x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-3237489 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
• | Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ |
• | Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨ |
• | Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. |
Large accelerated filer x | Accelerated filer ¨ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
Emerging growth company ¨ |
• | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
• | Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x |
• | As of April 25, 2018, the Registrant had 112,148,773 outstanding shares of Common Stock. |
Page | ||||
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 106,827 | $ | 126,457 | |||
Short-term investments | 82,264 | 81,742 | |||||
Accounts receivable, net of allowance for doubtful accounts of $176 and $259 at March 31, 2018 and December 31, 2017, respectively | 8,055 | 10,855 | |||||
Prepaid expenses | 10,799 | 2,043 | |||||
Other current assets | 6,898 | 7,845 | |||||
Total current assets | 214,843 | 228,942 | |||||
Long-term investments | 10,628 | 20,305 | |||||
Property and equipment, net | 48,197 | 47,493 | |||||
Goodwill | 125,525 | 125,272 | |||||
Intangible assets, net | 19,902 | 21,153 | |||||
Other assets | 4,383 | 3,765 | |||||
Total assets | $ | 423,478 | $ | 446,930 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,981 | $ | 7,049 | |||
Deferred revenue | 18,625 | 13,440 | |||||
Accrued liabilities | 26,418 | 31,074 | |||||
Total current liabilities | 49,024 | 51,563 | |||||
Long-term liabilities | |||||||
Total other long-term liabilities | 4,443 | 4,305 | |||||
Total liabilities | 53,467 | 55,868 | |||||
Commitments and contingencies (Note 8) | |||||||
Stockholders' equity: | |||||||
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock, $0.001 par value 400,000,000 shares authorized; 112,748,665 and 109,667,640 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 113 | 110 | |||||
Additional paid-in capital | 764,065 | 782,845 | |||||
Accumulated other comprehensive income (loss) | 138 | (282 | ) | ||||
Accumulated deficit | (394,305 | ) | (391,611 | ) | |||
Total stockholders' equity | 370,011 | 391,062 | |||||
Total liabilities and stockholders' equity | $ | 423,478 | $ | 446,930 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net revenues | $ | 76,949 | $ | 62,602 | |||
Cost of revenues | 20,224 | 21,396 | |||||
Gross profit | 56,725 | 41,206 | |||||
Operating expenses: | |||||||
Research and development | 25,533 | 19,302 | |||||
Sales and marketing | 15,336 | 15,964 | |||||
General and administrative | 18,256 | 15,342 | |||||
Restructuring charges | 220 | 900 | |||||
Gain on liquidation of textbooks | — | (4,766 | ) | ||||
Total operating expenses | 59,345 | 46,742 | |||||
Loss from operations | (2,620 | ) | (5,536 | ) | |||
Interest expense and other income (expense), net: | |||||||
Interest expense, net | (20 | ) | (19 | ) | |||
Other income (expense), net | 564 | (199 | ) | ||||
Total interest expense and other income (expense), net | 544 | (218 | ) | ||||
Loss before provision for income taxes | (2,076 | ) | (5,754 | ) | |||
Provision for income taxes | 541 | 647 | |||||
Net loss | $ | (2,617 | ) | $ | (6,401 | ) | |
Net loss per share, basic and diluted | $ | (0.02 | ) | $ | (0.07 | ) | |
Weighted average shares used to compute net loss per share, basic and diluted | 110,904 | 92,830 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net loss | $ | (2,617 | ) | $ | (6,401 | ) | |
Other comprehensive income: | |||||||
Change in net unrealized loss on available for sale investments | (91 | ) | — | ||||
Change in foreign currency translation adjustments, net of tax | 511 | 99 | |||||
Other comprehensive income | 420 | 99 | |||||
Total comprehensive loss | $ | (2,197 | ) | $ | (6,302 | ) |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities | * | ||||||
Net loss | $ | (2,617 | ) | $ | (6,401 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization expense | 5,217 | 4,389 | |||||
Share-based compensation expense | 11,642 | 8,278 | |||||
Gain on liquidation of textbooks | — | (4,766 | ) | ||||
Loss from write-offs of textbooks | — | 314 | |||||
Other non-cash items | (41 | ) | (46 | ) | |||
Change in assets and liabilities: | |||||||
Accounts receivable | 2,783 | 1,947 | |||||
Prepaid expenses and other current assets | (7,894 | ) | (1,241 | ) | |||
Other assets | (506 | ) | 72 | ||||
Accounts payable | (3,068 | ) | (1,139 | ) | |||
Deferred revenue | 5,185 | 3,270 | |||||
Accrued liabilities | (4,286 | ) | (3,743 | ) | |||
Other liabilities | 138 | 260 | |||||
Net cash provided by operating activities | 6,553 | 1,194 | |||||
Cash flows from investing activities | |||||||
Proceeds from liquidations of textbooks | — | 6,943 | |||||
Purchases of marketable securities | (12,511 | ) | — | ||||
Maturities of marketable securities | 21,630 | — | |||||
Purchases of property and equipment | (4,883 | ) | (4,770 | ) | |||
Acquisition of business | — | (188 | ) | ||||
Net cash provided by investing activities | 4,236 | 1,985 | |||||
Cash flows from financing activities | |||||||
Common stock issued under stock plans, net | 5,222 | 2,763 | |||||
Payment of taxes related to the net share settlement of equity awards | (35,640 | ) | (12,618 | ) | |||
Net cash used in financing activities | (30,418 | ) | (9,855 | ) | |||
Net decrease in cash, cash equivalents and restricted cash | (19,629 | ) | (6,676 | ) | |||
Cash, cash equivalents and restricted cash, beginning of period | 126,963 | 77,433 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 107,334 | $ | 70,757 | |||
Supplemental cash flow data: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 19 | $ | 30 | |||
Income taxes | $ | 503 | $ | 388 | |||
Non-cash investing and financing activities: | |||||||
Accrued purchases of long-lived assets | $ | 3,204 | $ | 2,022 | |||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||
Cash and cash equivalents | $ | 106,827 | $ | 70,294 | |||
Restricted cash included in other current assets | 84 | — | |||||
Restricted cash included in other assets | 423 | 463 | |||||
Total cash, cash equivalents and restricted cash | $ | 107,334 | $ | 70,757 |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017(1) | $ | % | |||||||||||
Chegg Services | $ | 56,277 | $ | 41,035 | $ | 15,242 | 37 | % | ||||||
Required Materials | 20,672 | 21,567 | (895 | ) | (4 | )% | ||||||||
Total net revenues | $ | 76,949 | $ | 62,602 | $ | 14,347 | 23 | % |
Change | ||||||||||||||
March 31, 2018 | December 31, 2017 | $ | % | |||||||||||
Accounts receivable, net | $ | 8,055 | $ | 10,855 | $ | (2,800 | ) | (26 | )% | |||||
Deferred revenue | $ | 18,625 | $ | 13,440 | $ | 5,185 | 39 | % |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Numerator: | |||||||
Net loss | $ | (2,617 | ) | $ | (6,401 | ) | |
Denominator: | |||||||
Weighted average shares used to compute net loss per share, basic and diluted | 110,904 | 92,830 | |||||
Net loss per share, basic and diluted | $ | (0.02 | ) | $ | (0.07 | ) |
Three Months Ended March 31, | |||||
2018 | 2017 | ||||
Options to purchase common stock | 4,079 | 7,975 | |||
RSUs and PSUs | 8,791 | 1,888 | |||
Warrants to purchase common stock | — | 200 | |||
Total common stock equivalents | 12,870 | 10,063 |
March 31, 2018 | December 31, 2017 | ||||||||||||||||||||||
Cost | Net Unrealized Loss | Fair Value | Cost | Net Unrealized Loss | Fair Value | ||||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||||||||
Cash | $ | 69,117 | $ | — | $ | 69,117 | $ | 98,370 | $ | — | $ | 98,370 | |||||||||||
Money market funds | 5,192 | — | $ | 5,192 | 5,358 | — | 5,358 | ||||||||||||||||
Commercial paper | 32,516 | 2 | 32,518 | 22,729 | — | 22,729 | |||||||||||||||||
Total cash and cash equivalents | $ | 106,825 | $ | 2 | $ | 106,827 | $ | 126,457 | $ | — | $ | 126,457 | |||||||||||
Short-term investments: | |||||||||||||||||||||||
Commercial paper | $ | 31,340 | $ | (17 | ) | $ | 31,323 | $ | 38,850 | $ | (27 | ) | $ | 38,823 | |||||||||
Corporate securities | 31,103 | (142 | ) | 30,961 | 23,001 | (43 | ) | 22,958 | |||||||||||||||
U.S. treasury securities | 19,992 | (12 | ) | 19,980 | 19,978 | (17 | ) | 19,961 | |||||||||||||||
Total short-term investments | $ | 82,435 | $ | (171 | ) | $ | 82,264 | $ | 81,829 | $ | (87 | ) | $ | 81,742 | |||||||||
Long-term corporate securities | $ | 10,735 | $ | (107 | ) | $ | 10,628 | $ | 20,405 | $ | (100 | ) | $ | 20,305 |
Cost | Fair Value | ||||||
Due in 1 year or less | $ | 114,951 | $ | 114,782 | |||
Due in 1-2 years | 10,735 | 10,628 | |||||
Investments not due at a single maturity date | 5,192 | 5,192 | |||||
Total | $ | 130,878 | $ | 130,602 |
March 31, 2018 | |||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||
Assets: | |||||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | 5,192 | $ | 5,192 | $ | — | |||||
Commercial paper | 32,518 | — | 32,518 | ||||||||
Short-term investments: | |||||||||||
Commercial paper | 31,323 | — | 31,323 | ||||||||
Corporate securities | 30,961 | — | 30,961 | ||||||||
U.S. treasury securities | 19,980 | 19,980 | — | ||||||||
Long-term corporate securities | 10,628 | — | 10,628 | ||||||||
Total assets measured and recorded at fair value | $ | 130,602 | $ | 25,172 | $ | 105,430 |
December 31, 2017 | |||||||||||
Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | |||||||||
Assets: | |||||||||||
Cash equivalents: | |||||||||||
Money market funds | $ | 5,358 | $ | 5,358 | $ | — | |||||
Commercial paper | 22,729 | — | 22,729 | ||||||||
Short-term investments: | — | ||||||||||
Commercial paper | 38,823 | — | 38,823 | ||||||||
Corporate securities | 22,958 | — | 22,958 | ||||||||
U.S. treasury securities | 19,961 | 19,961 | — | ||||||||
Long-term corporate securities | 20,305 | — | 20,305 | ||||||||
Total assets measured and recorded at fair value | $ | 130,134 | $ | 25,319 | $ | 104,815 |
Three Months Ended March 31, 2018 | Year Ended December 31, 2017 | ||||||
Beginning balance | $ | 125,272 | $ | 116,239 | |||
Additions due to acquisition | — | 9,024 | |||||
Foreign currency translation adjustment | 253 | 9 | |||||
Ending balance | $ | 125,525 | $ | 125,272 |
March 31, 2018 | ||||||||||||||
Weighted-Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||
Developed technologies | 70 | $ | 20,657 | $ | (10,852 | ) | $ | 9,805 | ||||||
Customer lists | 47 | 9,970 | (5,822 | ) | 4,148 | |||||||||
Trade names | 46 | 5,793 | (3,860 | ) | 1,933 | |||||||||
Non-compete agreements | 30 | 1,798 | (1,554 | ) | 244 | |||||||||
Master service agreements | 21 | 1,030 | (1,030 | ) | — | |||||||||
Indefinite-lived trade name | — | 3,600 | — | 3,600 | ||||||||||
Foreign currency translation adjustment | — | 172 | — | 172 | ||||||||||
Total intangible assets | 57 | $ | 43,020 | $ | (23,118 | ) | $ | 19,902 |
December 31, 2017 | ||||||||||||||
Weighted-Average Amortization Period | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||
Developed technologies | 70 | $ | 20,657 | $ | (10,220 | ) | $ | 10,437 | ||||||
Customer lists | 47 | 9,970 | (5,480 | ) | 4,490 | |||||||||
Trade names | 46 | 5,793 | (3,465 | ) | 2,328 | |||||||||
Non-compete agreements | 30 | 1,798 | (1,506 | ) | 292 | |||||||||
Master service agreements | 21 | 1,030 | (1,030 | ) | — | |||||||||
Indefinite-lived trade name | — | 3,600 | — | 3,600 | ||||||||||
Foreign currency translation adjustment | — | 6 | — | 6 | ||||||||||
Total intangible assets | 57 | $ | 42,854 | $ | (21,701 | ) | $ | 21,153 |
Remaining nine months of 2018 | $ | 3,893 | |
2019 | 4,347 | ||
2020 | 2,874 | ||
2021 | 1,518 | ||
2022 | 1,075 | ||
Thereafter | 2,595 | ||
Total | $ | 16,302 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cost of revenues | $ | 94 | $ | 67 | |||
Research and development | 4,133 | 3,241 | |||||
Sales and marketing | 1,589 | 1,126 | |||||
General and administrative | 5,826 | 3,844 | |||||
Total share-based compensation expense | $ | 11,642 | $ | 8,278 |
RSUs and PSUs Outstanding | ||||||
Number of RSUs and PSUs Outstanding | Weighted Average Grant Date Fair Value | |||||
Balance at December 31, 2017 | 14,335,115 | $ | 6.78 | |||
Granted | 2,600,433 | 19.55 | ||||
Released | (4,203,190 | ) | 6.19 | |||
Canceled | (683,587 | ) | 5.34 | |||
Balance at March 31, 2018 | 12,048,771 | $ | 9.83 |
2017 Restructuring Plan | 2015 Restructuring Plan | ||||||||||||||||||
Workforce Reduction Costs | Lease Termination and Other Costs | Workforce Reduction Costs | Lease Termination and Other Costs | Total | |||||||||||||||
