Chegg (CHGG) 5 Aug 222022 Q2 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Chegg, Inc.

Second Quarter 2022 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Tracey Ford, Vice President of Investor Relations and ESG. ahead. go Please

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

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

both GAAP measures. present will we call, and financial the During non-GAAP

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

recommend also posted sheet, We website. in review you investor is which also our data IR the

Now will over turn to I the Dan. call

our good Thank quarter call. you, earnings with to to Chegg everyone second And had growing X% increasing a XXXX Services Chegg QX X.X quarter. for subscribers welcome revenue Tracy. year-over-year, the million

as to basis executing Our in conversion current of are front Study strong doing point the year-over-year. excellent XXX us experience, continued well Study we with job on in and upgrades retention a team opportunities our Chegg increase is our an seeing of over impact of the rate Chegg user as rates. constant Pack and

lifetime We and services Pack. are Study resulting ARPU well take future This rates in increases our value our growing customer for in very of strategy, our base. both for bodes on Chegg well high very record executing

Our newer we top the is as which Skills contributing Busuu, and to even in such now, our starting and scale, to future. bottom investments lines Chegg to so and are improvements more believe also

we so, we providing course employable. believe In with material, The their substantially pain them skills-based master we their high-quality, of big rates opportunities understand through. while learning students and you moderately and them and the we help which Chegg, doing ecosystem walk been journey. helping of solving and graduation for At improved students education We make to Given work. been ROI points work outcomes. them learning mental focused their have years the when always challenging learning more better raising better these on their say both they overall Chegg course understand students on course faculty. that of higher helps learn the improve reported student results to grades subjects health use they our their speak for better themselves, and XX% impacts as for Andy last and XX% course Chegg increasingly The trends, get year, are guidance will enrollment, few load positive have with

As lens the higher constantly the learning leader in the of particularly education, student. industry, Chegg monitoring is our through

We reasons catch are in number pace summer survey, year. recent degree trends of significant a their summer up the our a some most accelerate compared are a their significantly to on this are result data COVID the suggest students very the interesting of direct of experience and getting seeing taking to are year school new higher The taking last courses. them of number and as school

that Our pandemic. taking showed study courses the during previous students were easier fewer and

taking believe classes, endeavor students journey XX-month What the family in in that is balance better they increasingly are also course this to surprise summer, harder no STEM-B. thinking interesting specifically as a and is load, throughout order subjects it's work, about academic year. are we So that their

convenient In students fact, do summer extending can and increasingly now. They schools college this going so more XX% money can more of online, making surveyed are accessible. they make are school because

plan in it surveyed XX% they attend semester. education higher industry the particular. If enrolled higher in whole for school fall. is fall for indicated to good has trends the Chegg already student addition, in of said stronger have these summer enrollment In attendance school as students Historically, the a and or summer continue,

users time. with existing will US continued For are over priorities to season, value expand and the which believe retention our platform, we conversion increase back-to-school should improve customers, to new our TAM personalization of and rollout Learn our our Chegg, the the both in of which

also Uversity, the significantly learning student-facing expanding fall. side We this and of for students content, the tools out courses, are rolling

$X while service, decrease our Study in to the out pricing for in be a in US to bundle the value expect As our increases, an the our from same. moderate XX.XX a students subscribers price Chegg going conversion subscription. to has monthly expanding According of we will even we Chegg but in over because all relationship seeing include This mid-July, customers, our the see does to price only pricing number is several Pack tests initiated the remains Study value XX.XX increased students better. rolled increase Study new so base existing months, past our Chegg choosing to to power. In October. All other been minimal price we very initially

in Our more Pack, making is ultimate and which Study adding subscribe world. from practice professors non-STEM recently requesting, we and Uversity the Over both we been we bundle tests, attractive even are Uversity And believe in universities students the US added globally and to from it students have time, is in content why are previously subjects. on guides, content all have TAM the study STEM valuable to will expand new into have we goal formats we specifically such Chegg. the and of Uversity new providing and as not content the had Through some top that quizzes, Chegg the our offering.

