CHEGG, INC, 10-Q filed on 4/29/2019
Quarterly Report
v3.19.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2019
Apr. 26, 2019
Document And Entity Information [Abstract]    
Entity Registrant Name CHEGG, INC  
Entity Central Index Key 0001364954  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Period End Date Mar. 31, 2019  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Common Stock, Shares Outstanding   118,548,013
v3.19.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 914,500 $ 374,664
Short-term investments 70,080 93,345
Accounts receivable, net of allowance for doubtful accounts of $27 and $229 at March 31, 2019 and December 31, 2018, respectively 8,870 12,733
Prepaid expenses 15,739 4,673
Other current assets 9,691 9,510
Total current assets 1,018,880 494,925
Long-term investments 12,533 16,052
Property and equipment, net 72,937 59,904
Goodwill 149,481 149,524
Intangible assets, net 24,097 25,915
Right of use assets 15,875 0
Other assets 15,412 14,618
Total assets 1,309,215 760,938
Current liabilities    
Accounts payable 6,341 8,177
Deferred revenue 26,276 17,418
Current operating lease liabilities 4,640 0
Accrued liabilities 35,706 34,077
Total current liabilities 72,963 59,672
Long-term liabilities    
Convertible senior notes, net 789,380 283,668
Long-term operating lease liabilities 15,424 0
Other long-term liabilities 3,311 6,964
Total long-term liabilities 808,115 290,632
Total liabilities 881,078 350,304
Commitments and contingencies (Note 9)
Stockholders' equity:    
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding 0 0
Common stock, $0.001 par value 400,000,000 shares authorized; 118,196,707 and 115,500,418 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively 118 116
Additional paid-in capital 839,924 818,113
Accumulated other comprehensive loss (900) (1,019)
Accumulated deficit (411,005) (406,576)
Total stockholders' equity 428,137 410,634
Total liabilities and stockholders' equity $ 1,309,215 $ 760,938
v3.19.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts receivable, current $ 27 $ 229
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 400,000,000 400,000,000
Common stock, shares issued 118,196,707 115,500,418
Common stock, shares outstanding 118,196,707 115,500,418
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Income Statement [Abstract]    
Net revenues $ 97,409 $ 76,949
Cost of revenues 23,335 20,224
Gross profit 74,074 56,725
Operating expenses:    
Research and development 32,692 25,533
Sales and marketing 18,717 15,336
General and administrative 23,670 18,256
Restructuring charges 22 220
Total operating expenses 75,101 59,345
Loss from operations (1,027) (2,620)
Interest expense and other income, net:    
Interest expense, net (4,232) (20)
Other income, net 1,567 564
Total interest expense and other income, net (2,665) 544
Loss before provision for income taxes (3,692) (2,076)
Provision for income taxes 626 541
Net loss $ (4,318) $ (2,617)
Net loss per share, basic and diluted (in dollars per share) $ (0.04) $ (0.02)
Weighted average shares used to compute net loss per share, basic and diluted (in shares) 116,730 110,904
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Statement of Comprehensive Income [Abstract]    
Net loss $ (4,318) $ (2,617)
Other comprehensive income:    
Change in net unrealized gain (loss) on available for sale investments, net of tax 119 (91)
Change in foreign currency translation adjustments, net of tax 0 511
Other comprehensive income 119 420
Total comprehensive loss $ (4,199) $ (2,197)
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Loss
Accumulated Deficit
Common stock, beginning balance (in shares) at Dec. 31, 2017   109,668,000      
Beginning balance at Dec. 31, 2017 $ 391,062 $ 110 $ 782,845 $ (282) $ (391,611)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Issuance of common stock upon exercise of stock options and ESPP (in shares)   628,000      
Issuance of common stock upon exercise of stock options and ESPP 5,219 $ 1 5,218    
Net issuance of common stock for settlement of RSUs (in shares)   2,419,000      
Net issuance of common stock for settlement of RSUs (35,638) $ 2 (35,640)    
Warrant exercises (in shares)   34,000      
Warrant exercises 0   0    
Share-based compensation expense 11,642   11,642    
Other comprehensive income 420     420  
Net loss (2,617)       (2,617)
Beginning balance at Mar. 31, 2018 $ 370,011 $ 113 764,065 138 (394,305)
Common stock, ending balance (in shares) at Mar. 31, 2018   112,749,000      
Common stock, beginning balance (in shares) at Dec. 31, 2018 115,500,418 115,500,000      
Beginning balance at Dec. 31, 2018 $ 410,634 $ 116 818,113 (1,019) (406,576)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Equity component of convertible senior notes, net of issuance costs 180,887   180,887    
Purchase of convertible senior notes capped call (85,050)   (85,050)    
Repurchase of common stock (in shares)   (504,000)      
Repurchase of common stock (20,000) $ (1) (19,999)    
Issuance of common stock upon exercise of stock options and ESPP (in shares)   709,000      
Issuance of common stock upon exercise of stock options and ESPP 5,820 $ 1 5,819    
Net issuance of common stock for settlement of RSUs (in shares)   2,451,000      
Net issuance of common stock for settlement of RSUs (76,042) $ 2 (76,044)    
Issuance of common stock in connection with acquisition (in shares)   41,000      
Issuance of common stock in connection with acquisition 1,160 $ 0 1,160    
Share-based compensation expense 15,038   15,038    
Other comprehensive income 119     119  
Net loss (4,318)       (4,318)
Beginning balance at Mar. 31, 2019 $ 428,137 $ 118 $ 839,924 $ (900) $ (411,005)
Common stock, ending balance (in shares) at Mar. 31, 2019 118,196,707 118,197,000      
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Cash flows from operating activities    
Net loss $ (4,318) $ (2,617)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Depreciation and amortization expense 6,785 5,217
Share-based compensation expense 15,038 11,642
Amortization of debt discount and issuance costs 4,005 0
Operating lease expense, net of accretion 1,049 0
Other non-cash items (44) (41)
Change in assets and liabilities:    
Accounts receivable 4,024 2,783
Prepaid expenses and other current assets (11,522) (7,894)
Other assets (1,166) (506)
Accounts payable (1,836) (3,068)
Deferred revenue 8,858 5,185
Accrued liabilities 216 (4,286)
Other liabilities (3,148) 138
Net cash provided by operating activities 17,941 6,553
Cash flows from investing activities    
Purchases of marketable securities (21,572) (12,511)
Maturities of marketable securities 48,805 21,630
Purchases of property and equipment (14,060) (4,883)
Net cash provided by investing activities 13,173 4,236
Cash flows from financing activities    
Common stock issued under stock plans, net 6,982 5,222
Payment of taxes related to the net share settlement of equity awards (76,044) (35,640)
Proceeds from issuance of convertible senior notes, net of issuance costs 682,594 0
Purchase of convertible senior notes capped call (85,050) 0
Repurchase of common stock (20,000) 0
Net cash provided by (used in) financing activities 508,482 (30,418)
Net increase (decrease) in cash, cash equivalents and restricted cash 539,596 (19,629)
Cash, cash equivalents and restricted cash, beginning of period 375,945 126,963
Cash, cash equivalents and restricted cash, end of period 915,541 107,334
Supplemental cash flow data:    
Interest 0 19
Income taxes 626 503
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows from operating leases 1,126 0
Non-cash investing activities:    
Accrued purchases of long-lived assets $ 5,127 $ 3,204
v3.19.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - Reconciliation of cash, cash equivalents and restricted cash - USD ($)
$ in Thousands
Mar. 31, 2019
Mar. 31, 2018
Statement of Cash Flows [Abstract]    
Cash and cash equivalents $ 914,500 $ 106,827
Cash and cash equivalents 121 84
Restricted cash included in other assets 920 423
Total cash, cash equivalents and restricted cash $ 915,541 $ 107,334
v3.19.1
Background and Basis of Presentation
3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Background and Basis of Presentation
Background and Basis of Presentation

Company and Background

Chegg, Inc. (Chegg, the Company, we, us, or our), headquartered in Santa Clara, California, was incorporated as a Delaware corporation in July 2005. Chegg is 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.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of March 31, 2019, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, the condensed consolidated statements of stockholder's equity, and the condensed consolidated statements of cash flows for the three months ended March 31, 2019 and 2018 and the related footnote disclosures are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2019, our results of operations, stockholder's equity, and cash flows for the three months ended March 31, 2019 and 2018. Our results of operations, stockholder's equity, and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year.

We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2018 as 2018.

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, 2018 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC).

Except for our policies on leases and convertible senior notes, 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.

Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right of use (ROU) assets, operating lease liabilities within current liabilities, and operating lease liabilities within long-term liabilities on our condensed consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Our leases do not provide an implicit rate and therefore we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future minimum lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. We do not record leases on our condensed consolidated balance sheet with a term of one year or less. We do not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Some of our leases include payments that are dependent on an index, such as the Consumer Price Index (CPI), and our minimum lease payments include payments based on the index at inception with any future changes in such indices recognized as an expense in the period of change. Where leases contain escalation clauses, rent abatements, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line operating lease cost over the lease term. Operating lease cost for minimum lease payments is recognized on a straight-line basis over the lease term.

Convertible Senior Notes, net

In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes) and in April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2025 notes and 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the carrying amount of the liability component from the par value of the notes. The difference represents the debt discount, recorded as a reduction of the convertible senior notes on our condensed consolidated balance sheet, and is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability component are being amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. The issuance costs attributable to the equity component are recorded as a reduction of the equity component within additional paid-in capital.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, restructuring charges (credits), share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, the valuation of our convertible senior notes, and operating lease ROU assets and operating lease liabilities. We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance contained within subtopic 350-40 to develop or obtain internal-use software. Early adoption is permitted and the guidance allows for a retrospective or prospective application. The guidance is effective for annual periods beginning after December 15, 2019, and we are currently in the process of evaluating the impact of this guidance.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements. ASU 2018-09 provides updates for technical corrections, clarifications, and other minor improvements to a wide variety of topics in the ASC. The transition method of adoption is dependent on the ASC topic impacted by this guidance. Additionally, some of the ASC topic updates are effective upon issuance of ASU 2018-09 and some of the ASC topic updates are effective at a future date. The ASC topic updates effective upon issuance of ASU 2018-09 do not impact our accounting for the respective ASC topics. For those ASC topic updates effective at a future date, we are currently in the process of evaluating the impact of this guidance update.

