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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025
or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________
Commission file number 001-36180

CHEGG, INC.
(Exact name of registrant as specified in its charter)

Delaware |  | 20-3237489
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

3990 Freedom Circle
Santa Clara, CA, 95054
(Address of principal executive offices)
(408) 855-5700
(Registrant’s telephone number, including area code)

Title of each class | Trading symbol(s) | Name of each exchange on which registered
Common stock, $0.001 par value per share | CHGG | The New York Stock Exchange

•Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
•Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨
•Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☐ | Accelerated filer | x
Non-accelerated filer | ☐ | Smaller reporting company | ☐
Emerging growth company | ☐ |  |

•If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
•Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
•As of May 5, 2025, the Registrant had 106,570,452 outstanding shares of Common Stock.

Table of Contents

|  | TABLE OF CONTENTS |  |
|  |  |  | Page
|  | PART I - FINANCIAL INFORMATION |  |
Item 1. |  | Financial Statements (unaudited): |  | 4
|  | Condensed Consolidated Balance Sheets - March 31, 2025 and December 31, 2024 |  | 4
|  | Condensed Consolidated Statements of Operations - for the Three Months Ended March 31, 2025 and 2024 |  | 5
|  | Condensed Consolidated Statements of Comprehensive Loss - for the Three Months Ended March 31, 2025 and 2024 |  | 6
|  | Condensed Consolidated Statements of Stockholders' Equity - for the Three Months Ended Ma r ch 3 1, 202 5 and 202 4 |  | 7
|  | Condensed Consolidated Statements of Cash Flows - for the Three Months Ended March 31, 202 5 and 202 4 |  | 8
|  | Notes to Condensed Consolidated Financial Statements |  | 9
Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 21
Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk |  | 29
Item 4. |  | Controls and Procedures |  | 29
|  | PART II - OTHER INFORMATION |  |
Item 1. |  | Legal Proceedings |  | 30
Item 1A. |  | Risk Factors |  | 30
Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds |  | 30
Item 5. |  | Other Information |  | 31
Item 6. |  | Exhibits |  | 32
Signatures |  | 33

Unless the context requires otherwise, the words “we,” “us,” “our,” “Company” and “Chegg” refer to Chegg, Inc. and its subsidiaries taken as a whole.
Chegg, Chegg.com, Chegg Study, EasyBib, the Chegg “C” logo, and Busuu are some of our trademarks used in this Quarterly Report on Form 10-Q. Solely for convenience, our trademarks, trade names and service marks referred to in this Quarterly Report on Form 10-Q appear without the ®, ™ and SM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. Other trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.
2

Table of Contents
NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations and results of operations are forward-looking statements. The words “believe,” “may,” “will,” “would,” “could,” “estimate,” “continue,” “anticipate,” “intend,” “project,” “endeavor,” “expect,” “plan to,” “if,” “future,” “likely,” “potentially,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as supplemented by the risks described under "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect.
Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
3

Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CHEGG, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for number of shares and par value)
(unaudited)

| March 31, 2025 |  | December 31, 2024
Assets |  |  |
Current assets |  |  |
Cash and cash equivalents | $ | 44,105 |  |  | $ | 161,475 |
Short-term investments | 44,188 |  |  | 154,249 |
Accounts receivable, net of allowance of $121 and $190 at March 31, 2025 and December 31, 2024, respectively | 28,549 |  |  | 23,641 |
Prepaid expenses | 14,514 |  |  | 17,100 |
Other current assets | 78,395 |  |  | 81,094 |
Total current assets | 209,751 |  |  | 437,559 |
Long-term investments | 38,093 |  |  | 212,650 |
Property and equipment, net | 144,971 |  |  | 170,648 |
Intangible assets, net | 9,271 |  |  | 10,347 |
Right of use assets | 21,479 |  |  | 22,256 |
Other assets | 15,204 |  |  | 15,491 |
Total assets | $ | 438,769 |  |  | $ | 868,951 |
Liabilities and stockholders' equity |  |  |
Current liabilities |  |  |
Accounts payable | $ | 16,812 |  |  | $ | 15,159 |
Deferred revenue | 45,150 |  |  | 39,217 |
Accrued liabilities | 109,070 |  |  | 115,360 |
Current portion of convertible senior notes, net | — |  |  | 358,605 |
Total current liabilities | 171,032 |  |  | 528,341 |
Long-term liabilities |  |  |
Convertible senior notes, net | 62,475 |  |  | 127,344 |
Long-term operating lease liabilities | 17,797 |  |  | 18,509 |
Other long-term liabilities | 1,794 |  |  | 1,776 |
Total long-term liabilities | 82,066 |  |  | 147,629 |
Total liabilities | 253,098 |  |  | 675,970 |
Commitments and contingencies (Note 8) |  |  |
Stockholders' equity: |  |  |
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, no shares issued and outstanding | — |  |  | — |
Common stock, $0.001 par value per share: 400,000,000 shares authorized; 105,376,973 and 104,880,048 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively | 105 |  |  | 105 |
Additional paid-in capital | 1,125,738 |  |  | 1,114,550 |
Accumulated other comprehensive loss | (33,247) |  |  | (32,233) |
Accumulated deficit | (906,925) |  |  | (889,441) |
Total stockholders' equity | 185,671 |  |  | 192,981 |
Total liabilities and stockholders' equity | $ | 438,769 |  |  | $ | 868,951 |

See Notes to Condensed Consolidated Financial Statements.
4

Table of Contents
CHEGG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

| Three Months Ended March 31,
| 2025 |  | 2024
Net revenues | $ | 121,387 |  |  | $ | 174,350 |
Cost of revenues | 53,973 |  |  | 46,497 |
Gross profit | 67,414 |  |  | 127,853 |
Operating expenses: |  |  |
Research and development | 29,428 |  |  | 44,435 |
Sales and marketing | 25,614 |  |  | 30,375 |
General and administrative | 39,374 |  |  | 55,534 |
Impairment expense | 2,000 |  |  | — |
Total operating expenses | 96,416 |  |  | 130,344 |
Loss from operations | (29,002) |  |  | (2,491) |
Interest expense and other income, net: |  |  |
Interest expense | (467) |  |  | (650) |
Other income, net | 12,997 |  |  | 10,780 |
Total interest expense and other income, net | 12,530 |  |  | 10,130 |
(Loss) income before provision for income taxes | (16,472) |  |  | 7,639 |
Provision for income taxes | (1,012) |  |  | (9,059) |
Net loss | $ | (17,484) |  |  | $ | (1,420) |
Net loss per share, basic and diluted | $ | (0.17) |  |  | $ | (0.01) |
Weighted average shares used to compute net loss per share, basic and diluted | 105,159 |  |  | 102,343 |

See Notes to Condensed Consolidated Financial Statements.
5

Table of Contents
CHEGG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)

| Three Months Ended March 31,
| 2025 |  | 2024
Net loss | $ | (17,484) |  |  | $ | (1,420) |
Other comprehensive loss |  |  |
Change in net unrealized loss on investments | (523) |  |  | (1,970) |
Change in foreign currency translation adjustments | (491) |  |  | (3,963) |
Other comprehensive loss | (1,014) |  |  | (5,933) |
Total comprehensive loss | $ | (18,498) |  |  | $ | (7,353) |

