CHEGG, INC, 10-Q filed on 10/26/2020
Quarterly Report
v3.20.2
Cover Page - shares
 9 Months Ended
Sep. 30, 2020
Oct. 23, 2020
Cover [Abstract]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2020  
Document Transition Report false  
Entity File Number 001-36180  
Entity Registrant Name CHEGG, INC  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-3237489  
Entity Address, Address Line One 3990 Freedom Circle  
Entity Address, City or Town Santa Clara  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 95054  
City Area Code 408  
Local Phone Number 855-5700  
Title of 12(b) Security Common stock, $0.001 par value per share  
Trading Symbol CHGG  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   128,810,888
Entity Central Index Key 0001364954  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current assets    
Cash and cash equivalents $ 527,541 $ 387,520
Short-term investments 723,327 381,074
Accounts receivable, net of allowance of $198 and $56 at September 30, 2020 and December 31, 2019, respectively 12,487 11,529
Prepaid expenses 15,082 10,538
Other current assets 21,059 16,606
Total current assets 1,299,496 807,267
Long-term investments 521,261 310,483
Textbook library, net 34,575 0
Property and equipment, net 113,058 87,359
Goodwill 284,809 214,513
Intangible assets, net 55,386 34,667
Right of use assets 14,124 15,931
Other assets 18,948 18,778
Total assets 2,341,657 1,488,998
Current liabilities    
Accounts payable 5,838 7,362
Deferred revenue 51,941 18,780
Current operating lease liabilities 5,652 5,283
Accrued liabilities 79,524 39,964
Total current liabilities 142,955 71,389
Long-term liabilities    
Convertible senior notes, net 1,536,984 900,303
Long-term operating lease liabilities 11,661 14,513
Other long-term liabilities 4,665 3,964
Total long-term liabilities 1,553,310 918,780
Total liabilities 1,696,265 990,169
Commitments and contingencies
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; 128,654,401 and 121,583,501 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively 129 122
Additional paid-in capital 1,092,574 916,095
Accumulated other comprehensive income (loss) 1,333 (1,096)
Accumulated deficit (448,644) (416,292)
Total stockholders' equity 645,392 498,829
Total liabilities and stockholders' equity $ 2,341,657 $ 1,488,998
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts receivable, current $ 198 $ 56
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized (in shares) 10,000,000 10,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 400,000,000 400,000,000
Common stock, shares issued (in shares) 128,654,401 121,583,501
Common stock, shares outstanding (in shares) 128,654,401 121,583,501
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]        
Net revenues $ 154,018 $ 94,151 $ 438,617 $ 285,422
Cost of revenues 62,370 22,164 148,284 66,017
Gross profit 91,648 71,987 290,333 219,405
Operating expenses:        
Research and development 44,041 36,442 123,956 101,199
Sales and marketing 24,625 16,822 60,621 47,334
General and administrative 40,784 23,752 98,221 70,044
Restructuring charges 0 28 0 97
Total operating expenses 109,450 77,044 282,798 218,674
(Loss) income from operations (17,802) (5,057) 7,535 731
Interest expense, net and other (expense) income, net:        
Interest expense, net (17,468) (13,548) (44,320) (31,294)
Other (expense) income, net (804) 7,751 7,396 14,571
Total interest expense, net and other (expense) income, net (18,272) (5,797) (36,924) (16,723)
Loss before provision for income taxes (36,074) (10,854) (29,389) (15,992)
Provision for income taxes 1,066 623 2,875 1,832
Net loss $ (37,140) $ (11,477) $ (32,264) $ (17,824)
Net loss per share, basic and diluted (in dollars per share) $ (0.29) $ (0.10) $ (0.26) $ (0.15)
Weighted average shares used to compute net loss per share, basic and diluted (in shares) 126,194 120,085 124,162 118,547
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net loss $ (37,140) $ (11,477) $ (32,264) $ (17,824)
Other comprehensive (loss) income        
Change in net unrealized (loss) gain on available for sale investments, net of tax (1,642) (73) 1,922 379
Change in foreign currency translation adjustments, net of tax 1,125 (1,067) 507 (1,118)
Other comprehensive (loss) income (517) (1,140) 2,429 (739)
Total comprehensive loss $ (37,657) $ (12,617) $ (29,835) $ (18,563)
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (unaudited) - USD ($)
$ in Thousands
Total
Cumulative Effect, Period of Adoption, Adjustment
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Accumulated Deficit
Cumulative Effect, Period of Adoption, Adjustment
Common stock, beginning balance (in shares) at Dec. 31, 2018     115,500,000        
Beginning balance at Dec. 31, 2018 $ 410,634 $ (111) $ 116 $ 818,113 $ (1,019) $ (406,576) $ (111)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201602Member            
Equity component of convertible senior notes, net of issuance costs $ 206,747     206,747      
Purchase of convertible senior notes capped call (97,200)     (97,200)      
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)     2,545,000        
Issuance of common stock upon exercise of stock options and ESPP 27,720   $ 3 27,717      
Net issuance of common stock for settlement of RSUs (in shares)     3,064,000        
Net issuance of common stock for settlement of equity awards (91,073)   $ 3 (91,076)      
Issuance of common stock in connection with prior acquisition (in shares)     64,000        
Issuance of common stock in connection with prior acquisition 3,003     3,003      
Share-based compensation expense 47,355     47,355      
Other comprehensive income (loss) (739)       (739)    
Net loss (17,824)         (17,824)  
Common stock, ending balance (in shares) at Sep. 30, 2019     120,669,000        
Beginning balance at Sep. 30, 2019 468,512   $ 121 894,660 (1,758) (424,511)  
Common stock, beginning balance (in shares) at Jun. 30, 2019     119,336,000        
Beginning balance at Jun. 30, 2019 459,571   $ 119 873,104 (618) (413,034)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Issuance of common stock upon exercise of stock options and ESPP (in shares)     991,000        
Issuance of common stock upon exercise of stock options and ESPP 11,674   $ 1 11,673      
Net issuance of common stock for settlement of RSUs (in shares)     319,000        
Net issuance of common stock for settlement of equity awards (8,824)   $ 1 (8,825)      
Issuance of common stock in connection with prior acquisition (in shares)     23,000        
Issuance of common stock in connection with prior acquisition 1,843     1,843      
Share-based compensation expense 16,865     16,865      
Other comprehensive income (loss) (1,140)       (1,140)    
Net loss (11,477)         (11,477)  
Common stock, ending balance (in shares) at Sep. 30, 2019     120,669,000        
Beginning balance at Sep. 30, 2019 $ 468,512   $ 121 894,660 (1,758) (424,511)  
Common stock, beginning balance (in shares) at Dec. 31, 2019 121,583,501   121,584,000        
Beginning balance at Dec. 31, 2019 $ 498,829 $ (88) $ 122 916,095 (1,096) (416,292) $ (88)
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Accounting Standards Update [Extensible List] us-gaap:AccountingStandardsUpdate201613Member            
Equity component of convertible senior notes, net of issuance costs $ 237,462     237,462      
Purchase of convertible senior notes capped call (103,400)     (103,400)      
Equity component related to conversions of 2023 convertible senior notes (345,552)     (345,552)      
Issuance of common stock upon conversion of 2023 convertible senior notes (in shares)     4,182,000        
Issuance of common stock upon conversion of 2023 convertible senior notes 327,141   $ 4 327,137      
Proceeds from capped call related to conversions of 2023 convertible senior notes 57,414     57,414      
Issuance of common stock upon exercise of stock options and ESPP (in shares)     778,000        
Issuance of common stock upon exercise of stock options and ESPP 9,234   $ 1 9,233      
Net issuance of common stock for settlement of RSUs (in shares)     2,110,000        
Net issuance of common stock for settlement of equity awards (65,222)   $ 2 (65,224)      
Share-based compensation expense 59,409     59,409      
Other comprehensive income (loss) 2,429       2,429    
Net loss $ (32,264)         (32,264)  
Common stock, ending balance (in shares) at Sep. 30, 2020 128,654,401   128,654,000        
Beginning balance at Sep. 30, 2020 $ 645,392   $ 129 1,092,574 1,333 (448,644)  
Common stock, beginning balance (in shares) at Jun. 30, 2020     124,123,000        
Beginning balance at Jun. 30, 2020 498,378   $ 124 907,908 1,850 (411,504)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Equity component of convertible senior notes, net of issuance costs 237,462     237,462      
Purchase of convertible senior notes capped call (103,400)     (103,400)      
Equity component related to conversions of 2023 convertible senior notes (345,552)     (345,552)      
Issuance of common stock upon conversion of 2023 convertible senior notes (in shares)     4,182,000        
Issuance of common stock upon conversion of 2023 convertible senior notes 327,141   $ 4 327,137      
Proceeds from capped call related to conversions of 2023 convertible senior notes 57,414     57,414      
Issuance of common stock upon exercise of stock options and ESPP (in shares)     106,000        
Issuance of common stock upon exercise of stock options and ESPP 1,197   $ 1 1,196      
Net issuance of common stock for settlement of RSUs (in shares)     243,000        
Net issuance of common stock for settlement of equity awards (11,120)   $ 0 (11,120)      
Share-based compensation expense 21,529     21,529      
Other comprehensive income (loss) (517)       (517)    
Net loss $ (37,140)         (37,140)  
Common stock, ending balance (in shares) at Sep. 30, 2020 128,654,401   128,654,000        
Beginning balance at Sep. 30, 2020 $ 645,392   $ 129 $ 1,092,574 $ 1,333 $ (448,644)  
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities    
Net loss $ (32,264) $ (17,824)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Print textbook depreciation expense 10,699 0
Other depreciation and amortization expense 33,088 21,369
Share-based compensation expense 59,409 47,355
Amortization of debt discount and issuance costs 42,910 30,114
Repayment of convertible senior notes attributable to debt discount (14,912) 0
Loss on early extinguishment of debt 3,315 0
Loss from write-off of property and equipment 1,057 832
Loss from impairment of strategic equity investment 10,000 0
Gain on textbook library, net (2,028) 0
Deferred income taxes (17) 59
Operating lease expense, net of accretion 3,400 3,284
Other non-cash items (85) (370)
Change in assets and liabilities, net of effect of acquisition of business:    
Accounts receivable 106 (850)
Prepaid expenses and other current assets (6,178) (20,741)
Other assets (2,638) 1,989
Accounts payable (1,634) (3,983)
Deferred revenue 32,239 10,039
Accrued liabilities 34,276 18,095
Other liabilities (2,088) (2,793)
Net cash provided by operating activities 168,655 86,575
Cash flows from investing activities    
Purchases of property and equipment (57,457) (31,520)
Purchases of textbooks (49,641) 0
Proceeds from disposition of textbooks 7,012 0
Purchases of investments (968,106) (822,869)
Proceeds from sale of investments 0 53,261
Maturities of investments 412,046 190,744
Purchase of strategic equity investment (2,000) 0
Acquisition of business, net of cash acquired (92,796) 0
Net cash used in investing activities (750,942) (610,384)
Cash flows from financing activities    
Proceeds from common stock issued under stock plans, net 9,236 27,723
Payment of taxes related to the net share settlement of equity awards (65,224) (91,076)
Proceeds from issuance of convertible senior notes, net of issuance costs 984,096 780,180
Purchase of convertible senior notes capped call (103,400) (97,200)
Repayment of convertible senior notes (159,677) 0
Proceeds from exercise of convertible senior notes capped call 57,414 0
Repurchase of common stock 0 (20,000)
Net cash provided by financing activities 722,445 599,627
Net increase in cash, cash equivalents and restricted cash 140,158 75,818
Cash, cash equivalents and restricted cash, beginning of period 389,432 375,945
Cash, cash equivalents and restricted cash, end of period 529,590 451,763
Supplemental cash flow data:    
Interest 1,546 901
Income taxes 2,450 1,492
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash flows from operating leases 5,174 3,847
Right of use assets obtained in exchange for operating lease obligations 1,713 2,638
Non-cash investing and financing activities:    
Accrued purchases of long-lived assets 6,102 4,452
Accrued escrow related to acquisition 7,451 0
Issuance of common stock related to prior acquisition 0 3,003
Issuance of common stock related to repayment of convertible senior notes 327,141 0
Reconciliation of cash, cash equivalents and restricted cash:    
Total cash, cash equivalents and restricted cash $ 529,590 $ 451,763
v3.20.2
Background and Basis of Presentation
 9 Months Ended
Sep. 30, 2020
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 September 30, 2020, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, and the condensed consolidated statements of stockholder's equity for the three and nine months ended September 30, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, 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 September 30, 2020, our results of operations, results of comprehensive loss, and stockholder's equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. Our results of operations, results of comprehensive loss, stockholder's equity, and cash flows for the nine months ended September 30, 2020 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, 2019 as 2019.

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, 2019 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC).

Except for our policies on investments, textbook library, convertible senior notes, net, revenue recognition and deferred revenue, and cost of revenues, 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.