Recently Adopted Accounting Pronouncements

The FASB has issued four ASUs related to Accounting Standards Codification (ASC) 842. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements and ASU 2018-10, Codification Improvements to Topic 842, Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASC 842 requires an entity to recognize a ROU asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements.

We have adopted ASC 842 on January 1, 2019 and have elected the transition method of adoption that allows for a modified retrospective adoption with a cumulative-effect adjustment to the opening balance of accumulated deficit and recorded an immaterial decrease to our opening balance of accumulated deficit. As a result, we have not changed previously disclosed amounts or provided additional disclosures for comparative periods. We initially recorded ROU assets of $17.2 million and lease liabilities of $21.1 million on our condensed consolidated balance sheet. ASC 842 does not have a material impact to our condensed consolidated statement of operations. We have elected a package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We have also elected a practical expedient to not separate lease and non-lease components. We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets. See Note 8. Leases for more information.
v3.19.1
Revenues
3 Months Ended
Mar. 31, 2019
Revenue from Contract with Customer [Abstract]  
Revenues
Revenues

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues, most significantly the revenue share we earn from our print textbook partners, being recognized at the point in time when print textbooks are shipped to students.

The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):

 
Three Months Ended 
 March 31,
 
Change
 
2019
 
2018
 
$
 
%
Chegg Services
$
75,292

 
$
56,277

 
$
19,015

 
34
%
Required Materials
22,117

 
20,672

 
1,445

 
7
%
Total net revenues
$
97,409

 
$
76,949

 
$
20,460

 
27
%


During the three months ended March 31, 2019, we recognized $12.4 million of revenues that were included in our deferred revenue balance as of December 31, 2018. During the three months ended March 31, 2019, there was an immaterial amount of revenues recognized from performance obligations satisfied in previous periods. The aggregate amount of unsatisfied performance obligations is approximately $29.0 million as of March 31, 2019, of which substantially all is expected to be recognized into revenues over the next year and the remainder within three years.

Contract Balances

The following table presents our accounts receivable, net and deferred revenue balances (in thousands, except percentages):
 
 
 
Change
 
March 31, 2019
 
December 31, 2018
 
$
 
%
Accounts receivable, net
$
8,870

 
$
12,733

 
$
(3,863
)
 
(30
)%
Deferred revenue
$
26,276

 
$
17,418

 
$
8,858

 
51
 %


During the three months ended March 31, 2019, our accounts receivable, net balance decreased by $3.9 million, or 30%, primarily due to an improvement in cash collections. During the three months ended March 31, 2019, our deferred revenue balance increased by $8.9 million, or 51%, primarily due to increased bookings for our Chegg Study service and eTextbook rentals driven by the seasonality of our business as well as the deferred variable consideration. Our contract assets balance was immaterial as of March 31, 2019 and December 31, 2018.
v3.19.1
Net Loss Per Share
3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]  
Net Loss Per Share
Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and shares related to convertible senior notes, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.

The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Numerator:
 
 
 
Net loss
$
(4,318
)
 
$
(2,617
)
Denominator:
 
 
 
Weighted average shares used to compute net loss per share, basic and diluted
116,730

 
110,904

 
 
 
 
Net loss per share, basic and diluted
$
(0.04
)
 
$
(0.02
)


The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Options to purchase common stock
3,258

 
4,079

RSUs and PSUs
6,732

 
8,791

Shares related to convertible senior notes
3,332

 

Employee stock purchase plan
41

 

Total common stock equivalents
13,363

 
12,870



Shares related to convertible senior notes represents the anti-dilutive impact of our issuance of $345 million in aggregate principal amount of our 0.25% convertible senior notes due in 2023 (2023 notes) as the average price of our common stock during the three months ended March 31, 2019 was higher than the conversion price of $26.95. While these shares are anti-dilutive during the three months ended March 31, 2019, they may be dilutive in periods we report net income. However, as a result of the capped call transactions described in Note 7, there will be no economic dilution from the 2023 notes up to $40.68, as exercise of the capped call instruments will reduce any dilution from the notes that would have otherwise occurred when the average price of our common stock exceeds the conversion price. None of the shares related to our issuance of $700 million in aggregate principal amount of our 0.125% convertible senior notes due in 2025 (2025 notes) were anti-dilutive during the three months ended March 31, 2019.
v3.19.1
Cash and Cash Equivalents, and Investment
3 Months Ended
Mar. 31, 2019
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents, and Investment
Cash and Cash Equivalents, and Investments
 
The following table shows our cash and cash equivalents, and investments’ adjusted cost, net unrealized gain/(loss) and fair value as of March 31, 2019 and December 31, 2018 (in thousands):
 
March 31, 2019
 
December 31, 2018
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
 
Cost
 
Net Unrealized Loss
 
Fair Value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
Cash
$
279,928

 
$

 
$
279,928

 
$
351,345

 
$

 
$
351,345

Money market funds
613,210

 

 
613,210

 
5,052

 

 
5,052

Commercial paper
21,369

 
(7
)
 
21,362

 
18,267

 

 
18,267

Total cash and cash equivalents
$
914,507

 
$
(7
)
 
$
914,500

 
$
374,664

 
$

 
$
374,664

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
$
28,360

 
$
(3
)
 
$
28,357

 
$
40,500

 
$
(12
)
 
$
40,488

Corporate securities
26,235

 
(3
)
 
26,232

 
38,616

 
(87
)
 
38,529

U.S. treasury securities
15,488

 
3

 
15,491

 
14,333

 
(5
)
 
14,328

Total short-term investments
$
70,083

 
$
(3
)
 
$
70,080

 
$
93,449

 
$
(104
)
 
$
93,345

Long-term investments:
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
10,842

 
$
56

 
$
10,898

 
$
14,429

 
$
(5
)
 
$
14,424

U.S. treasury securities
1,633

 
2

 
1,635

 
1,630

 
(2
)
 
1,628

Total long-term investments
$
12,475

 
$
58

 
$
12,533

 
$
16,059

 
$
(7
)
 
$
16,052


 
The adjusted cost and fair value of available-for-sale investments as of March 31, 2019 by contractual maturity were as follows (in thousands):
 
Cost
 
Fair Value
Due in 1 year or less
$
91,452

 
$
91,442

Due in 1-2 years
12,475

 
12,533

Investments not due at a single maturity date
613,210

 
613,210

Total
$
717,137

 
$
717,185



Investments not due at a single maturity date in the preceding table consist of money market fund deposits.

As of March 31, 2019, we considered the declines in market value of our investment portfolio to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired. We typically invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of one month, and our investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and our intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the three months ended March 31, 2019 and 2018, we did not recognize any impairment charges.

Restricted Cash

As of March 31, 2019 and December 31, 2018, we had approximately $1.0 million and $1.3 million, respectively, of restricted cash that consists of security deposits for our corporate offices. These amounts are classified in either other current assets or other assets on our condensed consolidated balance sheets based on the remaining term of the lease from the balance sheet dates.

Strategic Investments

In October 2018, we completed an investment of $10.0 million in WayUp, Inc., a U.S.-based job site and mobile application for college students and recent graduates. Additionally, we previously invested $3.0 million in a foreign entity to explore expanding our reach internationally. We did not record other-than-temporary impairment charges on our investments during the three months ended March 31, 2019 and 2018, as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment. There were no observable price changes in orderly transactions for the identical or a similar investment of the same issuer during the three months ended March 31, 2019 and 2018.
v3.19.1
Fair Value Measurement
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurement
Fair Value Measurement

We have established a fair value hierarchy used to determine the fair value of our financial instruments as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments.

Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value; the inputs require significant management judgment or estimation.

A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Financial instruments measured and recorded at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are classified based on the valuation technique level in the tables below (in thousands):
 
March 31, 2019
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant
Other Observable
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
613,210

 
$
613,210

 
$

Commercial paper
21,362

 

 
21,362

Short-term investments:
 
 
 
 
 
Commercial paper
28,357

 

 
28,357

Corporate securities
26,232

 

 
26,232

U.S. treasury securities
15,491

 
15,491

 

Long-term investments:
 
 
 
 
 
Corporate securities
10,898

 

 
10,898

U.S. treasury securities
1,635

 
1,635

 

Total assets measured and recorded at fair value
$
717,185

 
$
630,336

 
$
86,849


 
December 31, 2018
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant 
Other Observable 
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
5,052

 
$
5,052

 
$

Commercial paper
18,267

 

 
18,267

Short-term investments:

 
 
 
 
Commercial paper
40,488

 

 
40,488

Corporate securities
38,529

 

 
38,529

U.S. treasury securities
14,328

 
14,328

 

Long-term investments:
 
 
 
 
 
Corporate securities
14,424

 

 
14,424

U.S. treasury securities
1,628

 
1,628

 

Total assets measured and recorded at fair value
$
132,716

 
$
21,008

 
$
111,708


 
We value our marketable securities based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. Other than our money market funds and U.S. treasury securities, we classify our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. We do not hold any marketable securities valued with a Level 3 input.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
 
Financial Instruments Not Recorded at Fair Value on a Recurring Basis

We report our financial instruments at fair value with the exception of the 2023 notes and 2025 notes. Collectively, the 2025 notes and 2023 notes are referred to as the “notes.” The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period. We consider the fair value of the notes to be a Level 2 measurement due to the limited trading activity. For further information on the notes see Note 7.