Balance at January 1, 2017 | $ | — | $ | — | $ | — | $ | 306 | $ | 306 | |||||||||
Restructuring charges (credits) | 941 | 148 | — | (42 | ) | 1,047 | |||||||||||||
Cash payments | (897 | ) | (128 | ) | — | (43 | ) | (1,068 | ) | ||||||||||
Write-offs | — | (20 | ) | — | — | (20 | ) | ||||||||||||
Balance at December 31, 2017 | 44 | — | — | 221 | 265 | ||||||||||||||
Restructuring charges | 31 | 9 | — | 180 | 220 | ||||||||||||||
Cash payments | — | (9 | ) | — | (57 | ) | (66 | ) | |||||||||||
Write-offs | — | — | — | (18 | ) | (18 | ) | ||||||||||||
Balance at March 31, 2018 | $ | 75 | $ | — | $ | — | $ | 326 | $ | 401 |
Three Months Ended March 31, | |||||||||||||
2018 | 2017 | ||||||||||||
Net revenues | $ | 76,949 | 100 | % | $ | 62,602 | 100 | % | |||||
Cost of revenues(1) | 20,224 | 26 | 21,396 | 34 | |||||||||
Gross profit | 56,725 | 74 | 41,206 | 66 | |||||||||
Operating expenses(1): | |||||||||||||
Research and development | 25,533 | 33 | 19,302 | 31 | |||||||||
Sales and marketing | 15,336 | 20 | 15,964 | 26 | |||||||||
General and administrative | 18,256 | 24 | 15,342 | 25 | |||||||||
Restructuring charges | 220 | — | 900 | 1 | |||||||||
Gain on liquidation of textbooks | — | — | (4,766 | ) | (8 | ) | |||||||
Total operating expenses | 59,345 | 77 | 46,742 | 75 | |||||||||
Loss from operations | (2,620 | ) | (3 | ) | (5,536 | ) | (9 | ) | |||||
Total interest expense and other income (expense), net | 544 | 1 | (218 | ) | — | ||||||||
Loss before provision for income taxes | (2,076 | ) | (2 | ) | (5,754 | ) | (9 | ) | |||||
Provision for income taxes | 541 | (1 | ) | 647 | (1 | ) | |||||||
Net loss | $ | (2,617 | ) | (3 | )% | $ | (6,401 | ) | (10 | )% | |||
(1) Includes share-based compensation expense as follows: | |||||||||||||
Cost of revenues | $ | 94 | $ | 67 | |||||||||
Research and development | 4,133 | 3,241 | |||||||||||
Sales and marketing | 1,589 | 1,126 | |||||||||||
General and administrative | 5,826 | 3,844 | |||||||||||
Total share-based compensation expense | $ | 11,642 | $ | 8,278 |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Chegg Services | $ | 56,277 | $ | 41,035 | $ | 15,242 | 37 | % | ||||||
Required Materials | 20,672 | 21,567 | (895 | ) | (4 | )% | ||||||||
Total net revenues | $ | 76,949 | $ | 62,602 | $ | 14,347 | 23 | % |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Cost of revenues(1) | $ | 20,224 | $ | 21,396 | $ | (1,172 | ) | (5 | )% | |||||
(1) Includes share-based compensation expense of: | $ | 94 | $ | 67 | $ | 27 | 40 | % |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Research and development(1) | $ | 25,533 | $ | 19,302 | $ | 6,231 | 32 | % | ||||||
Sales and marketing(1) | 15,336 | 15,964 | (628 | ) | (4 | ) | ||||||||
General and administrative(1) | 18,256 | 15,342 | 2,914 | 19 | ||||||||||
Restructuring charges | 220 | 900 | (680 | ) | (76 | ) | ||||||||
Gain on liquidation of textbooks | — | (4,766 | ) | 4,766 | (100 | ) | ||||||||
Total operating expenses | $ | 59,345 | $ | 46,742 | $ | 12,603 | 27 | % | ||||||
(1) Includes share-based compensation expense of: | ||||||||||||||
Research and development | $ | 4,133 | $ | 3,241 | $ | 892 | 28 | % | ||||||
Sales and marketing | 1,589 | 1,126 | 463 | 41 | ||||||||||
General and administrative | 5,826 | 3,844 | 1,982 | 52 | ||||||||||
Share-based compensation expense | $ | 11,548 | $ | 8,211 | $ | 3,337 | 41 | % |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Interest expense, net | $ | (20 | ) | $ | (19 | ) | $ | (1 | ) | 5 | % | |||
Other income (expense), net | 564 | (199 | ) | 763 | n/m | |||||||||
Total interest expense and other income (expense), net | $ | 544 | $ | (218 | ) | $ | 762 | n/m |
Three Months Ended March 31, | Change | |||||||||||||
2018 | 2017 | $ | % | |||||||||||
Provision for income taxes | $ | 541 | $ | 647 | $ | (106 | ) | (16 | )% |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Consolidated Statements of Cash Flows Data: | |||||||
Net cash provided by operating activities | $ | 6,553 | $ | 1,194 | |||
Net cash provided by investing activities | $ | 4,236 | $ | 1,985 | |||
Net cash used in financing activities | $ | (30,418 | ) | $ | (9,855 | ) |
(a) | Evaluation of Disclosure Controls and Procedures |
(b) | Changes in Internal Control over Financial Reporting |
• | execute on our relatively new and evolving business model; |
• | develop new products and services, both independently and with developers or other third parties; |
• | attract and retain students and increase their engagement with our learning platform and our mobile applications; |
• | attract and retain brands, colleges, universities and other academic institutions to our marketing services; |
• | manage the growth of our business, including increasing or unforeseen expenses; |
• | develop and scale a high performance technology infrastructure to efficiently handle increased usage by students, especially during peak periods prior to each academic term; |
• | maintain and manage relationships with strategic partners, including Ingram, NRCCUA, and other distributors, publishers, wholesalers, colleges and brands; |
• | develop a profitable business model and pricing strategy; |
• | compete with companies that offer similar services or products; |
• | expand into adjacent markets; |
• | navigate the ongoing evolution and uncertain application of regulatory requirements, such as privacy laws, to our business, including our new products and services; |
• | integrate and realize synergies from businesses that we acquire; and |
• | expand into foreign markets. |
• | our ability to attract and retain students and increase their engagement with our learning platform and mobile applications, particularly related to our Chegg Services subscribers; |
• | the rate of adoption of our offerings; |
• | our ability to successfully utilize the information gathered from our learning platform to enhance our Student Graph (which is the accumulation of the collective activity of students in our learning platform) and target sales of complementary products and services to our students; |
• | changes in demand and pricing for print textbooks and eTextbooks; Ingram's ability to manage fulfillment processes to handle significant volumes during peak periods and as a result of the potential growth in volume of transactions over time; changes by our competitors to their product and service offerings; |
• | price competition and our ability to react appropriately to such competition; |
• | our ability and Ingram's ability to manage their textbook library; |
• | our ability to execute on our strategic partnership with Ingram; |
• | disruptions to our internal computer systems and our fulfillment information technology infrastructure, particularly during peak periods; |
• | the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and infrastructure; |
• | our ability to successfully manage the integration of operations, technology and personnel resulting from our acquisitions; |
• | governmental regulation in particular regarding privacy and advertising and taxation policies; and |
• | general macroeconomic conditions and economic conditions specific to higher education. |
• | require us to incur charges and substantial debt or liabilities; |
• | cause adverse tax consequences, substantial depreciation or deferred compensation charges; |
• | result in acquired in-process research and development expenses or in the future may require the amortization, write-down or impairment of amounts related to deferred compensation, goodwill and other intangible assets; and |
• | give rise to various litigation risks, including the increased likelihood of litigation. |
• | we may not generate sufficient financial return to offset acquisition costs; |
• | we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, services, operations and personnel of any company that we acquire, particularly if key personnel of the acquired company decide not to work for us; |
• | an acquisition may disrupt our ongoing business, divert resources, increase our expenses and distract our management; |
• | an acquisition may delay adoption rates or reduce engagement rates for our products and services and those of the company acquired by us due to student uncertainty about continuity and effectiveness of service from either company; |
• | we may encounter difficulties in, or may be unable to, successfully sell or otherwise monetize any acquired products and services; |
• | an acquisition may not ultimately be complementary to our evolving business model; and |
• | an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience. |
• | our ability to engage high school students with our Chegg Writing, Chegg Tutors, Chegg Test Prep and College Admissions and Scholarship Services; |
• | our ability to produce compelling supplemental materials and services for students to improve their outcomes throughout their educational journey; |
• | our ability to produce engaging mobile applications and websites for students to engage with our learning platform; |
• | our ability and Ingram's ability to consistently provide students with a convenient, high quality experience for selecting, receiving and returning print textbooks; |
• | our ability and Ingram's ability to accurately forecast and respond to student demand for print textbooks; |
• | the pricing of our physical textbooks and eTextbooks for rental or sale in relation to other alternatives, including the prices offered by publishers or by other competing textbook rental providers; |
• | the quality and prices of our offerings compared to those of our competitors; |
• | the rate of adoption of eTextbooks and our ability to capture a significant share of that market; |
• | changes in student spending levels; |
• | changes in the number of students attending college; |
• | the effectiveness of our sales and marketing efforts; and |
• | our ability to introduce new products and services that are favorably received by students. |
• | maintain our reputation as a trusted source of content, services and textbooks for students; |
• | maintain the quality of and improve our existing products, services and technologies; |
• | maintain and control the quality of our brand while Ingram handles our textbook fulfillment logistics; |
• | introduce products and services that are favorably received; |
• | adapt to changing technologies, including developing and enhancing compelling mobile offerings for our learning platform; |
• | adapt to students’ rapidly changing tastes, preferences, behavior and brand loyalties; |
• | protect our students’ data, such as passwords and personally identifiable information; |
• | protect our trademark and other intellectual property rights; |
• | continue to expand our reach to students in high school, graduate school and internationally; |
• | ensure that the content posted to our website by students is reliable and does not infringe on third-party copyrights or violate other applicable laws, our terms of use or the ethical codes of those students’ colleges; |
• | adequately address students’ concerns with our products and services; and |
• | convert and fully integrate the brands and students that we acquire, including Math 42, Imagine Easy Solutions and internships.com, into the Chegg brand and Chegg.com. |
• | changes in student sentiment about the quality or usefulness of our learning platform and our products and services; |
• | problems that prevent Ingram from delivering textbooks reliably or timely; |
• | technical or other problems that prevent us from providing our products and services reliably or otherwise negatively affect the student experience on our website or our mobile application; |
• | concern from colleges about the ways students use our content offerings, such as our Expert Answers service; |
• | brand conflict between acquired brands and the Chegg brand; |
• | student concerns related to privacy and the way in which we use student data as part of our products and services; |
• | the reputation or products and services of competitive companies; and |
• | students’ misuse of our products and services in ways that violate our terms of services, applicable laws or the code of conduct at their colleges. |