more We verified from of about student have to our higher-education platform XX than seeing now and we there on the all institutions have are from educators, And will the percent of already already US. that in over excited to as developed outcomes, X,XXX impact The are student increase. as well have more clear, participate, continues professors benefits XXX,XXX almost been on who are very we as are Uversity excited traction and content professor educate personalize Uversity These user lead pieces world. how as the number students. our increased channel individualized textbooks, versus the And can we efforts pathways students dynamic their to and as personalization so learning the courses preferred for more we classes faculty needs, around distribution Chegg. leveraging does shifts experience The around more styles, are learning learning sources. learning their and we even to program a are the to and see to new

their more learning country, we our All subscriber America, of this goal ultimately also ensuring finding outcomes. and and optimal outside has Due should each been America. Outside North than testing, in retention, Chegg the relationship investments those increase serve is content to payments, base in relevant already price-to-conversion while high-quality infrastructure, rapidly that a improve is have students engagement, million to by and localized of North our our price to needs. serving

of academic our that have Saudi we which Australia, clear Mexico. made proving grow, need we biggest Guild. India, partnership near-term direct-to-consumer Korea, and why we Students momentum. Skills, excellent focus is and are positive partner efforts are support, Chegg through scaling is on an early with our just which opportunities, they be than our some experiencing include it in we Arabia, Turkey, the more to South are As Guild both increasing and

catalog our increase and through to opportunity to learner demand expand we continue see list. more meet direct-to-student our where they their customer We the Guild offering through as

and with skills resulting Data $X,XXX course Analytics, having our in-demand strategy per to positive and Security, Software $X,XXX in align market, take-rates and courses our between course. ranging include Engineering, Design/UX, strong most with our in most both with experiences courses programming prices the and are curriculum, Our completion. Cyber the Students is popular

to be platform corporations in We Guild years. are significant so training both in to working and desired plan very students, direct-to-students, learning partnerships, skills - market player into a biggest a with Busuu we including and through very Chegg future. Like skills the Skills and of is through high-quality by to excited coming the the large that Skills world believe some continue will our integrate in employer be business, Busuu by offering language companies our in our is the

audience the students. expands do so our of As needs

on health, such categories have extend Chegg now soft to we which through as Yahoo! and helping result, literacy, the a the distribution mental financial channels content in and launched can of high-quality, new, career As find brand. large recently and skills, you Chegg MSN,

these expect students XXXX. In with us partner to in to addition product categories you to leaders content, starting see our in offerings can with

be continued our first amazing again, work we resulted not tireless once the for teams. always, our recognition put great accomplished As without to this quarter in employees. possible has, last would Their have students work

for of proud Work well our few named for as Millennials. Best and Comparably being team, to Fortune’s as Over women, win we the months, one awards past diversity, entire Places leadership were to

for celebrate And employees will to So, want to our incredible over Andy. with turn I I that it recognition. this

high for earlier. Dan as Dan we school mentioned everyone. EBITDA QX than the quarter was the revenue coming good adjusted of for afternoon another solid was in above range, Chegg, historically experienced Thanks stronger and with summer have end and reasons

that While we results. you any prudent is encouraging sign, through and before guidance. the walk making this me material QX With to evaluate to it wait semester let backdrop, believe fall trends is second our the half change an

X% in to high was to revenue subscribers of margin came million, XX% of For resulting end Services $XX QX, in expectations million $XXX also as the total of driven Gross quarter. or at grew margin Chegg This X.X million. EBITDA during at was our growth adjusted the revenue by million. $XXX XX%

the to investments. favorable billion, either shareholders. us across giving the possible we the our as balance prices debt or Late $X.X have and with sheet, in at of flow securities back buy increase This strongest sheet, quarter by the flexibility an ended continued industry. we at our the billion during $X quarter of in balance announced operating stock cash a times of authorization education Looking and buyback outstanding strong model market dislocation, an free we margins have is one with the cash to

on Moving guidance. to

revenue are our Given for guidance QX the the strength and our results year. of adjusted increasing EBITDA of mid-point we the ranges