The carrying amounts and estimated fair values of the notes as of March 31, 2019 and December 31, 2018 are as follows (in thousands):
 
March 31, 2019
 
December 31, 2018
 
Carrying Amount
 
Estimated Fair Value
 
Carrying Amount
 
Estimated Fair Value
2025 notes
$
502,252

 
$
693,945

 
$

 
$

2023 notes
$
287,128

 
$
520,108

 
$
283,668

 
$
416,156

Convertible senior notes, net
$
789,380

 
$
1,214,053

 
$
283,668

 
$
416,156



The carrying amount of the 2025 notes and 2023 notes as of March 31, 2019 was net of unamortized debt discount of $185.0 million and $51.7 million, respectively, and unamortized issuance costs of $12.8 million and $6.1 million, respectively. The carrying amount of the 2023 notes as of December 31, 2018 was net of unamortized debt discount of $54.8 million and unamortized issuance costs of $6.5 million.
v3.19.1
Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets
Goodwill and Intangible Assets

Goodwill consists of the following (in thousands):
 
March 31, 2019
 
December 31, 2018
Beginning balance
$
149,524

 
$
125,272

Additions due to acquisitions

 
24,673

Foreign currency translation adjustment
(43
)
 
(421
)
Ending balance
$
149,481

 
$
149,524



Intangible assets as of March 31, 2019 and December 31, 2018 consist of the following (in thousands, except weighted-average amortization period):
 
March 31, 2019
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(14,821
)
 
$
16,846

Customer lists
47

 
9,970

 
(7,188
)
 
2,782

Trade names
44

 
6,113

 
(5,162
)
 
951

Non-compete agreements
31

 
2,018

 
(1,801
)
 
217

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(299
)
 

 
(299
)
Total intangible assets
61

 
$
53,069

 
$
(28,972
)
 
$
24,097

 
 
December 31, 2018
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(13,737
)
 
$
17,930

Customer lists
47

 
9,970

 
(6,847
)
 
3,123

Trade names
44

 
6,113

 
(4,863
)
 
1,250

Non-compete agreements
31

 
2,018

 
(1,735
)
 
283

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(271
)
 

 
(271
)
Total intangible assets
61

 
$
53,097

 
$
(27,182
)
 
$
25,915



During the three months ended March 31, 2019 and 2018, amortization expense related to our acquired intangible assets totaled approximately $1.8 million and $1.4 million, respectively.

As of March 31, 2019, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
Remaining nine months of 2019
$
4,658

2020
4,816

2021
3,423

2022
2,943

2023
2,276

Thereafter
2,381

Total
$
20,497

v3.19.1
Convertible Senior Notes
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Convertible Senior Notes
Convertible Senior Notes

In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes). In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). The aggregate principal amount of the 2023 notes includes $45 million from the initial purchasers fully exercising their option to purchase additional notes. Collectively, the 2025 notes and 2023 notes are referred to as the “notes.” The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.

The total net proceeds from the notes are as follows (in thousands):
 
2025 Notes
 
2023 Notes
Principal amount
$
700,000

 
$
345,000

Less initial purchasers’ discount
(16,625
)
 
(8,625
)
Less other issuance costs
(781
)
 
(757
)
Net proceeds
$
682,594

 
$
335,618



The notes are our senior, unsecured obligations and are governed by indenture agreements by and between us and Wells Fargo Bank, National Association, as Trustee (the indentures). The 2025 notes bear interest of 0.125% per year which is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The 2025 notes will mature on March 15, 2025 (the 2025 notes maturity date), unless repurchased, redeemed or converted in accordance with their terms prior to such date. The 2023 notes bear interest of 0.25% per year which is payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2018. The 2023 notes will mature on May 15, 2023 (the 2023 notes maturity date), unless repurchased, redeemed or converted in accordance with their terms prior to such date.

Each $1,000 principal amount of the 2025 notes will initially be convertible into 19.3956 shares of our common stock. This is equivalent to an initial conversion price of approximately $51.56 per share, which is subject to adjustment in certain circumstances. Each $1,000 principal amount of the 2023 notes will initially be convertible into 37.1051 shares of our common stock. This is equivalent to an initial conversion price of approximately $26.95 per share, which is subject to adjustment in certain circumstances.

Prior to the close of business on the business day immediately preceding December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes, the notes are convertible at the option of holders only upon satisfaction of the following circumstances:

during any calendar quarter commencing after the calendar quarter ending on June 30, 2019 for the 2025 notes and June 30, 2018 for the 2023 notes, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the respective conversion price for the notes on each applicable trading day;
during the five business day period after any ten consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;
if we call any or all of the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or
upon the occurrence of certain specified corporate events described in the indentures.

On or after December 15, 2024 for the 2025 notes and February 15, 2023 for the 2023 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the notes may be settled in shares of our common stock, cash or a combination of cash and shares of our common stock, at our election.

If we undergo a fundamental change, as defined in the indentures, prior to the respective maturity dates, subject to certain conditions, holders of the notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events, described in the indentures, occur prior to the respective maturity dates, we will also increase the conversion rate for a holder who elects to convert their notes in connection with such specified corporate events.

During the three months ended March 31, 2019, the conditions allowing holders of the 2025 notes to convert have not been met and are therefore not convertible during the three months ended March 31, 2019. During the three months ended March 31, 2019, the conditions allowing holders of the 2023 notes to convert have been met and are therefore convertible during the three months ended March 31, 2019. None of the holders of the 2023 notes elected to convert their notes into shares of our common stock during the three months ended March 31, 2019.

In accounting for the issuance of the notes, we separated the notes into liability and equity components. The carrying amount of the liability components for the 2025 notes and 2023 notes of approximately $514.5 million and $280.8 million, respectively, was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature. The carrying amount of the equity components for the 2025 notes and 2023 notes of approximately $185.5 million and $64.2 million, respectively, representing the conversion option, was determined by deducting the carrying amount of the liability components from the principal amount of the notes. This difference between the principal amount of the notes and the liability components represents the debt discount, presented as a reduction to the notes on our condensed consolidated balance sheet, and is amortized to interest expense using the effective interest method over the remaining term of the notes. The equity components of the notes are included in additional paid-in capital on our condensed consolidated balance sheet and is not remeasured as long as it continues to meet the conditions for equity classification.

We incurred issuance costs related to the 2025 notes of approximately $17.4 million, consisting of the initial purchasers' discount of $16.6 million and other issuance costs of approximately $0.8 million. We incurred issuance costs related to the 2023 notes of approximately $9.4 million, consisting of the initial purchasers' discount of $8.6 million and other issuance costs of approximately $0.8 million. In accounting for the issuance costs, we allocated the total amount incurred to the liability and equity components using the same proportions determined above for the notes. Transaction costs attributable to the liability components for the 2025 notes and 2023 notes of approximately $12.8 million and $7.6 million, respectively, were recorded as debt issuance cost, presented as a reduction to the notes on our condensed consolidated balance sheet, and are amortized to interest expense using the effective interest method over the term of the notes. The issuance costs attributable to the equity components for the 2025 notes and 2023 notes were approximately $4.6 million and $1.7 million, respectively, and were recorded as a reduction to the equity component included in additional paid-in capital.

The net carrying amount of the liability component of the notes is as follows (in thousands):
 
March 31, 2019
 
December 31, 2018
 
2025 Notes
 
2023 Notes
 
2023 Notes
Principal
$
700,000

 
$
345,000

 
$
345,000

Unamortized debt discount
(184,990
)
 
(51,725
)
 
(54,817
)
Unamortized issuance costs
(12,758
)
 
(6,147
)
 
(6,515
)
Net carrying amount
$
502,252

 
$
287,128

 
$
283,668

    
The net carrying amount of the equity component of the notes is as follows (in thousands):
 
March 31, 2019
 
December 31, 2018

2025 Notes
 
2023 Notes
 
2023 Notes
Debt discount for conversion option
$
185,500

 
$
64,193

 
$
64,193

Issuance costs
(4,613
)
 
(1,749
)
 
(1,749
)
Net carrying amount
$
180,887

 
$
62,444

 
$
62,444


    
As of March 31, 2019, the remaining lives of the 2025 notes and 2023 notes are approximately 6.0 and 4.1 years, respectively, and are classified as long-term debt.

Based on the closing price of our common stock of $38.12 on March 31, 2019, the if-converted value of the 2025 notes was approximately $517.6 million which is less than the principal amount of $700 million by approximately $182.4 million and the if-converted value of the 2023 notes was approximately $488.0 million which exceeds the principal amount of $345 million by approximately $143.0 million.

The effective interest rate of the liability components for the 2025 notes and 2023 notes are 5.4% and 4.34%, respectively, and is based on the interest rate of similar debt instruments, at the time of our offering, that do not have associated convertible features. The following table sets forth the total interest expense recognized related to the notes (in thousands):
 
Three Months Ended 
 March 31, 2019
 
2025 Notes
 
2023 Notes
Contractual interest expense
$
14

 
$
213

Amortization of debt discount
510

 
3,091

Amortization of issuance costs
35

 
369

Total interest expense
$
559

 
$
3,673



Capped Call Transactions

Concurrently with the offering of the 2025 notes and 2023 notes, we used $85.1 million and $39.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to generally reduce or offset potential dilution to holders of our common stock upon conversion of the notes and/or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes. The capped call transactions cover 13,576,920 and 12,801,260 shares of our common stock for the 2025 notes and 2023 notes, respectively, and are intended to effectively increase the overall conversion price from $51.56 to $79.32 per share for the 2025 notes and $26.95 to $40.68 per share for the 2023 notes. As these transactions meet certain accounting criteria, they are recorded in stockholders’ equity as a reduction of additional paid-in capital on our condensed consolidated balance sheet and are not accounted for as derivatives. The fair value of the capped call instrument is not remeasured each reporting period. The cost of the capped call is not expected to be deductible for tax purposes.