• | Products and Services for Students. Our Chegg Services face competition from different businesses depending on the offering. For Chegg Study, our competitors primarily include publishers that provide study materials and online instructional systems. Additionally, we face competition from free services such as Yahoo! Answers and Brain.ly for our Expert Answers service. For our Chegg Writing service, we primarily face competition from other citation generating services such as Noodle Tools. For our Chegg Tutors services, we face competition from other online tutoring services such as Wyzant, Tutors.com and Varsity Tutors. The market for textbooks and supplemental materials is intensely competitive and subject to rapid change. We face competition from college bookstores, some of which are operated by Follett and Barnes & Noble Education, online marketplaces such as Amazon.com and providers of eTextbooks such as Apple iTunes and Blackboard, as well as various private textbook rental websites. Many students purchase from multiple textbook providers, are highly price sensitive and can easily shift spending from one provider or format to another. As a consequence, our Required Materials product line, which includes eTextbooks, competes primarily on price and further on selection and functionality and compatibility of the eTextbook Reader we utilize across a wide variety of desktop and mobile devices. |
• | Brand Advertising. With respect to brands, we compete with online and offline outlets that generate revenues from advertisers and marketers, especially those that target high school and college students. In this area, we seek to partner with brands that have offerings that will interest or delight students and have received very positive comments and feedback from students on these offerings. We provide these brands with preferential access to our audience, which we believe represents a highly engaged portion of the target demographic of our brand partners. |
• | compete for advertising and marketing dollars from colleges, brands, online marketing and media companies and advertisers; |
• | penetrate the market for student-focused advertising; |
• | develop a platform that can deliver advertising and marketing services across multiple channels, including print, email, Internet, mobile applications and other connected devices; |
• | improve our analytics and measurement solutions to demonstrate the value of our advertising and marketing services; |
• | maintain the retention, growth and engagement of our student user base; |
• | strengthen our brand and increase our presence in media reports and with publicity companies that utilize online platforms for advertising and marketing purposes; |
• | create new products that sustain or increase the value of our advertising and marketing services and other commercial content; |
• | manage changes in the way online advertising and marketing services are priced; |
• | weather the impact of macroeconomic conditions and conditions in the advertising industry and higher education in general; and |
• | manage legal developments relating to data privacy, advertising or marketing services, legislation and regulation and litigation. |
• | the CAN-SPAM Act of 2003 and similar laws adopted by a number of states regulate unsolicited commercial emails, create criminal penalties for emails containing fraudulent headers and control other abusive online marketing practices; |
• | the U.S. Federal Trade Commission (FTC) has guidelines that impose responsibilities on companies with respect to communications with consumers and impose fines and liability for failure to comply with rules with respect to advertising or marketing practices they may deem misleading or deceptive; and |
• | the TCPA restricts telemarketing and the use of automated telephone equipment. The TCPA limits the use of automatic dialing systems, artificial or prerecorded voice messages and SMS text messages. It also applies to unsolicited text messages advertising the commercial availability of goods or services. Additionally, a number of states have enacted statutes that address telemarketing. For example, some states, such as California, Illinois and |
• | our intellectual property and proprietary rights will provide competitive advantages to us; |
• | our competitors or others will not design around our intellectual property or proprietary rights; |
• | our ability to assert our intellectual property or proprietary rights against potential competitors or to settle current or future disputes will not be limited by our agreements with third parties; |
• | our intellectual property and proprietary rights will be enforced in jurisdictions where competition may be intense or where legal protection may be weak; |
• | any of the patents, trademarks, copyrights, trade secrets or other intellectual property or proprietary rights that we presently employ in our business will not lapse or be invalidated, circumvented, challenged or abandoned; or |
• | we will not lose the ability to assert our intellectual property or proprietary rights against or to license our intellectual property or proprietary rights to others and collect royalties or other payments. |
• | recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; |
• | compliance with applicable foreign laws and regulations; |
• | compliance with anti-bribery laws including, without limitation, compliance with the Foreign Corrupt Practices Act; |
• | currency exchange rate fluctuations; |
• | additional taxation of international costs and intercompany payments to our international subsidiaries associated with the U.S. Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act); |
• | political and economic instability; and |
• | higher costs of doing business internationally. |
• | borrow money and guarantee or provide other support for indebtedness of third-parties; |
• | pay dividends on, redeem or repurchase our capital stock; |
• | acquire entities or assets; |
• | make investments in entities that we do not control, including joint ventures; |
• | consummate a merger, consolidation or sale of all or substantially all of our assets; |
• | enter into certain asset sale transactions; and |
• | enter into secured financing arrangements; |
• | actual or anticipated fluctuations in our financial condition and operating results, including as a result of the seasonality in our business that results from the academic calendar; |
• | our announcement of actual results for a fiscal period that are higher or lower than projected results or our announcement of revenues or earnings guidance that is higher or lower than expected, including as a result of difficulty forecasting seasonal variations in our financial condition and operating results or the revenues generated by our offerings; |
• | issuance of new or updated research or reports by securities analysts, including the publication of unfavorable reports or change in recommendation or downgrading of our common stock; |
• | announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic relationships and partnerships, joint ventures or capital commitments; |
• | actual or anticipated changes in our growth rate relative to our competitors; |
• | changes in the economic performance or market valuations of companies perceived by investors to be comparable to us; |
• | the expiration of market standoff or contractual lock-up agreements and future sales of our common stock by our officers, directors and existing stockholders or the anticipation of such sales; |
• | issuances of additional shares of our common stock in connection with acquisitions; |
• | share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; |
• | lawsuits threatened or filed against us; |
• | regulatory developments in our target markets affecting us, students, colleges or brands, publishers or our competitors; |
• | political climate in the United States, with a focus on cutting or limiting budgets, higher education and taxation; |
• | terrorist attacks or natural disasters or other such events impacting countries where we have operations; |
• | international stock market conditions; and |
• | general economic and market conditions, such as recessions, unemployment rates, the limited availability of consumer credit, interest rate changes and currency fluctuations. |
• | our board of directors is classified into three classes of directors with staggered three-year terms and directors can only be removed from office for cause and by the approval of the holders of at least two-thirds of our outstanding common stock; |
• | subject to certain limitations, our board of directors has the sole right to set the number of directors and to fill a vacancy resulting from any cause or created by the expansion of our board of directors, which prevents stockholders from being able to fill vacancies on our board of directors; |
• | only our board of directors is authorized to call a special meeting of stockholders; |
• | certain litigation against us can only be brought in Delaware; |
• | our restated certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of common stock; |
• | advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; |
• | our stockholders cannot act by written consent; |
• | our restated bylaws can only be amended by our board of directors or by the approval of the holders of at least two-thirds of our outstanding common stock; and |
• | certain provisions of our restated certificate of incorporation can only be amended by the approval of the holders of at least two-thirds of our outstanding common stock. |
Incorporated by Reference | ||||||||||||
Exhibit No. | Exhibit | Form | File No | Filing Date | Exhibit No. | Filed Herewith | ||||||
X | ||||||||||||
X | ||||||||||||
X | ||||||||||||
X | ||||||||||||
101.INS | XBRL Instance | X | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema | X | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation | X | ||||||||||
101.LAB | XBRL Taxonomy Extension Labels | X | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation | X | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition | X |
** | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. |
CHEGG, INC. | |||
April 26, 2018 | By: | /S/ ANDREW BROWN | |
Andrew Brown | |||
Vice President, Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
BORROWER: | |
CHEGG, INC. | |
By: | /S/ ANDREW BROWN |
Name: | Andrew Brown |
Title: | Chief Financial Officer |
BANK: | |
WELLS FARGO BANK, NATIONAL ASSOCIATION | |
By: | /S/ MARISA PHAN |
Name: | Marisa Phan |
Title: | Senior Vice President |
1. | I have reviewed this quarterly report on Form 10-Q of Chegg, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ DAN ROSENSWEIG |
Dan Rosensweig |
President, Chief Executive Officer and Chairman |
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Chegg, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/S/ ANDREW BROWN |
Andrew Brown |
Chief Financial Officer |
(Principal Financial Officer) |
(1) | The Report, to which this certification is attached as Exhibit 32.01, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. |
/S/ DAN ROSENSWEIG | /S/ ANDREW BROWN | |
Dan Rosensweig | Andrew Brown | |
President, Chief Executive Officer and Chairman | Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Apr. 25, 2018 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | CHEGG, INC | |
Entity Central Index Key | 0001364954 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 112,148,773 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 176 | $ 259 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 112,748,665 | 109,667,640 |
Common stock, shares outstanding | 112,748,665 | 109,667,640 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||
Statement of Comprehensive Income [Abstract] | |||||
Net loss | $ (2,617) | $ (6,401) | [1] | ||
Other comprehensive income: | |||||
Change in net unrealized loss on available for sale investments | (91) | 0 | |||
Change in foreign currency translation adjustments, net of tax | 511 | 99 | |||
Other comprehensive income | 420 | 99 | |||
Total comprehensive loss | $ (2,197) | $ (6,302) | |||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
[1] | |||
Statement of Cash Flows [Abstract] | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | $ (19,629) | $ (6,676) | |||
Cash flows from operating activities | |||||
Net loss | (2,617) | (6,401) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Depreciation and amortization expense | 5,217 | 4,389 | |||
Share-based compensation expense | 11,642 | 8,278 | |||
Gain on liquidation of textbooks | 0 | (4,766) | |||
Loss from write-offs of textbooks | 0 | 314 | |||
Other non-cash items | (41) | (46) | |||
Change in assets and liabilities: | |||||
Accounts receivable | 2,783 | 1,947 | |||