Investments

We hold investments in commercial paper, corporate debt securities, U.S. treasury securities, and agency bonds. We classify our investments as available-for-sale based on the nature of each security that are either short or long-term based on the remaining contractual maturity of the investment. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses unrelated to credit loss factors, net of taxes, included in other comprehensive (loss) income in our condensed consolidated statements of stockholders’ equity. Beginning in 2020, unrealized losses related to credit loss factors are now recorded through an allowance for credit losses in other (expense) income, net in our condensed consolidated statements of operations, rather than as a reduction to the amortized cost basis in other comprehensive (loss) income, when a decline in fair value has resulted from a credit loss. We determine realized gains or losses on the sale of investments on a specific identification method, and record such gains or losses as other (expense) income, net in our condensed consolidated statements of operations.

Textbook Library

Beginning in January 2020, we began our transition back to print textbook ownership by purchasing print textbooks to establish our textbook library. We consider our print textbook library to be a long-term productive asset and, as such, classify it as a non-current asset in our condensed consolidated balance sheets. All print textbooks in our textbook library are stated at cost, which includes the purchase price less accumulated depreciation. We write down textbooks on a book-by-book basis for lost, damaged, or excess print textbooks.
We depreciate our print textbooks, less an estimated salvage value, over an estimated useful life of four years using an accelerated method of depreciation, as we estimate this method most accurately reflects the actual pattern of decline in their economic value. The salvage value considers the historical trend and projected proceeds for print textbooks. The useful life is determined based on the estimated time period in which the print textbooks are held and rented. We review the estimated salvage value and useful life of our print textbook library on an ongoing basis.
Write-downs for print textbooks, print textbook depreciation expense, the gain or loss on print textbooks liquidated, and the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis are recorded in cost of revenues in our condensed consolidated statements of operations and classified as adjustments to cash flows from operating activities. Cash outflows for the acquisition of print textbooks net of changes in related accounts payable and accrued liabilities, and cash inflows received from the proceeds from the disposition of print textbooks net of changes in related accounts receivable, are classified as cash flows from investing activities in our condensed consolidated statements of cash flows.

As of September 30, 2020, our net print textbook library of $34.6 million consisted of gross print textbook library of approximately $44.8 million net of accumulated depreciation and write-downs of approximately $9.2 million and $1.0 million, respectively.

During the three and nine months ended September 30, 2020, print textbook depreciation expense was approximately $3.6 million and $10.7 million, respectively, and our net gain on textbook library was approximately $0.6 million and $2.0 million, respectively.

Convertible Senior Notes, net

In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). 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 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total gross proceeds of $800 million. In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2026 notes, 2025 notes, and the 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components, as the notes represent convertible instruments with a cash conversion feature. 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 consolidated balance sheet, and is amortized to interest expense over the term of the notes using the effective interest rate method. The carrying amount of the liability component is classified as a long-term liability as we have the election to settle conversion requests in shares of our common stock. The carrying amount of 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. In accounting for extinguishment of the notes, we allocated the consideration transferred between the liability and equity components in a similar manner as upon issuance. The liability component for extinguished notes is then compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other (expense) income, net in our condensed consolidated statements of operations.

Revenue Recognition and Deferred Revenue

We recognize revenues when the control of 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. Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data. Customer refunds from cancellations and returns are recorded as a reduction to revenues.

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer
•Identification of the performance obligations in the contract
•Determination of the transaction price
•Allocation of the transaction price to the performance obligations in the contract
•Recognition of revenue when, or as, we satisfy a performance obligation

We generate revenues from our Chegg Services product line which primarily includes Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, Thinkful, and Mathway. Revenues from Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, and Mathway are primarily recognized ratably over the respective weekly or monthly subscription period. Revenues from Thinkful, our skills-based learning platform, are recognized either ratably over the term of the course, generally six months, or upon completion of the lessons, depending on the instruction type of the course.

    Revenues from our Required Materials product line includes revenues from print textbooks that we own or that are owned by a partner as well as revenues from eTextbooks. Beginning in 2020, our Required Materials product line includes operating leases with students for the rental of print textbooks that we own. Operating lease income is recognized as the total transaction amount, paid upon commencement of the lease, ratably over the lease term which is generally a two- to five-month lease period. Students generally have the option to extend the term of their rental or purchase the print textbook at the end of the term otherwise the print textbook is returned to our print textbook library for future rental. If a student chooses to purchase or not return the print textbook at the end of their rental term, we charge the student for the book and recognize the revenues immediately. Additionally, we provide students the ability to purchase print textbooks on a just-in-time basis and recognize revenues immediately upon shipment. Revenues from print textbooks owned by a partner are recognized as a revenue share on the total transactional amount of a rental or sale transaction immediately when a print textbook ships to a student. Shipping and handling activities are expensed as incurred. Revenues from eTextbooks are recognized ratably over the contractual period, generally a two- to five-month period.

Some of our customer arrangements include multiple performance obligations. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract. For these arrangements that contain multiple performance obligations, we allocate the transaction price based on the relative standalone selling price (SSP) method by comparing the SSP of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions, and information about the customer. Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations.

Some of our customer arrangements may include an amount of variable consideration in addition to a fixed revenue share that we earn. This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration. We estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period.

For sales of third-party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third-party products. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. In relation to print textbooks owned by a partner, we recognize revenues on a net basis based on our role in the transaction as an agent as we have concluded that we do not control the use of the print textbooks, and therefore record only the net revenue share we earn. We have concluded that we control our Chegg Services, print textbooks that we own for rental, purchase at the end of the rental term, or sale on a just-in-time basis, and eTextbook service and therefore we recognize revenues and cost of revenues on a gross basis.

Contract assets are contained within other current assets and other assets on our condensed consolidated balance sheets. Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer. Contract receivables are contained within accounts receivable, net on our condensed consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time. Contract liabilities are contained within deferred revenue on our condensed consolidated balance sheets. Deferred revenue primarily consists of advanced payments from students related to rental and subscription performance obligations that have not been satisfied and estimated variable consideration. Deferred revenue related to rental and subscription performance obligations is recognized as revenues ratably over the term for subscriptions or when the services are provided and all other revenue recognition criteria have been met. Deferred revenue related to variable consideration is recognized as revenues during each reporting period based on the estimated amount we believe we will earn over the life of the contract.
    We have elected a practical expedient to record incremental costs to obtain or fulfill a contract when the amortization period would have been one year or less as incurred. These incremental costs primarily relate to sales commissions costs and are recorded in sales and marketing expense in our condensed consolidated statements of operations.

Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Cost of revenues primarily consists of publisher content fees for eTextbooks, content amortization expense related to content that we develop, licenses from publishers for which we pay one-time license fees, or acquire through acquisitions, write-downs for print textbooks, the gain or loss on print textbooks liquidated, the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis, print textbook depreciation expense, payment processing costs, the payments made to tutors through our Chegg Tutors service, personnel costs and other direct costs related to providing products or services. In addition, cost of revenues includes allocated information technology and facilities costs.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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, share-based compensation expense including estimated forfeitures, accounting for income taxes, textbook library, 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, internal-use software and website development costs, operating lease right of use (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 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options, by reducing the number of accounting separation models for convertible instruments, amends the guidance in ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity, for certain contracts in an entity's own equity that are currently accounted for as derivatives, and requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share (EPS) calculation. Early adoption is permitted, but no earlier than annual periods beginning after December 15, 2020, and the guidance allows for a modified retrospective or fully retrospective method of transition. We currently plan to adopt the guidance on January 1, 2021. At this time, we are continuing to refine the quantitative impact of early adopting this guidance and we initially believe the most significant impacts will be an increase in liabilities on our condensed consolidated balance sheets as a result of removing the accounting separation model for convertible instruments with a cash conversion feature, a significant reduction of non-cash interest expense on our condensed consolidated statements of operations, and an increase in the number of shares included in our diluted EPS calculations. We will continue to evaluate the impacts of this guidance, including method of transition, as we near our adoption date.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides temporary optional expedients and exceptions for applying reference rate reform to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance can be applied immediately and only applies to contract modifications made or hedging relationships entered into or evaluated before December 31, 2022. While we do not have any hedging relationships and currently do not believe we have material contracts impacted by reference rate reform, we are in the process of evaluating the impact of this guidance.
Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 key changes include hybrid tax regimes, intraperiod tax allocation exception, and interim-period accounting for enacted changes in tax law. We early adopted ASU 2019-12 during the second quarter of 2020 under the prospective method of adoption. As a result of adoption, there was no modification required to the first quarter of 2020 results of operations as previously presented.

The FASB issued four ASUs related to ASC 326, Financial Instruments - Credit Losses. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. On January 1, 2020, we adopted ASC 326, which replaces the existing incurred loss impairment model for financial assets, including trade receivables, with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates. Additionally, the concept of other-than-temporary impairment for available-for-sale investments is eliminated and instead requires us to focus on determining whether any unrealized loss is a result of a credit loss or other factors. We adopted ASC 326 under the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after adoption are presented under ASC 326 while we have not changed previously disclosed amounts or provided additional disclosures for comparative periods. We recorded an immaterial cumulative-effect adjustment to trade receivables to the opening balance of accumulated deficit in our condensed consolidated balance sheet. We adopted ASC 326 under the prospective transition approach for available-for-sale investments which resulted in no change to amortized cost basis before and after adoption. Credit losses related to available-for-sale investments will now be recorded through an allowance for credit losses with immediate recognition to our condensed consolidated statement of operations rather than as a reduction to the amortized cost basis and recognition to our condensed consolidated statements of comprehensive loss. See above within Note 1, “Background and Basis of Presentation”, for updates to our significant accounting policies impacted by our adoption of ASC 326 as well as Note 4, “Cash and Cash Equivalents, and Investments” for more information.

In August 2018, the FASB issued 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. We adopted ASU 2018-15 on January 1, 2020 under the prospective method of adoption.
v3.20.2
Revenues
 9 Months Ended
Sep. 30, 2020
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 tables set 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 September 30,Change
 20202019$%
Chegg Services$118,895 $69,304 $49,591 72 %
Required Materials35,123 24,847 10,276 41 
Total net revenues$154,018 $94,151 $59,867 64 

 Nine Months Ended September 30,Change
 20202019$%
Chegg Services$345,258 $224,903 $120,355 54 %
Required Materials93,359 60,519 32,840 54 
Total net revenues$438,617 $285,422 $153,195 54 

During the three and nine months ended September 30, 2020, we recognized $25.4 million and $18.0 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each reporting period. During the three and nine months ended September 30, 2019, we recognized $15.7 million and $16.0 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each reporting period. During the three and nine months ended September 30, 2020, we recognized an immaterial amount of previously deferred revenues recognized from performance obligations satisfied in previous periods. During the three and nine months ended September 30, 2019, we recognized $2.2 million and $2.7 million, respectively, of previously deferred revenues recognized from performance obligations satisfied in previous periods related to variable consideration recognized from our agreement with our Required Materials print textbook partner. During the three and nine months ended September 30, 2020, we recognized $12.0 million and $35.4 million, respectively, of operating lease income from print textbook rentals that we own. The aggregate amount of unsatisfied performance obligations is approximately $51.9 million as of September 30, 2020, which are expected to be recognized as revenues over the next year.

