Chegg - 10-Q quarterly report FY2026 Q3

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-36180

CHEGG, INC.

(Exact name of registrant as specified in its charter)

Delaware

20-3237489

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2261 Market Street STE 46218

San Francisco, CA, 94114

(Address of principal executive offices)

(408) 855-5700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value per share	CHGG	The New York Stock Exchange

•

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 ☒ No ☐

•

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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	☐	Accelerated filer	☒
Non-accelerated filer	☐	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 transition 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 ☒

•

As of October 27, 2026 , the Registrant had 111,169,557 outstanding shares of Common Stock.

Table of Contents

TABLE OF CONTENTS

		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):	4
	Condensed Consolidated Balance Sheets - September 30, 2026 and December 31, 2025	4
	Condensed Consolidated Statements of Operations - for the Three and Nine Months Ended September 30, 2026 and 2025	5
	Condensed Consolidated Statements of Comprehensive Loss - Three and Nine Months Ended September 30, 2026 and 2025	6
	Condensed Consolidated Statements of Stockholders' Equity - Three and Nine Months Ended September 30, 2026 and 2025	7
	Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2026 and 2025	9
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

Unless the context requires otherwise, the words “we,” “us,” “our,” “Company” and “Chegg” refer to Chegg, Inc. and its subsidiaries taken as a whole.

Chegg, Chegg.com, Chegg Study, Chegg Study Pack, Chegg Writing, Chegg Math, and the Chegg “C” logo are some of our trademarks used in this Quarterly Report on Form 10-Q. Solely for convenience, our trademarks, trade names and service marks referred to in this Quarterly Report on Form 10-Q appear without the ®, ™ and SM symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks and trade names. Other trademarks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.

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NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations are forward-looking statements. The words “believe,” “may,” “will,” “would,” “could,” “estimate,” “continue,” “anticipate,” “intend,” “project,” “endeavor,” “expect,” “plan to,” “if,” “future,” “likely,” “potentially,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as supplemented by the risks described under "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect.

Our forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

CHEGG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for number of shares and par value)

(unaudited)

	September 30,			December 31,
	2026			2025
Assets
Current assets
Cash and cash equivalents	$	28,847		$	31,146
Short-term investments		14,757			41,674
Accounts receivable, net of allowance of $102 and $156 at September 30, 2026 and December 31, 2025, respectively		9,550			15,604
Prepaid expenses		13,891			16,331
Other current assets		13,909			16,857
Total current assets		80,954			121,612
Long-term investments		—			12,392
Property and equipment, net		85,390			115,168
Intangible assets, net		3,019			6,041
Right of use assets		10,846			13,188
Other assets		7,824			9,613
Total assets	$	188,033		$	278,014
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	8,216		$	3,258
Deferred revenue		25,685			29,675
Accrued liabilities		26,006			54,249
Current portion of convertible senior notes, net		—			53,765
Total current liabilities		59,907			140,947
Long-term liabilities
Long-term operating lease liabilities		9,863			15,205
Other long-term liabilities		2,672			2,239
Total long-term liabilities		12,535			17,444
Total liabilities		72,442			158,391
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $0.001 par value per share: 400,000,000 shares authorized; 111,058,059 and 110,985,562 shares issued and outstanding at September 30, 2026 and December 31, 2025, respectively		111			111
Additional paid-in capital		1,150,240			1,145,371
Accumulated other comprehensive loss		(34,485	)		(32,997	)
Accumulated deficit		(1,000,275	)		(992,862	)
Total stockholders' equity		115,591			119,623
Total liabilities and stockholders' equity	$	188,033		$	278,014

See Notes to Condensed Consolidated Financial Statements.

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CHEGG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Net revenues	$	46,468		$	77,742		$	161,579		$	304,249
Cost of revenues		22,229			31,701			71,170			121,152
Gross profit		24,239			46,041			90,409			183,097
Operating expenses:
Research and development		7,972			18,350			24,509			76,495
Sales and marketing		9,249			11,583			29,323			54,614
General and administrative		12,120			33,232			45,891			132,572
Impairment expense		—			—			—			2,000
Total operating expenses		29,341			63,165			99,723			265,681
Loss from operations		(5,102	)		(17,124	)		(9,314	)		(82,584	)
Interest expense, net and other income, net:
Interest expense, net		(15	)		(41	)		(68	)		(549	)
Other income, net		704			1,377			2,498			16,433
Total interest expense, net and other income, net		689			1,336			2,430			15,884
Loss before provision for income taxes		(4,413	)		(15,788	)		(6,884	)		(66,700	)
Provision for income taxes		(277	)		(1,683	)		(529	)		(3,918	)
Net loss	$	(4,690	)	$	(17,471	)	$	(7,413	)	$	(70,618	)
Net loss per share, basic and diluted	$	(0.04	)	$	(0.16	)	$	(0.07	)	$	(0.66	)
Weighted average shares used to compute net loss per share, basic and diluted		111,025			108,450			111,388			106,851

See Notes to Condensed Consolidated Financial Statements.

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CHEGG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Net loss	$	(4,690	)	$	(17,471	)	$	(7,413	)	$	(70,618	)
Other comprehensive (loss) income
Change in net unrealized (loss) gain on investments		(34	)		44			(247	)		(514	)
Change in foreign currency translation adjustments		(347	)		43			(1,241	)		(516	)
Other comprehensive (loss) income		(381	)		87			(1,488	)		(1,030	)
Total comprehensive loss	$	(5,071	)	$	(17,384	)	$	(8,901	)	$	(71,648	)

See Notes to Condensed Consolidated Financial Statements.

