Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | CHEGG, INC | ||
Entity Central Index Key | 1,364,954 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 109,962,798 | ||
Entity Public Float | $ 1,009,536,032 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 126,457 | $ 77,329 |
Short-term investments | 81,742 | 0 |
Accounts receivable, net of allowance for doubtful accounts of $259 and $436 at December 31, 2017 and December 31, 2016, respectively | 10,855 | 10,451 |
Prepaid expenses | 2,043 | 2,579 |
Other current assets | 7,845 | 21,014 |
Total current assets | 228,942 | 111,373 |
Long-term investments | 20,305 | 0 |
Textbook library, net | 0 | 2,575 |
Property and equipment, net | 47,493 | 35,305 |
Goodwill | 125,272 | 116,239 |
Intangible assets, net | 21,153 | 20,748 |
Other assets | 3,765 | 4,412 |
Total assets | 446,930 | 290,652 |
Current liabilities | ||
Accounts payable | 7,049 | 5,175 |
Deferred revenue | 13,440 | 14,836 |
Accrued liabilities | 31,074 | 44,319 |
Total current liabilities | 51,563 | 64,330 |
Long-term liabilities | ||
Total other long-term liabilities | 4,305 | 4,383 |
Total liabilities | 55,868 | 68,713 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding at December 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock, $0.001 par value – 400,000,000 shares authorized; 109,667,640 and 91,708,839 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 110 | 92 |
Additional paid-in capital | 782,845 | 593,351 |
Accumulated other comprehensive loss | (282) | (176) |
Accumulated deficit | (391,611) | (371,328) |
Total stockholders' equity | 391,062 | 221,939 |
Total liabilities and stockholders' equity | $ 446,930 | $ 290,652 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 259 | $ 436 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 109,667,640 | 91,708,839 |
Common stock, shares outstanding | 109,667,640 | 91,708,839 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Net revenues: | |||
Rental | $ 0 | $ 39,837 | $ 120,365 |
Services | 255,066 | 182,399 | 133,095 |
Sales | 0 | 31,854 | 47,913 |
Net revenues: | 255,066 | 254,090 | 301,373 |
Cost of revenues: | |||
Rental | 0 | 28,637 | 98,162 |
Services | 80,175 | 56,206 | 45,458 |
Sales | 0 | 34,758 | 46,229 |
Cost of revenues: | 80,175 | 119,601 | 189,849 |
Gross profit | 174,891 | 134,489 | 111,524 |
Operating expenses: | |||
Technology and development | 81,926 | 66,331 | 59,391 |
Sales and marketing | 51,240 | 53,949 | 64,082 |
General and administrative | 64,411 | 55,372 | 45,209 |
Restructuring charges (credits) | 1,047 | (423) | 4,868 |
Gain on liquidation of textbooks | (4,766) | (670) | (4,326) |
Total operating expenses | 193,858 | 174,559 | 169,224 |
Loss from operations | (18,967) | (40,070) | (57,700) |
Interest expense, net and other income (expense), net: | |||
Interest expense, net | (74) | (171) | (247) |
Other income (expense), net | 560 | (297) | 216 |
Total interest expense, net and other income (expense), net | 486 | (468) | (31) |
Loss before provision for income taxes | (18,481) | (40,538) | (57,731) |
Provision for income taxes | 1,802 | 1,707 | 1,479 |
Net loss | $ (20,283) | $ (42,245) | $ (59,210) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.20) | $ (0.47) | $ (0.68) |
Weighted average shares used to compute net loss per share, basic and diluted (in shares) | 100,022 | 90,534 | 86,818 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (20,283) | $ (42,245) | $ (59,210) |
Other comprehensive loss: | |||
Change in unrealized (loss) gain on available for sale investments | (187) | 25 | (8) |
Change in foreign currency translation adjustments, net of tax | 81 | (29) | (151) |
Other comprehensive loss | (106) | (4) | (159) |
Total comprehensive loss | $ (20,389) | $ (42,249) | $ (59,369) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Common stock, beginning balance, shares at Dec. 31, 2014 | 84,008,000 | ||||
Beginning balance at Dec. 31, 2014 | $ 247,043 | $ 84 | $ 516,845 | $ (13) | $ (269,873) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP, shares | 2,165,000 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 13,696 | $ 2 | 13,694 | ||
Net issuance of common stock for settlement of restricted stock units (RSUs), shares | 1,624,000 | ||||
Net issuance of common stock for settlement of restricted stock units (RSUs) | (8,710) | $ 2 | (8,712) | ||
Warrant exercises, shares | 368,000 | ||||
Warrant exercises | 0 | 0 | |||
Issuance of common stock in connection with acquisition, shares | 125,000 | ||||
Issuance of common stock in connection with acquisition | 825 | 825 | |||
Repurchase of common stock, shares | (190,000) | ||||
Repurchase of common stock | (1,185) | (1,185) | |||
Share-based compensation expense | 38,775 | 38,775 | |||
Other comprehensive loss | (159) | (159) | |||
Net loss | (59,210) | (59,210) | |||
Beginning balance at Dec. 31, 2015 | 231,075 | $ 88 | 560,242 | (172) | (329,083) |
Common stock, ending balance, shares at Dec. 31, 2015 | 88,100,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and ESPP, shares | 590,000 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 2,104 | $ 1 | 2,103 | ||
Net issuance of common stock for settlement of restricted stock units (RSUs), shares | 3,019,000 | ||||
Net issuance of common stock for settlement of restricted stock units (RSUs) | (10,776) | $ 3 | (10,779) | ||
Share-based compensation expense | 41,785 | 41,785 | |||
Other comprehensive loss | (4) | (4) | |||
Net loss | (42,245) | (42,245) | |||
Beginning balance at Dec. 31, 2016 | $ 221,939 | $ 92 | 593,351 | (176) | (371,328) |
Common stock, ending balance, shares at Dec. 31, 2016 | 91,708,839 | 91,709,000 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock in connection with follow-on offering, net of offering costs, shares | 11,500,000 | ||||
Issuance of common stock in connection with follow-on offering, net of offering costs | $ 147,609 | $ 12 | 147,597 | 0 | 0 |
Issuance of common stock upon exercise of stock options and ESPP, shares | 3,280,000 | ||||
Issuance of common stock upon exercise of stock options and ESPP | 23,656 | $ 3 | 23,653 | ||
Net issuance of common stock for settlement of restricted stock units (RSUs), shares | 3,155,000 | ||||
Net issuance of common stock for settlement of restricted stock units (RSUs) | (20,112) | $ 3 | (20,115) | ||
Warrant exercises, shares | 24,000 | ||||
Warrant exercises | 0 | 0 | |||
Share-based compensation expense | 38,359 | 38,359 | |||
Other comprehensive loss | (106) | (106) | |||
Net loss | (20,283) | (20,283) | |||
Beginning balance at Dec. 31, 2017 | $ 391,062 | $ 110 | $ 782,845 | $ (282) | $ (391,611) |
Common stock, ending balance, shares at Dec. 31, 2017 | 109,667,640 | 109,668,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (20,283) | $ (42,245) | $ (59,210) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Textbook library depreciation expense | 0 | 9,267 | 43,553 |
Amortization of warrants and deferred loan costs | 0 | 105 | 151 |
Other depreciation and amortization expense | 19,337 | 14,520 | 11,511 |
Share-based compensation expense | 38,359 | 41,785 | 38,775 |
Provision (release) for bad debts | 47 | 58 | (77) |
Gain on liquidation of textbooks | (4,766) | (670) | (4,326) |
Loss from write-offs of textbooks | 314 | 1,090 | 5,297 |
Realized loss (gain) on sale of securities | 21 | (11) | 0 |
Loss from write-off of property and equipment | 1,368 | 0 | 967 |
Interest accretion on deferred consideration | (626) | 0 | 0 |
Change in assets and liabilities net of effect of acquisition of businesses: | |||
Accounts receivable | (175) | (127) | 712 |
Prepaid expenses and other current assets | 13,550 | 10,039 | (27,878) |
Other assets | 647 | 1,437 | (592) |
Accounts payable | 2,649 | (728) | (4,236) |
Deferred revenue | (1,396) | (272) | (9,620) |
Accrued liabilities | 2,087 | (9,499) | 5,237 |
Other liabilities | 15 | 189 | (346) |
Net cash provided by (used in) operating activities | 51,148 | 24,938 | (82) |
Cash flows from investing activities | |||
Purchases of textbooks | 0 | (886) | (32,297) |
Proceeds from liquidations of textbooks | 6,943 | 25,646 | 38,260 |
Purchases of marketable securities | (128,247) | (7,633) | (35,610) |
Proceeds from sale of marketable securities | 16,393 | 22,830 | 350 |
Maturities of marketable securities | 9,750 | 6,844 | 47,840 |
Purchases of property and equipment | (26,142) | (24,689) | (8,253) |
Acquisition of businesses, net of cash acquired | (14,931) | (27,055) | 0 |
Purchase of strategic equity investment | 0 | (1,020) | (2,019) |
Net cash (used in) provided by investing activities | (136,234) | (5,963) | 8,271 |
Cash flows from financing activities | |||
Common stock issued under stock plans, net | 23,659 | 2,104 | 13,696 |
Payment of taxes related to the net share settlement of equity awards | (20,115) | (10,779) | (8,710) |
Repurchase of common stock | 0 | 0 | (2,263) |
Payment of deferred cash consideration related to acquisitions | (16,939) | 0 | 0 |
Proceeds from follow-on offering, net of offering costs | 147,609 | 0 | 0 |
Net cash provided by (used in) financing activities | 134,214 | (8,675) | 2,723 |
Net increase in cash and cash equivalents | 49,128 | 10,300 | 10,912 |
Cash and cash equivalents, beginning of period | 77,329 | 67,029 | 56,117 |
Cash and cash equivalents, end of period | 126,457 | 77,329 | 67,029 |
Supplemental cash flow data: | |||
Interest | 85 | 50 | 95 |
Income taxes | 1,790 | 1,094 | 827 |
Non-cash investing and financing activities: | |||
Accrued purchases of long-lived assets | 3,573 | 2,333 | 1,771 |
Issuance of common stock related to prior acquisition | $ 0 | $ 0 | $ 825 |
Background and Basis of Present
Background and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
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 the 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 Our fiscal year ends on December 31 and in this report, we refer to the year ended December 31, 2017 , December 31, 2016 , and December 31, 2015 as 2017 , 2016 , and 2015 , respectively. Reclassification of Prior Period Presentation In order to conform with current period presentation, $1.1 million of sales revenues during each of the years ended December 31, 2016 and 2015 have been reclassified to services revenues and $1.4 million and $1.7 million of sales cost of revenues during the years ended December 31, 2016 and 2015 , respectively, have been reclassified to services cost of revenues on our condensed consolidated statements of operations. Additionally, we have reclassified $1.2 million from other current assets to accounts receivable on our consolidated balance sheet as of December 31, 2016. These changes in presentation do not affect previously reported results. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, restructuring charges (credits), share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, and the valuation of acquired intangible assets. 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. Principles of Consolidation The consolidated financial statements include the accounts of Chegg and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. GAAP. Cash and Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity date of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents, which consist of cash, money market accounts, and commercial paper at financial institutions, are stated at cost, which approximates fair value. We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions. As of December 31, 2017 and 2016 , we had approximately $0.5 million and $0.1 million , respectively, of restricted cash that consisted of a security deposits for our corporate offices. As of December 31, 2017 , $0.1 million of restricted cash is classified in other current assets and $0.4 million is classified in other assets in our consolidated balance sheets. As of December 31, 2016 , $0.1 million of restricted cash is classified in other assets in our consolidated balance sheets . Investments We hold investments in commercial paper, corporate securities and U.S. treasury securities. We classify our marketable securities as available-for-sale investments that are either short or long-term based on the nature of each security based on the contractual maturity of the investment when purchased. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Unrealized losses are charged against other income (expense), net when a decline in fair value is determined to be other-than-temporary. We did not record any such impairment charges in the periods presented. We determined realized gains or losses on the sale of marketable securities on a specific identification method, and recorded such gains or losses as other income (expense), net. For the years ended December 31, 2017 and 2016 , the Company's gross realized gains and losses on short-term investments were not significant. Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers, and marketing services customers, and maintain an allowance for doubtful accounts to account for potentially uncollectible receivables. Allowance for Doubtful Accounts We assess the creditworthiness of our customers based on multiple sources of information, and analyze such factors as our historical bad debt experience, industry and geographic concentrations of credit risk, economic trends, and customer payment history. This assessment requires significant judgment. Because of this assessment, we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of certain customers to make all of their required payments. In making this estimate, we analyze historical payment performance and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off as a decrease to the allowance for doubtful accounts when all collection efforts have been exhausted and an account is deemed uncollectible. Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and marketable securities invested in highly liquid instruments in accordance with our investment policy. We place the majority of our cash and cash equivalents and restricted cash with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments. Certain of our cash balances held with financial institutions are in excess of Federal Deposit Insurance Corporation limits. Our investment portfolio consists of investment-grade marketable securities diversified among security types, industries and issuers. Our investments were held and managed by recognized financial institutions that followed our investment policy with the main objective of preserving capital and maintaining liquidity. Concentrations of credit risk with respect to trade receivables exist to the full extent of amounts presented in the financial statements. We had no textbook wholesalers or other customers that represented greater than 10% of our net accounts receivable balance as of December 31, 2017 and 2016 . No customers represented over 10% of net revenues in 2017 , 2016 or 2015 . Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and content amortization. Depreciation and content amortization are computed using the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Computers and equipment 3 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of the remaining lease term or the estimated useful life of 5 years Content Shorter of the licensed content term or the estimated useful life of 5 years We capitalize content costs related to the purchase or development of Chegg Study and Test Prep content and amortize these costs over a period of five years. Depreciation and content amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories in our consolidated statements of operations. Depreciation and content amortization expense during the years ended December 31, 2017 , 2016 and 2015 were approximately $13.8 million , $9.9 million and $6.8 million , respectively. The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in loss from operations. Business Combinations We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which is not to exceed one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings. Goodwill and Indefinite-Lived Intangible Asset Goodwill represents the excess of the fair value of consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business acquisition. Our indefinite-lived intangible asset represents the internships.com trade name. Goodwill and our indefinite-lived intangible asset are not amortized but rather tested for impairment at least annually on October 1, or more frequently if certain events or indicators of impairment occur between annual impairment tests. We first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative impairment test. In our qualitative assessment, we consider factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of our reporting unit is less than the carrying amount. We completed our annual impairment test on October 1 of 2017 and 2016 , each of which did not result in any impairment as our qualitative assessment did not indicate that it is more likely than not that the fair value of our reporting unit is less than the carrying amount. Acquired Intangible Assets and Other Long-Lived Assets Acquired intangible assets with finite useful lives, which include developed technology, customer lists, trade names, non-compete agreements, and master service agreements, are amortized over their estimated useful lives. We assess the impairment of acquired intangible assets and other long-lived assets when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Revenue Recognition and Deferred Revenue Revenues are recognized when the four basic criteria for revenue recognition have been met as follows: persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, the sale price is fixed or determinable, and collection is reasonably assured. 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, or charge backs from our payment processors who process payments from credit cards, debit cards, and PayPal, are recorded as a reduction to revenues. We generate revenues from our Chegg Services product line including our Chegg Study service, our Chegg Writing service, our Chegg Tutors service, Test Prep, through our partnership with Kaplan, Internship services, Brand Partnership services that we offer to brands and Enrollment Marketing services to colleges, through our strategic partnership with NRCCUA. Chegg Services are offered to students through weekly, monthly or annual subscriptions, and we recognize revenues ratably over the respective subscription period. Enrollment Marketing services and Brand Partnership services are offered either on a subscription or on an a la carte basis. Revenues are recognized ratably or as earned over the subscription service period, generally one year. Revenues from Enrollment Marketing services or Brand Partnership services delivered on an a la carte basis, without a subscription, are recognized when delivery of the respective lead or service has occurred. