CHEGG, INC
For the period ended Sep 30, 2026. Filed Nov 3, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 3, 2026
CHGG$0.61+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001364954-26-000088
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-03.
0001437749-26-034534
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 66 current paragraphs.
38 unchanged; 26 reworded; 2 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Chegg Skilling revenues decreased $1.1 million, or 6%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in enrollments in our workforce skilling programs distributed through our largest third-party marketplace. Chegg Skilling revenues as a percentage of net revenues were 35% during the three months ended September 30, 2026 compared to 23% during the same period in 2025.
Current report
Research and development expenses decreased $10.4 million, or 57%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $6.0 million including share-based compensation expense, lower technology-related expenses of $2.3 million, and lower restructuring charges of $2.0 million. Research and development expenses as a percentage of net revenues were 17% during the three months ended September 30, 2026 compared to 24% during the same period in 2025.
Removed paragraphs (4)
Previous report
Academic Services revenues decreased $113.2 million, or 59%, during the six months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to a decrease in subscription revenue of $104.4 million and advertising services revenues of $3.0 million, primarily related to reduced traffic which led to fewer subscribers, as well as a decrease in content licensing revenue of $4.9 million. Academic Services revenues as a percentage of net revenues were 69% during the six months ended June 30, 2026 compared to 85% during the same period in 2025.
Previous report
Research and development expenses decreased $41.6 million, or 72%, during the six months ended June 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $23.2 million including share-based compensation expense, lower restructuring charges of $7.1 million, lower technology-related expenses of $5.8 million, and lower web hosting fees of $3.5 million. Research and development expenses as a percentage of net revenues were 14% during the six months ended June 30, 2026 compared to 26% during the same period in 2025.
Previous report
(1) Consists of the current and long-term portion.
Previous report
Convertible senior notes, net decreased $19.9 million, or 37%, during the six months ended June 30, 2026 primarily due to the partial early extinguishments 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. 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 6, "Convertible Senior Notes” of our accompanying Notes to Condensed Consolidated
Reworded paragraphs (26)
Previous wording
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. 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. Our Chegg Math subscription service provides students with a computational engine to help them understand and solve math problems. We opportunistically monetize our content library through licensing and partnerships. We work with leading brands and programmatic partners to deliver advertising across our platforms.
Current wording
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. 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. Our Chegg Math subscription service provides students with a computational engine to help them understand and solve math problems. Our internships offering provides students job discovery, application creation and submission, networking, and interview preparation in one experience offered as both a stand-alone product and as a component of a Chegg Study Pack subscription. We opportunistically monetize our content library through licensing and partnerships. We work with leading brands and programmatic partners to deliver advertising across our platforms.
Previous wording
Three and Six Months Ended June 30, 2026 and 2025
Current wording
Three and Nine Months Ended September 30, 2026 and 2025
Previous wording
Chegg Skilling revenues increased $0.3 million, or 2%, and $1.8 million, or 5%, during the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to an increase in our workforce skilling programs primarily related to our AI-focused programs. Chegg Skilling revenues as a percentage of net revenues were 34% and 31% during the three and six months ended June 30, 2026, respectively, compared to 16% and 15% during the same periods in 2025, respectively.
Current wording
Chegg Skilling revenues increased during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase in our language learning platform primarily related to direct-to-consumer growth. Chegg Skilling revenues as a percentage of net revenues were 32% during the nine months ended September 30, 2026 compared to 17% during the same period in 2025.
Previous wording
Academic Services revenues decreased $53.6 million, or 61%, during the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to a decrease in subscription revenue of $46.7 million and advertising services revenue of $1.1 million, primarily related to reduced traffic which led to fewer subscribers, as well as a decrease in content licensing revenue of $5.6 million. Academic Services revenues as a percentage of net revenues were 66% during the three months ended June 30, 2026 compared to 84% during the same period in 2025.
Current wording
Academic Services revenues decreased $30.1 million, or 50%, and $143.3 million, or 57%, during the three and nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to a decrease in subscription revenue, primarily related to reduced traffic which led to fewer subscribers. Academic Services revenues as a percentage of net revenues were 65% and 68% during three and nine months ended September 30, 2026 compared to 77% and 83% during the same periods in 2025.
Previous wording
Cost of revenues decreased $11.9 million, or 34%, during the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower payment processing and other order fees of $4.0 million, primarily due to the decrease in subscribers who have paid to access our services, lower depreciation expense of $2.9 million, lower web hosting fees of $2.3 million and lower employee-related expenses of $1.1 million. Gross margins decreased to 55% during the three months ended June 30, 2026, from 66% during the same period in 2025.