See Notes to Condensed Consolidated Financial Statements.
6

Table of Contents
CHEGG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)

| Three Months Ended March 31, 2025
| Common Stock |  |  |  |  |  |  |  |
| Shares |  | Par Value |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Loss |  | Accumulated Deficit |  | Total Stockholders’ Equity
Balances at December 31, 2024 | 104,880 |  |  | $ | 105 |  |  | $ | 1,114,550 |  |  | $ | (32,233) |  |  | $ | (889,441) |  |  | $ | 192,981 |
Net share settlement of equity awards | 497 |  |  | — |  |  | (469) |  |  | — |  |  | — |  |  | (469) |
Share-based compensation expense | — |  |  | — |  |  | 11,657 |  |  | — |  |  | — |  |  | 11,657 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | (1,014) |  |  | — |  |  | (1,014) |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (17,484) |  |  | (17,484) |
Balances at March 31, 2025 | 105,377 |  |  | $ | 105 |  |  | $ | 1,125,738 |  |  | $ | (33,247) |  |  | $ | (906,925) |  |  | $ | 185,671 |

| Three Months Ended March 31, 2024
| Common Stock |  |  |  |  |  |  |  |
| Shares |  | Par Value |  | Additional Paid-In Capital |  | Accumulated Other Comprehensive Loss |  | Accumulated Deficit |  | Total Stockholders’ Equity
Balances at December 31, 2023 | 102,824 |  |  | $ | 103 |  |  | $ | 1,031,627 |  |  | $ | (34,739) |  |  | $ | (52,373) |  |  | $ | 944,618 |
Repurchase of common stock | (2,116) |  |  | (2) |  |  | (112) |  |  | — |  |  | — |  |  | (114) |
Net share settlement of equity awards | 862 |  |  | 1 |  |  | (4,294) |  |  | — |  |  | — |  |  | (4,293) |
Share-based compensation expense | — |  |  | — |  |  | 30,616 |  |  | — |  |  | — |  |  | 30,616 |
Other comprehensive loss | — |  |  | — |  |  | — |  |  | (5,933) |  |  | — |  |  | (5,933) |
Net loss | — |  |  | — |  |  | — |  |  | — |  |  | (1,420) |  |  | (1,420) |
Balances at March 31, 2024 | 101,570 |  | $ | 102 |  |  | $ | 1,057,837 |  |  | $ | (40,672) |  |  | $ | (53,793) |  |  | $ | 963,474 |

See Notes to Condensed Consolidated Financial Statements.
7

Table of Contents
CHEGG, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

| Three Months Ended March 31, |  |
| 2025 |  | 2024 |  |
Cash flows from operating activities |  |  |  |  |
Net loss | $ | (17,484) |  |  | $ | (1,420) |  |  |
Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |  |  |
Share-based compensation expense | 11,257 |  |  | 29,289 |  |  |
Depreciation and amortization expense | 32,094 |  |  | 19,687 |  |  |
Deferred tax assets | 15 |  |  | 2,877 |  |  |
Operating lease expense, net of accretion | 1,089 |  |  | 1,567 |  |  |
Amortization of debt issuance costs | 377 |  |  | 541 |  |  |
Loss from write-offs of property and equipment | 2,287 |  |  | 478 |  |  |
Gain on early extinguishment of debt | (7,360) |  |  | — |  |  |
Realized gain on sale of investments | (752) |  |  | — |  |  |
Other non-cash items | (28) |  |  | (31) |  |  |
Change in assets and liabilities: |  |  |  |  |
Accounts receivable | (4,693) |  |  | 6,705 |  |  |
Prepaid expenses and other current assets | 5,880 |  |  | 3,583 |  |  |
Other assets | 518 |  |  | (1,270) |  |  |
Accounts payable | 1,535 |  |  | (6,589) |  |  |
Deferred revenue | 5,437 |  |  | (1,159) |  |  |
Accrued liabilities | (4,894) |  |  | 640 |  |  |
Other liabilities | (752) |  |  | (1,580) |  |  |
Net cash provided by operating activities | 24,526 |  |  | 53,318 |  |  |
Cash flows from investing activities |  |  |  |  |
Purchases of property and equipment | (8,665) |  |  | (28,017) |  |  |
Purchases of investments | (793) |  |  | (79,028) |  |  |
Maturities of investments | 103,214 |  |  | 50,731 |  |  |
Proceeds from sale of investments | 181,158 |  |  | — |  |  |
Proceeds from sale of strategic equity investment | — |  |  | 15,500 |  |  |
Net cash provided by (used in) investing activities | 274,914 |  |  | (40,814) |  |  |
Cash flows from financing activities |  |  |  |  |
Payment of taxes related to the net share settlement of equity awards | (469) |  |  | (4,294) |  |  |
Repayment of convertible senior notes | (416,492) |  |  | — |  |  |
Net cash used in financing activities | (416,961) |  |  | (4,294) |  |  |
Effect of exchange rate changes | 218 |  |  | (226) |  |  |
Net (decrease) increase in cash, cash equivalents and restricted cash | (117,303) |  |  | 7,984 |  |  |
Cash, cash equivalents and restricted cash, beginning of period | 164,359 |  |  | 137,976 |  |  |
Cash, cash equivalents and restricted cash, end of period | $ | 47,056 |  |  | $ | 145,960 |  |  |

| Three Months Ended March 31, |  |
| 2025 |  | 2024 |  |
Supplemental cash flow data: |  |  |  |  |
Cash paid during the period for: |  |  |  |  |
Interest | $ | 224 |  |  | $ | 224 |  |  |
Income taxes, net of refunds | $ | 1,227 |  |  | $ | 641 |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |
Operating cash flows from operating leases | $ | 2,221 |  |  | $ | 2,216 |  |  |
Right of use assets obtained in exchange for lease obligations: |  |  |  |  |
Operating leases | $ | 258 |  |  | $ | — |  |  |
Non-cash investing and financing activities: |  |  |  |  |
Accrued purchases of long-lived assets | $ | 4,265 |  |  | $ | 6,302 |  |  |

| March 31,
| 2025 |  | 2024 |  |
Reconciliation of cash, cash equivalents and restricted cash: |  |  |  |  |
Cash and cash equivalents | $ | 44,105 |  |  | $ | 143,747 |  |  |
Restricted cash included in other current assets | 1,036 |  |  | 224 |  |  |
Restricted cash included in other assets | 1,915 |  |  | 1,989 |  |  |
Total cash, cash equivalents and restricted cash | $ | 47,056 |  |  | $ | 145,960 |  |  |

See Notes to Condensed Consolidated Financial Statements.
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CHEGG, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Background and Basis of Presentation
Company and Background
Chegg, Inc. (“we,” “us,” “our,” “Company” or “Chegg”), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005. Chegg provides individualized learning support to students as they pursue their educational journeys. Available on demand 24/7 and powered by over a decade of learning insights, the Chegg platform offers students artificial intelligence (AI)-powered academic support thoughtfully designed for education coupled with access to a vast network of subject matter experts who help ensure quality and accuracy. No matter the goal, level, or style, Chegg helps millions of students around the world learn with confidence by helping them build essential academic, life, and job skills to achieve success.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Chegg, Inc. and its wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2025 and our results of operations, results of comprehensive loss, stockholders' equity, and cash flows for the three months ended March 31, 2025 and 2024. Our results of operations, results of comprehensive loss, stockholders' equity, and cash flows for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.
We have a single operating and reportable segment and operating unit structure. The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the Annual Report on Form 10-K) filed with the SEC.
Except for the following change to our policy on revenue recognition and deferred revenue, there have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K. Our policy on revenue recognition and deferred revenue has been updated to address the revenue recognition of content licensing.
Revenue Recognition and Deferred Revenue
Revenues from content licensing are recognized upon fulfillment.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations. There have been no material changes in our use of estimates during the three months ended March 31, 2025 as compared to the use of estimates disclosed in Part II, Item 8 “Consolidated Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
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Reclassification of Prior Period Presentation
In order to conform with current period presentation, $1.0 million of deferred tax assets have been reclassified from deferred tax assets to other assets on our condensed consolidated balance sheet as of December 31, 2024. This change in presentation does not affect previously reported results.
Leases
As of March 31, 2025, we had an additional operating lease commitment of approximately $1.3 million for an office lease that has not yet commenced. This operating lease has a term of two years and is expected to commence during 2025. As such, we have not recorded the corresponding right of use asset or operating lease liability on our condensed consolidated balance sheet.
Recent Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-04, Debt—Debt with Conversion and Other Options. ASU 2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in Accounting Standards Codification (ASC) 470-20—Debt. Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis. The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. We did not early adopt ASU 2024-04 and we are currently in the process of evaluating the impact of this guidance.
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2024-03 requires disclosure of specified information about certain costs and expenses in the notes to financial statements. Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. We did not early adopt ASU 2024-03 and we are currently in the process of evaluating the impact of this guidance.
In March 2024, the FASB issued ASU 2024-02, Codification Improvements—Amendments to Remove References to the Concepts Statements. ASU 2024-02 removes various references to the FASB’s Concepts Statements from the FASB’s Accounting Standards Codification. Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively. The guidance is effective for annual periods beginning after December 15, 2024. We did not early adopt ASU 2024-02 and do not believe it will have a significant impact on our financial statements, however, we are currently in the process of evaluating the impact.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid that meet a quantitative threshold. Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively. The guidance is effective for annual periods beginning after December 15, 2024. We did not early adopt ASU 2023-09 and we are currently in the process of evaluating the impact of this guidance.
Recently Adopted Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. ASU 2023-07 enhances current interim and annual reportable segment disclosures and requires additional disclosures about significant segment expenses. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280—Segment Reporting on an interim and annual basis. In the first quarter of 2025, we adopted ASU 2023-07 on a retrospective basis for quarterly periods starting with this Quarterly Report on Form 10-Q. For further information on the additional reportable segment disclosures, refer to “Note 12, Segment Information.”
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Note 2. Revenues
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues being recognized at a point in time.
The following tables present our total net revenues for the periods shown disaggregated for our Subscription Services and Skills and Other product lines (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Subscription Services | $ | 107,566 |  |  | $ | 154,051 |  |  | $ | (46,485) |  |  | (30) | %
Skills and Other | 13,821 |  |  | 20,299 |  |  | (6,478) |  |  | (32) |
Total net revenues | $ | 121,387 |  |  | $ | 174,350 |  |  | $ | (52,963) |  |  | (30) |