As $XXX XX% million, gross we Chegg $XXX to total EBITDA million, expect, adjusted adjusted with and $XXX a $XXX between and XX% now for margin. Services margin revenue or between between XX%, and and million, result, revenue and EBITDA XXXX between $XXX be $XXX

questions. We industry. $XX best-in-class In operating total model Chegg call between very turn brand, between education the sheet. between to $XXX that million, believe over to subside, $XXX with despite beloved due and XX% and headwinds about best With revenue the $XXX emerge in be and economy I’ll For expect, margin positioned adjusted inflation, a that, once million. QX you. are and $XXX and the for generates and operating between challenges the stronger your operator cash concerns well to XX%, even we gross a revenue EBITDA closing, and million, $XX Services our we in strong are to class offerings, these balance Thank we

begin The [ph] question from from Doug We first will Ennis is JPMorgan. the question-and-answer Instructions] [Operator session. now

see guide? the to there? could backdrop, is macro Doug. back is in Bryan Smilek taking feel the times embedded trying if is fall an on then risk semester trends provide enrollment some in macro encouraging just questions. positioned any It's my seem do It's of any downturn? thanks for are for Hey. economic just Chegg on considering you of in you color how that's And how early track However, and good And Just to

But historically, strong education is fall. usually we summer right we is, a session X guide goes there about the recession, strong enrollment which it Well, how a in won't are tried know signs just and up. schools very If is. we're question if X to then the risk hard that results what to your definitely strong, now too really enthusiastic because the get the higher is weeks for not seeing about early to fall than

So than we fall year. is that enrollment the no fall the assuming enrollment in in at are the moment last was different

being to we're just confident, great. wait we're take would advantage upswing for quietly being we aggressive positioned we're - an well seeing our ability But here. We're see be happens. and we're right We're going just So now. not like what but what that, and obviously of

The next ahead. Sheldon from question Stephen go is William Please from Blair.

in serve bundle It to another to to based and thanks. I you're like the the Chegg Pack. how you're content ask great as drive it maybe available about the just like of upon Study wanted Uversity traction to only proposition seems planning part getting essentially with Hey, and value content. commentary, to be sounds may leverage monetize, upselling

So opportunity non-STEM-B about right? platform? to And am the thinking the attract how you to that thinking are about I students broader

Yeah, question. great

percentage to that question, We're first yes, and of Pack, price 'XX. customers, we take over the those way the So the path. amazing we revenue but the base and to of exactly Study which really all going increase a July so that's test in which in moderate net with has at and itself take beginning far goal students August, seeing your very our traction, to increase base, to objective price that took along get be to it student the those honest bundle all monetize for generate to in to we're been first, that The the encourage the we're the even that higher was was, but from indicated what course, 'XX reveals think of seeing. you, is

each into the And would more worth bundle it they to content bullish took that. of if be more really make that It it it customer on we're part to about add attractive. XX% was the So next Uversity even makes base. the than

a and customers it's So have existing all then upgrade for the opportunity the valuable time. to to subscribed ultimately really bundle us everybody

initially. we're is So it that how using

are able Now we historically accumulating STEM solutions, and non-STEM. the is And question directing both content be for experts subjects, with the size of STEM TAM U.S. going is done. [ph] is million to provide which we equal in are for second step-by-step size the which That XX that that to that our category, we're non-STEM of another we solutions the the to after existing business, haven't students

a have amount of of we think we tremendous So growth ahead us.

back the ahead we come from a that of it's students X.X% up get when First, also year. of And want a this sign, hopefully summer don't That's that. to sign indicate last but good numbers is ourselves. and fast

us subscribe of this point. think And them Chegg to of a when others. are to class. I science, other at of kinds to history be episodic stay that this of people with have the STEM category would they're we million but majors them then in other classes, We whole political XX students, mistake forced about that another and when taking XX% take want they're which a their

future bullish area. the to to very our and will to then in our bundle. U.S. it directing we're accumulate non-STEM we encouraging in Uversity will the So start able Q&A be the expert by people and content using on be And take growth

step it. a this for forward big is really So are time to good take both us, and

question ahead. is next Needham. Please The from from go MacDonald Ryan

far? making to in Hi, a drive question underneath activity starting that perhaps the what progress Andy. Chegg been quarter. congrats just terms that existing Chegg on umbrella nice Day? within have Busuu Thanks cross-sell of the the made what for efforts Dan core - and my and thus And I'm taking curious you're on