Current wording
Cost of revenues decreased $9.5 million, or 30%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower payment processing and other order fees of $3.5 million, primarily due to the decrease in subscribers who have paid to access our services, lower depreciation expense of $2.6 million, lower employee-related expenses of $1.2 million, and lower restructuring charges of $0.9 million. Gross margins decreased to 52% during the three months ended September 30, 2026, from 59% during the same period in 2025.
Previous wording
Cost of revenues decreased $40.5 million, or 45%, during the six months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower depreciation expense of $20.7 million primarily due to the accelerated depreciation recorded in 2025, lower payment processing and other order fees of $10.0 million, which is primarily due to the decrease in subscribers who have paid to access our services, lower web hosting fees of $4.4 million, and lower employee-related expenses of $2.7 million. Gross margins decreased to 57% during the six months ended June 30, 2026, from 61% during the same period in 2025.
Current wording
Cost of revenues decreased $50.0 million, or 41%, during the nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower depreciation expense of $23.4 million primarily due to the accelerated depreciation recorded in 2025, lower payment processing and other order fees of $13.5 million, which is primarily due to the decrease in subscribers who have paid to access our services, lower web hosting fees of $4.5 million, lower employee-related expenses of $3.9 million, lower restructuring charges of $1.7 million, and lower contractor spend of $0.9 million. Gross margins decreased to 56% during the nine months ended September 30, 2026, from 60% during the same period in 2025.
Previous wording
Operating expenses decreased $74.6 million, or 70%, and $132.1 million, or 65%, during the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to lower employee-related expenses as a result of prior year restructuring actions. See Note 10, “Restructuring Charges” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information regarding the prior year restructuring actions.
Current wording
Operating expenses decreased $33.8 million, or 54%, and $166.0 million, or 62%, during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to lower employee-related expenses as a result of prior year restructuring actions. See Note 10, “Restructuring Charges” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information regarding the prior year restructuring actions.
Previous wording
Research and development expenses decreased $21.3 million, or 74%, during the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $9.3 million including share-based compensation expense, lower restructuring charges of $6.8 million, lower technology-related expenses of $2.7 million, and lower web hosting fees of $2.2 million. Research and development expenses as a percentage of net revenues were 14% during the three months ended June 30, 2026 compared to 27% during the same period in 2025.
Current wording
Research and development expenses decreased $52.0 million, or 68%, during the nine months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $29.3 million including share-based compensation expense, lower restructuring charges of $9.2 million, lower technology-related expenses of $8.1 million, and lower web hosting fees of $3.7 million. Research and development expenses as a percentage of net revenues were 15% during the nine months ended September 30, 2026 compared to 25% during the same period in 2025.
Previous wording
Sales and marketing expenses decreased by $23.0 million, or 53%, during the six months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower paid marketing expenses of $13.9 million, lower employee-related expenses of $6.9 million including share-based compensation expense, and lower restructuring charges of $2.0 million. Sales and marketing expenses as a percentage of net revenues were 17% during the six months ended June 30, 2026 compared to 19% during the same period in 2025.
Current wording
Sales and marketing expenses decreased by $2.3 million, or 20%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower employee-related expenses of $1.7 million including share-based compensation expense. Sales and marketing expenses as a percentage of net revenues were 20% during the three months ended September 30, 2026 compared to 15% during the same period in 2025.
Previous wording
Sales and marketing expenses decreased by $7.9 million, or 46%, during the three months ended June 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower employee-related expenses of $2.9 million including share-based compensation expense, lower paid marketing expenses of $2.7 million, and lower restructuring charges of $2.0 million. Sales and marketing expenses as a percentage of net revenues were 18% during the three months ended June 30, 2026 compared to 17% during the same period in 2025.
Current wording
Sales and marketing expenses decreased by $25.3 million, or 46%, during the nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower paid marketing expenses of $14.1 million, lower employee-related expenses of $8.6 million including share-based compensation expense, and lower restructuring charges of $2.1 million. Sales and marketing expenses as a percentage of net revenues were flat at 18% during the nine months ended September 30, 2026 and 2025.
