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What changed in CHEGG, INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CHEGG, INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+378 added−419 removedSource: 10-K (2026-03-09) vs 10-K (2025-02-24)

Top changes in CHEGG, INC's 2025 10-K

378 paragraphs added · 419 removed · 289 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeProprietary Data We have over a hundred million pieces of proprietary learning content powering our personalized learning assistant. We are leveraging this data for our large language models and have built proprietary algorithms to optimize the quality and accuracy of our content. Our unique dataset enables personalized learning and powers new capabilities to enhance the learning experience.
Biggest changeWe have built large language models, and are leveraging frontier models, specific to academic subjects and use cases that cater to learner needs. Our AI capabilities allow us to leverage our data and expertise to optimize the learning experience effectively and efficiently. Proprietary Data We have over a hundred million pieces of proprietary learning content powering our learning platform.
In addition, many states have passed student privacy laws, some of which are more restrictive than FERPA, and therefore do not pre-empt FERPA. The Children’s Online Privacy Protection Act (COPPA) imposes additional restrictions on the ability of online services to collect, use, and disclose personal information from minors.
In addition, many states have passed student privacy laws, some of which are more restrictive than FERPA, and therefore do not pre-empt FERPA. The Children’s Online Privacy Protection Act (COPPA) imposes restrictions on the ability of online services to collect, use, and disclose personal information from minors.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the U.S. Securities and Exchange Commission (SEC), which maintains an Internet site at www.sec.gov to access such reports.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are filed with the SEC, which maintains an Internet site at www.sec.gov to access such reports.
A variety of business models are being pursued or may be considered for the provision of digital learning tools, some of which may be more profitable or successful than our business model. 6 Table of Contents Intellectual Property We use proprietary technology to operate our business, and our success depends, in part, on our ability to protect our technology and intellectual property.
A variety of business models are being pursued or may be considered for the provision of digital learning tools, some of which may be more profitable or successful than our business model. Intellectual Property We use proprietary technology to operate our business, and our success depends, in part, on our ability to protect our technology and intellectual property.
California’s Privacy Rights for California Minors in the Digital World Act (Eraser Bill) permits minors to remove or request and obtain removal of content or information posted on our services.
California’s Privacy Rights for California Minors in the Digital World Act (Eraser Law) permits minors to remove or request and obtain removal of content or information posted on our services.
In addition, we may be subject to state oversight for Chegg Skill's skills-based learning programs, including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business.
In addition, we may be subject to state oversight for Chegg's skills-based learning programs, including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business.
If we are unable to transfer data between and among countries in which we operate, it could affect the manner in which we 8 Table of Contents provide our services, the geographical location or segregation of our systems and operations and could adversely affect our financial results.
If we are unable to transfer data between and among countries in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our systems and operations and could adversely affect our financial results.
Information Security Our learning platform includes encryption, antivirus, firewall, intrusion prevention, and patch-management technologies to help protect our systems distributed across cloud-hosting providers and our offices. Our existing products and services 5 Table of Contents undergo periodic security assessments. New features are developed according to our secure software development lifecycle process.
Information Security Our learning platform includes encryption, antivirus, firewall, intrusion prevention, and patch-management technologies to help protect our systems distributed across cloud-hosting providers and our offices. Our existing products and services undergo periodic security assessments. New features are developed according to our secure software development lifecycle process.
The TCPA regulates the use of artificial or prerecorded voice messages, fax messages, and the use of automatic dialing systems for both voice calls and sending text messages. Additionally, a number of states have enacted statutes that address telemarketing.
The TCPA regulates the use of artificial or prerecorded voice messages, fax messages, and the use of automatic 8 Table of Contents dialing systems for both voice calls and sending text messages. Additionally, a number of states have enacted statutes that address telemarketing.
Federal Trade Commission (FTC) has guidelines that impose responsibilities on us with respect to communications with consumers and impose fines and liability for failure to comply with rules with respect to advertising or marketing practices it may deem misleading or deceptive.
Federal Trade Commission (FTC) Act imposes responsibilities on us with respect to communications with consumers and impose fines and liability for failure to comply with rules with respect to advertising or marketing practices it may deem misleading or deceptive.
The Data Protection Act and UK GDPR set a maximum fine of £17.5 million or 4% of annual global turnover for infringements – whichever is greater – for infringements.
The UK GDPR set a maximum fine of £17.5 million or 4% of annual global turnover for infringements – whichever is greater – for infringements.
These laws provide consumers with the right to know what personal data companies collect, how it is used, and the right to access, delete, and opt out of the sale of their personal information to third parties. The CPRA also includes special requirements for California consumers under the age of 16.
These laws provide consumers with the right to know what personal data companies collect, how it is used, and the right to access, delete, and opt out of the sale of their personal information to third parties. The CDPA includes special requirements for Virginia consumers under the age of 16 and additional requirements for consumers under the age of 13.
The California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020, provides consumers the right to know what personal data companies collect, how it is used, and the right to access, delete, and opt out of the sale of their personal information to third parties.
For example, the California Consumer Privacy Act, (CCPA), which went into effect on January 1, 2020 and was amended by the California Privacy Rights Act in 2023, provides consumers the right to know what personal data companies collect, how it is used, and the right to access, delete, and opt out of the sale of their personal information to third parties.
If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks’ costs, subject to fines and higher transaction fees, reputational damage, and lose our ability to accept credit and debit 7 Table of Contents card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and results of operations could be adversely affected.
If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks’ costs, subject to fines and higher transaction fees, reputational damage, and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and creates the potential for liability under state consumer protection and data security laws, and our business and results of operations could be adversely affected.
This infrastructure resides at major cloud-hosting providers globally. Our architecture consists primarily of front-end applications, backend services, operational databases, and reporting subsystems. We use industry standard logging and monitoring tools to ensure uptime. The architecture is also designed to allow for expansion into new international markets.
Our architecture consists primarily of front-end applications, backend services, operational databases, and reporting subsystems. We use industry standard logging and monitoring tools to ensure uptime. The architecture is also designed to allow for expansion into new international markets.
The Eraser Bill also has special requirements for marketing and advertising certain products based on personal information specific to a minor or knowingly using, disclosing or compiling or allowing a third party to do so. California has several laws protecting the literary works read by California residents.
The Eraser Law also prohibits directing the marketing and advertising of certain products to children based on personal information specific to a minor or knowingly using, disclosing or compiling or allowing a third party to do so. California has several laws protecting the literary works read by California residents.
The General Data Protection Regulation (GDPR) which went into effect in May 2018 gives European Union (EU) residents, among other things, the right to know what personal data we collect from them, how it is used, and the right to access, correct, delete, and opt out of the sale of their personal information to third parties.
The Nevada Online Privacy Law, which went into effect October 1, 2021, provides Nevada residents with the right to know our data practices and the right to opt-out of the sale of certain “covered information.” The General Data Protection Regulation (GDPR) which went into effect in May 2018 gives European Union (EU) residents, among other things, the right to know what personal data we collect from them, how it is used, and the right to access, correct, delete, and opt out of the sale of their personal information to third parties.
In November 2024 and June 2024, we announced restructuring plans that included reductions of our global workforce of approximately 760 employees, or approximately 22% of our workforce, to better align our cost structure with recent industry challenges that are negatively impacting our business, including increased competition and student adoption of generative AI products.
In May 2025 and October 2025, we announced restructuring plans that included reductions of our global workforce of approximately 640 employees, or approximately 56% of our then-current workforce, to better align our cost structure with recent industry challenges that are negatively impacting our business, including increased competition and student adoption of generative AI products.
Following our acquisition of Busuu in 2022, a small portion of our international workforce is covered under a collective bargaining agreement, however, the majority of our workforce is still not covered by any collective bargaining agreement. We appreciate that our employees are our greatest asset and place a premium on the importance of their retention, growth, and development.
Following our acquisition of Busuu in 2022, a small portion of our international workforce is covered under a collective bargaining agreement, however, the majority of our workforce is not covered by any collective bargaining agreement. We prioritize the retention, growth, and development of our employees.
In January 2025, we modified 9 Table of Contents the short-term retention cash bonus plan to run on a calendar year, from January 1, 2025 through December 31, 2025, and implemented an annual cash bonus plan based on the attainment of revenue and adjusted EBITDA goals for a select group of vice presidents and above.
In 2025, in order to continue to attract and retain a highly engaged workforce, we offered a company-wide short-term retention cash bonus plan to run on a calendar year, from January 1, 2025 through December 31, 2025, and a bonus plan based on the attainment of revenue and adjusted EBITDA goals for a select group of vice presidents and above.
The Credit Card Accountability Responsibility and Disclosure Act of 2009, or CARD Act, and similar laws and regulations adopted by a number of states regulate credit card and gift certificate use fairness, including expiration dates and fees. Our business also requires that we comply with payment card industry data security and other standards.
The Credit Card Accountability Responsibility and Disclosure Act of 2009, or CARD Act, and similar laws and regulations adopted by a number of states regulate credit card and gift certificate use fairness, including expiration dates and fees.
California Education Code Section 99122 requires for-profit postsecondary educational institutions to post a social media privacy policy on their website.
California Education Code Section 99122 requires each private nonprofit and for-profit postsecondary educational institution to post its social media privacy policy on its website.
For Skills, we face competition from other online learning platforms and online “skills accelerator” courses both in the direct-to-consumer category, including General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc., as well as white-label and co-branded providers who compete for adult learners through third party institutions, including 2U, Inc., Simplilearn, and Kenzie Academy.
For our workforce skilling program, we face competition from other online learning platforms and online “skills accelerator” course providers, both white-label and co-branded, which compete for adult learners through third party institutions, including 2U, Inc., Simplilearn, General Assembly, Galvanize, Inc., Flatiron School, Codecademy, DataCamp, and Lambda, Inc.
The Digital Millennium Copyright Act (DMCA) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing, or linking to third-party content that infringes copyrights of others.
The Digital Millennium Copyright Act (DMCA) prohibits the circumvention of technological protection measures and includes a safe harbor intended to reduce the liability of online service providers for hosting, caching, serving as a mere conduit for the transmission of or linking to third-party content that infringes copyrights of others.
We believe that we have competitive strengths that position us favorably in each aspect of our business. However, the education industry is evolving rapidly, including the utilization of AI and machine learning, and is increasingly competitive.
For Chegg Math, we face competition from other equation solver services, such as Photomath, Gauthmath, and Symbolab. We believe that we have competitive strengths that position us favorably in each aspect of our business. However, the education industry is evolving rapidly, including the utilization of AI and machine learning, and is increasingly competitive.
PPL provides for both civil and criminal penalties with a maximum financial penalty of ILS 25,000 and additional fines if the violation is on-going, and a maximum criminal penalty of imprisonment for up to five years. The Skills and Post-16 Education Act 2022 established the government’s skills and training strategy for the United Kingdom.
PPL provides for both civil and criminal penalties with significant financial penalties capped at 5% of a business’s annual turnover and a maximum criminal penalty of imprisonment for up to five years. The Skills and Post-16 Education Act 2022 established the government’s skills and training strategy for the United Kingdom.
We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC. Such reports and other information filed with the SEC are available free of charge on our website at www.investor.chegg.com and on the SEC’s website.
Such reports and other information filed with the SEC are available free of charge on the SEC's website and on our website at www.investor.chegg.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Regulations related to the Program Participation Agreement of the U.S. Department of Education and other similar laws that regulate the recruitment of students to colleges and other institutions of higher learning.
Requirements related to Title IV of the Higher Education Act and regulations promulgated thereunder by the U.S. Department of Education, and other similar laws, regulate the recruitment of students to colleges and other institutions of higher learning.
TEQSA may apply under section 127A to the Federal Court for an injunction requiring carriage service providers to take steps to disable access to websites found to contravene or facilitate a contravention of sections 114A or 114B of the TEQSA Act, and the Act also provides for other financial or custodial penalties where an offense is proven.
TEQSA may apply under section 127A to the Federal Court for an injunction requiring carriage service providers to take steps to disable access to websites found to contravene or facilitate a contravention of sections 114A or 114B of the TEQSA Act, and the Act also provides for other financial or custodial penalties where an offense is proven. 10 Table of Contents Human Capital As of December 31, 2025, we had 595 employees, of which 564 were full-time and 31 were part-time, with 411 located outside the United States.
Our principal executive offices are located at 3990 Freedom Circle, Santa Clara, California 95054 and our telephone number is (408) 855-5700. Available Information Our website address is www.chegg.com and our Investor Relations website address is www.investor.chegg.com.
Our principal executive offices are located at 2261 Market Street STE 46218, San Francisco, California 94114 and our telephone number is (408) 855-5700. Available Information Our website address is www.chegg.com and our Investor Relations website address is www.investor.chegg.com.
The key elements of our technology platform are: AI Our technology, which includes computational engines, machine learning, decision tools, proprietary generative AI capabilities, allow us to build an industry-leading personalized learning assistant without compromising quality and safety. We have built large language models, and are leveraging frontier models, specific to academic subjects and use cases that cater to learner needs.
The key elements of our technology platform are: 6 Table of Contents AI Our technology, which includes computational engines, machine learning, decision tools, and proprietary generative AI capabilities, allows us to build an industry-leading personalized learning assistant without compromising quality and safety.
We are also required to obtain consent from consumers in certain circumstances and adhere to certain data transfer mechanisms to transfer EU personal data to certain other jurisdictions. The Safe Harbor framework that many companies relied on to transfer data was recently found to be invalid.
We are also required to obtain consent from consumers in certain circumstances and adhere to certain data transfer mechanisms to transfer EU personal data to certain other jurisdictions. We rely on standard contractual clauses for data transfers from the EU.
We provide other educational offerings to help students with their coursework. Technology and Platform Integration Technology is at the core of our learning platform. We leverage the latest in distributed systems, machine learning, data analytics, and generative AI to increase efficiency and scale in our business.
We leverage the latest in distributed systems, machine learning, data analytics, and generative AI to increase efficiency and scale in our business.
