CHEGG, INC

Note1. Background and Basis of Presentation

Company and Background

Chegg, Inc. (“we,” “us,” “our,” “Company” or “Chegg”) was incorporated as a Delaware corporation in* July**2005.* 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. Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Chegg, Inc. and its wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of* September 30, 2026*, our results of operations, results of comprehensive loss, and stockholders' equity for thethree andnine months ended* September 30, 2026and2025*, and cash flows for thenine months ended* September 30, 2026and2025*. Our results of operations, results of comprehensive loss, stockholders' equity, and cash flows for thenine months ended* September 30, 2026* arenot necessarily indicative of the results to be expected for the full year.

We have a single operating and reportable segment and operating unit structure. The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form10-K for the year ended* December 31, 2025* (the Annual Report on Form10-K) filed with the SEC.

There have beenno material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form10-K.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent liabilities. Significant estimates, assumptions, and judgments are used for, butnot limited to: revenue recognition, share-based compensation expense, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill, intangible assets and long-lived assets, and internal-use software and website development costs. We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we* mayundertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations. There have beenno* material changes in our use of estimates during thenine months ended* September 30, 2026* as compared to the use of estimates disclosed in Part II, Item8 “Consolidated Financial Statements and Supplementary Data” contained in our Annual Report on Form10-K for the year ended* December 31, 2025*.

Leases

In* August 2026,we entered into a lease termination agreement related to our Santa Clara office which relieved us from all future obligations. During thethree* months ended* September 30, 2026*, we recognized a gain on lease termination of $3.7 million and a reversal of previously accrued facility exit restructuring costs of $1.4 million, both of which were included within general and administrative operating expenses on our condensed consolidated statements of operations.

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Recent Accounting Pronouncements

Recently Issued Accounting PronouncementsNot* Yet Adopted*

In* December 2025,the Financial Accounting Standards Board (FASB) issuedAccounting Standards Update (ASU)2025-12, Codification Improvements*. ASU2025-12 makes incremental improvements to the Accounting Standards Codification (ASC) and U.S. GAAP. Early adoption is permitted and the guidance* maybe applied either prospectively or retrospectively to the beginning of the earliest comparative period presented. The guidance is effective for annual reporting periods beginning after December 15, 2026and interim reporting periods within those annual periods. We didnot* early adopt ASU2025-12 and we are currently in the process of evaluating the impact of this guidance.

In* December 2025,the FASB issuedASU2025-11, Interim Reporting - Narrow Scope Improvements*. ASU2025-11 improves the guidance in ASC270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. Early adoption is permitted and the guidance* maybe applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.We didnot* early adopt ASU2025-11 and we are currently in the process of evaluating the impact of this guidance.

In* September 2025,the FASB issuedASU2025-06, Intangibles*—Goodwill and Other—Internal-Use Software. ASU2025-06 modernizes the accounting for software costs that are accounted for under ASC350-40 and350-50 by removing references to prescriptive and sequential software development stages and requiring capitalization of software costs to begin when management has authorized and committed to funding the project and it is probable that the project will be completed and used as intended. Early adoption is permitted and the guidance* maybe applied on either a prospective, retrospective or modified basis. The guidance is effective for annual periods beginning after December 15, 2027and interim periods within those annual periods. We didnot* early adopt ASU2025-06 and we are currently in the process of evaluating the impact of this guidance.

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU2024-03 requires disclosure of specified information about certain costs and expenses in the notes to financial statements. Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively. The guidance is effective for annual periods beginning after* December 15, 2026and interim periods beginning after December 15, 2027.We didnot* early adopt ASU2024-03 and we are currently in the process of evaluating the impact of this guidance.

Recently Adopted Accounting Pronouncements

In* July 2025,the FASB issuedASU2025-05, Financial Instruments*—Credit Losses. ASU2025-05 introduces a practical expedient for estimating expected credit losses on current accounts receivable and contract assets arising from transactions accounted for under ASC606. Early adoption is permitted, and the guidance will be applied on a prospective basis. The guidance is effective for annual periods beginning after* December 15, 2025and interim periods within those annual periods. We adopted ASU2025*-05 on* January 1, 2026and elected the practical expedient, which didnot* significantly impact our financial statements.