Contract Balances

The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages):
 Change
 September 30, 2020December 31, 2019$%
Accounts receivable, net$12,487 $11,529 $958 8 %
Deferred revenue51,941 18,780 33,161 177 
Contract assets8,214 3,531 4,683 133 

During the nine months ended September 30, 2020, our accounts receivable, net balance increased by $1.0 million, or 8%, primarily due to timing of billings and seasonality of our business. During the nine months ended September 30, 2020, our deferred revenue balance increased by $33.2 million, or 177%, primarily due to increased bookings driven by the seasonality of our business as well as from print textbooks that we own that are recognized ratably rather than immediately. During the nine months ended September 30, 2020, our contract assets balance increased by $4.7 million, or 133%, primarily due to deferred payment arrangements for Thinkful.
v3.20.2
Net Loss Per Share
 9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Net Loss Per Share Net Loss Per ShareBasic net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and shares related to convertible senior notes, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Numerator:
Net loss$(37,140)$(11,477)$(32,264)$(17,824)
Denominator:
Weighted average shares used to compute net loss per share, basic and diluted
126,194 120,085 124,162 118,547 
Net loss per share, basic and diluted
$(0.29)$(0.10)$(0.26)$(0.15)

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 September 30,Nine Months Ended September 30,
2020201920202019
Options to purchase common stock865 2,122 977 2,715 
RSUs and PSUs3,394 3,831 3,425 4,952 
Shares related to convertible senior notes8,721 4,098 4,422 3,709 
Employee stock purchase plan 9 7 4 3 
Total common stock equivalents12,989 10,058 8,828 11,379 

Shares related to convertible senior notes during the three and nine months ended September 30, 2020 represents the dilutive and anti-dilutive impact of our 2023 notes and 2025 notes as the average price of our common stock was higher than the conversion price of $26.95 and $51.56, respectively, and the conditions for conversion had been met. Shares related to convertible senior notes during the three and nine months ended September 30, 2019 represents the dilutive and anti-dilutive impact of our 2023 notes as the average price of our common stock was higher than the conversion price and the conditions for conversion had been met. While these shares are anti-dilutive during the three and nine months ended September 30, 2020 and 2019, they may be dilutive in periods we report net income. However, as a result of the capped call transactions, there will be no economic dilution from the 2023 notes and 2025 notes up to $40.68 and $79.32, respectively, as exercise of the capped call instruments will reduce dilution that would have otherwise occurred when the average price of our common stock exceeds the conversion price. None of the shares related to our 2025 notes were dilutive or anti-dilutive during the three and nine months ended September 30, 2019 as a result of the conditions for conversion not being met. None of the shares related to our 2026 notes were dilutive or anti-dilutive during the three and nine months ended September 30, 2020 as a result of the conditions for conversion not being met. For further information on the notes see Note 8, “Convertible Senior Notes.”
v3.20.2
Cash and Cash Equivalents, and Investments
 9 Months Ended
Sep. 30, 2020
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents, and Investment Cash and Cash Equivalents, and Investments
 
The following tables show our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss, and fair value as of September 30, 2020 and December 31, 2019 (in thousands):
 September 30, 2020
 Adjusted CostUnrealized GainUnrealized LossFair Value
Cash and cash equivalents:   
Cash$17,346 $— $— $17,346 
U.S. treasury securities307,673 — — 307,673 
Money market funds202,522 — — 202,522 
Total cash and cash equivalents$527,541 $— $— $527,541 
Short-term investments:   
Commercial paper$204,044 $38 $(24)$204,058 
Corporate securities516,682 2,644 (57)519,269 
Total short-term investments$720,726 $2,682 $(81)$723,327 
Long-term investments:   
Corporate securities$456,774 $602 $(635)$456,741 
Agency bonds64,495 25 — 64,520 
Total long-term investments$521,269 $627 $(635)$521,261 

 December 31, 2019
 Adjusted CostUnrealized GainUnrealized LossFair Value
Cash and cash equivalents:   
Cash$241,355 $— $— $241,355 
Money market funds146,165 — — 146,165 
Total cash and cash equivalents$387,520 $— $— $387,520 
Short-term investments:   
Commercial paper$7,489 $— $— $7,489 
Corporate securities318,946 425 (78)319,293 
U.S. treasury securities44,251 39 (4)44,286 
Agency bonds10,000 6 — 10,006 
Total short-term investments$380,686 $470 $(82)$381,074 
Long-term investments:   
Corporate securities$295,103 $533 $(158)$295,478 
Agency bonds14,999 6 — 15,005 
Total long-term investments$310,102 $539 $(158)$310,483 

The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of September 30, 2020 (in thousands):
 Adjusted CostFair Value
Due in 1 year or less$1,028,399 $1,031,000 
Due in 1-2 years521,269 521,261 
Investments not due at a single maturity date202,522 202,522 
Total$1,752,190 $1,754,783 

Investments not due at a single maturity date in the preceding table consisted of money market funds.
As of September 30, 2020, we did not consider the declines in market value of our investment portfolio to be driven by credit related factors. When evaluating whether an investment's unrealized losses are related to credit factors, we review factors such as the extent to which fair value is below its cost basis, any changes to the credit rating of the security, adverse conditions specifically related to the security, changes in market interest rates and our intent to sell, or whether it is more likely than not we will be required to sell, before recovery of cost basis. We invest in highly-rated securities with a minimum credit rating of A-, a weighted average maturity of less than 12 months, and our investment policy limits the amount of credit exposure to any one issuer or industry sector. 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. During the three and nine months ended September 30, 2020, we did not recognize any losses on our investments due to credit related factors. During the three and nine months ended September 30, 2019, we did not recognize any impairment charges.

Restricted Cash

As of September 30, 2020 and December 31, 2019, we had approximately $2.0 million and $1.9 million, respectively, of restricted cash that primarily 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 upon the term of the remaining restrictions.

Strategic Investments

In March 2020, we completed an investment of $2.0 million in TAPD, Inc., also known as Frank, a U.S.-based service that helps students access financial aid. In October 2018, we completed an investment of $10.0 million in WayUp, Inc. (WayUp), 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. During the three months ended September 30, 2020, we recorded a $10.0 million impairment charge on our investment in WayUp included within general and administrative expense on our condensed consolidated statements of operations. Our impairment assessment was the result of the uncertainty around WayUp's ability to raise additional funding to support their future operations. We did not record any impairment charges on our other strategic investments during the three and nine months ended September 30, 2020 and 2019, as there were no other significant identified events or changes in circumstances that would be considered an indicator for impairment. We considered general market conditions as a result of the COVID-19 pandemic in our impairment analysis. There were no observable price changes in orderly transactions for the identical or similar investments of the same issuers during the three and nine months ended September 30, 2020 and 2019.
v3.20.2
Fair Value Measurement
 9 Months Ended
Sep. 30, 2020
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 September 30, 2020 and December 31, 2019 are classified based on the valuation technique level in the tables below (in thousands):
 September 30, 2020
 TotalLevel 1Level 2
Assets:   
Cash equivalents:   
U.S. treasury securities$307,673 $307,673 $— 
Money market funds202,522 202,522 — 
Short-term investments: 
Commercial paper204,058 — 204,058 
Corporate securities519,269 — 519,269 
Long-term investments:
Corporate securities456,741 — 456,741 
Agency bonds64,520 — 64,520 
Total assets measured and recorded at fair value$1,754,783 $510,195 $1,244,588 

 December 31, 2019
 TotalLevel 1Level 2
Assets:   
Cash equivalents:   
Money market funds$146,165 $146,165 $— 
Short-term investments:
Commercial paper7,489 — 7,489 
Corporate securities319,293 — 319,293 
U.S. treasury securities44,286 44,286 — 
Agency bonds10,006 — 10,006 
Long-term investments:
Corporate securities295,478 — 295,478 
Agency bonds15,005 — 15,005 
Total assets measured and recorded at fair value$837,722 $190,451 $647,271 
 
We value our investments 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 investments 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 investments 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 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 8, “Convertible Senior Notes.”
The carrying amounts and estimated fair values of the notes as of September 30, 2020 and December 31, 2019 are as follows (in thousands):
September 30, 2020December 31, 2019
 Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2026 notes$751,349 $1,000,000 $— $— 
2025 notes631,061 1,208,800 602,611 831,000 
2023 notes154,574 462,358 297,692 523,538 
Convertible senior notes, net$1,536,984 $2,671,158 $900,303 $1,354,538 
The carrying amount of the 2026 notes, 2025 notes and 2023 notes as of September 30, 2020 was net of unamortized debt discount of $236.8 million, $158.1 million and $16.5 million, respectively, and unamortized issuance costs of $11.8 million, $10.9 million and $2.0 million, respectively. The carrying amount of the 2025 notes and 2023 notes as of December 31, 2019 was net of unamortized debt discount of $184.7 million and $42.3 million, respectively, and unamortized issuance costs of $12.7 million and $5.0 million, respectively.
v3.20.2
Acquisitions
 9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Acquisitions Acquisitions
On June 4, 2020, we completed our acquisition of Mathway, LLC (Mathway), an online, on-demand math problem solving company that provides a vast range of subject areas in mathematics, including pre-algebra, algebra, trigonometry, pre-calculus, calculus, and linear algebra, and related disciplines. This acquisition helps to strengthen our existing Chegg Math Solver service with the addition of new subjects, languages, and international reach. The total fair value of the purchase consideration was $101.0 million, of which $93.5 million was paid in cash on the acquisition date and $7.5 million, included within other long-term liabilities, was held in escrow as security for general representations and warranties and potential post-closing adjustments. Any remaining escrow amount will be released 15 months after the acquisition date.

The Mathway purchase agreement provides for additional payments of up to $15.0 million subject to the achievement of specified milestones and continued employment of the sellers. These payments are not included in the fair value of the purchase consideration but rather are expensed ratably as acquisition-related compensation costs classified as research and development and general and administrative expenses, based on the seller's job function, on our condensed consolidated statement of operations. We have recorded approximately $1.7 million as of September 30, 2020, included within accrued liabilities on our condensed consolidated balance sheet for these payments.

The following table presents the preliminary total allocation of purchase consideration recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands):
 Mathway
Cash$712 
Accounts receivable1,132 
Other acquired assets779 
Acquired intangible assets30,320 
Total identifiable assets acquired32,943 
Deferred revenue(1,423)
Liabilities assumed(727)
Net identifiable assets acquired30,793 
Goodwill70,167 
Total fair value of purchase consideration$100,960 

Goodwill is primarily attributable to the potential for enhancing our existing offerings and expanding our reach by providing additional mathematics support for students and helping them through their academic journey. The amounts recorded for intangible assets and goodwill are deductible for tax purposes.
The following table presents the details of the allocation of purchase consideration to the acquired intangible assets (in thousands, except weighted-average amortization period):
Mathway
AmountWeighted-Average Amortization Period (in months)
Domain names$220 18
Trade name520 18
Customer lists6,220 48
Developed technology23,360 84
Total acquired intangible assets$30,320 75

During the nine months ended September 30, 2020, we incurred $3.1 million of acquisition-related expenses associated with our acquisition of Mathway, which have been included in general and administrative expense on our condensed consolidated statement of operations. We have recorded immaterial amounts of revenue and earnings from Mathway since the acquisition date.

The following unaudited supplemental pro forma net loss is for informational purposes only and presents our combined results as if the acquisition of Mathway had occurred on January 1, 2019. The unaudited supplemental pro forma information includes the historical combined operating results adjusted for acquisition-related compensation costs, amortization of intangible assets, share-based compensation expense and acquisition-related expenses and does not necessarily reflect the actual results that would have been achieved, nor is it necessarily indicative of our future consolidated results. During the three and nine months ended September 30, 2020, our supplemental pro forma net loss would have been $37.3 million and $32.3 million, respectively. During the three and nine months ended September 30, 2019, our supplemental pro forma net loss would have been $14.1 million and $33.3 million, respectively. Revenues from Mathway were immaterial during the three and nine months ended September 30, 2020 and 2019 and therefore we have not presented pro forma revenues.
v3.20.2
Goodwill and Intangible Assets
 9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill consists of the following (in thousands):
 Nine Months Ended September 30, 2020Year Ended December 31, 2019
Beginning balance$214,513 $149,524 
Additions due to acquisitions70,167 65,181 
Foreign currency translation adjustment417 (192)
Measurement period adjustments related to prior acquisition(288)— 
Ending balance$284,809 $214,513 
Intangible assets consist of the following (in thousands, except weighted-average amortization period):
 September 30, 2020
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library72$66,628 $(25,392)$41,236 
Customer lists4716,190 (9,718)6,472 
Trade and domain names4411,613 (7,467)4,146 
Non-compete agreements312,018 (1,962)56 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (124)— (124)
Total intangible assets64$99,925 $(44,539)$55,386 
 
 December 31, 2019
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library66$43,268 $(18,395)$24,873 
Customer lists479,970 (8,210)1,760 
Trade and domain names4610,873 (6,169)4,704 
Non-compete agreements312,018 (1,890)128 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (398)— (398)
Total intangible assets58$69,331 $(34,664)$34,667 

During the three and nine months ended September 30, 2020, amortization expense related to our finite-lived intangible assets totaled approximately $4.4 million and $9.9 million, respectively. During the three and nine months ended September 30, 2019, amortization expense related to our finite-lived intangible assets totaled approximately $1.5 million and $5.0 million, respectively.

As of September 30, 2020, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
Remaining three months of 2020$4,404 
202113,320 
202210,889 
20238,760 
20245,707 
Thereafter8,706 
Total$51,786 
v3.20.2
Convertible Senior Notes
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Convertible Senior Notes Convertible Senior NotesIn August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). The aggregate principal amount of the 2026 notes includes $100 million from the initial purchasers fully exercising their option to purchase additional notes. 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 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total principal amount of $800 million. 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. The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. Concurrently with the offering of the 2026 notes, 2025 notes and 2023 notes, we used $103.4 million, $97.2 million and $39.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions.

The total net proceeds from the notes are as follows (in thousands):
2026 Notes2025 Notes2023 Notes
Principal amount$1,000,000 $800,000 $345,000 
Less initial purchasers’ discount(15,000)(18,998)(8,625)
Less other issuance costs(904)(822)(757)
Net proceeds$984,096 $780,180 $335,618 

In connection with our issuance of the 2026 notes, we exchanged $172.0 million aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $501.7 million, consisting of $174.6 million in cash and 4,182,320 shares of our common stock with a value of $327.1 million. Of the $501.7 million consideration, we allocated $156.1 million and $345.6 million to the liability and equity components of the exchanged 2023 notes, respectively. The fair value of the liability component was calculated by measuring the fair value of similar debt instruments that do not have an associated convertible feature. The carrying amount of the liability component of the 2023 notes subject to the exchange was $152.8 million resulting in a $3.3 million loss on early extinguishment of debt which was recorded in other (expense) income, net in our condensed consolidated statements of operations. Additionally, we terminated 2023 notes capped call transactions underlying 6,380,815 shares of our common stock and received cash proceeds of $57.4 million. As of September 30, 2020, $173.0 million of aggregate principal amount of the 2023 notes remain outstanding and 6,419,850 shares remain underlying the 2023 notes capped call transactions.