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. A team of leading experts have developed an online learning instruction to bring students from novice to advanced speakers in a fast-paced, enjoyable environment.
Chegg Skilling Our language learning platform provides subscribers access to a premium language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors and a community of members to practice alongside.
Our services face competition from other education and learning companies based on the particular offering. These competitors are using AI technology to build on their historical offerings. For Chegg Study, our competitors primarily include platforms that provide study materials and online instructional systems, such as Course Hero, Quizlet, Khan Academy, and Brainly.
For Chegg Study, our competitors primarily include platforms that provide study materials and online instructional systems, such as Course Hero, Quizlet, Brainly, and Khan Academy. For Chegg Writing, we primarily face competition from other citation generating and grammar and plagiarism services, such as Grammarly.
We use brand marketing and performance marketing to increase awareness of the Chegg brand and its services and drive traffic to our site. We use several major direct marketing channels to reach students, including social media.
The result is an online advertising platform that continuously maximizes the value of the digital impressions we serve. Sales and Marketing Students Our direct-to-consumer marketing strategy focuses on increasing awareness of the Chegg brand and its services, and driving traffic to our site. We use several major direct marketing channels to reach students, including social media.
The GDPR sets a maximum fine of €20 million or 4% of annual global turnover for infringements – whichever is greater.
As regulatory authorities continue to issue further guidance on personal data, we could suffer additional costs, complaints or regulatory investigations or fines. The GDPR sets a maximum fine of €20 million or 4% of annual global turnover for infringements – whichever is greater.
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.” Our service and product offerings fall into two categories: Subscription Services, which encompasses our Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu offerings that can be accessed internationally through our websites and on mobile devices, and Skills and Other, which encompasses our Chegg Skills, advertising services, print textbooks and eTextbooks offerings.
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 I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K. Our service and product offerings fall into two categories: Chegg Skilling and Academic Services.
Chegg Study Pack is a premium subscription bundle that includes all of the benefits of Chegg Study, as well as Chegg Writing and Chegg Math (both described further below). Chegg Writing. Our Chegg Writing subscription service consists of a suite of essential tools including plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation.
Subscribers engage with our conversational experience that delivers the right support at the right time. Our Chegg Writing subscription service consists of a suite of essential tools including plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation. Subscribers can also have a writing professional proofread papers for personalized feedback.
It also expands the definition of personal information and gives consumers increased privacy rights and protections for that information. The CCPA also includes special requirements for California consumers under the age of 16.
The CPA also includes special requirements for Colorado consumers under the age of 18. The CCPA also includes special requirements for California consumers under the age of 16.
In 2024, 6.6 million students subscribed to our Subscription Services, a decrease of 14% year over year from 7.7 million in 2023. Subscription Services Chegg Study. Chegg Study subscribers have access to personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts. Subscribers engage with our conversational experience that delivers the right support, at the right time.
Academic Services Our legacy academic learning services are headlined by Chegg Study Pack, a premium subscription bundle that includes all of the benefits of Chegg Study, Chegg Writing and Chegg Math. Chegg Study subscribers have access to personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts.
We utilize three types of customer relationship management campaigns: onboarding programs to drive activation and retention, personalized cross-sell campaigns to deepen engagement, and promotional campaigns to drive sales and interests. Student Advocacy We are committed to providing a high level of customer service to our students and to fulfilling our brand promise of putting students first.
The size and quality of our content catalog drives organic traffic to Chegg. Our lifecycle marketing focuses on increasing activation, engagement and retention. We utilize three types of customer relationship management campaigns: onboarding programs to drive activation and retention, personalized cross-sell campaigns to deepen engagement, and promotional campaigns to drive sales and interests. Customers Our customers include learners and businesses.
The Nevada Online Privacy Law, which went into effect October 1, 2021, provides Nevada residents with the right to know our data practices and the right to opt-out of the sale of certain “covered information.” The California Privacy Rights Act (CPRA), Virginia Consumer Data Protection Act (CDPA) and Colorado Privacy Act (CPA) all went into effect on January 1, 2023.
Similar comprehensive state privacy laws have been enacted, including the Virginia Consumer Data Protection Act (CDPA) and Colorado Privacy Act (CPA) which both went into effect on January 1, 2023.
For Chegg Writing, we primarily face competition from other citation generating and grammar and plagiarism services, such as Grammarly. For Chegg Math, we face competition from other equation solver services, such as Photomath, Gauthmath, and Symbolab. For Busuu, our competitors primarily include language learning platforms, such as Duolingo and Babbel.
Our services face competition from other education and learning 7 Table of Contents companies based on the particular offering. The competitors for our language learning platform primarily include similar language learning platforms such as GoFluent, Speexx, and Duolingo.
Subscribers can also have a writing professional proofread papers for personalized feedback. Chegg Writing also includes the popular website properties EasyBib, Citation Machine, BibMe, and CiteThisForMe. Chegg Math. Our Chegg Math subscription service provides students with a computational engine to help them understand and solve math problems.
Our Chegg Math subscription service provides students with a computational engine to help them understand and solve math problems. We also work with leading brands and programmatic partners to deliver advertising across our platforms. Technology and Platform Integration Technology is at the core of our learning platform.
We continued to offer our award-winning suite of benefits that are highly appreciated by our employee population. Environmental, Social, and Corporate Governance (ESG) At Chegg, our approach to ESG is tied to our mission to help every learner achieve their best, in school and beyond.
We continue to offer our award-winning suite of benefits that are highly appreciated by our employees.
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ITEM 1. BUSINESS Overview Chegg provides individualized learning support to students as they pursue their educational journeys.
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ITEM 1. BUSINESS Overview Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed. Focused on the large and growing skilling market, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning. Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support.
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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.
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Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world. Our long-term strategy is focused on helping learners achieve better outcomes by combining academic support with practical, career-relevant skills across the learning lifecycle.
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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.
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We are evolving our platform to support learners both in the classroom and beyond, leveraging AI to deliver faster, more personalized, and more effective learning experiences. We continue to invest in expanding our skilling offerings and integrating them with our core academic services to provide a differentiated, end-to-end solution that supports the whole learner.
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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.
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Our use of AI in our platform is designed to enable us to scale personalized support, improve learning outcomes, and increase course completion while maintaining high standards of quality and accuracy. We believe these investments position us to drive deeper engagement, expand our addressable market, and return the business to sustainable revenue growth over time.
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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.
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A team of leading experts have developed our online learning instruction to bring students from novice to advanced speakers in a fast-paced, enjoyable environment and we currently offer comprehensive courses taught by highly qualified teachers in 14 languages. We also provide workforce skilling programs that help employers develop and retain talent.
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Chegg Study also includes a collection of free perks where available, including services students care about in and out of the classroom, such as Tinder Gold, DashPass Student, and Max. Chegg Study Pack.
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Our workforce skilling programs align workforce needs with learner outcomes by combining in-demand technical skills such as AI, coding, data analytics, and cybersecurity, with foundational business and human-centered durable skills. We keep our portfolio current by working closely with employers, including Fortune 1000 companies, to understand emerging role requirements and workforce needs.
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They can work through difficult math problems with the help of a step-by-step math problem solver and calculator for instant guided instructional explanations that break things down in a range of math topics. Busuu .
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Programs feature engaging, modular online content, practice opportunities, and support. Our platform tracks learner progress in real time, delivering predictive nudges and timely interventions that improve engagement, retention, and completion rates. Our approach is informed by learning science to help skills stick, so learners can apply what they learn with confidence at work.
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The Busuu offering currently offers comprehensive courses, taught by highly qualified teachers in 14 languages. 4 Table of Contents Skills and Other Chegg Skills. Chegg Skills seeks to ensure that companies have the right talent, with the right skills, at the right time by aligning employer needs with learner outcomes.
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We are leveraging this data within our product to improve the learning experience of the students. Our unique dataset enables personalized learning and powers new capabilities to enhance the learning experience. Shared Infrastructure We leverage shared infrastructure to allow us to efficiently build products across our learning platform. This infrastructure resides at major cloud-hosting providers globally.
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We offer programs designed to train learners on the latest technical skills, such as AI, coding, data analytics, and cybersecurity. Our programs are available through partners that connect employers with top learning providers, and directly to large employers.
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We rely on a variety of customers and are not materially dependent on any single customer or group of customers. No customers represented over 10% of net revenues during the years ended December 31, 2025, 2024 or 2023).
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We expect to expand our skills-based learning service with durable skills programs, which cover competencies, such as emotional intelligence, mindset, emerging leadership and decision making, increasing the likelihood of success in the modern workplace. Advertising Services. We work with leading brands and programmatic partners to deliver advertising across our platforms. Other.
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Our business also requires that we comply with payment card industry data security and other standards, including state laws and industry standards that have data security obligations beyond federal requirements.
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We are building an AI Arena whereby we will automatically update to newer models as they are released and tested to improve solution accuracy and speed. Our AI capabilities allow us to leverage our data and expertise to optimize the learning experience effectively and efficiently.
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The FTC recently amended COPPA to expand the requirements for online services that collect personal information from children, such as requiring operators to implement a written children’s security program with certain safeguards.
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Personalization As learners engage with our platform, the conversational experience generates valuable data that we can, in turn, use to further personalize the learning experience. We combine this data with other public information about learners and their schools to tailor our offerings and predict student needs.
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The Communications Decency Act provides that interactive computer services, including websites and platforms, shall not be treated as publishers or speakers of any information provided by others, i.e., as individuals who post content on the interactive computer service’s website or platform. 9 Table of Contents Additionally, numerous states have enacted comprehensive privacy laws regulating the processing of the personal data of consumers.
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Search Search is a very efficient platform for Chegg, as learners increasingly turn online for academic support. Our business model benefits from more students asking more questions, as we index those questions in to search and other platforms, to drive even more customers. Shared Infrastructure We leverage shared infrastructure to allow us to efficiently build products across our learning platform.
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The CCPA also includes special requirements for California consumers under the age of 16. Under amendments to the CCPA that went into effect on January 1, 2026, the personal information of consumers under 16 years old is now considered sensitive personal information, which may trigger additional compliance requirements.
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The result is an online advertising platform that continuously maximizes the value of the digital impressions we serve. Customers In 2024, 2023 and 2022, 6.6 million, 7.7 million, and 8.1 million customers subscribed to our Subscription Services, respectively. Sales and Marketing Students Our direct-to-consumer marketing strategy focuses on brand and performance marketing.
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The CCPA imposes civil penalties for violations and grants a private right of action for certain data breaches. This private right of action may increase both the likelihood and risks of data breach litigation.
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The strength of our content flywheel drives significant organic traffic to Chegg, and we have a full funnel approach to building brand awareness and consideration. Our lifecycle marketing focuses on increasing activation, engagement and retention.
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Seasonality We are generally not subject to significant seasonal fluctuations. Corporate History We were incorporated in Delaware in July 2005 and appointed our current Chief Executive Officer in 2025, who previously served as our Chief Executive Officer from February 2010 to June 2024.
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We trust our students, understand the critical role our products and services have in their learning journey, and strive to resolve all problems quickly and thoroughly. Our student advocacy team can be reached directly through phone, email, and online chat during business hours.
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We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements, and other information with the SEC.
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We also proactively monitor social media to identify and solve problems before we are otherwise informed of their existence. We endeavor to respond to students’ concerns within five minutes.
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The FTC has proposed updates to COPPA which are currently in a notice-and-comment period.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe rate at which our student user base expands or declines, the rate at which we 13 Table of Contents retain existing students, and the engagement with our learning platform may fluctuate because of several factors, including, among others: • our ability to engage students with our suite of Subscription Services and the content contained therein; • our ability to introduce new products and services that are favorably received by students, including a new AI-enabled interactive and personalized user experience; • our ability to convert visitors to paying subscribers given the availability of free competitors and content; • piracy and unauthorized use of our content; • the decreasing number of students attending U.S. colleges; • our ability to localize our content, localize our pricing, localize our payment and commerce tools, and create new apps in different languages and for different geographies to further our international expansion through increased conversion and retention; • our ability to increase our total addressable market beyond STEM-B (science, technology, engineering, mathematics and business); • our ability to grow our skills business-to-business partnerships and partnerships with providers who link us to employers and their learners; • changes in student spending levels and habits; and • the effectiveness of our sales and marketing efforts, including generating word-of-mouth referrals.
Biggest changeThe rate at which our customer base expands or declines, the rate at which we retain existing learners, and the engagement with our learning platform may fluctuate because of several factors, including, among others: • our ability to locate and attract new customers to use our products and services and convert visitors to paying subscribers given the availability of competing content, including free content; • our ability to attract new customers to grow our Skilling business; • our ability to engage learners with our content; • our ability to introduce new products and services that are favorably received by business customers and learners, including integrating AI-enabled products; • piracy and unauthorized use of our content; • our ability to localize our content, localize our pricing, localize our payment and commerce tools, and create new apps in different languages and for different geographies to further our international expansion through increased conversion and retention; • our ability to increase our total addressable market beyond STEM-B (science, technology, engineering, mathematics and business); • changes in customer spending levels and habits; and • the effectiveness of our sales and marketing efforts, including generating word-of-mouth referrals.
To the extent that these conditions continue, students may elect to not attend colleges and universities and may reduce the amount they spend on educational content. In addition to decreased spending by students as a result of these economic conditions, business partners may reduce their spend on our offerings and brands may reduce their spend on our advertising services.
To the extent that these conditions continue, students may elect to not attend colleges and universities and may reduce the amount they spend on educational content. In addition to decreased spending by students as a result of these economic conditions, business partners may reduce their spending on our offerings and brands may reduce their spending on our advertising services.
We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all. Historically, investments in our business have substantially exceeded the cash we have generated from our operations. We have funded our operating losses and capital expenditures through proceeds from equity and debt financings, and cash flow from operations.
We may need additional capital, and we cannot be sure that additional financing will be available on favorable terms, if at all. Investments in our business have historically substantially exceeded the cash we have generated from our operations. We have funded our operating losses and capital expenditures through proceeds from equity and debt financings, and cash flow from operations.