Yeah, on also question. spot

you more we're with prepared to much talk we're much that in the very a imagine do for about So, where and strategy particularly to competitive it be we about a to more But we in imagine that that. U.S. can the detail to resources U.S. the after I have which create not model, progress really making good strategy, they're as not opportunity start U.S. that have the talk more to premium that our much we'll more the aggressive penetrated, have market, lot be it. effort the first major 'XX, will market And go talk relates today, to our but to about we'll to fall. and

Summer and of and everybody beginning it's will more in exciting. those we'll Europe, the is and it can end the So about be difficult fall you of as in post-COVID. But talk tests, with year then February. the the imagine, at traveling

ahead. Morgan Baer question from go The next from Stanley. Please Josh is

the for question. Thanks

positive Just about how QX ahead an yourself. is consensus, the really impact wanted the the the of should sure summer we wrong. want the at to is don't year had end maybe next just Like check get to QX, academic thinking to guidance, Maybe of impact about it was kind QX. and consensus missing school trends, on of into think part is

really like fit strong wondering QX? how summer school expectations trends the around Just with

then start remarks, the line, on detail. more Andy's you're I'll he very was even into leverage what line. bottom we get more Yes, think prepared But but much on have see in are top clear the taking I we seeing that Andy

confident we get or we're X know the we continue We're cautious lot fall So in being - as very that. profitable, to a weeks. in more we'll will we're scale, we believe just X because and about very and

the this So signs ahead All there's to good. point of are us no at reason get it. for

excellent not but because any moment. the other it's now trends if And at an this revenue upside so banking right prudent not we're But just experienced, we it's taking that continue, we're the

nailed Dan simple. It's it. Josh, mean, I Yeah. this really

we during summer. - the see are trends positive We seeing did

we prepared adjusting for our in I second the said QX. my half. are that expectations very clearly that not saw for our remarks You results in

on that least. to weeks from revenue see in at You away skis. getting Dan We're we're the a said, just not of ahead And about our few numbers line get the as a in sense come early November. for we'll And we make the any think is necessary what which next then to the fall that adjustments really are looks when we like. call,

is we are renewals prepared record as continues more But our and the build people who a to as to take just and grow, remarks, all sending very sure profitability because a – where absolutely rates, as know to continues the was This as Busuu cautious at increased point to be have and be weeks. our we because we just It's won't bundle, X conversions remain increased Speaker profitability. the its to year signal in skills X the high. next for one continue for about X in

from is Please ahead. question Brent from next go The Thill Jefferies.

Good afternoon, Dan.

was If you're a guess happened tweaks continue? you catch-up. just go that. how how that return follow-up. COVID signals that's you can into past to Can how that quick share like what and the oven seeing fall. back you're us indicate would little you. when just are Thank about you of confident why And that of What on this a may are summer as more think give the color the may made school summer as maybe the and If continue that, not you you've maybe reading that that year you a school, bit onetime actually years, reason the for a to this kind playbook summer some versus primary little into just - I what happen

but be Yeah. a very cautious changing anything optimistic, about November. very reason Again, us until to fair for questions and

students I - the should consideration couple So job people in take out. a of communicating there's haven't When really college best past. the market fall, that done into perhaps dropped market Last of type the the we higher even the in you think Chegg things that just understand that now, is left customers. a good fact majority thing is and Chegg to signs. the overwhelming that million which back though education, were The really positive fact we're really growth the X.X growing

History on fall. strong schools has shown that strong your summer equals specific Second, about school. question summer

X and use well, The second going remarks as which they takes and timing That already the projectable them was our are to regularly we high do - registered of summer. the them a we own or planning to our trying our are is number build that thing, when survey good believe products to to to accelerate such last reason summer and because asked in had Then that surveys think year. we're we prepared why. it the for the are asked, fall. That's we this we've and out an into asked And the new them register catch years. XX% that to things. continue took last the that to and And our said usually up, we what add percentage fall. overall year versus school It's them graduate and But question substantially it the for reasons means they're experiencing up. those students

us, if to classes what taking of semester in this excellent an taking of a over thinking as Which summer. the deeper And of in for means That we we you fewer relationships trend some means down with. holds mentioned consider it again, course remarks, is they're classes months have survey. As number us. by the the an of the I extension during that for prepared it's that what the the would and traditional trend,

good it then have say over back means course it's that or either we're we're people we the having funnel, are not stopped top seeing summer, just that and still the the the paused when historically renewing in of summer. would come So fall good who of

of subset long-term that's viewed spread college sense? before. if us value than they proposition classes the for are make traditional good a Does those the during the the good really business. summer, the year, That that XX-month number it over for about signs classes been our we've students a product course makes in larger and but really of fewer all of semesters, the as total So is

Thanks.