Prepaid expenses and other current assets | (7,894) | (1,241) | |||
Other assets | (506) | 72 | |||
Accounts payable | (3,068) | (1,139) | |||
Deferred revenue | 5,185 | 3,270 | |||
Accrued liabilities | (4,286) | (3,743) | |||
Other liabilities | 138 | 260 | |||
Net cash provided by operating activities | 6,553 | 1,194 | |||
Cash flows from investing activities | |||||
Proceeds from liquidations of textbooks | 0 | 6,943 | |||
Purchases of marketable securities | (12,511) | 0 | |||
Maturities of marketable securities | 21,630 | 0 | |||
Purchases of property and equipment | (4,883) | (4,770) | |||
Acquisition of business | 0 | (188) | |||
Net cash provided by investing activities | 4,236 | 1,985 | |||
Cash flows from financing activities | |||||
Common stock issued under stock plans, net | 5,222 | 2,763 | |||
Payment of taxes related to the net share settlement of equity awards | (35,640) | (12,618) | |||
Net cash used in financing activities | (30,418) | (9,855) | |||
Cash, cash equivalents and restricted cash, beginning of period | 126,963 | 77,433 | |||
Cash, cash equivalents and restricted cash, end of period | 107,334 | 70,757 | |||
Supplemental cash flow data: | |||||
Interest | 19 | 30 | |||
Income taxes | 503 | 388 | |||
Non-cash investing and financing activities: | |||||
Accrued purchases of long-lived assets | 3,204 | 2,022 | |||
Reconciliation of cash, cash equivalents and restricted cash: | |||||
Total cash, cash equivalents and restricted cash | $ 126,963 | $ 77,433 | |||
|
Background and Basis of Presentation |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background and Basis of Presentation | Background and Basis of Presentation Company and Background Chegg, Inc. (Chegg, the Company, we, us, or our), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005. Chegg is the smarter way to student. As the leading direct-to-student learning platform, we strive to improve educational outcomes by putting the student first in all our decisions. We support students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials. Our services are available online, anytime and anywhere, so we can reach students when they need us most. Basis of Presentation The accompanying condensed consolidated balance sheet as of March 31, 2018, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 and the related footnote disclosures are unaudited. 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 March 31, 2018 and our results of operations and cash flows for the three months ended March 31, 2018 and 2017. Our results of operations and cash flows for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2017 as 2017. 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 Form 10-K for the year ended December 31, 2017 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC). We have changed the caption on our condensed consolidated statements of operations from “technology and development” to “research and development.” This change does not impact any current or previously reported amounts. Except for our policies on revenue recognition and deferred revenue, there have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K. Revenue Recognition and Deferred Revenue We recognize revenues from our Chegg Services and Required Materials offerings when control of the goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: •Identification of the contract, or contracts, with a customer •Identification of the performance obligations in the contract •Determination of the transaction price •Allocation of the transaction price to the performance obligations in the contract •Recognition of revenue when, or as, we satisfy a performance obligation We generate revenues from our Chegg Services product line including our Chegg Study service, our Chegg Writing service, our Chegg Tutors service, Test Prep, through our partnership with Kaplan Test Prep (Kaplan), Internship services, Brand Partnership services that we offer to brands and Enrollment Marketing services to colleges, through our strategic partnership with the National Record Center for College and University Admissions (NRCCUA). Chegg Services are offered to students through weekly, monthly or annual subscriptions, and we recognize revenues ratably over the respective subscription period. Enrollment Marketing services and Brand Partnership services are offered either on a subscription or on an a la carte basis. Revenues are recognized ratably or as earned over the subscription service period, generally one year. Revenues from Enrollment Marketing services or Brand Partnership services delivered on an a la carte basis, without a subscription, are recognized when delivery of the respective lead or service has occurred. Historically, under previous revenue recognition guidance, revenue recognition was delayed for certain contracts with extended payment terms. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our Enrollment Marketing and Brand Partnership customers with normal credit terms, typically 30 days. Some of our customer arrangements for Brand Partnership and Enrollment Marketing services include multiple performance obligations. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer and our promise to transfer the service is separately identifiable from other promises in the contract. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (SSP) of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions, and information about the customer. Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations. We also generate revenues from our Required Materials product line including revenue share earned on print textbooks for rental or sale transactions, owned by Ingram and other partners, which are recognized immediately when a book ships to the student. Revenues from the rental or sale of eTextbooks is recognized ratably over the contractual period, generally two to five months, or at time of the sale, respectively. Our strategic partnership with Ingram includes an amount of variable consideration in addition to a fixed revenue share that we earn. This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration. Under the new revenue recognition guidance, we estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period as opposed to the contractual amount earned under the previous revenue recognition guidance. For sales of third party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third party products. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. For our strategic partnership with Ingram and our agreements with other textbook publishers, we have concluded that we do not control the use of the print textbooks, and therefore record net revenue only for the revenue share we earn upon the shipment of a print textbook to a student. For the sale of eTextbooks we have concluded that we control the service, therefore we recognize revenue and cost of revenue on a gross basis. Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data. Customer refunds from cancellations and returns are recorded as a reduction to revenues. Contract assets are contained within other current assets on our condensed consolidated balance sheets. Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer. Contract receivables are contained within accounts receivable, net on our condensed consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time. Contract liabilities are contained within deferred revenue on our condensed consolidated balance sheets. Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions performance obligations that have not been satisfied, and Brand Partnership and Enrollment Marketing performance obligations that have yet to be satisfied. Deferred revenue is recognized as revenues ratably over the term for subscriptions or when the services are provided and all other revenue recognition criteria have been met. 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 and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition including variable consideration, recoverability of accounts receivable, restructuring charges, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, valuation of goodwill and long-lived assets, and the valuation of acquired intangible assets. 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 may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements not yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted, and the guidance requires a modified retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2018 and we plan to adopt the guidance on January 1, 2019. We plan to elect the package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We will continue to evaluate ASU 2016-02 as we near our adoption date. Recently Adopted Accounting Pronouncements In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. We adopted the guidance on January 1, 2018 recording an immaterial reclassification from accumulated other comprehensive income (loss) to the opening balance of accumulated deficit. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 from the annual goodwill impairment test no longer requiring the comparison of the implied fair value of a reporting unit's goodwill with the carrying amount of goodwill. We early adopted the guidance with a prospective application on January 1, 2018 and will apply the guidance starting with our 2018 annual goodwill impairment assessment. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business to assist entities with evaluating whether a transaction should be accounted for as acquisitions of assets or businesses. We adopted the guidance with a prospective application on January 1, 2018. We will analyze the clarified definition of a business to determine whether transactions from our application date should be accounted for as an asset acquisition or business combination under the new guidance. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires an entity to explain the change during a period in restricted cash equivalents on the condensed consolidated statements of cash flows and include such amounts when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. We adopted the guidance with a retrospective application on January 1, 2018 and have adjusted our beginning-of-period and end-of-period amounts on our condensed consolidated statement of cash flows to include restricted cash with the change in restricted cash included within the other assets line on our condensed consolidated statement of cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires entities to measure equity investments at fair value and recognize any changes in fair value within the statement of operations. We have a strategic investment of $3.0 million recorded in other assets on our condensed consolidated balance sheets that falls under this guidance update. The guidance provides for electing a measurement alternative for equity investments that do not have readily determinable fair values. We have elected the measurement alternative for our strategic investment as there is not a readily determinable fair value, which we will apply to our strategic investment starting with our adoption date of January 1, 2018. This investment will be measured at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, with any changes in the value of the investment recorded within the statement of operations. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (Topic 606) (ASC 606), which changes the way we recognize revenue and significantly expands the disclosure requirements for revenue arrangements. We adopted ASU 2014-09 under the modified retrospective application, recording the cumulative effect of adoption as an adjustment to the opening balance of accumulated deficit on our adoption date of January 1, 2018. We have not adjusted previously reported amounts. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, and trade and other receivables. See note 2 for more information. |
Net Loss Per Share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | et Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), and performance-based restricted stock units (PSUs), to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):
|