In addition, our restated certificate of incorporation and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • our board of directors is classified into three classes of directors with staggered three-year terms and directors can only be removed from office for cause and by the approval of the holders of at least two-thirds of our outstanding common stock; • subject to certain limitations, our board of directors has the sole right to set the number of directors and to fill a vacancy resulting from any cause or created by the expansion of our board of directors, which prevents stockholders from being able to fill vacancies on our board of directors; • only our board of directors is authorized to call a special meeting of stockholders; • our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of common stock; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our stockholders cannot act by written consent; • our restated bylaws can only be amended by our board of directors or by the approval of the holders of at least two-thirds of our outstanding common stock; and • certain provisions of our restated certificate of incorporation can only be amended by the approval of the holders of at least two-thirds of our outstanding common stock.
In addition, our restated certificate of incorporation and restated bylaws contain provisions that may make the acquisition of our company more difficult, including the following: • our Board is classified into three classes of directors with staggered three-year terms and directors can only be removed from office for cause and by the approval of the holders of at least two-thirds of our outstanding common stock; • subject to certain limitations, our Board has the sole right to set the number of directors and to fill a vacancy resulting from any cause or created by the expansion of our Board, which prevents stockholders from being able to fill vacancies on our Board; • only our Board is authorized to call a special meeting of stockholders; • our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of common stock; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our stockholders cannot act by written consent; • our restated bylaws can only be amended by our Board or by the approval of the holders of at least two-thirds of our outstanding common stock; and • certain provisions of our restated certificate of incorporation can only be amended by the approval of the holders of at least two-thirds of our outstanding common stock.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among others: • our announcement of actual results for a fiscal period that are higher or lower than projected results or our announcement of revenues or earnings guidance that is higher or lower than expected; • issuance of new or updated research or reports by securities analysts, including unfavorable reports or change in recommendation or downgrading of our common stock; • announcements by us, our competitors, or other parties of significant products or features, technologies (including AI-related developments), acquisitions, strategic relationships and partnerships, joint ventures, or capital commitments; • actual or anticipated changes in our growth rate relative to our competitors; • changes in the economic performance or market valuations of actual or perceived comparable companies; • future sales of our common stock by our officers, directors, and existing stockholders or the anticipation of such sales; • issuances of additional shares of our common stock or convertible instruments in connection with acquisitions and capital raising transactions; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares, including any common stock issued upon conversion of the notes; • lawsuits threatened or filed against us; • regulatory developments in our target markets affecting us, students, colleges, brands, publishers, or our competitors; • the U.S. political climate, with a focus on cutting budgets, higher education, and taxation; • terrorist attacks or natural disasters or similar events impacting countries where we operate; and • general economic and market conditions.
In addition to the factors discussed in this Annual Report on Form 10-K, the trading price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, among others: • our announcement of actual results for a fiscal period that are higher or lower than projected results or our announcement of revenues or earnings guidance that is higher or lower than expected; • issuance of new or updated research or reports by securities analysts, including unfavorable reports or change in recommendation or downgrading of our common stock; • announcements by us, our competitors, or other parties of significant products or features, technologies (including AI-related developments), acquisitions, strategic relationships and partnerships, joint ventures, or capital commitments; • actual or anticipated changes in our growth rate relative to our competitors; • changes in the economic performance or market valuations of actual or perceived comparable companies; • future sales of our common stock by our officers, directors, and existing stockholders or the anticipation of such sales; • issuances of additional shares of our common stock or convertible instruments in connection with acquisitions and capital raising transactions; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares, including any common stock issued upon conversion of the notes; • lawsuits threatened or filed against us; • regulatory developments in our target markets affecting us, students, colleges, brands, or our competitors; • the U.S. political climate, with a focus on cutting budgets, higher education, and taxation; • terrorist attacks or natural disasters or similar events impacting countries where we operate; and • general economic and market conditions.
To succeed in our efforts to strengthen our brands’ identities, we must, among other activities: • maintain our reputation as a trusted technology platform and source of content, services, and textbooks for students; • maintain and improve the quality of our existing products, services, and technologies; • introduce compelling products and services; • adapt to changing technologies, including AI and machine learning, and changes in the learning environment; • protect user data, such as passwords and personally identifiable information; • adapt to students’ rapidly changing tastes, preferences, behavior, and brand loyalties; • continue to expand our reach to students in high school, college, graduate school, lifelong learners throughout their careers, and internationally; • ensure that the student-posted content to our website is reliable and does not infringe on third-party copyrights or violate other applicable laws, our terms of use, or the ethical codes of those students’ colleges; • ensure that our experts' content is reliable and helpful; • protect our trademarks and other intellectual property rights; • convert and integrate the brands and students that we acquire into the Chegg brand and Chegg.com; and • maintain and control the quality of our brand.
To succeed in our efforts to strengthen our brands’ identities, we must, among other activities: • maintain our reputation as a trusted technology platform and source of content and services; • maintain and improve the quality of our existing products, services, and technologies; • introduce compelling products and services; • adapt to changing technologies, including AI and machine learning, and changes in the learning environment; • protect user data, such as passwords and personally identifiable information; • adapt to students’ rapidly changing tastes, preferences, behavior, and brand loyalties; • continue to expand our reach to students in high school, college, graduate school, lifelong learners throughout their careers, and internationally; • ensure that the student-posted content to our website is reliable and does not infringe on third-party copyrights or violate other applicable laws, our terms of use, or the ethical codes of those students’ colleges; • ensure that our experts' content is reliable and helpful; • protect our trademarks and other intellectual property rights; • convert and integrate the brands and students that we acquire into the Chegg brand and Chegg.com; and • maintain and control the quality of our brand.
Some of our competitors have adopted, and may continue to adopt, aggressive pricing policies (including free offerings), less stringent standards for user-uploaded content, and devote substantially more resources to marketing, website, and systems development than we do. As a result, we have and could continue to experience a material adverse effect on our operating results, growth and financial condition.
Some of our competitors have adopted, and may continue to adopt, aggressive pricing policies (including free offerings), less stringent standards for user-uploaded content, and devote substantially more resources to marketing, website, and systems development than we do. As a result, we have experienced, and could continue to experience, a material adverse effect on our operating results, growth and financial condition.
TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities. Furthermore, under various other privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
TCPA violations can result in significant financial penalties, including penalties or fines imposed by the Federal Communications Commission or fines of up to $1,500 per violation imposed through private litigation or by state authorities. Furthermore, under various other privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
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.
In November 2024, our Board 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.
For example, proposed or recently adopted EU laws could significantly affect our business in the future. For example, the Digital Services Act or “DSA”, took effect in February of 2024, imposes new restrictions and requirements for our products and services, such as a prohibition on targeted advertising to minors in the EEA, and may significantly increase our compliance costs.
For example, proposed or recently adopted EU laws could significantly affect our business in the future. For example, the Digital Services Act or “DSA”, took effect in February of 2024, imposes restrictions and requirements for our products and services, such as a prohibition on targeted advertising to minors in the EEA, and may significantly increase our compliance costs.
If we elect to deliver shares of our common stock to settle such conversion, the issuance of our common stock may cause immediate and significant dilution. In addition, our ability to repurchase the notes or to pay cash upon conversions of notes may be limited by law, regulatory authority or agreements governing any future indebtedness.
If we elect to deliver shares of our common stock to settle such conversion, the issuance of our common stock may cause immediate and significant dilution. In addition, our ability to repurchase the 2026 notes or to pay cash upon conversions of 2026 notes may be limited by law, regulatory authority or agreements governing any future indebtedness.
Similarly, the adoption of any laws or regulations affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments, such as the Restore Online Shoppers’ Confidence Act, may materially adversely affect our business, financial condition and results of operations.
Similarly, the adoption of any laws or regulations affecting the ability of service providers to periodically charge consumers for, among other things, recurring subscription payments, such as the Restore Online Shoppers’ Confidence Act (ROSCA), may materially adversely affect our business, financial condition and results of operations.
In addition, upon conversion of the notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the notes being converted.
In addition, upon conversion of the 2026 notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 2026 notes being converted.
The safe harbors available under the DMCA can limit liability for copyright infringement in the U.S., but they do not limit our liability for infringement of other intellectual property or proprietary rights, they do not apply outside the U.S., and they do not prevent or address requests for injunctive relief.
The safe harbors available under the DMCA can limit liability for copyright infringement in the U.S., but they do not limit our liability for infringement of other intellectual property or proprietary rights, they do not automatically apply outside the U.S., and they do not prevent or address requests for injunctive relief.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or to pay cash upon conversions of notes.
If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the 2026 notes or to pay cash upon conversions of 2026 notes.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefore or pay cash with respect to notes being converted.
However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of 2026 notes surrendered therefore or pay cash with respect to 2026 notes being converted.
Factors that could negatively affect our brands include, among others: • changes in student sentiment about the quality or usefulness of our products and services, especially as we introduce our new AI-enabled interactive and personalized user experience; • the quality and accuracy of our content; • technical or other problems that prevent us from providing our products and services reliably or otherwise negatively affect the student experience with our products and services; • concern from colleges and regulatory agencies regarding how students use our content offerings, such as our Expert Questions and Answers service; • student concerns related to privacy and use of data in our products and services; • the reputation of the products and services of competitive companies; and • students’ misuse of our products and services in ways that violate our Terms of Use, our Honor Code, other company policies, applicable laws, or the code of conduct at their educational institutions.
Factors that could negatively affect our brands include, among others: • changes in student sentiment about the quality or usefulness of our products and services, especially as we introduce our new AI-enabled interactive and personalized user experience; • the quality and accuracy of our content; • technical or other problems that prevent us from providing our products and services reliably or otherwise negatively affect the student experience with our products and services; • concern from colleges and regulatory agencies regarding how students use our content offerings, such as our Expert Questions and Answers service; 16 Table of Contents • student concerns related to privacy and use of data in our products and services; • the reputation of the products and services of competitive companies; and • students’ misuse of our products and services in ways that violate our Terms of Use, our Honor Code, other company policies, applicable laws, or the code of conduct at their educational institutions.
As a publisher and distributor of online content, including content uploaded by both by Chegg itself and by our users, we face potential liability for claims related to intellectual property rights including copyright and trademark infringement, rights of publicity or privacy, defamation, personal injury torts, laws regulating hate speech or other types of content, online safety, consumer protection, or other claims based on the nature and content of materials that we publish or distribute.
As a publisher and distributor of online content, including both our content and content uploaded by our users, we face potential liability for claims related to intellectual property rights including copyright and trademark infringement, rights of publicity or privacy, defamation, personal injury torts, laws regulating hate speech or other types of content, online safety, consumer protection, or other claims based on the nature and content of materials that we publish or distribute.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data (including data regarding foreign students) and work with partners, vendors and other third parties, injunctions against our processing or transferring of personal data necessary to operate our business, among other consequences.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face the interruption or degradation of our operations, the need to relocate 30 Table of Contents part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data (including data regarding foreign students) and work with partners, vendors and other third parties, injunctions against our processing or transferring of personal data necessary to operate our business, among other consequences.
Any disruption in the services provided by third-party providers, including AWS, could harm our reputation or brand, cause us to lose subscribers or revenues or incur substantial recovery costs and distract management from operating our business. Further, these third-party software and service providers may experience operational difficulties, including increased usage of their software and services from time to time.
Any disruption in the services provided by third-party providers, including AWS, could harm our reputation or brand, cause us to lose subscribers or revenues or incur substantial recovery costs and distract management from operating our business. These third-party software and service providers also may experience operational difficulties, including increased usage of their software and services from time to time.
We may not be able to generate cash flow from operations, in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
We may not be able to generate cash flow from operations, in the foreseeable future, sufficient to service any of our debt and make necessary capital expenditures and may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
Additionally, the SCCs impose additional compliance burdens, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data. In addition, Switzerland similarly restricts personal data transfers outside of those jurisdictions to countries that do not provide an adequate level of personal data protection.
The SCCs also impose additional compliance burdens, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data. In addition, Switzerland similarly restricts personal data transfers outside of those jurisdictions to countries that do not provide an adequate level of personal data protection.
From time to time, third parties have alleged and are likely to allege in the future that we or our business infringes, misappropriates, or otherwise violates their intellectual property or proprietary rights beyond those circumstances discussed in 28 Table of Contents other risk factors contained in this Section, “Risks Relating to Our Intellectual Property.” Many companies, including various “non-practicing entities” or “patent trolls,” devote significant resources to developing or acquiring patents that could affect aspects of our business.
From time to time, third parties have alleged and are likely to allege in the future that we or our business infringes, misappropriates, or otherwise violates their intellectual property or proprietary rights beyond those circumstances discussed in other risk factors contained in this Section, “Risks Relating to Our Intellectual Property.” Many companies, including various “non-practicing entities” or “patent trolls,” devote significant resources to developing or acquiring patents that could affect aspects of our business.
Chegg derives a significant portion of its revenue from students attending U.S. colleges; and as such, a continued decrease in the number of students enrolled in U.S. colleges could materially negatively impact our business, growth, results of operations, and financial condition.
Chegg derives a significant portion of its revenue from students attending U.S. colleges; and as such, a further decrease in the number of students enrolled in U.S. colleges could materially negatively impact our business, growth, results of operations, and financial condition.
Any of the foregoing may have an adverse effect on our business. We have a history of losses, and we may not achieve or sustain profitability in the future. We have experienced cumulative net losses since our incorporation in July 2005, and we may continue to experience net losses in the future.
Any of these may have an adverse effect on our business. We have a history of losses, and we may not achieve or sustain profitability in the future. We have experienced cumulative net losses since our incorporation in July 2005, and we may continue to experience net losses in the future.
Allegations of abuse of federal financial aid funds and other statutory violations against for-profit higher education companies, even if unfounded, could negatively impact our opportunity to succeed due to increased regulation or decreased demand for our offerings.
Allegations of abuse of federal financial aid funds and other legal violations against for-profit higher education companies, even if unfounded, could negatively impact our opportunity to succeed due to increased regulation or decreased demand for our offerings.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested 35 Table of Contents stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders.
