Chegg Reports Fourth Quarter and Fiscal Year 2015 Results
SANTA CLARA, Calif., Feb. 22, 2016 /PRNewswire/ -- Chegg, Inc. (NYSE: CHGG), the Student Hub, today reported financial results for the three and twelve months ended December 31, 2015.
"We continue to see strong growth in Chegg Services, particularly Chegg Study, where our investments in product quality led to record subscribers, renewals and engagement," said Dan Rosensweig, Chairman and CEO of Chegg. "Driven by our higher margin Chegg Services, we also delivered our first full year of non-GAAP profitability, and we are beginning to see the leverage in our student-centric business model."
"In the final year of our transition to a commission-based textbook model, an important nuance to understand is that, as previously announced, total GAAP revenue declines in 2016, while we expect profitability to materially improve," continued Rosensweig."
An updated investor presentation and an investor data sheet can be found on Chegg's Investor Relations website http://investor.chegg.com.
Q4 2015 Financial Highlights:
- Revenue of $68.2 million, a decrease of 19% compared to Q4 2014;
- Chegg Services Revenue grew 32% year-over-year to $28.7 million, or 42% of total revenue compared to 26% in Q4 2014;
- Print Revenue was $30.1 million;
- Digital Revenue was $38.1 million;
- GAAP Gross Profit was $41.8 million;
- Non-GAAP Gross Profit was $41.9 million;
- Adjusted EBITDA was $15.3 million;
- GAAP Net Income was $3.6 million; and
- Non-GAAP Net Income was $13.2 million.
Fiscal 2015 Financial Highlights:
- Revenue of $301.4 million, a decrease of 1% compared to fiscal 2014;
- Chegg Services Revenue grew 38% year-over-year to $94.3 million, or 31% of total revenues compared to 22% in fiscal 2014;
- Print Revenue was $161.4 million;
- Digital Revenue was $140.0 million;
- GAAP Gross Profit was $111.5 million;
- Non-GAAP Gross Profit was $117.8 million;
- Adjusted EBITDA profit was $5.4 million;
- GAAP Net Loss was ($59.2) million; and
- Non-GAAP Net Loss was ($2.9) million.
Business Highlights:
- 3.1 million: Total number of Chegg customers in 2015;
- 1.4 million: Total number of digital subscribers on the Chegg platform in 2015;
- 1 million: Total number of Chegg Services subscribers in 2015;
- 1.4 million: Number of job applications submitted through Chegg's Career Center; and
- 6 million+: Number of textbook delivered in 2015.
Business Outlook:
Our outlook for the first quarter of and fiscal year 2016 is comprised of two revenue streams: Required Materials revenue which includes print textbooks, eTextbooks, and Ingram commission revenue; and Chegg Services revenue, which includes Chegg Study, Chegg Tutors, Enrollment Marketing, Brand Partnerships and Careers.
First Quarter 2016
- Total GAAP Revenue in the range of $60 million and $65 million;
- Total Pro Forma Revenue in the range of $44 million and $47 million;
- Chegg Services Revenue in the range of $24 million and $26 million;
- Total Gross Margin on a GAAP basis between 38%; and 40%; and
- Adjusted EBITDA loss of $2 million to approximately breakeven.
Adjusted EBITDA guidance for the first quarter includes approximately $4.5 million for textbook depreciation and excludes approximately $11.0 million for stock-based compensation; $0.6 million for amortization of intangible assets; and $0.2 million for acquisition-related costs. It assumes, among other things, that no additional business acquisitions, investments, restructurings or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.
Fiscal Year 2016
- Total GAAP Revenue in the range of $230 million and $250 million;
- Total Pro Forma Revenue in the range of $170 million and $185 million;
- Chegg Services Revenue in the range of $115 million and $125 million;
- Total Gross Margin on a GAAP basis between 48% and 50%;
- Total Gross Margin on a Pro Forma basis between 64% and 66%; and
- Adjusted EBITDA in the range of $10 million and $20 million.
