Chegg adds a premier global math solver to its portfolio of
world-class direct-to-student learning support
Chegg, Inc. (NYSE: CHGG), a Smarter Way to Student®, today
announced it has acquired the popular math solver Mathway. Mathway
has subscribers in approximately 100 countries and has been
localized in 13 languages.
“Math proficiency is a foundational and critical pillar of
learning around the world,” said Nathan Schultz, President of
Learning Services at Chegg. “The modern student understands that
the mastery of math is more important than ever, and Mathway has
built an incredible product that students love. Bringing Mathway
into the Chegg family will bring additional subject coverage,
languages, and international reach, significantly expanding our
TAM,” Schultz added.
Math deficiency is a large-scale issue that is pervasive in both
education and workforce preparedness. In the latest OECD rankings,
the US ranked 37th of developed countries in terms of math
proficiency1.
Founded in 2002 by middle school friends Frank Balcavage and
Jake Kuehner, Mathway has become one of the highest rated education
mobile apps2. Mathway teaches students with an easy-to-use solver
that can be accessed through optical character recognition and
offers step‑by‑step instruction to teach both simple and complex
mathematics.
“In Mathway we set out to build a math solver that could work
directly with a range of students to help them master all forms of
math, and meet them at their level,” said Balcavage. “Chegg shares
our direct‑to‑the‑student, always available, step‑by‑step
instruction model. By joining them we believe we will quickly be
able to scale to help millions of students at a time when math is
increasingly important,” Kuehner added.
Mathway offers a vast range of subject areas with 400+ different
topics including pre-algebra, algebra, trigonometry, pre-calculus,
calculus, and linear algebra, and related disciplines. In 2019,
Mathway solved over 1.3 billion problems for learners.
Mathway is used across the academic spectrum for both learning
and instruction; approximately half of its users are in high
school, while 1 in 10 are teachers, professors or parents.
Mathway’s ‘Ask an Expert - Live’ feature allows those still
struggling with a concept to get immediate support.
Chegg acquired Mathway for approximately $100 million in an
all-cash transaction. There are potential additional payments of up
to $15 million payable in cash over the next three years that
remain subject to performance and other contingencies.
Mathway's 2019 unaudited net revenue was approximately $13
million. Chegg expects the Q2 2020 revenue contribution of Mathway,
after the effect of the fair-value adjustment through purchase
accounting to deferred revenue, to be approximately $0.5 million
and an adjusted EBITDA loss of approximately $0.5 million.
For more information about the use of forward-looking non-GAAP
measures, see the below section of the press release titled "Use of
Non-GAAP Measures."
1
http://www.oecd.org/pisa/PISA%202018%20Insights%20and%20Interpretations%20FINAL%20PDF.pdf
2 IOS Appstore, 4.9/5 rating
About Chegg
Chegg is a Smarter Way to Student. As the leading
direct-to-student learning platform, we strive to improve
educational outcomes by putting the student first in all our
decisions. We support students on their journey from high school to
college and into their career with tools designed to help them pass
their test, pass their class, and save money on required materials.
Our services are available online, anytime and anywhere, so we can
reach students when they need us most. 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 generally accepted accounting principles in the United States
("GAAP"), this press release contains the non-GAAP financial
measure adjusted EBITDA. The presentation of this non-GAAP
financial measure 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 adjusted EBITDA as earnings before
interest, taxes, depreciation and amortization, or EBITDA, adjusted
for print textbook depreciation expense and to exclude share-based
compensation expense, other income, net, restructuring charges, and
acquisition-related compensation costs. 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 adjusted EBITDA, when taken together with
the corresponding GAAP net loss, 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 adjusted EBITDA in
assessing Chegg's operating results, as well as when planning,
forecasting and analyzing future periods and believes that such
measure enhances investors' overall understanding of our current
financial performance. Adjusted EBITDA also facilitates comparisons
of Chegg's performance to prior periods.
A reconciliation of forward-looking Q2 2020 adjusted EBITDA to
net loss is not available without unreasonable effort due to the
unavailability of certain information needed to calculate
reconciling items, largely driven by the unknown effect of purchase
accounting adjustments on such reconciling line items. However,
Chegg believes that the change between the adjusted EBITDA guidance
contained within this press release, from our most recently issued
adjusted EBITDA guidance for Q2 2020 furnished in our Current
Report on Form 8-K and filed with the Securities and Exchange
Commission ("SEC") on May 2, 2020, will mostly impact the net loss
reconciling line item.
Forward-Looking
Statements
This press release may be deemed to contain forward-looking
statements, which are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including
statements regarding Chegg's belief that Mathway will significantly
expand Chegg’s TAM; that Mathway will be able to quickly scale to
help millions of more students; Mathway’s expected Q2 2020 revenue
contribution; and Mathway’s expected contribution of $0.5 million
adjusted EBITDA loss for Q2 2020. Statements regarding future
events are based on management's current expectations and
projections about future events and trends that we believe may
affect Chegg’s 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 the potential impact on the business of Mathway due to
the acquisition, general economic conditions, including the ongoing
effects of the COVID-19 pandemic, competition, integration risks,
and other factors described in the "Risk Factors" section of
Chegg's most recent Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 2020 filed with the SEC on May 4, 2020 and
Chegg's other SEC filings. Moreover, we operate in a very
competitive and rapidly changing environment. 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 discussed
herein may not occur and actual results could differ materially and
adversely from those anticipated or implied in the forward-looking
statements. You can obtain copies of Chegg's SEC filings on the
SEC's website at www.sec.gov or at Chegg Investor Relations website
at investor.chegg.com. The forward-looking statements included
herein are made only as of the date hereof, and Chegg undertakes no
obligation to revise or update any forward-looking statements for
any reason, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200604005631/en/
Investor Contact Tracey Ford ir@chegg.com
Media Contact Marc Boxser press@chegg.com
Chegg (NYSE:CHGG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Chegg (NYSE:CHGG)
Historical Stock Chart
From Apr 2023 to Apr 2024