Our reliance on these and other third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts and to otherwise assist in the operation of our business increases our risk exposure as our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
Our reliance on these and other third-party service providers and technologies to operate critical business 26 Table of Contents systems to process sensitive information in a variety of contexts and to otherwise assist in the operation of our business increases our risk exposure as our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
The CCPA provides for fines of up to $7,988 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages. 31 Table of Contents Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
The CCPA provides for fines of up to $7,988 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages. Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
If it is more difficult for students to access and use our apps on their mobile devices, our student growth and engagement levels could be harmed. Our wide variety of accepted payment methods subjects us to third-party payment processing-related risks, including risks associated with credit card fraud.
If it is more difficult for students to access and use our apps on their mobile devices, our student user base and engagement levels could be harmed. Our wide variety of accepted payment methods subjects us to third-party payment processing-related risks, including risks associated with credit card fraud.
A failure to adequately control fraudulent transactions could harm our business and results of operations. We rely on Amazon Web Services (AWS) and other third-party software and service providers to provide systems, storage, and services for our website and any disruption of such services or a material change to our arrangements could adversely affect our business.
A failure to adequately control fraudulent transactions could harm our business and results of operations. 18 Table of Contents We rely on Amazon Web Services (AWS) and other third-party software and service providers to provide systems, storage, and services for our website and any disruption of such services or a material change to our arrangements could adversely affect our business.
Also, despite the potential benefits of AI technology, the advancement of AI may increase certain risks and adverse impacts associated with misuse of our content, including the development of AI 27 Table of Contents applications that may facilitate piracy and new forms of intellectual property infringement through the unauthorized reproduction of copyrighted content to “train” AI applications and to create unauthorized derivative works.
Also, despite the potential benefits of AI technology, the advancement of AI may increase certain risks and adverse impacts associated with misuse of our content, including the development of AI applications that may facilitate piracy and new forms of intellectual property infringement through the unauthorized reproduction of copyrighted content to “train” AI applications and to create unauthorized derivative works.
Additionally, even if we succeed in establishing brand awareness and loyalty, we may be unable to maintain and grow our student user base if we cannot offer competitive prices for our products and services, adequately prevent unauthorized account sharing of our subscription program services, or prevent the piracy and illegal reproduction of our content.
Additionally, even if we succeed in establishing brand awareness and loyalty, we may be unable to maintain and grow our customer base if we cannot offer competitive prices for our products and services, adequately prevent unauthorized account sharing of our subscription program services, or prevent the piracy and illegal reproduction of our content.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business and results of operations. We may be subject to short-selling strategies that may drive down the market price of our common stock.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business and results of operations. 32 Table of Contents We may be subject to short-selling strategies that may drive down the market price of our common stock.
If the market and demand for a comprehensive learning platform does not develop as we expect, or if we fail to address the needs of this market, our business and prospects would be harmed. Given the current environment of uncertainty, we may not be able to provide annual financial guidance.
If the market and demand for a comprehensive learning platform does not develop as we expect, or if we fail to address the needs of this market, our business and prospects would be harmed. Given the current environment of uncertainty, we may not be able to provide annual financial guidance accurately, or at all.
We have depended in the past on various search engines and free marketing tools to direct a significant amount of traffic to our website, but we are increasingly investing in other channels, including social media campaigns, to drive traffic and make us more discoverable to students.
We have depended in the past on various search engines and free marketing tools to direct a significant amount of traffic to our website, but we are increasingly investing in other channels, including social media campaigns, to drive traffic and make 15 Table of Contents us more discoverable to students.
In addition, we face risks in doing business internationally that could constrain our operations, increase our cost structure, and compromise our growth prospects, including: • the need to localize and adapt content for specific countries, including translation into foreign languages; • local laws restricting students from accessing online education platforms such as ours; • data privacy laws that may require data to be handled in a specific manner, including storing, processing, and encrypting data solely on local servers; • varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; • difficulties in staffing and managing foreign operations, including in countries in which foreign employees may become part of labor unions, employee representative bodies, workers’ councils or collective bargaining agreements, and challenges relating to work stoppages or slowdowns; • different pricing environments, difficulties in adopting and supporting new and different payment preferences, and collections issues; • new and different sources of competition and practices which may favor local competitors; • the ability to protect and enforce intellectual property rights abroad; • the educational regulatory regime in certain countries and their ability to levy civil and criminal penalties on, or completely block students from accessing, services like Chegg; • compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, legal systems, and alternative dispute systems, including, but not limited to, employment, tax, privacy and data protection, economic sanctions and export controls, U.S. and other anti-boycott authorities, anti-money laundering laws, and anti-bribery laws and regulations such as the U.S.
In addition, we face risks in doing business internationally that could constrain our operations, increase our cost structure, and compromise our growth prospects, including: • the need to localize and adapt content for specific countries, including translation into foreign languages; • local laws restricting students from accessing online education platforms such as ours; • data privacy laws that may require data to be handled in a specific manner, including storing, processing, and encrypting data solely on local servers; • varying levels of internet technology adoption and infrastructure, and increased or varying network and hosting service provider costs; • difficulties in staffing and managing employment of individuals in foreign operations, including differing compensation and benefits regulations, relying on professional employer organizations and staffing agencies to provide personnel, foreign employees becoming part of labor unions, employee representative bodies, workers’ councils or collective bargaining agreements, and challenges relating to work stoppages or slowdowns; • different pricing environments, difficulties in adopting and supporting new and different payment preferences, and collections issues; • new and different sources of competition and practices which may favor local competitors; • the ability to protect and enforce intellectual property rights abroad; • the educational regulatory regime in certain countries and their ability to levy civil and criminal penalties on, or completely block students from accessing, services like Chegg; • compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, legal systems, and alternative dispute systems, including, but not limited to, employment, tax, privacy and data protection, economic sanctions and export controls, U.S. and other anti-boycott authorities, anti-money laundering laws, and anti-bribery laws and regulations such as the U.S.
Our business depends on general economic conditions and their effect on spending behavior by students and advertising budgets. Our business is dependent on, among other factors, general economic conditions, which affect student spending, and brand advertising.
Our business depends on general economic conditions and their effect on spending behavior by students and advertising budgets. Our business depends on, among other factors, general economic conditions, which affect student spending, and brand advertising.
Sanctions and export violations can result in significant fines or penalties, as well as reputational harm and loss of business. Our customers outside of the United States generated approximately 13% of our net revenues during the year ended December 31, 2024, and our growth strategy includes further expanding our operations and customer base across all major global markets.
Sanctions and export violations can result in significant fines or penalties, as well as reputational harm and loss of business. Our customers outside of the United States generated approximately 15% of our net revenues during the year ended December 31, 2025, and our growth strategy includes further expanding our operations and customer base across all major global markets.
Failure to keep pace with these 14 Table of Contents technological developments or otherwise bring to market products that reflect these technologies and are accepted by students would have a material adverse impact on our overall business and results of operations.
Failure to keep pace with these technological developments or otherwise bring to market products that reflect these technologies and are accepted by students would have a material adverse impact on our overall business and results of operations.
Several jurisdictions around the globe, including Europe and certain U.S. states, have proposed enacted, or are considering laws governing the development and use of AI/ML, such as the EU’s AI Act. We expect other jurisdictions will adopt similar laws.
Several jurisdictions around the world, including Europe and certain U.S. states, including California, have proposed enacted, or are considering laws governing the development and use of AI/ML, such as the EU’s AI Act. We expect other jurisdictions will adopt similar laws.
For example: CAN-SPAM regulates unsolicited commercial emails and imposes civil and criminal penalties for abusive practices; the FTC imposes penalties on companies for misleading and deceptive marketing practices; TCPA restricts telemarketing and the use of automated telephone equipment; and CCPA requires us to make certain disclosures regarding our marketing practices, allows consumers to opt-out of certain data sharing practices.
For example: CAN-SPAM regulates unsolicited commercial emails and imposes civil and criminal penalties for abusive practices; the FTC imposes penalties on companies for misleading and deceptive marketing practices; TCPA restricts telemarketing and the use of automated telephone equipment and prerecorded/artificially voiced calls; and CCPA requires us to make certain disclosures regarding our marketing practices, allows consumers to opt-out of certain data sharing practices.
In addition, restructuring activities has in the past and may continue to result in loss of institutional knowledge and expertise, attrition beyond our intended reduction in force, or a negative impact on employee morale and productivity or our ability to attract highly skilled employees.
In addition, restructuring activities result in the loss of institutional knowledge and expertise, and may result in attrition beyond our intended reduction in force, or a negative impact on employee morale and productivity or on our ability to attract highly skilled employees.
Further, our ability to continue to develop and effectively deploy AI technologies is dependent on access to specific third-party large language models, equipment and other physical infrastructure, such as processing hardware and network capacity, as to which we cannot control the availability or pricing, especially in a highly competitive environment.
Further, our ability to continue to develop and effectively deploy AI technologies depends on access to specific third-party large language models, equipment and other physical infrastructure, such as processing hardware and network capacity, which we cannot control the availability or pricing of, especially in a highly competitive environment.
If we fail to successfully complete any acquisitions or integrate them into our company, or identify and address liabilities associated with the acquisition, our business, results of operations, and financial condition could be adversely affected.
If we fail to successfully complete any acquisitions or integrate them into our company, or identify and address 19 Table of Contents liabilities associated with the acquisition, our business, results of operations, and financial condition could be adversely affected.
If our marketing activities are curtailed, our ability to attract new students may be adversely affected. 25 Table of Contents We are subject to U.S. trade control laws that may restrict growth prospects and impose liability if we are non-compliant. As a U.S. company with U.S. origin software applications, we are required to comply with U.S. trade controls.
If our marketing activities are curtailed, our ability to attract new students may be adversely affected. We are subject to U.S. trade control laws that may restrict growth prospects and impose liability if we are non-compliant. As a U.S. company with U.S. origin software applications, we are required to comply with U.S. trade controls.
Furthermore, European legislative proposals and present laws and regulations – other than the EU and UK GDPR – apply to cookies and similar tracking technologies, electronic communications, and marketing and regulators are increasingly 32 Table of Contents focusing on compliance with requirements related to the behavioral, interest-based, or tailored advertising ecosystem.
Furthermore, European legislative proposals and present laws and regulations – other than the EU and UK GDPR – apply to cookies and similar tracking technologies, electronic communications, and marketing and regulators are increasingly focusing on compliance with requirements related to the behavioral, interest-based, or tailored advertising ecosystem.
We monitor changes to the state regulatory requirements applicable to our business activities, including Chegg Skills; however, if we do not obtain the appropriate licenses or address evolving state requirements, it may result in governmental or regulatory proceedings or actions by private litigants, which could potentially harm our business, results of operations, and financial condition.
We monitor changes to the state regulatory requirements applicable to our business activities, including Chegg's skills-based learning programs; however, if we do not obtain the appropriate licenses or address evolving state requirements, it may result in governmental or regulatory proceedings or actions by private litigants, which could potentially harm our business, results of operations, and financial condition.
Our ability to deliver course content to students enrolled in Chegg Skills (formerly Thinkful) skills-based learning programs may be subject to state oversight including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business.
Our ability to deliver course content to students enrolled in Chegg's skills-based learning programs may be subject to state oversight including regulatory approvals and licensure for the course content, the faculty members teaching the content, and the recruiting, admissions, and marketing activities associated with the business.
We are dependent on the interoperability of our mobile apps with popular third-party mobile operating systems such as Google's Android and Apple's iOS, and their placement in popular app stores like the Google Play Store and the Apple App Store, and any changes in such systems that degrade our products’ functionality or 20 Table of Contents give preferential treatment or app store placement to competitive products could adversely affect the access and usage of our applications on mobile devices.
We depend on the interoperability of our mobile apps with popular third-party mobile operating systems such as Google's Android and Apple's iOS, and their placement in popular app stores like the Google Play Store and the Apple App Store, and any changes in such systems that degrade our products’ functionality or give preferential treatment or app store placement to competitive products could adversely affect the access to and usage of our applications on mobile devices.
However, we have a limited operating history in international jurisdictions and expanding our international operations will require considerable management attention and resources to attract talented employees and students. Our expansion efforts into international markets may not be successful.
However, we have a limited operating history in international jurisdictions, and expanding our international operations will require considerable management attention and resources to attract talented employees and 14 Table of Contents students. Our expansion efforts into international markets may not be successful.
We make critical estimates and assumptions involving accounting matters including revenue recognition and deferred revenue, impairment of acquired intangible assets and other long-lived assets, goodwill and indefinite lived intangible assets, share-based compensation 26 Table of Contents expense, and (provision for) benefit from income taxes.
We make critical 23 Table of Contents estimates and assumptions involving accounting matters including revenue recognition and deferred revenue, impairment of acquired intangible assets and other long-lived assets, goodwill and indefinite lived intangible assets, share-based compensation expense, and provision for income taxes.
In mid-August, Google broadly rolled out its AIO search experience, 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 Chegg’s site. AIO’s prevalence will only continue to increase.
In August 2024, Google broadly rolled out its AIO search experience, 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 instead of leading them to Chegg’s site. AIO’s prevalence will only continue to increase.
Our products and services compete for students, and we expect such competition to increase as our industry evolves rapidly.
Our products and services compete for customers, and we expect such competition to increase as our industry evolves rapidly.
While we continue to study the changes and adjust our SEO strategy, we expect Google may continue its shift from being a search origination point to the destination, which could materially adversely affect our business, operating results and financial condition.
While we continue to study these changes and adjust our marketing 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.
Our business and operations could be materially adversely affected in the event of earthquakes, blackouts, or other power losses, floods, fires, telecommunications failures, break-ins, acts of terrorism, wars, including the war in Ukraine and the Israel-Hamas war, public health crises, inclement weather, shelving accidents, or similar events.
Our business and operations could be materially adversely affected in the event of earthquakes, blackouts, or other power losses, floods, fires, telecommunications failures, break-ins, acts of terrorism, wars, public health crises, inclement weather, shelving accidents, or similar events.