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CHEGG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)

	Three Months Ended September 30, 2026
	Common Stock
								Accumulated
					Additional			Other						Total
			Par		Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares		Value		Capital			Loss			Deficit			Equity
Balances at June 30, 2026		110,914	$	111	$	1,148,192		$	(34,104	)	$	(995,585	)	$	118,614
Net share settlement of equity awards		144		—		(93	)		—			—			(93	)
Share-based compensation expense		—		—		2,141			—			—			2,141
Other comprehensive loss		—		—		—			(381	)		—			(381	)
Net loss		—		—		—			—			(4,690	)		(4,690	)
Balances at September 30, 2026		111,058	$	111	$	1,150,240		$	(34,485	)	$	(1,000,275	)	$	115,591

	Three Months Ended September 30, 2025
	Common Stock
								Accumulated
					Additional			Other						Total
			Par		Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares		Value		Capital			Loss			Deficit			Equity
Balances at June 30, 2025		107,821	$	108	$	1,133,686		$	(33,350	)	$	(942,588	)	$	157,856
Net share settlement of equity awards		955		1		(605	)		—			—			(604	)
Share-based compensation expense		—		—		6,185			—			—			6,185
Other comprehensive income		—		—		—			87			—			87
Net loss		—		—		—			—			(17,471	)		(17,471	)
Balances at September 30, 2025		108,776	$	109	$	1,139,266		$	(33,263	)	$	(960,059	)	$	146,053

See Notes to Condensed Consolidated Financial Statements.

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	Nine Months Ended September 30, 2026
	Common Stock
										Accumulated
							Additional			Other						Total
				Par			Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares			Value			Capital			Loss			Deficit			Equity
Balances at December 31, 2025		110,986		$	111		$	1,145,371		$	(32,997	)	$	(992,862	)	$	119,623
Repurchases of common stock		(1,447	)		(1	)		(1,720	)		—			—			(1,721	)
Issuance of common stock upon issuance of ESPP		77			—			68			—			—			68
Net share settlement of equity awards		1,442			1			(868	)		—			—			(867	)
Share-based compensation expense		—			—			7,389			—			—			7,389
Other comprehensive loss		—			—			—			(1,488	)		—			(1,488	)
Net loss		—			—			—			—			(7,413	)		(7,413	)
Balances at September 30, 2026		111,058		$	111		$	1,150,240		$	(34,485	)	$	(1,000,275	)	$	115,591

	Nine Months Ended September 30, 2025
	Common Stock
								Accumulated
					Additional			Other						Total
			Par		Paid-In			Comprehensive			Accumulated			Stockholders’
	Shares		Value		Capital			Loss			Deficit			Equity
Balances at December 31, 2024		104,880	$	105	$	1,114,550		$	(32,233	)	$	(889,441	)	$	192,981
Issuance of common stock upon issuance of ESPP		558		1		388			—			—			389
Net share settlement of equity awards		3,338		3		(1,642	)		—			—			(1,639	)
Share-based compensation expense		—		—		25,970			—			—			25,970
Other comprehensive loss		—		—		—			(1,030	)		—			(1,030	)
Net loss		—		—		—			—			(70,618	)		(70,618	)
Balances at September 30, 2025		108,776	$	109	$	1,139,266		$	(33,263	)	$	(960,059	)	$	146,053

See Notes to Condensed Consolidated Financial Statements.

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CHEGG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	September 30,
	2026			2025
Cash flows from operating activities
Net loss	$	(7,413	)	$	(70,618	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation expense		7,090			25,094
Depreciation and amortization expense		39,377			63,641
Deferred tax assets		41			319
Operating lease expense, net of accretion		1,609			2,883
Amortization of debt issuance costs		68			459
Loss from write-offs of property and equipment		103			793
Gain on early extinguishment of debt		(523	)		(7,360	)
Realized gain on sale of investments		(5	)		(752	)
Impairment expense		—			2,000
Impairment of lease related assets		—			3,004
Impairment of equity investment		—			6,000
Gain on lease termination		(3,675	)		—
Litigation settlement credits		(3,000	)		—
Other non-cash items		(340	)		1,049
Change in assets and liabilities:
Accounts receivable		5,992			8,592
Prepaid expenses and other current assets		5,506			7,822
Other assets		779			1,323
Accounts payable		4,856			(4,977	)
Deferred revenue		(3,783	)		(8,195	)
Accrued liabilities		(24,709	)		(3,301	)
Other liabilities		(597	)		(3,277	)
Net cash provided by operating activities		21,376			24,499
Cash flows from investing activities
Purchases of property and equipment		(6,411	)		(21,651	)
Purchases of investments		—			(793	)
Maturities of investments		32,810			111,124
Proceeds from sale of investments		5,679			181,158
Net cash provided by investing activities		32,078			269,838
Cash flows from financing activities
Repayment of convertible senior notes		(53,309	)		(416,492	)
Repurchase of common stock		(1,721	)		—
Payment of taxes related to the net share settlement of equity awards		(868	)		(1,642	)
Proceeds from common stock issued under stock plans		68			392
Net cash used in financing activities		(55,830	)		(417,742	)
Effect of exchange rate changes		(569	)		(160	)
Net decrease in cash, cash equivalents and restricted cash		(2,945	)		(123,565	)
Cash, cash equivalents and restricted cash, beginning of period		33,411			164,359
Cash, cash equivalents and restricted cash, end of period	$	30,466		$	40,794

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	Nine Months Ended
	September 30,
	2026			2025
Supplemental cash flow data:
Cash paid during the period for:
Interest	$	—		$	224
Income taxes, net of refunds	$	(655	)	$	2,205
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	3,281		$	5,429
Right of use assets obtained in exchange for lease obligations:
Operating leases	$	—		$	1,636
Non-cash investing and financing activities:
Accrued purchases of long-lived assets	$	183		$	1,750

	Nine Months Ended
	September 30,
	2026		2025
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	28,847	$	38,180
Restricted cash included in other current assets		573		912
Restricted cash included in other assets		1,046		1,702
Total cash, cash equivalents and restricted cash	$	30,466	$	40,794

See Notes to Condensed Consolidated Financial Statements.