Impact to Earnings per Share

The notes will have no impact to diluted earnings per share until the average price of Chegg’s common stock exceeds the conversion price for the 2025 notes and 2023 notes of $51.56 and $26.95 per share, respectively, because we intend to settle the principal amount of the notes in cash upon conversion. Under the treasury stock method, in periods we report net income, we are required to include the effect of additional shares that may be issued under the notes when the average price of our common stock exceeds the conversion price. However, as a result of the capped call transactions described above, there will be no economic dilution from the 2025 notes and 2023 notes up to $79.32 and $40.68, respectively, as exercise of the capped call instruments will reduce any dilution from the notes that would have otherwise occurred when the average price of our common stock exceeds the conversion price.
v3.19.1
Leases
3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
Leases
Leases

We have operating leases for corporate offices worldwide, which expire at various dates through 2024. Our primary operating lease commitments at March 31, 2019 are related to our corporate headquarters in Santa Clara, California. We have additional offices in California, Oregon, Georgia and New York in the United States and internationally in India, Israel and Germany.

As of March 31, 2019, we had operating lease ROU assets of $15.9 million and operating lease liabilities of $20.1 million. As of March 31, 2019, we do not have finance leases recorded on our condensed consolidated balance sheet. As of March 31, 2019, our weighted average remaining lease term was 4.3 years. During the three months ended March 31, 2019, our weighted average discount rate was 4.7%.

Operating lease expense was approximately $1.3 million during the three months ended March 31, 2019. Variable lease cost was immaterial during the three months ended March 31, 2019. We did not record any sublease income or short term lease cost during the three months ended March 31, 2019.

The aggregate future minimum lease payments and reconciliation to lease liabilities as of March 31, 2019, are as follows (in thousands):
 
March 31, 2019
Remaining nine months of 2019
$
4,101

2020
5,200

2021
4,724

2022
3,948

2023
3,424

Thereafter
788

Total future minimum lease payments
22,185

Less imputed interest
(2,121
)
Total lease liabilities
$
20,064


The aggregate future minimum lease payments as of December 31, 2018, are as follows (in thousands):
 
December 31, 2018
2019
$
5,222

2020
5,251

2021
4,775

2022
3,999

2023
3,421

Thereafter
788

Total
$
23,456

v3.19.1
Commitments and Contingencies
3 Months Ended
Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Commitments and Contingencies

From time to time, third parties may assert patent infringement claims against us in the form of letters, litigation, or other forms of communication. In addition, we may from time to time be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, disputes, or investigations. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters.

On September 27, 2018 a purported securities class action captioned Shah v. Chegg, Inc. et. al. (Case No. 3:18-cv-05956-CRB) was filed in the U.S. District Court for the Northern District of California against us and our CEO. The complaint was filed by a purported Company shareholder and alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and SEC Rule 10b-5, based on allegedly misleading statements regarding the Company’s security measures to protect users’ data and related internal controls and procedures, as well as our second quarter 2018 financial results. The suit is purportedly brought on behalf of purchasers of our securities between July 30, 2018 and September 25, 2018. The complaint seeks unspecified compensatory damages, as well as interest, costs and attorneys’ fees. On November 15, 2018, a second purported securities class action captioned Kurland v. Chegg, Inc. et al. (Case No. 3:18-cv-06714-CRB) was filed in the U.S. District Court for the Northern District of California against us, our CEO, and our CFO. The Shah and Kurland actions contain similar allegations, assert similar claims, and seek similar relief, and on January 24, 2019, the Court consolidated the two actions. On March 29, 2019, the Plaintiffs filed a Lead Plaintiff's notice of Voluntary Dismissal Without Prejudice.
NetSoc, LLC (“NetSoc”) filed a complaint for patent infringement against us in the U.S. District Court for the Southern District of New York on November 5, 2018.  NetSoc alleges that our Chegg Tutors service infringes U.S. Patent No. 9,978,107 (“the ’107 Patent”).  A responsive pleading was filed on February 19, 2019 and an initial status conference was held on March 1, 2019.  The parties have been ordered to schedule mediation. The complaint seeks unspecified compensatory damages.

We have not recorded any amounts related to the above matters, as we do not believe that a loss is probable in either matter. We are not aware of any other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our consolidated financial position, results of operations or cash flows. However, our analysis of whether a claim may 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. An adverse outcome in any of these actions, including a judgment or settlement, may cause a material adverse effect on our future business, operating results and/or financial condition.
v3.19.1
Guarantees and Indemnifications
3 Months Ended
Mar. 31, 2019
Guarantees And Indemnifications [Abstract]  
Guarantees and Indemnifications
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 limits our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited.

We believe the fair value of these indemnification agreements is minimal. We have not recorded any liabilities for these agreements as of March 31, 2019.
v3.19.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stockholders' Equity
Stockholders' Equity

In conjunction with our 2025 notes offering in March 2019, we repurchased 504,286 shares of our common stock at an average price per share of $39.66.

Share-based Compensation Expense

Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Cost of revenues
$
125

 
$
94

Research and development
4,917

 
4,133

Sales and marketing
1,808

 
1,589

General and administrative
8,188

 
5,826

Total share-based compensation expense
$
15,038

 
$
11,642



RSU and PSU Activity

Activity for RSUs and PSUs is as follows:
 
 
RSUs and PSUs Outstanding
 
Number of RSUs and PSUs
Outstanding
 
Weighted 
Average Grant Date 
Fair Value
Balance at December 31, 2018
10,804,808

 
$
11.87

Granted
1,440,428

 
39.95

Released
(4,352,468
)
 
8.97

Canceled
(727,939
)
 
7.12

Balance at March 31, 2019
7,164,829

 
$
19.76



As of March 31, 2019, our total unrecognized share-based compensation expense related to RSUs and PSUs was approximately $98.1 million, which will be recognized over the remaining weighted-average vesting period of approximately 1.9 years.
v3.19.1
Income Taxes
3 Months Ended
Mar. 31, 2019
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes

We recorded an income tax provision of approximately $0.6 million and $0.5 million during the three months ended March 31, 2019 and 2018, respectively, primarily due to state and foreign income tax expense.
v3.19.1
Restructuring Charges
3 Months Ended
Mar. 31, 2019
Restructuring and Related Activities [Abstract]  
Restructuring Charges
Restructuring Charges

2017 Restructuring Plan

In January 2017, we entered into a strategic partnership with the National Research Center for College & University Admissions (NRCCUA) where they will assume responsibility for managing, renewing, and maintaining our existing university contracts and become the exclusive reseller of our digital marketing services for colleges and universities. As a result of this strategic partnership, approximately 55 employees in China and the United States supporting the sales and account support functions of our marketing services offerings were terminated. Costs incurred to date are expected to be fully paid within 1 month.

2015 Restructuring Plan

We recorded a reduction of $0.3 million to our 2015 Restructuring Plan liability related to our adoption of ASU 2016-02, Leases (Topic 842) during the three months ended March 31, 2019. Our 2015 Restructuring Plan is now complete.

The following table summarizes the activity related to the accrual for restructuring charges (in thousands):
 
2017 Restructuring Plan
 
2015 Restructuring Plan
 
 
 
Workforce Reduction Costs
 
Lease Termination and Other Costs
 
Lease Termination and Other Costs
 
Total
Balance at January 1, 2018
$
44

 
$

 
$
221

 
$
265

Restructuring charges
253

 
19

 
317

 
589

Cash payments
(151
)
 
(19
)
 
(218
)
 
(388
)
Write-offs

 

 
(18
)
 
(18
)
Balance at December 31, 2018
146

 

 
302

 
448

Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02

 

 
(302
)
 
(302
)
Restructuring charges
22

 

 

 
22

Cash payments
(132
)
 

 

 
(132
)
Balance at March 31, 2019
$
36

 
$

 
$

 
$
36

v3.19.1
Related-Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
Related-Party Transactions
Related-Party Transactions

Our Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the three months ended March 31, 2019 and 2018, we had purchases of $1.0 million and $1.7 million, respectively, from Adobe. We had no revenues during the three months ended March 31, 2019 and $0.1 million of revenues during the three months ended March 31, 2018 from Adobe. We had an immaterial amount in payables as of March 31, 2019 and December 31, 2018 to Adobe. We had no outstanding receivables as of March 31, 2019 and December 31, 2018 from Adobe.

One of our board members is also a member of the Board of Directors of Cengage Learning, Inc. (Cengage).  During the three months ended March 31, 2019 and 2018, we had purchases of $9.1 million and $5.1 million, respectively, from Cengage.  We had $1.2 million and $1.9 million of revenues during the three months ended March 31, 2019, respectively, from Cengage. We had $0.5 million and $0.1 million in payables as of March 31, 2019 and December 31, 2018, respectively, to Cengage. We had an immaterial amount of outstanding receivables as of March 31, 2019 and December 31, 2018 from Cengage.

The immediate family of one of our board members is also a member of the Board of Directors of PayPal Holdings, Inc. (PayPal). During the three months ended March 31, 2019 and 2018, we incurred payment processing fees of $0.4 million to PayPal.

One of our board members is also a member of the Board of Directors of Synack, Inc. (Synack). During the three months ended March 31, 2019, we had purchases of $0.3 million of services from Synack.
v3.19.1
Subsequent Event
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event

On April 3, 2019, in conjunction with our March 2019 issuance of the 2025 notes, we issued an additional $100 million of the 2025 notes from the initial purchasers fully exercising their option to purchase additional notes. We used approximately $12.2 million of the additional proceeds to pay for the cost of additional privately negotiated capped call transactions. The notes from this additional issuance and additional capped call transactions follow the same terms as disclosed in Note 7. Convertible Senior Notes.
v3.19.1
Background and Basis of Presentation (Policies)
3 Months Ended
Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying condensed consolidated balance sheet as of March 31, 2019, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, the condensed consolidated statements of stockholder's equity, and the condensed consolidated statements of cash flows for the three months ended March 31, 2019 and 2018 and the related footnote disclosures are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of March 31, 2019, our results of operations, stockholder's equity, and cash flows for the three months ended March 31, 2019 and 2018. Our results of operations, stockholder's equity, and cash flows for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year.