Previous wording
General and administrative expenses decreased $45.4 million, or 76%, during the three months ended June 30, 2026 compared to the same period in 2025. The decrease was due to lower employee-related expenses of $12.2 million including share-based compensation expense, a reduction in litigation settlements of $10.5 million, lower restructuring charges of $9.5 million, the absence of an impairment loss on an equity investment of $6.0 million, lower professional fees of $3.1 million, the absence of an impairment of lease-related assets of $3.0 million, and lower facility expenses of $2.1 million, partially offset by higher contractor spend of $1.1 million. General and administrative expenses as a percentage of net revenues were 29% during the three months ended June 30, 2026 compared to 57% during the same period in 2025.
Current wording
General and administrative expenses decreased $21.1 million, or 64%, during the three months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $7.6 million including share-based compensation expense, lower restructuring charges of $6.3 million, a gain on lease termination related to our Santa Clara office of $3.7 million, lower professional fees of $2.5 million, and lower facility expenses of $1.5 million, partially offset by higher contractor spend of $0.9 million. General and administrative expenses as a percentage of net revenues were 26% during the three months ended September 30, 2026 compared to 43% during the same period in 2025.
Previous wording
General and administrative expenses decreased $65.6 million, or 66%, during the six months ended June 30, 2026 compared to the same period in 2025. The decrease was due to lower employee-related expenses of $26.8 million including share-based compensation expense, lower restructuring charges of $12.2 million, a reduction in litigation settlements of $10.5 million, lower professional fees of $6.5 million, the absence of an impairment loss on an equity investment of $6.0 million, lower facility expenses of $3.5 million, the absence of an impairment of lease-related assets of $3.0 million, and lower technology-related expenses of $1.2 million, partially offset by higher contractor spend of $2.0 million. General and administrative expenses as a percentage of net revenues were 30% during the six months ended June 30, 2026 compared to 44% during the same period in 2025.
Current wording
General and administrative expenses decreased $86.7 million, or 65%, during the nine months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $34.5 million including share-based compensation expense, lower restructuring charges of $18.6 million, a reduction in litigation settlements of $10.5 million, lower professional fees of $9.0 million, the absence of an impairment loss on an equity investment of $6.0 million, lower facility expenses of $5.0 million, a gain on lease termination related to our Santa Clara office of $3.7 million, the absence of an impairment of lease-related assets of $3.0 million, and lower technology-related expenses of $1.8 million, partially offset by higher contractor spend of $2.9 million. General and administrative expenses as a percentage of net revenues were 28% during the nine months ended September 30, 2026 compared to 44% during the same period in 2025.
Previous wording
Impairment expense decreased $2.0 million during the six months ended June 30, 2026 compared to the same period in 2025 as we impaired property and equipment in 2025.
Current wording
Impairment expense decreased $2.0 million during the nine months ended September 30, 2026 compared to the same period in 2025 as we impaired property and equipment in 2025.
Previous wording
Interest expense, net decreased during the three months ended June 30, 2026 compared to the same period in 2025 due to the early extinguishment of a portion of the 2026 notes.
Current wording
Interest expense, net decreased during the three months ended September 30, 2026 compared to the same period in 2025 due to the repayment and partial early extinguishment of convertible senior notes.
Previous wording
Interest expense, net decreased $0.5 million, or 90%, during the six months ended June 30, 2026 compared to the same period in 2025, due to the maturity of the 2025 notes and the early extinguishment of a portion of the 2026 notes.
Current wording
Interest expense, net decreased $0.5 million, or 88%, during the nine months ended September 30, 2026 compared to the same period in 2025, due to the repayment and partial early extinguishment of convertible senior notes.
Previous wording
Other income, net decreased $1.4 million, or 69%, during the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in interest income due to lower investment balances.
Current wording
Other income, net decreased $0.7 million, or 49%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in interest income due to lower investment balances.
Previous wording
Other income, net decreased $13.3 million, or 88%, during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in gain on early extinguishment of a portion of the 2026 notes of $6.8 million and a decrease in interest income of $5.1 million due to lower investment balances.
Current wording
Other income, net decreased $13.9 million, or 85%, during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in gain on early extinguishment of a portion of the 2026 notes of $6.8 million and a decrease in interest income of $5.7 million due to lower investment balances.
Previous wording
Provision for income taxes decreased $0.8 million, or 68%, and $2.0 million, or 89%, during the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to a decrease in foreign income taxes.
Current wording
Provision for income taxes decreased $1.4 million, or 84%, and $3.4 million, or 86%, during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to a decrease in foreign income taxes.
Previous wording
Cash, cash equivalents, and investments decreased $12.9 million, or 15%, during the six months ended June 30, 2026 primarily due to the net cash used for the early extinguishment of a portion of the 2026 notes of $19.5 million, purchases of property and equipment of $4.7 million, and repurchase of shares of our common stock of $1.7 million, partially offset by the net cash provided by operating activities of $14.2 million.