Please Celino next Markets. from question Jason from ahead. KeyBanc Capital The is go

One thanks. international. on for Dan Great,

that's efforts you're discounts, the you're it going? if promotions toggling price are that on tests or And with XXs how pricing the you're [ph] the looking in in or at How both. I'm doing if So those Curious those list geographies. going? doing select curious your

Yeah. Fair question.

So huge pricing. there's content, international all now students do. languages local learning went for business us lot beneficiary a out terms the COVID. growth of and the of were of which built allowed lot do we price is were price that over is, of end the to And at us course has a The of summer. a year, the in infrastructure when once those and to we're We the last test. the the tests for of the product, reality aligning the at And of though, local semester over lot

a So to more lot we have learning do.

we what not level six representative have conversion really we prepared we huge those with get We And places, interest. can where the to. we remarks, said in the have top-of-the-funnel at is of we're that feel

quarter, and use we optimal we So what will about the we of talk what were month. the to summer winter last that prepared now, could end in the where doing pricing. find learned we detail that more And be is we're greater and out that's in start of the at that testing really 'XX. and to is something But remember, fall really only

So not Europe the as are literally months nearly just they take robust the and fall as in where particularly as summer off.

a is want there. there, obviously we very those learning big really six what large funnel, we a growing But we're have we top-of-the lot but So to still have we're places And faster in doing. to lot interest grow have learned more what do.

will that trying but there. So confident get pricing, and figure we're we're right just to some right time, out take still we'll the very and messaging the

Please from go Securities. ahead. question Mike Grondahl from next is Northland The

summer guys. October? chance to how Any price increase you subs? in school maybe the maybe to then the And Hey, revenues you'll what $X added are or just strong going secondly, incrementally say communicate

Andy, you to… want

the I'll yeah. first one. take Yeah, Mike,

school, days school the actually and XX that is me, - guys end of summer ago. a a our see at even top about you part when beat we think range you had excuse the gave some I in - of talk you numbers, QX big we nice just

the to think saw and I a you indicator Dan, handle momentum the of QX do So school. some of want in next that type one? that's clear we

Yes.

done specific What what step new now October, picked So the next is a in which the and the customer messaging. and that's of no only very beginning we've there's of is heart price new for we sees every the finals. October is midterms and reason,

we there imagine. have so can our anyway, you always best renewal as percentages And

going So it's notified that's in also notice to happen. out been thoughtful. advance, to just have send very but testing We've we been which messaging, a them

It's a increase imagine. can you And else, what exactly value it's It's very than sweet. It's done. just is is messaging messaging So again, a testing, to different of short. historically going the messaging and keeps see. hasn't others very world it's just - our ways wait But the cautious But all going added. have in really here's very of or positive. it's no and smart anybody just to suggests Spotify be be it all so moderate, $X the being all evolving the patient our we're and and we've because that

are you all pricing Pack if new here's well. the that's now in your want product. And everything as the renewal to in Here Chegg here's assets Study upgrade,

some we'll upgrades. get so And

each market forecast that some have could. that in overall does for take Our of not bundle one in assumes period, of higher this revenue XXXX. them, the are all will it seeing new uptake loss signs rate then we again during the in renewals people bigger, both plus college dollar although the the customers, increase accretive percentage be very get the of And but the such second, of that any that we're a

big very given fact that October. for second just the this I all more win Mike, point, Dan set just information, in the just half renewals to Yeah. for It's with in new but starting moderate of customers recent we're and XXXX. is think recently your until year, I mean, think it I Dan's the for the the us really doesn't affect

from ahead. Pierson Please The James. Raymond next question is from Brian go

towards tittering wanted fund ask plans I drivers at mix and subscription other between consider look This on call How you just Chegg international with the Thanks. contributing the growth growth? as Hi. out potential, ARPU? should upside and is we what would Brian. for your to Jessica we key for ARPU offerings

Great Yeah. question.