We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2018 as 2018.

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, 2018 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC).

Except for our policies on leases and convertible senior notes, 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.

Leases
Leases

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right of use (ROU) assets, operating lease liabilities within current liabilities, and operating lease liabilities within long-term liabilities on our condensed consolidated balance sheet. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Our leases do not provide an implicit rate and therefore we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future minimum lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. We do not record leases on our condensed consolidated balance sheet with a term of one year or less. We do not separate lease and non-lease components but rather account for each separate component as a single lease component for all underlying classes of assets. Some of our leases include payments that are dependent on an index, such as the Consumer Price Index (CPI), and our minimum lease payments include payments based on the index at inception with any future changes in such indices recognized as an expense in the period of change. Where leases contain escalation clauses, rent abatements, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line operating lease cost over the lease term. Operating lease cost for minimum lease payments is recognized on a straight-line basis over the lease term.
Convertible Senior Notes, net
Convertible Senior Notes, net

In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes) and in April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2025 notes and 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of similar liabilities that do not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the carrying amount of the liability component from the par value of the notes. The difference represents the debt discount, recorded as a reduction of the convertible senior notes on our condensed consolidated balance sheet, and is amortized to interest expense over the term of the notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. In accounting for the issuance costs related to the notes, we allocated the total amount of issuance costs incurred to liability and equity components based on their relative values. Issuance costs attributable to the liability component are being amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. The issuance costs attributable to the equity component are recorded as a reduction of the equity component within additional paid-in capital.
Use of Estimates
Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, restructuring charges (credits), share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, the valuation of acquired intangible assets, the valuation of our convertible senior notes, and operating lease ROU assets and operating lease liabilities. We base our estimates on historical experience, knowledge of current business conditions, and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations.
Recent Accounting Pronouncements
Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In August 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with existing guidance contained within subtopic 350-40 to develop or obtain internal-use software. Early adoption is permitted and the guidance allows for a retrospective or prospective application. The guidance is effective for annual periods beginning after December 15, 2019, and we are currently in the process of evaluating the impact of this guidance.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements. ASU 2018-09 provides updates for technical corrections, clarifications, and other minor improvements to a wide variety of topics in the ASC. The transition method of adoption is dependent on the ASC topic impacted by this guidance. Additionally, some of the ASC topic updates are effective upon issuance of ASU 2018-09 and some of the ASC topic updates are effective at a future date. The ASC topic updates effective upon issuance of ASU 2018-09 do not impact our accounting for the respective ASC topics. For those ASC topic updates effective at a future date, we are currently in the process of evaluating the impact of this guidance update.

Recently Adopted Accounting Pronouncements

The FASB has issued four ASUs related to Accounting Standards Codification (ASC) 842. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements and ASU 2018-10, Codification Improvements to Topic 842, Leases. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASC 842 requires an entity to recognize a ROU asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements.

We have adopted ASC 842 on January 1, 2019 and have elected the transition method of adoption that allows for a modified retrospective adoption with a cumulative-effect adjustment to the opening balance of accumulated deficit and recorded an immaterial decrease to our opening balance of accumulated deficit. As a result, we have not changed previously disclosed amounts or provided additional disclosures for comparative periods. We initially recorded ROU assets of $17.2 million and lease liabilities of $21.1 million on our condensed consolidated balance sheet. ASC 842 does not have a material impact to our condensed consolidated statement of operations. We have elected a package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We have also elected a practical expedient to not separate lease and non-lease components. We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets. See Note 8. Leases for more information.

Revenue Recognition
Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues, most significantly the revenue share we earn from our print textbook partners, being recognized at the point in time when print textbooks are shipped to students.
Net Loss Per Share
Net Loss Per Share

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and shares related to convertible senior notes, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.

v3.19.1
Revenues (Tables)
3 Months Ended
Mar. 31, 2019
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following table sets forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages):

 
Three Months Ended 
 March 31,
 
Change
 
2019
 
2018
 
$
 
%
Chegg Services
$
75,292

 
$
56,277

 
$
19,015

 
34
%
Required Materials
22,117

 
20,672

 
1,445

 
7
%
Total net revenues
$
97,409

 
$
76,949

 
$
20,460

 
27
%
Schedule of Accounts Receivable
The following table presents our accounts receivable, net and deferred revenue balances (in thousands, except percentages):
 
 
 
Change
 
March 31, 2019
 
December 31, 2018
 
$
 
%
Accounts receivable, net
$
8,870

 
$
12,733

 
$
(3,863
)
 
(30
)%
Deferred revenue
$
26,276

 
$
17,418

 
$
8,858

 
51
 %
v3.19.1
Net Loss Per Share (Tables)
3 Months Ended
Mar. 31, 2019
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Numerator:
 
 
 
Net loss
$
(4,318
)
 
$
(2,617
)
Denominator:
 
 
 
Weighted average shares used to compute net loss per share, basic and diluted
116,730

 
110,904

 
 
 
 
Net loss per share, basic and diluted
$
(0.04
)
 
$
(0.02
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share because including them would have been anti-dilutive (in thousands):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Options to purchase common stock
3,258

 
4,079

RSUs and PSUs
6,732

 
8,791

Shares related to convertible senior notes
3,332

 

Employee stock purchase plan
41

 

Total common stock equivalents
13,363

 
12,870

v3.19.1
Cash and Cash Equivalents, and Investment (Tables)
3 Months Ended
Mar. 31, 2019
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Investments
The following table shows our cash and cash equivalents, and investments’ adjusted cost, net unrealized gain/(loss) and fair value as of March 31, 2019 and December 31, 2018 (in thousands):
 
March 31, 2019
 
December 31, 2018
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
 
Cost
 
Net Unrealized Loss
 
Fair Value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
Cash
$
279,928

 
$

 
$
279,928

 
$
351,345

 
$

 
$
351,345

Money market funds
613,210

 

 
613,210

 
5,052

 

 
5,052

Commercial paper
21,369

 
(7
)
 
21,362

 
18,267

 

 
18,267

Total cash and cash equivalents
$
914,507

 
$
(7
)
 
$
914,500

 
$
374,664

 
$

 
$
374,664

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
$
28,360

 
$
(3
)
 
$
28,357

 
$
40,500

 
$
(12
)
 
$
40,488

Corporate securities
26,235

 
(3
)
 
26,232

 
38,616

 
(87
)
 
38,529

U.S. treasury securities
15,488

 
3

 
15,491

 
14,333

 
(5
)
 
14,328

Total short-term investments
$
70,083

 
$
(3
)
 
$
70,080

 
$
93,449

 
$
(104
)
 
$
93,345

Long-term investments:
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
10,842

 
$
56

 
$
10,898

 
$
14,429

 
$
(5
)
 
$
14,424

U.S. treasury securities
1,633

 
2

 
1,635

 
1,630

 
(2
)
 
1,628

Total long-term investments
$
12,475

 
$
58

 
$
12,533

 
$
16,059

 
$
(7
)
 
$
16,052

Schedule of Available-for-sale Securities Reconciliation
The adjusted cost and fair value of available-for-sale investments as of March 31, 2019 by contractual maturity were as follows (in thousands):
 
Cost
 
Fair Value
Due in 1 year or less
$
91,452

 
$
91,442

Due in 1-2 years
12,475

 
12,533

Investments not due at a single maturity date
613,210

 
613,210

Total
$
717,137

 
$
717,185

v3.19.1
Fair Value Measurement (Tables)
3 Months Ended
Mar. 31, 2019
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis
Financial instruments measured and recorded at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are classified based on the valuation technique level in the tables below (in thousands):
 
March 31, 2019
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant
Other Observable
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
613,210

 
$
613,210

 
$

Commercial paper
21,362

 

 
21,362

Short-term investments:
 
 
 
 
 
Commercial paper
28,357

 

 
28,357

Corporate securities
26,232

 

 
26,232

U.S. treasury securities
15,491

 
15,491

 

Long-term investments:
 
 
 
 
 
Corporate securities
10,898

 

 
10,898

U.S. treasury securities
1,635

 
1,635

 

Total assets measured and recorded at fair value
$
717,185

 
$
630,336

 
$
86,849


 
December 31, 2018
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant 
Other Observable 
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
5,052

 
$
5,052

 
$

Commercial paper
18,267

 

 
18,267

Short-term investments:

 
 
 
 
Commercial paper
40,488

 

 
40,488

Corporate securities
38,529

 

 
38,529

U.S. treasury securities
14,328

 
14,328

 

Long-term investments:
 
 
 
 
 
Corporate securities
14,424

 

 
14,424

U.S. treasury securities
1,628

 
1,628

 

Total assets measured and recorded at fair value
$
132,716

 
$
21,008

 
$
111,708


Fair Value Measurements, Nonrecurring
The carrying amounts and estimated fair values of the notes as of March 31, 2019 and December 31, 2018 are as follows (in thousands):
 
March 31, 2019
 
December 31, 2018
 
Carrying Amount
 
Estimated Fair Value
 
Carrying Amount
 
Estimated Fair Value
2025 notes
$
502,252

 
$
693,945

 
$

 
$

2023 notes
$
287,128

 
$
520,108

 
$
283,668

 
$
416,156

Convertible senior notes, net
$
789,380

 
$
1,214,053

 
$
283,668

 
$
416,156

v3.19.1
Goodwill and Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
Goodwill consists of the following (in thousands):
 
March 31, 2019
 
December 31, 2018
Beginning balance
$
149,524

 
$
125,272

Additions due to acquisitions

 
24,673

Foreign currency translation adjustment
(43
)
 
(421
)
Ending balance
$
149,481

 
$
149,524

Finite-Lived Intangible Assets
Intangible assets as of March 31, 2019 and December 31, 2018 consist of the following (in thousands, except weighted-average amortization period):
 
March 31, 2019
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(14,821
)
 