Revenues |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Adoption of ASC Topic 606, Revenue from Contracts with Customers On January 1, 2018, we adopted the new revenue recognition guidance using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning January 1, 2018 are presented under the new revenue recognition guidance, while prior period amounts were not adjusted and continue to be reported in accordance with the previous revenue recognition guidance. We recorded an immaterial net increase to the opening balance of accumulated deficit as of January 1, 2018 due to the cumulative impact of adopting the new revenue recognition guidance. The two primary impacts of the new revenue recognition guidance are for our Enrollment Marketing services where revenue is recognized earlier in the contract life under the new revenue recognition guidance than under the previous guidance and for our strategic partnership with Ingram where we are required to estimate variable consideration under the new revenue recognition guidance, which we were not previously required to estimate. Both of these changes had an immaterial impact on our revenue under the new revenue recognition guidance during the three months ended March 31, 2018 as compared to the previous revenue recognition guidance. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues, most significantly the revenue share we earn from Ingram and other partners, being recognized at the point in time when print textbooks are shipped to students. The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):
(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. During the three months ended March 31, 2018, we recognized $9.6 million of revenues that were included in our deferred revenue balance as of December 31, 2017. During the three months ended March 31, 2018, there were no revenues recognized from performance obligations satisfied in previous periods. The aggregate amount of unsatisfied performance obligations is approximately $27.1 million as of March 31, 2018, of which a majority is expected to be recognized into revenues over the next year and the remainder within three years. As a practical expedient, we do not disclose the value of unsatisfied performance obligations for contracts with an expected duration of one year or less. Contract Balances The following table presents our accounts receivable, net and deferred revenue balances (in thousands, except percentages):
During the three months ended March 31, 2018, our accounts receivable, net balance decreased by $2.8 million, or 26%, primarily due to an improvement in cash collections. Deferred revenue balance increased by $5.2 million, or 39%, primarily due to increased bookings for our Chegg Study service and eTextbook rentals. Our contract assets balance was immaterial as of March 31, 2018 and December 31, 2017. |
Cash and Cash Equivalents, and Investment |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents, and Investment | ash and Cash Equivalents, and Investments The following table shows our cash and cash equivalents, and investments’ cost, net unrealized loss and fair value as of March 31, 2018 and December 31, 2017 (in thousands):
The cost and fair value of available-for-sale investments as of March 31, 2018 by contractual maturity were as follows (in thousands):
Investments not due at a single maturity date in the preceding table consist of money market fund deposits. As of March 31, 2018, we considered the declines in market value of our investment portfolio to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired. We do not intend to sell the investments nor is it more likely than not that we will be required to sell the investments before recovery of their cost bases. We typically invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of four months, and our investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and our intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the three months ended March 31, 2018 and 2017, we did not recognize any impairment charges. Restricted Cash As of March 31, 2018 and December 31, 2017, we had approximately $0.5 million of restricted cash that consists of security deposits for our offices. These amounts are classified in either other current assets and other assets on our condensed consolidated balance sheets based on the remaining term of the lease from the balance sheet dates. Strategic Investment We previously invested $3.0 million in a foreign entity to explore expanding our reach internationally. Our investment is included in other assets on our condensed consolidated balance sheets. We did not record an impairment charge on this investment during the three months ended March 31, 2018 and 2017, as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment. Further, there were no observable price changes in orderly transactions for the identical or a similar investment of the same issuer during the three months ended March 31, 2018. |
Fair Value Measurement |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | air Value Measurement We have established a fair value hierarchy used to determine the fair value of our financial instruments as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value; the inputs require significant management judgment or estimation. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial instruments measured and recorded at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 are classified based on the valuation technique level in the tables below (in thousands):
We value our marketable securities based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. Other than our U.S. treasury securities, we classify our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. |
Goodwill and Intangible Assets |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | oodwill and Intangible Assets Goodwill consists of the following (in thousands):
Intangible assets as of March 31, 2018 and December 31, 2017 consist of the following (in thousands, except the weighted-average amortization period in months):
During each the three months ended March 31, 2018 and 2017, amortization expense related to our acquired intangible assets totaled approximately $1.4 million. As of March 31, 2018, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
|
Debt Obligations |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt Obligations | ebt Obligations In September 2016, we entered into a revolving line of credit, which was amended in March 2018, with an aggregate principal amount of $30.0 million (the Line of Credit) with an accordion feature that, subject to the lender's discretion, allows us to borrow up to a total of $50.0 million. This new line of credit replaced the previous line of credit that expired in August 2016. The Line of Credit matures September 2019 and requires us to repay the outstanding balance upon maturity. We will pay a fee equal to 0.25% per year on the average daily unused amount of the Line of Credit and a base interest rate equal to the LIBOR. In addition, we will pay a fee for each issued letter of credit which will be determined based on our current leverage ratio at the time the letter of credit is issued. If our leverage ratio is less than 1.00%, we will pay a fee equal to 1.50% per year and if our leverage ratio is greater than or equal to 1.00%, we will pay a fee equal to 2.50% per year. Our leverage ratio is a ratio of all obligations owed to the bank divided by our consolidated EBITDA. EBITDA for the purposes of calculating our leverage ratio is defined as net profit (loss) before tax, plus interest expense and amortized debt issuance costs, plus non-cash stock compensation (net of capitalized interest expense), plus depreciation expense, plus amortization expense and other non-cash expenses (assuming there are no future cash costs), plus expenses incurred in connection with permitted acquisitions (including without limitation accrued acquisition-related contingent expenses) in an amount not to exceed $6.0 million per calendar year, plus non-recurring expenses in an amount not to exceed $2.0 million per calendar year. We must maintain financial covenants under the Line of Credit as follows: (1) maintain a balance of unrestricted cash at the lender of not less than $30.0 million at all times, other than the three months ending March 31, 2017 and June 30, 2017, and not less than $25.0 million during the three months ending March 31, 2017 and June 30, 2017; and (2) achieve EBITDA, on a trailing 12 month basis, of not less than (i) $25.0 million for the period of time from September 30, 2016 through June 30, 2017, (ii) $30.0 million for the period of time from September 30, 2017 through June 30, 2018, and (iii) $35.0 million for the period of time from September 30, 2018 through the maturity of the Line of Credit. As of March 31, 2018, we were in compliance with the financial covenants of the Line of Credit. Further, we had no amounts outstanding and were able to borrow up to $30.0 million under the Line of Credit. |
Commitments and Contingencies |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | ommitments and Contingencies We lease our offices under operating leases, which expire at various dates through 2022. Our primary operating lease commitments at March 31, 2018 are related to our headquarters in Santa Clara, California and our office in San Francisco, California. We recognize rent expense on a straight-line basis over the lease period. Where leases contain escalation clauses, rent abatements, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line rent expense over the lease term. Rental expense, net of sublease income, was approximately $0.6 million and $0.7 million in the three months ended March 31, 2018 and 2017, respectively. From time to time, third parties may assert patent infringement claims against us in the form of letters, litigation, or other forms of communication. In addition, we may from time to time be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, disputes, or investigations. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters. We are not aware of any other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. However, our determination of whether a claim will proceed to litigation cannot be made with certainty, nor can the results of litigation be predicted with certainty. Nevertheless, defending any of these actions, regardless of the outcome, may be costly, time consuming, distract management personnel, and have a negative effect on our business. 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, and/or financial condition. |
Guarantees and Indemnifications |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Guarantees And Indemnifications [Abstract] | |
Guarantees and Indemnifications | uarantees 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 may terminate the indemnification agreements with these persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. We have a directors’ and officers’ insurance policy that limits 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 have not recorded any liabilities for these agreements as of March 31, 2018. |
Stockholders' Equity |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | tockholders' Equity Share-based Compensation Expense Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
There was no capitalized share-based compensation expense as of March 31, 2018 or 2017. RSU and PSU Activity Activity for RSUs and PSUs is as follows:
As of March 31, 2018, our total unrecognized share-based compensation expense related to RSUs and PSUs was approximately $81.3 million, which will be recognized over the remaining weighted-average vesting period of approximately 1.9 years. |
Income Taxes |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | come Taxes We recorded an income tax provision of approximately $0.5 million and $0.6 million for the three months ended March 31, 2018 and 2017, respectively, primarily due to state and foreign income tax expense and federal tax expense related to acquired indefinite lived intangible assets. On December 22, 2017, Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Cuts and Jobs Act (Tax Act). In accordance with SAB 118, as of March 31, 2018, we had not yet completed our accounting for the tax effects of the enactment of the Tax Act. Our estimate of the effects the Tax Act have not materially changed from the amounts recorded during the year ended December 31, 2017. We will continue to analyze certain aspects of the Tax Act and the newly issued Internal Revenue Service notifications and we expect future notices may continue to impact and refine our estimates. |