don't that And out. break so you usually

that Chegg and company, and Chegg So post Skills remind Study map Busuu. which well includes business, textbooks tools let's people Services, and writing just the now Pack, Study, ads as our is Chegg as

take the that we ARPU is out if So Busuu, X.X% increase year-over-year already.

we built the why expected, time, drives it particularly it, Over Study of would Chegg than Study writing is more the going the So That's better working substantially. about business complicated percentage user we That times. think have why the increased it's our and bundles, retention has and put at more these up content, we we in the map are while That's as we've been core increased invest experience. people more cash Pack. [ph] and is of all taking along way is time of to which Chegg see ARPU bundle, amount the a on and you'll a XX.XX them XX.XX It's in moved been profit of to the result or what saying to and in of of objective. from tremendous addition bundle, flow. to free a XX.XX and our renewals XX.XX what

year, of model just have year free So we last and you what which sort I'll not next about again have we flow, cash top how the on Andy marks to works. but of expect for sort numbers, describe this already year,

we'll incremental And Busuu. if nearly the X% is increase plans have Busuu all annual seeing on to continue very that, But up do a are two-year so quite you down they nicely month. So we ARPU, fast, remove core in that that in profit. as a it as the of it's and years. and next subscription products going and internally brings $X are plans many low as over because

to cash sort thing. So to of Andy, the do flow want you add

Yeah.

- think flow, in I mean, the increase and where even flow. and have year. we we're in year, that we a range told, next Dan's to last free $XXX EBITDA-generating believe were to think year we've a could without our above of in getting I significantly. that be in free further strong company. And XX% deeply free many really this said million. there fairly that that is company cash flow certainly education at I the into going sector strong over for cash - this to We're we EBITDA for will be unique XX% our we're be numbers mean I range point, and alone, were cash years, actually range

year. in And that anticipate much we'll free more thing a in a big - stress is talked result, and flow next increase a can't we're in respect than it's talked Uversity critical jump again, CapEx will a enough that I the like one more - as unique our in is things the a That's I the and of we we have jump of content, year, I reminder mean I with generating this moderated a getting mean, so where - onetime - year Uversity, as about was in this industry here, - not I Next flow. cases, right? a to about generating very is there companies a we of said, free see, are cash but significant maybe this This many be we're, kind no. us just Once - cash mass EBITDA.

is Arvind question Ramnani from go Please next Piper ahead. Sandler. The from

question. for Thanks taking Hi. my

about the see are and are integration? the I you what topic And to second you months of to Just the what some is, X ask XX already still had looking has of to what particular, couple with in integrated to been what's same the kind Busuu And so? or part remaining? a already the wanted and over then seeing benefits of questions. next

what fully degraded? question, Yeah. first heard about part I'm but have of something not sure I your said the we you

you integrated with to I remaining? Busuu stages Because what's integration. the So have know this what and multiple

the remember, mid-January. in this takes time. we only So integration closed And

made So difficult. has traveling plus COVID very

realities of we're to So expected a those is fall acquired company. going and knew see we in systems. the as the What the our when we is lot personalization integration with integration we learn because going into Chegg

surveys of So Chegg existing we U.S. already that interest XX% an to and research customers or a through need all language. know learn over our have

as So to market them. be the return will able in they fall, begin to we to

add looking aggressive. all data, integrating can opportunities the bundle. then, mentioned more or as earlier, we upgrade you be as it I add we'll of to And and at the of bundle much are to are a as imagine. there the Second, to course, an And to

whereas has comes Busuu, Duolingo interested model. tremendous but one, a We have we that in, volume a of on amount in a that's day paywall premium have

States ownership space to expect could we under So competitive Busuu United on be much the our than the in in do our premium more own.

be So zero, to of high. almost Dingo inside use of Duolingo whereas U.S. inside our targeting when Busuu mean, very we'll - notify very was an going we Chegg that's low, is think I and move, recognition we exciting Chegg to the brand acquired for

turn people expect textbook, be we're do or of everybody and couple the renew who building abroad interested those more. and robust course in language. when it We over years the might to part they have opportunity rather because the why do personalize better know super the than is taking system, who's tables studying next That's actually engage we a and such of to exciting because which by personalization language

if growth, lot a So lot the and at it's we'll very hold to fun and if fall that's of a the we've do, they difficult good a got news see time, good of for and summer us. trends