$
16,846

Customer lists
47

 
9,970

 
(7,188
)
 
2,782

Trade names
44

 
6,113

 
(5,162
)
 
951

Non-compete agreements
31

 
2,018

 
(1,801
)
 
217

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(299
)
 

 
(299
)
Total intangible assets
61

 
$
53,069

 
$
(28,972
)
 
$
24,097

 
 
December 31, 2018
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(13,737
)
 
$
17,930

Customer lists
47

 
9,970

 
(6,847
)
 
3,123

Trade names
44

 
6,113

 
(4,863
)
 
1,250

Non-compete agreements
31

 
2,018

 
(1,735
)
 
283

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(271
)
 

 
(271
)
Total intangible assets
61

 
$
53,097

 
$
(27,182
)
 
$
25,915



Indefinite-lived Intangible Assets
Intangible assets as of March 31, 2019 and December 31, 2018 consist of the following (in thousands, except weighted-average amortization period):
 
March 31, 2019
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(14,821
)
 
$
16,846

Customer lists
47

 
9,970

 
(7,188
)
 
2,782

Trade names
44

 
6,113

 
(5,162
)
 
951

Non-compete agreements
31

 
2,018

 
(1,801
)
 
217

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(299
)
 

 
(299
)
Total intangible assets
61

 
$
53,069

 
$
(28,972
)
 
$
24,097

 
 
December 31, 2018
 
Weighted-Average Amortization
Period
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies and content library
71

 
$
31,667

 
$
(13,737
)
 
$
17,930

Customer lists
47

 
9,970

 
(6,847
)
 
3,123

Trade names
44

 
6,113

 
(4,863
)
 
1,250

Non-compete agreements
31

 
2,018

 
(1,735
)
 
283

Indefinite-lived trade name

 
3,600

 

 
3,600

Foreign currency translation adjustment

 
(271
)
 

 
(271
)
Total intangible assets
61

 
$
53,097

 
$
(27,182
)
 
$
25,915

Estimated Future Amortization Expense Related to Intangible Assets
As of March 31, 2019, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
Remaining nine months of 2019
$
4,658

2020
4,816

2021
3,423

2022
2,943

2023
2,276

Thereafter
2,381

Total
$
20,497

v3.19.1
Convertible Senior Notes (Tables)
3 Months Ended
Mar. 31, 2019
Debt Disclosure [Abstract]  
Schedule Of Net Proceeds From Debt Issuance
The total net proceeds from the notes are as follows (in thousands):
 
2025 Notes
 
2023 Notes
Principal amount
$
700,000

 
$
345,000

Less initial purchasers’ discount
(16,625
)
 
(8,625
)
Less other issuance costs
(781
)
 
(757
)
Net proceeds
$
682,594

 
$
335,618

Schedule of Debt
The net carrying amount of the liability component of the notes is as follows (in thousands):
 
March 31, 2019
 
December 31, 2018
 
2025 Notes
 
2023 Notes
 
2023 Notes
Principal
$
700,000

 
$
345,000

 
$
345,000

Unamortized debt discount
(184,990
)
 
(51,725
)
 
(54,817
)
Unamortized issuance costs
(12,758
)
 
(6,147
)
 
(6,515
)
Net carrying amount
$
502,252

 
$
287,128

 
$
283,668

    
The net carrying amount of the equity component of the notes is as follows (in thousands):
 
March 31, 2019
 
December 31, 2018

2025 Notes
 
2023 Notes
 
2023 Notes
Debt discount for conversion option
$
185,500

 
$
64,193

 
$
64,193

Issuance costs
(4,613
)
 
(1,749
)
 
(1,749
)
Net carrying amount
$
180,887

 
$
62,444

 
$
62,444

Schedule Of Interest Expense Recognized
The following table sets forth the total interest expense recognized related to the notes (in thousands):
 
Three Months Ended 
 March 31, 2019
 
2025 Notes
 
2023 Notes
Contractual interest expense
$
14

 
$
213

Amortization of debt discount
510

 
3,091

Amortization of issuance costs
35

 
369

Total interest expense
$
559

 
$
3,673

v3.19.1
Leases (Tables)
3 Months Ended
Mar. 31, 2019
Leases [Abstract]  
Lessee, Operating Lease, Liability, Maturity
The aggregate future minimum lease payments and reconciliation to lease liabilities as of March 31, 2019, are as follows (in thousands):
 
March 31, 2019
Remaining nine months of 2019
$
4,101

2020
5,200

2021
4,724

2022
3,948

2023
3,424

Thereafter
788

Total future minimum lease payments
22,185

Less imputed interest
(2,121
)
Total lease liabilities
$
20,064


The aggregate future minimum lease payments as of December 31, 2018, are as follows (in thousands):
 
December 31, 2018
2019
$
5,222

2020
5,251

2021
4,775

2022
3,999

2023
3,421

Thereafter
788

Total
$
23,456

v3.19.1
Stockholders' Equity (Tables)
3 Months Ended
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation Expense for Employees and Non-Employees
Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
 
Three Months Ended 
 March 31,
 
2019
 
2018
Cost of revenues
$
125

 
$
94

Research and development
4,917

 
4,133

Sales and marketing
1,808

 
1,589

General and administrative
8,188

 
5,826

Total share-based compensation expense
$
15,038

 
$
11,642

Summary of Restricted Stock Unit Activity
Activity for RSUs and PSUs is as follows:
 
 
RSUs and PSUs Outstanding
 
Number of RSUs and PSUs
Outstanding
 
Weighted 
Average Grant Date 
Fair Value
Balance at December 31, 2018
10,804,808

 
$
11.87

Granted
1,440,428

 
39.95

Released
(4,352,468
)
 
8.97

Canceled
(727,939
)
 
7.12

Balance at March 31, 2019
7,164,829

 
$
19.76



v3.19.1
Restructuring Charges (Tables)
3 Months Ended
Mar. 31, 2019
Restructuring and Related Activities [Abstract]  
Schedule of Restructuring Reserve by Type of Cost
The following table summarizes the activity related to the accrual for restructuring charges (in thousands):
 
2017 Restructuring Plan
 
2015 Restructuring Plan
 
 
 
Workforce Reduction Costs
 
Lease Termination and Other Costs
 
Lease Termination and Other Costs
 
Total
Balance at January 1, 2018
$
44

 
$

 
$
221

 
$
265

Restructuring charges
253

 
19

 
317

 
589

Cash payments
(151
)
 
(19
)
 
(218
)
 
(388
)
Write-offs

 

 
(18
)
 
(18
)
Balance at December 31, 2018
146

 

 
302

 
448

Cumulative-effect adjustment to accumulated deficit related to adoption of ASU 2016-02

 

 
(302
)
 
(302
)
Restructuring charges
22

 

 

 
22

Cash payments
(132
)
 

 