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 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date. 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, 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, unless repurchased, redeemed or converted in accordance with their terms prior to such date.

Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock. This is equivalent to an initial conversion price of approximately $107.55 per share, which is subject to adjustment in certain circumstances. 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 June 1, 2026 for the 2026 notes, 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 December 31, 2020 for the 2026 notes, 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 10 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 June 1, 2026 for the 2026 notes, 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.

The conditions allowing holders of the 2026 notes to convert were not met and therefore the 2026 notes are not convertible. The first circumstance allowing holders of the 2025 notes to convert was met during the three months ended September 30, 2020 and therefore, the 2025 notes are convertible starting October 1, 2020 through December 31, 2020. The first circumstance allowing holders of the 2023 notes to convert was met during the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, June 30, 2019, and March 31, 2019 and therefore, the 2023 notes were and are convertible starting April 1, 2019 through September 30, 2019 and from January 1, 2020 through December 31, 2020. During the three and nine months ended September 30, 2020, aside from the exchange of $172.0 million aggregate principal amount of the 2023 notes discussed above, we received immaterial requests for conversion of the 2023 notes which we settled in cash during the three and nine months ended September 30, 2020.

In accounting for their issuance, we separated the notes into liability and equity components. The carrying amount of the liability components for the 2026 notes, 2025 notes and 2023 notes of approximately $758.7 million, $588.0 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 2026 notes, 2025 notes and 2023 notes of approximately $241.3 million, $212.0 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 sheets, 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 sheets and are not remeasured as long as they continue to meet the conditions for equity classification.

We incurred issuance costs related to the 2026 notes, 2025 notes and 2023 notes of approximately $15.9 million, $19.8 million, $9.4 million, respectively. 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. Issuance costs attributable to the liability components for the 2026 notes, 2025 notes and 2023 notes of approximately $12.1 million, $14.6 million and $7.6 million, respectively, were recorded as debt issuance cost, presented as a reduction to the notes on our condensed consolidated balance sheets, 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 2026 notes, 2025 notes and 2023 notes were approximately $3.8 million, $5.3 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):
September 30, 2020December 31, 2019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Principal$1,000,000 $800,000 $173,018 $800,000 $345,000 
Unamortized debt discount(236,809)(158,077)(16,484)(184,698)(42,280)
Unamortized issuance costs(11,842)(10,862)(1,960)(12,691)(5,028)
Net carrying amount (liability)$751,349 $631,061 $154,574 $602,611 $297,692 
    
The net carrying amount of the equity component of the notes is as follows (in thousands):
September 30, 2020December 31, 2019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Debt discount for conversion option$241,300 $212,000 $32,193 $212,000 $64,193 
Issuance costs(3,838)(5,253)(877)(5,253)(1,749)
Net carrying amount (equity)$237,462 $206,747 $31,316 $206,747 $62,444 
    
As of September 30, 2020, the remaining lives of the 2026 notes, 2025 notes and 2023 notes were approximately 5.9 years, 4.5 years and 2.6 years, respectively. Based on the closing price of our common stock of $71.44 on September 30, 2020, the if-converted value of the 2026 notes was approximately $664.2 million, which was less than the principal amount of $1.0 billion by approximately $335.8 million, the if-converted value of the 2025 notes was approximately $1,108.5 million, which exceeds the principal amount of $800 million by approximately $308.5 million and the if-converted value of the 2023 notes was approximately $458.6 million, which exceeds the principal amount of $173 million by approximately $285.6 million.

The effective interest rates of the liability components for the 2026 notes, 2025 notes and 2023 notes are 4.63%, 5.40% and 4.34%, respectively, and each 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 tables set forth the total interest expense recognized related to the notes (in thousands):
Three Months Ended September 30,
20202019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Contractual interest expense$— $252 $169 $252 $217 
Amortization of debt discount4,491 8,938 2,458 8,939 3,161 
Amortization of issuance costs225 614 292 614 375 
Total interest expense$4,716 $9,804 $2,919 $9,805 $3,753 

Nine Months Ended September 30,
20202019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Contractual interest expense$— $750 $599 $517 $645 
Amortization of debt discount4,491 26,621 8,709 18,363 9,377 
Amortization of issuance costs225 1,829 1,035 1,262 1,112 
Total interest expense$4,716 $29,200 $10,343 $20,142 $11,134 

Capped Call Transactions

Concurrently with the offering of the 2026 notes, 2025 notes and 2023 notes, we used $103.4 million, $97.2 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 automatically exercise upon conversion of the notes and cover 9,297,800, 15,516,480 and 6,419,850 shares of our common stock for the 2026 notes, 2025 notes and 2023 notes, respectively, and are intended to effectively increase the overall conversion price from $107.55 to $156.44 per share for the 2026 notes, $51.56 to $79.32 per share for the 2025 notes and $26.95 to $40.68 per share for the 2023 notes. The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted 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 sheets 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.
v3.20.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2020
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 June 18, 2020, we received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) to determine whether we may have violated Section 5 of the FTC Act or the Children's Online Privacy Protection Act (COPPA), as they relate to deceptive or unfair acts or practices related to consumer privacy and/or data security. Pursuant to the CID, the FTC has requested responses to interrogatories and the production of documents pertaining to data breach incidents and our data security and privacy practices generally. Efforts are currently underway to collect the documents and information requested after reaching an agreement with the FTC on the order and timing of our responses.

On May 12, 2020, we received notice that 15,107 arbitration demands were filed against us by individuals represented by the same legal counsel, each alleging to have suffered more than $25,000 in damages as a result of the 2018 Data Incident. On July 1, 2020, an additional 1,007 arbitration demands were filed by the same counsel. On August 12, 2020, an additional 577 arbitration demands were filed by the same counsel. We dispute that these claimants have a valid basis for seeking arbitration and assert that they have acted in bad faith. We have filed a motion seeking modification of the Court's order to arbitrate.

On March 3, 2020, Ingram Hosting Holdings LLC (IHH) filed a complaint in the U.S. District Court for the Middle District of Tennessee alleging that Chegg breached its various contracts with IHH and other Ingram group entities, seeking damages in the amount of $17 million. An answer was filed on March 31, 2020. Chegg and Ingram have now dismissed the litigation after reaching an amicable settlement of the dispute which includes an immaterial undisclosed payment from Ingram.

On November 5, 2018, NetSoc, LLC (NetSoc) filed a complaint against us in the U.S. District Court for the Southern District of New York for patent infringement alleging that the Chegg Tutors service infringes U.S. Patent No. 9.978,107 and seeking unspecified compensatory damages. A responsive pleading was filed on February 19, 2019. On January 13, 2020, the Court issued an order dismissing the case as to Chegg. On January 30, 2020, NetSoc appealed the dismissal. On April 21, 2020, the Court granted Chegg's motion to hold the appeal in abeyance pending outcome of an appeal in the litigation above.
We have not recorded any amounts related to the above matters, as we do not believe that a loss is probable in these matters. 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 condensed 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.
v3.20.2
Guarantees and Indemnifications
 9 Months Ended
Sep. 30, 2020
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 September 30, 2020.
v3.20.2
Stockholders' Equity
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Stockholders' Equity Stockholders' Equity
Securities Repurchase Program

In June 2020, our board of directors approved a securities repurchase program pursuant to which we may, from time to time, repurchase up to $500.0 million of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, and other factors. The repurchase program will end on December 31, 2021. There were no securities repurchased during the three months ended September 30, 2020.

Share-based Compensation Expense

Total share-based compensation expense recorded for employees and non-employees is as follows (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Cost of revenues$262 $96 $644 $295 
Research and development8,433 5,741 23,044 15,876 
Sales and marketing2,431 1,843 7,053 5,405 
General and administrative10,403 9,185 28,668 25,779 
Total share-based compensation expense$21,529 $16,865 $59,409 $47,355 

RSU and PSU Activity

Activity for RSUs and PSUs is as follows:
 RSUs and PSUs Outstanding
 Shares OutstandingWeighted Average Grant Date Fair Value
Balance at December 31, 20196,909,530 $24.04 
Granted2,462,160 43.54 
Released(3,591,076)18.89 
Canceled(409,544)30.57 
Balance at September 30, 20205,371,070 $35.92 

As of September 30, 2020, our total unrecognized share-based compensation expense related to RSUs and PSUs was approximately $122.8 million, which will be recognized over the remaining weighted-average vesting period of approximately 2.0 years.
v3.20.2
Income Taxes
 9 Months Ended
Sep. 30, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income TaxesWe recorded an income tax provision of approximately $1.1 million and $2.9 million during the three and nine months ended September 30, 2020, respectively, primarily due to state and foreign income tax expense. We recorded an income tax provision of approximately $0.6 million and $1.8 million during the three and nine months ended September 30, 2019, respectively, primarily due to state and foreign income tax expense.
v3.20.2
Related-Party Transactions
 9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
Related-Party Transactions Related-Party TransactionsOur Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the three and nine months ended September 30, 2020, we purchased $0.3 million and $1.1 million, respectively, and during the three and nine months ended September 30, 2019, we purchased $0.4 million and $1.9 million, respectively, of services from Adobe. We had no revenues during the three months ended September 30, 2020 and $0.1 million of revenues during the nine months ended September 30, 2020 from Adobe. We had no revenues during the three and nine months ended September 30,
2019 from Adobe. We had $0.1 million and $0.2 million of payables as of September 30, 2020 and December 31, 2019, respectively, to Adobe. We had no outstanding receivables as of September 30, 2020 and December 31, 2019 from Adobe.

The immediate family of one of our board members is a member of the Board of Directors of PayPal Holdings, Inc. (PayPal). During the three and nine months ended September 30, 2020, we incurred payment processing fees of $0.5 million and $1.5 million, respectively, and during the three and nine months ended September 30, 2019, we incurred payment processing fees of $0.4 million and $1.2 million, respectively, to PayPal.

One of our board members is also a member of the Board of Directors of Synack, Inc. (Synack). We had no purchases of services from Synack during the three months ended September 30, 2020 and $0.1 million during the nine months ended September 30, 2020. During the three and nine months ended September 30, 2019, we purchased $0.1 million and $0.4 million, respectively, of services from Synack.
v3.20.2
Background and Basis of Presentation (Policies)
 9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

The accompanying condensed consolidated balance sheet as of September 30, 2020, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive loss, and the condensed consolidated statements of stockholder's equity for the three and nine months ended September 30, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, 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 September 30, 2020, our results of operations, results of comprehensive loss, and stockholder's equity for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. Our results of operations, results of comprehensive loss, stockholder's equity, and cash flows for the nine months ended September 30, 2020 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, 2019 as 2019.

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, 2019 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC).

Except for our policies on investments, textbook library, convertible senior notes, net, revenue recognition and deferred revenue, and cost of revenues, 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.
Investments InvestmentsWe hold investments in commercial paper, corporate debt securities, U.S. treasury securities, and agency bonds. We classify our investments as available-for-sale based on the nature of each security that are either short or long-term based on the remaining contractual maturity of the investment. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses unrelated to credit loss factors, net of taxes, included in other comprehensive (loss) income in our condensed consolidated statements of stockholders’ equity. Beginning in 2020, unrealized losses related to credit loss factors are now recorded through an allowance for credit losses in other (expense) income, net in our condensed consolidated statements of operations, rather than as a reduction to the amortized cost basis in other comprehensive (loss) income, when a decline in fair value has resulted from a credit loss. We determine realized gains or losses on the sale of investments on a specific identification method, and record such gains or losses as other (expense) income, net in our condensed consolidated statements of operations.
Textbook Library
Textbook Library

Beginning in January 2020, we began our transition back to print textbook ownership by purchasing print textbooks to establish our textbook library. We consider our print textbook library to be a long-term productive asset and, as such, classify it as a non-current asset in our condensed consolidated balance sheets. All print textbooks in our textbook library are stated at cost, which includes the purchase price less accumulated depreciation. We write down textbooks on a book-by-book basis for lost, damaged, or excess print textbooks.
We depreciate our print textbooks, less an estimated salvage value, over an estimated useful life of four years using an accelerated method of depreciation, as we estimate this method most accurately reflects the actual pattern of decline in their economic value. The salvage value considers the historical trend and projected proceeds for print textbooks. The useful life is determined based on the estimated time period in which the print textbooks are held and rented. We review the estimated salvage value and useful life of our print textbook library on an ongoing basis.
Write-downs for print textbooks, print textbook depreciation expense, the gain or loss on print textbooks liquidated, and the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis are recorded in cost of revenues in our condensed consolidated statements of operations and classified as adjustments to cash flows from operating activities. Cash outflows for the acquisition of print textbooks net of changes in related accounts payable and accrued liabilities, and cash inflows received from the proceeds from the disposition of print textbooks net of changes in related accounts receivable, are classified as cash flows from investing activities in our condensed consolidated statements of cash flows.
Convertible Senior Notes, net
Convertible Senior Notes, net

In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). 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 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total gross proceeds of $800 million. In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2026 notes, 2025 notes, and the 2023 notes are referred to as the “notes.” In accounting for their issuance, we separated the notes into liability and equity components, as the notes represent convertible instruments with a cash conversion feature. 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 consolidated balance sheet, and is amortized to interest expense over the term of the notes using the effective interest rate method. The carrying amount of the liability component is classified as a long-term liability as we have the election to settle conversion requests in shares of our common stock. The carrying amount of 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. In accounting for extinguishment of the notes, we allocated the consideration transferred between the liability and equity components in a similar manner as upon issuance. The liability component for extinguished notes is then compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other (expense) income, net in our condensed consolidated statements of operations.
Revenue Recognition and Deferred Revenue
Revenue Recognition and Deferred Revenue

We recognize revenues when the control of 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. Revenues are presented net of sales tax collected from customers to be remitted to governmental authorities and net of allowances for estimated cancellations and customer returns, which are based on historical data. Customer refunds from cancellations and returns are recorded as a reduction to revenues.