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CHEGG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Background and Basis of Presentation

Company and Background

Chegg, Inc. (“we,” “us,” “our,” “Company” or “Chegg”) was incorporated as a Delaware corporation in July 2005. Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed. Focused on the large and growing skilling market, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning. Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support. Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements include the results of Chegg, Inc. and its wholly-owned subsidiaries. Significant intercompany balances and transactions have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2026, our results of operations, results of comprehensive loss, and stockholders' equity for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025. Our results of operations, results of comprehensive loss, stockholders' equity, and cash flows for the nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full year.

We have a single operating and reportable segment and operating unit structure. The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the Annual Report on Form 10-K) filed with the SEC.

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.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent liabilities. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition, share-based compensation expense, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill, intangible assets and long-lived assets, and internal-use software and website development costs. We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we 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. There have been no material changes in our use of estimates during the nine months ended September 30, 2026 as compared to the use of estimates disclosed in Part II, Item 8 “Consolidated Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Leases

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

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Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-12, Codification Improvements. ASU 2025-12 makes incremental improvements to the Accounting Standards Codification (ASC) and U.S. GAAP. Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to the beginning of the earliest comparative period presented. The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual periods. We did not early adopt ASU 2025-12 and we are currently in the process of evaluating the impact of this guidance.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting - Narrow Scope Improvements. ASU 2025-11 improves the guidance in ASC 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. Early adoption is permitted and the guidance may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We did not early adopt ASU 2025-11 and we are currently in the process of evaluating the impact of this guidance.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software. ASU 2025-06 modernizes the accounting for software costs that are accounted for under ASC 350-40 and 350-50 by removing references to prescriptive and sequential software development stages and requiring capitalization of software costs to begin when management has authorized and committed to funding the project and it is probable that the project will be completed and used as intended. Early adoption is permitted and the guidance may be applied on either a prospective, retrospective or modified basis. The guidance is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods. We did not early adopt ASU 2025-06 and we are currently in the process of evaluating the impact of this guidance.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. ASU 2024-03 requires disclosure of specified information about certain costs and expenses in the notes to financial statements. Early adoption is permitted, and the guidance will be applied prospectively with the option to apply retrospectively. The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. We did not early adopt ASU 2024-03 and we are currently in the process of evaluating the impact of this guidance.

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses. ASU 2025-05 introduces a practical expedient for estimating expected credit losses on current accounts receivable and contract assets arising from transactions accounted for under ASC 606. Early adoption is permitted, and the guidance will be applied on a prospective basis. The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. We adopted ASU 2025-05 on January 1, 2026 and elected the practical expedient, which did not significantly impact our financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options. ASU 2024-04 improves the relevance and consistency in application of the induced conversion guidance requirements in ASC 470-20 for convertible debt instruments with cash conversion features and debt instruments that are not currently convertible, when the face value of the debt is settled in cash. Early adoption is permitted, and the guidance can be applied on either a prospective or retrospective basis. The guidance is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. We adopted ASU 2024-04 on January 1, 2026 on a prospective basis and applied the guidance to applicable transactions occurring after the adoption date including the partial repurchase of our convertible senior notes in February 2026. The adoption of this guidance did not have an effect on our financial position, results of operations or cash flows as the partial repurchase of the convertible senior notes should not be accounted for as an induced conversion as they did not contain a substantive conversion option as of the date of the repurchase.

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Note 2. Revenues

Revenue Recognition

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

	Three Months Ended
	September 30,				Change
	2026		2025		$			%
Chegg Skilling	$	16,442	$	17,583	$	(1,141	)		(6	)%
Academic Services		30,026		60,159		(30,133	)		(50	)
Total net revenues	$	46,468	$	77,742	$	(31,274	)		(40	)

	Nine Months Ended
	September 30,				Change
	2026		2025		$			%
Chegg Skilling	$	51,554	$	50,935	$	619			1	%
Academic Services		110,025		253,314		(143,289	)		(57	)
Total net revenues	$	161,579	$	304,249	$	(142,670	)		(47	)

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

Contract Balances

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

	September 30,		December 31,		Change
	2026		2025		$			%
Accounts receivable, net	$	9,550	$	15,604	$	(6,054	)		(39	)%
Contract assets		6,281		6,536		(255	)		(4	)
Deferred revenue		25,685		29,675		(3,990	)		(13	)

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

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Note 3. Net Loss Per Share

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Numerator:
Net loss	$	(4,690	)	$	(17,471	)	$	(7,413	)	$	(70,618	)
Denominator:
Weighted average shares used to compute net loss per share, basic and diluted		111,025			108,450			111,388			106,851

Net loss per share, basic and diluted	$	(0.04	)	$	(0.16	)	$	(0.07	)	$	(0.66	)

During the three and nine months ended September 30, 2026 and 2025, basic and diluted net loss per share was the same, as the inclusion of all potential common shares outstanding would have been anti-dilutive.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Shares related to stock plan activity		6,040		3,226		4,545		8,177
Shares related to convertible senior notes		212		583		310		2,573
Total common stock equivalents		6,252		3,809		4,855		10,750

Note 4. Cash and Cash Equivalents, Investments and Fair Value Measurements

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

	September 30, 2026
	Fair Value	Adjusted		Unrealized		Unrealized			Fair
	Level	Cost		Gain		Loss			Value
Cash and cash equivalents:
Cash		$	15,734	$	—	$	—		$	15,734
Money market funds	Level 1		13,113		—		—			13,113
Total cash and cash equivalents		$	28,847	$	—	$	—		$	28,847
Short-term investments:
Corporate debt securities	Level 2	$	14,777	$	2	$	(22	)	$	14,757

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	December 31, 2025
	Fair Value	Adjusted		Unrealized		Unrealized		Fair
	Level	Cost		Gain		Loss		Value
Cash and cash equivalents:
Cash		$	16,942	$	—	$	—	$	16,942
Money market funds	Level 1		14,204		—		—		14,204
Total cash and cash equivalents		$	31,146	$	—	$	—	$	31,146
Short-term investments:
Corporate debt securities	Level 2	$	41,549	$	125	$	—	$	41,674
Long-term investments:
Corporate debt securities	Level 2	$	12,290	$	102	$	—	$	12,392

During the three and nine months ended September 30, 2026 and 2025, we did not recognize any losses on our investments due to credit related factors and our realized gains and losses on investments were not significant.

