Q2-20 Investor Presentation

August 3, 2020

Confidential Material / © 2020 Chegg, Inc. / All Rights Reserved

Safe Harbor Statement

Forward-Looking Statements

This presentation contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases you can identify forward-looking statements by references to future periods and use of terminology such "plan," "outlook," "non-GAAP," "will," "expect," "anticipate," "guidance," "as if," "transition," or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. These forward-looking statements include, without limitation Chegg's positioning to capture market opportunity, Chegg's total potential market opportunity, Chegg's aim to provide overwhelming value to solve learners' problems, Chegg's belief that 54 million students can currently benefit from Chegg and 102 million students could potentially benefit from Chegg, Chegg's expectation that Required Materials revenue will increase for 2020 and 2021 and then stabilize in 2022 and operate as a breakeven service, Chegg's expectation that it will deploy small amounts of capital to own print textbooks for rental, including related capital expenditure amounts for 2020 and 2021, with the expectation that it will decrease thereafter, Chegg's expectation that the transition to FedEx will be completed by the end of 2020, the non-GAAP presentations of Chegg's results of operations, and all statements about Chegg's financial outlook. These statements are not guarantees of future performance, and are based on management's expectations as of the date of this presentation and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements.

Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: the effects of the COVID-19 pandemic on our business and the economy generally; the effects of the COVID-19 on education, including in-person classes, the transition to virtual learning, and enrollment in colleges and universities; Chegg's ability to attract new students, increase engagement and increase monetization; Chegg's ability to attract new students from high schools and colleges, which are populations with inherently high turnover; Chegg's ability to maintain its services and systems without interruption, including as a result of technical issues or cybersecurity threats; the ease of accessing Chegg's offerings through search engines; the rate of adoption of Chegg's offerings; the effect and integration of Chegg's acquisition of Imagine Easy Solutions, Cogeon, WriteLab, StudyBlue, Thinkful and Mathway; Chegg's ability to expand internationally; Chegg's ability to strategically take advantage of new opportunities;

competitive developments, including pricing pressures and other services targeting students; Chegg's anticipated growth of Chegg Services; Chegg's ability to build and expand its services offerings; Chegg's ability to develop new products and services on a cost-effective basis and to integrate acquired businesses and assets; the impact of seasonality on the business; Chegg's reputation with students and tutors; the outcome of any current litigation; Chegg's transition from Ingram to FedEx for Required Materials; Chegg's ability to effectively control operating costs; changes in Chegg's addressable market; regulatory changes, in particular concerning privacy and marketing; any significant disruptions related to cybersecurity or cyber-attacks; changes in the education market, including as a result of COVID-19; and general economic, political and industry conditions. All information provided in this presentation and in the conference call is as of the date hereof and Chegg undertakes no duty to update this information except as required by law. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Chegg's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 filed with the Securities and Exchange Commission on May 4, 2020 and Chegg's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020 to be filed with the Securities and Exchange Commission, and could cause actual results to vary from expectations.

Use of Non-GAAP Measures

In addition to financial results presented in accordance with generally accepted accounting principles (GAAP), this presentation includes certain non-GAAP financial measures of financial performance, including adjusted EBITDA and non-GAAP Required Materials revenues. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non- GAAP measures have limitations in that they do not reflect all of the amounts associated with Chegg's results of operations as determined in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures, are contained in the Appendix to this presentation.

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Chegg Inc. © 2005 - 2020. All Rights Reserved.

Leading direct-to-student learning platform

to improve outcomes

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Investment Highlights

Leading Direct-To-Student Connected Learning

Platform

Large Addressable Market with Compelling Market

Trends

High Growth and High Margin Model

Competitive Moat Given Brand, Reach, Data and

Proprietary Content

4

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Chegg at a Glance(1)

3.9 Million

29%

CHEGG SERVICES

CHEGG SERVICES SUBSCRIBERS

SUBSCRIBERS

Y/Y GROWTH

31%

30%

CHEGG SERVICES

ADJUSTED EBITDA

Y/Y REVENUE GROWTH

MARGIN(2)

~15 Million

CHEGG PLATFORM UNIQUE VISITORS IN AN

AVERAGE MONTH

VOTED FORTUNE'S BEST

Small and Medium Workplaces

Workplaces in Technology

Workplaces for Parents

1. All amounts shown are for FY19 and are based on Company internal data

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2. Adjusted EBITDA is a non-GAAP financial measure. See Appendix for reconciliation to GAAP.