We determine revenue recognition through the following steps:

•Identification of the contract, or contracts, with a customer
•Identification of the performance obligations in the contract
•Determination of the transaction price
•Allocation of the transaction price to the performance obligations in the contract
•Recognition of revenue when, or as, we satisfy a performance obligation

We generate revenues from our Chegg Services product line which primarily includes Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, Thinkful, and Mathway. Revenues from Chegg Study, Chegg Writing, Chegg Tutors, Chegg Math Solver, and Mathway are primarily recognized ratably over the respective weekly or monthly subscription period. Revenues from Thinkful, our skills-based learning platform, are recognized either ratably over the term of the course, generally six months, or upon completion of the lessons, depending on the instruction type of the course.

    Revenues from our Required Materials product line includes revenues from print textbooks that we own or that are owned by a partner as well as revenues from eTextbooks. Beginning in 2020, our Required Materials product line includes operating leases with students for the rental of print textbooks that we own. Operating lease income is recognized as the total transaction amount, paid upon commencement of the lease, ratably over the lease term which is generally a two- to five-month lease period. Students generally have the option to extend the term of their rental or purchase the print textbook at the end of the term otherwise the print textbook is returned to our print textbook library for future rental. If a student chooses to purchase or not return the print textbook at the end of their rental term, we charge the student for the book and recognize the revenues immediately. Additionally, we provide students the ability to purchase print textbooks on a just-in-time basis and recognize revenues immediately upon shipment. Revenues from print textbooks owned by a partner are recognized as a revenue share on the total transactional amount of a rental or sale transaction immediately when a print textbook ships to a student. Shipping and handling activities are expensed as incurred. Revenues from eTextbooks are recognized ratably over the contractual period, generally a two- to five-month period.

Some of our customer arrangements include multiple performance obligations. We have determined these performance obligations qualify as distinct performance obligations, as the customer can benefit from the service on its own or together with other resources that are readily available to the customer, and our promise to transfer the service is separately identifiable from other promises in the contract. For these arrangements that contain multiple performance obligations, we allocate the transaction price based on the relative standalone selling price (SSP) method by comparing the SSP of each distinct performance obligation to the total value of the contract. We determine the SSP based on our historical pricing and discounting practices for the distinct performance obligation when sold separately. If the SSP is not directly observable, we estimate the SSP by considering information such as market conditions, and information about the customer. Additionally, we limit the amount of revenues recognized for delivered promises to the amount that is not contingent on future delivery of services or other future performance obligations.

Some of our customer arrangements may include an amount of variable consideration in addition to a fixed revenue share that we earn. This variable consideration can either increase or decrease the total transaction price depending on the nature of the variable consideration. We estimate the amount of variable consideration that we will earn at the inception of the contract, adjusted during each period, and include an estimated amount each period.

For sales of third-party products, we evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount as revenues and related costs or the net amount earned as a revenue share from the sale of third-party products. Our determination is based on our evaluation of whether we control the specified goods or services prior to transferring them to the customer. In relation to print textbooks owned by a partner, we recognize revenues on a net basis based on our role in the transaction as an agent as we have concluded that we do not control the use of the print textbooks, and therefore record only the net revenue share we earn. We have concluded that we control our Chegg Services, print textbooks that we own for rental, purchase at the end of the rental term, or sale on a just-in-time basis, and eTextbook service and therefore we recognize revenues and cost of revenues on a gross basis.

Contract assets are contained within other current assets and other assets on our condensed consolidated balance sheets. Contract assets represent the goods or services that we have transferred to a customer before invoicing the customer. Contract receivables are contained within accounts receivable, net on our condensed consolidated balance sheets and represent unconditional consideration that will be received solely due to the passage of time. Contract liabilities are contained within deferred revenue on our condensed consolidated balance sheets. Deferred revenue primarily consists of advanced payments from students related to rental and subscription performance obligations that have not been satisfied and estimated variable consideration. Deferred revenue related to rental and subscription performance obligations is recognized as revenues ratably over the term for subscriptions or when the services are provided and all other revenue recognition criteria have been met. Deferred revenue related to variable consideration is recognized as revenues during each reporting period based on the estimated amount we believe we will earn over the life of the contract.
    We have elected a practical expedient to record incremental costs to obtain or fulfill a contract when the amortization period would have been one year or less as incurred. These incremental costs primarily relate to sales commissions costs and are recorded in sales and marketing expense in our condensed consolidated statements of operations.
Lessor, Leases Beginning in 2020, our Required Materials product line includes operating leases with students for the rental of print textbooks that we own. Operating lease income is recognized as the total transaction amount, paid upon commencement of the lease, ratably over the lease term which is generally a two- to five-month lease period. Students generally have the option to extend the term of their rental or purchase the print textbook at the end of the term otherwise the print textbook is returned to our print textbook library for future rental.
Cost of Revenues
Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Cost of revenues primarily consists of publisher content fees for eTextbooks, content amortization expense related to content that we develop, licenses from publishers for which we pay one-time license fees, or acquire through acquisitions, write-downs for print textbooks, the gain or loss on print textbooks liquidated, the net book value of print textbooks purchased by students at the end of the term or on a just-in-time basis, print textbook depreciation expense, payment processing costs, the payments made to tutors through our Chegg Tutors service, personnel costs and other direct costs related to providing products or services. In addition, cost of revenues includes allocated information technology and facilities costs.
Use of Estimates
Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States 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, share-based compensation expense including estimated forfeitures, accounting for income taxes, textbook library, 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, internal-use software and website development costs, operating lease right of use (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 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options, by reducing the number of accounting separation models for convertible instruments, amends the guidance in ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity, for certain contracts in an entity's own equity that are currently accounted for as derivatives, and requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share (EPS) calculation. Early adoption is permitted, but no earlier than annual periods beginning after December 15, 2020, and the guidance allows for a modified retrospective or fully retrospective method of transition. We currently plan to adopt the guidance on January 1, 2021. At this time, we are continuing to refine the quantitative impact of early adopting this guidance and we initially believe the most significant impacts will be an increase in liabilities on our condensed consolidated balance sheets as a result of removing the accounting separation model for convertible instruments with a cash conversion feature, a significant reduction of non-cash interest expense on our condensed consolidated statements of operations, and an increase in the number of shares included in our diluted EPS calculations. We will continue to evaluate the impacts of this guidance, including method of transition, as we near our adoption date.

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides temporary optional expedients and exceptions for applying reference rate reform to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance can be applied immediately and only applies to contract modifications made or hedging relationships entered into or evaluated before December 31, 2022. While we do not have any hedging relationships and currently do not believe we have material contracts impacted by reference rate reform, we are in the process of evaluating the impact of this guidance.
Recently Adopted Accounting Pronouncements

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 key changes include hybrid tax regimes, intraperiod tax allocation exception, and interim-period accounting for enacted changes in tax law. We early adopted ASU 2019-12 during the second quarter of 2020 under the prospective method of adoption. As a result of adoption, there was no modification required to the first quarter of 2020 results of operations as previously presented.

The FASB issued four ASUs related to ASC 326, Financial Instruments - Credit Losses. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. On January 1, 2020, we adopted ASC 326, which replaces the existing incurred loss impairment model for financial assets, including trade receivables, with an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates. Additionally, the concept of other-than-temporary impairment for available-for-sale investments is eliminated and instead requires us to focus on determining whether any unrealized loss is a result of a credit loss or other factors. We adopted ASC 326 under the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after adoption are presented under ASC 326 while we have not changed previously disclosed amounts or provided additional disclosures for comparative periods. We recorded an immaterial cumulative-effect adjustment to trade receivables to the opening balance of accumulated deficit in our condensed consolidated balance sheet. We adopted ASC 326 under the prospective transition approach for available-for-sale investments which resulted in no change to amortized cost basis before and after adoption. Credit losses related to available-for-sale investments will now be recorded through an allowance for credit losses with immediate recognition to our condensed consolidated statement of operations rather than as a reduction to the amortized cost basis and recognition to our condensed consolidated statements of comprehensive loss. See above within Note 1, “Background and Basis of Presentation”, for updates to our significant accounting policies impacted by our adoption of ASC 326 as well as Note 4, “Cash and Cash Equivalents, and Investments” for more information.

In August 2018, the FASB issued 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. We adopted ASU 2018-15 on January 1, 2020 under the prospective method of adoption.
Net Loss Per Share Net Loss Per ShareBasic net loss per share is computed by dividing 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, 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.
v3.20.2
Revenues (Tables)
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following tables set 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 September 30,Change
 20202019$%
Chegg Services$118,895 $69,304 $49,591 72 %
Required Materials35,123 24,847 10,276 41 
Total net revenues$154,018 $94,151 $59,867 64 

 Nine Months Ended September 30,Change
 20202019$%
Chegg Services$345,258 $224,903 $120,355 54 %
Required Materials93,359 60,519 32,840 54 
Total net revenues$438,617 $285,422 $153,195 54 
Schedule of Accounts Receivable
The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages):
 Change
 September 30, 2020December 31, 2019$%
Accounts receivable, net$12,487 $11,529 $958 8 %
Deferred revenue51,941 18,780 33,161 177 
Contract assets8,214 3,531 4,683 133 
v3.20.2
Net Loss Per Share (Tables)
 9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Numerator:
Net loss$(37,140)$(11,477)$(32,264)$(17,824)
Denominator:
Weighted average shares used to compute net loss per share, basic and diluted
126,194 120,085 124,162 118,547 
Net loss per share, basic and diluted
$(0.29)$(0.10)$(0.26)$(0.15)
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 September 30,Nine Months Ended September 30,
2020201920202019
Options to purchase common stock865 2,122 977 2,715 
RSUs and PSUs3,394 3,831 3,425 4,952 
Shares related to convertible senior notes8,721 4,098 4,422 3,709 
Employee stock purchase plan 9 7 4 3 
Total common stock equivalents12,989 10,058 8,828 11,379 
v3.20.2
Cash and Cash Equivalents, and Investments (Tables)
 9 Months Ended
Sep. 30, 2020
Cash and Cash Equivalents [Abstract]  
Cash, Cash Equivalents and Investments
The following tables show our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss, and fair value as of September 30, 2020 and December 31, 2019 (in thousands):
 September 30, 2020
 Adjusted CostUnrealized GainUnrealized LossFair Value
Cash and cash equivalents:   
Cash$17,346 $— $— $17,346 
U.S. treasury securities307,673 — — 307,673 
Money market funds202,522 — — 202,522 
Total cash and cash equivalents$527,541 $— $— $527,541 
Short-term investments:   
Commercial paper$204,044 $38 $(24)$204,058 
Corporate securities516,682 2,644 (57)519,269 
Total short-term investments$720,726 $2,682 $(81)$723,327 
Long-term investments:   
Corporate securities$456,774 $602 $(635)$456,741 
Agency bonds64,495 25 — 64,520 
Total long-term investments$521,269 $627 $(635)$521,261 