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our Enrollment Marketing and Brand Partnership customers with normal credit terms, typically 30 days. Some of our customer arrangements for Enrollment Marketing and Brand Partnership services include multiple deliverables, which include the delivery of student leads as well as other services to the end customer. We have determined these deliverables qualify as separate units of accounting, as they have value to the customer on a standalone basis and our arrangements do not contain a right of return. For these arrangements that contain multiple deliverables, we allocate the arrangement consideration based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence of fair value (VSOE), when available; (2) third-party evidence of selling price (TPE), if VSOE does not exist; and (3) estimated selling price (ESP), if neither VSOE nor TPE is available. We determine VSOE based on our historical pricing and discounting practices for the specific solution when sold separately and when a substantial majority of the selling prices for these services fall within a narrow range. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our go-to-market strategy differs from that of our peers, and our offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. If we have not established VSOE or TPE for our Enrollment Marketing services, we have used ESP in our allocation of arrangement consideration. Additionally, we limit the amount of revenues recognized for delivered elements to the amount that is not contingent on future delivery of services or other future performance obligations. Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions that have not been recognized, and marketing services that have yet to be performed. Deferred revenue is recognized as revenues ratably over the term or when the services are provided and all other revenue recognition criteria have been met. We historically generated revenues from the rental of print textbooks and to a lesser extent, through the sales of print textbooks through our website on a just-in-time basis. Rental revenues for textbooks that we owned were previously recognized ratably over the term of the rental period, generally two to five months. Commissions earned on rental textbooks owned by Ingram and other partners are recognized immediately when a book ships to the student. We did not recognize any revenues from the rental or sale of our own print textbooks during the year ended December 31, 2017 reflecting our transition of print textbook rentals to Ingram and the increasing growth in our Chegg Services. Revenues from selling textbooks on a just-in-time basis were historically recognized upon shipment. During the year ended December 31, 2017, revenues from selling textbooks on a just-in-time basis are commission based as a result of the transition to Ingram and other partners. Revenues from the rental or sale of eTextbooks is recognized ratably over the contractual period, generally two to five months or at time of the sale, respectively . We evaluate whether we are acting as a principal or an agent in a transaction, and therefore would record the gross sales amount and related costs as revenues or the net amount earned as commissions from the sale of third-party products. Our determination is based on our evaluation of certain indicators including whether we are the principal in the transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, none of which is presumptive or determinative. We generally operate as the principal and so in those instances revenues are recorded at the gross sale price. We generally record the net amounts as commissions earned when such amounts are determined using a fixed percentage of the transaction price, we are not subject to inventory risk or responsible for the fulfillment of the textbooks. We operate as an agent in our strategic partnership with Ingram and agreements with other partners and therefore our revenues include a commission on the total transaction amount that we earn upon Ingram's fulfillment of a rental transaction using print textbooks for which Ingram or the other partner has title and risk of loss, as opposed to the total rental transaction amount. We also present our revenues separately for rental, services and sales. Rental revenues historically included the rental of print textbooks for which we take title and bear the risk of loss, service revenues includes Chegg Study, Chegg Writing, Chegg Tutors, Enrollment Marketing, Brand Partnership, eTextbooks, and commissions we earn from Ingram, other partners, and e-commerce partners; sales revenues includes just-in-time sale of print textbooks and the sale of other required materials. As a result of our strategic partnership with Ingram and other partners, we no longer recognize rental revenues or sales revenues from the rental or sale of a print textbook. Instead, our services revenues includes a commission on the total transaction amount that we earn from Ingram and other partners upon Ingram's fulfillment of a rental transaction using books for which Ingram or other partner has title and risk of loss, as opposed to the total rental transaction amount. Cost of Revenues Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Certain cost of revenues, including textbook depreciation expense, the cost of textbooks sold, write-offs and allowances related to the print textbook library, have decreased during 2016 and in to 2017 as we have completely transitioned the shipping and fulfillment activities related to the rental and sale of print textbooks to Ingram. Cost of revenues consists of publisher content fees for eTextbooks, content amortization expense related to content that we develop or license, including publisher agreements for which we pay one-time license fees for published content, payment processing costs, the payments made to tutors through our Chegg Tutors service, Enrollment Marketing services leads purchased from third-party suppliers to fulfill leads that we are unable to fulfill through our internal database, personnel costs and other direct costs related to providing content or services. In addition, cost of revenues includes allocated information technology and facilities costs. Technology and Development Costs Our technology and development expenses consist of salaries, benefits and share-based compensation expense for employees in our product and web design, engineering and technical teams who are responsible for maintaining our website, developing new products and improving existing products. Technology and development costs also include amortization of acquired intangible assets, webhosting costs, third-party development costs, research and development expenses and allocated information technology and facilities expenses. We expense substantially all of our technology and development expenses as they are incurred. Advertising Costs Advertising costs are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures. During years ended December 31, 2017 , 2016 and 2015 , advertising costs were approximately $16.5 million , $18.4 million , and $25.0 million , respectively. Share-based Compensation Share-based compensation expense for stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of employee share-based compensation awards based on the grant-date fair value of the award. Share-based compensation expense for stock options and our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while expense for RSUs and PSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. We recognize share-based compensation expense over the requisite service period, which is generally the vesting period, on a straight line basis for RSUs and on a graded basis for PSUs, contingent on the achievement of performance conditions. These amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Equity awards issued to non-employees are recorded at their fair value on the measurement date and are subject to adjustment each period as the underlying awards vest or consulting services are performed. Income Taxes We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. Restructuring Charges Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on our policies and practices and negotiated settlements. Restructuring charges for employee workforce reductions are recorded upon employee notification for employees whose required continuing service period is 60 days or less and ratably over the employee’s continuing service period for employees whose required continuing service period is greater than 60 days. Strategic Investment We have entered into an equity investment in a privately-held foreign entity to explore expanding our reach internationally. Our investment is accounted for under the cost method and we periodically review this investment for other-than-temporary declines in fair value based on the specific identification method and write down the value of our investment when an other-than-temporary decline has occurred. Any fair value estimates are made based on consideration of the current cash position, recent operational performance, and forecasts of the investees. During years ended December 31, 2017 , 2016 and 2015 , we did not record any other-than-temporary declines in the value of our investment. Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), and performance-based restricted stock units (PSUs), to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive. The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts): Years Ended December 31, 2017 2016 2015 Numerator: Net loss $ (20,283 ) $ (42,245 ) $ (59,210 ) Denominator: Weighted average shares used to compute net loss per share, basic and diluted 100,022 90,534 86,818 Net loss per share, basic and diluted $ (0.20 ) $ (0.47 ) $ (0.68 ) The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share attributable to common stockholders because including them would have been anti-dilutive (in thousands): Years Ended December 31, 2017 2016 2015 Options to purchase common stock 3,045 10,799 11,446 RSUs and PSUs 153 1,239 200 Employee stock purchase plan 5 15 — Warrants to purchase common stock — 200 299 Total common stock equivalents 3,203 12,253 11,945 Foreign Currency Translation The functional currency of our foreign subsidiaries is the local currency. Adjustments resulting from the translation of foreign currencies into U.S. dollars for balance sheet amounts are based on the exchange rates as of the consolidated balance sheet date. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. Revenues and expenses are translated at average exchange rates during the period. Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets. Gains or losses resulting from foreign currency transactions, which are denominated in currencies other than the entity’s functional currency, are included in other income (expense), net in the consolidated statements of operations and were not material during 2017 , 2016 or 2015 . Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, and the guidance requires a prospective application to awards modified on or after the adoption date. We elected to early adopt this standard as of July 1, 2017 and will account for any modifications after this date under the new guidance. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates step 2 from the annual goodwill impairment test no longer requiring the comparison of the implied fair value of a reporting unit's goodwill with the carrying amount of goodwill. Early adoption is permitted and the guidance requires a prospective application. The guidance is effective for annual periods beginning after December 15, 2019, and we are currently in the process of evaluating the impact of this guidance. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017-01 clarifies the definition of a business to assist entities with evaluating whether a transaction should be accounted for as acquisitions of assets or businesses. We will analyze the clarified definition of a business for potential future transactions to determine whether they should be accounted for as an asset acquisition or business combination under the new guidance. Early adoption is permitted and the guidance requires a prospective application. The guidance is effective for annual periods beginning after December 15, 2017 and we will adopt the guidance on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires an entity to explain the change during a period in restricted cash equivalents on the consolidated statements of cash flows and include such amounts when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. Early adoption is permitted, and the guidance requires a retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2017, and we will adopt the guidance on January 1, 2018. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide for simplification involving several aspects of the accounting for share-based payment transactions. The new standard requires excess tax benefits and tax deficiencies to be recorded in our consolidated statements of operations as a component of provision for income taxes when stock awards vest or are settled and an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur. In addition, it eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the consolidated statements of cash flows. The standard also allows us to withhold more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting. We adopted this standard in the first quarter of 2017 and the adoption had no impact to our consolidated financial statements. The requirement to record excess tax benefits and deficiencies in our consolidated statements of operations as a component of provision of income taxes when stock awards vest or are settled does not impact our provision of income taxes as we currently have a full valuation allowance recorded against our deferred tax assets related to share-based compensation. Additionally, we have elected to continue to recognize share-based compensation expense net of estimated forfeitures. We have not recorded an adjustment to retained earnings to reflect the modified retrospective adoption of this standard update as neither of these updates change the accounting of the prior period financial results. We have elected to adopt the elimination of the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows prospectively and therefore prior periods have not been adjusted. Further, there was no change related to the requirement that all payments made to tax authorities on an employees' behalf for withheld shares be presented as a financing activity on the consolidated statements of cash flows as we have always recorded such amounts as a financing activity. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted, and the guidance requires a modified retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2018 and we plan to adopt the guidance on January 1, 2019. We plan to elect the package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We will continu |
Cash and Cash Equivalents, and
Cash and Cash Equivalents, and Investments | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents, and Investments | Cash and Cash Equivalents, and Investments The following table shows our cash and cash equivalents, restricted cash and investments’ adjusted cost, net unrealized loss and fair value as of December 31, 2017 (in thousands): December 31, 2017 Cost Net Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 98,370 $ — $ 98,370 Money market funds 5,358 — 5,358 Commercial paper 22,729 — 22,729 Total cash and cash equivalents $ 126,457 $ — $ 126,457 Short-term investments: Commercial paper $ 38,850 $ (27 ) $ 38,823 Corporate securities 23,001 (43 ) 22,958 U.S. treasury securities 19,978 (17 ) 19,961 Total short-term investments $ 81,829 $ (87 ) $ 81,742 Long-term corporate securities $ 20,405 $ (100 ) $ 20,305 The adjusted cost and fair value of available-for-sale investments as of December 31, 2017 by contractual maturity were as follows (in thousands): Cost Fair Value Due in 1 year or less $ 104,558 $ 104,471 Due in 1-2 years 20,405 20,305 Investments not due at a single maturity date 5,358 5,358 Total $ 130,321 $ 130,134 Investments not due at a single maturity date in the preceding table consist of money market fund deposits. As of December 31, 2017 , we considered the declines in market value of our investment portfolio to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired. We typically invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of five months, and our investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and our intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the year ended December 31, 2017 , we did not recognize any impairment charges. As of December 31, 2016, we did not carry a balance of cash equivalents, short-term or long-term investments. Restricted Cash As of December 31, 2017 and 2016 , we had approximately $0.5 million and $0.1 million , respectively, of restricted cash that consisted of a security deposits for our corporate offices. As of December 31, 2017 , $0.1 million of restricted cash is classified in other current assets and $0.4 million is classified in other assets in our consolidated balance sheets. As of December 31, 2016 , $0.1 million of restricted cash is classified in other assets in our consolidated balance sheets . Strategic Investment We previously invested $3.0 million in a foreign entity to explore expanding our reach internationally. Our investment is included in other assets on our consolidated balance sheets. We did not record other-than-temporary impairment charges on this investment during the years ended December 31, 2017 , 2016 , and 2015 , as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
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. 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 December 31, 2017 are classified based on the valuation technique level in the tables below (in thousands): December 31, 2017 Total Quoted Prices Significant Assets: Cash equivalents: Money market funds $ 5,358 $ 5,358 $ — Commercial paper 22,729 — 22,729 Short-term investments: Commercial paper 38,823 — 38,823 Corporate securities 22,958 — 22,958 U.S. treasury securities 19,961 19,961 — Long-term corporate securities 20,305 — 20,305 Total assets measured and recorded at fair value $ 130,134 $ 25,319 $ 104,815 We value our marketable securities based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. Other than our U.S. treasury securities, we classify our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. 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. |