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

	Adjusted		Fair
	Cost		Value
Due within one year	$	14,777	$	14,757
Investments not due at a single maturity date		13,113		13,113
Total	$	27,890	$	27,870

Investments not due at a single maturity date in the preceding table consisted of money market funds.

Note 5. Balance Sheet Details

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

	September 30,		December 31,
	2026		2025
Taxes payable	$	9,668	$	11,331
Current operating lease liabilities		2,461		4,279
Litigation settlement liabilities		1,000		8,190
Restructuring liability		902		15,592
Other		11,975		14,857
Accrued liabilities	$	26,006	$	54,249

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Note 6. Convertible Senior Notes

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

Previously, in February 2026, in connection with our securities repurchase program, we extinguished $20.0 million aggregate principal amount of the 2026 notes in privately-negotiated transactions for a total consideration of $19.4 million, which was paid to the holders in cash. We also incurred an immaterial amount of fees resulting in a total reacquisition price of $19.5 million. The carrying amount of the extinguished notes was $20.0 million resulting in a $0.5 million gain on early extinguishment of debt. We elected to reacquire and not cancel the extinguished 2026 notes and left the associated capped call transactions outstanding.

The following table presents the net carrying amount of the 2026 notes (in thousands):

	September 30,		December 31,
	2026		2025
Principal		—		53,860
Unamortized issuance costs		—		(95	)
Net carrying amount	$	—	$	53,765

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
2026 notes:
Contractual interest expense	$	—	$	—	$	—	$	—
Amortization of issuance costs		15		41		68		151
Total 2026 notes interest expense	$	15	$	41	$	68	$	151
2025 notes:
Contractual interest expense	$	—	$	—	$	—	$	90
Amortization of issuance costs		—		—		—		308
Total 2025 notes interest expense	$	—	$	—	$	—	$	398

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Note 7. Commitments and Contingencies

We may from time to time be involved in certain legal proceedings and regulatory compliance matters in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and contractual and related disputes brought through private actions, class actions, administrative proceedings, regulatory actions or other litigation. We may also, from time to time, be involved in various legal or government claims, demands, disputes, investigations, or requests for information. 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.

On February 24, 2025, we filed a complaint in the U.S. District Court for the District of Columbia against Google, asserting federal antitrust claims and common-law unjust enrichment claims, in connection with Google's expansion of its AI Overview ("AIO") search experience, and seeking damages, restitution, disgorgement, and injunctive relief. Google moved to dismiss the amended complaint on July 25, 2025. On September 30, 2026, the court entered an order dismissing our complaint.

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

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Note 8. Guarantees and Indemnifications

We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We 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 covers our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited.

We believe the fair value of these indemnification agreements is immaterial. We have not recorded any liabilities for these agreements as of September 30, 2026.

Note 9. Stockholders' Equity

Share Repurchases

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

Share-based Compensation Expense

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Cost of revenues	$	14	$	102	$	49	$	471
Research and development		138		1,141		819		5,937
Sales and marketing		80		352		335		1,826
General and administrative		1,823		4,330		5,887		16,860
Total share-based compensation expense	$	2,055	$	5,925	$	7,090	$	25,094

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

The following table presents activity for outstanding RSUs and PSUs:

	RSUs and PSUs Outstanding
				Weighted
				Average
	Shares			Grant Date
	Outstanding			Fair Value
Balance at December 31, 2025		10,041,008		$	1.56
Granted		3,821,218			0.91
Released		(2,390,925	)		2.78
Forfeited		(222,224	)		8.27
Balance at September 30, 2026		11,249,077		$	0.95

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Note 10. Restructuring Charges

July 2026 Restructuring Plan

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

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

	Nine Months Ended
	September 30,
	2026
Beginning balance	$	—
Restructuring charges		766
Restructuring payments		(616	)
Ending balance	$	150

October 2025 Restructuring Plan

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

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

	Nine Months Ended September 30, 2026
	One-Time			Facility
	Termination			Exit
	Benefits			Costs			Total
Beginning balance	$	8,198		$	1,694		$	9,892
Restructuring charges (credits)		1,394			(1,399	)		(5	)
Restructuring payments		(8,917	)		(295	)		(9,212	)
Ending balance	$	675		$	—		$	675

May 2025 Restructuring Plan

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

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

	Nine Months Ended
	September 30,
	2026
Beginning balance	$	6,263
Restructuring credits		(847	)
Restructuring payments		(5,325	)
Ending balance	$	91

November 2024 Restructuring Plan

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

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The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

	Nine Months Ended
	September 30,
	2026
Beginning balance	$	138
Restructuring charges		—
Restructuring payments		(138	)
Ending balance	$	—

June 2024 Restructuring Plan

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

The following table presents a reconciliation of the beginning and ending restructuring liability balance (in thousands):

	Nine Months Ended
	September 30,
	2026
Beginning balance	$	457
Restructuring credits		(450	)
Restructuring payments		(7	)
Ending balance	$	—

Note 11. Segment Information

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

Our chief operating decision maker uses net loss in assessing performance and determining how to allocate resources and is regularly provided with cost of revenues, paid marketing expenses, and consolidated operating expenses when reviewing financial information as part of the annual budgeting and forecasting process as well as the review over quarterly budget to actual variances. Asset information is not regularly provided to our chief operating decision maker.