In* November 2024,the FASB issuedASU2024-04, Debt*—Debt with Conversion and Other Options. ASU2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in ASC470-20 for convertible debt instruments with cash conversion features and debt instruments that arenot currently convertible, when the face value of the debt is settled in cash. Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis. The guidance is effective for annual periods beginning after* December 15, 2025and interim periods within those annual periods. We adopted ASU2024*-04 on* January 1, 2026on a prospective basis and applied the guidance to applicable transactions occurring after the adoption date including the partial repurchase of our convertible senior notes in February 2026.The adoption of this guidance didnot* have an effect on our financial position, results of operations or cash flows as the partial repurchase of the convertible senior notes shouldnot be accounted for as an induced conversion as they didnot contain a substantive conversion option as of the date of the repurchase.

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Note2. Revenues

Revenue Recognition

The following tables present our total net revenues for the periods shown disaggregated for our Chegg Skilling and Academic Services product lines (in thousands, except percentages):

During thethree andnine months ended* September 30, 2026*, we recognized revenues of $15.0 million and $27.6 million, respectively, that were included in our deferred revenue balance at the beginning of each respective reporting period. During thethree andnine months ended* September 30, 2025*, we recognized revenues of $22.5 million and $38.0 million, respectively, that were included in our deferred revenue balance at the beginning of each respective reporting period.

Contract Balances

The following table presents our accounts receivable, net, contract assets and deferred revenue balances (in thousands, except percentages):

During thenine months ended* September 30, 2026*, our accounts receivable, net balance decreased by $6.1 million, or 39%, primarily due to cash collections and lower bookings. During thenine months ended* September 30, 2026*, our contract assets balance remained relatively flat. During thenine months ended* September 30, 2026*, our deferred revenue balance decreased by $4.0 million, or 13%, primarily due to lower bookings.

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Note3. Net Loss Per Share

The following table presents the computation of basic and diluted net loss per share (in thousands, except per share amounts):

During thethree andnine months ended* September 30, 2026and2025*, basic and diluted net loss per share was the same, as the inclusion of all potential common shares outstanding would have been anti-dilutive.

The following table presents potential weighted-average shares of common stock outstanding that were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):

Note4. Cash and Cash Equivalents, Investments and Fair Value Measurements

The following tables present our cash and cash equivalents, and investments’ fair value level classification, adjusted cost, unrealized gain, unrealized loss and fair value as of* September 30, 2026* and* December 31, 2025* (in thousands):

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During thethree andnine months ended* September 30, 2026and2025*, we didnot recognize any losses on our investments due to credit related factors and our realized gains and losses on investments werenot significant.

The following table presents our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of* September 30, 2026* (in thousands):

Investmentsnot due at a single maturity date in the preceding table consisted of money market funds.

Note5. Balance Sheet Details

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

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Note6. Convertible Senior Notes

In* August 2020,we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in2026* (2026 notes). The2026 notes matured on* September 1, 2026*and we paid $33.9 million to repay them which was classified as a financing activity on our condensed consolidated statements of cash flows.

Previously, in* February 2026,in connection with our securities repurchase program, we extinguished $20.0 million aggregate principal amount of the2026* notes in privately-negotiated transactions for a total consideration of $19.4 million, which was paid to the holders in cash. We also incurred an immaterial amount of fees resulting in a total reacquisition price of $19.5 million. The carrying amount of the extinguished notes was $20.0 million resulting in a $0.5 million gain on early extinguishment of debt. We elected to reacquire andnot cancel the extinguished2026 notes and left the associated capped call transactions outstanding.

The following table presents the net carrying amount of the2026 notes (in thousands):

The following table presents the total interest expense recognized related to the notes (in thousands):

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Note7. Commitments and Contingencies

We* mayfrom 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. We mayalso, from time to time, be involved in various legal or government claims, demands, disputes, investigations, or requests for information. Such matters mayinclude, butnot* be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.

On* February 24, 2025,we filed a complaint in the U.S. 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 AI Overview ("AIO") search experience, and seeking damages, restitution, disgorgement, and injunctive relief. Google moved to dismiss the amended complaint on July 25, 2025.On September 30, 2026,*the court entered an order dismissing our complaint.

As of* September 30, 2026*, accrued liabilities and other long-term liabilities on our condensed consolidated balance sheets included $2.0 million related to litigation settlement liabilities. We arenot aware of any other pending legal matters or claims, individually or in the aggregate, which are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. Our analysis of whether a claim will proceed to litigation cannot be predicted with certainty, nor can the results of litigation be predicted with certainty. Nevertheless, defending any of these actions, regardless of the outcome,* maybe costly, time consuming, distract management personnel and have a negative effect on our business. In the ordinary course of business and for certain of the above matters, we are actively pursuing all avenues and strategies to resolve these matters, including available legal remedies, remediation and settlement negotiations with the parties. An adverse outcome in any of these actions, including a judgment or settlement, may*cause a material adverse effect on our future business, operating results or financial condition.