Long-Lived Assets
Long-Lived Assets | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Long-Lived Assets | Long-Lived Assets Textbook Library, Net Textbook library, net consisted of the following (in thousands): December 31, 2016 Textbook library $ 33,980 Less accumulated depreciation (31,405 ) Textbook library, net $ 2,575 As of December 31, 2017, we did not carry a balance of textbook library, net. Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2017 2016 Computer and equipment $ 2,449 $ 1,597 Software 5,317 4,324 Furniture and fixtures 2,893 2,148 Leasehold improvements 7,154 5,342 Content 70,110 49,725 Property and equipment 87,923 63,136 Less accumulated depreciation and amortization (40,430 ) (27,831 ) Property and equipment, net $ 47,493 $ 35,305 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions 2017 Acquisition In October 2017 , we acquired all of the outstanding interests of Cogeon GmbH (Cogeon), a provider of adaptive math technology and developer of the math application, Math 42 , based in Germany. With this acquisition, Chegg will be able to provide self-guided and individualized math solutions to more students, deepening our reach in to the high school market. The total fair value of the purchase consideration was $15.0 million which included an escrow amount of $2.2 million for general representations and warranties and potential post-closing adjustments. The escrow amount will be released in 24 months after the acquisition date. The acquisition date fair value of the purchase consideration for the above transactions consisted of the following (in thousands): Initial cash consideration $ 12,717 Net working capital adjustment 53 Escrow 2,244 Fair value of purchase consideration $ 15,014 Included in the purchase agreement for the acquisition of Cogeon are additional contingent payments of up to approximately $9.0 million subject to achievement of specified milestones and continued employment of the sellers. These payments will be expensed ratably as technology and development expense on our consolidated statements of operations. These contingent payments may be settled by us, at our sole discretion, either in cash or shares of our common stock. We have recorded approximately $0.6 million as of December 31, 2017 included within accrued liabilities on our consolidated balance sheet for these contingent payments. Additionally, included in the purchase agreement are contingent equity grants of up to approximately $3.8 million subject to achievement of the above specified milestones, continued employment of the sellers, and an adverse tax ruling on the additional contingent payments from the German tax authority. We have not recorded any expense amounts related to these contingent equity grants as the definition of a grant has not been met in accordance with share-based compensation accounting guidance. The fair value of the intangible assets acquired was determined under the acquisition method of accounting for business combinations. The excess of the purchase consideration paid over the fair value of net identifiable assets acquired was recorded as goodwill. Goodwill is primarily attributable to the potential for future product offerings as well as our expanded student reach. The amounts recorded for goodwill are expected to be deductible for tax purposes. The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands): Net tangible assets $ 60 Acquired intangible assets: Trade name 50 Domain names 230 Non-compete agreements 70 Developed technology 5,510 Content Library 70 Total acquired intangible assets 5,930 Total identifiable assets acquired 5,990 Goodwill 9,024 Total fair value of purchase consideration $ 15,014 During the year ended December 31, 2017 , we incurred $0.7 million of acquisition-related expenses associated with the above acquisition which have been included in general and administrative expenses in our consolidated statements of operations. 2016 Acquisitions In May 2016 , we acquired all of the outstanding interests of Imagine Easy Solutions, LLC (Imagine Easy), a privately held online learning company based in New York that provides a portfolio of online writing tools. We anticipate this acquisition will enhance our ability to acquire new students, increase the value of our platform to our existing students, and have a meaningful and positive impact on their outcomes. The total fair value of the purchase consideration was $42.3 million which included deferred cash consideration of $17.0 million . We recorded the present value of the deferred cash consideration of $16.4 million at the acquisition date and recorded accretion expense until it was paid to the sellers in April 2017. During the year ended December 31, 2017 and 2016 , we recorded accretion expense of $0.2 million and $0.4 million , respectively, through other income (expense), net on our consolidated statement of operations. Further, the consideration included an escrow and a hold-back amount of $4.2 million and $0.5 million , respectively, for general representations and warranties and potential post-closing adjustments. The escrow amount was released in July 2017 and the hold-back amount was released during the third quarter of 2016. In December 2016 , we acquired certain assets of RefME Ltd., a privately held online learning company based in London, England, to enhance our already existing portfolio of writing tools. The total fair value of the purchase consideration was $1.8 million . The purchase consideration included deferred cash consideration of $0.8 million , which was paid out in four quarterly installments during the years ended December 31, 2017 and 2016 . The acquisition date fair value of the purchase consideration for the above transactions consisted of the following (in thousands): Initial cash consideration $ 22,007 Net working capital adjustment 200 Fair value of deferred cash consideration 17,127 Escrow 4,200 Hold-back 500 Fair value of purchase consideration $ 44,034 Included in the purchase agreement for the acquisition of Imagine Easy are additional contingent payments of up to $18.0 million , of which $3.0 million relates to the achievement of performance conditions for the fiscal year ended 2016 . These performance conditions were achieved therefore these payments will be made through April 2019, subject to continued employment of the sellers, and will be expensed ratably as technology and development and general and administrative expense on our consolidated statements of operations. These contingent payments may be settled by us, at our sole discretion, either in cash or shares of our common stock. We have recorded $0.4 million as of December 31, 2017 included within prepaid expenses on our consolidated balance sheet and $1.0 million as of December 31, 2016 included within accrued liabilities on our consolidated balance sheet for these contingent payments. The fair value of the intangible assets acquired was determined under the acquisition method of accounting for business combinations. The excess of the purchase consideration paid over the fair value of net identifiable assets acquired was recorded as goodwill. Goodwill is primarily attributable to the potential for future product offerings as well as our expanded student reach. The amounts recorded for goodwill are expected to be deductible for tax purposes. The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands): Cash $ 59 Accounts receivable 2,610 Favorable lease acquired 300 Other acquired assets 212 Acquired intangible assets: Trade names 1,840 Domain names 1,330 Advertiser relationships 6,600 User base 550 Non-compete agreements 508 Developed technology 5,660 Total acquired intangible assets 16,488 Total identifiable assets acquired 19,669 Liabilities assumed (573 ) Net identifiable assets acquired 19,096 Goodwill 24,938 Total fair value of purchase consideration $ 44,034 During the year ended December 31, 2016 , we incurred $1.1 million of acquisition-related expenses associated with the above acquisitions which have been included in general and administrative expenses in our consolidated statements of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill consists of the following (in thousands): December 31, 2017 December 31, 2016 Beginning balance $ 116,239 $ 91,301 Additions due to acquisitions 9,024 24,938 Foreign currency translation adjustment 9 — Ending balance $ 125,272 $ 116,239 Intangible assets as of December 31, 2017 and December 31, 2016 consist of the following (in thousands, except weighted-average amortization period): December 31, 2017 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technologies and content library 70 $ 20,657 $ (10,220 ) $ 10,437 Customer lists 47 9,970 (5,480 ) 4,490 Trade names 46 5,793 (3,465 ) 2,328 Non-compete agreements 30 1,798 (1,506 ) 292 Master service agreements 21 1,030 (1,030 ) — Indefinite-lived trade name — 3,600 — 3,600 Foreign currency translation adjustment — 6 — 6 Total intangible assets 57 $ 42,854 $ (21,701 ) $ 21,153 December 31, 2016 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technologies 60 $ 15,077 $ (8,245 ) $ 6,832 Customer lists 47 9,970 (3,673 ) 6,297 Trade names 47 5,513 (1,998 ) 3,515 Non-compete agreements 30 1,728 (1,249 ) 479 Master service agreements 21 1,030 (1,005 ) 25 Indefinite-lived trade name — 3,600 — 3,600 Total intangible assets 51 $ 36,918 $ (16,170 ) $ 20,748 During the years ended December 31, 2017 , 2016 and 2015 , amortization expense related to our acquired intangible assets totaled approximately $5.5 million , $4.6 million and $4.8 million , respectively. As part of our acquisition of internships.com in October 2015 , we acquired an indefinite-lived trade name intangible asset valued at $3.6 million . We assess this asset for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying value may not be recoverable and have not recorded any impairment charges during the years ended December 31, 2017 , 2016 and 2015 . As of December 31, 2017 , the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands): 2018 $ 5,311 2019 4,347 2020 2,874 2021 1,518 2022 1,075 Thereafter 2,428 Total $ 17,553 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Details [Abstract] | |
Balance Sheet Details | Balance Sheet Details Other Current Assets Other current assets consist of the following (in thousands): December 31, 2017 2016 Reimbursement from Ingram and other partners $ 4,219 $ 18,759 Other 3,626 2,255 Other current assets $ 7,845 $ 21,014 Accrued Liabilities Accrued liabilities consist of the following (in thousands): December 31, 2017 2016 Payable to Ingram and other partners $ 8,001 $ 8,237 Taxes payable 3,337 2,927 Chegg credit 2,457 2,341 Accrued purchases of long-lived assets 3,573 2,333 Accrued deferred cash consideration related to acquisition — 17,378 Other 13,706 11,103 Accrued liabilities $ 31,074 $ 44,319 |
Debt Obligations
Debt Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations In September 2016 , we entered into a revolving line of credit with an aggregate principal amount of $30.0 million (the Line of Credit) with an accordion feature that, subject to the lender's discretion, allows us to borrow up to a total of $50.0 million . This new line of credit replaced the previous line of credit that expired in August 2016. The Line of Credit matures September 2019 and requires us to repay the outstanding balance upon maturity. We will pay a fee equal to 0.25% per year on the average daily unused amount of the Line of Credit and a base interest rate equal to the LIBOR. In addition, we will pay a fee for each issued letter of credit which will be determined based on our current leverage ratio at the time the letter of credit is issued. If our leverage ratio is less than 1.00% , we will pay a fee equal to 1.50% per year and if our leverage ratio is greater than or equal to 1.00% , we will pay a fee equal to 2.50% per year. Our leverage ratio is a ratio of all obligations owed to the bank divided by our consolidated EBITDA. EBITDA for the purposes of calculating our leverage ratio is defined as net profit (loss) before tax, plus interest expense, plus non-cash stock compensation (net of capitalized interest expense), depreciation expense, amortization expense and other non-cash expenses (assuming there are no future cash costs), plus expenses incurred in connection with permitted acquisitions (including without limitation accrued acquisition-related contingent expenses) in an amount not to exceed $6.0 million per calendar year, plus non-recurring expenses in an amount not to exceed $2.0 million per calendar year. We must maintain financial covenants under the Line of Credit as follows: (1) maintain a balance of unrestricted cash at the Bank of not less than $30.0 million at all times, other than the three months ending March 31, 2017 and June 30, 2017 , and not less than $25.0 million during the three months ending March 31, 2017 and June 30, 2017 ; and (2) achieve EBITDA, on a trailing 12 month basis, of not less than (i) $25.0 million for the period of time from September 30, 2016 through June 30, 2017 , (ii) $30.0 million for the period of time from September 30, 2017 through June 30, 2018 , and (iii) $35.0 million for the period of time from September 30, 2018 through the maturity of the Line of Credit. As of December 31, 2015 , we had a revolving credit facility with an aggregate principal amount of $30.0 million (the Revolving Credit Facility) with an accordion feature that, subject to certain financial criteria, allowed us to borrow up to a total of $65.0 million beginning the quarter ended December 31, 2015. The Revolving Credit Facility carried, at our election, a base interest rate of the greater of the Federal Funds Rate plus 0.5% or one-month LIBOR plus 1% or a LIBOR based interest rate plus additional interest of up to 4.5% depending on our leverage ratio. The Revolving Credit Facility expired in August 2016. As of December 31, 2017 , we were in compliance with the financial covenants of the Line of Credit. Further, we had no amounts outstanding and were able to borrow up to $30.0 million under the Line of Credit. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We lease our offices under operating leases, which expire at various dates through 2022 . Our primary operating lease commitments at December 31, 2017 related to our headquarters in Santa Clara, California and our office in San Francisco, California. We recognize rent expense on a straight-line basis over the lease period. Where leases contain escalation clauses, rent abatements, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line rent expense over the lease term. Rental expense, net of sublease income, was approximately $2.7 million , $1.9 million and $2.5 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. The aggregate future minimum lease payments as of December 31, 2017 , are as follows (in thousands): 2018 $ 2,934 2019 2,038 2020 939 2021 485 2022 230 Thereafter — Total $ 6,626 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. We are not aware of any other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. However, our determination of whether a claim will proceed to litigation cannot be made 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. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 12 Months Ended |
Dec. 31, 2017 | |
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 December 31, 2017 . |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | Common Stock We are authorized to issue 400 million shares of common stock, with a par value per share of $0.001 . As of December 31, 2017 , we have reserved the following shares of common stock for future issuance: December 31, 2017 Warrants to purchase common stock 100,000 Outstanding stock options 8,066,846 Outstanding RSUs and PSUs 14,335,115 Shares available for grant under the stock plans 11,177,175 Shares available for issuance under employee stock purchase plan 5,849,986 Total common shares reserved for future issuance 39,529,122 Stock Plans 2013 Equity Incentive Plan On June 6, 2013, the Board of Directors adopted our 2013 Equity Incentive Plan (the 2013 Plan), which was subsequently approved by our stockholders on August 29, 2013. The 2013 Plan became effective on November 11, 2013 and replaced the 2005 Plan. On the effective date of the 2013 Plan, 12,000,000 shares of our common stock were reserved for issuance, plus an additional 3,838,985 shares reserved but not issued or subject to outstanding awards under our 2005 Plan on the effective date of the 2013 Plan, plus, on and after the effective date of the 2013 Plan, (i) shares that are subject to outstanding awards under the 2005 Plan which cease to be subject to such awards, (ii) shares issued under the 2005 Plan that are forfeited or repurchased at their original issue price and (iii) shares subject to awards under the 2005 Plan that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any award. As of December 31, 2017 there were 11,177,175 shares available for grant under the 2013 Plan. The 2013 Plan permits the granting of incentive stock options, non-qualified stock options, RSUs, stock appreciation rights, restricted shares of common stock and performance share awards. The exercise price of stock options may not be less than the 100% of the fair market value of the common stock on the date of grant. Options granted pursuant to the 2013 Plan generally expire no later than ten years. 2013 Employee Stock Purchase Plan On June 6, 2013, our board of directors adopted our 2013 Employee Stock Purchase Plan (the 2013 ESPP) and our stockholders subsequently approved the 2013 ESPP Plan on August 29, 2013. The 2013 ESPP permits eligible employees to acquire shares of our common stock by accumulating funds through periodic payroll deductions of up to 15% of base salary. Our 2013 ESPP is intended to qualify as an ESPP under Section 423 of the Code and employees will receive a 15% discount to the lesser of the fair market value of our common stock on (i) the first trading day of the applicable offering period or (ii) the last day of each purchase period in the applicable offering period. Each offering period may run for no more than six months. We have reserved 4,000,000 shares of our common stock under our 2013 ESPP. The aggregate number of shares issued over the term of our 2013 ESPP will not exceed 20,000,000 shares of our common stock. As of December 31, 2017 , there were 5,849,986 shares of common stock available for future issuance under the 2013 ESPP. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders' Equity Share-based Compensation Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Cost of revenues $ 316 $ 172 $ 262 Technology and development 14,333 14,771 11,992 Sales and marketing 5,007 6,124 7,901 General and administrative 18,703 20,718 18,620 Total share-based compensation expense $ 38,359 $ 41,785 $ 38,775 Total share-based compensation expense for consultants was $44 thousand , $0.5 million and $0.4 million in the years ended December 31, 2017 , 2016 and 2015 , respectively. There was no capitalized share-based compensation expense as of December 31, 2017 , 2016 or 2015 . Fair Value of Stock Options We estimate the fair value of each stock option award using the Black-Scholes-Merton option-pricing model, which utilizes the fair value of our common stock based on active market and requires input on the following subjective assumptions: Expected Term. The expected term for options granted to employees, officers, and directors is calculated as the midpoint between the vesting date and the end of the contractual term of the options. The expected term for options granted to consultants is determined using the remaining contractual life. Expected Volatility. The expected volatility was historically based on the average volatility of public companies within our peer group as our common stock had previously not been publicly trading for a long enough period to rely on our own expected volatility. Beginning with stock options granted during the fourth quarter of 2015, we have based the expected volatility on the average volatility of our stock price as we now have over two years of trading history. Expected Dividends. The dividend assumption is based on our historical experience. To date we have not paid any dividends on our common stock. Risk-Free Interest Rate. The risk-free interest rate used in the valuation method is the implied yield currently available on the United States treasury zero-coupon issues, with a remaining term equal to the expected life term of our options. The following table summarizes the key assumptions used to determine the fair value of our stock options granted to employees, officers and directors: Years Ended December 31, 2016 2015 Expected term (years) 5.50 5.50-6.00 Expected volatility 56.94 % 50.68%-51.69% Dividend yield — % — % Risk-free interest rate 1.43 % 1.75%-1.86% Weighted-average grant-date fair value per share $ 2.58 $ 3.54 We did not grant any stock option awards during the year ended December 31, 2017 . Fair Value of Restricted Stock Units (RSUs) and of Performance-Based Restricted Stock Units (PSUs) RSUs and PSUs are converted into shares of our common stock upon vesting on a one-for-one basis. Vesting of RSUs is subject to the employee’s continuing service to us, while vesting of PSUs is subject to our achievement of specified corporate financial performance objectives in addition to the employee's continuing service to us. We recognize share-based compensation expense over the requisite service period, which is generally the vesting period, on a straight line basis for RSUs and on a graded basis for PSUs, contingent on the achievement of performance conditions. RSUs are typically fully vested at the end of three or four years while PSUs vest subject to the achievement of performance objectives and if achieved, typically vest over two to three years . We assess the achievement of performance objectives on a quarterly basis and adjust our share-based payment expense as appropriate. Fair Value of 2013 ESPP Under the 2013 ESPP, rights to purchase shares are generally granted during the second and fourth quarter of each year. We estimate the fair value of rights granted under the 2013 ESPP at the date of grant using the Black-Scholes-Merton option-pricing model. The following table summarizes the key assumptions used to determine the fair value of rights granted under the 2013 ESPP: Years Ended December 31, 2017 2016 2015 Expected term (years) 0.50 0.50 0.50 Expected volatility 38.15%-45.57% 35.10%-75.74% 36.20%-49.59% Dividend yield — % — % — % Risk-free interest rate 1.04%-1.42% 0.38%-0.62% 0.09%-0.31% Weighted-average grant-date fair value per share $ 3.55 $ 1.79 $ 1.98 There were 377,530 shares purchased under the 2013 ESPP for the year ended December 31, 2017 at an average price per share of $7.88 with cash proceeds from the issuance of shares of $3.0 million . There were 467,979 shares purchased under the 2013 ESPP for the year ended December 31, 2016 at an average price per share of $3.76 with cash proceeds from the issuance of shares of $1.8 million . Stock Option Activity Stock option activity under our equity incentive plans was as follows: Options Outstanding Number of Options Outstanding Weighted- Average Exercise Price per Share Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance at December 31, 2016 11,333,624 $ 8.60 5.22 $ 6,608,611 Granted — — Exercised (2,902,403 ) 7.13 Canceled (364,375 ) 12.23 Balance at December 31, 2017 8,066,846 $ 8.97 4.64 $ 59,318,983 As of December 31, 2017 Options exercisable 8,033,749 $ 8.98 4.63 $ 59,002,312 Options vested and expected to vest 8,064,829 $ 8.97 4.64 $ 59,299,650 The total intrinsic value of options exercised during 2017 , 2016 and 2015 , was approximately $16.8 million , $0.6 million and $3.2 million , respectively. As of December 31, 2017 , our total unrecognized compensation expense for stock options granted to employees, officers, directors, and consultants was approximately $0.1 million , which will be recognized over a weighted-average vesting period of approximately 0.8 years . We recognize only the portion of the stock options granted to employees that is ultimately expected to vest as compensation expense. Estimated forfeitures are determined based on historical data and management’s expectation of exercise behaviors. Forfeiture rates and the resulting compensation expense are revised in subsequent periods if actual forfeitures differ from the estimate. RSU and PSU Activity RSUs and PSUs Outstanding Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value Balance at December 31, 2016 14,142,109 $ 5.20 Granted 6,800,381 9.10 Released (5,362,478 ) 5.73 Canceled (1,244,897 ) 6.16 Balance at December 31, 2017 14,335,115 $ 6.78 2015 PSU Grants In February 2015, we granted PSUs under the 2013 Plan to certain of our key employees (the February 2015 grants). The PSUs entitle the employees to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2015 (the 2015 Performance Period) and 2016 (the 2016 Performance Period). Based on the achievement of the performance conditions during the 2015 Performance Period for the February 2015 grants, the final settlement met the minimum threshold for the 2015 Performance Period based on a specified objective formula approved by the Compensation Committee of the Board of Directors (the Compensation Committee). The PSUs related to the 2015 Performance Period vest annually over a one or three -year period depending on the employee, with the initial vesting occurring in February 2016. In March 2016, the financial and strategic performance targets were set by the Compensation Committee for the 2016 Performance Period for the February 2015 grants. Based on the achievement of the performance conditions during the 2016 Performance Period for the February 2015 grants, the final settlement met the minimum threshold for the 2016 Performance Period based on a specified objective formula approved by the Compensation Committee. The PSUs related to the 2016 Performance Period vest over a one -year period with vesting occurring in March 2017. During the year ended December 31, 2016 , the Compensation Committee approved a modification of the performance targets related to the 2015 Performance Period of the February 2015 grant for 26 employees. As a result of the modification, we recorded an expense of $1.5 million during the year ended December 31, 2016 . The number of shares underlying the PSUs granted during the year ended December 31, 2015 totaled 2,300,824 shares and had a weighted average grant date fair value of $6.59 per share. During the year ended December 31, 2017 and 2016 , 850,066 and 688,464 shares, respectively, were released relating to the February 2015 grants. 2016 PSU Grants In March 2016, we granted PSUs under the 2013 Plan to certain of our key executives. The PSUs entitle the executives to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2016. Based on the achievement of the performance conditions for the March 2016 grant, the final settlement met the minimum threshold based on a specified objective formula approved by the Compensation Committee. These PSUs will vest over a three -year period depending on the employee, with the initial vesting occurring in March 2018. The number of shares underlying the PSUs granted during the year ended December 31, 2016 totaled 2,377,842 shares and had a weighted average grant date fair value of $4.32 per share. 2017 PSU Grants In March 2017, we granted PSUs under the 2013 Plan to certain of our key executives. The PSUs entitle the executives to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2017. Based on the achievement of the performance conditions for the March 2017 grant, the final settlement met the maximum threshold based on a specified objective formula approved by the Compensation Committee. These PSUs will vest over a three -year period, with the initial vesting occurring in March 2018. The number of shares underlying the PSUs granted during the year ended December 31, 2017 totaled 1,822,284 shares and had a grant date fair value of $8.91 per share. As of December 31, 2017 , we had a total of approximately $52.1 million of unrecognized compensation costs related to RSUs and PSUs that is expected to be recognized over the remaining weighted average period of 1.7 years . Stock Warrants As of December 31, 2017 , we had a total of 100,000 common stock warrants exercisable at an exercise price of $12.00 . During the year ended December 31, 2017, 100,000 common stock warrants were exercised at an exercise price of $12.00 . No common stock warrants were exercised in the year ended December 31, 2016. During the year ended December 31, 2015, 795,549 common stock warrants were exercised at a weighted average exercise price of $4.12 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We recorded an income tax provision of approximately $1.8 million , $1.7 million and $1.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The income tax provision for the years ended December 31, 2017 , 2016 and 2015 was primarily due to state and foreign income tax expense and federal and state tax expense related to tax amortization of acquired indefinite lived intangible assets. Our income tax provision consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current income taxes: Federal $ (103 ) $ (18 ) $ — State 100 321 263 Foreign 1,523 959 778 Total current income taxes 1,520 1,262 1,041 Deferred income taxes: Federal (992 ) 503 484 State 75 48 56 Foreign 1,199 (106 ) (102 ) Total deferred income taxes 282 445 438 Total income tax provision $ 1,802 $ 1,707 $ 1,479 Loss before provision for income taxes consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 United States $ (20,983 ) $ (42,687 ) $ (59,376 ) Foreign 2,502 2,149 1,645 Total $ (18,481 ) $ (40,538 ) $ (57,731 ) The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages): Years Ended December 31, 2017 2016 2015 Income tax at U.S. statutory rate 34.0 % 34.0 % 34.0 % State, net of federal benefit 8.3 1.7 3.7 Foreign rate differential (3.8 ) (0.3 ) (0.2 ) Share-based compensation 38.2 (9.1 ) (7.0 ) Non-deductible expenses (1.1 ) (0.2 ) (0.2 ) Tax credits 7.8 (0.4 ) 1.4 Tax Cuts and Jobs Act impact (220.2 ) — — Other 0.4 (0.7 ) (1.2 ) Change in valuation allowance 126.6 (29.2 ) (33.1 ) Total (9.8 )% (4.2 )% (2.6 )% On December 22, 2017, the Tax Cuts and Jobs Act (Tax Act) was signed into law, enacting significant changes to the U.S. Internal Revenue Code. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, reducing the U.S. federal corporate tax rate from 35 percent to 21 percent; requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; creating a global intangible low-taxed income inclusion (GILTI) and the base erosion anti-abuse tax (BEAT), a new minimum tax. The Tax Act, also imposes significant limitations on the deductibility of interest, executive compensation and future net operating losses. The Tax Act allows for the expensing of certain capital expenditures. On December 22, 2017, Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of US GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, as of December 31, 2017, we had not yet completed our accounting for the tax effects of the enactment of the Act. Our provision for income taxes for the year ended December 31, 2017 is based in part on our best estimate of the effects of the transition tax and existing deferred tax balances with our understanding of the Tax Act and guidance available as of the date of this filing. For the amounts which we were able to reasonably estimate, we recognized a provisional remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future of $42 million , which is offset by a valuation allowance. The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was a benefit of $0.1 million . We also provided withholding tax on the deemed repatriation of foreign earnings of $1.2 million . We are still analyzing certain aspects of the Tax Act and refining the estimate of the expected reversal of our deferred tax balance. This can potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The Act also includes provisions for the GILTI tax inclusion, wherein taxes on foreign income are imposed in excess of a deemed return on tangible assets of foreign corporations. This income will effectively be taxed at a 10.5% tax rate in general. As a result, our deferred tax assets and liabilities are being evaluated if the deferred tax assets and liabilities should be recognized for the basis differences expected to reverse as a result of GILTI provisions that are effective for us after the calendar year ending December 31, 2017, or should the tax on GILTI provisions be recognized in the period the Act was signed into law. Because of the complexity of the new provisions, we are continuing to evaluate on how the provisions will be accounted for under the U.S. generally accepted accounting principles wherein companies are allowed to make an accounting policy election of either (i) account for GILTI as a component of tax expense in the period in which we are subject to the rules (the “period cost method”), or (ii) account for GILTI in our measurement of deferred taxes (the “deferred method”). Currently, we have not elected a method and will only do so after our completion of the analysis of the GILTI provisions and our election method will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in our taxable income related to GILTI and, if so, the impact that is expected. A summary of our deferred tax assets is as follows (in thousands): Years Ended December 31, 2017 2016 Deferred tax assets: Accrued expenses and reserves $ 1,665 $ 5,069 Share-based compensation 14,430 23,864 Deferred revenue — 1,085 Net operating loss carryforwards 71,653 73,708 Property and equipment, textbooks and intangibles assets 3,905 5,168 Other items 960 1,407 Gross deferred tax assets 92,613 110,301 Valuation allowance (91,183 ) (110,045 ) Total deferred tax assets 1,430 256 Deferred tax liabilities: Other (2,869 ) (1,413 ) Total deferred tax liabilities (2,869 ) (1,413 ) Net deferred tax liability $ (1,439 ) $ (1,157 ) At December 31, 2017 and 2016 the deferred tax liability is created by the tax amortization of acquired indefinite lived intangible assets. Under the accounting guidance this deferred tax liability can be used as a source of income for recognition of deferred tax assets when determining the amount of valuation allowance to be recorded. The 2017 Tax Cuts and Job Acts changed the expiration of post 2017 net operating losses. Under the Act, post 2017 net operating losses can only be used to offset 80% of future taxable income; however, they do not expire. The indefinite-lived deferred tax liabilities are therefore a source of income for the indefinite-lived net operating loss carryforward and no valuation allowance is necessary on 80% of the deferred tax liabilities. Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain. Accordingly, the federal and state gross deferred tax assets have been fully offset by a valuation allowance. The valuation allowance decreased by approximately $18.9 million during the year ended December 31, 2017 and increased by $11.8 million during the year ended December 31, 2016 . As of December 31, 2017 , we had net operating loss carryforwards for federal and state income tax purposes of approximately $257 million and $195 million , respectively, which will begin to expire in years beginning 2028 and 2018 , respectively. As of December 31, 2017 , we had tax credit carryforwards for federal and state income tax purposes of approximately $5.6 million and $6.4 million , respectively. The federal credits expire in various years beginning in 2030 . The state credits do not expire. Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitations due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions. Such annual limitations could result in the expiration of the net operating losses and tax credit carryforwards before utilization. As describe above, the Tax Act includes a transition tax in 2017 that taxes any previously deferred foreign earnings and profits in 2017 at a reduced tax rate. As a result of this tax and the accrual of associated withholding tax, we have no unrecorded tax liabilities associated with unremitted foreign retained earnings as of December 31, 2017. As of December 31, 2016 , we permanently reinvested approximately $6.0 million of earnings from our international subsidiaries. We recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During the years ended December 31, 2017 , 2016 and 2015 , we recognized an increase of $0.2 million , a decrease of $18 thousand and an increase of $0.1 million of interest and penalties, respectively. Accrued interest and penalties as of December 31, 2017 and 2016 were approximately $0.8 million and $0.6 million , respectively. During the year ended December 31, 2017, we settled an audit relating to an examination by the tax authorities in India for the fiscal filing period ending March 31, 2015. During the year ended December 31, 2017, we also settled two years, 2012 and 2013, of a four-year tax audit in Israel. The remaining years under audit, 2014 and 2015 are waiting on the settlement of similar court decisions prior to assessments by the Israel Tax Authority. We file tax returns in U.S. federal, state, and certain foreign jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryforwards, all of the tax years since inception through the 2017 tax year remain subject to examination by the U.S. federal and some state authorities. Foreign jurisdictions remain subject to examination up to approximately seven years from the filing date, depending on the jurisdiction. A reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 4,882 $ 4,849 $ 4,272 Increase in tax positions for prior years 280 478 82 Decrease in tax positions for prior years (101 ) (855 ) (416 ) Decrease in tax positions for prior year settlement (172 ) (32 ) (61 ) Decrease in tax positions for prior years due to statutes lapsing (169 ) (76 ) — Increase in tax positions for current year 978 595 948 Change due to translation of foreign currencies 74 (77 ) 24 Ending balance $ 5,772 $ 4,882 $ 4,849 The actual amount of any taxes due could vary significantly depending on the ultimate timing and nature of any settlement. We believe that the amount by which the unrecognized tax benefits may increase or decrease within the next 12 months is not estimable. The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $1.2 million for the year ended December 31, 2017 . One or more of these unrecognized tax benefits could be subject to a valuation allowance if, and when recognized in a future period, which could impact the timing of any related effective tax rate benefit. |