During the three months ended March 31, 2025 and 2024, we recognized revenues of $27.2 million and $37.5 million, respectively, that were included in our deferred revenue balance at the beginning of each respective reporting period.
Contract Balances
The following table presents our accounts receivable, net, contract assets and deferred revenue balances (in thousands, except percentages):

|  | Change
| March 31, 2025 |  | December 31, 2024 |  | $ |  | %
Accounts receivable, net | $ | 28,549 |  |  | $ | 23,641 |  |  | $ | 4,908 |  |  | 21 | %
Contract assets | 6,771 |  |  | 7,027 |  |  | (256) |  |  | (4) |
Deferred revenue | 45,150 |  |  | 39,217 |  |  | 5,933 |  |  | 15 |

During the three months ended March 31, 2025 our accounts receivable, net balance increased by $4.9 million, or 21%, primarily due to amounts receivable from content licensing partially offset by the seasonality of our business. During the three months ended March 31, 2025, our contract assets balance remained relatively flat. During the three months ended March 31, 2025, our deferred revenue balance increased by $5.9 million, or 15%, primarily due to content licensing.
Note 3. Net Loss Per Share
The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):

| Three Months Ended March 31,
| 2025 |  | 2024
Basic |  |  |
Numerator: |  |  |
Net loss | $ | (17,484) |  |  | $ | (1,420) |
Denominator: |  |  |
Weighted average shares used to compute net loss per share, basic and diluted | 105,159 |  |  | 102,343 |
Net loss per share, basic and diluted | $ | (0.17) |  |  | $ | (0.01) |

During the three months ended March 31, 2025 and 2024, basic and diluted net loss per share was the same, as the inclusion of all potential common shares outstanding would have been anti-dilutive.
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The following table presents potential weighted-average shares of common stock outstanding that were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Shares related to stock plan activity | 10,091 |  |  | 6,992 |
Shares related to convertible senior notes | 6,620 |  |  | 9,234 |
Total common stock equivalents | 16,711 |  |  | 16,226 |

Note 4. Cash and Cash Equivalents, Investments and Fair Value Measurements
The following tables present our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value as of March 31, 2025 and December 31, 2024 (in thousands):

| March 31, 2025
| Fair Value Level |  | Adjusted Cost |  | Unrealized Gain |  | Unrealized Loss |  | Fair Value
Cash and cash equivalents: |  |  |  |  |  |  |  |  |
Cash |  |  | $ | 26,863 |  |  | $ | — |  |  | $ | — |  |  | $ | 26,863 |
Money market funds | Level 1 |  | 17,242 |  |  | — |  |  | — |  |  | 17,242 |
Total cash and cash equivalents |  |  | $ | 44,105 |  |  | $ | — |  |  | $ | — |  |  | $ | 44,105 |
Short-term investments: |  |  |  |  |  |  |  |  |
Corporate debt securities | Level 2 |  | $ | 44,074 |  |  | $ | 114 |  |  | $ | — |  |  | $ | 44,188 |
Long-term investments: |  |  |  |  |  |  |  |  |
Corporate debt securities | Level 2 |  | $ | 37,882 |  |  | $ | 211 |  |  | $ | — |  |  | $ | 38,093 |
Total long-term investments |  |  | $ | 37,882 |  |  | $ | 211 |  |  | $ | — |  |  | $ | 38,093 |

| December 31, 2024
| Fair Value Level |  | Adjusted Cost |  | Unrealized Gain |  | Unrealized Loss |  | Fair Value
Cash and cash equivalents: |  |  |  |  |  |  |  |  |
Cash |  |  | $ | 28,716 |  |  | $ | — |  |  | $ | — |  |  | $ | 28,716 |
Money market funds | Level 1 |  | 132,759 |  |  | — |  |  | — |  |  | 132,759 |
Total cash and cash equivalents |  |  | $ | 161,475 |  |  | $ | — |  |  | $ | — |  |  | $ | 161,475 |
Short-term investments: |  |  |  |  |  |  |  |  |
Corporate debt securities | Level 2 |  | $ | 113,968 |  |  | $ | 157 |  |  | $ | (29) |  |  | $ | 114,096 |
U.S. treasury securities | Level 1 |  | 40,162 |  |  | — |  |  | (9) |  |  | 40,153 |
Total short-term investments |  |  | $ | 154,130 |  |  | $ | 157 |  |  | $ | (38) |  |  | $ | 154,249 |
Long-term investments: |  |  |  |  |  |  |  |  |
Corporate debt securities | Level 2 |  | $ | 133,516 |  |  | $ | 736 |  |  | $ | (78) |  |  | $ | 134,174 |
U.S. treasury securities | Level 1 |  | 78,405 |  |  | 97 |  |  | (26) |  |  | 78,476 |
Total long-term investments |  |  | $ | 211,921 |  |  | $ | 833 |  |  | $ | (104) |  |  | $ | 212,650 |

As of March 31, 2025, there were no unrealized losses on our investments. During the three months ended March 31, 2025 and 2024, we did not recognize any losses on our investments due to credit related factors and our realized gains and losses on investments were not significant.
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The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of March 31, 2025 (in thousands):

| Adjusted Cost |  | Fair Value
Due within one year | $ | 44,074 |  |  | $ | 44,188 |
Due after one year through three years | 37,882 |  |  | 38,093 |
Investments not due at a single maturity date | 17,242 |  |  | 17,242 |
Total | $ | 99,198 |  |  | $ | 99,523 |

Investments not due at a single maturity date in the preceding table consisted of money market funds.
Strategic Investments
In July 2022, we completed an investment of $6.0 million in Knack Technologies, Inc. (Knack), a privately held U.S. based peer-to-peer tutoring platform for higher education institutions. We do not have the ability to exercise significant influence over Knack's operating and financial policies and have elected to account for our investment at cost as it does not have a readily determinable fair value. We did not record any impairment expenses during the three months ended March 31, 2025 and 2024, as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment. There were no observable price changes in orderly transactions for the identical or similar investments of the same issuer during the three months ended March 31, 2025 and 2024.
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
We report our financial instruments at fair value with the exception of the 2026 notes. The estimated fair value of the 2026 notes was determined based on the trading price as of the last day of trading for the period. We consider the fair value of the 2026 notes to be a Level 2 measurement due to the limited trading activity. The estimated fair value of the 2026 notes as of March 31, 2025 and December 31, 2024 was $52.1 million and $105.8 million, respectively. For further information on the 2026 notes, refer to Note 7, “Convertible Senior Notes.”
Note 5. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):

| March 31, 2025 |  | December 31, 2024
Content | $ | 339,227 |  |  | $ | 381,629 |
Software | 51,003 |  |  | 67,612 |
Leasehold improvements | 8,235 |  |  | 8,207 |
Furniture and fixtures | 3,337 |  |  | 3,346 |
Computer and equipment | 2,985 |  |  | 2,953 |
Property and equipment | 404,787 |  |  | 463,747 |
Less accumulated depreciation | (259,816) |  |  | (293,099) |
Property and equipment, net | $ | 144,971 |  |  | $ | 170,648 |