Adjusted EBITDA guidance for fiscal 2016 includes approximately $11.0 million for textbook depreciation and excludes approximately $46.0 million for stock-based compensation; $2.2 million for amortization of intangible assets; and $1.0 million for acquisition-related costs. It assumes, among other things, that no additional business acquisitions, investments, restructurings or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates.
Conference Call and Webcast Information
To access the call, please dial (877) 407-4018, or outside the U.S. +1 (201) 689-8471, five minutes prior to 1:30 p.m. Pacific Standard Time (or 4:30 p.m. Eastern Standard Time) on February 22nd. A live webcast of the call will also be available at http://investor.chegg.com under the Events & Presentations menu. An audio replay will be available beginning at 8:00 p.m. Eastern Standard Time February 22, 2016, until 11:59 p.m. Eastern Standard Time February 29, 2016, by calling (877) 870-5176 or +1 (858) 384-5517, with Conference ID 13630000. An audio archive of the call will also be available at http://investor.chegg.com.
Use of Investor Relations Website for Regulation FD Purposes
Chegg also uses its media center website, http://www.chegg.com/mediacenter, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor http://www.chegg.com/mediacenter, in addition to following press releases, Securities Exchange Commission filings and public conference calls and webcasts.
About Chegg
Chegg puts students first. As the leading student-first connected learning platform, the company makes higher education more affordable, more accessible, and more successful for students. Chegg is a publicly-held company based in Santa Clara, California and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.
Use of Non-GAAP Measures
To supplement Chegg's financial results presented in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables and the related earnings conference call contain non-GAAP financial measures, including pro forma revenue, adjusted EBITDA, non-GAAP gross profit and margin, non-GAAP operating expenses, non-GAAP net income (loss) and diluted earnings per share. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliation of GAAP to Non-GAAP Financial Measures" and "Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA."
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Chegg defines (1) Non-GAAP total pro forma net revenue as revenue as if it had already transitioned to a fully commission-based revenue model with Ingram for its print textbook business, (2) adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, or EBITDA, adjusted for textbook depreciation and to exclude stock-based compensation expense, acquisition-related compensation costs, restructuring charges, transitional logistic charges, impairment of intangible assets and other (expense) income, net, (3) non-GAAP gross profit as gross profit excluding share-based compensation and transitional logistic charges, (4) non-GAAP gross margin is non-GAAP gross profit divided by GAAP total net revenue, (5) non-GAAP net income (loss) as GAAP net income (loss) excluding share-based compensation expense, amortization of intangible assets, acquisition related compensation costs, acquisition related income tax benefit, restructuring charges, transitional logistic charges, and impairment of intangible assets and (6) non-GAAP net income (loss) per share is defined as non-GAAP net income (loss) divided by non-GAAP weighted-average diluted shares outstanding. To the extent additional significant non-recurring items arise in the future, Chegg may consider whether to exclude such items in calculating the non-GAAP financial measures it uses.
Chegg believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Chegg's performance by excluding items that may not be indicative of Chegg's core business, operating results or future outlook. Chegg management uses these non-GAAP financial measures in assessing Chegg's operating results, as well as when planning, forecasting and analyzing future periods and believes that such measures enhance investors' overall understanding of our current financial performance. These non-GAAP financial measures also facilitate comparisons of Chegg's performance to prior periods.
As presented in the "Reconciliation of GAAP Net Income (Loss) to EBITDA and Adjusted EBITDA" and "Reconciliation of GAAP to Non-GAAP Financial Measures" tables below, each of the non-GAAP financial measures excludes one or more of the following items:
- Pro forma revenue adjustments.
Chegg is in the process of transitioning ownership of the print textbook library and print textbook logistics and fulfillment functions for its required materials business to Ingram. Upon completion of that transition, all revenue from its print textbook business will be digital revenue representing an approximately 20% commission from each such transaction. During the transition, Chegg reports print textbook revenue for orders that are fulfilled with textbooks owned by Chegg and commission-based revenue for orders that are fulfilled with textbooks owned by Ingram. Chegg expects the transition to a fully commission-based model with Ingram to be complete in 2017. The pro forma revenue adjustments present revenue "as if" Ingram already owned all textbooks and managed all logistics and order fulfillment. Management believes that presenting revenue as if Chegg had already fully transitioned to the commission-based model with Ingram provides investors with a better understanding of Chegg's results of operations in light of the ongoing changes to its business model by facilitating period over period revenue comparisons during the transition period. The adjustments to GAAP revenue provided below reflect a number of estimates, assumptions and other uncertainties, and are approximate in nature.