Restructuring Charges (Credits)
Restructuring Charges (Credits) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges (Credits) | Restructuring Charges (Credits) 2017 Restructuring Plan In January 2017, we entered into a strategic partnership with the National Research Center for College & University Admissions (NRCCUA) where NRCCUA will assume responsibility for managing, renewing, and maintaining our existing university contracts and become the exclusive reseller of our digital Enrollment Marketing services for colleges and universities. As a result of this strategic partnership, approximately 50 employees in China and the United States supporting the sales and account support functions of our Enrollment Marketing offering were terminated, resulting in one-time workforce reduction costs of $0.9 million and lease termination and other costs of $0.1 million recorded during the year ended December 31, 2017 . We expect costs incurred to date related to this workforce reduction to be fully paid within three months. 2015 Restructuring Plan During the years ended December 31, 2017 and 2016 , we recorded restructuring credits of $42 thousand and $0.4 million , respectively, primarily related to a partial reversal of previously accrued lease termination costs due to our subtenant leasing additional space. Costs incurred to date related to the lease termination and other costs are expected to be fully paid by 2021. The following table summarizes the activity related to the accrual for restructuring charges (credits) (in thousands): 2017 Restructuring Plan 2015 Restructuring Plan Workforce Reduction Costs Lease Termination and Other Costs Workforce Reduction Costs Lease Termination and Other Costs Total Balance at January 1, 2016 $ — $ — $ 55 $ 2,463 $ 2,518 Restructuring credits — — — (423 ) (423 ) Cash payments — — (55 ) (1,734 ) (1,789 ) Balance at December 31, 2016 — — — 306 306 Restructuring charges (credits) 941 148 — (42 ) 1,047 Cash payments (897 ) (128 ) — (43 ) (1,068 ) Write-offs — (20 ) — — (20 ) Balance at December 31, 2017 $ 44 $ — $ — $ 221 $ 265 As of December 31, 2017 , the $0.3 million liability was comprised of a short-term accrual of $0.1 million included within accrued liabilities and a long-term accrual of $0.2 million included within other liabilities on the consolidated balance sheet. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Our Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the years ended December 31, 2017 , 2016 and 2015 , we had purchases of $3.2 million , $3.1 million and $2.9 million , respectively, from Adobe. We had $0.1 million in revenues year ended December 31, 2017 , no revenues in the year ended December 31, 2016 and $0.1 million in revenues in the year ended December 31, 2015 from Adobe. We had $0.3 million in payables as of December 31, 2017 and 2016 to Adobe. We had an immaterial amount of outstanding receivables as of December 31, 2017 and no outstanding accounts receivables as of December 31, 2016 from Adobe. One of our board members is also a member of the Board of Directors of Cengage Learning, Inc. (Cengage). During the years ended December 31, 2017 , 2016 and 2015 , we had purchases of $11.5 million , $10.2 million and $11.5 million , respectively, from Cengage. We had $1.9 million , $0.6 million and $0.1 million in revenues from Cengage in the years ended December 31, 2017 , 2016 and 2015 , respectively. We had $0.1 million in payables as of December 31, 2017 and an immaterial amount in payables as of December 31, 2016 to Cengage. We had $0.3 million and $0.1 million in outstanding accounts receivables as of December 31, 2017 and 2016 , respectively, from Cengage. One of our board members is also a member of the Board of Directors of Synack, Inc. (Synack). During the years ended December 31, 2017 , 2016 and 2015 , we had purchases of $0.1 million , $0.2 million and $0.1 million , respectively, of services from Synack. The immediate family of one of our board members is also a member of the Board of Directors of PayPal Holdings, Inc. (PayPal). During the year ended December 31, 2017 , 2016 and 2015 , we incurred payment processing fees of $1.0 million , $0.9 million and $0.7 million , respectively, to PayPal. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan We sponsor a 401(k) savings plan for eligible employees and their beneficiaries. Contributions by us are discretionary. Participants may contribute, on a pretax basis, a percentage of their annual compensation, but not to exceed a maximum contribution amount pursuant to Section 401(k) of the IRC. During the year ended December 31, 2017 , 2016 and 2015 , our matching contributions totaled approximately $1.1 million , $0.9 million , and $0.8 million , respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and reviews financial information presented on a consolidated basis. Accordingly, we have determined that we have a single operating and reporting segment and operating unit structure. Product Information We derive our revenues from our Chegg Services and Required Materials product lines. Chegg Services includes our products and services we provide to supplement the requirements and help students with their coursework as well as our marketing services which help to complete our offering of services to students. Required Materials includes all products that are essential for students to meet the requirements of their coursework. Chegg Services includes Chegg Study, Chegg Writing, Chegg Tutors, Brand Partnership, Test Prep and Internships . Required Materials includes commissions from Ingram and other partners, on the rental and sale of print textbooks, as well as revenues from eTextbooks . The following table sets forth our total net revenues for the periods shown for our Chegg Services and Required Materials product lines (in thousands): December 31, 2017 2016 2015 Chegg Services $ 185,683 $ 129,335 $ 94,285 Required Materials 69,383 124,755 207,088 Total net revenues $ 255,066 $ 254,090 $ 301,373 Geographic Information Our headquarters and most of our operations are located in the United States. We conduct our sales, marketing and customer service activities primarily in the United States. Geographic revenues information is based on the location of the customer. In 2017 , 2016 and 2015 , substantially all of our revenues and long-lived assets are located in the United States. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (unaudited) | Selected Quarterly Financial Data (unaudited) Three Months Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Total net revenues $ 62,602 $ 56,317 $ 62,640 $ 73,507 Gross profit $ 41,206 $ 39,275 $ 40,284 $ 54,126 Net (loss) income $ (6,401 ) $ (6,025 ) $ (11,516 ) $ 3,659 Weighted average shares used to compute net (loss) income per share: Basic 92,830 95,047 103,041 108,968 Diluted 92,830 95,047 103,041 121,557 Net (loss) income per share: Basic $ (0.07 ) $ (0.06 ) $ (0.11 ) $ 0.03 Diluted $ (0.07 ) $ (0.06 ) $ (0.11 ) $ 0.03 Three Months Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Total net revenues $ 66,654 $ 53,036 $ 71,343 $ 63,057 Gross profit $ 27,731 $ 31,629 $ 32,644 $ 42,485 Net loss $ (15,685 ) $ (9,008 ) $ (16,063 ) $ (1,489 ) Weighted average shares used to compute net loss per share, basic and diluted 89,118 90,416 91,059 91,526 Net loss per share, basic and diluted $ (0.18 ) $ (0.10 ) $ (0.17 ) $ (0.02 ) We recorded restructuring charges of $24 thousand , $64 thousand , $59 thousand and $0.9 million in the three months ended December 31, 2017 , September 30, 2017 , June 30, 2017 and March 31, 2017 , respectively. We recorded restructuring credits of $0.1 million , $0.1 million , $0.2 million and $44 thousand in the three months ended December 31, 2016 , September 30, 2016 , June 30, 2016 and March 31, 2016 , respectively. |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions, and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, restructuring charges (credits), share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, and the valuation of acquired intangible assets. 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. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Chegg and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. GAAP. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash We consider all highly liquid investments with an original maturity date of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents, which consist of cash, money market accounts, and commercial paper at financial institutions, are stated at cost, which approximates fair value. We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions. A |
Investments | Investments We hold investments in commercial paper, corporate securities and U.S. treasury securities. We classify our marketable securities as available-for-sale investments that are either short or long-term based on the nature of each security based on the contractual maturity of the investment when purchased. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Unrealized losses are charged against other income (expense), net when a decline in fair value is determined to be other-than-temporary. We did not record any such impairment charges in the periods presented. We determined realized gains or losses on the sale of marketable securities on a specific identification method, and recorded such gains or losses as other income (expense), net. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable Accounts receivable are recorded at the invoiced amount and are non-interest bearing. We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers, and marketing services customers, and maintain an allowance for doubtful accounts to account for potentially uncollectible receivables. Allowance for Doubtful Accounts We assess the creditworthiness of our customers based on multiple sources of information, and analyze such factors as our historical bad debt experience, industry and geographic concentrations of credit risk, economic trends, and customer payment history. This assessment requires significant judgment. Because of this assessment, we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of certain customers to make all of their required payments. In making this estimate, we analyze historical payment performance and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off as a decrease to the allowance for doubtful accounts when all collection efforts have been exhausted and an account is deemed uncollectible. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and marketable securities invested in highly liquid instruments in accordance with our investment policy. We place the majority of our cash and cash equivalents and restricted cash with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments. Certain of our cash balances held with financial institutions are in excess of Federal Deposit Insurance Corporation limits. Our investment portfolio consists of investment-grade marketable securities diversified among security types, industries and issuers. Our investments were held and managed by recognized financial institutions that followed our investment policy with the main objective of preserving capital and maintaining liquidity. C |
Property and Equipment | Depreciation and content amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories in our consolidated statements of operations. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and content amortization. Depreciation and content amortization are computed using the straight-line method over the following estimated useful lives of the assets: The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in loss from operations |
Goodwill and Indefinite-Lived Intangible Asset | Goodwill and Indefinite-Lived Intangible Asset Goodwill represents the excess of the fair value of consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business acquisition. Our indefinite-lived intangible asset represents the internships.com trade name. Goodwill and our indefinite-lived intangible asset are not amortized but rather tested for impairment at least annually on October 1, or more frequently if certain events or indicators of impairment occur between annual impairment tests. We first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative impairment test. In our qualitative assessment, we consider factors including economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of our reporting unit is less than the carrying amount. We completed our annual impairment test on October 1 of 2017 and 2016 , each of which did not result in any impairment as our qualitative assessment did not indicate that it is more likely than not that the fair value of our reporting unit is less than the carrying amount. |
Acquired Intangible Assets, and Other Long-Lived Assets | Acquired Intangible Assets and Other Long-Lived Assets Acquired intangible assets with finite useful lives, which include developed technology, customer lists, trade names, non-compete agreements, and master service agreements, are amortized over their estimated useful lives. We assess the impairment of acquired intangible assets and other long-lived assets when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. |
Revenue Recognition and Deferred Revenue | Revenue Recognition and Deferred Revenue Revenues are recognized when the four basic criteria for revenue recognition have been met as follows: persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, the sale price is fixed or determinable, and collection is reasonably assured. 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, or charge backs from our payment processors who process payments from credit cards, debit cards, and PayPal, are recorded as a reduction to revenues. We generate revenues from our Chegg Services product line including our Chegg Study service, our Chegg Writing service, our Chegg Tutors service, Test Prep, through our partnership with Kaplan, Internship services, Brand Partnership services that we offer to brands and Enrollment Marketing services to colleges, through our strategic partnership with NRCCUA. Chegg Services are offered to students through weekly, monthly or annual subscriptions, and we recognize revenues ratably over the respective subscription period. Enrollment Marketing services and Brand Partnership services are offered either on a subscription or on an a la carte basis. Revenues are recognized ratably or as earned over the subscription service period, generally one year. Revenues from Enrollment Marketing services or Brand Partnership services delivered on an a la carte basis, without a subscription, are recognized when delivery of the respective lead or service has occurred. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our Enrollment Marketing and Brand Partnership customers with normal credit terms, typically 30 days. Some of our customer arrangements for Enrollment Marketing and Brand Partnership services include multiple deliverables, which include the delivery of student leads as well as other services to the end customer. We have determined these deliverables qualify as separate units of accounting, as they have value to the customer on a standalone basis and our arrangements do not contain a right of return. For these arrangements that contain multiple deliverables, we allocate the arrangement consideration based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence of fair value (VSOE), when available; (2) third-party evidence of selling price (TPE), if VSOE does not exist; and (3) estimated selling price (ESP), if neither VSOE nor TPE is available. We determine VSOE based on our historical pricing and discounting practices for the specific solution when sold separately and when a substantial majority of the selling prices for these services fall within a narrow range. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our go-to-market strategy differs from that of our peers, and our offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. If we have not established VSOE or TPE for our Enrollment Marketing services, we have used ESP in our allocation of arrangement consideration. Additionally, we limit the amount of revenues recognized for delivered elements to the amount that is not contingent on future delivery of services or other future performance obligations. Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions that have not been recognized, and marketing services that have yet to be performed. Deferred revenue is recognized as revenues ratably over the term or when the services are provided and all other revenue recognition criteria have been met. We historically generated revenues from the rental of print textbooks and to a lesser extent, through the sales of print textbooks through our website on a just-in-time basis. Rental revenues for textbooks that we owned were previously recognized ratably over the term of the rental period, generally two to five months. Commissions earned on rental textbooks owned by Ingram and other partners are recognized immediately when a book ships to the student. We did not recognize any revenues from the rental or sale of our own print textbooks during the year ended December 31, 2017 reflecting our transition of print textbook rentals to Ingram and the increasing growth in our Chegg Services. Revenues from selling textbooks on a just-in-time basis were historically recognized upon shipment. During the year ended December 31, 2017, revenues from selling textbooks on a just-in-time basis are commission based as a result of the transition to Ingram and other partners. Revenues from the rental or sale of eTextbooks is recognized ratably over the contractual period, generally two to five months or at time of the sale, respectively . We evaluate whether we are acting as a principal or an agent in a transaction, and therefore would record the gross sales amount and related costs as revenues or the net amount earned as commissions from the sale of third-party products. Our determination is based on our evaluation of certain indicators including whether we are the principal in the transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, none of which is presumptive or determinative. We generally operate as the principal and so in those instances revenues are recorded at the gross sale price. We generally record the net amounts as commissions earned when such amounts are determined using a fixed percentage of the transaction price, we are not subject to inventory risk or responsible for the fulfillment of the textbooks. We operate as an agent in our strategic partnership with Ingram and agreements with other partners and therefore our revenues include a commission on the total transaction amount that we earn upon Ingram's fulfillment of a rental transaction using print textbooks for which Ingram or the other partner has title and risk of loss, as opposed to the total rental transaction amount. We also present our revenues separately for rental, services and sales. Rental revenues historically included the rental of print textbooks for which we take title and bear the risk of loss, service revenues includes Chegg Study, Chegg Writing, Chegg Tutors, Enrollment Marketing, Brand Partnership, eTextbooks, and commissions we earn from Ingram, other partners, and e-commerce partners; sales revenues includes just-in-time sale of print textbooks and the sale of other required materials. As a result of our strategic partnership with Ingram and other partners, we no longer recognize rental revenues or sales revenues from the rental or sale of a print textbook. Instead, our services revenues includes a commission on the total transaction amount that we earn from Ingram and other partners upon Ingram's fulfillment of a rental transaction using books for which Ingram or other partner has title and risk of loss, as opposed to the total rental transaction amount. C |