Restructuring Charges |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | estructuring Charges 2017 Restructuring Plan In January 2017, we entered into a strategic partnership with NRCCUA where they will assume responsibility for managing, renewing, and maintaining our existing university contracts and become the exclusive reseller of our digital Enrollment Marketing services for colleges and universities. As a result of this strategic partnership, approximately 50 employees in China and the United States supporting the sales and account support functions of our Enrollment Marketing offering were terminated. Costs incurred to date are expected to be fully paid within 6 months. 2015 Restructuring Plan Restructuring charges of $0.2 million recorded during the three months ended March 31, 2018 primarily related to our subtenant filing for bankruptcy and exiting our leased office. Costs incurred to date are expected to be fully paid by 2021. The following table summarizes the activity related to the accrual for restructuring charges (credits) (in thousands):
As of March 31, 2018, the $0.4 million liability was comprised of a short-term accrual of $0.3 million included within accrued liabilities and a long-term accrual of $0.1 million included within other liabilities on our condensed consolidated balance sheet. |
Related-Party Transactions |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | elated-Party Transactions Our Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the three months ended March 31, 2018 and March 31, 2017, we had purchases of $1.7 million and $0.5 million, respectively, from Adobe. We had $0.1 million of revenues during the three months ended March 31, 2018 and no revenues during the three months ended March 31, 2017 from Adobe. We had $0.6 million and $0.3 million in payables as of March 31, 2018 and December 31, 2017, respectively, to Adobe. We no accounts receivables as of March 31, 2018 and an immaterial amount of accounts receivable as of December 31, 2017 from Adobe. One of our board members is also a member of the Board of Directors of Cengage Learning, Inc. (Cengage). During the three months ended March 31, 2018 and March 31, 2017, we had purchases of $5.1 million and $3.5 million, respectively, from Cengage. We had $1.9 million and $0.4 million of revenues during the three months ended March 31, 2018 and March 31, 2017, respectively, from Cengage. We had $0.6 million and $0.1 million in payables as of March 31, 2018 and December 31, 2017, respectively, to Cengage. We had no outstanding receivables as of March 31, 2018 and $0.3 million in outstanding receivables as of December 31, 2017 from Cengage. The immediate family of one of our board members is also a member of the Board of Directors of PayPal Holdings, Inc. (PayPal). During the three months ended March 31, 2018 and March 31, 2017, we incurred payment processing fees of $0.4 million and $0.3 million, respectively, to PayPal. |
Subsequent Event Subsequent Event |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On April 3, 2018, we closed an offering of our 0.25% convertible senior notes due 2023 for gross proceeds of $345.0 million, which included the full exercise of the option held by the initial purchasers to purchase $45 million of additional notes. The notes are our senior, unsecured obligations and bear cash interest of 0.25% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2018. The net proceeds from the offering are approximately $335.6 million, after deducting the initial purchasers’ discount and estimated offering expenses payable by us. The notes will mature on May 15, 2023, unless repurchased, redeemed or converted in accordance with their terms prior to such date. Prior to February 15, 2023, the notes are convertible at the option of holders only upon satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the notes may be settled in shares of our common stock, cash or a combination of cash and shares of our common stock, at our election. We may not redeem the notes prior to May 20, 2021. The notes have an initial conversion rate of 37.1051 shares of our common stock per $1,000 principal amount of notes (which is subject to adjustment in certain circumstances). This is equivalent to an initial conversion price of approximately $26.95 per share which represented a premium of approximately 32.5% to the $20.34 per share closing price of our common stock on The New York Stock Exchange on March 28, 2018. We used approximately $39.2 million of the net proceeds from the offering of the notes to pay for the cost of privately negotiated capped call transactions with certain financial institutions, which are expected generally to reduce or offset potential dilution to holders of our common stock upon conversion of the notes and/or offset the potential cash payments that we could be required to make in excess of the principal amount of any converted notes upon conversion thereof, with such reduction and/or offset subject to a cap based on the cap price. In addition, we used approximately $20.0 million of the net proceeds from the offering to repurchase 983,284 shares of our common stock. |
Background and Basis of Presentation (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheet as of March 31, 2018, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss and the condensed consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 and the related footnote disclosures are unaudited. 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 March 31, 2018 and our results of operations and cash flows for the three months ended March 31, 2018 and 2017. Our results of operations and cash flows for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected for the full year. We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2017 as 2017. 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 Form 10-K for the year ended December 31, 2017 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC). We have changed the caption on our condensed consolidated statements of operations from “technology and development” to “research and development.” This change does not impact any current or previously reported amounts. Except for our policies on revenue recognition and deferred revenue, there have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue We recognize revenues from our Chegg Services and Required Materials offerings when control of the goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: •Identification of the contract, or contracts, with a customer •Identification of the performance obligations in the contract •Determination of the transaction price •Allocation of the transaction price to the performance obligations in the contract •Recognition of revenue when, or as, we satisfy a performance obligation We generate revenues from our Chegg Services product line including our Chegg Study service, our Chegg Writing service, our Chegg Tutors service, Test Prep, through our partnership with Kaplan Test Prep (Kaplan), Internship services, Brand Partnership services that we offer to brands and Enrollment Marketing services to colleges, through our strategic partnership with the National Record Center for College and University Admissions (NRCCUA). Chegg Services are offered to students through weekly, monthly or annual subscriptions, and we recognize revenues ratably over the respective subscription period. Enrollment Marketing services and Brand Partnership services are offered either on a subscription or on an a la carte basis. Revenues are recognized ratably or as earned over the subscription service period, generally one year. Revenues from Enrollment Marketing services or Brand Partnership services delivered on an a la carte basis, without a subscription, are recognized when delivery of the respective lead or service has occurred. Historically, under previous revenue recognition guidance, revenue recognition was delayed for certain contracts with extended payment terms. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our Enrollment Marketing and Brand Partnership customers with normal credit terms, typically 30 days. Some of our customer arrangements for Brand Partnership and Enrollment Marketing services include multiple performance obligations. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer and our promise to transfer the service is separately identifiable from other promises in the contract. For these arrangements that contain distinct performance obligations, we allocate the transaction price based on the relative standalone selling price method by comparing the standalone selling price (SSP) of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions, and information about the customer. Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations. We also generate revenues from our Required Materials product line including revenue share earned on print textbooks for rental or sale transactions, owned by Ingram and other partners, which are recognized immediately when a book ships to the student. Revenues from the rental or sale of eTextbooks is recognized ratably over the contractual period, generally two to five months, or at time of the sale, respectively. Our strategic partnership with Ingram includes an amount of variable consideration in addition to a fixed revenue share that we earn. This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration. Under the new revenue recognition guidance, we estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period as opposed to the contractual amount earned under the previous revenue recognition guidance. For sales of third party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third party products. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. For our strategic partnership with Ingram and our agreements with other textbook publishers, we have concluded that we do not control the use of the print textbooks, and therefore record net revenue only for the revenue share we earn upon the shipment of a print textbook to a student. For the sale of eTextbooks we have concluded that we control the service, therefore we recognize revenue and cost of revenue on a gross basis. Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data. Customer refunds from cancellations and returns are recorded as a reduction to revenues. Contract assets are contained within other current assets on our condensed consolidated balance sheets. Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer. Contract receivables are contained within accounts receivable, net on our condensed consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time. Contract liabilities are contained within deferred revenue on our condensed consolidated balance sheets. Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions performance obligations that have not been satisfied, and Brand Partnership and Enrollment Marketing performance obligations that have yet to be satisfied. Deferred revenue is recognized as revenues ratably over the term for subscriptions or when the services are provided and all other revenue recognition criteria have been met. |
