Chegg presentation

THE STUDENT HUB

BEGINNING

WHY CHEGG?

https://www.youtube.com/watch?v=YYHnkwiD7Oo

VISION

BUSINESS MODEL

Get matched to schools

Get matched to scholarships

Research & schedule courses

Rent or buy [e] textbooks

Connect toclassmates

Learn from textbook solutions

Access 24/7study help

PRE-COLLEGE COLLEGE LIFE POST COLLEGE

Get matched to internships

Discover Careers

STUDENT SERVICES

HOW IS CHEGG’S TRANSITION TO DIGITAL REVENUE ALLOWING

IT TO NETWORK FOR STUDENTS?

900+ EMPLOYEES IN 8 OFFICES

BEST PLACE TO WORK 2015

CHEGG FOR GOOD PROGRAM

WHO THEY ARE

#1 RECOMMENDATION FROM A FRIEND

MARKETING

- CONCURRENT PLATFORM USERS - SIMULTANEOUS ACTIONS - HANDHELD DEVICES - VIRTUAL + REAL

SEGMENTATION

12

SEGMENTATION

13

STRATEGIES

PARTNERSHIPS

CHEGG PLAY

TRACTION

HOW THEY MAKE MONEY

- Problem: textbook acquisitions

- Result: Increase in loss from operations and net loss from 2008-2013

- Solution: 2014 shift towards digital revenues

PROBLEMATIC OPERATIONS DATA

- Focus on new digital era Increase in digital revenues Decrease in print revenues

- Acquisition of Ingram

- Growing culture overall and within teams

- Patient, but aggressive approach

NEW BUSINESS APPROACH

Net and cost of revenues are broken down into three parts: 1) Rentals 2) Services 3) Sales

Total gross margin in 2014: 30.7% ○ Rentals: 19.7% ○ Services: 64.4% ○ Sales: 4.9%

Total Operating Expenses (in thousands): $158,983 ○ Technology and Development: $49,386 ○ Sales and Marketing: $72,315 ○ General and Administrative: $41,837

KEY ASPECTS OF 2014 BALANCE SHEET

• Substantial net loss in Q4 2014

• Substantial net loss in Q1 2015

• Extremely high operations costs relative to revenues

• Approximately 20% less cash than total liabilities

RPROBLEMS

Mixed results:

○ IPO: Nov 2013 $150 Million share price of $9.13 ○ Stock price on May 9, 2014: $5.21 ○ Current stock price: $8.30 ○ 52 week range: $5.53-$8.85 ○ 1 year estimate: $11.25

SPERFORMANCE

CHEGG’S OUTLOOK 2015

2015 REVENUE SEASONALITY

25

NEW TEXTBOOK MODEL

• PREMIUM MEMBERSHIPS • SIMILAR TO LINKEDIN MODEL

• PACKAGE DEALS • ACQUISITIONS • GLOBAL SCALE

• WILL BE MORE FEASIBLE WITH DIGITAL GROWTH

OTHER POTENTIAL OPPORTUNITIES FOR

GROWTH

28

SAVE SAVE GET

29THANK YOU

Nice quote about their potential relevance and how they are helping students :))))QUESTIONS

& ANSWERS