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2026			2025			2026			2025
Net revenues	$	46,468		$	77,742		$	161,579		$	304,249
Less:
Cost of revenues		22,229			31,701			71,170			121,152
Research and development		7,972			18,350			24,509			76,495
Paid marketing expenses⁽¹⁾		4,197			4,403			13,727			27,836
Other sales and marketing⁽²⁾		5,052			7,180			15,596			26,778
General and administrative		12,120			33,232			45,891			132,572
Impairment expense		—			—			—			2,000
Total segment expenses		51,570			94,866			170,893			386,833
Other segment items⁽³⁾		412			(347	)		1,901			11,966
Net loss	$	(4,690	)	$	(17,471	)	$	(7,413	)	$	(70,618	)

_____________________________________________________

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

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

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

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
Chegg Skilling	$	16,442	$	17,583	$	51,554	$	50,935
Academic Services		30,026		60,159		110,025		253,314
Total net revenues	$	46,468	$	77,742	$	161,579	$	304,249

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2026		2025		2026		2025
United States	$	36,140	$	64,841	$	128,287	$	260,483
International		10,328		12,901		33,292		43,766
Total net revenues	$	46,468	$	77,742	$	161,579	$	304,249

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

	September 30,		December 31,
	2026		2025
United States	$	75,685	$	106,918
India		11,212		12,907
Other international		9,339		8,531
Total long-lived assets	$	96,236	$	128,356

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. See the section titled “Note about Forward-Looking Statements” for additional information. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q.

Overview

Chegg is a learning platform helping businesses bring new skills to their workforce and giving lifelong learners and students the skills and confidence to succeed. Focused on the large and growing skilling market, Chegg offers innovative tools for workplace readiness, professional upskilling, and language learning. Chegg also continues to offer students artificial intelligence (AI)-driven, personalized support. Chegg remains committed to its mission of improving learning outcomes and career opportunities for millions of people around the world.

Our long-term strategy is focused on helping learners achieve better outcomes by combining academic support with practical, career-relevant skills across the learning lifecycle. We are evolving our platform to support learners both in the classroom and beyond, leveraging AI to deliver faster, more personalized, and more effective learning experiences. We continue to invest in expanding our skilling offerings and integrating them with our core academic services to provide a differentiated, end-to-end solution that supports the whole learner. Our use of AI in our platform is designed to enable us to scale personalized support, improve learning outcomes, and increase course completion while maintaining high standards of quality and accuracy. We believe these investments position us to drive deeper engagement, expand our addressable market, and return the business to sustainable revenue growth over time. Our ability to achieve these long-term objectives is subject to numerous risks and uncertainties, which are described in greater detail below and in Part II, Item 1A, “Risk Factors.”

Business Updates and Developments

Increased availability and adoption of AI tools and products, including the continued increase in availability and adoption of free and paid generative AI services by students, has reduced, and is expected to continue to reduce, traffic to our website and customers subscribing to our services. For example, the AI Overview feature of Google's search results, which includes questions and solutions for education, keeps users on Google search results instead of leading them to our site. As sites like Google seek to shift from being a search origination tool to a destination, we expect traffic to our platform to continue to be reduced, adversely affecting our business, operating results and financial condition.

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Students are increasingly turning to generative AI for academic support, such as homework and exams, as well as assistance in other areas of daily life, where they see generative AI products like ChatGPT and others as strong alternatives to vertically specialized solutions for education. This has negatively impacted our industry and is expected to continue to negatively impact traffic to our platform and accelerate the decline in the number of new subscribers that sign up for our services, adversely affecting our business, operating results and financial condition.

Our service and product offerings fall into two categories: Chegg Skilling and Academic Services, which are described below.

Chegg Skilling

Our language learning platform provides subscribers access to a premium language learning platform that offers comprehensive support through self-paced lessons, live classes with expert tutors and a community of members to practice alongside. A team of leading experts have developed our online learning instruction to bring students from novice to advanced speakers in a fast-paced, enjoyable environment and we currently offer comprehensive courses taught by highly qualified teachers in 14 languages.

We also provide workforce skilling programs that help employers develop and retain talent. Our workforce skilling programs align workforce needs with learner outcomes by combining in-demand technical skills such as AI, coding, data analytics, and cybersecurity, with foundational business and human-centered durable skills. We keep our portfolio current by working closely with employers, including Fortune 1000 companies, to understand emerging role requirements and workforce needs. Programs feature engaging, modular online content, practice opportunities, and support. Our platform tracks learner progress in real time, delivering predictive nudges and timely interventions that improve engagement, retention, and completion rates. Our approach is informed by learning science to help skills stick, so learners can apply what they learn with confidence at work.

Academic Services

Our legacy academic learning services are headlined by Chegg Study Pack, a premium subscription bundle that includes all of the benefits of Chegg Study, Chegg Writing, and Chegg Math. Chegg Study subscribers have access to personalized, step-by-step learning support powered by AI, computational engines, and subject matter experts. Subscribers engage with our conversational experience that delivers the right support at the right time. Our Chegg Writing subscription service consists of a suite of essential tools including plagiarism detection scans, grammar and writing fluency checking, expert personalized writing feedback, and premium citation generation. Subscribers can also have a writing professional proofread papers for personalized feedback. Our Chegg Math subscription service provides students with a computational engine to help them understand and solve math problems. Our internships offering provides students job discovery, application creation and submission, networking, and interview preparation in one experience offered as both a stand-alone product and as a component of a Chegg Study Pack subscription. We opportunistically monetize our content library through licensing and partnerships. We work with leading brands and programmatic partners to deliver advertising across our platforms.