Depreciation expense during the three months ended March 31, 2025 and 2024 was $31.0 million and $15.7 million, respectively.
During the three months ended March 31, 2025, we streamlined our product experiences. As a result, we elected to abandon certain content and internal-use software assets and recorded charges of $18.2 million, consisting of $16.2 million of accelerated depreciation classified as cost of revenues on our condensed consolidated statements of operations and $2.0 million of impairment of in-progress internal-use software assets classified as impairment expense on our condensed consolidated statements of operations.
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Note 6. Balance Sheet Details
Other Current Assets
Other current assets consisted of the following (in thousands):

| March 31, 2025 |  | December 31, 2024
Insurance loss recovery | $ | 55,000 |  |  | $ | 55,000 |
Restricted cash | 1,036 |  |  | 956 |
Other | 22,359 |  |  | 25,138 |
Other current assets | $ | 78,395 |  |  | $ | 81,094 |

Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):

| March 31, 2025 |  | December 31, 2024
Loss contingency | $ | 62,000 |  |  | $ | 62,000 |
Taxes payable | 11,446 |  |  | 11,319 |
Current operating lease liabilities | 4,496 |  |  | 5,625 |
Restructuring liability | 2,044 |  |  | 7,310 |
Other | 29,084 |  |  | 29,106 |
Accrued liabilities | $ | 109,070 |  |  | $ | 115,360 |

Note 7. Convertible Senior Notes
In March/April 2019, we issued $800 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes). The 2025 notes matured on March 15, 2025 and we paid $358.9 million to repay them which was classified as a financing activity on our condensed consolidated statements of cash flows.
In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes, together with the 2025 notes, the notes). The 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock. This is equivalent to an initial conversion price of approximately $107.55 per share, which is subject to adjustment in certain circumstances. Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes, the notes are convertible at the option of holders only upon satisfaction of certain circumstances. During the three months ended March 31, 2025, the circumstances allowing holders of the 2026 notes to convert were not met. On or after June 1, 2026 for the 2026 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the circumstances.
In March 2025, in connection with our securities repurchase program, we extinguished $65.2 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $57.4 million, which was paid to the holders in cash. We also incurred approximately $0.2 million in fees resulting in a total reacquisition price of $57.6 million. The carrying amount of the extinguished notes was $64.9 million resulting in a $7.4 million gain on early extinguishment of debt. We elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding.
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The following table presents the net carrying amount of the notes (in thousands):

| March 31, 2025 |  |  |  | December 31, 2024
| 2026 Notes |  | 2025 Notes |  |  |  | 2026 Notes |  | 2025 Notes |  |
Principal | $ | 62,710 |  |  | $ | — |  |  |  |  | $ | 127,906 |  |  | $ | 358,914 |  |  |
Unamortized issuance costs | (235) |  |  | — |  |  |  |  | (562) |  |  | (309) |  |  |
Net carrying amount | $ | 62,475 |  |  | $ | — |  |  |  |  | $ | 127,344 |  |  | $ | 358,605 |  |  |

The following table presents the total interest expense recognized related to the notes (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
2026 notes: |  |  |
Contractual interest expense | $ | — |  |  | $ | — |
Amortization of issuance costs | 69 |  |  | 161 |
Total 2026 notes interest expense | $ | 69 |  |  | $ | 161 |
2025 notes: |  |  |
Contractual interest expense | $ | 90 |  |  | $ | 109 |
Amortization of issuance costs | 308 |  |  | 380 |
Total 2025 notes interest expense | $ | 398 |  |  | $ | 489 |

Capped Call Transactions
Concurrently with the offering of the 2026 notes, we used $103.4 million of the net proceeds to enter into privately negotiated capped call transactions which are expected to reduce or offset potential dilution to holders of our common stock upon conversion of the notes or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes. The capped call transactions automatically exercise upon conversion of the notes and as of March 31, 2025, cover 9,297,800 shares of our common stock for the 2026 notes. These are intended to effectively increase the overall conversion price from $107.55 to $156.44 per share for the 2026 notes. The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted notes. As these transactions meet certain accounting criteria, they are recorded in stockholders’ equity as a reduction of additional paid-in capital on our condensed consolidated balance sheets and are not accounted for as derivatives. The fair value of the capped call instrument is not remeasured each reporting period. The cost of the capped call is not expected to be deductible for tax purposes.
Note 8. Commitments and Contingencies
We may from time to time be subject to certain legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, demands, disputes, investigations, or requests for information. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.
On March 1, 2023, Plaintiff Shiva Stein, derivatively on behalf of Chegg, filed a stockholder derivative complaint in the Court of Chancery of the State of Delaware (Case No. 2023-0244-NAC) asserting breach of fiduciary duty, unjust enrichment, and waste of corporate asset claims against members of Chegg’s Board and certain Chegg officers. The matter is stayed. The Company disputes these claims and intends to vigorously defend itself in this matter.
On February 14, 2023, Plaintiff Brian Stansell, individually and on behalf of other similarly situated stockholders of Chegg, filed a putative class action complaint in the Court of Chancery of the State of Delaware (Case No. 2023-0180) on behalf of all Chegg stockholders who were eligible to vote at Chegg's 2022 Annual Stockholders' Meeting, asserting breach of fiduciary duty claims against the members of Chegg's Board. The Court dismissed this matter pursuant to the Company's motion to dismiss and the matter is concluded.
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On December 22, 2022, JPMorgan Chase Bank, N.A. (JPMC) asserted a demand for repayment by the Company of certain investment proceeds received by the Company in its capacity as an investor in TAPD, Inc. (more commonly known as “Frank”). JPMC seeks such repayment pursuant to certain provisions in the existing Support Agreement between JPMC and the Company that was entered into in connection with JPMC's acquisition of Frank. JPMC has alleged fraud on the part of certain former Frank executives regarding the quantity and quality of its customer accounts. The Company is not at fault, however is pursuing a settlement agreement with JPMC.
On March 30, 2022, Joseph Robinson, derivatively on behalf of Chegg, filed a shareholder derivative complaint against Chegg and certain of its current and former directors and officers in the United States District Court for the Northern District of California, alleging violations of securities laws and breaches of fiduciary duties. On February 22, 2023, Plaintiff filed an Amended Shareholder Derivative Complaint. This matter has been consolidated with Choi, below, and both matters are stayed. The Company disputes these claims and intends to vigorously defend itself in this matter.
On January 12, 2022, Rak Joon Choi, derivatively on behalf of Chegg, filed a shareholder derivative complaint against Chegg and certain of its current and former directors and officers in the United States District Court for the Northern District of California, alleging violations of securities laws, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. On February 22, 2023, Plaintiff filed an Amended Shareholder Derivative Complaint. This matter has been consolidated with Robinson, above, and both matters are stayed. The Company disputes these claims and intends to vigorously defend itself in this matter.
On December 22, 2021, Steven Leventhal, individually and on behalf of all others similarly situated, filed a purported securities fraud class action on behalf of all purchasers of Chegg common stock between May 5, 2020 and November 1, 2021, inclusive, against Chegg and certain of its current and former officers in the United States District Court for the Northern District of California (Case No. 5:21-cv-09953), alleging that Chegg and several of its officers made materially false and misleading statements in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as amended (the Exchange Act). On September 7, 2022, KBC Asset Management and The Pompano Beach Police & Firefighters Retirement System were appointed as lead plaintiff in the case. On December 8, 2022, Plaintiff filed his Amended Complaint seeking unspecified compensatory damages, costs, and expenses, including counsel and expert fees. On September 26, 2024, the parties participated in an in-person mediation and reached a settlement in principle to pay $55.0 million wherein the Company denies any and all allegations of fault, liability, wrongdoing, or damages. On November 6, 2024, Plaintiffs filed a motion for preliminary approval of the settlement. The Court held a final approval hearing on April 24, 2025. The estimated contingent liability for the loss contingency recorded was $55.0 million as of March 31, 2025 and was included within accrued liabilities on our condensed consolidated balance sheets. The same amount was recorded for expected insurance loss recoveries, which is included within other current assets on our condensed consolidated balance sheets.
On September 13, 2021, Pearson Education, Inc. (Pearson) filed a complaint captioned Pearson Education, Inc. v. Chegg, Inc. (Pearson Complaint) in the United States District Court for the District of New Jersey against the Company (Case 2:21-cv-16866), alleging infringement of Pearson’s registered copyrights and exclusive rights under copyright in violation of the United States Copyright Act. Pearson is seeking injunctive relief, monetary damages, costs, and attorneys’ fees. The Company filed its answer to the Pearson Complaint on November 19, 2021. Pearson’s June 29, 2022 Motion for Leave to File Amended Complaint seeking to add Bedford, Freeman & Worth Publishing Group, LLC d/b/a Macmillan Learning as a plaintiff was denied. Pearson filed an Amended Complaint on May 10, 2023, and the Company filed an amended answer on June 7, 2023. Chegg and Pearson have resolved this litigation. Pursuant to the terms of the parties' confidential settlement, the Court dismissed the case with prejudice on December 20, 2024. While the terms of the settlement are confidential, Chegg’s decision to settle the lawsuit was driven by the expense, burden and uncertainty of ongoing protracted litigation.
On June 18, 2020, we received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) regarding certain alleged deceptive or unfair acts or practices related to consumer privacy and/or data security. On October 31, 2022, the FTC published the parties’ agreed-upon consent order regarding Chegg’s privacy and data security practices. On January 27, 2023, the FTC finalized its order (Final Order) requiring Chegg to implement a comprehensive information security program, limit the data the Company can collect and retain, offer users multi factor authentication to secure their accounts, and allow users to request access to and delete their data. We are currently cooperating with the FTC on an investigation as to whether we have violated certain terms of the Final Order.
We record a contingent liability for loss contingencies related to legal matters when a loss is both probable and reasonably estimable. Additionally, we record an insurance loss recovery up to the recognized loss contingency when realization is probable. Related to the above matters, as of March 31, 2025, the net impact of contingent liabilities less the related insurance loss recovery is $7.0 million. For those matters upon which we have sufficient insurance coverage, we have recorded contingent liabilities within accrued liabilities and the loss recovery from insurance within other current assets on our
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condensed consolidated balance sheets. We are not aware of any other pending legal matters or claims, individually or in the aggregate, which are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. Our analysis of whether a claim will proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty. Nevertheless, defending any of these actions, regardless of the outcome, may be costly, time consuming, distract management personnel and have a negative effect on our business. In the ordinary course of business and for certain of the above matters, we are actively pursuing all avenues and strategies to resolve these matters, including available legal remedies, remediation and settlement negotiations with the parties. An adverse outcome in any of these actions, including a judgment or settlement, may cause a material adverse effect on our future business, operating results or financial condition.
Note 9. Guarantees and Indemnifications
We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. We have a directors’ and officers’ insurance policy that covers our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited.
We believe the fair value of these indemnification agreements is immaterial. We have not recorded any liabilities for these agreements as of March 31, 2025.
Note 10. Stockholders' Equity
Share Repurchases
During the three months ended March 31, 2025, we had no cash repurchases of our common stock.
During the year ended December 31, 2024, we repurchased 2,115,952 shares of our common stock related to the final delivery of our November 2023 accelerated share repurchase (ASR) agreement. The November 2023 ASR settled, and we were not required to make any additional cash payments or delivery of common stock to the financial institution upon settlement.
Securities Repurchase Program
In November 2024, our board of directors approved a $300.0 million increase to our existing securities repurchase program authorizing the repurchase of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, alternative investment opportunities, and other factors. As of March 31, 2025, we had $150.1 million remaining under the securities repurchase program, which has no expiration date and will continue until otherwise suspended, terminated or modified at any time for any reason by our board of directors.
Share-based Compensation Expense
The following table presents total share-based compensation expense recorded (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Cost of revenues | $ | 238 |  |  | $ | 513 |
Research and development | 3,212 |  |  | 9,209 |
Sales and marketing | 1,061 |  |  | 2,140 |
General and administrative | 6,746 |  |  | 17,427 |
Total share-based compensation expense | $ | 11,257 |  |  | $ | 29,289 |

