On this page of StockholderLetter.com we present the latest annual shareholder letter from CHEGG, INC — ticker symbol CHGG. Reading current and past CHGG letters to shareholders can bring important insights into the investment thesis.

 •  4/17/2025 Letter Continued (Full PDF)
 •  4/21/2023 CHGG Stockholder Letter
 •  4/19/2024 CHGG Stockholder Letter
 •  More "Education & Training Services" Category Stockholder Letters
 •  CHGG Benford's Law Stock Score = 81

CHGG Shareholder/Stockholder Letter Transcript:

2024 ANNUAL REPORT


Dear Shareholders,
With 2025 well underway, Chegg remains deeply focused on supporting students in building
knowledge and achieving academic success. We are deeply committed to helping students
thrive!
Delivering on that commitment, we have launched innovative products like Solution Scout, an
AI-powered tool to help students learn more efficiently and confidently, made substantial
enhancements to our practice and exam preparation tools, and progressed our learning journey
by making our AI-powered Q&A experience even more personalized. Our aim is to create
experiences that drive real outcomes, increasing acquisition, and boosting retention     while
expanding accessibility for all students.
Through focused investment over the past year, and the integration of cutting-edge
technologies, we have advanced the Chegg product offering to deliver a comprehensive,
personalized and verticalized learning experience for higher education. The Chegg of today
provides precisely what learners need and ensures that Chegg maintains its strong reputation
for quality and trust.
In 2024, we significantly enhanced our AI and machine learning (ML) capabilities. While
remaining AI model-agnostic, we   ve seamlessly integrated frontier models like Llama, Anthropic,
Mistral, and GPT into our product stack. We are leveraging A/B testing, multi-shot prompting,
and retrieval-augmented generation to help improve accuracy and consistency. These
innovations have allowed us to build verticalized education applications at a fraction of the time
and cost, while also increasing our level of personalization. Our implementation of ML and
multiple AI models has significantly reduced the cost of creating new content by more than 70%,
while keeping our quality high.
In the second half of 2024, we launched an innovative brand marketing campaign and activation
program that reinvigorated top-of-funnel traffic, creating strong consideration, and increasing
conversion. This momentum has carried into 2025, with continued year-over-year improvements
in click-through and conversation rates. We are doubling down on this strategy as we work to
improve our customer growth and funnel resilience.
Busuu, our language learning platform, had a strong year marked by its successful transition to
a freemium model and the integration of AI through the launch of its new Speaking Practice
feature. The enterprise side of this business continues to perform very well, with revenue up
46% in 2024 and strong new customer adoption. We are optimistic about further expansion
through both consumer and institutional partnerships.
Chegg Skills is focused on channel partnership expansion and entered into a pilot agreement
with Edify Online and Noodle to provide AI programs as part of their support for a higher
education internationalization initiative in India. Chegg Skills programs will be offered to college
students looking to gain foundational AI skills in an international workforce context.

We launched a business-to-institution pilot program in late 2024. With five pilots currently
underway and plans to reach approximately 35 additional institutions by the end of this year, we
see significant opportunity to support academic outcomes such as persistence and graduation.
Early feedback has been positive, and we aim to convert many of these pilots into broader
campus-wide implementations.
While we made significant headway on our technology, product, and marketing programs, 2024
came with a series of challenges, including the rapid evolution of the content landscape,
particularly the rise of Google AIO, which has impacted our traffic, revenue, and our workforce.
In response, we initiated a strategic review process to evaluate a range of alternatives to
maximize stockholder value, including a potential acquisition, a go-private transaction, or
remaining a public company. We have also taken action to streamline operations, reduce costs,
and refocus the business and are on track to deliver non-GAAP savings of $100-120 million in
2025.
We continue to believe in the need for high-quality, personalized student success platforms.
Chegg remains a trusted brand with a loyal customer base, a strong team, and a clear path
forward to deliver long-term value to our students, employees, and stockholders. On behalf of
the entire leadership team, thank you for your continued support, and for sharing in our mission
to put students first.
Sincerely,
Nathan Schultz
President and Chief Executive Officer
Chegg Inc.
Forward-Looking Statements
This letter contains forward-looking statements made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995, which include, without limitation, that there
continues to be a large market of students looking for the high-quality, proven, and differentiated
learning expertise and experience that Chegg provides, that we will continue to enthusiastically
serve this audience, our ability to extend our brand, individualize our product and to weather
current and future business challenges, our strategy to drive more qualified traffic, and increase
conversion rates, our strategy to expand our product set to offer unique solutions for students
that increase the frequency of use and create clear and differentiated value for us, our strategy
to diversify our revenue streams with business-to-institution programs and other enterprise
offerings, our commencement of a process to explore strategic alternatives and the outcome of
such process, the expected timing, volume and nature of our existing securities repurchase
program, the disintermediation of content sites like Chegg, the impact of generative AI for
academic support on the education ecosystem at large, including universities and education

technology companies broadly, the speed, scale and potential impact of Google's AIO rollout,
our litigation commenced against Google and its outcome, student adoption of generative AI
products, our intent to develop a verticalized and individualized experience for education and
supporting students throughout their entire learning journey for education at a fraction of the
time and cost, starting with academic support and eventually functional support, our expectation
that our expansion into new media channels, including streaming platforms such as Hulu and
YouTube, and social channels like Discord and Twitch, will reach students where they are, will
engage them with our product, create new pathways for product-driven growth, and reduce our
reliance on SEO, that our new vendor-based commerce platform will reduce our costs, provide
flexibility and allow us to move faster as we continue to evolve our pricing and packaging
programs, our commitment to building and generating momentum with our brand, traffic, and
product capabilities, that we will bring both audience expansion and acquisition efficiency based
on what we learned from prior brand marketing campaigns, that our product will continue to
deliver individualized learning solutions, that our brand and product experiences are resilient,
our ability to strengthen our student experience and increase efficiency across the business and
to manage our expenses prudently as the competitive landscape evolves, all statements about
Chegg   s outlook under    Business Outlook   , including our Q1 2025 guidance, including total
revenue, Subscription Services revenue, gross margin, and adjusted EBITDA, the time it will
take to adjust to Chegg's new opportunity and see the benefits in our business results and our
ability to stabilize the business, as well as those included in the investor presentation referenced
above and those included in the    Prepared Remarks    sections above. The words    anticipate,   
   believe,       estimate,       expect,       intend,       project,       endeavor,       will,       should,       future,   
   transition,       outlook    and similar expressions, as they relate to Chegg, are intended to identify
forward-looking statements. These statements are not guarantees of future performance, and
are based on management   s expectations as of the date of this press release 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 AI technology on Chegg   s business and the economy
generally; Chegg   s ability to stabilize the business by attracting new learners to, and retaining
existing learners on, our learning platform in light of declining revenue and user traffic; Chegg's
ability to innovate and offer new products and services in response to competitive technology
and market developments, including generative AI; Chegg   s ability to diversify its revenue
streams with business-to-institution programs and other enterprise offerings; the outcome and
effects of Chegg   s exploration of strategic alternatives, which may not be successful and may
disrupt our ongoing business, result in increased expenses and present other risks; the
uncertainty surrounding the evolving educational landscape; enrollment and student behavior,
including the impact of generative AI; Chegg   s ability to expand internationally; the efficacy of
Chegg's expanded efforts to drive user traffic, including search engine optimization, social
media campaigns, and other marketing efforts; the efficacy of Chegg   s efforts to build and
maintain strong brands and reputation; the success of Chegg   s new product offerings, including
360 degrees of individualized academic and functional support; competition in all aspects of



 4/17/2025 Letter Continued (Full PDF)