- Share-based compensation expense.
Share-based compensation is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Chegg's control. As a result, management excludes this item from Chegg's internal operating forecasts and models. Management believes that non-GAAP measures adjusted for share-based compensation provide investors with a basis to measure Chegg's core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.
- Restructuring charges.
Restructuring charges primarily relate to expenses incurred in making infrastructure-related changes as a result of transitioning Chegg's fulfillment obligations for the print textbook business to Ingram, as well as expenses related to the exit of Chegg's print coupon business. These restructuring charges are excluded from non-GAAP financial measures because they are the result of discrete events that are not considered core-operating activities. Chegg believes that it is appropriate to exclude restructuring charges from non-GAAP financial measures because it enables the comparison of period-over-period operating results from continuing operations.
- Transitional logistic charges.
Transitional logistic charges relate primarily to the expected closure of our warehouse and as we transition to Ingram's distribution centers, which results in duplicative logistic charges. The duplicative logistic charges were expected to be incurred throughout 2015 until the transition of our logistics and fulfillment obligations for our print textbook business to Ingram were complete. Chegg believes that it is appropriate to exclude transitional logistic charges from non-GAAP financial measures because it enables the comparison of period-over-period operating results from continuing operations.
- Acquisition-related compensation costs.
Acquisition-related compensations costs include: (1) compensation expense resulting from the employment retention of certain key employees established in accordance with the terms of the acquisitions, (2) the remaining pay-out related to the Bookstep acquisition and (3) adjustments to previously recognized earn-out liability on contingent compensation expense related to acquisitions. In most cases, these acquisition-related compensation costs are not factored into management's evaluation of potential acquisitions or Chegg's performance after completion of acquisitions, because they are not related to Chegg's core operating performance. In addition, the frequency and amount of such charges can vary significantly based on the size and timing of acquisitions and the maturities of the businesses being acquired. Excluding acquisition-related compensation costs from non-GAAP measures provides investors with a basis to compare Chegg's results against those of other companies without the variability caused by purchase accounting.
- Amortization of intangible assets.
Chegg amortizes intangible assets that it acquires in conjunction with business combinations, which results in non‑cash operating expenses that would not otherwise have been incurred had Chegg internally developed such intangible assets. Chegg believes excluding the accounting expense associated with acquired intangible asset from non-GAAP measures allows for a more accurate assessment of its ongoing operations.
- Acquisition related income tax benefit
Acquisition related income tax benefit is due to our InstaEDU acquisition completed in 2014, which under U.S. GAAP required recording a net deferred tax liability against goodwill. This resulted in a release of the associated valuation allowance. Chegg believes that it is appropriate to exclude acquisition related income tax benefits from non-GAAP financial measures because it enables the comparison of period-over-period operating results from net income (loss).
Forward-Looking Statements
This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include, without limitation those included in the investor presentation referenced above, and all statements about Chegg's outlook under "Business Outlook." The words "anticipate," "believe," "estimate," "expect," "intend," "project," "endeavor," "will," "should," "future," "transition," "outlook" and similar expressions, as they relate to Chegg, are intended to identify forward-looking statements. These statements are not guarantees of future performance, and are based on management's expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: Chegg's anticipated complete transition to a fully commission-based model with Ingram by 2017; Chegg's ability to attract new students, increase engagement and increase monetization; competitive developments, including pricing pressures; Chegg's anticipated growth of Chegg Services; Chegg's ability to build and expand its services offerings; Chegg's ability to develop new products and services on a cost-effective basis and to integrate acquired businesses and assets; the impact of seasonality on the business; Chegg's partnership with Ingram and the parties' ability to achieve the anticipated benefits of the partnership, including the potential impact of the economic risk-sharing arrangements between Chegg and Ingram on Chegg's results of operations; Chegg's ability to effectively control operating costs; changes in Chegg's addressable market; changes in the education market; and general economic and industry conditions. All information provided in this release and in the conference call is as of the date hereof and Chegg undertakes no duty to update this information except as required by law. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Chegg's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2015, and could cause actual results to vary from expectations. Additional information will also be set forth in Chegg's Annual Report on Form 10-K for the year ended December 31, 2015.