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Results of Operations

The following table presents our historical condensed consolidated statements of operations (in thousands, except percentage of total net revenues):

	Three Months Ended										Nine Months Ended
	September 30,										September 30,
	2026					2025					2026					2025
Net revenues	$	46,468		100	%	$	77,742		100	%	$	161,579		100	%	$	304,249		100	%
Cost of revenues⁽¹⁾		22,229		48			31,701		41			71,170		44			121,152		40
Gross profit		24,239		52			46,041		59			90,409		56			183,097		60
Operating expenses:
Research and development⁽¹⁾		7,972		17			18,350		24			24,509		15			76,495		25
Sales and marketing⁽¹⁾		9,249		20			11,583		15			29,323		18			54,614		18
General and administrative⁽¹⁾		12,120		26			33,232		43			45,891		28			132,572		44
Impairment expense		—		—			—		—			—		—			2,000		1
Total operating expenses		29,341		63			63,165		81			99,723		61			265,681		87
Loss from operations		(5,102	)	(11	)		(17,124	)	(22	)		(9,314	)	(5	)		(82,584	)	(27	)
Total interest expense, net and other income, net		689		1			1,336		2			2,430		2			15,884		5
Loss before provision for income taxes		(4,413	)	(10	)		(15,788	)	(20	)		(6,884	)	(3	)		(66,700	)	(22	)
Provision for income taxes		(277	)	(1	)		(1,683	)	(2	)		(529	)	(0	)		(3,918	)	(1	)
Net loss	$	(4,690	)	(11	)%	$	(17,471	)	(22	)%	$	(7,413	)	(3	)%	$	(70,618	)	(23	)%

(1) Includes share-based compensation expense as follows:
Cost of revenues	$	14				$	102				$	49				$	471
Research and development		138					1,141					819					5,937
Sales and marketing		80					352					335					1,826
General and administrative		1,823					4,330					5,887					16,860
Total share-based compensation expense	$	2,055				$	5,925				$	7,090				$	25,094

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Three and Nine Months Ended September 30, 2026 and 2025

Net Revenues

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

	Three Months Ended
	September 30,				Change
	2026		2025		$			%
Chegg Skilling	$	16,442	$	17,583	$	(1,141	)		(6	)%
Academic Services		30,026		60,159		(30,133	)		(50	)
Total net revenues	$	46,468	$	77,742	$	(31,274	)		(40	)

	Nine Months Ended
	September 30,				Change
	2026		2025		$			%
Chegg Skilling	$	51,554	$	50,935	$	619			1	%
Academic Services		110,025		253,314		(143,289	)		(57	)
Total net revenues	$	161,579	$	304,249	$	(142,670	)		(47	)

Chegg Skilling revenues decreased $1.1 million, or 6%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in enrollments in our workforce skilling programs distributed through our largest third-party marketplace. Chegg Skilling revenues as a percentage of net revenues were 35% during the three months ended September 30, 2026 compared to 23% during the same period in 2025.

Chegg Skilling revenues increased during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to an increase in our language learning platform primarily related to direct-to-consumer growth. Chegg Skilling revenues as a percentage of net revenues were 32% during the nine months ended September 30, 2026 compared to 17% during the same period in 2025.

Academic Services revenues decreased $30.1 million, or 50%, and $143.3 million, or 57%, during the three and nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to a decrease in subscription revenue, primarily related to reduced traffic which led to fewer subscribers. Academic Services revenues as a percentage of net revenues were 65% and 68% during three and nine months ended September 30, 2026 compared to 77% and 83% during the same periods in 2025.

Cost of Revenues

The following tables present our cost of revenues for the periods shown (in thousands, except percentages):

	Three Months Ended
	September 30,				Change
	2026		2025		$			%
Cost of revenues⁽¹⁾	$	22,229	$	31,701	$	(9,472	)		(30	)%

⁽¹⁾Includes share-based compensation expense of:	$	14	$	102	$	(88	)		(86	)%

	Nine Months Ended
	September 30,				Change
	2026		2025		$			%
Cost of revenues⁽¹⁾	$	71,170	$	121,152	$	(49,982	)		(41	)%

⁽¹⁾Includes share-based compensation expense of:	$	49	$	471	$	(422	)		(90	)%

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Cost of revenues decreased $9.5 million, or 30%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower payment processing and other order fees of $3.5 million, primarily due to the decrease in subscribers who have paid to access our services, lower depreciation expense of $2.6 million, lower employee-related expenses of $1.2 million, and lower restructuring charges of $0.9 million. Gross margins decreased to 52% during the three months ended September 30, 2026, from 59% during the same period in 2025.

Cost of revenues decreased $50.0 million, or 41%, during the nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower depreciation expense of $23.4 million primarily due to the accelerated depreciation recorded in 2025, lower payment processing and other order fees of $13.5 million, which is primarily due to the decrease in subscribers who have paid to access our services, lower web hosting fees of $4.5 million, lower employee-related expenses of $3.9 million, lower restructuring charges of $1.7 million, and lower contractor spend of $0.9 million. Gross margins decreased to 56% during the nine months ended September 30, 2026, from 60% during the same period in 2025.

Operating Expenses

The following tables present our total operating expenses for the periods shown (in thousands, except percentages):

	Three Months Ended
	September 30,				Change
	2026		2025		$			%
Research and development ⁽¹⁾	$	7,972	$	18,350	$	(10,378	)		(57	)%
Sales and marketing ⁽¹⁾		9,249		11,583		(2,334	)		(20	)
General and administrative ⁽¹⁾		12,120		33,232		(21,112	)		(64	)
Total operating expenses	$	29,341	$	63,165	$	(33,824	)		(54	)

⁽¹⁾ Includes share-based compensation expense as follows:
Research and development	$	138	$	1,141	$	(1,003	)		(88	)%
Sales and marketing		80		352		(272	)		(77	)
General and administrative		1,823		4,330		(2,507	)		(58	)
Share-based compensation expense	$	2,041	$	5,823	$	(3,782	)		(65	)

	Nine Months Ended
	September 30,				Change
	2026		2025		$			%
Research and development ⁽¹⁾	$	24,509	$	76,495	$	(51,986	)		(68	)%
Sales and marketing ⁽¹⁾		29,323		54,614		(25,291	)		(46	)
General and administrative ⁽¹⁾		45,891		132,572		(86,681	)		(65	)
Impairment expense		—		2,000		(2,000	)		(100	)
Total operating expenses	$	99,723	$	265,681	$	(165,958	)		(62	)

⁽¹⁾ Includes share-based compensation expense as follows:
Research and development	$	819	$	5,937	$	(5,118	)		(86	)%
Sales and marketing		335		1,826		(1,491	)		(82	)
General and administrative		5,887		16,860		(10,973	)		(65	)
Share-based compensation expense	$	7,041	$	24,623	$	(17,582	)		(71	)

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Operating expenses decreased $33.8 million, or 54%, and $166.0 million, or 62%, during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to lower employee-related expenses as a result of prior year restructuring actions. See Note 10, “Restructuring Charges” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information regarding the prior year restructuring actions.