Use of Estimates | 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 and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition including variable consideration, recoverability of accounts receivable, restructuring charges, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, valuation of goodwill and long-lived assets, and the valuation of acquired intangible assets. 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 may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations. Recent A |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements not yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted, and the guidance requires a modified retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2018 and we plan to adopt the guidance on January 1, 2019. We plan to elect the package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We will continue to evaluate ASU 2016-02 as we near our adoption date. Recently Adopted Accounting Pronouncements In February 2018, the FASB issued ASU No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. ASU 2018-02 allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. We adopted the guidance on January 1, 2018 recording an immaterial reclassification from accumulated other comprehensive income (loss) to the opening balance of accumulated deficit. In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. ASU 2017-04 eliminates step 2 from the annual goodwill impairment test no longer requiring the comparison of the implied fair value of a reporting unit's goodwill with the carrying amount of goodwill. We early adopted the guidance with a prospective application on January 1, 2018 and will apply the guidance starting with our 2018 annual goodwill impairment assessment. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 clarifies the definition of a business to assist entities with evaluating whether a transaction should be accounted for as acquisitions of assets or businesses. We adopted the guidance with a prospective application on January 1, 2018. We will analyze the clarified definition of a business to determine whether transactions from our application date should be accounted for as an asset acquisition or business combination under the new guidance. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 requires an entity to explain the change during a period in restricted cash equivalents on the condensed consolidated statements of cash flows and include such amounts when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. We adopted the guidance with a retrospective application on January 1, 2018 and have adjusted our beginning-of-period and end-of-period amounts on our condensed consolidated statement of cash flows to include restricted cash with the change in restricted cash included within the other assets line on our condensed consolidated statement of cash flows. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 requires entities to measure equity investments at fair value and recognize any changes in fair value within the statement of operations. We have a strategic investment of $3.0 million recorded in other assets on our condensed consolidated balance sheets that falls under this guidance update. The guidance provides for electing a measurement alternative for equity investments that do not have readily determinable fair values. We have elected the measurement alternative for our strategic investment as there is not a readily determinable fair value, which we will apply to our strategic investment starting with our adoption date of January 1, 2018. This investment will be measured at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer, with any changes in the value of the investment recorded within the statement of operations. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (Topic 606) (ASC 606), which changes the way we recognize revenue and significantly expands the disclosure requirements for revenue arrangements. We adopted ASU 2014-09 under the modified retrospective application, recording the cumulative effect of adoption as an adjustment to the opening balance of accumulated deficit on our adoption date of January 1, 2018. We have not adjusted previously reported amounts. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, and trade and other receivables. See note 2 for more information. |
Net Loss Per Share | et Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), and performance-based restricted stock units (PSUs), to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. The |
Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):
|
Revenues (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):
(1) As noted above, prior period amounts have not been adjusted under the modified retrospective method. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable | The following table presents our accounts receivable, net and deferred revenue balances (in thousands, except percentages):
|
Cash and Cash Equivalents, and Investment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and Cash Equivalents [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Investments | and fair value as of March 31, 2018 and December 31, 2017 (in thousands):
The cost and fair value of available-for-sale investments as of March 31, 2018 by contractual maturity were a |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation | The cost and fair value of available-for-sale investments as of March 31, 2018 by contractual maturity were as follows (in thousands):
|
Fair Value Measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial instruments measured and recorded at fair value on a recurring basis as of March 31, 2018 and December 31, 2017 are classified based on the valuation technique level in the tables below (in thousands):
|
Goodwill and Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill consists of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-Lived Intangible Assets | Intangible assets as of March 31, 2018 and December 31, 2017 consist of the following (in thousands, except the weighted-average amortization period in months):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indefinite-lived Intangible Assets | Intangible assets as of March 31, 2018 and December 31, 2017 consist of the following (in thousands, except the weighted-average amortization period in months):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Amortization Expense Related to Intangible Assets | As of March 31, 2018, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
|
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation Expense for Employees and Non-Employees | Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Unit Activity | Activity for RSUs and PSUs is as follows:
As of March 31, 2018, our total unrecognized share-based compensation expense r |
Restructuring Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activity related to the accrual for restructuring charges (credits) (in thousands):
|
Background and Basis of Presentation (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Cost-method Investments | Other Assets | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Investments | $ 3.0 |
Chegg Services | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Revenue recognition, subscription service period | 1 year |
Minimum | Required Materials | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Revenue recognition, textbook rental or sale, contractual period | 2 months |
Maximum | Required Materials | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Revenue recognition, textbook rental or sale, contractual period | 5 months |
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||
Numerator: | |||||
Net loss | $ (2,617) | $ (6,401) | [1] | ||
Denominator: | |||||
Weighted average shares used to compute net loss per share, basic and diluted (in shares) | 110,904 | 92,830 | |||
Net loss per share, basic and diluted (in dollars per share) | $ (0.02) | $ (0.07) | |||
|
Net Loss Per Share - Shares Excluded From Computation Of Diluted Net Loss Per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents (in shares) | 12,870 | 10,063 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents (in shares) | 4,079 | 7,975 |
RSUs and PSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents (in shares) | 8,791 | 1,888 |
Warrants to purchase common stock | Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total common stock equivalents (in shares) | 0 | 200 |
Revenues (Details) - USD ($) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
||||
Disaggregation of Revenue [Line Items] | ||||||
Total net revenues | $ 76,949,000 | $ 62,602,000 | ||||
Change in total net revenues | $ 14,347,000 | |||||
Change in total net revenues, percent | 23.00% | |||||
Deferred revenue, revenue recognized | $ 9,600,000 | |||||
Contract with customer, liability, revenue recognized | 0 | |||||
Aggregate amount of unsatisfied performance obligations | 27,100,000 | |||||
Accounts receivable | 8,055,000 | $ 10,855,000 | ||||
Deferred revenue | 18,625,000 | $ 13,440,000 | ||||
Change in accounts receivable | (2,783,000) | (1,947,000) | [1] | |||
Change in deferred revenue | $ 5,200,000 | |||||
Change in accounts receivable, percent | (26.00%) | |||||
Change in deferred revenue, percent | 39.00% | |||||
Chegg Services | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total net revenues | $ 56,277,000 | 41,035,000 | ||||
Change in total net revenues | $ 15,242,000 | |||||
Change in total net revenues, percent | 37.00% | |||||
Required Materials | ||||||
Disaggregation of Revenue [Line Items] | ||||||
Total net revenues | $ 20,672,000 | $ 21,567,000 | ||||
Change in total net revenues | $ (895,000) | |||||
Change in total net revenues, percent | (4.00%) | |||||
|
Cash and Cash Equivalents, and Investment - Additional Information (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Schedule of Cost-method Investments [Line Items] | ||
Restricted cash | $ 0.5 | $ 0.5 |
Other Assets | Equity Investments | ||
Schedule of Cost-method Investments [Line Items] | ||
Investments | $ 3.0 |
Cash and Cash Equivalents, and Investment - Schedule of Available For Sale Securities (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Cash and cash equivalents: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | $ 106,825 | $ 126,457 |
Net Unrealized Loss | 2 | 0 |
Fair Value | 106,827 | 126,457 |
Short-term investments: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 82,435 | 81,829 |
Net Unrealized Loss | (171) | (87) |
Fair Value | 82,264 | 81,742 |
Long-term corporate securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 10,735 | 20,405 |
Net Unrealized Loss | (107) | (100) |
Fair Value | 10,628 | 20,305 |
Corporate securities | Short-term investments: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 31,103 | 23,001 |
Net Unrealized Loss | (142) | (43) |
Fair Value | 30,961 | 22,958 |
Commercial paper | Short-term investments: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 31,340 | 38,850 |
Net Unrealized Loss | (17) | (27) |
Fair Value | 31,323 | 38,823 |
U.S. treasury securities | Short-term investments: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 19,992 | 19,978 |
Net Unrealized Loss | (12) | (17) |
Fair Value | 19,980 | 19,961 |
Cash | Cash and cash equivalents: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 69,117 | 98,370 |
Net Unrealized Loss | 0 | 0 |
Fair Value | 69,117 | 98,370 |
Money market funds | Cash and cash equivalents: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 5,192 | 5,358 |
Net Unrealized Loss | 0 | 0 |
Fair Value | 5,192 | 5,358 |
Commercial paper | Cash and cash equivalents: | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Cost | 32,516 | 22,729 |
Net Unrealized Loss | 2 | 0 |
Fair Value | $ 32,518 | $ 22,729 |
Cash and Cash Equivalents, and Investment - Contractual Maturity (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2018
USD ($)
| |
Cash and Cash Equivalents [Abstract] | |
Due in 1 year or less, Cost | $ 114,951 |
Due in 1-2 years, Cost | 10,735 |
Investments not due at a single maturity date, Cost | 5,192 |
Total, Cost | 130,878 |
Due in 1 year or less, Fair Value | 114,782 |
Due in 1-2 years, Fair Value | 10,628 |
Investments not due at a single maturity date, Fair Value | 5,192 |
Total, Fair Value | $ 130,602 |
Weighted average maturity | 4 months |
Fair Value Measurement (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 82,264 | $ 81,742 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 130,602 | 130,134 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 25,172 | 25,319 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 105,430 | 104,815 |
Commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 31,323 | 38,823 |
Commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 31,323 | 38,823 |
Corporate securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 30,961 | 22,958 |
Long-term corporate securities | 10,628 | 20,305 |
Corporate securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term corporate securities | 0 | 0 |
Corporate securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 30,961 | 22,958 |
Long-term corporate securities | 10,628 | 20,305 |
U.S. treasury securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 19,980 | 19,961 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 19,980 | 19,961 |
U.S. treasury securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,192 | 5,358 |
Money market funds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 5,192 | 5,358 |
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 32,518 | 22,729 |
Commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 32,518 | $ 22,729 |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 125,272 | $ 116,239 |
Additions due to acquisition | 0 | 9,024 |
Foreign currency translation adjustment | 253 | 9 |
Ending balance | $ 125,525 | $ 125,272 |
Goodwill and Intangible Assets - Finite-lived and Indefinite-lived Intangibe Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 57 months | 57 months |