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. Certain cost of revenues, including textbook depreciation expense, the cost of textbooks sold, write-offs and allowances related to the print textbook library, have decreased during 2016 and in to 2017 as we have completely transitioned the shipping and fulfillment activities related to the rental and sale of print textbooks to Ingram. Cost of revenues consists of publisher content fees for eTextbooks, content amortization expense related to content that we develop or license, including publisher agreements for which we pay one-time license fees for published content, payment processing costs, the payments made to tutors through our Chegg Tutors service, Enrollment Marketing services leads purchased from third-party suppliers to fulfill leads that we are unable to fulfill through our internal database, personnel costs and other direct costs related to providing content or services. In addition, cost of revenues includes allocated information technology and facilities costs. |
Technology and Development Costs | Technology and Development Costs Our technology and development expenses consist of salaries, benefits and share-based compensation expense for employees in our product and web design, engineering and technical teams who are responsible for maintaining our website, developing new products and improving existing products. Technology and development costs also include amortization of acquired intangible assets, webhosting costs, third-party development costs, research and development expenses and allocated information technology and facilities expenses. We expense substantially all of our technology and development expenses as they are incurred. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures. |
Share-based Compensation | Share-based Compensation Share-based compensation expense for stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs), and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of employee share-based compensation awards based on the grant-date fair value of the award. Share-based compensation expense for stock options and our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while expense for RSUs and PSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. We recognize share-based compensation expense over the requisite service period, which is generally the vesting period, on a straight line basis for RSUs and on a graded basis for PSUs, contingent on the achievement of performance conditions. These amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Equity awards issued to non-employees are recorded at their fair value on the measurement date and are subject to adjustment each period as the underlying awards vest or consulting services are performed. |
Income Taxes | Income Taxes We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense. |
Restructuring Charges | Restructuring Charges Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on our policies and practices and negotiated settlements. Restructuring charges for employee workforce reductions are recorded upon employee notification for employees whose required continuing service period is 60 days or less and ratably over the employee’s continuing service period for employees whose required continuing service period is greater than 60 days. |
Strategic Investments | Strategic Investment We have entered into an equity investment in a privately-held foreign entity to explore expanding our reach internationally. Our investment is accounted for under the cost method and we periodically review this investment for other-than-temporary declines in fair value based on the specific identification method and write down the value of our investment when an other-than-temporary decline has occurred. Any fair value estimates are made based on consideration of the current cash position, recent operational performance, and forecasts of the investees. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, warrants, restricted stock units (RSUs), and performance-based restricted stock units (PSUs), 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. |
Foreign Currency Translations | Foreign Currency Translation The functional currency of our foreign subsidiaries is the local currency. Adjustments resulting from the translation of foreign currencies into U.S. dollars for balance sheet amounts are based on the exchange rates as of the consolidated balance sheet date. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. Revenues and expenses are translated at average exchange rates during the period. Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets. Gains or losses resulting from foreign currency transactions, which are denominated in currencies other than the entity’s functional currency, are included in other income (expense), net in the consolidated statements of operations and were not material during 2017 , 2016 or 2015 . |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . ASU 2017-09 clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. The guidance is effective for annual periods beginning after December 15, 2017, with early adoption permitted, and the guidance requires a prospective application to awards modified on or after the adoption date. We elected to early adopt this standard as of July 1, 2017 and will account for any modifications after this date under the new guidance. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 eliminates step 2 from the annual goodwill impairment test no longer requiring the comparison of the implied fair value of a reporting unit's goodwill with the carrying amount of goodwill. Early adoption is permitted and the guidance requires a prospective application. The guidance is effective for annual periods beginning after December 15, 2019, and we are currently in the process of evaluating the impact of this guidance. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . ASU 2017-01 clarifies the definition of a business to assist entities with evaluating whether a transaction should be accounted for as acquisitions of assets or businesses. We will analyze the clarified definition of a business for potential future transactions to determine whether they should be accounted for as an asset acquisition or business combination under the new guidance. Early adoption is permitted and the guidance requires a prospective application. The guidance is effective for annual periods beginning after December 15, 2017 and we will adopt the guidance on January 1, 2018. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash . ASU 2016-18 requires an entity to explain the change during a period in restricted cash equivalents on the consolidated statements of cash flows and include such amounts when reconciling beginning-of-period and end-of-period total amounts shown on the consolidated statements of cash flows. Early adoption is permitted, and the guidance requires a retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2017, and we will adopt the guidance on January 1, 2018. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to provide for simplification involving several aspects of the accounting for share-based payment transactions. The new standard requires excess tax benefits and tax deficiencies to be recorded in our consolidated statements of operations as a component of provision for income taxes when stock awards vest or are settled and an option to recognize gross share-based compensation expense with actual forfeitures recognized as they occur. In addition, it eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows and clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the consolidated statements of cash flows. The standard also allows us to withhold more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting. We adopted this standard in the first quarter of 2017 and the adoption had no impact to our consolidated financial statements. The requirement to record excess tax benefits and deficiencies in our consolidated statements of operations as a component of provision of income taxes when stock awards vest or are settled does not impact our provision of income taxes as we currently have a full valuation allowance recorded against our deferred tax assets related to share-based compensation. Additionally, we have elected to continue to recognize share-based compensation expense net of estimated forfeitures. We have not recorded an adjustment to retained earnings to reflect the modified retrospective adoption of this standard update as neither of these updates change the accounting of the prior period financial results. We have elected to adopt the elimination of the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the consolidated statements of cash flows prospectively and therefore prior periods have not been adjusted. Further, there was no change related to the requirement that all payments made to tax authorities on an employees' behalf for withheld shares be presented as a financing activity on the consolidated statements of cash flows as we have always recorded such amounts as a financing activity. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . ASU 2016-02 requires an entity to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The amendments in this update also require certain quantitative and qualitative disclosures about leasing arrangements. Early adoption is permitted, and the guidance requires a modified retrospective adoption. The guidance is effective for annual periods beginning after December 15, 2018 and we plan to adopt the guidance on January 1, 2019. We plan to elect the package of transition practical expedients which include not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We will continue to evaluate ASU 2016-02 as we near our adoption date. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (Topic 606) (ASU 2014-09), which will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. In July 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 for public companies and further amendments and technical corrections were made to ASU 2014-09 during 2016. ASU 2014-09 allows for companies to choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We will adopt ASU 2014-09 on January 1, 2018 under the modified retrospective application and our adjustment to the opening balance of retained earnings is immaterial. We have determined the impact ASU 2014-09 will have on our consolidated financial statements, accounting policies, and related disclosures. We will continue to operate as an agent in our strategic partnership with Ingram and agreements with other partners under the new guidance and therefore continue to recognize a commission on print textbook rental transactions. We have determined two areas of impact. First, the timing of revenue recognition relating to our Enrollment Marketing and Brand Partnership product offerings will be recognized earlier in the contract life under ASU 2014-09 than under the current guidance. Second, we will estimate and account for the variable consideration earned relating to our performance related obligation with Ingram over the period in which it is earned under ASU 2014-09 as opposed to at the completion of the period under the current guidance. These are the significant areas that we have identified will be different under ASU 2014-09. |
Significant Accounting Polici28
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives For Property And Equipment | Property and equipment are recorded at cost less accumulated depreciation and content amortization. Depreciation and content amortization are computed using the straight-line method over the following estimated useful lives of the assets: Classification Useful Life Computers and equipment 3 years Software 3 years Furniture and fixtures 5 years Leasehold improvements Shorter of the remaining lease term or the estimated useful life of 5 years Content Shorter of the licensed content term or the estimated useful life of 5 years |
Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts): Years Ended December 31, 2017 2016 2015 Numerator: Net loss $ (20,283 ) $ (42,245 ) $ (59,210 ) Denominator: Weighted average shares used to compute net loss per share, basic and diluted 100,022 90,534 86,818 Net loss per share, basic and diluted $ (0.20 ) $ (0.47 ) $ (0.68 ) |
Common Shares Outstanding Excluded from Computation of Diluted Net Loss Per Share | The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share attributable to common stockholders because including them would have been anti-dilutive (in thousands): Years Ended December 31, 2017 2016 2015 Options to purchase common stock 3,045 10,799 11,446 RSUs and PSUs 153 1,239 200 Employee stock purchase plan 5 15 — Warrants to purchase common stock — 200 299 Total common stock equivalents 3,203 12,253 11,945 |
Cash and Cash Equivalents, an29
Cash and Cash Equivalents, and Investments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents, and Investments | The following table shows our cash and cash equivalents, restricted cash and investments’ adjusted cost, net unrealized loss and fair value as of December 31, 2017 (in thousands): December 31, 2017 Cost Net Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 98,370 $ — $ 98,370 Money market funds 5,358 — 5,358 Commercial paper 22,729 — 22,729 Total cash and cash equivalents $ 126,457 $ — $ 126,457 Short-term investments: Commercial paper $ 38,850 $ (27 ) $ 38,823 Corporate securities 23,001 (43 ) 22,958 U.S. treasury securities 19,978 (17 ) 19,961 Total short-term investments $ 81,829 $ (87 ) $ 81,742 Long-term corporate securities $ 20,405 $ (100 ) $ 20,305 |
Schedule of Available-for-sale Securities Reconciliation | The adjusted cost and fair value of available-for-sale investments as of December 31, 2017 by contractual maturity were as follows (in thousands): Cost Fair Value Due in 1 year or less $ 104,558 $ 104,471 Due in 1-2 years 20,405 20,305 Investments not due at a single maturity date 5,358 5,358 Total $ 130,321 $ 130,134 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Measured and Recorded at Fair Value on Recurring Basis | Financial instruments measured and recorded at fair value on a recurring basis as of December 31, 2017 are classified based on the valuation technique level in the tables below (in thousands): December 31, 2017 Total Quoted Prices Significant Assets: Cash equivalents: Money market funds $ 5,358 $ 5,358 $ — Commercial paper 22,729 — 22,729 Short-term investments: Commercial paper 38,823 — 38,823 Corporate securities 22,958 — 22,958 U.S. treasury securities 19,961 19,961 — Long-term corporate securities 20,305 — 20,305 Total assets measured and recorded at fair value $ 130,134 $ 25,319 $ 104,815 |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of textbook library | Textbook library, net consisted of the following (in thousands): December 31, 2016 Textbook library $ 33,980 Less accumulated depreciation (31,405 ) Textbook library, net $ 2,575 |