Research and Development

Research and development expenses decreased $10.4 million, or 57%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $6.0 million including share-based compensation expense, lower technology-related expenses of $2.3 million, and lower restructuring charges of $2.0 million. Research and development expenses as a percentage of net revenues were 17% during the three months ended September 30, 2026 compared to 24% during the same period in 2025.

Research and development expenses decreased $52.0 million, or 68%, during the nine months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $29.3 million including share-based compensation expense, lower restructuring charges of $9.2 million, lower technology-related expenses of $8.1 million, and lower web hosting fees of $3.7 million. Research and development expenses as a percentage of net revenues were 15% during the nine months ended September 30, 2026 compared to 25% during the same period in 2025.

Sales and Marketing

Sales and marketing expenses decreased by $2.3 million, or 20%, during the three months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower employee-related expenses of $1.7 million including share-based compensation expense. Sales and marketing expenses as a percentage of net revenues were 20% during the three months ended September 30, 2026 compared to 15% during the same period in 2025.

Sales and marketing expenses decreased by $25.3 million, or 46%, during the nine months ended September 30, 2026, compared to the same period in 2025. The decrease was primarily attributable to lower paid marketing expenses of $14.1 million, lower employee-related expenses of $8.6 million including share-based compensation expense, and lower restructuring charges of $2.1 million. Sales and marketing expenses as a percentage of net revenues were flat at 18% during the nine months ended September 30, 2026 and 2025.

General and Administrative

General and administrative expenses decreased $21.1 million, or 64%, during the three months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $7.6 million including share-based compensation expense, lower restructuring charges of $6.3 million, a gain on lease termination related to our Santa Clara office of $3.7 million, lower professional fees of $2.5 million, and lower facility expenses of $1.5 million, partially offset by higher contractor spend of $0.9 million. General and administrative expenses as a percentage of net revenues were 26% during the three months ended September 30, 2026 compared to 43% during the same period in 2025.

General and administrative expenses decreased $86.7 million, or 65%, during the nine months ended September 30, 2026 compared to the same period in 2025. The decrease was primarily due to lower employee-related expenses of $34.5 million including share-based compensation expense, lower restructuring charges of $18.6 million, a reduction in litigation settlements of $10.5 million, lower professional fees of $9.0 million, the absence of an impairment loss on an equity investment of $6.0 million, lower facility expenses of $5.0 million, a gain on lease termination related to our Santa Clara office of $3.7 million, the absence of an impairment of lease-related assets of $3.0 million, and lower technology-related expenses of $1.8 million, partially offset by higher contractor spend of $2.9 million. General and administrative expenses as a percentage of net revenues were 28% during the nine months ended September 30, 2026 compared to 44% during the same period in 2025.

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Impairment Expense

Impairment expense decreased $2.0 million during the nine months ended September 30, 2026 compared to the same period in 2025 as we impaired property and equipment in 2025.

Interest Expense, Net and Other Income, Net

The following tables present our interest expense, net and other income, net, for the periods shown (in thousands, except percentages):

	Three Months Ended
	September 30,						Change
	2026			2025			$			%
Interest expense, net	$	(15	)	$	(41	)	$	26			(63	)%
Other income, net		704			1,377			(673	)		(49	)
Interest expense, net and other income, net:	$	689		$	1,336		$	(647	)		(48	)

	Nine Months Ended
	September 30,						Change
	2026			2025			$			%
Interest expense, net	$	(68	)	$	(549	)	$	481			(88	)%
Other income, net		2,498			16,433			(13,935	)		(85	)
Interest expense, net and other income, net:	$	2,430		$	15,884		$	(13,454	)		(85	)

Interest expense, net decreased during the three months ended September 30, 2026 compared to the same period in 2025 due to the repayment and partial early extinguishment of convertible senior notes.

Interest expense, net decreased $0.5 million, or 88%, during the nine months ended September 30, 2026 compared to the same period in 2025, due to the repayment and partial early extinguishment of convertible senior notes.

Other income, net decreased $0.7 million, or 49%, during the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in interest income due to lower investment balances.

Other income, net decreased $13.9 million, or 85%, during the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a decrease in gain on early extinguishment of a portion of the 2026 notes of $6.8 million and a decrease in interest income of $5.7 million due to lower investment balances.

Provision for income taxes

The following tables present our provision for income taxes for the periods shown (in thousands, except percentages):

	Three Months Ended
	September 30,						Change
	2026			2025			$		%
Provision for income taxes	$	(277	)	$	(1,683	)	$	1,406		(84	)%

	Nine Months Ended
	September 30,						Change
	2026			2025			$		%
Provision for income taxes	$	(529	)	$	(3,918	)	$	3,389		(86	)%

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Provision for income taxes decreased $1.4 million, or 84%, and $3.4 million, or 86%, during the three and nine months ended September 30, 2026, respectively, compared to the same periods in 2025, primarily due to a decrease in foreign income taxes.

Liquidity and Capital Resources

The following table presents our cash, cash equivalents and investments and convertible senior notes as of the periods shown (in thousands, except percentages):

	September 30,		December 31,		Change
	2026		2025		$			%
Cash, cash equivalents and investments	$	43,604	$	85,212	$	(41,608	)		(49	)%
Convertible senior notes, net		—		53,765		(53,765	)		(100	)

Cash, cash equivalents, and investments decreased $41.6 million, or 49%, during the nine months ended September 30, 2026 primarily due to the net cash used for the repayment and partial early extinguishment of the 2026 notes of $53.3 million, purchases of property and equipment of $6.4 million, and repurchase of shares of our common stock of $1.7 million, partially offset by the net cash provided by operating activities of $21.4 million.