 
(132
)
Balance at March 31, 2019
$
36

 
$

 
$

 
$
36

v3.19.1
Background and Basis of Presentation (Details) - USD ($)
Mar. 31, 2019
Jan. 01, 2019
Dec. 31, 2018
Apr. 30, 2018
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Right of use assets $ 15,875,000   $ 0  
Operating lease liability 20,064,000      
Senior Notes | 0.125% Convertible Senior Notes Due 2025        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Face value $ 700,000,000      
Interest rate, stated percentage 0.125%      
Senior Notes | 0.25% Convertible Senior Notes Due 2023        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Face value $ 345,000,000   $ 345,000,000 $ 345,000,000
Interest rate, stated percentage       0.25%
Accounting Standards Update 2016-02        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Right of use assets   $ 17,200,000    
Operating lease liability   $ 21,100,000    
v3.19.1
Revenues (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Disaggregation of Revenue [Line Items]      
Total net revenues $ 97,409 $ 76,949  
Change in total net revenues $ 20,460    
Change in total net revenues, percent 27.00%    
Contract with customer, liability, revenue recognized $ 12,400    
Aggregate amount of unsatisfied performance obligations 29,000    
Accounts receivable, net 8,870   $ 12,733
Change in accounts receivable $ (3,863)    
Change in accounts receivable, percent (30.00%)    
Deferred revenue $ 26,276   $ 17,418
Change in deferred revenue $ 8,858    
Change in deferred revenue, percent 51.00%    
Chegg Services      
Disaggregation of Revenue [Line Items]      
Total net revenues $ 75,292 56,277  
Change in total net revenues $ 19,015    
Change in total net revenues, percent 34.00%    
Required Materials      
Disaggregation of Revenue [Line Items]      
Total net revenues $ 22,117 $ 20,672  
Change in total net revenues $ 1,445    
Change in total net revenues, percent 7.00%    
v3.19.1
Net Loss Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Numerator:    
Net loss $ (4,318) $ (2,617)
Denominator:    
Weighted average shares used to compute net loss per share, basic and diluted (in shares) 116,730 110,904
Net loss per share, basic and diluted (in dollars per share) $ (0.04) $ (0.02)
v3.19.1
Net Loss Per Share - Shares Excluded From Computation Of Diluted Net Loss Per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Apr. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total common stock equivalents (in shares) 13,363 12,870    
Options to purchase common stock        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total common stock equivalents (in shares) 3,258 4,079    
RSUs and PSUs        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total common stock equivalents (in shares) 6,732 8,791    
Shares related to convertible senior notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total common stock equivalents (in shares) 3,332 0    
Employee stock purchase plan        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total common stock equivalents (in shares) 41 0    
0.25% Convertible Senior Notes Due 2023 | Shares related to convertible senior notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Face value $ 345,000,000   $ 345,000,000 $ 345,000,000
Conversion price       $ 26.95
Interest rate, stated percentage       0.25%
0.125% Convertible Senior Notes Due 2025 | Shares related to convertible senior notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Face value $ 700,000,000      
Conversion price $ 51.56      
Interest rate, stated percentage 0.125%      
Capped Call | 0.25% Convertible Senior Notes Due 2023 | Shares related to convertible senior notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Conversion price $ 40.68      
Capped Call | 0.125% Convertible Senior Notes Due 2025 | Shares related to convertible senior notes        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Conversion price $ 79.32      
v3.19.1
Cash and Cash Equivalents, and Investment - Additional Information (Details) - USD ($)
$ in Millions
Mar. 31, 2019
Dec. 31, 2018
Oct. 31, 2018
Schedule of Investments [Line Items]      
Restricted cash $ 1.0 $ 1.3  
Cost method investment     $ 10.0
Other Assets | Equity Investments      
Schedule of Investments [Line Items]      
Investments $ 3.0    
v3.19.1
Cash and Cash Equivalents, and Investment - Schedule of Available For Sale Securities (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]    
Cost $ 717,137  
Fair Value 717,185  
Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Cost 914,507 $ 374,664
Net Unrealized Gain/(Loss) (7) 0
Fair Value 914,500 374,664
Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Cost 70,083 93,449
Net Unrealized Gain/(Loss) (3) (104)
Fair Value 70,080 93,345
Total long-term investments    
Debt Securities, Available-for-sale [Line Items]    
Cost 12,475 16,059
Net Unrealized Gain/(Loss) 58 (7)
Fair Value 12,533 16,052
Corporate securities | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Cost 26,235 38,616
Net Unrealized Gain/(Loss) (3) (87)
Fair Value 26,232 38,529
Corporate securities | Total long-term investments    
Debt Securities, Available-for-sale [Line Items]    
Cost 10,842 14,429
Net Unrealized Gain/(Loss) 56 (5)
Fair Value 10,898 14,424
Commercial paper | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Cost 28,360 40,500
Net Unrealized Gain/(Loss) (3) (12)
Fair Value 28,357 40,488
U.S. treasury securities | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Cost 15,488 14,333
Net Unrealized Gain/(Loss) 3 (5)
Fair Value 15,491 14,328
U.S. treasury securities | Total long-term investments    
Debt Securities, Available-for-sale [Line Items]    
Cost 1,633 1,630
Net Unrealized Gain/(Loss) 2 (2)
Fair Value 1,635 1,628
Cash | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Cost 279,928 351,345
Net Unrealized Gain/(Loss) 0 0
Fair Value 279,928 351,345
Money market funds | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Cost 613,210 5,052
Net Unrealized Gain/(Loss) 0 0
Fair Value 613,210 5,052
Commercial paper | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Cost 21,369 18,267
Net Unrealized Gain/(Loss) (7) 0
Fair Value $ 21,362 $ 18,267
v3.19.1
Cash and Cash Equivalents, and Investment - Contractual Maturity (Details)
$ in Thousands
3 Months Ended
Mar. 31, 2019
USD ($)
Cash and Cash Equivalents [Abstract]  
Due in 1 year or less, Cost $ 91,452
Due in 1-2 years, Cost 12,475
Investments not due at a single maturity date, Cost 613,210
Cost 717,137
Due in 1 year or less, Fair Value 91,442
Due in 1-2 years, Fair Value 12,533
Investments not due at a single maturity date, Fair Value 613,210
Total, Fair Value $ 717,185
Weighted average maturity 1 month
v3.19.1
Fair Value Measurement - Financial Instruments (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments $ 70,080 $ 93,345
Long-term investments 12,533 16,052
Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets measured and recorded at fair value 717,185 132,716
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets measured and recorded at fair value 630,336 21,008
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets measured and recorded at fair value 86,849 111,708
Commercial paper | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 28,357 40,488
Commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 0 0
Commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 28,357 40,488
Corporate securities | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 26,232 38,529
Long-term investments 10,898 14,424
Corporate securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 0 0
Long-term investments 0 0
Corporate securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 26,232 38,529
Long-term investments 10,898 14,424
U.S. treasury securities | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 15,491 14,328
Long-term investments 1,635 1,628
U.S. treasury securities | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 15,491 14,328
Long-term investments 1,635 1,628
U.S. treasury securities | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 0 0
Long-term investments 0 0
Money market funds | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 613,210 5,052
Money market funds | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 613,210 5,052
Money market funds | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0 0
Commercial paper | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 21,362 18,267
Commercial paper | Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0 0
Commercial paper | Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2)    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 21,362 $ 18,267
v3.19.1
Fair Value Measurement - Debt (Details) - Senior Notes - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Carrying Amount | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes $ 789,380 $ 283,668
Estimated Fair Value | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes 1,214,053 416,156
0.125% Convertible Senior Notes Due 2025    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Unamortized debt discount 184,990  
Unamortized issuance costs 12,758  
0.125% Convertible Senior Notes Due 2025 | Carrying Amount | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes 502,252 0
0.125% Convertible Senior Notes Due 2025 | Estimated Fair Value | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes 693,945 0
0.25% Convertible Senior Notes Due 2023    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Unamortized debt discount 51,725 54,817
Unamortized issuance costs 6,147 6,515
0.25% Convertible Senior Notes Due 2023 | Carrying Amount | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes 287,128 283,668
0.25% Convertible Senior Notes Due 2023 | Estimated Fair Value | Fair Value, Measurements, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Convertible senior notes $ 520,108 $ 416,156
v3.19.1
Goodwill and Intangible Assets - Goodwill (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Goodwill [Roll Forward]    
Beginning balance $ 149,524 $ 125,272
Additions due to acquisitions 0 24,673
Foreign currency translation adjustment (43) (421)
Ending balance $ 149,481 $ 149,524
v3.19.1
Goodwill and Intangible Assets - Finite-lived and Indefinite-lived Intangibe Assets (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Finite Lived Intangible Assets [Line Items]    
Weighted-Average Amortization Period 61 months 61 months
Accumulated Amortization $ (28,972) $ (27,182)
Net Carrying Amount 20,497  
Indefinite-lived trade name 3,600 3,600
Foreign currency translation adjustment (299) (271)
Total intangible assets, gross carrying amount 53,069 53,097
Intangible assets, net $ 24,097 $ 25,915
Developed technologies and content library    
Finite Lived Intangible Assets [Line Items]    
Weighted-Average Amortization Period 71 months 71 months
Gross Carrying Amount $ 31,667 $ 31,667
Accumulated Amortization (14,821) (13,737)
Net Carrying Amount $ 16,846 $ 17,930
Customer lists    
Finite Lived Intangible Assets [Line Items]    
Weighted-Average Amortization Period 47 months 47 months
Gross Carrying Amount $ 9,970 $ 9,970
Accumulated Amortization (7,188) (6,847)
Net Carrying Amount $ 2,782 $ 3,123
Trade names    
Finite Lived Intangible Assets [Line Items]    
Weighted-Average Amortization Period 44 months 44 months
Gross Carrying Amount $ 6,113 $ 6,113
Accumulated Amortization (5,162) (4,863)
Net Carrying Amount $ 951 $ 1,250
Non-compete agreements    
Finite Lived Intangible Assets [Line Items]    
Weighted-Average Amortization Period 31 months 31 months
Gross Carrying Amount $ 2,018 $ 2,018
Accumulated Amortization (1,801) (1,735)
Net Carrying Amount $ 217 $ 283
v3.19.1
Goodwill and Intangible Assets - Additional Information (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Acquisition-Related Intangible Assets    
Finite Lived Intangible Assets [Line Items]    
Amortization expense of acquisition related to acquired intangible assets $ 1.8 $ 1.4
v3.19.1
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Details)
$ in Thousands
Mar. 31, 2019
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Remaining nine months of 2019 $ 4,658
2020 4,816
2021 3,423
2022 2,943
2023 2,276
Thereafter 2,381
Net Carrying Amount $ 20,497
v3.19.1
Convertible Senior Notes - Convertible Senior Notes (Details)
1 Months Ended 3 Months Ended
Jun. 30, 2018
USD ($)
Mar. 31, 2019
USD ($)
$ / shares
shares
Apr. 30, 2018
USD ($)
day
$ / shares
shares
Mar. 31, 2019
USD ($)
$ / shares