We believe our brands are a key asset of our business. Developing, protecting, and enhancing our “Chegg” brands are critical to expanding our student user base and increasing student engagement. Having a strong brand can counteract the significant student turnover we experience from year to year as students graduate and differentiate us from our competitors.
Developing, protecting, and enhancing our “Chegg” brands are critical to expanding our student user base and increasing student engagement. Having a strong brand can counteract the significant student turnover we experience from year to year as students graduate and differentiate us from our competitors.
These laws may be, or in some cases, have already been, subject to legal challenges and changing interpretations, which may further complicate our efforts to comply with these laws. Students who use some of our services, including high school students who use our Chegg Writing and Chegg Prep services, may be under the age of 18.
These laws may be, or in some cases, have already been, subject to legal challenges and changing interpretations, which may further complicate our efforts to comply with these laws. 28 Table of Contents Students who use some of our services, including high school students who use our services, may be under the age of 18.
If we do not retain our senior management team and key employees, we may not be able to sustain our growth or achieve our business objectives. We depend on the continued contributions of our senior management and other key personnel. In particular, we rely on the contributions of our President and Chief Executive Officer, Nathan Schultz.
If we do not retain our senior management team and key employees, we may not be able to sustain our growth or achieve our business objectives. We depend on the continued contributions of our senior management and other key personnel. In particular, we rely on the contributions of our Chief Executive Officer and Executive Chairman, Dan Rosensweig.
Attracting new students depends not only on our investment in our brand and content and our marketing efforts, but also on the perceived value of our products and services versus alternatives, some of which are free.
Attracting new customers depends not only on our 12 Table of Contents investment in our brand and content and our marketing efforts, but also on the perceived value of our products and services versus alternatives, some of which are free.
Chegg Skills' efforts to obtain necessary approvals and licenses began prior to our acquisition of the business and continues following the acquisition.
Chegg's efforts to obtain necessary approvals and licenses began prior to our acquisition of the business and continues following the acquisition.
The DMCA has provisions that limit, but do not necessarily eliminate, our liability for caching or hosting or for listing or linking to, content or third-party websites that include materials or other content that infringe copyrights, provided we comply with the strict statutory requirements of the DMCA.
The DMCA has provisions that limit, but do not necessarily eliminate, our liability for caching or hosting or for serving as a mere conduit for the transmission of or linking to, content or third-party websites that include materials or other content that infringe copyrights, provided we comply with the strict statutory requirements of the DMCA.
As of December 31, 2024, we had an accumulated deficit of $889.4 million. We expect to make significant investments in the development and expansion of our business and, as a result, our cost of revenues and operating expenses may increase.
As of December 31, 2025, we had an accumulated deficit of $992.9 million. We expect to make significant investments in the development and expansion of our business and, as a result, our cost of revenues and operating expenses may increase.
As of December 31, 2024, there were 10,340,723 shares available for grant under the 2023 Equity Incentive Plan. Given the number of shares available for grant and given the decrease in our stock price, we may need to request that our shareholders vote on a new equity incentive plan sooner than previously anticipated.
As of December 31, 2025, there were 6,606,932 shares available for grant under the 2023 Equity Incentive Plan. Given the number of shares available for grant and given the decrease in our stock price, we may need to request that our shareholders vote on a new equity incentive plan sooner than previously anticipated.
For example, California adopted the Student Online Personal Information Protection Act which prohibits operators of online services used for K-12 school purposes from using or sharing student personal information, Illinois adopted the Student Online Personal Protection Act which went into effect on July 1, 2021 and regulates how we collect and process data, and Colorado adopted House Bill 16-1423 designed to protect the use of student personal data in elementary and secondary school.
For example, California adopted the Student Online Personal Information Protection Act which went into effect in 2016 and prohibits operators of online services used for K-12 school purposes from using or sharing student personal information, Illinois adopted the Student Online Personal Protection Act which went into effect on July 1, 2021 and regulates how we collect and process data, and Colorado’s Student Data Transparency and Security Act which went into effect in 2016 and is designed to protect the use of student personal data in elementary and secondary school.
The existence of our securities repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our common stock.
Repurchases pursuant to our securities repurchase program could affect the price of our common stock and increase its volatility. The existence of our securities repurchase program could also cause the price of our common stock to be higher than it would be in the absence of such a program and could reduce the market liquidity for our common stock.
We may not be able to effectively shift our operations due to disruptions arising from the occurrence of such events, and our business and results of operations could be affected adversely as a result.
We may not be able to effectively shift our operations due to disruptions arising from the occurrence of such events, and our business and results of operations could be affected adversely as a result. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Accordingly, if we fail to comply with such statutory requirements or if the interpretations of the DMCA change, we may be subject to potential liability for caching or hosting, or for listing or linking to, content or third-party websites that include materials or other content that infringe copyrights.
Accordingly, if we fail to comply with such statutory requirements or if the interpretations of the DMCA change, we may be subject to potential liability for caching or hosting, or for serving as a mere conduit for the transmission of, content or third-party websites that include materials or other content that infringe copyrights.
Our actual or perceived failure to comply with these laws could harm our business. We have internal and publicly posted policies regarding our collection, processing, use, disclosure, deletion and security of information. Although we endeavor to comply with our policies and documentation, we may at times fail to do so or be accused of having failed to do so.
We have internal and publicly posted policies regarding our collection, processing, use, disclosure, deletion and security of information. Although we endeavor to comply with our policies and documentation, we may at times fail to do so or be accused of having failed to do so.
This shift in student behavior impacts education technology companies broadly, where students see generative AI products like Chat GPT and others as strong alternatives to vertically specialized solutions for 15 Table of Contents education such as Chegg.
This shift in student behavior impacts education technology companies broadly, where students see generative AI products like ChatGPT and others as strong alternatives to vertically specialized solutions for education such as Chegg.
Our business may also be subject to laws specific to students, such as the Family Educational Rights and Privacy Act, the Delaware Higher Education Privacy Act, and a California statute which restricts the access by postsecondary educational institutions of prospective students’ social media account information.
Our business may also be subject to laws related to students, such as FERPA, the Delaware Higher Education Privacy Act, and the California Education Code which restricts the access by postsecondary educational institutions of prospective students’ social media account information.
Our future success also depends on our ability to identify, attract, and retain highly skilled personnel. Competition for these employees is intense. Qualified individuals are in high demand, particularly in the San Francisco Bay Area where our executive offices are located, and if we cannot attract or retain the personnel we need to succeed, our business may suffer.
Our future success also depends on our ability to identify, attract, and retain highly skilled personnel. Competition for these employees is intense. Qualified individuals are in high demand, and if we cannot attract or retain the personnel we need to succeed, our business may suffer.
For example, in November 2024 and June 2024, we announced restructuring plans that included reductions of our global workforce of approximately 760 employees, or approximately 22% of our workforce, to better align our cost structure with recent industry challenges that are negatively impacting our business, including increased competition and student adoption of generative AI products.
For example, in May 2025 and October 2025, we announced restructuring plans that included reductions of our global workforce of approximately 640 employees, or approximately 56% of our workforce, to better align our cost structure with recent industry challenges that are negatively impacting our business, including increased competition and student adoption of generative AI products.
Newly enacted laws such CDPA and CPA will place additional restrictions on our marketing practices. Notwithstanding existing laws, we may discontinue use or support of these activities if we become concerned that students or potential students deem them intrusive, or they otherwise adversely affect our reputation, goodwill and brand.
Other state privacy laws such as CDPA and CPA place additional restrictions on our marketing practices. 22 Table of Contents Notwithstanding existing laws, we may discontinue use or support of these activities if we become concerned that students or potential students deem them intrusive, or they otherwise adversely affect our reputation, goodwill and brand.
If our efforts to satisfy our existing student user base are not successful or become less effective, or if the cost of such efforts were to significantly increase, we may not be able to attract new students as successfully or efficiently and we may not be able to retain existing students on our platform.
If our efforts to satisfy our existing customer base are not successful or become less effective, or if the cost of such efforts were to significantly increase, we may not be able to attract new customers and we may not be able to retain existing customers on our platform.
Holders of the notes will have the right to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any.
In addition, in the event of a delisting, holders of the 2026 notes will have the right to require us to repurchase all or a portion of their 2026 notes before the maturity date at a repurchase price equal to 100% of the principal amount of the 2026 notes to be repurchased, plus accrued and unpaid interest, if any.
Upon expiration or termination of our agreement with AWS, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete. 21 Table of Contents Our growth strategy includes acquisitions, and we may not be able to execute on our acquisition strategy or integrate acquisitions successfully.
Upon expiration or termination of our agreement with AWS, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational disruptions and inefficiencies until the transition is complete.
If any of these legal proceedings were to be determined adversely to us, or we were to enter into a settlement arrangement, we could be exposed to monetary damages or limits on our ability to operate our business in the way that it is currently operated, which could have an adverse effect on our business, financial condition, and operating results.
If any of these legal proceedings were to be determined adversely to us, or we were to enter into a settlement arrangement, we could be exposed to monetary damages or limits on our ability to operate our business in the way that it is currently operated, which could have an adverse effect on our business, financial condition, and operating results. 20 Table of Contents If we are not able to manage the changes in our business both in terms of scale and complexity, our business could be adversely affected.
Wayfair, Inc. et al ruled that a state can require an online retailer with no in-state property or personnel to collect and remit sales and use tax on sales made to the state’s residents.
In June 2018, the U.S. Supreme Court in South Dakota v. Wayfair, Inc. et al ruled that a state can require an online retailer with no in-state property or personnel to collect and remit sales and use tax on sales made to the state’s residents.
As individuals become increasingly aware of and resistant to the collection, use, and sharing of personal information in connection with advertising, some users have opted out of our processing of personal data for advertising purposes, which has negatively impacted our ability to collect certain user data and our advertising partners’ ability to deliver relevant content, and more may do so in the future.
As individuals become increasingly aware of and resistant to the collection, use, and sharing of personal information in connection with advertising, some users have opted out of our processing of personal data for advertising purposes, which has negatively impacted our ability to collect certain user data and our advertising partners’ ability to deliver relevant content, and more may do so in the future. 29 Table of Contents We use AI, including generative AI, and ML technologies in our products and services (collectively, “AI/ML” technologies).

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CEO, CFO and General Counsel each hold degrees in their respective fields, and each have over 20 years of experience managing risks at Chegg and other companies, including risks arising from cybersecurity threats. 38 Table of Contents For discussion of our risk factors relating to cybersecurity and data privacy, see the “Risks Related to Data Privacy” section included in Part I, Item 1A, “Risk factors” of this Annual Report on Form 10-K.
Biggest changeFor discussion of our risk factors relating to cybersecurity and data privacy, see the “Risks Related to Data Privacy” section included in Part I, Item 1A, “Risk factors” of this Annual Report on Form 10-K.
The ISP has three core functions underlying its design, which are intended to provide Chegg with appropriate oversight and governance to execute, monitor, measure and report on the performance of the program in a consistent manner: • management (control owners) have a responsibility to own and manage risks associated with day-to-day operations, including the design, implementation, and ongoing operation of controls; • compliance and cybersecurity teams enable the identification of emerging risks in daily operation of our business, providing compliance and oversight in the form of frameworks, policies, tools, and techniques to support management; and • independent assessors provide objective evaluation by assessing whether the first and second functions above are operating successfully, providing assurance that controls are effective in both design and operation.
The ISP has three core functions underlying its design, which are intended to provide Chegg with appropriate oversight and governance to execute, monitor, measure and report on the performance of the program in a consistent manner: • management (control owners) have a responsibility to own and manage risks associated with day-to-day operations, including the design, implementation, and ongoing operation of controls; • compliance and cybersecurity teams enable the identification of emerging risks in daily operation of our business, providing compliance and oversight in the form of frameworks, policies, tools, and techniques to support management; and • third-party independent assessors provide objective evaluation by assessing whether the first and second functions above are operating successfully, providing assurance that controls are effective in both design and operation.
T&S is made up of two sub-teams, each led by a director who reports to the CISO: • Information Security , which is responsible for implementing all aspects of the ISP and is structured around the following pillars: (i) Application Security, (ii) Infrastructure (Cloud) Security, (iii) Corporate IT Security, (iv) Security Operations, and (v) Governance and Risk Management. • Compliance and Privacy , which is responsible for assessing and preparing internal teams for regulatory compliance pertaining to information security, secured financial reporting, and privacy and is structured around the following pillars: (i) Privacy, (ii) Compliance, (iii) Vendor Risk Management, and (iv) Security Awareness.
T&S is made up of two sub-teams, each led by a director who reports to the CISO: • Information Security , which is responsible for implementing all aspects of the ISP and is structured around the following pillars: (i) Application Security, (ii) Infrastructure (Cloud) Security, (iii) Corporate IT Security, and (iv) Security Operations. 35 Table of Contents • Compliance and Privacy , which is responsible for assessing and preparing internal teams for regulatory compliance pertaining to information security, secured financial reporting, and privacy and is structured around the following pillars: (i) Privacy, (ii) Compliance, (iii) Vendor Risk Management, (iv) Security Awareness, (v) Governance and Risk Management, and (vi) Privacy and Abuse Engineering.
ITEM 1C. CYBERSECURITY Chegg and its Board of Directors (the “Board”) recognize the critical importance of maintaining the trust and confidence of our students, business partners, and employees. We have established an Information Security and Governance Program (“ISP") utilizing the National Institute of Standards and Technology Cybersecurity Framework as an authoritative source of cybersecurity standards and framework for measurement.
ITEM 1C. CYBERSECURITY Chegg and its Board recognize the critical importance of maintaining the trust and confidence of our students, business partners, and employees. We have established an ISP utilizing the National Institute of Standards and Technology Cybersecurity Framework as an authoritative source of cybersecurity standards and framework for measurement.
Benavides holds an undergraduate degree in Information Technology with a specialization in Information Assurance and Security and was a distinguished graduate of the US Air Force Secure Communications school. Mr.