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Q2 - 20 Highlights

  • 3.7 million Chegg Services subscribers, up 67% y/y, Mathway added 9pts of growth (1))
  • Chegg total revenue of $153 million, up 63% y/y(1)
  • 375 million Chegg Study content views (1))

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1. Based on Company internal data

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Today's Learners Face More Pressure Than Ever

It's Harder to Be a Student

They're Faced with Mounting Costs They Aren't Prepared for the Workplace

25

37%

41%

AVERAGE STUDENT AGE(1)

DON'T GRADUATE(3)

OF RECENT GRADUATES ARE

~40%

$30K

UNDEREMPLOYED (5)

ARE EMPLOYED(2)

DEBT OWED BY 2018 GRADUATES(4)

Need a Platform to Support Them

1.

Hall and Partners Survey, Oct 2017, (College (n=1788))

4. https://studentloanhero.com/student-loan-debt-statistics/

2. https://nces.ed.gov/programs/coe/pdf/coe_ssa.pdf

5. https://www.newyorkfed.org/research/college-labor-market/college-labor-

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3.

National Clearinghouse Research Center (2018); Reflects % of students who don't

market_underemployment_rates.html

graduate from a 4-yr institution in 6 years or less

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Large and Expanding Market Opportunity

Current Market OpportunityTotal Potential Opportunity

102 Million Total

Students Can Benefit from

18M

36M

CA, AU and UK

Secondary and

US University

Tertiary

Students(3)

(1) and High

School

Students (2)

3.9 Million(4)

Chegg Services Subscribers in 2019 Y/Y growth of 29%

48M

36M

US University

(1) and High

English Language

School

Instruction as a

Students (2)

Medium - Tertiary

Students Outside

18M

UK(5)

the US, CA, AU,

CA, AU and UK

Secondary

and Tertiary

Students(3)

  1. National Center for Education Statistics and US Census Bureau, 2017; includes graduate and undergraduate students,
  2. National Center for Education Statistics and US Census Bureau, 2017
  3. http://data.uis.unesco.org/Index.aspx?DataSetCode=EDULIT_DS
  4. Based on Company internal data

5. See sources in appendix. Includes India, Philippines, Mexico, South Korea, South Africa, Japan, Malaysia, Saudi Arabia, Finland, New Zealand, Puerto Rico, Denmark, Netherlands, Hong Kong, Ireland, Singapore,

Germany, UAE, Sweden

Chegg Aims to Provide Overwhelming Value to Solve Learner's Problems

Online

On-demand

Personalized

Adaptive

Affordable

…and Backed by Human Help

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Chegg is Well-Known Among College Students

Percent Unaided Awareness (College)(1)

37%

Amazon

26%

Quizlet

20%

Khan

12%

Academy

Google

9%

87%

OF COLLEGE STUDENTS HAVE HEARD OF A CHEGG SERVICE (1)

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1.

H&P Annual Survey, October 2019 (College n=1737)

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Chegg Services are Used by Students Across Several Fields of Study

Primary Field of Study for Chegg Services

Subscribers*

19%

STEM

61%

Business

21%

Humanities/Social

Studies/Other

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* = Hall & Partners Brand Tracker October 2019 (College n=1737).

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Integrated Platform of Connected Services

Chegg Services

Academic

Skills

Chegg Study

Homework help learning service with a library 43 million pieces of content (~37 million expert answered Q&As and ~6 million textbook solutions)*

Chegg Writing

A leading provider of online writing tools. Creates bibliographies and checks for grammar errors and plagiarism

Chegg Math Solver

Chegg Study Pack

Three-in-one package that bundles together Chegg Study, Chegg Math Solver and Chegg Writing

Thinkful

High quality on-lineskills-based courses

•

Data science

•

Data analytics

• UX / UI design

•

Project management

•

Technical project management

Step by step math problem solver

Chegg Tutors

24/7 support help from a community of subject experts

•

Digital marketing

•

Software engineering

Required Materials

Textbooks

Rent or buy print textbooks or eTextbooks

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12

* = Company data as of Q2-20

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Chegg is Delivering Strong Outcomes for Students

92%

90%

Chegg Study helps me

Chegg Study helps me better

get better grades(1)

understand my schoolwork(1)

85%

Thinkful placement rate(2)

1

= Source: H&P Blind Customer Survey, October 2019. Bases (College Chegg Study product payers who paid for services and used

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Chegg Study for at least 2 months in 2019)

Chegg Inc. © 2005 - 2020. All Rights Reserved.

2

= As of September 2019. Thinkful graduates who get jobs in their field of study within six months of graduating their program

Rapid Growth of Chegg Services

Chegg Services Subscribers

Annual Chegg Services Subscribers (in

millions)

FY'15 1.0

FY'16

1.5

29%

y/y growth

FY'17

2.2

for '19

FY'18

3.1

FY'19

3.9

Chegg Services Revenue

Revenue Growth ($ in millions)*

Chegg Services

FY'15 - FY'20 CAGR: 39%

  • Prior to FY 2017, Required Materials revenues are shown on a non-GAAP basis as if the transition of print textbook business to Ingram was complete and the revenues from our print textbook business were entirely commission-based. Chegg has completed its transition to Ingram and in FY 2017 all Required Materials revenues are commission-based. A reconciliation of Required Materials revenues to non-GAAP Required Materials revenues is set forth in the appendix

14 hereto. FY'20 (E) is based on the midpoint of guidance provided on August 3, 2020.