The next Goldman go is Please ahead. Sachs. Eric Sheridan from question from

Thanks Number versus reinvesting would you would as view? questions. make move Thank interested help on to that think do about so one, sort a and up. what to spend financial what philosophically said of the platform? about with investments for a And in taking in Can about you beyond environment continue profit and like 'XX think refresh customer into the multiyear just you literacy the continuing soft of time for skills, you That real the how what I sort as think investing call skills, harvesting talk you was see one. just there be out little on business mental back per Can you of health. things do sort in number you. the moving those bit you what much

and you. meet questions, nice Phenomenal to Yeah.

lot luxury clear Chegg Pack, the and EBITDA lot has, high, a are high. is cash So space of flow. education standpoint, core Study flow has it from EBITDA that wrong. the extraordinarily me Study That Andy to in a and us correct extraordinarily free cash the down of products, produce But and nobody drop think gives Chegg in else the and I we he'll I'm our if which made and gross a margins are

year, last flow. free produced of million cash $XXX think I worth we

So that will better can pointed better imagine, be you out, as the ‘XX than you than year. can Andy this imagine year, and

a cash. So we have lot of

have balance $X.X worth We growing. billion cash on we're sheet, of also and the

our these Busuu prepared we don't break money, remarks same give and year, and that money is and of make in make less bigger, all get we money as loses they with those businesses investments. a the freedom to this really that's that lose out What why the in lose smart less So year, investment lot us we'll next put ultimately skills.

turn ability Guild our the think partners. ability partnership from to market own and audience to to what into the to So was our I the with and own market

the year, investment, All of get critical XXX,XXX in We the to those investments don't a plan already started mass spend near to me, pieces we critical and that incremental have Content. since made will a pointed that not year that this was only Uversity investments we'll out, need because those as that next and substantially wanted is very, content And of it. benefit Andy quickly this anywhere content content things October. already critical a we to very of willing now And of to of to we year the are content. have our in we we're have and to - mass adding we of because be mass get believe lot get be in

make like feel just more we It's we get that with and the company significant So even those investments, ability to we is going the to have are. investments, profitable.

more profitable. it to be a few a have we over So we're I'll more others Andy not model just holding is extraordinarily to do, which give turn that. back investments details on you that to profitable, have to

No, Dan, I nailed think you it.

invest bottom you about going going future that going things. Eric, the this, we're to leverage as is seek think the we're way growth we're line. I we two need going to to and to leverage do - our We're on think scale, in

the investments. when that you of a got scales, as and our at look have don't future we've out So of start room margin, line EBITDA leverage get top to we lot to

that pull and – again, business our profitability, inherently next the both believe of to to or line. the more talked lot optionality somewhat also area about years. and I investment go of the more profits over our and free do one flow, unique core where used we're word a we're once gives So way of us drops flow cash levers think this what bottom the in several And on can we that another, we cash but model unique I part we

know for and Yes. And I to the grateful company you're that. just - new because now, we're

So thank you.

many We last have presentation Content been getting the personalization years, and is in our with which we're both learn over years, technological of making now substantial our investment of platform, and investments which pricing Chegg, substantial and in many, localization international benefit in couple platform. over the

of benefit So now those get we to And exciting the and we're investing, have going been investments. really that's

to This closing over for like any remarks. concludes back the to I Dan turn session. conference would question-and-answer the

more thank them in the seen and everybody, education strong, call. everybody the signs complicated investments and incredibly for momentum excited all are We're skills language in are These times that study the we're and operator, who haven't we're take about them. making expansion higher our and in you, the and And through in in Thank then you, seeing industry, Uversity the to Yeah. but people joined business. while. people we a international of pack particularly getting in and

just out power we're exciting us, year. yet of to returning the million you shows that and very the digging the the are X.X strength revenue we're business. students half once, last for of and very big of excited hole the We which at which growth, second all of And a is about

and to And a at Study congratulations for joining. named Laurie. Chegg everybody, baby Chegg Study new thanks, So [ph] who Pack, Gears brand runs today

one you about thank be as well, in future So Anyway, more Chegg all. customer. that We'll touch. we're excited

today's conference call. concludes This

Thank lines. you participating, may a You and disconnect your for pleasant day. have