During the three months ended March 31, 2025 and 2024, we capitalized share-based compensation expense of $0.4 million and $1.3 million, respectively. As of March 31, 2025, total unrecognized share-based compensation expense was
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approximately $33.9 million, which is expected to be recognized over the remaining weighted-average vesting period of approximately 1.4 years.
The following table presents activity for outstanding RSUs and PSUs:

| RSUs and PSUs Outstanding
| Shares Outstanding |  | Weighted Average Grant Date Fair Value
Balance at December 31, 2024 | 7,386,965 |  |  | $ | 10.58 |
Granted | 6,100,000 |  |  | 1.50 |
Released | (862,212) |  |  | 14.02 |
Forfeited | (770,167) |  |  | 26.69 |
Balance at March 31, 2025 | 11,854,586 |  |  | $ | 4.58 |

Note 11. Restructuring Charges
November 2024 Restructuring Plan
In November 2024, we announced a workforce reduction that resulted in a management approved restructuring plan. As of March 31, 2025, we recorded $17.2 million of cumulative restructuring charges, primarily related to one-time employee termination benefits, which were classified on our condensed consolidated statement of operations based on employees' job function. The restructuring liability is included within accrued liabilities on our condensed consolidated balance sheets. The total amount of restructuring charges have been recorded and we expect the plan to be substantially completed by the end of the third quarter of fiscal 2025.
The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

| Three Months Ended March 31, 2025
Beginning balance | $ | 3,915 |
Restructuring charges | 2,595 |
Restructuring payments | (4,963) |
Ending balance | $ | 1,547 |

June 2024 Restructuring Plan
In June 2024, we announced a workforce reduction that resulted in a management approved restructuring plan. As of March 31, 2025, we recorded $10.3 million of cumulative restructuring charges, primarily related to other associated costs. The restructuring liability is included within accrued liabilities on our condensed consolidated balance sheets. The total amount of restructuring charges have been recorded and we expect the plan to be substantially completed by the end of the second quarter of fiscal 2025.
The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

| Three Months Ended March 31, 2025
Beginning balance | $ | 3,395 |
Restructuring charges | 325 |
Restructuring payments | (3,223) |
Ending balance | $ | 497 |

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Note 12. Segment Information
Our chief operating decision maker is our Chief Executive Officer who makes resource allocation decisions and reviews financial information presented on a consolidated basis. Accordingly, we have determined that we have a single operating and reportable segment and operating unit structure.
Our chief operating decision maker uses net loss in assessing performance and determining how to allocate resources and is regularly provided with cost of revenues, paid marketing expenses, and consolidated operating expenses when reviewing financial information as part of the annual budgeting and forecasting process as well as the review over quarterly budget to actual variances.
The following table presents information about our significant segment expenses and includes a reconciliation to net loss (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Net revenues | $ | 121,387 |  |  | $ | 174,350 |
Less: |  |  |
Cost of revenues | 53,973 |  |  | 46,497 |
Research and development | 29,428 |  |  | 44,435 |
Paid marketing expenses(1) | 16,379 |  |  | 16,335 |
Other sales and marketing(2) | 9,235 |  |  | 14,040 |
General and administrative | 39,374 |  |  | 55,534 |
Impairment expense | 2,000 |  |  | — |
Total segment expenses | 150,389 |  |  | 176,841 |
Other segment items(3) | 11,518 |  |  | 1,071 |
Net loss | $ | (17,484) |  |  | $ | (1,420) |

_____________________________________________________
(1)Paid marketing expenses consist primarily of online advertising and marketing promotional expenditures.
(2)Other sales and marketing primarily consists of employee related expenses, including share-based compensation expense, and depreciation and amortization expenses.
(3)Other segment items consist of interest expense, other income, and provision for income taxes.
We derive our revenues from our Subscription Services and Skills and Other product lines. Our Subscription Services include Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu. Our Skills and Other product line includes revenues from Chegg Skills, advertising services, content licensing, print textbooks and eTextbooks.
The following table presents our total net revenues for our Subscription Services and Skills and Other product lines (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
Subscription Services | $ | 107,566 |  |  | $ | 154,051 |
Skills and Other | 13,821 |  |  | 20,299 |
Total net revenues | $ | 121,387 |  |  | $ | 174,350 |

The following table presents our total net revenues by geographic area (in thousands):

| Three Months Ended March 31,
| 2025 |  | 2024
United States | $ | 105,497 |  |  | $ | 152,131 |
International | 15,890 |  |  | 22,219 |
Total net revenues | $ | 121,387 |  |  | $ | 174,350 |