Mar. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Debt Instrument [Line Items]            
Net proceeds       $ 682,594,000 $ 0  
Senior Notes | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Face value   $ 700,000,000   $ 700,000,000    
Interest rate, stated percentage   0.125%   0.125%    
Less initial purchasers’ discount   $ (16,625,000)        
Less other issuance costs   (781,000)        
Net proceeds   $ 682,594,000        
Conversion price | $ / shares   $ 51.56   $ 51.56    
Equity component   $ 180,887,000   $ 180,887,000    
Debt issuance costs   (17,400,000)   $ (17,400,000)    
Debt instrument, remaining useful life       6 years    
Debt conversion, converted instrument, amount $ 517,600,000          
Debt instrument, if-converted value less than principal   $ (182,400,000)        
Interest rate, effective percentage   5.40%   5.40%    
Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Face value   $ 345,000,000 $ 345,000,000 $ 345,000,000   $ 345,000,000
Interest rate, stated percentage     0.25%      
Option to purchase additional notes     $ 45,000,000      
Less initial purchasers’ discount     (8,625,000)      
Less other issuance costs     (757,000)      
Net proceeds     $ 335,618,000      
Conversion ratio   0.0193956 0.0371051      
Conversion price | $ / shares     $ 26.95      
Equity component   $ 62,444,000 $ 64,200,000 $ 62,444,000   $ 62,444,000
Debt issuance costs     (9,400,000)      
Debt instrument, remaining useful life       4 years 1 month    
Share price (in dollars per share) | $ / shares   $ 38.12   $ 38.12    
Debt conversion, converted instrument, amount $ 488,000,000          
Debt instrument, if-converted value in excess of principal     $ 143,000,000      
Interest rate, effective percentage     4.34%      
Sale Price Is Greater Or Equal 130% | Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Threshold trading days | day     20      
Threshold consecutive trading days | day     30      
Threshold percentage of stock price trigger     130.00%      
Trading Price Per $1,000 Principal Amount Less Than 98% | Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Threshold trading days | day     5      
Threshold consecutive trading days | day     10      
Trading Price Per $1,000 Principal Amount Less Than 98% | Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Maximum            
Debt Instrument [Line Items]            
Threshold percentage of stock price trigger     98.00%      
Liability component | Senior Notes | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Net carrying amount   $ 514,500,000   $ 514,500,000    
Equity component   185,500,000   185,500,000    
Debt issuance costs   (12,800,000)   (12,800,000)    
Liability component | Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Net carrying amount     $ 280,800,000      
Debt issuance costs     (7,600,000)      
Equity component | Senior Notes | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Debt issuance costs   (4,600,000)   $ (4,600,000)    
Equity component | Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Debt issuance costs     (1,700,000)      
Capped Call | Senior Notes | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Net proceeds   $ 85,100,000        
Conversion price | $ / shares   $ 79.32   $ 79.32    
Shares covered by capped call transactions (in shares) | shares   13,576,920        
Capped Call | Senior Notes | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Net proceeds     $ 39,200,000      
Conversion price | $ / shares   $ 40.68   $ 40.68    
Shares covered by capped call transactions (in shares) | shares     12,801,260      
v3.19.1
Convertible Senior Notes - Net Carrying Amount (Details) - Senior Notes - USD ($)
Mar. 31, 2019
Dec. 31, 2018
Apr. 30, 2018
0.125% Convertible Senior Notes Due 2025      
Debt Instrument [Line Items]      
Principal $ 700,000,000    
Unamortized debt discount (184,990,000)    
Unamortized issuance costs (12,758,000)    
Debt discount for conversion option 185,500,000    
Issuance costs (4,613,000)    
Net carrying amount 180,887,000    
0.25% Convertible Senior Notes Due 2023      
Debt Instrument [Line Items]      
Principal 345,000,000 $ 345,000,000 $ 345,000,000
Unamortized debt discount (51,725,000) (54,817,000)  
Unamortized issuance costs (6,147,000) (6,515,000)  
Debt discount for conversion option 64,193,000 64,193,000  
Issuance costs (1,749,000) (1,749,000)  
Net carrying amount 62,444,000 62,444,000 $ 64,200,000
Carrying Amount | Fair Value, Measurements, Nonrecurring      
Debt Instrument [Line Items]      
Net carrying amount 789,380,000 283,668,000  
Carrying Amount | Fair Value, Measurements, Nonrecurring | 0.125% Convertible Senior Notes Due 2025      
Debt Instrument [Line Items]      
Net carrying amount 502,252,000 0  
Carrying Amount | Fair Value, Measurements, Nonrecurring | 0.25% Convertible Senior Notes Due 2023      
Debt Instrument [Line Items]      
Net carrying amount $ 287,128,000 $ 283,668,000  
v3.19.1
Convertible Senior Notes - Interest Expense Recognized (Details) - Senior Notes - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
0.125% Convertible Senior Notes Due 2025    
Debt Instrument [Line Items]    
Contractual interest expense $ 14  
Amortization of debt discount 510  
Amortization of issuance costs 35  
Total interest expense $ 559  
0.25% Convertible Senior Notes Due 2023    
Debt Instrument [Line Items]    
Contractual interest expense   $ 213
Amortization of debt discount   3,091
Amortization of issuance costs   369
Total interest expense   $ 3,673
v3.19.1
Leases - Additional Information (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Dec. 31, 2018
Leases [Abstract]    
Right of use assets $ 15,875 $ 0
Operating lease liability $ 20,064  
Weighted average remaining lease term for operating lease 4 years 3 months 11 days  
Weighted average discount rate used to determine the operating lease liability 4.70%  
Operating lease expense, net of accretion $ 1,300  
v3.19.1
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($)
$ in Thousands
Mar. 31, 2019
Dec. 31, 2018
Leases [Abstract]    
Remaining nine months of 2019 $ 4,101  
2020 5,200  
2021 4,724  
2022 3,948  
2023 3,424  
2024 788  
Total future minimum lease payments 22,185  
Less imputed interest (2,121)  
Total lease liabilities $ 20,064  
2019   $ 5,222
2020   5,251
2021   4,775
2022   3,999
2023   3,421
Thereafter   788
Total   $ 23,456
v3.19.1
Stockholders' Equity - Share-based Compensation Expense (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]    
Share-based compensation expense $ 15,038 $ 11,642
Cost of revenues    
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]    
Share-based compensation expense 125 94
Research and development    
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]    
Share-based compensation expense 4,917 4,133
Sales and marketing    
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]    
Share-based compensation expense 1,808 1,589
General and administrative    
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]    
Share-based compensation expense $ 8,188 $ 5,826
v3.19.1
Stockholders' Equity - Additional Information (Details)
$ / shares in Units, $ in Millions
1 Months Ended 3 Months Ended
Mar. 31, 2019
USD ($)
$ / shares
shares
Mar. 31, 2019
USD ($)
$ / shares
RSUs and PSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation costs related to restricted stock units | $ $ 98.1 $ 98.1
Weighted average vesting period for recognition of compensation expense   1 year 10 months 21 days
Common Stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares repurchased (in shares) | shares 504,286  
Share price (in dollars per share) | $ / shares $ 39.66 $ 39.66
v3.19.1
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - RSUs and PSUs
3 Months Ended
Mar. 31, 2019
$ / shares
shares
Number of RSUs and PSUs Outstanding  
Number of RSUs and PSUs Outstanding, Beginning (shares) | shares 10,804,808
Number of RSUs and PSUs, Granted (shares) | shares 1,440,428
Number of RSUs and PSUs, Released (shares) | shares (4,352,468)
Number of RSUs and PSUs, Canceled (shares) | shares (727,939)
Number of RSUs and PSUs Outstanding, Ending (shares) | shares 7,164,829
Weighted Average Grant Date Fair Value  
Weighted Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares $ 11.87
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares 39.95
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares 8.97
Weighted Average Grant Date Fair Value, Canceled (in dollars per share) | $ / shares 7.12
Weighted Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares $ 19.76
v3.19.1
Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Income Tax Disclosure [Abstract]    
Provision for income taxes $ 626 $ 541
v3.19.1
Restructuring Charges - Narrative (Details)
3 Months Ended
Mar. 31, 2019
position
2017 Restructuring Plan | Workforce Reduction Costs  
Restructuring Cost and Reserve [Line Items]  
Number of positions eliminated 55
v3.19.1
Restructuring Charges - Restructuring Reserve (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2019
Mar. 31, 2018
Dec. 31, 2018
Restructuring Reserve [Roll Forward]      
Beginning balance $ 448 $ 265 $ 265
Restructuring charges 22 220 589
Cash payments (132)   (388)
Write-offs     (18)
Ending balance 36   448
2017 Restructuring Plan | Workforce Reduction Costs      
Restructuring Reserve [Roll Forward]      
Beginning balance 146 44 44
Restructuring charges 22   253
Cash payments (132)   (151)
Write-offs     0
Ending balance 36   146
2017 Restructuring Plan | Lease Termination and Other Costs      
Restructuring Reserve [Roll Forward]      
Beginning balance 0 0 0
Restructuring charges 0   19
Cash payments 0   (19)
Write-offs     0
Ending balance 0   0
2015 Restructuring Plan | Lease Termination and Other Costs      
Restructuring Reserve [Roll Forward]      
Beginning balance 302 $ 221 221
Restructuring charges 0   317
Cash payments 0   (218)
Write-offs     (18)
Ending balance 0   $ 302
Accounting Standards Update 2016-02      
Restructuring Reserve [Roll Forward]      
Write-offs (302)    
Accounting Standards Update 2016-02 | 2017 Restructuring Plan | Workforce Reduction Costs      
Restructuring Reserve [Roll Forward]      
Write-offs 0    
Accounting Standards Update 2016-02 | 2017 Restructuring Plan | Lease Termination and Other Costs      
Restructuring Reserve [Roll Forward]      
Write-offs 0    
Accounting Standards Update 2016-02 | 2015 Restructuring Plan | Lease Termination and Other Costs      
Restructuring Reserve [Roll Forward]      
Write-offs $ (302)    
v3.19.1
Related-Party Transactions (Details)
3 Months Ended
Mar. 31, 2019
USD ($)
board_member
Mar. 31, 2018
USD ($)
Dec. 31, 2018
USD ($)
Adobe Systems | Chief Executive Officer      
Related Party Transaction [Line Items]      
Purchases from related party $ 1,000,000 $ 1,700,000  
Revenue from related parties 0 100,000  
Receivables from related party 0   $ 0
Cengage | Chief Executive Officer      
Related Party Transaction [Line Items]      
Revenue from related parties 1,200,000 1,900,000  
Due to related parties 500,000   $ 100,000
Cengage | Board Of Directors Member      
Related Party Transaction [Line Items]      
Purchases from related party $ 9,100,000 5,100,000  
Number of board members appointed to Board of Directors of related party | board_member 1    
PayPal | Board Of Directors Member      
Related Party Transaction [Line Items]      
Expenses from transactions with related party $ 400,000 $ 400,000  
Synack, Inc. | Board Of Directors Member      
Related Party Transaction [Line Items]      
Purchases from related party $ 300,000    
Number of board members appointed to Board of Directors of related party | board_member 1    
v3.19.1
Subsequent Event (Details) - 0.125% Convertible Senior Notes Due 2025 - Senior Notes - Subsequent Event
Apr. 03, 2019
USD ($)
Subsequent Event [Line Items]  
Face value $ 100,000,000
Payments for additional privately negotiated capped call transactions $ 12,200,000
v3.19.1
Label Element Value
Accounting Standards Update 2018-02 And 2014-09 [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ (77,000)
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (111,000)
Accounting Standards Update 2018-02 And 2014-09 [Member] | Retained Earnings [Member]  
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption (77,000)
Cumulative Effect of New Accounting Principle in Period of Adoption us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption $ (111,000)