|
CHEGG, INC. | |||
|
CONSOLIDATED BALANCE SHEETS | |||
|
(in thousands, except for number of shares and par value) | |||
|
(unaudited) | |||
|
December 31, 2015 |
December 31, 2014 | ||
|
Assets |
|||
|
Current assets |
|||
|
Cash and cash equivalents |
$ 67,029 |
$ 56,117 | |
|
Short-term investments |
17,800 |
33,346 | |
|
Accounts receivable, net of allowance for doubtful accounts of $378 and $559 at December31, 2015 and December 31, 2014, respectively |
13,157 |
14,396 | |
|
Prepaid expenses |
3,117 |
3,091 | |
|
Other current assets |
31,732 |
3,864 | |
|
Total current assets |
132,835 |
110,814 | |
|
Long-term investments |
4,229 |
1,451 | |
|
Textbook library, net |
29,728 |
80,762 | |
|
Property and equipment, net |
19,971 |
18,369 | |
|
Goodwill |
91,301 |
91,301 | |
|
Intangible assets, net |
8,865 |
13,626 | |
|
Other assets |
4,427 |
1,804 | |
|
Total assets |
$ 291,356 |
$ 318,127 | |
|
Liabilities and stockholders' equity |
|||
|
Current liabilities |
|||
|
Accounts payable |
$ 5,860 |
$ 10,945 | |
|
Deferred revenue |
14,971 |
24,591 | |
|
Accrued liabilities |
35,280 |
31,183 | |
|
Total current liabilities |
56,111 |
66,719 | |
|
Long-term liabilities |
|||
|
Total other long-term liabilities |
4,170 |
4,365 | |
|
Total liabilities |
60,281 |
71,084 | |
|
Commitments and contingencies |
|||
|
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; 88,099,983 and 84,008,043 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively |
88 |
84 | |
|
Additional paid-in capital |
560,242 |
516,845 | |
|
Accumulated other comprehensive loss |
(172) |
(13) | |
|
Accumulated deficit |
(329,083) |
(269,873) | |
|
Total stockholders' equity |
231,075 |
247,043 | |
|
Total liabilities and stockholders' equity |
$ 291,356 |
$ 318,127 | |
|
CHEGG, INC. | |||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
|
(in thousands, except per share amounts) | |||||||
|
(unaudited) | |||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||
|
2015 |
2014 |
2015 |
2014 | ||||
|
Net revenues: |
|||||||
|
Rental |
$ 27,166 |
$ 53,534 |
$ 120,365 |
$ 181,570 | |||
|
Services |
37,995 |
28,206 |
131,996 |
87,460 | |||
|
Sales |
2,993 |
2,677 |
49,012 |
35,804 | |||
|
Total net revenues |
68,154 |
84,417 |
301,373 |
304,834 | |||
|
Cost of revenues(1): |
|||||||
|
Rental |
11,289 |
24,672 |
98,162 |
145,760 | |||
|
Services |
11,605 |
10,372 |
43,794 |
31,158 | |||
|
Sales |
3,486 |
3,579 |
47,893 |
34,067 | |||
|
Total cost of revenues |
26,380 |
38,623 |
189,849 |
210,985 | |||
|
Gross profit |
41,774 |
45,794 |
111,524 |
93,849 | |||
|
Operating expenses: |
|||||||
|
Technology and development(1) |
14,315 |
12,387 |
59,391 |
49,386 | |||
|
Sales and marketing(1) |
14,097 |
19,018 |
64,082 |
72,315 | |||
|
General and administrative(1) |
9,429 |
10,357 |
45,209 |
41,837 | |||
|
Restructuring charges |
1,548 |
— |
4,868 |
— | |||
|
(Gain) loss on liquidation of textbooks |
(1,677) |
1,289 |
(4,326) |
(4,555) | |||
|
Total operating expenses |
