increasing Nobody’s and a U.S. maybe very flow. lot nobody we our we’re are profitable very competition fast our little are, sheet one has balance people, at and

invested growing. circumstances, million for Q&A’s prices So do replicate we best raised to the to it’s in better our what to have XX XX hard even in years because our you’d already and expensive we the translation. over and we less something come already We’ve to and have up database under start ability do is haven’t and of in with

language translated any in ask can be can you of any any It So expert. language. to

our there And any on So country country of what for U.S. do are a are reaching in low the aren’t who then I by up most we them global to speed on we us that of including all continues competitors and it, it -- a makes basis, what I startups, really that any significance to coming bootstrap depth But the to ability such think, be we’re against scale different, of a the which charge the quality, price of is in out. have, expand. something

you’re that itself. content subject it’s on in, there’s more So a always whatever going builds effect to more subjects be network and and

earlier, Andy of which interesting, really about lot created the lot the a to people. a speaking that doing, what’s alluded So it it we’ve of is money to content and non-English spent years it’s and translating doing

not lot taking stem. people now the speaking people get a of the the people we’re are non-English speaking getting stem English and who to starting non-English speaking are get who goal and to is We’re first taking the

the let the our the the word much spend brand mean, don’t even a in the in across think I anywhere So that mouth world. We we’re world, collectively of great product. comprehensiveness, alone quality, price, now. advertising I

curriculum we’re -- is to most in it’s where most for ubiquitous five institutions. content the a very the publishers So be develop fortunate in almost who same of the position the It’s world.

other those countries So and move into on to just opportunity unique have have a we’re like we’re It’s to wheel do. the who capitalizing it. not companies reinventing

like looks become -- over it mean, portion bigger revenue? the could I Yes. Great. overall can conceivably even international medium-term of your Great.

It will.

there need then all a that to And you are need product And overall improve a speed overall really sort gets product. well from exciting. perspective, of you perspective you’re will Are from using of kind monetized at, of appropriately. skills do factors from pretty sort the Yeah. your of partnerships? course, to kind AI of really limiting resourced these kind tech strides been hire you Are perspective? analytics Great. some of of more moving any good have entering from tech you specialized making do tech your a That’s technology

resourced. But say every resource. over data fully you’re engineer, Look, scientist I CEOs never will think, say they’re every

and different data is, and onboard and don’t concepts that always new will the centralized, a we to don’t and the data, to what that of year, in would But you kinds you translation. call, sure So kind technologies a efficient season. focused I so countries, investments of to more we the of them and different different the our our local to is model I’ve always to really earlier of that made on is our the budget works need on algorithms have will this people things. need fast. we an different Others that have obviously, on lot that support them done languages significant make debate analytics, is And countries, in and mentioned standpoint, the fund I growing say need in things. of we’ve beauty team mean, different in those don’t ability those with -- effort be have code, different just international us make writing as do job you better good there extraordinary translation we’re even there’s always lot we on a a those from things. because invent work have be we And one science technology all AI,

luck XXXX. you Thank for good and Great. very much

for much the Thank very you question.

will remarks. reached Rosensweig now over have And the for end question-and-answer closing the Dan I we And of turn session. to the call

Yes. to Thank And keep execute. for complex consistent been It’s thank joining you we you, your everybody and focus just trying year for support. everybody, for us. and a really

And imagined. to that students I do a it before. we been more on it’s I that affect I’ve but all that to many the want that the of have, can have. are to The has great, of joining also ever than a many never been business you able and And realize is than because more we’ve what impact want we do us. bigger Chegg that now that thank about obviously than we employees global to that I ability is you we’re as excited is even Chegg able for scale ever honestly impact opportunity more beginning it’s drives important to to the think the do clear say and So so

tremendous diversity a priorities continue that to are can because moment leading a and are it’s Chegg company promise on And confident as with deliver built mission, our have acknowledge be they and celebrated and of the team. culture, they want them, to awards to and the thank I we take for industry We our building.

the months magazine and recognized from the for company by place been as diversity. a great culture they including best multiple received few have to Fortune last comparatively awards and work best Over

company belonging. celebrates unique and and innovation, an to a We committed perspectives are building culture fosters inclusive environment creates that of each our of

of the those have ahead of thank to is to journey on they’ve journey again may we’re the you this us many call. your are the to company. to all have each continue students, on just really great. look who Chegg that grateful and that all and on who for for and may quarter past to for with entire to Thank -- around been thank interest forward have you we been next they world journey. us you team support our our other turn part been of not all to joined and in to year Those and customers you you years, over did continued you the and the And talking all learning be it’s been excited who So to easy their a the for

So and healthy. thank stay you

This concludes today’s conference.

You your time. your you participation. may Thank lines this for at disconnect