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The following table presents our long-lived assets by geographic area (in thousands):

| March 31, 2025 |  | December 31, 2024 |  |
United States | $ | 145,539 |  |  | $ | 172,483 |  |  |
International | 20,911 |  |  | 20,421 |  |  |
Total long-lived assets | $ | 166,450 |  |  | $ | 192,904 |  |  |

Note 13. Subsequent Events
May 2025 Restructuring Plan
In May 2025, we announced a restructuring plan that includes a reduction of our global workforce as well as other actions to streamline our operations. We estimate that we will incur charges of approximately $34 million to $38 million in connection with these actions, of which $31 million to $35 million is expected to result in future cash expenditures, primarily consisting of expenditures for one-time employee termination benefits, impairment of lease related assets, and other related costs. We expect that substantially all of these charges will be incurred by the fourth quarter of 2025, with approximately $24 million to $28 million by the second quarter of 2025. The accounting for the May 2025 restructuring plan is in process as of the issuance date of our condensed consolidated financial statements and therefore we are unable to make any additional disclosures.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See the section titled “Note about Forward-Looking Statements” for additional information. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q.
Overview
Chegg provides individualized learning support to students as they pursue their educational journeys. Available on demand 24/7 and powered by over a decade of learning insights, the Chegg platform offers students artificial intelligence (AI)-powered academic support thoughtfully designed for education coupled with access to a vast network of subject matter experts who help ensure quality and accuracy. No matter the goal, level, or style, Chegg helps millions of students around the world learn with confidence by helping them build essential academic, life, and job skills to achieve success.
Our long-term strategy is centered upon our ability to utilize our Subscription Services to increase student engagement with our learning platform. We continue to invest in the expansion of our offerings and technology platform to provide a more compelling and personalized solution and deepen engagement with students. We continue to integrate artificial intelligence into our platform, and it is now conversational, more instructional, and interactive. We remain focused on providing a holistic and differentiated product offering that supports the whole student with 360 degrees of individualized academic and functional support, including the delivery of high-quality and accurate content. We believe the investments we are making will allow us to return to revenue growth over time. Our ability to achieve these long-term objectives is subject to numerous risks and uncertainties, which are described in greater detail below and in Part II, Item 1A, “Risk Factors.”
Exploration of Strategic Alternatives
On February 24, 2025, we announced that we are undertaking a strategic review process and exploring a range of alternatives to maximize shareholder value, including being acquired, undertaking a go-private transaction, or remaining as a standalone public company. This review will be ongoing with our continued investment, innovation, and execution. We have not set a timetable for the completion of this process, and there can be no assurance that it will result in any transaction or outcome.
Business Updates and Developments
Recent technological shifts, notably Google's roll out of AI Overviews (AIO) and continued increase in adoption of free and paid generative AI services by students, have created and are expected to continue to create headwinds for our industry and our business, most notably a reduction in traffic to our website and customers subscribing to our services. In mid-August, Google broadly rolled out its AIO search experience, or AIO, which displays AI-generated content at the top of its search results. This experience, which includes questions and solutions for education, keeps users on Google search results versus leading them onto our site. AIO’s prevalence has grown and will only continue to increase. While we continue to study the changes and adjust our SEO strategy, we expect Google to continue its shift from being a search origination point to the destination, which could materially adversely affect our business, operating results and financial condition.
In addition, across our industry, there has been a continued increase in the adoption of free and paid generative AI products for academic support, and students are increasingly turning to generative AI for academic support, such as homework and exams, as well as assistance in other areas of daily life. This issue impacts education technology companies broadly, where students see generative AI products like Chat GPT and others as strong alternatives to vertically specialized solutions for education such as Chegg. These developments have negatively impacted our industry and our business and are expected to continue to impact our overall traffic and accelerate the decline in the number of new subscribers that sign up for our services, resulting in continued negative impacts to our growth, business, operating results and financial condition. See Part II, Item 1A, “Risk Factors” for additional details.
In May 2025, we announced an additional restructuring plan to further manage costs and align with the market. The May 2025 restructuring plan included a reduction in workforce and the closure of two offices. For fiscal year 2025 and 2026, we
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expect to realize cost savings as a result of the May 2025 restructuring plan. See Note 11, “Restructuring Charges” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional details.
We have presented revenues for our two product lines, Subscription Services and Skills and Other, based on how students view us and the utilization of our products by them. More detail on our two product lines is discussed in the next two sections titled “Subscription Services” and “Skills and Other.”
Subscription Services
Our Subscription Services can be accessed internationally through our websites and on mobile devices and include Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu. Students typically pay to access our Subscription Services on a monthly basis. Revenues from our Subscription Services are primarily recognized ratably over the monthly subscription period whereas the number of subscribers are determined as those who have paid to access our services at any time during the period. Changes in revenues are primarily related to changes in subscribers. Our Chegg Study subscription service provides access to personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts. When students need writing help, including plagiarism detection scans and creating citations for their papers, they can use our Chegg Writing subscription service. Our Chegg Math subscription service helps students understand math by providing a step-by-step math solver and calculator. We also offer our Chegg Study Pack as a premium subscription bundle of our Chegg Study, Chegg Writing, and Chegg Math services. Subscribers to Busuu have access to a premium language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors and a huge community of members to practice alongside.
Skills and Other
Our Skills and Other product line includes revenues from Chegg Skills, advertising services, content licensing, print textbooks and eTextbooks. Our Chegg Skills learning platform offers professional courses focused on the latest technology skills. We work with leading brands and programmatic partners to deliver advertising across our platforms. Beginning in the first quarter of 2025, we enter into non-exclusive content library licensing agreements with third parties. We also provide a platform for students to rent or buy print textbooks and eTextbooks, which helps students save money compared to the cost of buying new.
Seasonality of Our Business
Revenues from Subscription Services are primarily recognized ratably over the subscription term which has generally resulted in our highest revenues and profitability in the fourth quarter as it reflects more days of the academic year. Certain variable expenses, such as marketing expenses, remain highest in the first and third quarters such that our profitability may not provide meaningful insight on a sequential basis. As a result of these factors, the most concentrated periods for our revenues and expenses do not necessarily coincide, and comparisons of our historical quarterly results of operations on a sequential basis may not provide meaningful insight into our overall financial performance.
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Results of Operations
The following table presents our historical condensed consolidated statements of operations (in thousands, except percentage of total net revenues):

| Three Months Ended March 31,
| 2025 |  | 2024
Net revenues | $ | 121,387 |  |  | 100 | % |  | $ | 174,350 |  |  | 100 | %
Cost of revenues(1) | 53,973 |  |  | 44 |  |  | 46,497 |  |  | 27 |
Gross profit | 67,414 |  |  | 56 |  |  | 127,853 |  |  | 73 |
Operating expenses: |  |  |  |  |  |  |
Research and development(1) | 29,428 |  |  | 24 |  |  | 44,435 |  |  | 26 |
Sales and marketing(1) | 25,614 |  |  | 21 |  |  | 30,375 |  |  | 17 |
General and administrative(1) | 39,374 |  |  | 33 |  |  | 55,534 |  |  | 32 |
Impairment expense | 2,000 |  |  | 2 |  |  | — |  |  | — |
Total operating expenses | 96,416 |  |  | 80 |  |  | 130,344 |  |  | 75 |
Loss from operations | (29,002) |  |  | (24) |  |  | (2,491) |  |  | (2) |
Total interest expense and other income, net | 12,530 |  |  | 10 |  |  | 10,130 |  |  | 6 |
(Loss) income before provision for income taxes | (16,472) |  |  | (14) |  |  | 7,639 |  |  | 4 |
Provision for income taxes | (1,012) |  |  | — |  |  | (9,059) |  |  | (5) |
Net loss | $ | (17,484) |  |  | (14) | % |  | $ | (1,420) |  |  | (1) | %
(1) Includes share-based compensation expense and restructuring charges as follows: |  |  |  |  |  |  |
Share-based compensation expense: |  |  |  |  |  |  |
Cost of revenues | $ | 238 |  |  |  |  | $ | 513 |  |  |
Research and development | 3,212 |  |  |  |  | 9,209 |  |  |
Sales and marketing | 1,061 |  |  |  |  | 2,140 |  |  |
General and administrative | 6,746 |  |  |  |  | 17,427 |  |  |
Total share-based compensation expense | $ | 11,257 |  |  |  |  | $ | 29,289 |  |  |
Restructuring charges: |  |  |  |  |  |  |
Cost of revenues | $ | — |  |  |  |  | $ | — |  |  |
Research and development | 959 |  |  |  |  | — |  |  |
Sales and marketing | 132 |  |  |  |  | — |  |  |
General and administrative | 1,829 |  |  |  |  | — |  |  |
Total restructuring charges | $ | 2,920 |  |  |  |  | $ | — |  |  |