Property, plant and equipment | Property and equipment, net consisted of the following (in thousands): December 31, 2017 2016 Computer and equipment $ 2,449 $ 1,597 Software 5,317 4,324 Furniture and fixtures 2,893 2,148 Leasehold improvements 7,154 5,342 Content 70,110 49,725 Property and equipment 87,923 63,136 Less accumulated depreciation and amortization (40,430 ) (27,831 ) Property and equipment, net $ 47,493 $ 35,305 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Consideration | The acquisition date fair value of the purchase consideration for the above transactions consisted of the following (in thousands): Initial cash consideration $ 22,007 Net working capital adjustment 200 Fair value of deferred cash consideration 17,127 Escrow 4,200 Hold-back 500 Fair value of purchase consideration $ 44,034 The acquisition date fair value of the purchase consideration for the above transactions consisted of the following (in thousands): Initial cash consideration $ 12,717 Net working capital adjustment 53 Escrow 2,244 Fair value of purchase consideration $ 15,014 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands): Cash $ 59 Accounts receivable 2,610 Favorable lease acquired 300 Other acquired assets 212 Acquired intangible assets: Trade names 1,840 Domain names 1,330 Advertiser relationships 6,600 User base 550 Non-compete agreements 508 Developed technology 5,660 Total acquired intangible assets 16,488 Total identifiable assets acquired 19,669 Liabilities assumed (573 ) Net identifiable assets acquired 19,096 Goodwill 24,938 Total fair value of purchase consideration $ 44,034 The following table presents the total allocation of purchase consideration recorded in our consolidated balance sheets as of the acquisition date (in thousands): Net tangible assets $ 60 Acquired intangible assets: Trade name 50 Domain names 230 Non-compete agreements 70 Developed technology 5,510 Content Library 70 Total acquired intangible assets 5,930 Total identifiable assets acquired 5,990 Goodwill 9,024 Total fair value of purchase consideration $ 15,014 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill consists of the following (in thousands): December 31, 2017 December 31, 2016 Beginning balance $ 116,239 $ 91,301 Additions due to acquisitions 9,024 24,938 Foreign currency translation adjustment 9 — Ending balance $ 125,272 $ 116,239 |
Intangible Assets | Intangible assets as of December 31, 2017 and December 31, 2016 consist of the following (in thousands, except weighted-average amortization period): December 31, 2017 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technologies and content library 70 $ 20,657 $ (10,220 ) $ 10,437 Customer lists 47 9,970 (5,480 ) 4,490 Trade names 46 5,793 (3,465 ) 2,328 Non-compete agreements 30 1,798 (1,506 ) 292 Master service agreements 21 1,030 (1,030 ) — Indefinite-lived trade name — 3,600 — 3,600 Foreign currency translation adjustment — 6 — 6 Total intangible assets 57 $ 42,854 $ (21,701 ) $ 21,153 December 31, 2016 Weighted-Average Amortization Period (in months) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technologies 60 $ 15,077 $ (8,245 ) $ 6,832 Customer lists 47 9,970 (3,673 ) 6,297 Trade names 47 5,513 (1,998 ) 3,515 Non-compete agreements 30 1,728 (1,249 ) 479 Master service agreements 21 1,030 (1,005 ) 25 Indefinite-lived trade name — 3,600 — 3,600 Total intangible assets 51 $ 36,918 $ (16,170 ) $ 20,748 |
Estimated Future Amortization Expense Related to Intangible Assets | As of December 31, 2017 , the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands): 2018 $ 5,311 2019 4,347 2020 2,874 2021 1,518 2022 1,075 Thereafter 2,428 Total $ 17,553 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Balance Sheet Details [Abstract] | |
Schedule of Other Current Assets | Other current assets consist of the following (in thousands): December 31, 2017 2016 Reimbursement from Ingram and other partners $ 4,219 $ 18,759 Other 3,626 2,255 Other current assets $ 7,845 $ 21,014 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): December 31, 2017 2016 Payable to Ingram and other partners $ 8,001 $ 8,237 Taxes payable 3,337 2,927 Chegg credit 2,457 2,341 Accrued purchases of long-lived assets 3,573 2,333 Accrued deferred cash consideration related to acquisition — 17,378 Other 13,706 11,103 Accrued liabilities $ 31,074 $ 44,319 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The aggregate future minimum lease payments as of December 31, 2017 , are as follows (in thousands): 2018 $ 2,934 2019 2,038 2020 939 2021 485 2022 230 Thereafter — Total $ 6,626 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | We are authorized to issue 400 million shares of common stock, with a par value per share of $0.001 . As of December 31, 2017 , we have reserved the following shares of common stock for future issuance: December 31, 2017 Warrants to purchase common stock 100,000 Outstanding stock options 8,066,846 Outstanding RSUs and PSUs 14,335,115 Shares available for grant under the stock plans 11,177,175 Shares available for issuance under employee stock purchase plan 5,849,986 Total common shares reserved for future issuance 39,529,122 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense for Employees and Non-Employees | Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Cost of revenues $ 316 $ 172 $ 262 Technology and development 14,333 14,771 11,992 Sales and marketing 5,007 6,124 7,901 General and administrative 18,703 20,718 18,620 Total share-based compensation expense $ 38,359 $ 41,785 $ 38,775 |
Summary of Assumptions Used to Determine Fair Value of Stock Options Granted | The following table summarizes the key assumptions used to determine the fair value of our stock options granted to employees, officers and directors: Years Ended December 31, 2016 2015 Expected term (years) 5.50 5.50-6.00 Expected volatility 56.94 % 50.68%-51.69% Dividend yield — % — % Risk-free interest rate 1.43 % 1.75%-1.86% Weighted-average grant-date fair value per share $ 2.58 $ 3.54 |
Summary of Assumptions Used to Determine Fair Value of ESPP | The following table summarizes the key assumptions used to determine the fair value of rights granted under the 2013 ESPP: Years Ended December 31, 2017 2016 2015 Expected term (years) 0.50 0.50 0.50 Expected volatility 38.15%-45.57% 35.10%-75.74% 36.20%-49.59% Dividend yield — % — % — % Risk-free interest rate 1.04%-1.42% 0.38%-0.62% 0.09%-0.31% Weighted-average grant-date fair value per share $ 3.55 $ 1.79 $ 1.98 |
Summary of Stock Option Activity | Stock option activity under our equity incentive plans was as follows: Options Outstanding Number of Options Outstanding Weighted- Average Exercise Price per Share Weighted-Average Remaining Contractual Term in Years Aggregate Intrinsic Value Balance at December 31, 2016 11,333,624 $ 8.60 5.22 $ 6,608,611 Granted — — Exercised (2,902,403 ) 7.13 Canceled (364,375 ) 12.23 Balance at December 31, 2017 8,066,846 $ 8.97 4.64 $ 59,318,983 As of December 31, 2017 Options exercisable 8,033,749 $ 8.98 4.63 $ 59,002,312 Options vested and expected to vest 8,064,829 $ 8.97 4.64 $ 59,299,650 |
Summary of Restricted Stock Unit Activity | RSU and PSU Activity RSUs and PSUs Outstanding Number of RSUs and PSUs Outstanding Weighted Average Grant Date Fair Value Balance at December 31, 2016 14,142,109 $ 5.20 Granted 6,800,381 9.10 Released (5,362,478 ) 5.73 Canceled (1,244,897 ) 6.16 Balance at December 31, 2017 14,335,115 $ 6.78 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | Our income tax provision consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 Current income taxes: Federal $ (103 ) $ (18 ) $ — State 100 321 263 Foreign 1,523 959 778 Total current income taxes 1,520 1,262 1,041 Deferred income taxes: Federal (992 ) 503 484 State 75 48 56 Foreign 1,199 (106 ) (102 ) Total deferred income taxes 282 445 438 Total income tax provision $ 1,802 $ 1,707 $ 1,479 |
Schedule of Loss before Provision for Income Taxes | Loss before provision for income taxes consisted of the following (in thousands): Years Ended December 31, 2017 2016 2015 United States $ (20,983 ) $ (42,687 ) $ (59,376 ) Foreign 2,502 2,149 1,645 Total $ (18,481 ) $ (40,538 ) $ (57,731 ) |
Schedule of Effective Income Tax Rate Reconciliation | The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages): Years Ended December 31, 2017 2016 2015 Income tax at U.S. statutory rate 34.0 % 34.0 % 34.0 % State, net of federal benefit 8.3 1.7 3.7 Foreign rate differential (3.8 ) (0.3 ) (0.2 ) Share-based compensation 38.2 (9.1 ) (7.0 ) Non-deductible expenses (1.1 ) (0.2 ) (0.2 ) Tax credits 7.8 (0.4 ) 1.4 Tax Cuts and Jobs Act impact (220.2 ) — — Other 0.4 (0.7 ) (1.2 ) Change in valuation allowance 126.6 (29.2 ) (33.1 ) Total (9.8 )% (4.2 )% (2.6 )% |
Schedule of Deferred Tax Assets and Liabilities | A summary of our deferred tax assets is as follows (in thousands): Years Ended December 31, 2017 2016 Deferred tax assets: Accrued expenses and reserves $ 1,665 $ 5,069 Share-based compensation 14,430 23,864 Deferred revenue — 1,085 Net operating loss carryforwards 71,653 73,708 Property and equipment, textbooks and intangibles assets 3,905 5,168 Other items 960 1,407 Gross deferred tax assets 92,613 110,301 Valuation allowance (91,183 ) (110,045 ) Total deferred tax assets 1,430 256 Deferred tax liabilities: Other (2,869 ) (1,413 ) Total deferred tax liabilities (2,869 ) (1,413 ) Net deferred tax liability $ (1,439 ) $ (1,157 ) |
Schedule of Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands): Years Ended December 31, 2017 2016 2015 Beginning balance $ 4,882 $ 4,849 $ 4,272 Increase in tax positions for prior years 280 478 82 Decrease in tax positions for prior years (101 ) (855 ) (416 ) Decrease in tax positions for prior year settlement (172 ) (32 ) (61 ) Decrease in tax positions for prior years due to statutes lapsing (169 ) (76 ) — Increase in tax positions for current year 978 595 948 Change due to translation of foreign currencies 74 (77 ) 24 Ending balance $ 5,772 $ 4,882 $ 4,849 |
Restructuring Charges (Credit39
Restructuring Charges (Credits) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activity related to the accrual for restructuring charges (credits) (in thousands): 2017 Restructuring Plan 2015 Restructuring Plan Workforce Reduction Costs Lease Termination and Other Costs Workforce Reduction Costs Lease Termination and Other Costs Total Balance at January 1, 2016 $ — $ — $ 55 $ 2,463 $ 2,518 Restructuring credits — — — (423 ) (423 ) Cash payments — — (55 ) (1,734 ) (1,789 ) Balance at December 31, 2016 — — — 306 306 Restructuring charges (credits) 941 148 — (42 ) 1,047 Cash payments (897 ) (128 ) — (43 ) (1,068 ) Write-offs — (20 ) — — (20 ) Balance at December 31, 2017 $ 44 $ — $ — $ 221 $ 265 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Product Line | The following table sets forth our total net revenues for the periods shown for our Chegg Services and Required Materials product lines (in thousands): December 31, 2017 2016 2015 Chegg Services $ 185,683 $ 129,335 $ 94,285 Required Materials 69,383 124,755 207,088 Total net revenues $ 255,066 $ 254,090 $ 301,373 |
Selected Quarterly Financial 41
Selected Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Three Months Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Total net revenues $ 62,602 $ 56,317 $ 62,640 $ 73,507 Gross profit $ 41,206 $ 39,275 $ 40,284 $ 54,126 Net (loss) income $ (6,401 ) $ (6,025 ) $ (11,516 ) $ 3,659 Weighted average shares used to compute net (loss) income per share: Basic 92,830 95,047 103,041 108,968 Diluted 92,830 95,047 103,041 121,557 Net (loss) income per share: Basic $ (0.07 ) $ (0.06 ) $ (0.11 ) $ 0.03 Diluted $ (0.07 ) $ (0.06 ) $ (0.11 ) $ 0.03 Three Months Ended March 31, 2016 June 30, 2016 September 30, 2016 December 31, 2016 Total net revenues $ 66,654 $ 53,036 $ 71,343 $ 63,057 Gross profit $ 27,731 $ 31,629 $ 32,644 $ 42,485 Net loss $ (15,685 ) $ (9,008 ) $ (16,063 ) $ (1,489 ) Weighted average shares used to compute net loss per share, basic and diluted 89,118 90,416 91,059 91,526 Net loss per share, basic and diluted $ (0.18 ) $ (0.10 ) $ (0.17 ) $ (0.02 ) |
Background and Basis of Prese42
Background and Basis of Presentation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Services | $ 255,066 | $ 182,399 | $ 133,095 |
Services, cost of service | 80,175 | 56,206 | 45,458 |
Sales revenue | 0 | 31,854 | 47,913 |
Cost of goods sold | 0 | 34,758 | 46,229 |
Accounts receivable, current | 10,855 | 10,451 | |
Other current assets | $ (7,845) | (21,014) | |
Restatement Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Services | 1,100 | 1,100 | |
Services, cost of service | 1,400 | 1,700 | |
Sales revenue | (1,100) | (1,500) | |
Cost of goods sold | (1,400) | $ (1,700) | |
Accounts receivable, current | 1,200 | ||
Other current assets | $ 1,200 |
Significant Accounting Polici43
Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | |||
Advertising costs | $ 16.5 | $ 18.4 | $ 25 |
Required employee continuing service period | 60 days |
Significant Accounting Polici44
Significant Accounting Policies - Restricted Cash (Details) - Security Deposit For Office - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 0.5 | $ 0.1 |
Restricted cash, current | 0.1 | |
Restricted cash, noncurrent | $ 0.4 |
Significant Accounting Polici45
Significant Accounting Policies - Property Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $ 13.8 | $ 9.9 | $ 6.8 |
Computer and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Content | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years |
Significant Accounting Polici46
Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Brand Partnership | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Revenue recognition, subscription service period | 1 year |
Minimum | Textbooks | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Revenue recognition, textbook rental period | 2 months |
Minimum | eTextbooks | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Revenue recognition, textbook rental or sale contractual period | 2 months |
Maximum | Textbooks | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Revenue recognition, textbook rental period | 5 months |
Maximum | eTextbooks | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |
Revenue recognition, textbook rental or sale contractual period | 5 months |
Significant Accounting Polici47
Significant Accounting Policies - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net loss | $ 3,659 | $ (11,516) | $ (6,025) | $ (6,401) | $ (1,489) | $ (16,063) | $ (9,008) | $ (15,685) | $ (20,283) | $ (42,245) | $ (59,210) |
Denominator: | |||||||||||
Weighted-average common shares outstanding (in shares) | 108,968 | 103,041 | 95,047 | 92,830 | 91,526 | 91,059 | 90,416 | 89,118 | |||
Weighted average shares used to compute net loss per share, basic and diluted (in shares) | 100,022 | 90,534 | 86,818 | ||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.20) | $ (0.47) | $ (0.68) |
Significant Accounting Polici48
Significant Accounting Policies - Common Shares Outstanding Excluded From Computation Of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents | 3,203 | 12,253 | 11,945 |
Options to purchase common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents | 3,045 | 10,799 | 11,446 |
RSUs and PSUs | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents | 153 | 1,239 | 200 |
Employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents | 5 | 15 | 0 |
Warrants to purchase common stock | Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total common stock equivalents | 0 | 200 | 299 |
Cash and Cash Equivalents, an49
Cash and Cash Equivalents, and Investments - Schedule of Investments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Cash and cash equivalents: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | $ 126,457 |
Net Unrealized Loss | 0 |
Fair Value | 126,457 |
Short-term investments: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 81,829 |
Net Unrealized Loss | (87) |
Fair Value | 81,742 |
Long-term investments: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 20,405 |
Net Unrealized Loss | (100) |
Fair Value | 20,305 |
Commercial paper | Short-term investments: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 38,850 |
Net Unrealized Loss | (27) |
Fair Value | 38,823 |
Corporate securities | Short-term investments: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 23,001 |
Net Unrealized Loss | (43) |
Fair Value | 22,958 |
U.S. treasury securities | Short-term investments: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 19,978 |
Net Unrealized Loss | (17) |
Fair Value | 19,961 |
Cash | Cash and cash equivalents: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 98,370 |
Net Unrealized Loss | 0 |
Fair Value | 98,370 |
Money market funds | Cash and cash equivalents: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 5,358 |
Net Unrealized Loss | 0 |
Fair Value | 5,358 |
Commercial paper | Cash and cash equivalents: | |
Schedule Of Available For Sale Securities [Line Items] | |
Cost | 22,729 |
Net Unrealized Loss | 0 |
Fair Value | $ 22,729 |
Cash and Cash Equivalents, an50
Cash and Cash Equivalents, and Investments - Contractual Maturity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Cash and Cash Equivalents [Abstract] | |
Due in 1 year or less, Cost | $ 104,558 |
Due in 1-2 years, Cost | 20,405 |
Investments not due at a single maturity date, Cost | 5,358 |
Total, Cost | 130,321 |
Due in 1 year or less, Fair Value | 104,471 |
Due in 1-2 years, Fair Value | 20,305 |
Investments not due at a single maturity date, Fair Value | 5,358 |
Total, Fair Value | $ 130,134 |
Weighted average maturity | 5 months |
Cash and Cash Equivalents, an51
Cash and Cash Equivalents, and Investments - Restricted Cash (Details) - Security Deposit For Office - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 0.5 | $ 0.1 |
Restricted cash, current | 0.1 | |
Restricted cash, noncurrent | $ 0.4 |
Cash and Cash Equivalents, an52
Cash and Cash Equivalents, and Investments - Strategic Investment (Details) $ in Millions | Dec. 31, 2017USD ($) |
Other Assets | Equity Investments | |
Schedule of Cost-method Investments [Line Items] | |
Investments | $ 3 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||
Short-term investments | $ 81,742 | $ 0 |
Fair Value on Recurring Basis | ||
Assets: | ||
Total assets measured and recorded at fair value | 130,134 | |
Fair Value on Recurring Basis | Commercial paper | ||
Assets: | ||
Short-term investments | 38,823 | |
Fair Value on Recurring Basis | Corporate securities | ||
Assets: | ||
Short-term investments | 22,958 | |
Long-term investments | 20,305 | |
Fair Value on Recurring Basis | U.S. treasury securities | ||
Assets: | ||
Short-term investments | 19,961 | |
Fair Value on Recurring Basis | Money market funds | ||
Assets: | ||
Cash equivalents | 5,358 | |
Fair Value on Recurring Basis | Commercial paper | ||
Assets: | ||
Cash equivalents | 22,729 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets: | ||
Total assets measured and recorded at fair value | 25,319 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial paper | ||
Assets: | ||
Short-term investments | 0 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate securities | ||
Assets: | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. treasury securities | ||
Assets: | ||
Short-term investments | 19,961 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds | ||
Assets: | ||
Cash equivalents | 5,358 | |
Fair Value on Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial paper | ||
Assets: | ||
Cash equivalents | 0 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | ||