Convertible senior notes, net decreased $53.8 million, or 100%, during the nine months ended September 30, 2026 primarily due to the repayment and partial early extinguishment of the 2026 notes. See Note 6, "Convertible Senior Notes” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for additional information on our 2026 notes.

As of September 30, 2026, our principal sources of liquidity were cash, cash equivalents, and investments totaling $43.6 million, which were held for working capital purposes. We believe that our existing sources of liquidity will be sufficient to fund our operations for at least the next 12 months. Our future capital requirements will depend on many factors, including our rate of revenue growth, our investments in research and development activities, our acquisition of new products and services, and our sales and marketing activities. To the extent that existing sources of liquidity are insufficient to fund our future operations, we may need to raise additional funds through public or private equity or debt financing. Additional funds may not be available on terms favorable to us or at all. If adequate funds are not available on acceptable terms, or at all, we may be unable to adequately fund our business plans and it could have a negative effect on our business, operating cash flows and financial condition. As of September 30, 2026, we have incurred cumulative losses of $1.0 billion from our operations and we may incur additional losses in the future.

Most of our cash, cash equivalents, and investments are held in the United States. As part of our ongoing cash planning, we continue to assess whether to repatriate a portion of earnings from our subsidiary in India. Accordingly, the net cumulative tax expense as of September 30, 2026 is $1.1 million, related to a potential future distribution of such earnings. This reflects our continued assessment of cash needs and the absence of an indefinite reinvestment assertion for our subsidiary in India. As a result of the Tax Cuts and Jobs Act, we anticipate the U.S. federal impact for the remaining foreign jurisdictions to be minimal if these funds are repatriated. In addition, based on our current and future needs, we believe our current funding and capital resources for our international operations are adequate.

Aside from the changes to our operating lease obligations and convertible senior notes as disclosed in Note 1, “Background and Basis of Presentation” and "Note 6, "Convertible Senior Notes”, respectively, of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (Unaudited)” of this Quarterly Report on Form 10-Q, there were no other material changes in our contractual obligations and other commitments, as disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

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The following table presents our condensed consolidated statements of cash flows data (in thousands):

	Nine Months Ended
	September 30,						Change
	2026			2025			$			%
Net cash flows provided by operating activities	$	21,376		$	24,499		$	(3,123	)		(13	)%
Net cash flows provided by investing activities		32,078			269,838			(237,760	)		(88	)
Net cash flows used in financing activities		(55,830	)		(417,742	)		361,912			(87	)

The substantial majority of our cash inflows from operating activities are from e-commerce transactions with learners, which are settled immediately through payment processors, as opposed to cash outflows from bill payments, which are settled based on contractual payment terms with our suppliers.

Net cash flows provided by operating activities decreased $3.1 million, or 13%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to the net effect of lower depreciation and amortization of $24.3 million, an increase in the change in accrued liabilities of $21.4 million primarily due to payments from our restructuring actions, lower share-based compensation expense of $18.0 million, and a gain on lease termination of our Santa Clara office of $3.7 million, partially offset by a decrease in net loss of $63.2 million and a decrease in the gain on partial early extinguishments of convertible senior notes of $6.8 million.

Net cash flows provided by investing activities decreased $237.8 million, or 88%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to lower proceeds from the sale of investments of $175.5 million and lower proceeds from the maturities of our investments of $78.3 million, partially offset by lower purchases of property and equipment of $15.2 million.

Net cash flows used in financing activities decreased $361.9 million, or 87%, during the nine months ended September 30, 2026 compared to the same period in 2025 and was primarily related to lower repayments of our convertible senior notes.

Critical Accounting Policies, Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes in our critical accounting policies and estimates during the nine months ended September 30, 2026 as compared to the critical accounting policies and estimates disclosed in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

For relevant recent accounting pronouncements, see Note 1, “Background and Basis of Presentation,” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk during the nine months ended September 30, 2026, compared to the disclosures in Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” contained in our Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 4. CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on management’s evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2026, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

(b)

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2026, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We may from time to time be involved in certain legal proceedings and regulatory compliance matters in the ordinary course of business, including claims of alleged infringement of trademarks, patents, copyrights, and other intellectual property rights; employment claims; and contractual and related disputes brought through private actions, class actions, administrative proceedings, regulatory actions or other litigation. We may also, from time to time, be involved in various legal or government claims, demands, disputes, investigations, or requests for information. 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. See Note 7, “Commitments and Contingencies,” of our accompanying Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, “Financial Statements (unaudited)” of this Quarterly Report on Form 10-Q for more information on our legal proceedings.

In addition, we may in the future be subject to additional inquiries, investigations, litigation or other proceedings or actions, regulatory or otherwise. An unfavorable outcome of any such litigation or regulatory proceeding or action could have a material adverse effect on our business, financial condition and results of operations.

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. There have been no material changes in our risk factors from our Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Securities

We had no unregistered sales of our securities during the three months ended September 30, 2026.

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Purchases of Securities by the Registrant and Affiliated Purchasers

We did not purchase any of our common stock during the three months ended September 30, 2026.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the three months ended September 30, 2026, none of our Section 16 officers or directors adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of Regulation S-K during the covered period.

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ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit

No.

Exhibit

Form

File No

Filing Date

Exhibit No.

Filed

Herewith

3.1

Restated Certificate of Incorporation of Chegg, Inc. effective November 18, 2013

10-K

001-36180

3/4/2016

3.01

3.2

Amended and Restated Bylaws of Chegg, Inc., as amended on March 15, 2023

8-K

001-36180

3/21/2023

3.1

31.1

Certification of Dan Rosensweig, Chief Executive Officer and Executive Chairman, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of David Longo, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1**

Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation

101.LAB

Inline XBRL Taxonomy Extension Labels

101.PRE

Inline XBRL Taxonomy Extension Presentation

101.DEF

Inline XBRL Taxonomy Extension Definition

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Indicates a management contract or compensatory plan.
**	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.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHEGG, INC.
November 3, 2026	By:	/S/ DAVID LONGO
		David Longo
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Chegg - 10-Q quarterly report FY2026 Q3

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