Our CISO has served various roles in information technology and security for over 25 years, including serving as CISO. Our CISO holds an undergraduate degree in Information Technology with a specialization in Information Assurance and Security and was a distinguished graduate of the US Air Force Secure Communications school.
The Audit Committee provides guidance and oversight to help ensure the ISP meets the needs of all interested parties and fulfills its core functions. Our Trust and Security organization (“T&S”) is responsible for implementing the ISP. T&S is led by our Chief Information Security Officer (“CISO”), Lonnie Benavides, who reports to our Chief Technology Officer (“CTO”), Chuck Geiger.
Cybersecurity risks, including through oversight of the ISP, are considered alongside other operational and strategic risks as part of Chegg’s broader risk management and reporting. Our Trust and Security organization (“T&S”) is responsible for implementing the ISP. T&S is led by our Chief Information Security Officer (“CISO”) who reports to our Chief Technology Officer (“CTO”).
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T&S also partners with other dedicated teams which report to our CTO: • Operations and Analytics , which is responsible for identifying and measuring consumer fraud and abuse of our customer-facing services, implementing manual and automated operations to ensure these are within acceptable bounds, and working with our product and engineering teams to design and implement longer term solutions. • Security and Fraud Engineering , which is responsible for building libraries, services, and integrations that interface with both backend and vendor systems to support the objectives of T&S.
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The Audit Committee provides guidance and oversight to help ensure the ISP meets the needs of all interested parties and fulfills its core functions. Management provides the Audit Committee a quarterly update on cybersecurity risks and incidents.
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Mr. Benavides joined Chegg in 2024 and has served various roles in information technology and security for over 25 years, including serving as CISO of a mortgage servicing company prior to joining Chegg. Mr.
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Our CTO holds an undergraduate degree in computer science and has more than 25 years of experience in technology and operations. Our CEO and CFO each hold degrees in their respective fields, and each have over 20 years of experience managing risks at Chegg and other companies, including risks arising from cybersecurity threats.
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Geiger holds an undergraduate degree in computer science and has served in various roles in information technology for over 30 years, including serving as either the CTO or Executive Vice President of Technology of four companies prior to joining Chegg.
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During the year ended December 31, 2025, Chegg did not experience any cybersecurity threats or incidents that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Santa Clara, California and consist of approximately 45,000 square feet of space under a lease that expires in November 2028. We have additional offices in Oregon in the United States and internationally in the United Kingdom, India, and Spain. Our corporate office leases expire at varying times between 2025 and 2033.
Biggest changeITEM 2. PROPERTIES As of December 31, 2025, we no longer maintain a corporate headquarters office in the U.S. as we do not believe this is necessary to support our globally-distributed workforce. We lease corporate offices internationally in India, the United Kingdom, and Spain which expire at varying times between 2026 and 2033.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeGiven 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 4. MINE SAFETY DISCLOSURES Not Applicable. 39 Table of Contents PART II
Biggest changeGiven 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. In addition, we may in the future be subject to additional inquiries, investigations, litigation or other proceedings or actions, regulatory or otherwise.
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.
We may also, from time to time, be involved in various legal or government claims, demands, disputes, investigations, or requests for information. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.
For further information on our legal proceedings, see Note 10, “Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. In addition, on February 24, 2025, we filed a complaint in the U.S.
For further information on our legal proceedings, see “Note 10. Commitments and Contingencies,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 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.
District Court for the District of Columbia against 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. Google moved to dismiss the amended complaint on July 25, 2025.
ITEM 3. 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.
ITEM 3. LEGAL PROCEEDINGS We may from time to time be involved in certain legal proceedings and regulatory compliance matters in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and contractual and related disputes brought through private actions, class actions, administrative proceedings, regulatory actions or other litigation.
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An unfavorable outcome of any such litigation or regulatory proceeding or action could have a material adverse effect on our business, financial condition and results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. 36 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2024, we had $207.5 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. 40 Table of Contents Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Chegg under the Securities Act or the Exchange Act.
Biggest changeAs of December 31, 2025, we had $141.8 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. ITEM 6. [RESERVED] 37 Table of Contents
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.
Securities Repurchase Program In November 2024, our Board 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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange under the symbol “CHGG.” Stockholders of Record As of January 31, 2025 , there were 25 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the New York Stock Exchange under the symbol “CHGG.” Stockholders of Record As of February 28, 2026, there were 23 stockholders of record of our common stock.
Recent Sales of Unregistered Securities We had no unregistered sales of our securities during the three months ended December 31, 2024. Purchases of Equity Securities by the Registrant and Affiliated Purchasers We did not purchase any of our common stock during the three months ended December 31, 2024.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers We did not purchase any of our common stock during the three months ended December 31, 2025.
Securities Authorized for Issuance under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for more information regarding securities authorized for issuance.
Securities Authorized for Issuance under Equity Compensation Plans See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report on Form 10-K for more information regarding securities authorized for issuance. Recent Sales of Unregistered Securities We had no unregistered sales of our securities during the year ended December 31, 2025.
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The following graph presents a comparison from December 31, 2019, through December 31, 2024, of the cumulative total return for our common stock, the Standard & Poor’s 500 Stock Index (S&P 500) and the NASDAQ Composite Index (NASDAQ Composite).
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The graph assumes that $100 was invested at the market close on December 31, 2019, in the common stock of Chegg, Inc., the S&P 500 and the NASDAQ Composite and data for the S&P 500 and the NASDAQ Composite assumes reinvestment of dividends. The stock price performance of the following graph is not necessarily indicative of future stock price performance.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+26 added−30 removed34 unchanged
Biggest changeResults of Operations The following table presents our historical consolidated statements of operations (in thousands, except percentage of total net revenues): Years Ended December 31, 2024 2023 Net revenues $ 617,574 100 % $ 716,295 100 % Cost of revenues (1) 180,927 29 225,941 32 Gross profit 436,647 71 490,354 68 Operating expenses: Research and development (1) 170,431 28 191,705 27 Sales and marketing (1) 108,329 18 126,591 18 General and administrative (1) 217,756 35 236,183 33 Impairment expense 677,239 n/m 3,600 — Total operating expenses 1,173,755 n/m 558,079 78 Loss from operations (737,108) n/m (67,725) (10) Total interest expense, net and other income, net 48,742 9 118,037 17 (Loss) income before provision for income taxes (688,366) n/m 50,312 7 Provision for income taxes (148,702) n/m (32,132) (4) Net (loss) income $ (837,068) n/m $ 18,180 3 % (1) Includes share-based compensation expense and restructuring charges as follows: Share-based compensation expense: Cost of revenues $ 1,786 $ 2,256 Research and development 28,044 44,103 Sales and marketing 7,466 9,524 General and administrative 47,318 77,619 Total share-based compensation expense $ 84,614 $ 133,502 Restructuring charges: Cost of revenues $ 762 $ 12 Research and development 11,387 1,692 Sales and marketing 2,630 1,228 General and administrative 9,824 2,772 Total restructuring charges $ 24,603 $ 5,704 _______________________________________ *n/m - not meaningful 45 Table of Contents Years Ended December 31, 2024 and 2023 Net Revenues The following table presents our total net revenues for the periods shown for our Subscription Services and Skills and Other product lines (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Subscription Services $ 549,211 $ 640,520 $ (91,309) (14) % Skills and Other 68,363 75,775 (7,412) (10) Total net revenues $ 617,574 $ 716,295 $ (98,721) (14) Subscription Services revenues decreased by $91.3 million, or 14%, during the year ended December 31, 2024, compared to the same period in 2023.
Biggest changeProvision For Income Taxes Provision for income taxes consists primarily of state income taxes in the United States and income taxes in certain non-U.S. jurisdictions. 40 Table of Contents Results of Operations The following table presents our historical consolidated statements of operations (in thousands, except percentage of total net revenues): Years Ended December 31, 2025 2024 Net revenues $ 376,908 100 % $ 617,574 100 % Cost of revenues (1) 152,151 40 180,927 29 Gross profit 224,757 60 436,647 71 Operating expenses: Research and development (1) 93,453 25 170,431 28 Sales and marketing (1) 68,754 18 108,329 18 General and administrative (1) 177,406 47 217,756 35 Impairment expense 2,000 1 677,239 n/m Total operating expenses 341,613 91 1,173,755 n/m Loss from operations (116,856) (31) (737,108) n/m Total interest expense, net and other income, net 16,714 4 48,742 9 Loss before provision for income taxes (100,142) (27) (688,366) n/m Provision for income taxes (3,279) (1) (148,702) n/m Net loss $ (103,421) (28) % $ (837,068) n/m (1) Includes share-based compensation expense and restructuring charges as follows: Share-based compensation expense: Cost of revenues $ 503 $ 1,786 Research and development 6,812 28,044 Sales and marketing 2,174 7,466 General and administrative 22,375 47,318 Total share-based compensation expense $ 31,864 $ 84,614 Restructuring charges: Cost of revenues $ 2,099 $ 762 Research and development 15,376 11,387 Sales and marketing 4,793 2,630 General and administrative 29,271 9,824 Total restructuring charges $ 51,539 $ 24,603 _______________________________________ *n/m - not meaningful 41 Table of Contents Years Ended December 31, 2025 and 2024 Net Revenues The following table presents our total net revenues for the periods shown for our Chegg Skilling and Academic Services product lines (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Chegg Skilling $ 68,654 $ 73,959 $ (5,305) (7) % Academic Services 308,254 543,615 (235,361) (43) Total net revenues $ 376,908 $ 617,574 $ (240,666) (39) Chegg Skilling revenues decreased by $5.3 million, or 7%, during the year ended December 31, 2025 compared to the same period in 2024.
We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the tax benefit as the largest amount that is cumulative more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of technical merits of the position and (2) for those tax positions 48 Table of Contents that meet the more likely than not recognition threshold, we recognize the tax benefit as the largest amount that is cumulative more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.
Our marketing expenses are largely variable and to the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels' shifts, we could see a corresponding change in our sales and marketing expenses.
Our marketing expenses are largely variable and to the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we could see a corresponding change in our sales and marketing expenses.
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.
In August 2024, Google broadly rolled out 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.
Critical Accounting Policies, Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of these 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.
Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of these 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.
In our qualitative assessment, we consider factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of our reporting unit is less than the carrying amount.
In our qualitative assessment, we consider factors including economic conditions, industry and 47 Table of Contents market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of our reporting unit is less than the carrying amount.
There are significant judgments involved in determining whether we control the specified goods or 50 Table of Contents services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service.
There are significant judgments involved in determining whether we control the specified goods or services prior to transferring them to the customer including whether we have the ability to direct the use of the good or service and obtain substantially all of the remaining benefits from the good or service.
We have omitted discussion of the earliest of the three years of financial condition and results of operations and this information can be found in Part I, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 20, 2024, which is available free of charge on the SEC's website at sec.gov and on our website at investor.chegg.com.
We have omitted discussion of the earliest of the three years of financial condition and results of operations and this information can be found in Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 24, 2025, which is available free of charge on the SEC's website at sec.gov and on our website at investor.chegg.com.
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.
This issue impacts education technology companies broadly, where students see generative AI products like ChatGPT and others as strong alternatives to vertically specialized solutions for education such as Chegg.
If our estimates or related assumptions are inaccurate, our conclusion on whether these assets are recoverable or impaired could be incorrect, which could whether we recognize an impairment in a given period. Goodwill Goodwill is tested for impairment at least annually or whenever events or changes in circumstances indicate that their carrying values may not be recoverable.
If our estimates or related assumptions are inaccurate, our conclusion on whether these assets are recoverable or impaired could be incorrect, which could impact whether we recognize an impairment in a given period. Goodwill Goodwill is tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
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.
Business Updates and Developments Recent technological shifts, notably Google's AI Overviews search experience, or 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.
See Note 8, “Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information on the gain on early extinguishment of a portion of the 2026 notes and 2025 notes.
See “Note 8. Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information on the gain on early extinguishment of a portion of the 2026 notes and the maturity of the 2025 notes.
Some of our customer arrangements include multiple performance obligations. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract.
We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract.
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.
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” in this Annual Report on Form 10-K for additional information.
This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as a cost of revenues. Where our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned.
Where our role in a transaction is that of principal, revenues are recognized on a gross basis. This requires revenue to comprise the gross value of the transaction billed to the customer, after trade discounts, with any related expenditure charged as a cost of revenues.
As of December 31, 2024, we have incurred cumulative losses of $889.4 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.
As of December 31, 2025, we have incurred cumulative losses of $992.9 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.
Research and Development Research and development expenses consist of employee-related expenses, which includes salaries, benefits, and share-based compensation expense for employees on our product, engineering, and technical teams who are responsible for maintaining our website, developing new products, and improving existing products. Research and development expenses also include technology costs to support our research and development, and outside services.
Research and Development Research and development expenses consist of employee-related expenses, which includes salaries, benefits, and share-based compensation expense for employees on our product, engineering, and technical teams who are responsible for maintaining our website, developing new products, and improving existing products.
See Note 8, “Convertible Senior Notes” of our accompanying Notes to Consolidated Financial Statements included in Part I, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information on our notes.
Convertible Senior Notes” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information on our 2026 notes.
General and Administrative General and administrative expenses consist of employee-related expenses, which includes salaries, benefits and share-based compensation expense for certain executives as well as our finance, legal, human resources and other administrative employees.
General and Administrative General and administrative expenses consist of employee-related expenses, which includes salaries, benefits and share-based compensation expense for certain executives as well as our finance, legal, human resources and other administrative employees. In addition, general and administrative expenses include outside services, legal and accounting services, and facilities expense.
Sales and marketing expenses as a percentage of net revenues were 18% during each of the years ended December 31, 2024 and 2023. General and Administrative General and administrative expenses decreased $18.4 million, or 8%, during the year ended December 31, 2024 compared to the same period in 2023.
Sales and marketing expenses as a percentage of net revenues were 18% during each of the years ended December 31, 2025 and 2024. 43 Table of Contents General and Administrative General and administrative expenses decreased $40.4 million, or 19%, during the year ended December 31, 2025 compared to the same period in 2024.