Current wording
Cash, cash equivalents, and investments decreased $41.6 million, or 49%, during the nine months ended September 30, 2026 primarily due to the net cash used for the repayment and partial early extinguishment of the 2026 notes of $53.3 million, purchases of property and equipment of $6.4 million, and repurchase of shares of our common stock of $1.7 million, partially offset by the net cash provided by operating activities of $21.4 million.
Previous wording
Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information on our 2026 notes.
Current wording
Convertible senior notes, net decreased $53.8 million, or 100%, during the nine months ended September 30, 2026 primarily due to the repayment and partial early extinguishment of the 2026 notes. See Note 6, "Convertible Senior Notes” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information on our 2026 notes.
Previous wording
As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents, and investments totaling $72.3 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. Our future capital requirements will depend on many factors, including our rate of revenue growth, our investments in research and development activities, our acquisition of new products and services, and our sales and marketing activities. To the extent that existing sources of liquidity are insufficient to fund our future operations, we may need to raise additional funds through public or private equity or debt financing. Additional funds may not be available on terms favorable to us or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, operating cash flows and financial condition. As of June 30, 2026, we have incurred cumulative losses of $995.6 million from our operations and we may incur additional losses in the future.
Current wording
As of September 30, 2026, our principal sources of liquidity were cash, cash equivalents, and investments totaling $43.6 million, which were held for working capital purposes. We believe that our existing sources of liquidity will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, our investments in research and development activities, our acquisition of new products and services, and our sales and marketing activities. To the extent that existing sources of liquidity are insufficient to fund our future operations, we may need to raise additional funds through public or private equity or debt financing. Additional funds may not be available on terms favorable to us or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, operating cash flows and financial condition. As of September 30, 2026, we have incurred cumulative losses of $1.0 billion from our operations and we may incur additional losses in the future.
Previous wording
Aside from the changes in convertible senior notes as disclosed in Note 6, "Convertible Senior Notes” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q, there were no other material changes in our commitments under contractual obligations, as disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
Aside from the changes to our operating lease obligations and convertible senior notes as disclosed in Note 1, “Background and Basis of Presentation” and** **"Note 6, "Convertible Senior Notes”, respectively, of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q, there were no other material changes in our contractual obligations and other commitments, as disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
Net cash flows provided by operating activities decreased $5.5 million, or 28%, during the six months ended June 30, 2026 compared to the same period in 2025 and was primarily related to the net effect of lower depreciation and amortization of $21.3 million, lower share-based compensation expense of $14.1 million, an increase in the change in accrued liabilities of $24.7 million primarily due to payments from our restructuring actions partially offset by a decrease in net loss of $50.4 million and a decrease in the gain on partial early extinguishments of convertible senior notes of $6.8 million.
Current wording
Net cash flows provided by operating activities decreased $3.1 million, or 13%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to the net effect of lower depreciation and amortization of $24.3 million, an increase in the change in accrued liabilities of $21.4 million primarily due to payments from our restructuring actions, lower share-based compensation expense of $18.0 million, and a gain on lease termination of our Santa Clara office of $3.7 million, partially offset by a decrease in net loss of $63.2 million and a decrease in the gain on partial early extinguishments of convertible senior notes of $6.8 million.
Previous wording
Net cash flows provided by investing activities decreased $251.2 million, or 92%, during the six months ended June 30, 2026 compared to the same period in 2025 and was primarily related to lower proceeds from the sale of investments of $175.5 million and lower proceeds from the maturities of our investments of $87.7 million, partially offset by lower purchases of property and equipment of $11.2 million.
Current wording
Net cash flows provided by investing activities decreased $237.8 million, or 88%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to lower proceeds from the sale of investments of $175.5 million and lower proceeds from the maturities of our investments of $78.3 million, partially offset by lower purchases of property and equipment of $15.2 million.
Previous wording
Net cash flows used in financing activities decreased $395.3 million, or 95%, during the six months ended June 30, 2026 compared to the same period in 2025 and was primarily related to lower repayments of our convertible senior notes.
Current wording
Net cash flows used in financing activities decreased $361.9 million, or 87%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to lower repayments of our convertible senior notes.
Previous wording
There have been no material changes in our critical accounting policies and estimates during the six months ended June 30, 2026 as compared to the critical accounting policies and estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
There have been no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2026 as compared to the critical accounting policies and estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.