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Note8. Guarantees and Indemnifications

We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We* mayterminate the indemnification agreements with these persons upon termination of employment, but termination willnot* affect claims for indemnification related to events occurring prior to the effective date of termination. We have a directors’ and officers’ insurance policy that covers our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited.

We believe the fair value of these indemnification agreements is immaterial. We havenot recorded any liabilities for these agreements as of* September 30, 2026*.

Note9. Stockholders' Equity

Share Repurchases

During thenine months ended* September 30, 2026*, we repurchased 1,447,194 shares of our common stock for $1.7 million in open market transactions in* May 2026,*which were retired immediately.

Share-based Compensation Expense

The following table presents total share-based compensation expense recorded (in thousands):

As of* September 30, 2026*, total unrecognized share-based compensation expense was $5.7 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.2 years.

The following table presents activity for outstanding RSUs and PSUs:

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Note10. Restructuring Charges

**** July 2026Restructuring Plan**

In* July 2026,we executed a workforce reduction that resulted in a management approved restructuring plan. As of September 30, 2026*, we recorded $0.8 million of cumulative restructuring charges, primarily related toone-time employee termination benefits, which were classified within operating expenses on our condensed consolidated statements of operations based on employees' job function. The restructuring liability is included within accrued liabilities on our condensed consolidated balance sheets. The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the end of fiscal year2026.

**** October 2025Restructuring Plan**

In* October 2025,we announced a workforce reduction that resulted in a management approved restructuring plan. As of September 30, 2026*, we recorded $17.9 million of cumulative restructuring charges, primarily related toone-time employee termination benefits, which were classified primarily within operating expenses on our condensed consolidated statements of operations based on employees' job function, and facility exit costs related to the closure of our Santa Clara office, which were classified as general and administrative operating expenses on our condensed consolidated statements of operations. The restructuring liability is included within accrued liabilities on our condensed consolidated balance sheets. The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the end of fiscal year2026.

**** May 2025Restructuring Plan**

In* May 2025,we announced a workforce reduction that resulted in a management approved restructuring plan. As of September 30, 2026*, we recorded $29.3 million of cumulative restructuring charges, primarily related toone-time employee termination benefits, which were classified primarily within operating expenses on our condensed consolidated statement of operations based on employees' job function. The restructuring liability is included within accrued liabilities on our condensed consolidated balance sheets. The total amount of restructuring charges has been recorded and we expect the plan to be substantially completed by the end of fiscal year2026.

**** November 2024Restructuring Plan**

In* November 2024,we announced a workforce reduction that resulted in a management approved restructuring plan. As of September 30, 2026*, we recorded $17.1 million of cumulative restructuring charges, primarily related toone-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statement of operations based on employees' job function. The total amount of restructuring charges has been recorded and the plan is complete.

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**** June 2024Restructuring Plan**

In* June 2024,we announced a workforce reduction that resulted in a management approved restructuring plan. As of September 30, 2026*, we recorded $10.5 million of restructuring charges, primarily related toone-time employee termination benefits, which were classified primarily within operating expenses on our consolidated statement of operations based on employees' job function. The total amount of restructuring charges has been recorded and the plan is complete.

Note11. Segment Information

Our chief operating decision maker is our Chief Executive Officer who makes resource allocation decisions and reviews financial information presented on a consolidated basis. Accordingly, we have determined that we have asingle operating and reportable segment and operating unit structure.

Our chief operating decision maker uses net loss in assessing performance and determining how to allocate resources and is regularly provided with cost of revenues, paid marketing expenses, and consolidated operating expenses when reviewing financial information as part of the annual budgeting and forecasting process as well as the review over quarterly budget to actual variances. Asset information isnot regularly provided to our chief operating decision maker.

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The following table presents information about our significant segment expenses and includes a reconciliation to net loss (in thousands):

(1)Paid marketing expenses consist primarily of online advertising and marketing promotional expenditures.

(2)Other sales and marketing primarily consists of employee related expenses.

(3)Other segment items consist of interest expense, other income, and provision for income taxes.

The following table presents our total net revenues for our Chegg Skilling and Academic Services product lines (in thousands):

The following table presents our total net revenues by geographic area (in thousands):

The following table presents our long-lived assets by geographic area (in thousands):

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