 December 31, 2019
 Adjusted CostUnrealized GainUnrealized LossFair Value
Cash and cash equivalents:   
Cash$241,355 $— $— $241,355 
Money market funds146,165 — — 146,165 
Total cash and cash equivalents$387,520 $— $— $387,520 
Short-term investments:   
Commercial paper$7,489 $— $— $7,489 
Corporate securities318,946 425 (78)319,293 
U.S. treasury securities44,251 39 (4)44,286 
Agency bonds10,000 6 — 10,006 
Total short-term investments$380,686 $470 $(82)$381,074 
Long-term investments:   
Corporate securities$295,103 $533 $(158)$295,478 
Agency bonds14,999 6 — 15,005 
Total long-term investments$310,102 $539 $(158)$310,483 
Schedule of Available-for-sale Securities Reconciliation
The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of September 30, 2020 (in thousands):
 Adjusted CostFair Value
Due in 1 year or less$1,028,399 $1,031,000 
Due in 1-2 years521,269 521,261 
Investments not due at a single maturity date202,522 202,522 
Total$1,752,190 $1,754,783 
v3.20.2
Fair Value Measurement (Tables)
 9 Months Ended
Sep. 30, 2020
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 September 30, 2020 and December 31, 2019 are classified based on the valuation technique level in the tables below (in thousands):
 September 30, 2020
 TotalLevel 1Level 2
Assets:   
Cash equivalents:   
U.S. treasury securities$307,673 $307,673 $— 
Money market funds202,522 202,522 — 
Short-term investments: 
Commercial paper204,058 — 204,058 
Corporate securities519,269 — 519,269 
Long-term investments:
Corporate securities456,741 — 456,741 
Agency bonds64,520 — 64,520 
Total assets measured and recorded at fair value$1,754,783 $510,195 $1,244,588 

 December 31, 2019
 TotalLevel 1Level 2
Assets:   
Cash equivalents:   
Money market funds$146,165 $146,165 $— 
Short-term investments:
Commercial paper7,489 — 7,489 
Corporate securities319,293 — 319,293 
U.S. treasury securities44,286 44,286 — 
Agency bonds10,006 — 10,006 
Long-term investments:
Corporate securities295,478 — 295,478 
Agency bonds15,005 — 15,005 
Total assets measured and recorded at fair value$837,722 $190,451 $647,271 
Fair Value Measurements, Nonrecurring
The carrying amounts and estimated fair values of the notes as of September 30, 2020 and December 31, 2019 are as follows (in thousands):
September 30, 2020December 31, 2019
 Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
2026 notes$751,349 $1,000,000 $— $— 
2025 notes631,061 1,208,800 602,611 831,000 
2023 notes154,574 462,358 297,692 523,538 
Convertible senior notes, net$1,536,984 $2,671,158 $900,303 $1,354,538 
v3.20.2
Acquisitions (Tables)
 9 Months Ended
Sep. 30, 2020
Business Combinations [Abstract]  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed
The following table presents the preliminary total allocation of purchase consideration recorded on our condensed consolidated balance sheet as of the acquisition date (in thousands):
 Mathway
Cash$712 
Accounts receivable1,132 
Other acquired assets779 
Acquired intangible assets30,320 
Total identifiable assets acquired32,943 
Deferred revenue(1,423)
Liabilities assumed(727)
Net identifiable assets acquired30,793 
Goodwill70,167 
Total fair value of purchase consideration$100,960 
Schedule Of Allocation Of Purchase Consideration To Acquired Intangible Assets
The following table presents the details of the allocation of purchase consideration to the acquired intangible assets (in thousands, except weighted-average amortization period):
Mathway
AmountWeighted-Average Amortization Period (in months)
Domain names$220 18
Trade name520 18
Customer lists6,220 48
Developed technology23,360 84
Total acquired intangible assets$30,320 75
v3.20.2
Goodwill and Intangible Assets (Tables)
 9 Months Ended
Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
Goodwill consists of the following (in thousands):
 Nine Months Ended September 30, 2020Year Ended December 31, 2019
Beginning balance$214,513 $149,524 
Additions due to acquisitions70,167 65,181 
Foreign currency translation adjustment417 (192)
Measurement period adjustments related to prior acquisition(288)— 
Ending balance$284,809 $214,513 
Finite-Lived Intangible Assets
Intangible assets consist of the following (in thousands, except weighted-average amortization period):
 September 30, 2020
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library72$66,628 $(25,392)$41,236 
Customer lists4716,190 (9,718)6,472 
Trade and domain names4411,613 (7,467)4,146 
Non-compete agreements312,018 (1,962)56 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (124)— (124)
Total intangible assets64$99,925 $(44,539)$55,386 
 
 December 31, 2019
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library66$43,268 $(18,395)$24,873 
Customer lists479,970 (8,210)1,760 
Trade and domain names4610,873 (6,169)4,704 
Non-compete agreements312,018 (1,890)128 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (398)— (398)
Total intangible assets58$69,331 $(34,664)$34,667 
Indefinite-lived Intangible Assets
Intangible assets consist of the following (in thousands, except weighted-average amortization period):
 September 30, 2020
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library72$66,628 $(25,392)$41,236 
Customer lists4716,190 (9,718)6,472 
Trade and domain names4411,613 (7,467)4,146 
Non-compete agreements312,018 (1,962)56 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (124)— (124)
Total intangible assets64$99,925 $(44,539)$55,386 
 
 December 31, 2019
 Weighted-Average Amortization Period (in months)Gross Carrying AmountAccumulated AmortizationNet Carrying Amount
Developed technologies and content library66$43,268 $(18,395)$24,873 
Customer lists479,970 (8,210)1,760 
Trade and domain names4610,873 (6,169)4,704 
Non-compete agreements312,018 (1,890)128 
Indefinite-lived trade name— 3,600 — 3,600 
Foreign currency translation adjustment— (398)— (398)
Total intangible assets58$69,331 $(34,664)$34,667 
Estimated Future Amortization Expense Related to Intangible Assets
As of September 30, 2020, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
Remaining three months of 2020$4,404 
202113,320 
202210,889 
20238,760 
20245,707 
Thereafter8,706 
Total$51,786 
v3.20.2
Convertible Senior Notes (Tables)
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
The total net proceeds from the notes are as follows (in thousands):
2026 Notes2025 Notes2023 Notes
Principal amount$1,000,000 $800,000 $345,000 
Less initial purchasers’ discount(15,000)(18,998)(8,625)
Less other issuance costs(904)(822)(757)
Net proceeds$984,096 $780,180 $335,618 
Schedule of Debt
The net carrying amount of the liability component of the notes is as follows (in thousands):
September 30, 2020December 31, 2019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Principal$1,000,000 $800,000 $173,018 $800,000 $345,000 
Unamortized debt discount(236,809)(158,077)(16,484)(184,698)(42,280)
Unamortized issuance costs(11,842)(10,862)(1,960)(12,691)(5,028)
Net carrying amount (liability)$751,349 $631,061 $154,574 $602,611 $297,692 
    
The net carrying amount of the equity component of the notes is as follows (in thousands):
September 30, 2020December 31, 2019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Debt discount for conversion option$241,300 $212,000 $32,193 $212,000 $64,193 
Issuance costs(3,838)(5,253)(877)(5,253)(1,749)
Net carrying amount (equity)$237,462 $206,747 $31,316 $206,747 $62,444 
Schedule Of Interest Expense Recognized The following tables set forth the total interest expense recognized related to the notes (in thousands):
Three Months Ended September 30,
20202019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Contractual interest expense$— $252 $169 $252 $217 
Amortization of debt discount4,491 8,938 2,458 8,939 3,161 
Amortization of issuance costs225 614 292 614 375 
Total interest expense$4,716 $9,804 $2,919 $9,805 $3,753 