We believe that assumptions and estimates of the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
We believe that assumptions and estimates of the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations. For further information on all of our significant accounting policies, see “Note 2.
See Note 10, “Commitments and Contingencies” of our accompanying Notes to Consolidated Financial Statements included in Part I, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.
Restructuring Charges” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.
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, 42 Table of Contents resulting in continued negative impacts to our growth, business, operating results and financial condition.
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 I, Item 1A, “Risk Factors” for additional details.
We expense substantially all of our research and development expenses as they are incurred. Our research and development expenses continue to support new products and services as well as expand our infrastructure capabilities to support back-end processes associated with our revenue transactions and internal systems.
Our research and development expenses continue to support new products and services as well as expand our infrastructure capabilities to support back-end processes associated with our revenue transactions and internal systems.
Holders of the 2026 notes and 2025 notes may convert their notes at any time on or after June 1, 2026 and December 15, 2024, respectively, until the close of business on the second scheduled trading day immediately preceding the respective maturity dates.
Holders of the 2026 notes may convert their notes at any time on or after June 1, 2026 until the close of business on the second scheduled trading day immediately preceding the respective maturity dates. See “Note 8.
For further information on all of our significant accounting policies, see Note 2, “Significant Accounting Policies”, of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Significant Accounting Policies”, of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements.
Our actual results may differ from these estimates under different assumptions or conditions. 46 Table of Contents An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements.
Interest Expense, Net and Other Income, Net Interest expense, net consists primarily of interest expense on the amortization of debt issuance costs related to the convertible senior notes. Other income, net consists primarily of interest income, gains on early extinguishment of the convertible senior notes, and realized gains/losses on the sale of our investments.
Other income, net consists primarily of interest income, gains on early extinguishment of the convertible senior notes, and realized gains and losses on the sale of our investments.
Convertible senior notes, net decreased $113.9 million, or 19%, during the year ended December 31, 2024 primarily due to the early extinguishment of a portion of the 2026 notes. The 2026 notes and 2025 notes mature on September 1, 2026 and March 15, 2025, respectively, unless converted, redeemed, or repurchased in accordance with their terms prior to such dates.
Convertible senior notes, net decreased $432.2 million, or 89%, during the year ended December 31, 2025 primarily due to the maturity of the 2025 notes and the early extinguishment of a portion of the 2026 notes. The 2026 notes mature on September 1, 2026 unless converted, redeemed, or repurchased in accordance with their terms prior to such date.
General and administrative expenses as a percentage of net revenues were 35% during the year ended December 31, 2024 compared to 33% during the same period in 2023. 47 Table of Contents Impairment Expense Impairment expense was $677.2 million during the year ended December 31, 2024, consisting of impairments of goodwill, intangible assets, and other related property and equipment.
General and administrative expenses as a percentage of net revenues were 47% during the year ended December 31, 2025 compared to 35% during the same period in 2024. Impairment Expense Impairment expense was $2.0 million during the year ended December 31, 2025, consisting of impairment of property and equipment.
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.
We expect Google to continue its shift from being a search origination point to the destination, which we believe has materially adversely affected our business, operating results and financial condition.
Cash, cash equivalents, and investments decreased $51.2 million, or 9%, during the year ended December 31, 2024 primarily due to the early extinguishment of a portion of the 2026 notes of $96.5 million and purchases of property and equipment of $75.0 million, partially offset by the net cash provided by operating activities of $125.2 million.
Cash, cash equivalents, and investments decreased $443.2 million, or 84%, during the year ended December 31, 2025 primarily due to the maturity of the 2025 notes and early extinguishment of a portion of the 2026 notes of $424.8 million and purchases of property and equipment of $28.1 million, partially offset by the net cash provided by operating activities of $15.5 million.
Our qualitative assessment requires management to make judgments based on the factors listed above in our determination of whether events or changes in circumstances indicate that the carrying values may not be recoverable.
Our qualitative assessment requires management to make judgments based on the factors listed above in our determination of whether events or changes in circumstances indicate that the carrying values may not be recoverable. If our qualitative assessment concludes that it is more likely than not that the fair value is less than the carrying amount, a quantitative assessment is performed.
Cost of revenues primarily consists of content amortization expense related to content that we develop, license from publishers, or acquire through acquisitions, web hosting fees, customer support fees, payment processing costs, amortization of acquired intangible assets, employee-related expenses, which includes salaries, benefits and share-based compensation expense, and other direct costs related to providing content or services.
Cost of Revenues Cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services including content amortization expense, web hosting fees, customer support fees, payment processing costs, amortization of acquired intangible assets, employee-related expenses, which includes salaries, benefits and share-based compensation expense, contractor costs, and other direct costs related to providing content or services.
Provision for income taxes The following table presents our provision for income taxes for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Provision for income taxes $ (148,702) $ (32,132) $ (116,570) n/m _______________________________________ *n/m - not meaningful The $116.6 million change in provision for income taxes during the year ended December 31, 2024 compared to the same period in 2023, was primarily due to the establishment of a valuation allowance against our U.S. federal and state deferred tax assets. 48 Table of Contents 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): As of December 31, Change in 2024 2024 2023 $ % Cash, cash equivalents, investments $ 528,374 $ 579,561 $ (51,187) (9) % Convertible senior notes, net (1) 485,949 599,837 (113,888) (19) _____________________________________________________ (1) Consists of the current and long-term portion of convertible senior notes, net.
Provision for income taxes The following table presents our provision for income taxes for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Provision for income taxes $ (3,279) $ (148,702) $ 145,423 n/m _______________________________________ *n/m - not meaningful Provision for income taxes decreased by $145.4 million during the year ended December 31, 2025 compared to the same period in 2024, primarily due to the establishment of a valuation allowance against our U.S. federal and state deferred tax assets in 2024. 44 Table of Contents 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): As of December 31, Change in 2025 2025 2024 $ % Cash, cash equivalents, investments $ 85,212 $ 528,374 $ (443,162) (84) % Convertible senior notes, net (1) 53,765 485,949 (432,184) (89) _____________________________________________________ (1) Consists of the current and long-term portion.
If estimates or related assumptions change, this could have a significant impact on either the fair value of our reporting unit, the amount of any goodwill impairment, or both. 51 Table of Contents Share-based Compensation Expense We measure and recognize share-based compensation expense for all awards made to employees, directors and consultants, including restricted stock units (RSUs), performance-based RSUs (PSUs) with either a market-based condition or financial and strategic performance target and our employee stock purchase plan (ESPP) based on estimated fair values.
Share-based Compensation Expense We measure and recognize share-based compensation expense for all awards made to employees, directors and consultants, including restricted stock units (RSUs), performance-based RSUs (PSUs) with either a market-based condition or financial and strategic performance target and our employee stock purchase plan (ESPP) based on estimated fair values.
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, print textbooks and eTextbooks.
Chegg Skilling Our language learning platform provides subscribers access to a premium language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors and a community of members to practice alongside.
During the years ended December 31, 2024, and 2023, we generated net revenues of $617.6 million and $716.3 million, respectively, and in the same periods had a net loss of $837.1 million and a net income of $18.2 million.
During the years ended December 31, 2025, and 2024, we generated net revenues of $376.9 million and $617.6 million, respectively, and in the same periods had net losses of $103.4 million and $837.1 million, respectively.
See Note 6, “Property and Equipment, Net” and Note 7, “Goodwill and Intangible Assets” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 1, “Financial Statements” of this Annual Report on Form 10-K for additional information.
Goodwill and Intangible Assets” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.
Other income, net decreased $70.5 million, or 58%, during the year ended December 31, 2024 compared to the same period in 2023, primarily due to a decrease in gain on early extinguishment of a portion of convertible senior notes of $66.4 million and a decrease in interest income of $9.4 million partially offset by the gain on the sale of equity investment of $3.8 million.
Other income, net decreased $34.0 million, or 66%, during the year ended December 31, 2025 compared to the same period in 2024, primarily due to a decrease in interest income of $19.2 million due to lower investment balances, a decrease in gain on early extinguishment of a portion of the 2026 notes of $11.7 million, and the absence of a gain on the sale of our equity investment of $3.8 million.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.” Overview Chegg provides individualized learning support to students as they pursue their educational journeys.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in Part I, Item 1A, “Risk Factors.” Overview Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed.
Interest Expense, Net and Other Income, Net The following table presents our interest expense, net, and other income, net, for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Interest expense, net $ (2,590) $ (3,773) $ 1,183 (31) % Other income, net 51,332 121,810 (70,478) (58) Total interest expense, net and other income, net $ 48,742 $ 118,037 $ (69,295) (59) Interest expense, net decreased by $1.2 million, or 31%, during the year ended December 31, 2024, compared to the same period in 2023.
Interest Expense, Net and Other Income, Net The following table presents our interest expense, net, and other income, net, for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Interest expense, net $ (590) $ (2,590) $ 2,000 (77) % Other income, net 17,304 51,332 (34,028) (66) Total interest expense, net and other income, net $ 16,714 $ 48,742 $ (32,028) (66) Interest expense, net decreased by $2.0 million, or 77%, during the year ended December 31, 2025, compared to the same period in 2024.
Cost of Revenues The following table presents our cost of revenues for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Cost of revenues (1) $ 180,927 $ 225,941 $ (45,014) (20) % (1) Includes share-based compensation expense of: $ 1,786 $ 2,256 $ (470) (21) % (1) Includes restructuring charges of: $ 762 $ 12 $ 750 n/m _______________________________________ *n/m - not meaningful Cost of revenues decreased $45.0 million, or 20%, during the year ended December 31, 2024, compared to the same period in 2023.
Cost of Revenues The following table presents our cost of revenues for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Cost of revenues (1) $ 152,151 $ 180,927 $ (28,776) (16) % (1) Includes share-based compensation expense of: $ 503 $ 1,786 $ (1,283) (72) % (1) Includes restructuring charges of: $ 2,099 $ 762 $ 1,337 175 % Cost of revenues decreased $28.8 million, or 16%, during the year ended December 31, 2025, compared to the same period in 2024.
The decrease was primarily due to the absence of the $38.2 million content and related assets charge, lower contractor spend of $4.4 million, lower depreciation and amortization expense of $4.0 million, and lower payment processing fees of $2.9 million, which is primarily due to the decrease in subscribers who have paid to access our services, which was partially offset by higher web hosting fees of $2.5 million and the absence of the gain on disposition of textbooks of $1.2 million.
The decrease was primarily due to lower payment processing and other order fees of $16.3 million, which is primarily due to the decrease in subscribers who have paid to access our services, lower employee-related expenses of $4.6 million, lower web hosting fees of $4.0 million, lower write-offs of content and internally developed software of $3.1 million, lower contractor spend of $2.4 million, and lower advertising services revenue costs of $1.0 million, partially offset by higher depreciation and amortization expense of $3.2 million and higher restructuring charges of $1.3 million.
(3) Our corporate offices are leased under operating leases, which expire at various dates through 2033. In addition, we are also subject to certain legal proceedings and claims in the ordinary course of business and record a liability when we believe that a loss is probable and reasonably estimable.
In addition, we are also subject to certain legal proceedings and claims, including in the ordinary course of business, and record a liability when we believe that a loss is probable and reasonably estimable. See “Note 10.
During the year ended December 31, 2024, we recorded $24.6 million of restructuring charges and for fiscal year 2025, we expect to realize cost savings as a result of the restructuring plans.
During the year ended December 31, 2025, we recorded $51.5 million of restructuring charges and for fiscal year 2026, we expect to realize cost savings as a result of the restructuring plans. See Part I, Item 1A, “Risk Factors”, “Note 9. Leases”, and “Note 15.
We believe that our existing sources of liquidity will be sufficient to fund our operations and debt service obligations for at least the next 12 months.
As of December 31, 2025, our principal sources of liquidity were cash, cash equivalents, and investments totaling $85.2 million, which were held for working capital purposes. We believe that our existing sources of liquidity will be sufficient to fund our operations and debt service obligations for at least the next 12 months.
We allocate certain costs to each expense category, primarily based on the headcount in each group at the end of a period. As our business grows, our operating expenses may increase over time to expand capacity and sustain our workforce.
We allocate certain costs to each expense category, primarily based on the headcount in each group at the end of a period.
Net cash used in financing activities decreased $743.6 million, or 87%, during the year ended December 31, 2024, compared to the same period in 2023 and was primarily related to lower repurchases of our convertible senior notes of $409.5 million and lower repurchases of our common stock of $332.2 million.
Net cash used in financing activities increased $319.3 million during the year ended December 31, 2025, compared to the same period in 2024 and was primarily related to higher repayments of our convertible senior notes of $328.3 million, partially offset by lower taxes paid related to the net share settlement of equity awards of $6.6 million and the absence of repurchases of our common stock of $2.6 million.
The decrease was primarily attributable to lower depreciation and amortization expense of $12.0 million, which is primarily due to previously recognized impairment charges, lower employee-related expenses $4.3 million, which is primarily due to share-based compensation expense, and lower paid marketing expenses of $1.7 million.
The decrease was primarily due to lower paid marketing expenses of $22.1 million, lower employee-related expenses of $14.3 million including share-based compensation expense, lower indirect marketing expenses of $2.7 million, and lower depreciation and amortization expense of $1.3 million, partially offset by higher restructuring charges of $2.2 million.
Sales and Marketing Sales and marketing expenses decreased by $18.3 million, or 14%, during the year ended December 31, 2024, compared to the same period in 2023.
Research and Development Research and development expenses decreased $77.0 million, or 45%, during the year ended December 31, 2025 compared to the same period in 2024.
The decrease was due to lower employee-related expenses of $38.6 million, which is primarily due to share-based compensation expense, partially offset by higher restructuring charges of $7.1 million, impairment of lease related assets of $5.6 million, and a higher loss contingency of $5.0 million.