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Three Months Ended March 31, 2025 and 2024
Net Revenues
The following tables present our total net revenues for the periods shown for our Subscription Services and Skills and Other product lines (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Subscription Services | $ | 107,566 |  |  | $ | 154,051 |  |  | $ | (46,485) |  |  | (30) | %
Skills and Other | 13,821 |  |  | 20,299 |  |  | (6,478) |  |  | (32) |
Total net revenues | $ | 121,387 |  |  | $ | 174,350 |  |  | $ | (52,963) |  |  | (30) |

Subscription Services revenues decreased $46.5 million, or 30%, during the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily due to a 31% decrease in subscribers who have paid to access our services during the three months ended March 31, 2025, compared to the same period in 2024.
Skills and Other revenues decreased $6.5 million, or 32%, during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in Chegg Skills of $5.0 million related to lower enrollments and a decrease in advertising services revenues of $3.8 million due to lower fulfillment partially offset by content licensing revenue of $4.0 million.
Cost of Revenues
The following tables present our cost of revenues for the periods shown (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Cost of revenues(1) | $ | 53,973 |  |  | $ | 46,497 |  |  | $ | 7,476 |  |  | 16 | %
(1)Includes share-based compensation expense of: | $ | 238 |  |  | $ | 513 |  |  | $ | (275) |  |  | (54) | %

Cost of revenues increased $7.5 million, or 16%, during the three months ended March 31, 2025, compared to the same period in 2024. The increase was primarily due to higher depreciation expense of $13.8 million, primarily due to the accelerated depreciation recorded as we streamlined our product experiences, partially offset by lower payment processing and other order fees of $3.7 million, primarily due to the decrease in subscribers who have paid to access our services, and lower contractor spend of $1.0 million. Gross margins decreased to 56% during the three months ended March 31, 2025, from 73% during the same period in 2024.
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Operating Expenses
The following tables present our total operating expenses for the periods shown (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Research and development(1) | $ | 29,428 |  |  | $ | 44,435 |  |  | $ | (15,007) |  |  | (34) | %
Sales and marketing(1) | 25,614 |  |  | 30,375 |  |  | (4,761) |  |  | (16) |
General and administrative(1) | 39,374 |  |  | 55,534 |  |  | (16,160) |  |  | (29) |
Impairment expense | 2,000 |  |  | — |  |  | 2,000 |  |  | n/m
Total operating expenses | $ | 96,416 |  |  | $ | 130,344 |  |  | $ | (33,928) |  |  | (26) |
(1) Includes share-based compensation expense and restructuring charges as follows: |  |  |  |  |  |  |
Share-based compensation expense: |  |  |  |  |  |  |
Research and development | $ | 3,212 |  |  | $ | 9,209 |  |  | $ | (5,997) |  |  | (65) | %
Sales and marketing | 1,061 |  |  | 2,140 |  |  | (1,079) |  |  | (50) |
General and administrative | 6,746 |  |  | 17,427 |  |  | (10,681) |  |  | (61) |
Share-based compensation expense | $ | 11,019 |  |  | $ | 28,776 |  |  | $ | (17,757) |  |  | (62) |
Restructuring charges: |  |  |  |  |  |  |
Research and development | $ | 959 |  |  | $ | — |  |  | $ | 959 |  |  | n/m
Sales and marketing | 132 |  |  | — |  |  | 132 |  |  | n/m
General and administrative | 1,829 |  |  | — |  |  | 1,829 |  |  | n/m
Restructuring charges | $ | 2,920 |  |  | $ | — |  |  | $ | 2,920 |  |  | n/m

______________________________________
*n/m - not meaningful
Operating expenses decreased $33.9 million, or 26%, during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to lower employee-related expenses and contractor spend as a result of prior year restructuring actions. See Note 11, “Restructuring Charges” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information regarding the prior year restructuring actions.
Research and Development
Research and development expenses decreased $15.0 million, or 34%, during the three months ended March 31, 2025 compared to the same period in 2024. The decrease was primarily due to lower employee-related expenses of $12.7 million, including share-based compensation expense, and lower contractor spend of $1.9 million. Research and development expenses as a percentage of net revenues were 24% during the three months ended March 31, 2025 compared to 26% during the same period in 2024.
Sales and Marketing
Sales and marketing expenses decreased by $4.8 million, or 16%, during the three months ended March 31, 2025, compared to the same period in 2024. The decrease was primarily attributable to lower employee-related expenses of $1.8 million, including share-based compensation expense, and lower depreciation and amortization expense of $0.9 million. Sales and marketing expenses as a percentage of net revenues were 21% during the three months ended March 31, 2025 compared to 17% during the same period in 2024.
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General and Administrative
General and administrative expenses decreased $16.2 million, or 29%, during the three months ended March 31, 2025 compared to the same period in 2024. The decrease was due to lower employee-related expenses of $12.9 million, which is primarily due to share-based compensation expense, and lower professional fees of $3.0 million partially offset by restructuring charges of $1.8 million. General and administrative expenses as a percentage of net revenues were 33% during the three months ended March 31, 2025 compared to 32% during the same period in 2024.
Impairment Expense
Impairment expense was $2.0 million during the three months ended March 31, 2025, consisting of impairment of property and equipment. See Note 5, Property and Equipment, Net” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information.
Interest Expense and Other Income, Net
The following tables present our interest expense and other income, net, for the periods shown (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Interest expense | $ | (467) |  |  | $ | (650) |  |  | $ | 183 |  |  | (28) | %
Other income, net | 12,997 |  |  | 10,780 |  |  | 2,217 |  |  | 21 |
Total interest expense and other income, net | $ | 12,530 |  |  | $ | 10,130 |  |  | $ | 2,400 |  |  | 24 |

Interest expense decreased $0.2 million, or 28%, during the three months ended March 31, 2025, respectively, compared to the same periods in 2024, primarily due to the partial early extinguishments of our convertible senior notes.
Other income, net increased $2.2 million, or 21%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to the gain on early extinguishment of a portion of the 2026 notes of $7.4 million partially offset primarily due to the absence of the gain on sale of the strategic equity investment in Sound Ventures of $3.8 million and a decrease in interest income of $2.1 million.
Provision for income taxes
The following tables present our provision for income taxes for the periods shown (in thousands, except percentages):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Provision for income taxes | $ | (1,012) |  |  | $ | (9,059) |  |  | $ | 8,047 |  |  | (89) | %

Provision for income taxes decreased $8.0 million, or 89% during the three months ended March 31, 2025 compared to the same period in 2024, primarily due to a decrease in worldwide forecasted income and the valuation allowance against our U.S. federal and state deferred tax assets.
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Liquidity and Capital Resources
The following table presents our cash, cash equivalents and investments and convertible senior notes as of the periods shown (in thousands, except percentages):

|  | Change
| March 31, 2025 |  | December 31, 2024 |  | $ |  | %
Cash, cash equivalents and investments | $ | 126,386 |  |  | $ | 528,374 |  |  | $ | (401,988) |  |  | (76) | %
Convertible senior notes, net(1) | 62,475 |  |  | 485,949 |  |  | (423,474) |  |  | (87) |

