Chegg, Inc.

Greetings. Welcome to Chegg's second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. At this time, I'll now turn the conference over to Tracy Ford. Tracy, you may now begin.

Good afternoon. Good afternoon. Thank you for joining Chegg's second quarter 2021 conference call. On today's call are Dan Rosenzweig, co-chairperson and CEO, and Andy Brown, chief financial officer. A copy of our earnings press release, along with our investor presentation, is available on our investor relations website, investor.chegg.com. A replay of this call will also be available on our website. We routinely post information on our website and intend to make important announcements on our media center website at chegg.com slash media center. We encourage you to make use of these resources. Before we begin, I would like to point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of the company. These forward-looking statements are subject to material risks and uncertainties. that could cause actual results to differ materially from those in forward-looking statements. We caution you to consider the important factors that could cause actual results to differ materially from those in the forward-looking statements. In particular, we refer you to the cautionary language included in today's earnings release and the risk factors described in Chegg's annual report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2021, as well as other filings with the SEC. Any forward-looking statements that we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. Our GAAP results and GAAP to non-GAAP reconciliations can be found in our earnings press release in the investor slide deck found on the IR website, investor.cheg.com. We also recommend you review the investor data sheet, which is also posted on our IR website. Now I will turn the call over to Dan.

Thank you, Tracy, and welcome everyone to Chegg's Q2 2021 earnings call. We had strong growth the entire school year, particularly in this quarter, reaffirming that students value Chegg as quarter of their education journey. It is clear wherever they are learning, whether online, on campus, or in a hybrid model, the value of Chegg to students is unquestionable. We had a great quarter with total revenue growth of 30% led by 38% growth of Chegg services and adjusted EBITDA growth of 52%. Our international growth is strong, and we are confident that we will exceed our initial expectations of over 1 million international subscribers for the year. As our opportunities continue to expand, we have remained focused on our efforts to reduce account sharing as students have returned to campus, which allows us to reinvest in even more new content, the student experience, and solving the big growing problems students are facing around the world. Our financial and user results reflect our success, which allows us to once again raise both our revenue and adjusted EBITDA guidance for the remainder of 2021. Over the last decade, we have focused on putting the student first, and we believe we set the standard in how to support the modern learner. Chegg now serves over 30 million students monthly, and if we want to build and maintain a long-term relationship with students, we must listen to the issues that are important to them. They care that we operate sustainably, that we invest in our employees, and that we contribute to our communities. We accept this responsibility. We have redoubled our efforts to build out programs that support our environment, employees, communities, and contribute positively to the learning ecosystem. Recent examples include the launch of honor shield and university, which help protect academic integrity and build an entirely new educator economy that will also increase access to high quality learning content. These new initiatives, and are continued focused on supporting learners wherever they are in their journey, are reflections of our company values, are dedication to our mission, and are clearly contributing to the success of our business. Chegg is continuously improving learning outcomes for students, and we continue to add the right content and services that they need at the time they need it most. This fall, we will be dramatically increasing discovery of content through greater personalization, Advancing from a focus on aligning content to textbooks, to allowing students to search and discover our content and services by their courses. We believe by adding new content and improving the discovery of content on our platform, we will positively impact student outcomes and increase the length of our relationship with our students. Our TAM is huge and we are scaling very quickly to serve our growing global student base. To give you a sense of our size, we now have over 66 million step-by-step solutions in Chegg Study to help students master their subjects. And in the second quarter alone, we added 7 million new solutions that were asked and answered by our subject matter experts. And more than 37% of them were asked by international subscribers. Those questions were viewed over 360 million times. And within our writing product, over 1 million citations were created daily. In Mathway, almost 10 million math questions were asked every single day in Q2. The size, scale, and quality of what we offer is second to none. Most importantly, we survey our students, and 92% of them say that using Chegg helps them learn their course material. which is why 94% of them also report that using Chegg helps them get better grades. We also believe that this kind of support directly impacts students' mental health. As 89% of students reported that Chegg Study helps them get their work done with less stress, and 77% said that Chegg Study builds their competence before an exam. These outcomes reflect the real and tangible impact we have, which we are incredibly proud of and why we believe Chegg is such a beloved student brand. As we continue to support students in their academic pursuits, we will also continue to focus on helping them move from learning to earning. We know students are seeking alternative pathways to gain the in-demand skills employers are looking for so that they can compete in the global economy. That is why we will continue to make investments not just in academic content, but also in professional skills-based content. As the education landscape rapidly evolves, institutions are making the difficult transition to online or hybrid environments. New challenges have emerged, including the need to increase access to high-quality online content, protect the integrity of that content, and the need to create opportunities for the greatest educators and professors to share and get compensated for their content. I want to highlight two of the initiatives we already mentioned in these areas, Honor Shield and University. Earlier this year, we launched Honor Shield to block students' ability to access CHEG content during specified exam periods, which supports institutions' efforts around academic integrity. As more institutions move online, our goal is to increase access to even more high-quality content by working with schools and faculty around the world. We are very excited about the enthusiasm of leading educators from top universities to have the ability to work with Chegg to create and add content like practice exams, course study guides, lecture notes, lab guides, case studies, and quizzes through Chegg, and to get compensated for their great content. While it is still early, I'm pleased to say that faculty who have joined University Educator Community have already earned $700,000 and are helping us build an even richer and more valuable learning library for students. In addition to serving students, faculties, and institutions, we know it's important to make a positive impact beyond our core business, which is why we are aligning Chegg's business activities and major themes of our philanthropic and community efforts with the UN Sustainable Development Goals, including a heightened focus on quality education, good health, and well-being, and moving to a world with zero hunger. To that end, we focused our financial contributions to organizations focused on food insecurity, and we have invested in programs that support the physical and mental health of our employees. We have donated to nonprofits supporting students in the U.S. and internationally, and one effort that we are particularly proud of that aligns with our belief to substantially reduce student debt are our programs like Equity for Education, which we launched in 2019. That program is designed to pay off all our employees' student debt, and combined with our existing reimbursement programs, we have contributed nearly $1 million towards paying off our employees' loans, and I couldn't be prouder Of course, none of this would be possible without our incredible employees who are dedicated and focused on our mission to improve student outcomes. Their tremendous work has resulted in continued recognition for our teams. And in this past quarter, we were proud to win comparably awards for women employees, diversity, our leadership team, as well as being named one of the Fortune's best place to work for millennials. We had a phenomenal school year, a great quarter, and we believe the opportunities ahead for us are only getting bigger. We are excited to take on our increased role and responsibility in our industry. And with that, I will turn it over to Andy. Andy?