Nine Months Ended September 30,
20202019
2026 Notes2025 Notes2023 Notes2025 Notes2023 Notes
Contractual interest expense$— $750 $599 $517 $645 
Amortization of debt discount4,491 26,621 8,709 18,363 9,377 
Amortization of issuance costs225 1,829 1,035 1,262 1,112 
Total interest expense$4,716 $29,200 $10,343 $20,142 $11,134 
v3.20.2
Stockholders' Equity (Tables)
 9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [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 September 30,Nine Months Ended September 30,
 2020201920202019
Cost of revenues$262 $96 $644 $295 
Research and development8,433 5,741 23,044 15,876 
Sales and marketing2,431 1,843 7,053 5,405 
General and administrative10,403 9,185 28,668 25,779 
Total share-based compensation expense$21,529 $16,865 $59,409 $47,355 
Summary of Restricted Stock Unit Activity
Activity for RSUs and PSUs is as follows:
 RSUs and PSUs Outstanding
 Shares OutstandingWeighted Average Grant Date Fair Value
Balance at December 31, 20196,909,530 $24.04 
Granted2,462,160 43.54 
Released(3,591,076)18.89 
Canceled(409,544)30.57 
Balance at September 30, 20205,371,070 $35.92 
v3.20.2
Background and Basis of Presentation (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Textbook library, net $ 34,575 $ 34,575   $ 0
Print textbook depreciation expense   10,699 $ 0  
Gain on textbook library, net   $ (2,028) $ 0  
Textbook Library        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Estimated useful life   4 years    
Textbook library, net 34,600 $ 34,600    
Property, plant and equipment, gross 44,800 44,800    
Accumulated depreciation (9,200) (9,200)    
Write down   (1,000)    
Print textbook depreciation expense 3,600 10,700    
Gain on textbook library, net $ (600) $ (2,000)    
Textbook Library | Minimum        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Contractual period   2 months    
Textbook Library | Maximum        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Contractual period   5 months    
eTextbooks | Minimum        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Contractual period   2 months    
eTextbooks | Maximum        
Error Corrections and Prior Period Adjustments Restatement [Line Items]        
Contractual period   5 months    
v3.20.2
Background and Basis of Presentation - Convertible Notes (Details) - Senior Notes - USD ($)
 1 Months Ended
Aug. 31, 2020
Apr. 30, 2019
Apr. 30, 2018
Sep. 30, 2020
Dec. 31, 2019
Mar. 31, 2019
0% Convertible Senior Notes Due 2026            
Debt Instrument [Line Items]            
Face value $ 1,000,000,000.0     $ 1,000,000,000    
Interest rate, stated percentage 0.00%          
Proceeds from issuance of debt $ 1,000,000,000          
0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Face value   $ 100,000,000   800,000,000 $ 800,000,000 $ 700,000,000
Interest rate, stated percentage           0.125%
Proceeds from issuance of debt   $ 800,000,000        
0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Face value     $ 345,000,000 $ 173,018,000 $ 345,000,000  
Interest rate, stated percentage     0.25%      
Proceeds from issuance of debt     $ 345,000,000      
v3.20.2
Revenues (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Disaggregation of Revenue [Line Items]          
Total net revenues $ 154,018 $ 94,151 $ 438,617 $ 285,422  
Change in total net revenues $ 59,867   $ 153,195    
Change in total net revenues, percent 64.00%   54.00%    
Contract with customer, liability, revenue recognized $ 25,400 15,700 $ 18,000 16,000  
Contract with customer, liability, revenue recognized, prior period   2,200   2,700  
Accounts receivable, net 12,487   12,487   $ 11,529
Change in accounts receivable     $ 958    
Change in accounts receivable, percent     8.00%    
Deferred revenue 51,941   $ 51,941   18,780
Change in deferred revenue     $ 33,161    
Change in deferred revenue, percent     177.00%    
Contract assets 8,214   $ 8,214   $ 3,531
Change in contract assets     $ 4,683    
Change in contract assets, percent     133.00%    
Textbook Library          
Disaggregation of Revenue [Line Items]          
Operating lease income 12,000   $ 35,400    
Chegg Services          
Disaggregation of Revenue [Line Items]          
Total net revenues 118,895 69,304 345,258 224,903  
Change in total net revenues $ 49,591   $ 120,355    
Change in total net revenues, percent 72.00%   54.00%    
Required Materials          
Disaggregation of Revenue [Line Items]          
Total net revenues $ 35,123 $ 24,847 $ 93,359 $ 60,519  
Change in total net revenues $ 10,276   $ 32,840    
Change in total net revenues, percent 41.00%   54.00%    
v3.20.2
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 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Numerator:        
Net loss $ (37,140) $ (11,477) $ (32,264) $ (17,824)
Denominator:        
Weighted average shares used to compute net loss per share, basic and diluted (in shares) 126,194 120,085 124,162 118,547
Net loss per share, basic and diluted (in dollars per share) $ (0.29) $ (0.10) $ (0.26) $ (0.15)
v3.20.2
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 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Apr. 30, 2019
Mar. 31, 2019
Apr. 30, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Total common stock equivalents (in shares) 12,989 10,058 8,828 11,379        
0.25% Convertible Senior Notes Due 2023 | Senior Notes                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Face value $ 173,018,000   $ 173,018,000   $ 345,000,000     $ 345,000,000
Conversion price $ 26.95   $ 26.95          
0.25% Convertible Senior Notes Due 2023 | Senior Notes | Capped Call                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Conversion price $ 40.68   $ 40.68          
0.125% Convertible Senior Notes Due 2025 | Senior Notes                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Face value $ 800,000,000   $ 800,000,000   $ 800,000,000 $ 100,000,000 $ 700,000,000  
Conversion price $ 51.56   $ 51.56          
0.125% Convertible Senior Notes Due 2025 | Senior Notes | Capped Call                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Conversion price $ 79.32   $ 79.32          
Options to purchase common stock                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Total common stock equivalents (in shares) 865 2,122 977 2,715        
RSUs and PSUs                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Total common stock equivalents (in shares) 3,394 3,831 3,425 4,952        
Senior Notes                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Total common stock equivalents (in shares) 8,721 4,098 4,422 3,709        
Employee stock purchase plan                
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]                
Total common stock equivalents (in shares) 9 7 4 3        
v3.20.2
Cash and Cash Equivalents, and Investments - Schedule of Available For Sale Securities (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost $ 1,752,190  
Fair Value 1,754,783  
Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 527,541 $ 387,520
Unrealized Gain 0 0
Unrealized Loss 0 0
Fair Value 527,541 387,520
Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 720,726 380,686
Unrealized Gain 2,682 470
Unrealized Loss (81) (82)
Fair Value 723,327 381,074
Long-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 521,269 310,102
Unrealized Gain 627 539
Unrealized Loss (635) (158)
Fair Value 521,261 310,483
Commercial paper | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 204,044 7,489
Unrealized Gain 38 0
Unrealized Loss (24) 0
Fair Value 204,058 7,489
Corporate securities | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 516,682 318,946
Unrealized Gain 2,644 425
Unrealized Loss (57) (78)
Fair Value 519,269 319,293
Corporate securities | Long-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 456,774 295,103
Unrealized Gain 602 533
Unrealized Loss (635) (158)
Fair Value 456,741 295,478
U.S. treasury securities | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost   44,251
Unrealized Gain   39
Unrealized Loss   (4)
Fair Value   44,286
Agency bonds | Short-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost   10,000
Unrealized Gain   6
Unrealized Loss   0
Fair Value   10,006
Agency bonds | Long-term investments:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 64,495 14,999
Unrealized Gain 25 6
Unrealized Loss 0 0
Fair Value 64,520 15,005
Cash | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 17,346 241,355
Unrealized Gain 0 0
Unrealized Loss 0 0
Fair Value 17,346 241,355
Money market funds | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 202,522 146,165
Unrealized Gain 0 0
Unrealized Loss 0 0
Fair Value 202,522 $ 146,165
U.S. treasury securities | Cash and cash equivalents:    
Debt Securities, Available-for-sale [Line Items]    
Adjusted Cost 307,673  
Unrealized Gain 0  
Unrealized Loss 0  
Fair Value $ 307,673  
v3.20.2
Cash and Cash Equivalents, and Investments - Contractual Maturity (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2020
USD ($)
Cash and Cash Equivalents [Abstract]  
Due in 1 year or less, Cost $ 1,028,399
Due in 1-2 years, Cost 521,269
Investments not due at a single maturity date, Cost 202,522
Adjusted Cost 1,752,190
Due in 1 year or less, Fair Value 1,031,000
Due in 1-2 years, Fair Value 521,261
Investments not due at a single maturity date, Fair Value 202,522
Total, Fair Value $ 1,754,783
Weighted average maturity 12 months
v3.20.2
Cash and Cash Equivalents, and Investments - Restricted Cash (Details) - USD ($)
$ in Millions
Sep. 30, 2020
Dec. 31, 2019
Security Deposit For Office    
Restricted Cash and Cash Equivalents Items [Line Items]    
Restricted cash $ 2.0 $ 1.9
v3.20.2
Cash and Cash Equivalents, and Investments - Strategic Investment (Details) - USD ($)
$ in Millions
Jun. 30, 2020
Oct. 31, 2018
Mar. 31, 2017
TAPD, Inc.      
Schedule of Investments [Line Items]      
Cost method investment $ 2.0    
WayUp, Inc.      
Schedule of Investments [Line Items]      
Cost method investment   $ 10.0  
Foreign Entity      
Schedule of Investments [Line Items]      
Cost method investment     $ 3.0
v3.20.2
Fair Value Measurement - Financial Instruments (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments $ 723,327 $ 381,074
Long-term investments 521,261 310,483
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 1,754,783 837,722
Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets measured and recorded at fair value 510,195 190,451
Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets measured and recorded at fair value 1,244,588 647,271
Commercial paper | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 204,058 7,489
Commercial paper | Fair Value, Measurements, Recurring | 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 | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 204,058 7,489
Corporate securities | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 519,269 319,293
Long-term investments 456,741 295,478
Corporate securities | Fair Value, Measurements, Recurring | 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 | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments 519,269 319,293
Long-term investments 456,741 295,478
U.S. treasury securities | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   44,286
U.S. treasury securities | Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   44,286
U.S. treasury securities | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   0
Agency bonds | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   10,006
Long-term investments 64,520 15,005
Agency bonds | Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   0
Long-term investments 0 0
Agency bonds | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Short-term investments   10,006
Long-term investments 64,520 15,005
Money market funds | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 202,522 146,165
Money market funds | Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 202,522 146,165
Money market funds | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 0 $ 0
U.S. treasury securities | Fair Value, Measurements, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 307,673  
U.S. treasury securities | Fair Value, Measurements, Recurring | Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 307,673  
U.S. treasury securities | Fair Value, Measurements, Recurring | Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 0  
v3.20.2
Fair Value Measurement - Debt (Details) - Senior Notes - USD ($)
$ in Thousands
Sep. 30, 2020
Aug. 31, 2020
Dec. 31, 2019
Apr. 30, 2019
Apr. 30, 2018
Carrying Amount | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes $ 1,536,984   $ 900,303    
Estimated Fair Value | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes 2,671,158   1,354,538    
0% Convertible Senior Notes Due 2026          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Unamortized debt discount 236,809        
Unamortized issuance costs 11,842 $ 15,900      
0% Convertible Senior Notes Due 2026 | Carrying Amount          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes   758,700      
0% Convertible Senior Notes Due 2026 | Carrying Amount | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes 751,349   0    
0% Convertible Senior Notes Due 2026 | Estimated Fair Value | Fair Value, Measurements, Nonrecurring          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes 1,000,000   0    
0.125% Convertible Senior Notes Due 2025          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Unamortized debt discount 158,077   184,698    
Unamortized issuance costs 10,862   12,691 $ 19,800  
0.125% Convertible Senior Notes Due 2025 | Carrying Amount          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes       $ 588,000  
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 631,061   602,611    
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 1,208,800   831,000    
0.25% Convertible Senior Notes Due 2023          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes   $ 156,100      
Unamortized debt discount 16,484   42,280    
Unamortized issuance costs 1,960   5,028   $ 9,400
0.25% Convertible Senior Notes Due 2023 | Carrying Amount          
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]          
Convertible senior notes         $ 280,800
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 154,574   297,692    
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 $ 462,358   $ 523,538    
v3.20.2
Acquisitions (Details) - Mathway, LLC - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Jun. 04, 2020
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Business Acquisition [Line Items]          
Fair value of purchase consideration $ 101.0        
Initial cash consideration 93.5        
Escrow $ 7.5        
Remaining escrow release period 15 months        
Contingent payments $ 15.0        
Contingent consideration, liability   $ 1.7   $ 1.7  
Acquisition related costs       3.1  
Pro forma net income (loss)   $ (37.3) $ (14.1) $ (32.3) $ (33.3)
v3.20.2
Acquisitions - Assets Acquired and Liabilities Assumed (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Jun. 04, 2020
Dec. 31, 2019
Dec. 31, 2018
Business Acquisition [Line Items]        
Goodwill $ 284,809   $ 214,513 $ 149,524
Mathway, LLC        
Business Acquisition [Line Items]        
Cash   $ 712    
Accounts receivable   1,132    
Other acquired assets   779    
Acquired intangible assets   30,320    
Total identifiable assets acquired   32,943    
Deferred revenue   (1,423)    
Liabilities assumed   (727)    
Net identifiable assets acquired   30,793    
Goodwill   70,167    
Total fair value of purchase consideration   $ 100,960    
v3.20.2
Acquisitions - Intangible Assets (Details)
$ in Thousands
Jun. 04, 2020
USD ($)
Business Acquisition [Line Items]  
Weighted-Average Amortization Period (in months) 75 months
Mathway, LLC  
Business Acquisition [Line Items]  
Total acquired intangible assets $ 30,320
Domain names  
Business Acquisition [Line Items]  
Total acquired intangible assets $ 220
Weighted-Average Amortization Period (in months) 18 months
Trade and domain names  
Business Acquisition [Line Items]  
Total acquired intangible assets $ 520
Weighted-Average Amortization Period (in months) 18 months
Customer lists  
Business Acquisition [Line Items]  
Total acquired intangible assets $ 6,220
Weighted-Average Amortization Period (in months) 48 months
Developed technology  
Business Acquisition [Line Items]  
Total acquired intangible assets $ 23,360
Weighted-Average Amortization Period (in months) 84 months
v3.20.2
Goodwill and Intangible Assets - Goodwill (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Goodwill [Roll Forward]    
Beginning balance $ 214,513 $ 149,524
Additions due to acquisitions 70,167 65,181
Foreign currency translation adjustment 417 (192)
Measurement period adjustments related to prior acquisition (288) 0
Ending balance $ 284,809 $ 214,513
v3.20.2
Goodwill and Intangible Assets - Finite-lived and Indefinite-lived Intangibe Assets (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Mar. 31, 2020
Sep. 30, 2020
Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period (in months) 58 months 64 months  
Accumulated Amortization   $ (44,539) $ (34,664)
Net Carrying Amount   51,786  
Indefinite-lived trade name   3,600 3,600