______________________________________
(1) Consists of the current and long-term portion of convertible senior notes, net.
Cash, cash equivalents, and investments decreased $402.0 million, or 76%, and convertible senior notes decreased $423.5 million, or 87% during the three months ended March 31, 2025. The decreases were primarily due to the net cash used for the repayment of the 2025 notes early extinguishment of a portion of the 2026 notes.
As of March 31, 2025, our principal sources of liquidity were cash, cash equivalents, and investments totaling $126.4 million, which were held for working capital purposes. We believe that our existing sources of liquidity as well as net cash flows from operations will be sufficient to fund our operations and debt service obligations for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, our investments in research and development activities, our acquisition of new products and services and our sales and marketing activities. To the extent that existing sources of liquidity are insufficient to fund our future operations, we may need to raise additional funds through public or private equity or debt financing. Additional funds may not be available on terms favorable to us or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, operating cash flows and financial condition. As of March 31, 2025, we have incurred cumulative losses of $906.9 million from our operations and we may incur additional losses in the future.
Most of our cash, cash equivalents, and investments are held in the United States. While there is no formal plan in place to repatriate earnings from our subsidiary in India, we recorded $1.8 million of tax expense as of March 31, 2025, related to a potential future distribution of such earnings. This reflects our continued assessment of cash needs and the absence of an indefinite reinvestment assertion for India. As a result of the Tax Cuts and Jobs Act, we anticipate the U.S. federal impact for the remaining foreign jurisdictions to be minimal if these funds are repatriated. In addition, based on our current and future needs, we believe our current funding and capital resources for our international operations are adequate.
There were no material changes in our commitments under contractual obligations, as disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
The following table presents our condensed consolidated statements of cash flows data (in thousands):

| Three Months Ended March 31, |  | Change
| 2025 |  | 2024 |  | $ |  | %
Net cash flows from operating activities | $ | 24,526 |  |  | $ | 53,318 |  |  | $ | (28,792) |  |  | (54) | %
Net cash flows from investing activities | 274,914 |  |  | (40,814) |  |  | 315,728 |  |  | n/m
Net cash flows from financing activities | (416,961) |  |  | (4,294) |  |  | (412,667) |  |  | n/m

_______________________________________
*n/m - not meaningful
The substantial majority of our cash inflows from operating activities are from e-commerce transactions with students, which are settled immediately through payment processors, as opposed to cash outflows from bill payments, which are settled based on contractual payment terms with our suppliers.
Net cash flows from operating activities decreased $28.8 million, or 54%, during the three months ended March 31, 2025 compared to the same period in 2024 and was primarily related to an increase in net loss of $16.1 million as well as non-cash adjustments including a decrease in share-based compensation expense of $18.0 million, a gain on early extinguishment of debt of $7.4 million, and higher depreciation and amortization of $12.4 million.
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Net cash flows from investing activities increased $315.7 million during the three months ended March 31, 2025 compared to the same period in 2024 and was primarily related to higher proceeds from the sale of investments of $181.2 million, fewer purchases of investments of $78.2 million, higher proceeds from the maturities of our investments of $52.5 million, fewer purchases of property and equipment of $19.4 million and partially offset by the absence of proceeds from the sale of our strategic investment of $15.5 million that occurred in the three months ended March 31, 2024.
Net cash flows from financing activities decreased $412.7 million during the three months ended March 31, 2025 compared to the same period in 2024 and was primarily related to the repayment of our convertible debt of $416.5 million.
Critical Accounting Policies, Significant Judgments and Estimates
Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
There have been no material changes in our critical accounting policies and estimates during the three months ended March 31, 2025 as compared to the critical accounting policies and estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recent Accounting Pronouncements
For relevant recent accounting pronouncements, see Note 1, “Background and Basis of Presentation,” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our market risk during the three months ended March 31, 2025, compared to the disclosures in Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
ITEM 4. CONTROLS AND PROCEDURES
(a)Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report.
In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on management’s evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2025, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
(b)Changes in Internal Control over Financial Reporting
During the three months ended March 31, 2025, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We may from time to time be subject to certain legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, demands, disputes, investigations, or requests for information. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters. See Note 8, “Commitments and Contingencies,” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for more information on our legal proceedings.
In addition, on February 24, 2025, we filed a complaint in the U.S. District Court for the District of Columbia against Google LLC and Alphabet Inc. ("Google"), asserting federal antitrust claims and common-law unjust enrichment claims, in connection with Google's expansion of its AIO search experience, and seeking damages, restitution, disgorgement, and injunctive relief. Given the nature of the case, including that the proceedings are in their early stages, we are unable to predict the ultimate outcome of the case or whether Google will seek to counter claim, or the likelihood of success should Google do so.
ITEM 1A. RISK FACTORS
Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes in our risk factors from our Annual Report on Form 10-K, except as described below:
Our failure to regain compliance with the continued listing requirements of the NYSE, or any future failure to remain in compliance with such standards, could result in the delisting of our common stock, which would have an adverse impact on the trading, liquidity and market price of our common stock.
On April 1, 2025, the Company was notified by the New York Stock Exchange (NYSE) that it is not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing share price of the Company’s common stock as of March 31, 2025 was less than $1.00 over a consecutive 30 trading-day period. The Company has until October 1, 2025 to regain compliance with the NYSE’s minimum share price requirement or cure the deficiency, which may include, if necessary, effecting a reverse stock split, subject to approval by the board of directors and stockholders of the Company. We cannot guarantee that closing price of our common stock will increase such that we will regain compliance with the NYSE’s minimum share price requirement during the six-month cure period; that, if necessary, we will obtain stockholder approval with respect to a reverse stock split in order to cure the deficiency; or that we will remain in compliance with any of the NYSE’s other applicable continued listing standards. Our failure to regain compliance with the NYSE’s minimum share price requirement within the applicable cure period could lead to suspension and delisting procedures. Any suspension and delisting procedures taken by the NYSE, any future failure to remain in compliance with the NYSE’s continued listing standards, and any subsequent failure to timely resume compliance with the NYSE’s continued listing standards within the applicable cure period, if any, could have adverse consequences, including, among others, reducing the number of investors willing to hold or acquire our common stock, loss of confidence from stakeholders, employees and potential business partners, reducing the liquidity and market price of our common stock, adverse publicity, and a reduced interest in us from investors, analysts and other market participants. In addition, a suspension or delisting could impair our ability to raise additional capital through the public markets, result in negative publicity, adversely affect the market liquidity of our securities, decrease securities analysts’ coverage of us, diminish investor, supplier and employee confidence and impair our ability to attract and retain employees by means of equity compensation.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Securities
We had no unregistered sales of our securities during the three months ended March 31, 2025.
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Purchases of Securities by the Registrant and Affiliated Purchasers
We did not purchase any of our common stock during the three months ended March 31, 2025.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Plans
The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our Section 16 officers and directors for the three months ended March 31, 2025, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act ("Rule 10b5-1 Plan"), were as follows:

Name |  | Title |  | Action |  | Date Adopted |  | Expiration Date |  | Aggregate # of Securities to be Purchased/Sold
Renee Budig(1) |  | Director |  | Adoption |  | March 6, 2025 |  | July 7, 2025 |  | 27,973

(1) Ms. Budig entered into a Rule 10b5-1 Plan on March 6, 2025 which provides for the potential sale of up to 27,973 shares of the Company's common stock. The plan expires on July 7, 2025, or upon the earlier completion of all authorized transactions under the plan.
None of our Section 16 officers or directors adopted or terminated a "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of Regulation S-K during the covered period.
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ITEM 6. EXHIBITS

|  |  |  | Incorporated by Reference
Exhibit No. |  | Exhibit |  | Form |  | File No |  | Filing Date |  | Exhibit No. |  | Filed Herewith
31.01 |  | Certification of Nathan Schultz, Chief Executive Officer and President, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |  |  | X
31.02 |  | Certification of David Longo, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |  |  | X
32.01** |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  |  |  |  |  |  |  |  |  | X
101.INS |  | Inline XBRL Instance Document |  |  |  |  |  |  |  |  |  | X
101.SCH |  | Inline XBRL Taxonomy Extension Schema |  |  |  |  |  |  |  |  |  | X
101.CAL |  | Inline XBRL Taxonomy Extension Calculation |  |  |  |  |  |  |  |  |  | X
101.LAB |  | Inline XBRL Taxonomy Extension Labels |  |  |  |  |  |  |  |  |  | X
101.PRE |  | Inline XBRL Taxonomy Extension Presentation |  |  |  |  |  |  |  |  |  | X
101.DEF |  | Inline XBRL Taxonomy Extension Definition |  |  |  |  |  |  |  |  |  | X
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |  |  |  |  |  |  |  |  |  | X

* | Indicates a management contract or compensatory plan.
** | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| CHEGG, INC.
May 12, 2025 | By: |  | /S/ DAVID LONGO
|  |  | David Longo
|  |  | Chief Financial Officer
|  |  | (Principal Financial Officer and Principal Accounting Officer)

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