Chegg Inc. © 2005 - 2020. All Rights Reserved.

We are increasing our organic guidance

Business Outlook

Q2 2020

Q3 2020

Full Year 2020

Results

Guidance

Guidance

Total Net Revenues

$153.0m

$140m - $145m

$605m

- $615m

Chegg Services Revenue

$126.0m

$110m - $115m

$490m

- $500m

Gross Margin %

72%

56% - 57%

68% - 69%

Adjusted EBITDA*

$55.5m

$21m - $23m

$190m

- $195m

CapEx

$23.7m

$105m

- $115m

• * = Non-GAAP financial measure. See appendix for reconciliation of 1) Q2-20 net income (loss) to EBITDA and adjusted EBITDA,

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15

and 2) forward looking net loss to EBITDA and adjusted EBITDA

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Appendix

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Chegg Inc. © 2005 - 2020. All Rights Reserved.

Required Materials - FedEx Agreement*

2019

Revenue Recognition

~$550 MM1

2020

2021annual savings for

Print Rental

Commission

Commission/Gross (ratable)

students from 6 MM

Gross (ratable)

books delivered in 2015

Print Sales

Commission

Commission/Gross

Gross

Consignment

Commission

Commission

Commission

e-Textbooks

Gross (ratable)

Gross (ratable)

Gross (ratable)

  • Required Materials revenue will increase for 2020 and 2021, then stabilize in 2022. It will continue to operate as a breakeven service.
  • Chegg will deploy small amounts of capital to own print textbooks for rental: $50 million (net of liquidations) in 2020, $15 million in 2021, decreasing each year after.
  • Transition to FedEx will be complete by the end of 2020.
    • = Transition began January 2020

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Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

18

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Reconciliation of Forward-Looking Net Income (Loss)

to EBITDA and Adjusted EBITDA

19

Chegg Inc. © 2005 - 2020. All Rights Reserved.

Reconciliation of Required Materials Net Revenues to

Non-GAAP Required Materials Net Revenues

CHEGG, INC.

RECONCILIATION OF REQUIRED MATERIALS NET REVENUES TO NON-GAAP REQUIRED MATERIALS NET REVENUES

(in thousands, except percentages)

(unaudited)

`

Year Ended December31,

Required Materials net revenues

2016

2015

2014

2013

2012

$

124,755

$

207,088

$

236,717

$

213,746

$

188,530

Adjustment as if transition to Ingram is complete

(54,671)

(135,270)

(170,606)

(156,554)

(142,617)

Non-GAAP Required Materials net revenues

$

70,084

$

71,818

$

66,111

$

57,192

$

45,913

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Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

21

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Reconciliation of Net Cash Provided by Operating Activities to

Free Cash Flow

22

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Sources: Large and Expanding Market Opportunity

5. = Turkey: http://www.macrothink.org/journal/index.php/elr/article/view/11438/9108 Turkey: https://wenr.wes.org/2017/04/education-in-turkey

Korea: https://www.universityworldnews.com/post.php?story=20110715171111979, https://cpb-us-w2.wpmucdn.com/blog.nus.edu.sg/dist/7/112/files/2015/04/EMI-in-South-Korea_editforpdf-1gmsyy5.pdf

Korea: https://wpel.gse.upenn.edu/sites/default/files/WPEL%2033%20Kang.pdf

https://www.timeshighereducation.com/student/best-universities/best-universities-south-korea

https://en.wikipedia.org/wiki/Education_in_South_Korea

https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1174&context=cehsedaddiss

Singapore: https://www.britishcouncil.cl/sites/default/files/escrito-way-yin-pryke.pdf

Saudi Arabia: https://files.eric.ed.gov/fulltext/EJ1075240.pdf

Japan: https://link.springer.com/article/10.1007/s10734-018-0323-5#Tab3

UAE & Global Data: https://prezi.com/gdp3rpaw838r/emi-english-as-a-medium-of-instruction/

https://www.bbc.com/news/business-35429233

http://www.studyportals.com/intelligence/mapping-english-taught-programmes-at-the-top-1000-universities-2/

https://www.hotcoursesabroad.com/study-in-malaysia/applying-to-university/malaysian-education/

https://www.thecompleteuniversityguide.co.uk/international/asia/india/

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Chegg Inc. published this content on 03 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2020 21:36:04 UTC