37,712 |
43,051 |
169,224 |
158,983 | |||
|
Income (loss) from operations |
4,062 |
2,743 |
(57,700) |
(65,134) | |||
|
Interest expense and other (expense) income, net: |
|||||||
|
Interest expense, net |
(65) |
(62) |
(247) |
(317) | |||
|
Other (expense) income, net |
(1) |
62 |
216 |
879 | |||
|
Total interest expense and other (expense) income, net |
(66) |
- |
(31) |
562 | |||
|
Income (loss) before provision for income taxes |
3,996 |
2,743 |
(57,731) |
(64,572) | |||
|
Provision for income taxes |
366 |
1,055 |
1,479 |
186 | |||
|
Net income (loss) |
$ 3,630 |
$ 1,688 |
$ (59,210) |
$ (64,758) | |||
|
Net income (loss) per share |
|||||||
|
Basic |
$ 0.04 |
$ 0.02 |
$ (0.68) |
$ (0.78) | |||
|
Diluted |
$ 0.04 |
$ 0.02 |
$ (0.68) |
$ (0.78) | |||
|
Weighted average shares used to compute net income (loss) per share |
|||||||
|
Basic |
87,993 |
83,925 |
86,818 |
83,205 | |||
|
Diluted |
93,225 |
86,543 |
86,818 |
83,205 | |||
|
(1) Includes share-based compensation expense as follows: |
|||||||
|
Cost of revenues |
$ (56) |
$ 145 |
$ 262 |
$ 617 | |||
|
Technology and development |
2,548 |
2,199 |
11,992 |
10,451 | |||
|
Sales and marketing |
1,687 |
3,229 |
7,901 |
11,300 | |||
|
General and administrative |
2,812 |
4,110 |
18,620 |
14,520 | |||
|
Total share-based compensation expense |
$ 6,991 |
$ 9,683 |
$ 38,775 |
$ 36,888 | |||
|
CHEGG, INC. | |||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
|
(in thousands) | |||
|
(unaudited) | |||
|
Year Ended December 31, | |||
|
2015 |
2014 | ||
|
Cash flows from operating activities |
|||
|
Net loss |
$ (59,210) |
$ (64,758) | |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||
|
Textbook library depreciation expense |
43,553 |
70,147 | |
|
Amortization of warrants and deferred loan costs |
151 |
187 | |
|
Other depreciation and amortization expense |
11,511 |
11,159 | |
|
Share-based compensation expense |
38,775 |
36,888 | |
|
(Release) provision for bad debts |
(77) |
234 | |
|
Gain on liquidation of textbooks |
(4,326) |
(4,555) | |
|
Loss from write-offs of textbooks |
5,297 |
10,534 | |
|
Deferred income taxes |
— |
(1,291) | |
|
Realized gain on sale of securities |
— |
(21) | |
|
Loss from disposal of property and equipment |
967 |
— | |
|
Impairment of intangible assets |
— |
1,552 | |
|
Change in assets and liabilities net of effect of acquisition of business: |
|||
|
Accounts receivable |
712 |
(1,709) | |
|
Prepaid expenses and other current assets |
(27,878) |
(2,981) | |
|
Other assets |
(592) |
(155) | |
|
Accounts payable |
(4,236) |
5,037 | |
|
Deferred revenue |
(9,620) |
1,657 | |
|
Accrued liabilities |
5,237 |
7,448 | |
|
Other liabilities |
(346) |
(898) | |
|
Net cash (used in) provided by operating activities |
(82) |
68,475 | |
|
Cash flows from investing activities |
|||
|
Purchases of textbooks |
(32,297) |
(112,814) | |
|
Proceeds from liquidations of textbooks |
38,260 |
58,119 | |
|
Purchases of marketable securities |
