Revenues

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues, most significantly the revenue share we earn from our print textbook partners, being recognized at the point in time when print textbooks are shipped to students.

The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):



	Three Months Ended March 31,				Change
	2020		2019		$		%
Chegg Services	$	100,359	$	75,292	$	25,067	33	%
Required Materials	31,231		22,117		9,114		41
Total net revenues	$	131,590	$	97,409	$	34,181	35

During the three months ended March 31, 2020 and 2019, we recognized $17.5 million and $12.4 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each reporting period. During the three months ended March 31, 2020 and 2019, we recognized an immaterial amount of previously deferred revenues recognized from performance obligations satisfied in previous periods. During the three months ended March 31, 2020, we recognized $12.3 million of operating lease income from print textbook rentals that we own. The aggregate amount of unsatisfied performance obligations is approximately $35.8 million as of March 31, 2020, which are expected to be recognized into revenues over the next year.

Contract Balances

The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages):



					Change
	March 31, 2020		December 31, 2019		$			%
Accounts receivable, net	$	6,493	$	11,529	$	(5,036	)	(44	)%
Deferred revenue	35,753		18,780		16,973			90
Contract assets	4,482		3,531		951			27

During the three months ended March 31, 2020, our accounts receivable, net balance decreased by $5.0 million, or 44%, primarily due to timing of billings and seasonality of our business. During the three months ended March 31, 2020, our deferred revenue balance increased by $17.0 million, or 90%, primarily due to increased bookings for our Chegg Study service and eTextbook service driven by the seasonality of our business as well as from print textbooks that we own that are recognized ratably rather than immediately. During the three months ended March 31, 2020, our contract assets balance increased by $1.0 million, or 27%, primarily due to payment arrangements for Thinkful.