The decrease was primarily due to lower employee-related expenses of $50.9 million including share-based compensation expense, lower professional fees of $6.0 million, lower loss contingency accruals of $4.5 million, lower contractor spend of $3.0 million, and lower facility expenses of $2.9 million, partially offset by higher restructuring charges of $19.4 million, an impairment loss on our equity investment of $6.0 million, and higher impairments of lease-related assets of $1.8 million.
See Part I, Item 1A, “Risk Factors”, Note 6, “Property and Equipment, Net”, and Note 15, “Restructuring Charges” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements” of this Annual Report on Form 10-K for additional information.
Commitments and Contingencies" of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information.
The decrease was primarily due to the early extinguishment of a portion of the 2026 notes.
The decrease was primarily due lower interest expense recognized as a result of the maturity of the 2025 notes and the early extinguishment of a portion of the 2026 notes.
Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer.
Where our role in a transaction is that of an agent, revenues are recognized on a net basis with revenues representing the margin earned. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer.
Our convertible senior notes are recorded on our consolidated balance sheets at their carrying amounts. As of December 31, 2024, the carrying amount of the 2026 notes and 2025 notes was $127.3 million and $358.6 million, respectively. 49 Table of Contents (2) Represents contractual obligations primarily related to information technology services.
As of December 31, 2025, our convertible senior notes are recorded on our consolidated balance sheets at the carrying amounts of $53.8 million. (2) Represents contractual obligations primarily related to information technology services. (3) Our corporate offices are leased under operating leases, which expire at various dates through 2033.
We incur employee-related expenses, which includes salaries, benefits and share-based compensation expenses for our employees engaged in marketing, business development and sales, sales support functions, and amortization of acquired intangible assets.
Sales and Marketing Sales and marketing expenses consist of user and advertiser-facing marketing and promotional expenditures through a number of targeted online marketing channels, sponsored search, display advertising, social media campaigns, and other initiatives. We incur employee-related expenses, which includes salaries, benefits and share-based compensation expenses for our employees engaged in marketing, business development and sales, and sales support functions.
As of December 31, 2024, the net cumulative tax expense related to future distributions amounts to $1.7 million. 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.
This reflects our continued assessment of cash needs and the absence of an indefinite reinvestment assertion for our subsidiary in 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.
Net cash provided by investing activities decreased $257.3 million, or 96%, during the year ended December 31, 2024, compared to the same period in 2023 and was primarily driven by lower cash from investment maturities of $425.5 million and lower cash proceeds from the sale of investments of $324.5 million partially offset by an increase in cash used for the purchases of investments of $467.0 million.
Net cash provided by investing activities increased $271.0 million during the year ended December 31, 2025, compared to the same period in 2024 and was primarily related to fewer purchases of investments of $170.2 million, higher proceeds from the sale of investments of $111.1 million, and fewer purchases of property and equipment of $46.8 million, partially offset by a lower cash from investment maturities of $41.6 million and the absence of proceeds from the sale of our equity investment of $15.5 million.
As a result, significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period. 52 Table of Contents Recent Accounting Pronouncements For relevant recent accounting pronouncements, see Note 2, “Significant Accounting Policies”, of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Significant Accounting Policies”, of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Revenue Recognition and Deferred Revenue For sales of third-party products, we evaluate whether we are acting as a principal or an agent.
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.
We also work with leading brands and programmatic partners to deliver advertising across our platforms. Conclusion of Process to Explore Strategic Alternatives On February 24, 2025, we announced that we were 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.
The decrease was primarily due to lower employee-related expenses of $28.8 million, which is primarily due to share-based compensation expense, partially offset by higher restructuring charges of $9.7 million. Research and development expenses as a percentage of net revenues were 28% during the year ended December 31, 2024 compared to 27% during the same period in 2023.
Research and development expenses as a percentage of net revenues were 25% during the year ended December 31, 2025 compared to 28% during the same period in 2024. Sales and Marketing Sales and marketing expenses decreased by $39.6 million, or 37%, during the year ended December 31, 2025, compared to the same period in 2024.
Revenues from Chegg Study Pack, Chegg Study, Chegg Writing, Chegg Math, and Busuu are primarily recognized ratably over the monthly subscription period. Revenues from Chegg Skills are recognized over the delivery period, adjusted for an estimate of non-redemption. Revenues from advertising services are recognized upon fulfillment. Revenues from print textbooks and eTextbooks are recognized immediately.
Revenues from our workforce skilling programs are 39 Table of Contents recognized over the delivery period, adjusted for an estimate of non-redemption, or upon fulfillment. Revenues from advertising services and content licensing are recognized upon fulfillment.
Impairment expense was $3.6 million during the year ended December 31, 2023 consisting of an impairment of intangible assets. See Note 6, “Property and Equipment, Net” and Note 7, “Goodwill and Intangible Assets” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 1, “Financial Statements” of this Annual Report on Form 10-K for additional information.
Restructuring Charges” included in our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K for additional information regarding impairment expense and the restructuring plans, respectively.
Skills and Other revenues as a percentage of net revenues were 11% during each of the years ended December 31, 2024 and 2023.
Academic Services revenues as a percentage of net revenues were 82% during the year ended December 31, 2025 compared to 88% during the same period in 2024.
Skills and Other revenues decreased by $7.4 million, or 10%, during the year ended December 31, 2024 compared to the same period in 2023. The decrease was primarily due to lower revenues in Chegg Skills related to fewer enrollments.
Chegg Skilling revenues as a percentage of net revenues were 18% during the year ended December 31, 2025 compared to 12% during the same period in 2024. Academic Services revenues decreased by $235.4 million, or 43%, during the year ended December 31, 2025, compared to the same period in 2024.
The following table presents our contractual obligations and other commitments as of December 31, 2024 (in thousands): Total Next 12 Months Beyond 12 Months Convertible senior notes (1) $ 487,044 $ 359,138 $ 127,906 Purchase obligations (2) 172,827 61,170 111,657 Operating lease obligations (3) 29,165 6,822 22,343 Total contractual obligations $ 689,036 $ 427,130 $ 261,906 _____________________________________________________ (1) Consists of the remaining principal amount due upon maturity and cash interest payments.
In addition, based on our current and future needs, we believe our current funding and capital resources for our international operations are adequate. 45 Table of Contents The following table presents our contractual obligations and other commitments as of December 31, 2025 (in thousands): Total Next 12 Months Beyond 12 Months Convertible senior notes (1) $ 53,860 $ 53,860 $ — Purchase obligations (2) 81,767 25,852 55,915 Operating lease obligations (3) 22,511 4,795 17,716 Total contractual obligations $ 158,138 $ 84,507 $ 73,631 _____________________________________________________ (1) Consists of the remaining principal amount due upon maturity.
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. 43 Table of Contents Components of Results of Operations Net Revenues We recognize revenues net of allowances for refunds or charge backs from our payment processors who process payments from credit cards, debit cards, and PayPal.
Components of Results of Operations Net Revenues We recognize revenues net of allowances for refunds or charge backs from our payment processors who process payments from credit cards, debit cards, and PayPal. Revenues from our language learning platform and Academic Services are primarily recognized ratably over the monthly subscription period.
See Note 6, “Property and Equipment, Net” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Financial Statements” of this Annual Report on Form 10-K for additional information on the content and related assets charge. 46 Table of Contents Operating Expenses The following table presents our total operating expenses for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Research and development (1) $ 170,431 $ 191,705 $ (21,274) (11) % Sales and marketing (1) 108,329 126,591 (18,262) (14) General and administrative (1) 217,756 236,183 (18,427) (8) Impairment expense 677,239 3,600 673,639 n/m Total operating expenses $ 1,173,755 $ 558,079 $ 615,676 n/m (1) Includes share-based compensation expense of: Research and development $ 28,044 $ 44,103 $ (16,059) (36) % Sales and marketing 7,466 9,524 (2,058) (22) General and administrative 47,318 77,619 (30,301) (39) Total share-based compensation expense $ 82,828 $ 131,246 $ (48,418) (37) (1) Includes restructuring charges of: Research and development $ 11,387 $ 1,692 $ 9,695 n/m Sales and marketing 2,630 1,228 1,402 n/m General and administrative 9,824 2,772 7,052 n/m Total restructuring charges $ 23,841 $ 5,692 $ 18,149 n/m _______________________________________ *n/m - not meaningful Research and Development Research and development expenses decreased $21.3 million, or 11%, during the year ended December 31, 2024 compared to the same period in 2023.
Gross margins decreased to 60% during the year ended December 31, 2025, from 71% during the same period in 2024. 42 Table of Contents Operating Expenses The following table presents our total operating expenses for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Research and development (1) $ 93,453 $ 170,431 $ (76,978) (45) % Sales and marketing (1) 68,754 108,329 (39,575) (37) General and administrative (1) 177,406 217,756 (40,350) (19) Impairment expense 2,000 677,239 (675,239) (100) Total operating expenses $ 341,613 $ 1,173,755 $ (832,142) (71) (1) Includes share-based compensation expense of: Research and development $ 6,812 $ 28,044 $ (21,232) (76) % Sales and marketing 2,174 7,466 (5,292) (71) General and administrative 22,375 47,318 (24,943) (53) Total share-based compensation expense $ 31,361 $ 82,828 $ (51,467) (62) (1) Includes restructuring charges of: Research and development $ 15,376 $ 11,387 $ 3,989 35 % Sales and marketing 4,793 2,630 2,163 82 General and administrative 29,271 9,824 19,447 198 Total restructuring charges $ 49,440 $ 23,841 $ 25,599 107 Operating expenses decreased $832.1 million, or 71% during the year ended December 31, 2025, compared to the same period in 2024, primarily due to the absence of impairment expense of $677.2 million recognized in 2024.
The following table presents our consolidated statements of cash flows data for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2024 2024 2023 $ % Net cash provided by operating activities $ 125,205 $ 246,198 $ (120,993) (49) % Net cash provided by investing activities 11,345 268,673 (257,328) (96) Net cash used in financing activities (109,142) (852,770) 743,628 (87) Net cash provided by operating activities decreased $121.0 million, or 49%, during the year ended December 31, 2024, compared to the same period in 2023 and was primarily driven by lower bookings as well as timing of bill payments.
The following table presents our consolidated statements of cash flows data for the periods shown (in thousands, except percentages): Years Ended December 31, Change in 2025 2025 2024 $ % Net cash provided by operating activities $ 15,490 $ 125,205 $ (109,715) (88) % Net cash provided by investing activities 282,297 11,345 270,952 n/m Net cash used in financing activities (428,479) (109,142) (319,337) n/m The substantial majority of our cash inflows from operating activities are from e-commerce transactions with learners, 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.
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.
Chegg Study subscribers have access to personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts. Subscribers engage with our conversational experience that delivers the right support at the right time.
In September 2024 and June 2024, in consideration of the sustained decline in our stock price, industry developments, and our financial performance, we determined that impairment tests for our goodwill, intangible assets and property and equipment were necessary. As a result, we recorded $677.2 million of impairment expense during the year ended December 31, 2024.
Impairment expense was $677.2 million during the year ended December 31, 2024 consisting of impairments of goodwill, intangible assets, and other related property and equipment. See “Note 6. Property and Equipment, Net” and “Note 7.
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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.
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Focused on the large and growing skilling market, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning. Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support. Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world.
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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.
Added
Our long-term strategy is focused on helping learners achieve better outcomes by combining academic support with practical, career-relevant skills across the learning lifecycle. We are evolving our platform to support learners both in the classroom and beyond, leveraging AI to deliver faster, more personalized, and more effective learning experiences.
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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.
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We continue to invest in expanding our skilling offerings and integrating them with our core academic services to provide a differentiated, end-to-end solution that supports the whole learner. Our use of AI in our platform is designed to enable us to scale personalized support, improve learning outcomes, and increase course completion while maintaining high standards of quality and accuracy.
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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.
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We believe these investments position us to drive deeper engagement, expand our addressable market, and return the business to sustainable 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 I, Item 1A, “Risk Factors” of this Annual Report on Form 10-K.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe 2026 notes and 2025 notes have a fixed annual interest rate of 0.0% and 0.125%, respectively, and therefore we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates. The fair value, however, may fluctuate when interest rates and the market price of our stock changes.
Biggest changeThe 2026 notes do not bear interest, and therefore we do not have any economic interest rate exposure or financial statement risk associated with changes in interest rates. The fair value, however, may fluctuate when interest rates and the market price of our stock changes. For more information, see “Note 8.
We accept foreign currencies from our international customers and our international revenues were 13%, 14% and 15% of total net revenues during the years ended December 31, 2024, 2023 and 2022, respectively. Additionally, a portion of our operating expenses are incurred outside of the United States and are denominated in foreign currencies.
We accept foreign currencies from our international customers and our international revenues were 15%, 13% and 14% of total net revenues during the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, a portion of our operating expenses are incurred outside of the United States and are denominated in foreign currencies.
Changes in U.S. interest rates, affect the interest earned on our cash and cash equivalents and the market value of our investments. A hypothetical 100 basis point increase or decrease in interest rates would result in a $4.3 million increase or decline in the fair value of our investments as of December 31, 2024.
Changes in U.S. interest rates, affect the interest earned on our cash and cash equivalents and the market value of our investments. A hypothetical 100 basis point increase or decrease in interest rates would result in an immaterial increase or decline in the fair value of our investments as of December 31, 2025.
For more information, see Note 8, “Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 53 Table of Contents
Convertible Senior Notes,” of our accompanying Notes to Consolidated Financial Statements included in Part II, Item 8, “Consolidated Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. 49 Table of Contents
Interest Rate Sensitivity As of December 31, 2024 and 2023, we had cash and cash equivalents totaling $161.5 million and $135.8 million, respectively, and investments of $366.9 million and $443.8 million, respectively. Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities and U.S. treasury securities.
Interest Rate Sensitivity As of December 31, 2025 and 2024, we had cash and cash equivalents totaling $31.1 million and $161.5 million, respectively, and investments of $54.1 million and $366.9 million, respectively. Our cash and cash equivalents consist of cash and money market funds and investments consist of corporate debt securities.

Other CHGG 10-K year-over-year comparisons