Foreign currency translation adjustment $ (398) (124)  
Total intangible assets, gross carrying amount   99,925 69,331
Intangible assets, net   $ 55,386 34,667
Developed technologies and content library      
Finite Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period (in months) 66 months 72 months  
Gross Carrying Amount   $ 66,628 43,268
Accumulated Amortization   (25,392) (18,395)
Net Carrying Amount   $ 41,236 24,873
Customer lists      
Finite Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period (in months) 47 months 47 months  
Gross Carrying Amount   $ 16,190 9,970
Accumulated Amortization   (9,718) (8,210)
Net Carrying Amount   $ 6,472 1,760
Trade and domain names      
Finite Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period (in months) 46 months 44 months  
Gross Carrying Amount   $ 11,613 10,873
Accumulated Amortization   (7,467) (6,169)
Net Carrying Amount   $ 4,146 4,704
Non-compete agreements      
Finite Lived Intangible Assets [Line Items]      
Weighted-Average Amortization Period (in months) 31 months 31 months  
Gross Carrying Amount   $ 2,018 2,018
Accumulated Amortization   (1,962) (1,890)
Net Carrying Amount   $ 56 $ 128
v3.20.2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Acquisition-Related Intangible Assets        
Finite Lived Intangible Assets [Line Items]        
Amortization expense of acquisition related to acquired intangible assets $ 4.4 $ 1.5 $ 9.9 $ 5.0
v3.20.2
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Details)
$ in Thousands
Sep. 30, 2020
USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]  
Remaining three months of 2020 $ 4,404
2021 13,320
2022 10,889
2023 8,760
2024 5,707
Thereafter 8,706
Net Carrying Amount $ 51,786
v3.20.2
Convertible Senior Notes (Details)
 1 Months Ended 9 Months Ended
Aug. 31, 2020
USD ($)
shares
Apr. 30, 2019
USD ($)
Apr. 30, 2018
USD ($)
day
Sep. 30, 2020
USD ($)
$ / shares
shares
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Mar. 31, 2019
USD ($)
Debt Instrument [Line Items]              
Net proceeds       $ 984,096,000 $ 780,180,000    
Repayments of convertible senior notes       159,677,000 0    
Gain (loss) on extinguishment of debt       (3,315,000) 0    
Proceeds from exercise of convertible senior notes capped call       $ 57,414,000 $ 0    
Senior Notes              
Debt Instrument [Line Items]              
Share price (in dollars per share) | $ / shares       $ 71.44      
Senior Notes | 0% Convertible Senior Notes Due 2026              
Debt Instrument [Line Items]              
Face value $ 1,000,000,000.0     $ 1,000,000,000      
Interest rate, stated percentage 0.00%            
Proceeds from issuance of debt $ 1,000,000,000            
Less initial purchasers’ discount (15,000,000)            
Less other issuance costs (904,000)            
Net proceeds 984,096,000            
Debt instrument, equity component $ 241,300,000     $ 237,462,000      
Conversion ratio 0.0092978            
Conversion price | $ / shares       $ 107.55      
Debt instrument, remaining useful life       5 years 10 months 24 days      
Debt conversion, converted instrument, amount       $ 664,200,000      
Debt instrument, if-converted value less than principal       (335,800,000)      
Interest rate, effective percentage   4.63%          
Debt issuance costs $ (15,900,000)     $ (11,842,000)      
Senior Notes | 0% Convertible Senior Notes Due 2026 | Debt Instrument, Liability Component              
Debt Instrument [Line Items]              
Debt issuance costs (12,100,000)            
Senior Notes | 0% Convertible Senior Notes Due 2026 | Debt Instrument, Equity Component              
Debt Instrument [Line Items]              
Debt issuance costs (3,800,000)            
Senior Notes | 0% Convertible Senior Notes Due 2026 | Carrying Amount              
Debt Instrument [Line Items]              
Convertible senior notes 758,700,000            
Senior Notes | 0% Convertible Senior Notes Due 2026 | Capped Call              
Debt Instrument [Line Items]              
Net proceeds 103,400,000            
Debt instrument, convertible (in shares) | shares       9,297,800      
Conversion price | $ / shares       $ 156.44      
Senior Notes | 0% Convertible Senior Notes Due 2026, Additional Notes              
Debt Instrument [Line Items]              
Face value 100,000,000            
Senior Notes | 0.125% Convertible Senior Notes Due 2025              
Debt Instrument [Line Items]              
Face value   $ 100,000,000   $ 800,000,000   $ 800,000,000 $ 700,000,000
Interest rate, stated percentage             0.125%
Proceeds from issuance of debt   800,000,000          
Less initial purchasers’ discount   (18,998,000)          
Less other issuance costs   (822,000)          
Net proceeds   780,180,000          
Debt instrument, equity component   $ 212,000,000.0   $ 206,747,000   206,747,000  
Conversion ratio   0.0193956          
Conversion price | $ / shares       $ 51.56      
Debt instrument, remaining useful life       4 years 6 months      
Debt conversion, converted instrument, amount       $ 1,108,500,000      
Debt instrument, if-converted value in excess of principal       308,500,000      
Interest rate, effective percentage   5.40%          
Debt issuance costs   $ (19,800,000)   $ (10,862,000)   (12,691,000)  
Senior Notes | 0.125% Convertible Senior Notes Due 2025 | Debt Instrument, Liability Component              
Debt Instrument [Line Items]              
Debt issuance costs   (14,600,000)          
Senior Notes | 0.125% Convertible Senior Notes Due 2025 | Debt Instrument, Equity Component              
Debt Instrument [Line Items]              
Debt issuance costs   (5,300,000)          
Senior Notes | 0.125% Convertible Senior Notes Due 2025 | Carrying Amount              
Debt Instrument [Line Items]              
Convertible senior notes   588,000,000.0          
Senior Notes | 0.125% Convertible Senior Notes Due 2025 | Capped Call              
Debt Instrument [Line Items]              
Net proceeds   $ 97,200,000          
Debt instrument, convertible (in shares) | shares       15,516,480      
Conversion price | $ / shares       $ 79.32      
Senior Notes | 0.25% Convertible Senior Notes Due 2023              
Debt Instrument [Line Items]              
Face value     $ 345,000,000 $ 173,018,000   345,000,000  
Interest rate, stated percentage     0.25%        
Proceeds from issuance of debt     $ 345,000,000        
Less initial purchasers’ discount     (8,625,000)        
Less other issuance costs     (757,000)        
Net proceeds     335,618,000        
Option to purchase additional notes     45,000,000        
Repurchased principal amount 172,000,000.0            
Aggregate consideration for principal amount exchanged 501,700,000            
Repayments of convertible senior notes $ 174,600,000            
Debt conversion, shares issued (in shares) | shares 4,182,320            
Debt conversion, shares issued, value $ 327,100,000            
Convertible senior notes 156,100,000            
Debt instrument, equity component 345,600,000   $ 64,200,000 $ 31,316,000   62,444,000  
Carrying amount 152,800,000            
Gain (loss) on extinguishment of debt $ (3,300,000)            
Conversion ratio     0.0371051        
Conversion price | $ / shares       $ 26.95      
Debt instrument, remaining useful life       2 years 7 months 6 days      
Debt conversion, converted instrument, amount       $ 458,600,000      
Debt instrument, if-converted value in excess of principal       285,600,000      
Interest rate, effective percentage     4.34%        
Debt issuance costs     $ (9,400,000) $ (1,960,000)   $ (5,028,000)  
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Debt Instrument, Liability Component              
Debt Instrument [Line Items]              
Debt issuance costs     (7,600,000)        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Debt Instrument, Equity Component              
Debt Instrument [Line Items]              
Debt issuance costs     (1,700,000)        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Carrying Amount              
Debt Instrument [Line Items]              
Convertible senior notes     $ 280,800,000        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Sale Price Is Greater Or Equal 130%              
Debt Instrument [Line Items]              
Threshold trading days | day     20        
Threshold consecutive trading days | day     30        
Threshold percentage of stock price trigger     130.00%        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Trading Price Per $1,000 Principal Amount Less Than 98%              
Debt Instrument [Line Items]              
Threshold trading days | day     5        
Threshold consecutive trading days | day     10        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Trading Price Per $1,000 Principal Amount Less Than 98% | Maximum              
Debt Instrument [Line Items]              
Threshold percentage of stock price trigger     98.00%        
Senior Notes | 0.25% Convertible Senior Notes Due 2023 | Capped Call              
Debt Instrument [Line Items]              
Net proceeds     $ 39,200,000        
Debt instrument, convertible, shares terminated (in shares) | shares 6,380,815            
Proceeds from exercise of convertible senior notes capped call $ 57,400,000            
Debt instrument, convertible (in shares) | shares       6,419,850      
Conversion price | $ / shares       $ 40.68      
v3.20.2
Convertible Senior Notes - Net Carrying Amount (Details) - Senior Notes - USD ($)
Sep. 30, 2020
Aug. 31, 2020
Dec. 31, 2019
Apr. 30, 2019
Mar. 31, 2019
Apr. 30, 2018
0% Convertible Senior Notes Due 2026            
Debt Instrument [Line Items]            
Principal $ 1,000,000,000 $ 1,000,000,000.0        
Unamortized debt discount (236,809,000)          
Unamortized issuance costs (11,842,000) (15,900,000)        
Debt discount for conversion option 241,300,000          
Issuance costs (3,838,000)          
Net carrying amount (equity) 237,462,000 241,300,000        
0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Principal 800,000,000   $ 800,000,000 $ 100,000,000 $ 700,000,000  
Unamortized debt discount (158,077,000)   (184,698,000)      
Unamortized issuance costs (10,862,000)   (12,691,000) (19,800,000)    
Debt discount for conversion option 212,000,000   212,000,000      
Issuance costs (5,253,000)   (5,253,000)      
Net carrying amount (equity) 206,747,000   206,747,000 212,000,000.0    
0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Principal 173,018,000   345,000,000     $ 345,000,000
Unamortized debt discount (16,484,000)   (42,280,000)      
Unamortized issuance costs (1,960,000)   (5,028,000)     (9,400,000)
Net carrying amount (liability)   156,100,000        
Debt discount for conversion option 32,193,000   64,193,000      
Issuance costs (877,000)   (1,749,000)      
Net carrying amount (equity) 31,316,000 345,600,000 62,444,000     64,200,000
Carrying Amount | 0% Convertible Senior Notes Due 2026            
Debt Instrument [Line Items]            
Net carrying amount (liability)   $ 758,700,000        
Carrying Amount | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Net carrying amount (liability)       $ 588,000,000.0    
Carrying Amount | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Net carrying amount (liability)           $ 280,800,000
Carrying Amount | Fair Value, Measurements, Nonrecurring            
Debt Instrument [Line Items]            
Net carrying amount (liability) 1,536,984,000   900,303,000      
Carrying Amount | Fair Value, Measurements, Nonrecurring | 0% Convertible Senior Notes Due 2026            
Debt Instrument [Line Items]            
Net carrying amount (liability) 751,349,000   0      
Carrying Amount | Fair Value, Measurements, Nonrecurring | 0.125% Convertible Senior Notes Due 2025            
Debt Instrument [Line Items]            
Net carrying amount (liability) 631,061,000   602,611,000      
Carrying Amount | Fair Value, Measurements, Nonrecurring | 0.25% Convertible Senior Notes Due 2023            
Debt Instrument [Line Items]            
Net carrying amount (liability) $ 154,574,000   $ 297,692,000      
v3.20.2
Convertible Senior Notes - Interest Expense Recognized (Details) - Senior Notes - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
0% Convertible Senior Notes Due 2026        
Debt Instrument [Line Items]        
Contractual interest expense $ 0   $ 0  
Amortization of debt discount 4,491   4,491  
Amortization of issuance costs 225   225  
Total interest expense 4,716   4,716  
0.125% Convertible Senior Notes Due 2025        
Debt Instrument [Line Items]        
Contractual interest expense 252 $ 252 750 $ 517
Amortization of debt discount 8,938 8,939 26,621 18,363
Amortization of issuance costs 614 614 1,829 1,262
Total interest expense 9,804 9,805 29,200 20,142
0.25% Convertible Senior Notes Due 2023        
Debt Instrument [Line Items]        
Contractual interest expense 169 217 599 645
Amortization of debt discount 2,458 3,161 8,709 9,377
Amortization of issuance costs 292 375 1,035 1,112
Total interest expense $ 2,919 $ 3,753 $ 10,343 $ 11,134
v3.20.2
Commitments and Contingencies (Details)
$ in Thousands
Aug. 12, 2020
numberOfPlaintiffs
Jul. 01, 2020
numberOfPlaintiffs
May 12, 2020
USD ($)
numberOfPlaintiffs
Mar. 03, 2020
USD ($)
Ingram Hosting Holdings LLC vs. Chegg | Pending Litigation        
Loss Contingencies [Line Items]        
Loss contingency, damages sought, value | $       $ 17,000
2018 Data Incident, Arbitration Demands        
Loss Contingencies [Line Items]        
Loss contingency, number of arbitration demands filed | numberOfPlaintiffs 577      
2018 Data Incident, Arbitration Demands | Pending Litigation        
Loss Contingencies [Line Items]        
Loss contingency, number of arbitration demands filed | numberOfPlaintiffs   1,007 15,107  
Loss contingency, damages sought, value | $     $ 25  
v3.20.2
Stockholders' Equity - Share-based Compensation Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense $ 21,529 $ 16,865 $ 59,409 $ 47,355
Cost of revenues        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense 262 96 644 295
Research and development        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense 8,433 5,741 23,044 15,876
Sales and marketing        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense 2,431 1,843 7,053 5,405
General and administrative        
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]        
Share-based compensation expense $ 10,403 $ 9,185 $ 28,668 $ 25,779
v3.20.2
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - RSUs and PSUs
 9 Months Ended
Sep. 30, 2020
$ / shares
shares
Shares Outstanding  
Number of RSUs and PSUs Outstanding, Beginning (shares) | shares 6,909,530
Number of RSUs and PSUs, Granted (shares) | shares 2,462,160
Number of RSUs and PSUs, Released (shares) | shares (3,591,076)
Number of RSUs and PSUs, Canceled (shares) | shares (409,544)
Number of RSUs and PSUs Outstanding, Ending (shares) | shares 5,371,070
Weighted Average Grant Date Fair Value  
Weighted Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares $ 24.04
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares 43.54
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares 18.89
Weighted Average Grant Date Fair Value, Canceled (in dollars per share) | $ / shares 30.57
Weighted Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares $ 35.92
v3.20.2
Stockholders' Equity - Additional Information (Details)
 9 Months Ended
Sep. 30, 2020
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Stock Repurchase Program, Authorized Amount $ 500,000,000.0
RSUs and PSUs  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Unrecognized compensation costs related to restricted stock units $ 122,800,000
Weighted average vesting period for recognition of compensation expense 2 years
v3.20.2
Income Taxes (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Tax Disclosure [Abstract]        
Provision for income taxes $ 1,066 $ 623 $ 2,875 $ 1,832
v3.20.2
Related-Party Transactions (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
board_member
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Adobe Systems | Chief Executive Officer          
Related Party Transaction [Line Items]          
Purchases from related party $ 300,000 $ 400,000 $ 1,100,000 $ 1,900,000  
Revenue from related parties 0 0 100,000 0  
Due to related parties 100,000   100,000   $ 200,000
Receivables from related party 0   0    
PayPal | Board Of Directors Member          
Related Party Transaction [Line Items]          
Expenses from transactions with related party 500,000 400,000 1,500,000 1,200,000  
Synack, Inc. | Board Of Directors Member          
Related Party Transaction [Line Items]          
Purchases from related party $ 0 $ 100,000 $ 100,000 $ 400,000  
Number of board members appointed to board of directors of related party | board_member     1    
v3.20.2
Label Element Value
Restricted Cash and Cash Equivalents, Noncurrent us-gaap_RestrictedCashAndCashEquivalentsNoncurrent $ 1,181,000
Restricted Cash and Cash Equivalents, Noncurrent us-gaap_RestrictedCashAndCashEquivalentsNoncurrent 1,736,000
Restricted Cash and Cash Equivalents, Current us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue 125,000
Restricted Cash and Cash Equivalents, Current us-gaap_RestrictedCashAndCashEquivalentsAtCarryingValue $ 313,000