Accumulated Amortization | $ (23,118) | $ (21,701) |
Net Carrying Amount | 16,302 | |
Indefinite-lived trade name | 3,600 | 3,600 |
Foreign currency translation adjustment | 172 | 6 |
Total intangible assets, gross carrying amount | 43,020 | 42,854 |
Intangible assets, net | $ 19,902 | $ 21,153 |
Developed technologies | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 70 months | 70 months |
Gross Carrying Amount | $ 20,657 | $ 20,657 |
Accumulated Amortization | (10,852) | (10,220) |
Net Carrying Amount | $ 9,805 | $ 10,437 |
Customer lists | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 47 months | 47 months |
Gross Carrying Amount | $ 9,970 | $ 9,970 |
Accumulated Amortization | (5,822) | (5,480) |
Net Carrying Amount | $ 4,148 | $ 4,490 |
Trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 46 months | 46 months |
Gross Carrying Amount | $ 5,793 | $ 5,793 |
Accumulated Amortization | (3,860) | (3,465) |
Net Carrying Amount | $ 1,933 | $ 2,328 |
Non-compete agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 30 months | 30 months |
Gross Carrying Amount | $ 1,798 | $ 1,798 |
Accumulated Amortization | (1,554) | (1,506) |
Net Carrying Amount | $ 244 | $ 292 |
Master service agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 21 months | 21 months |
Gross Carrying Amount | $ 1,030 | $ 1,030 |
Accumulated Amortization | (1,030) | (1,030) |
Net Carrying Amount | $ 0 | $ 0 |
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Acquisition-Related Intangible Assets | ||
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense of acquisition related to acquired intangible assets | $ 1.4 | $ 1.4 |
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Details) $ in Thousands |
Mar. 31, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remaining nine months of 2018 | $ 3,893 |
2019 | 4,347 |
2020 | 2,874 |
2021 | 1,518 |
2022 | 1,075 |
Thereafter | 2,595 |
Net Carrying Amount | $ 16,302 |
Debt Obligations (Details) - Revolving Credit Facility - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Mar. 31, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2019 |
Sep. 30, 2016 |
|
Debt Instrument [Line Items] | ||||||
Face amount | $ 30,000,000.0 | |||||
Maximum borrowing capacity | $ 30,000,000 | $ 50,000,000.0 | ||||
EBITDA calculation expense threshold, acquisition expenses permissible | 6,000,000.0 | |||||
EBITDA calculation expense threshold, nonrecurring expenses | 2,000,000.0 | |||||
Cash and cash equivalents minimum balance | 30,000,000.0 | $ 25,000,000.0 | ||||
EBITDA target | $ 25,000,000.0 | |||||
Amount outstanding | $ 0 | |||||
LIBOR Rate | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 0.25% | |||||
Total Leverage Ratio Less Than 1% | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 1.50% | |||||
Total Leverage Ratio Greater Or Equal 1% | ||||||
Debt Instrument [Line Items] | ||||||
Unused capacity, commitment fee percentage | 2.50% | |||||
Scenario, Forecast | ||||||
Debt Instrument [Line Items] | ||||||
EBITDA target | $ 30,000,000.0 | $ 35,000,000.0 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Rental expense | $ 0.6 | $ 0.7 |
Stockholders' Equity - Share-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 11,642 | $ 8,278 |
Cost of revenues | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 94 | 67 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 4,133 | 3,241 |
Sales and marketing | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | 1,589 | 1,126 |
General and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Share-based compensation expense | $ 5,826 | $ 3,844 |
Stockholders' Equity - Additional Information (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Capitalized share-based compensation | $ 0 | $ 0 |
RSUs and PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation costs related to restricted stock units | $ 81,300,000 | |
Weighted average vesting period for recognition of compensation expense | 1 year 11 months 1 day |
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - RSUs and PSUs |
3 Months Ended |
---|---|
Mar. 31, 2018
$ / shares
shares
| |
Number of RSUs and PSUs Outstanding | |
Number of RSUs and PSUs Outstanding, Beginning (shares) | shares | 14,335,115 |
Number of RSUs and PSUs, Granted (shares) | shares | 2,600,433 |
Number of RSUs and PSUs, Released (shares) | shares | (4,203,190) |
Number of RSUs and PSUs, Canceled (shares) | shares | (683,587) |
Number of RSUs and PSUs Outstanding, Ending (shares) | shares | 12,048,771 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 6.78 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 19.55 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 6.19 |
Weighted Average Grant Date Fair Value, Canceled (in dollars per share) | $ / shares | 5.34 |
Weighted Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 9.83 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 541 | $ 647 |
Restructuring Charges - Narrative (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2018
USD ($)
position
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 220 | $ 900 | $ 1,047 | |
Restructuring reserve | 401 | 265 | $ 306 | |
Restructuring reserve, current | 300 | |||
Restructuring reserve, noncurrent | $ 100 | |||
2017 Restructuring Plan | Workforce Reduction Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of positions eliminated | position | 50 | |||
Restructuring charges | $ 31 | 941 | ||
Restructuring reserve | 75 | 44 | 0 | |
2017 Restructuring Plan | Lease Termination and Other Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 9 | 148 | ||
Restructuring reserve | 0 | 0 | 0 | |
2015 Restructuring Plan | Workforce Reduction Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 0 | ||
Restructuring reserve | 0 | 0 | 0 | |
2015 Restructuring Plan | Lease Termination and Other Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 180 | (42) | ||
Restructuring reserve | $ 326 | $ 221 | $ 306 |
Restructuring Charges - Restructuring Reserve (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
|
Restructuring Reserve [Roll Forward] | |||
Beginning balance | $ 265 | $ 306 | $ 306 |
Restructuring charges | 220 | 900 | 1,047 |
Cash payments | (66) | (1,068) | |
Write-offs | (18) | (20) | |
Ending balance | 401 | 265 | |
2017 Restructuring Plan | Workforce Reduction Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 44 | 0 | 0 |
Restructuring charges | 31 | 941 | |
Cash payments | 0 | (897) | |
Write-offs | 0 | 0 | |
Ending balance | 75 | 44 | |
2017 Restructuring Plan | Lease Termination and Other Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Restructuring charges | 9 | 148 | |
Cash payments | (9) | (128) | |
Write-offs | 0 | (20) | |
Ending balance | 0 | 0 | |
2015 Restructuring Plan | Workforce Reduction Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 0 | 0 | 0 |
Restructuring charges | 0 | 0 | |
Cash payments | 0 | 0 | |
Write-offs | 0 | 0 | |
Ending balance | 0 | 0 | |
2015 Restructuring Plan | Lease Termination and Other Costs | |||
Restructuring Reserve [Roll Forward] | |||
Beginning balance | 221 | $ 306 | 306 |
Restructuring charges | 180 | (42) | |
Cash payments | (57) | (43) | |
Write-offs | (18) | 0 | |
Ending balance | $ 326 | $ 221 |
Related-Party Transactions (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2018
USD ($)
board_member
|
Mar. 31, 2017
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Adobe Systems | Chief Executive Officer | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 1,700,000 | $ 500,000 | |
Due to related parties | 600,000 | $ 300,000 | |
Revenue from related parties | 100,000 | 0 | |
Receivables from related party | 0 | 0 | |
Cengage | Chief Executive Officer | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 600,000 | 100,000 | |
Revenue from related parties | 1,900,000 | 400,000 | |
Receivables from related party | $ 300,000 | ||
Cengage | Board Of Directors Member | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 5,100,000 | 3,500,000 | |
Number of board members appointed to Board of Directors of related party | board_member | 1 | ||
PayPal | Board Of Directors Member | |||
Related Party Transaction [Line Items] | |||
Number of board members appointed to Board of Directors of related party | board_member | 1 | ||
Expenses from transactions with related party | $ 400,000 | $ 300,000 |
Subsequent Event (Details) - 0.25 Percent Convertible Senior Notes Due 2023 - Senior Notes $ / shares in Units, $ in Millions |
Apr. 03, 2018
USD ($)
$ / shares
shares
|
Mar. 28, 2018
$ / shares
|
---|---|---|
Subsequent Event [Line Items] | ||
Share price (in dollars per share) | $ / shares | $ 20.34 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Face amount | $ 345.0 | |
Face amount, option to purchase additional notes | $ 45.0 | |
Interest rate, stated percentage | 0.25% | |
Proceeds from debt, net | $ 335.6 | |
Conversion ratio | 0.037051 | |
Conversion price (in dollars per share) | $ / shares | $ 26.95 | |
Conversion price, premium percent | 32.50% | |
Payments for capital call transactions | $ 39.2 | |
Payments for repurchase of common stock | $ 20.0 | |
Shares repurchased (in shares) | shares | 983,284 |
Label | Element | Value | ||
---|---|---|---|---|
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | $ 0 | [1] | |
Restricted Cash and Cash Equivalents, Current | us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue | 84,000 | ||
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | 463,000 | [1] | |
Restricted Cash and Cash Equivalents, Noncurrent | us-gaap_RestrictedCashAndCashEquivalentsNoncurrent | $ 423,000 | ||
|
JW/)Y0 H\@Z=\4_,?W4[*GI@BG*L&MRR
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MIG$ K$GV8V"^R\XKL/ 3)2L2'^>07V7M%]O<$2; 2\6$^>*[8
M*Q)[",*5B _SP9LD7I'DGB!:_W8>3+)=B9#%?\Y!UJ[#%2K$I7/39>&=A\AC
MZ/KD'WR<0-^HK-M.H;/0IMM<3U1":#"I! _FZ1HS]&:#0:7M-C9[.;;^:&C1
M3U.-S*,U_PM02P,$% @ ;8&:3(PC].[" 0 -P0 !D !X;"]W;W)K
M WU(;:$A50XM^H5%RJ**95UB+$=@$R/0&39("+%=AB
M99\D&(A-'"6 RP_8\@.,3[C M0+@\RL.>,T"4K/6BH-=LT!"#O:*8TC*PNG#
M'/#R!NPN8ZXXV'>4NRB>WEV ESA@EQ1KP;$2GY!',$M\_!6O7K#O%MP\(A%,
M;.;J#:[5N2B/38M3.3MY*51=BH/1OHU:07TM-\;7=+:ER/@&9EL,OX)0]V,A
MY@GX>Z?F?834]GD_DO*8%I7S+)5N()IK_D%*)72ZY%[/^4FWEOU+)@ZJ?N3Z
MN6S[J_9%R7/7.WI] [O\#U!+ P04 " !M@9I,(3;;=]$! "W! &0
M 'AL+W=O >Y@MH')V\+W9I-#NM]4+*
M^GVU31;IO_X&2&>5EE_2W_PA:KPS1"$/Q7J9EM7O"$9V3]\'@%H.N6*,\ZK?
MZ_<'<"5E!.]WGT;_ZW_.AH/!#]&@'_?[])\0URC9[^ I9W]+EP YA?DVJRJ\
M%-Q-T8&V&,VU33KN=\P&:QD,X_/Q+)Y.)S31H#^'S^?Q=-SO7L:WP007RV6&
M=!WN%C'"&6#41;+-X*X#(+K?[-=$"!EN%L4&[NP!, @,#2\<_DZCDW515?5K
M]CHOTU6VR!JODP&L"MST05"DC1_3\S@*<_(QP3?VD.XR()>G1U. YR_[&7PBZ
M;&H@ "6< ;I(EP02T*:SO:,ICV6V2\^*U:KJI%\,EWF1G]&NH,^FXR6P $VK
M5_QY8ZL!C<@A%86B(-TZ!UYPAZ#Z_M@;.@0SC!NZ^P!)6J3I4GHHIJ'[U#_N
M@?E)<-O0BED;PDM5"IL/3O13LI-?CN[B3;(-:F&:%P>_B#@#G>[V59:G83+:
M..)CCJM^Q"N6HKK[*&[WYVG&PT]MFU )Z\:M6YG+;>
M]P?&7-F"%N[&]-#AG]I8+3RZMF&NMR"J"-**\=WNEFDA.UID,7:R168&KV0'
M)TO
)$9'(@9>]_Q\,3;0^)[4P9G;$6\\^*M]UZ*;7J3L4L@
MFF*.8TRRC)DCF&>?4R1K*8[)!WBR#M^M*MQ%^.X?A?MU@G25((T$Z7]+7(OY
M_"X)6_14@6GB-%E28J_C)"^\\\#>)O%-_H:/T_[(32.T)6=T_F5C_VM$!U[*
MYLJ/4.L_V&Q(J%TXWOBS&<=L-!QVTP]B\S\IJ:$1@PI/=OP
V$ *[Y0VRSIWW=L"$4-RHOM&9]SYN)Q/AK[[#H 3UZ4U*Z@
MG??]D3%7=:"XNS$]:+QIC%7)*RMYYHR86E*+X^[@+'?=AO$EW$VP=D$R 9 ;L8QXV)HK*'[CG
M16;-0.S8^XZ')]X>$NQ-&9RQ%?$.Q3OT7HKM]4W&+H%HBCF.,%XX
M\2KI$K?S=_:OOG9;RXEJ>)#\+ZM-5^!;C&IHZ,C-HYR^P5+/#J.E^!]P!F[A
MSHG5J"37_HNJ41LI%A9K1="7>62]'Z=Y)[M9TL()R9*0K FW7H?,0M[Y%VIH
MF2LY(36?_4#=%[Q)Y-Y8+^*/R>-:]M]%S&=U%.SHYHP1QF3++%K ABV5>)
M)"1Q2#ZD)^'T-.@P]>GI5CV]"Q-D08+,$V3_E1A?E!C"?.)R%Q39!0C2"Y$0
M)KL0(9N+$Z!:_V0UJN38^W;91->NN$_\Q?^#SRWUDZJ6]1J=I+'/QU]R(Z4!
M:R6ZLEXZV\7K@D-CW/3&SM7\EN>%D2IF3]5Y1O4$L#!!0 ( &V!FDP1
M:_YDQ@$ #<$ 9 >&PO=V]R:W-H965T0!<>+C0?AHGGYC[X_R!-Q!@#H(&@?!R(%O3%2+X0VF:# \
MC(.8$&(D; -#" D,@:.0&!H20T(*C)"8Q40#/^"33"'*%"),S","%.PE$2
MCC@PML&:6^G$(2&3V40H48001091BV$#H@F*&*6($8K8H(@M"N#T1C*4X!5,
M+"Y*S'0ZT) L(HQ9._.A XXV#(G&R'%4$[I"K:A\
#Q^W'ZK&^$^$V5LVLM-/TSIPIM4)YKV6<)#FZ:J(1L[.8:(8)
M)P12[%.*R)5B%]V%1[<)]O>()'5GB)TB8A,?WXCX#\'*2; R!*L;@FS1!8M)
M#:8SF& AXSW$31%K9Q'KNR*B>.,F2)P$R;D#H)4D<;-HLVI'
SW]>W%6[,EGL_G>]IS3^
ME-YGV *&>)]LTGJKRS]>_?AC'%V_OVSI?PF3E\D:)EVF7Z,_IT^-$?9EB0M\
MFU4+:/9]&%XM%
M"JV@S9+;MQ[8[=.V,?^@?_9OK1T^IF56+%O7;N[P?_S+OW1>E#Z'M_!E U3J
M+67>8-M_:YS5!71=
4<
M(JT#K#:5U3*:)^;"**-P,Y=[(5Q_*NXJ)$&L>)=+Z7XR,Q&TV:Z"&FY#<7[5
MOCAO@A$#,;443F"$-&;+ZBD4R!'7K(YS/1"06)*GP.N&3%0E()+7!?P3G2 H
MG5I8"C7\S)CU!"[QU$#:^5E_3'XGPOY4T5GTHV:E&!P$M$83!*V;;+-%,Z=Y
MON3)@E=F.UYOMDE6DI1@809G HR4D580YD%OJ6CH[E'0H^7C,C<&>JZC@QVR
M=21.(4JVV@*VW%5.:4S+0[X4^CNS6Z+X]CT@BM]5;B[KWK( 4D'[