(35,610) |
(70,706) | |
|
Proceeds from sale of marketable securities |
350 |
46,358 | |
|
Maturities of marketable securities |
47,840 |
50,700 | |
|
Purchases of property and equipment |
(8,253) |
(5,083) | |
|
Acquisition of businesses, net of cash acquired |
— |
(53,872) | |
|
Release of cash from escrow |
— |
(52) | |
|
Purchase of strategic equity investment |
(2,019) |
— | |
|
Net cash provided by (used in) investing activities |
8,271 |
(87,350) | |
|
Cash flows from financing activities |
|||
|
Common stock issued under stock plans, net |
13,696 |
2,712 | |
|
Payment of taxes related to the net share settlement of RSUs |
(8,710) |
(3,980) | |
|
Repurchase of common stock |
(2,263) |
(604) | |
|
Net cash provided by (used in) financing activities |
2,723 |
(1,872) | |
|
Net increase (decrease) in cash and cash equivalents |
10,912 |
(20,747) | |
|
Cash and cash equivalents, beginning of period |
56,117 |
76,864 | |
|
Cash and cash equivalents, end of period |
$ 67,029 |
$ 56,117 | |
|
Supplemental cash flow data |
|||
|
Cash paid during the period for: |
|||
|
Interest |
$ 95 |
$ 114 | |
|
Income taxes |
$ 827 |
$ 625 | |
|
Non-cash investing and financing activities: |
|||
|
Accrued purchases of long-lived assets |
$ 1,771 |
$ 5,132 | |
|
Issuance of common stock related to prior acquisition |
$ 825 |
$ 2,585 | |
|
CHEGG, INC. | |||||||
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA | |||||||
|
(in thousands) | |||||||
|
(unaudited) | |||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||
|
2015 |
2014 |
2015 |
2014 | ||||
|
Net income (loss) |
$ 3,630 |
$ 1,688 |
$ (59,210) |
$ (64,758) | |||
|
Interest expense, net |
65 |
62 |
247 |
317 | |||
|
Provision for income taxes |
366 |
1,055 |
1,479 |
186 | |||
|
Textbook library depreciation expense |
6,715 |
15,927 |
43,553 |
70,147 | |||
|
Other depreciation and amortization |
2,331 |
3,336 |
11,511 |
11,159 | |||
|
EBITDA |
13,107 |
22,068 |
(2,420) |
17,051 | |||
|
Textbook library depreciation expense |
(6,715) |
(15,927) |
(43,553) |
(70,147) | |||
|
Share-based compensation expense |
6,991 |
9,683 |
38,775 |
36,888 | |||
|
Other (expense) income, net |
1 |
(62) |
(216) |
(879) | |||
|
Restructuring charges |
1,548 |
— |
4,868 |
— | |||
|
Transitional logistic charges |
174 |
— |
6,033 |
— | |||
|
Acquisition related compensation costs |
208 |
1,512 |
1,871 |
2,583 | |||
|
Impairment of intangible assets |
— |
1,552 |
— |
1,552 | |||
|
Adjusted EBITDA |
$ 15,314 |
$ 18,826 |
$ 5,358 |
$ (12,952) | |||
|
CHEGG, INC. | |||||||
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||||
|
(in thousands, except percentages) | |||||||
|
(unaudited) | |||||||
|
Three Months Ended December 31, |
Year Ended December 31, | ||||||
|
2015 |
2014 |
2015 |
2014 | ||||
|
GAAP total net revenues |
$ 68,154 |
$ 84,417 |
$ 301,373 |
$ 304,834 | |||
|
Adjustments |
(27,143) |
(51,543) |
(135,270) |
(170,606) | |||
|
Non-GAAP total pro forma net revenues |
$ 41,011 |
$ 32,874 |
$ 166,103 |
$ 134,228 | |||
|
GAAP gross profit |
$ 41,774 |
$ 45,794 |
$ 111,524 |
$ 93,849 | |||
|
Share-based compensation expense |
(56) |
145 |
262 |
617 | |||
|
Transitional logistic charges |
174 |
— |
6,033 |
— | |||
|
Non-GAAP gross profit |
$ 41,892 |
$ 45,939 |
$ 117,819 |
$ 94,466 | |||
|
GAAP gross margin % |
61.3% |
54.2% |
37.0% |
30.8% | |||
|
Non-GAAP gross margin % |
61.5% |
54.4% |
39.1% |
31.0% | |||
|
GAAP operating expenses |
$ 37,712 |
$ 43,051 |
$ 169,224 |
$ 158,983 | |||
|
Share-based compensation expense |
(7,047) |
(9,538) |
(38,513) |
(36,271) | |||
|
Amortization of intangible assets |
(646) |
(1,674) |
(4,761) |
(4,970) | |||
|
Restructuring charges |
(1,548) |
— |
(4,868) |
— | |||
|
Acquisition related compensation costs |
(208) |
(1,512) |
(1,871) |
(2,583) | |||
|
Impairment of intangible assets |
— |
(1,552) |
— |
(1,552) | |||
|
Non-GAAP operating expenses |
$ 28,263 |
$ 28,775 |
$ 119,211 |
$ 113,607 | |||
|
GAAP operating expenses as a percent of net revenues |
55.3% |
51.0% |
56.2% |
52.2% | |||
|
Non-GAAP operating expenses as a percent of net revenues |
41.5% |
34.1% |
39.6% |
37.3% | |||
|
GAAP operating income (loss) |
$ 4,062 |
$ 2,743 |
$ (57,700) |
$ (65,134) | |||
|
Share-based compensation expense |
6,991 |
9,683 |
38,775 |
36,888 | |||
|
Amortization of intangible assets |
646 |
1,674 |
4,761 |
4,970 | |||
|
Restructuring charges |
1,548 |
— |
4,868 |
— | |||
|
Transitional logistic charges |
174 |
— |
6,033 |
— | |||
|
Acquisition related compensation costs |
208 |
1,512 |
1,871 |
2,583 | |||
|
Impairment of intangible assets |
— |
1,552 |
— |
1,552 | |||
|
Non-GAAP operating income (loss) |
$ 13,629 |
$ 17,164 |
$ (1,392) |
$ (19,141) | |||
|
GAAP net income (loss) |
$ 3,630 |
$ 1,688 |
$ (59,210) |
$ (64,758) | |||
|
Share-based compensation expense |
6,991 |
9,683 |
38,775 |
36,888 | |||
|
Amortization of intangible assets |
646 |
1,674 |
4,761 |
4,970 | |||
|
Restructuring charges |
1,548 |
— |
4,868 |
— | |||
|
Transitional logistic charges |
174 |
— |
6,033 |
— | |||
|
Acquisition related compensation costs |
208 |
1,512 |
1,871 |
2,583 | |||
|
Impairment of intangible assets |
— |
1,552 |
— |
1,552 | |||
|
Acquisition related income tax benefit |
— |
335 |
— |
(1,291) | |||
|
Non-GAAP net income (loss) |
$ 13,197 |
$ 16,444 |
$ (2,902) |
$ (20,056) | |||
|
GAAP weighted average shares used to compute net income (loss) per share |
87,993 |
83,925 |
86,818 |
83,205 | |||
|
Effect of dilutive options, restricted stock units and warrants |
5,232 |
2,618 |
— |
— | |||
|
Non-GAAP weighted average shares used to compute net income (loss) per share |
93,225 |
86,543 |
86,818 |
83,205 | |||
|
GAAP net income (loss) per share |
$ 0.04 |
$ 0.02 |
$ (0.68) |
$ (0.78) | |||
|
Adjustments |
$ 0.10 |
$ 0.17 |
$ 0.65 |
$ 0.54 | |||
|
Non-GAAP net income (loss) per share |
$ 0.14 |
$ 0.19 |
$ (0.03) |
$ (0.24) | |||
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SOURCE Chegg, Inc.