Assets: | ||
Total assets measured and recorded at fair value | 104,815 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Assets: | ||
Short-term investments | 38,823 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | Corporate securities | ||
Assets: | ||
Short-term investments | 22,958 | |
Long-term investments | 20,305 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | U.S. treasury securities | ||
Assets: | ||
Short-term investments | 0 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | Money market funds | ||
Assets: | ||
Cash equivalents | 0 | |
Fair Value on Recurring Basis | Significant Other Observable Inputs (Level 2) | Commercial paper | ||
Assets: | ||
Cash equivalents | $ 22,729 |
Long-Lived Assets - Textbook Li
Long-Lived Assets - Textbook Library, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Textbook library | $ 33,980 | |
Less accumulated depreciation | (31,405) | |
Textbook library, net | $ 0 | $ 2,575 |
Long-Lived Assets - Property, P
Long-Lived Assets - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 87,923 | $ 63,136 |
Less accumulated depreciation and amortization | (40,430) | (27,831) |
Property and equipment, net | 47,493 | 35,305 |
Computer and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,449 | 1,597 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 5,317 | 4,324 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,893 | 2,148 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,154 | 5,342 |
Content | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 70,110 | $ 49,725 |
Acquisitions - 2017 Acquisition
Acquisitions - 2017 Acquisitions (Details) - Cogeon GmbH - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Total fair value of purchase consideration | $ 15,014 | |
Escrow | $ 2,244 | |
Escrow release period | 24 months | |
Contingent consideration arrangements, range of outcomes, value, high | $ 9,000 | |
Contingent purchase consideration, cash | $ 600 | |
Acquisition related expenses | $ 700 | |
Contingent Equity Grants | ||
Business Acquisition [Line Items] | ||
Contingent consideration arrangements, range of outcomes, value, high | $ 3,800 |
Acquisitions - 2017 Acquisiti57
Acquisitions - 2017 Acquisitions summary of Fair Value of the Consideration (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 9,024 | $ 24,938 | |
Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Initial cash consideration | $ 12,717 | ||
Net working capital adjustment | 53 | ||
Escrow | 2,244 | ||
Total fair value of purchase consideration | 15,014 | ||
Net tangible assets | 60 | ||
Total acquired intangible assets | 5,930 | ||
Total identifiable assets acquired | 5,990 | ||
Goodwill | 9,024 | ||
Trade names | Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Total acquired intangible assets | 50 | ||
Domain names | Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Total acquired intangible assets | 230 | ||
Non-compete agreements | Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Total acquired intangible assets | 70 | ||
Developed technologies and content library | Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Total acquired intangible assets | 5,510 | ||
Content Library | Cogeon GmbH | |||
Business Acquisition [Line Items] | |||
Total acquired intangible assets | $ 70 |
Acquisitions - 2016 Acquisition
Acquisitions - 2016 Acquisitions (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2016USD ($) | May 31, 2016USD ($) | Dec. 31, 2017USD ($)installment | Dec. 31, 2016USD ($) | |
Imagine Easy Solutions, LLC | ||||
Business Acquisition [Line Items] | ||||
Total fair value of purchase consideration | $ 42.3 | |||
Deferred cash | 17 | |||
Accrued liabilities | 16.4 | |||
Accretion expense | $ 0.2 | $ 0.4 | ||
Escrow | 4.2 | |||
Hold-back | $ 0.5 | |||
RefME Ltd. | ||||
Business Acquisition [Line Items] | ||||
Total fair value of purchase consideration | $ 1.8 | |||
Deferred cash | $ 0.8 | |||
Number of quarterly installments | installment | 4 |
Acquisitions - 2016 Acquisiti59
Acquisitions - 2016 Acquisitions summary of Fair Value of the Consideration (Details) - USD ($) $ in Thousands | May 01, 2016 | Dec. 31, 2016 | May 31, 2016 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 116,239 | $ 116,239 | $ 125,272 | $ 91,301 | ||
Imagine Easy Solutions, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Escrow | $ 4,200 | |||||
Hold-back | 500 | |||||
Contingent consideration arrangements, range of outcomes, value, high | $ 18,000 | |||||
Contingent consideration, liability, current | 1,000 | 1,000 | $ 400 | |||
Total purchase consideration | $ 42,300 | |||||
Imagine Easy Solutions, LLC | Achievement Of Performance Conditions | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration arrangements, range of outcomes, value, high | 3,000 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | ||||||
Business Acquisition [Line Items] | ||||||
Initial cash consideration | 22,007 | |||||
Net working capital adjustment | 200 | |||||
Fair value of deferred cash consideration | 17,127 | |||||
Escrow | 4,200 | |||||
Hold-back | 500 | |||||
Total fair value of purchase consideration | 44,034 | |||||
Cash | 59 | |||||
Accounts receivable | 2,610 | |||||
Favorable lease acquired | 300 | |||||
Other acquired assets | 212 | |||||
Total acquired intangible assets | 16,488 | |||||
Total identifiable assets acquired | 19,669 | |||||
Liabilities assumed | (573) | |||||
Net identifiable assets acquired | 19,096 | |||||
Goodwill | 24,938 | |||||
Total purchase consideration | 44,034 | |||||
Acquisition related expenses | $ 1,100 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | Trade names | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | 1,840 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | Domain names | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | 1,330 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | Advertiser relationships | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | 6,600 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | User base | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | 550 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | Non-compete agreements | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | 508 | |||||
Imagine Easy Solutions, LLC and RefME Ltd. | Developed technologies and content library | ||||||
Business Acquisition [Line Items] | ||||||
Total acquired intangible assets | $ 5,660 | |||||
RefME Ltd. | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase consideration | $ 1,800 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 116,239 | $ 91,301 |
Additions due to acquisitions | 9,024 | 24,938 |
Foreign currency translation adjustment | 9 | 0 |
Ending balance | $ 125,272 | $ 116,239 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 57 months | 51 months |
Accumulated Amortization | $ (21,701) | $ (16,170) |
Net Carrying Amount | 17,553 | |
Indefinite-lived trade name | 3,600 | 3,600 |
Foreign currency translation adjustment | 6 | |
Total intangible assets, gross carrying amount | 42,854 | 36,918 |
Intangible assets, net | $ 21,153 | $ 20,748 |
Developed technologies and content library | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 70 months | 60 months |
Gross Carrying Amount | $ 20,657 | $ 15,077 |
Accumulated Amortization | (10,220) | (8,245) |
Net Carrying Amount | $ 10,437 | $ 6,832 |
Customer lists | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 47 months | 47 months |
Gross Carrying Amount | $ 9,970 | $ 9,970 |
Accumulated Amortization | (5,480) | (3,673) |
Net Carrying Amount | $ 4,490 | $ 6,297 |
Trade names | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 46 months | 47 months |
Gross Carrying Amount | $ 5,793 | $ 5,513 |
Accumulated Amortization | (3,465) | (1,998) |
Net Carrying Amount | $ 2,328 | $ 3,515 |
Non-compete agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 30 months | 30 months |
Gross Carrying Amount | $ 1,798 | $ 1,728 |
Accumulated Amortization | (1,506) | (1,249) |
Net Carrying Amount | $ 292 | $ 479 |
Master service agreements | ||
Finite Lived Intangible Assets [Line Items] | ||
Weighted-Average Amortization Period | 21 months | 21 months |
Gross Carrying Amount | $ 1,030 | $ 1,030 |
Accumulated Amortization | (1,030) | (1,005) |
Net Carrying Amount | $ 0 | $ 25 |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||||
Indefinite-lived trade name | $ 3,600 | $ 3,600 | ||
Acquisition-Related Intangible Assets | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expense of acquisition related to acquired intangible assets | $ 5,500 | $ 4,600 | $ 4,800 | |
Internships.Com | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Indefinite-lived trade name | $ 3,600 |
Goodwill and Intangible Asset63
Goodwill and Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,018 | $ 5,311 |
2,019 | 4,347 |
2,020 | 2,874 |
2,021 | 1,518 |
2,022 | 1,075 |
Thereafter | 2,428 |
Net Carrying Amount | $ 17,553 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Reimbursement from Ingram and other partners | $ 4,219 | $ 18,759 |
Other | 3,626 | 2,255 |
Other current assets | 7,845 | 21,014 |
Current liabilities | ||
Payable to Ingram and other partners | 8,001 | 8,237 |
Taxes payable | 3,337 | 2,927 |
Chegg credit | 2,457 | 2,341 |
Accrued purchases of long-lived assets | 3,573 | 2,333 |
Accrued deferred cash consideration related to acquisition | 0 | 17,378 |
Other | 13,706 | 11,103 |
Accrued liabilities | $ 31,074 | $ 44,319 |
Debt Obligations (Details)
Debt Obligations (Details) - Revolving Credit Facility - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Sep. 30, 2019 | Dec. 31, 2017 | Dec. 31, 2015 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | |||||||
Face amount | $ 30,000,000 | $ 30,000,000 | |||||
Credit facility, maximum borrowing capacity | $ 65,000,000 | $ 50,000,000 | |||||
EBITDA calculation expense threshold, acquisition expenses permissible | 6,000,000 | ||||||
EBITDA calculation expense threshold, nonrecurring expenses | 2,000,000 | ||||||
Cash and cash equivalents minimum balance | $ 25,000,000 | 30,000,000 | |||||
EBITDA target | $ 25,000,000 | ||||||
Line of credit facility, current borrowing capacity | $ 30,000,000 | ||||||
Amount outstanding | $ 0 | ||||||
Base Interest Rate | |||||||
Debt Instrument [Line Items] | |||||||
Marginal interest rate | 0.50% | ||||||
One-Month LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Marginal interest rate | 1.00% | ||||||
LIBOR Rate | |||||||
Debt Instrument [Line Items] | |||||||
Unused capacity, commitment fee percentage | 0.25% | ||||||
Marginal interest rate | 4.50% | ||||||
Total Leverage Ratio Less Than 1 Percent | |||||||
Debt Instrument [Line Items] | |||||||
Unused capacity, commitment fee percentage | 1.50% | ||||||
Total Leverage Ratio Greater Or Equal 1 Percent | |||||||
Debt Instrument [Line Items] | |||||||
Unused capacity, commitment fee percentage | 2.50% | ||||||
Scenario, Forecast | |||||||
Debt Instrument [Line Items] | |||||||
EBITDA target | $ 30,000,000 | $ 35,000,000 |
Commitments and Contingencies66
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rental expense | $ 2,700 | $ 1,900 | $ 2,500 |
Aggregate Future Minimum Lease Payments [Abstract] | |||
2,018 | 2,934 | ||
2,019 | 2,038 | ||
2,020 | 939 | ||
2,021 | 485 | ||
2,022 | 230 | ||
Thereafter | 0 | ||
Total | $ 6,626 |
Common Stock (Details)
Common Stock (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Nov. 11, 2013 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 400,000,000 | 400,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Warrants to purchase common stock | 100,000 | ||
Outstanding stock options | 8,066,846 | 11,333,624 | |
Total common shares reserved for future issuance | 39,529,122 | ||
2013 Plan | |||
Class of Stock [Line Items] | |||
Shares available for grant under the stock plans | 11,177,175 | ||
Total common shares reserved for future issuance | 12,000,000 | ||
Award exercise price as percent of fair market value of common stock on grant date threshold | 100.00% | ||
2005 Stock Incentive Plan | |||
Class of Stock [Line Items] | |||
Total common shares reserved for future issuance | 3,838,985 | ||
2013 Employee Stock Purchase Plan | |||
Class of Stock [Line Items] | |||
Total common shares reserved for future issuance | 5,849,986 | ||
Maximum employee subscription rate | 15.00% | ||
Employee discount on applicable offering period | 15.00% | ||
Offering period (no more than 6 months) | 6 months | ||
Shares reserved | 4,000,000 | ||
Maximum aggregate number of shares to be issued | 20,000,000 | ||
RSUs and PSUs | |||
Class of Stock [Line Items] | |||
Outstanding RSUs and PSUs | 14,335,115 | 14,142,109 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)employee$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ | $ 38,359,000 | $ 41,785,000 | $ 38,775,000 |
Stock issued under ESPP (in shares) | 377,530 | 467,979 | |
Weighted average purchase price of shares purchased (in dollars per share) | $ / shares | $ 7.88 | $ 3.76 | |
Exercises in period, intrinsic value | $ | $ 16,800,000 | $ 600,000 | 3,200,000 |
Unrecognized compensation expense for stock options granted to employees, officers, directors, and consultants | $ | $ 100,000 | ||
Number of options, granted (shares) | 0 | ||
Capitalized share-based compensation expense | $ | $ 0 | $ 0 | $ 0 |
Warrants to purchase common stock | 100,000 | ||
Restricted Stock Units (RSUs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 3 years | ||
Restricted Stock Units (RSUs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 4 years | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average vesting period for recognition of compensation expense | 9 months 18 days | ||
Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based restricted stock unit award granted to executive officers (in shares) | 2,300,824 | ||
Performance based restricted stock unit award granted weighted average grant date fair value (in dollars per share) | $ / shares | $ 6.59 | ||
Released in period | 850,066 | 688,464 | |
Performance-based restricted stock units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 2 years | ||
Performance-based restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 3 years | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Proceeds from issuance of shares under ESPP | $ | $ 3,000,000 | $ 1,800,000 | |
RSUs and PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average vesting period for recognition of compensation expense | 1 year 7 months 28 days | ||
Performance based restricted stock unit award granted to executive officers (in shares) | 6,800,381 | ||
Performance based restricted stock unit award granted weighted average grant date fair value (in dollars per share) | $ / shares | $ 9.10 | ||
Awards forfeited | 1,244,897 | ||
Unrecognized compensation costs related to restricted stock units | $ | $ 52,100,000 | ||
Consultant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ | $ 0 | $ 500,000 | $ 400,000 |
2015 Performance Period | Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of employees affected | employee | 26 | ||
Incremental compensation cost | $ | $ 1,500,000 | ||
2015 Performance Period | Performance-based restricted stock units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 1 year | ||
2015 Performance Period | Performance-based restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 3 years | ||
2016 Performance Period | Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance based restricted stock unit award granted to executive officers (in shares) | 2,377,842 | ||
Performance based restricted stock unit award granted weighted average grant date fair value (in dollars per share) | $ / shares | $ 4.32 | ||
2017 Performance Period | Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 3 years | ||
Performance based restricted stock unit award granted to executive officers (in shares) | 1,822,284 | ||
Performance based restricted stock unit award granted weighted average grant date fair value (in dollars per share) | $ / shares | $ 8.91 | ||
Share-based Compensation Award, Tranche One | 2016 Performance Period | Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 1 year | ||
Share-based Compensation Award, Tranche Two | 2016 Performance Period | Performance-based restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period of stock awards | 3 years | ||
Common Stock Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock warrants remaining | 100,000 | ||
Weighted average exercise price (in dollars per share) | $ / shares | $ 12 | $ 4.12 | |
Common stock warrants exercised | 100,000 | 0 | 795,549 |
Stockholders' Equity - Share-ba
Stockholders' Equity - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 38,359 | $ 41,785 | $ 38,775 |
Cost of revenues | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 316 | 172 | 262 |
Technology and development | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 14,333 | 14,771 | 11,992 |
Sales and marketing | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 5,007 | 6,124 | 7,901 |
General and administrative | |||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 18,703 | $ 20,718 | $ 18,620 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 6 months | ||
Expected volatility | 56.94% | ||
Dividend yield | 0.00% | 0.00% | |
Risk-free interest rate | 1.43% | ||
Weighted-average grant-date fair value per share (in dollars per share) | $ 2.58 | $ 3.54 | |
Stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 5 years 6 months | ||
Expected volatility | 50.68% | ||
Risk-free interest rate | 1.75% | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 years | ||
Expected volatility | 51.69% | ||
Risk-free interest rate | 1.86% | ||
Employee stock purchase plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term | 6 months | 6 months | 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% |
Weighted-average grant-date fair value per share (in dollars per share) | $ 3.55 | $ 1.79 | $ 1.98 |
Employee stock purchase plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 38.15% | 35.10% | 36.20% |
Risk-free interest rate | 1.04% | 0.38% | 0.09% |
Employee stock purchase plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 45.57% | 75.74% | 49.59% |
Risk-free interest rate | 1.42% | 0.62% | 0.31% |
Stockholders' Equity - Summar71
Stockholders' Equity - Summary of Stock Option Activity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Options Outstanding | ||
Number of Options Outstanding, Beginning (shares) | 11,333,624 | |
Number of options, granted (shares) | 0 | |
Number of Options, Exercised (shares) | (2,902,403) | |
Number of Options, Canceled (shares) | (364,375) | |
Number of Options Outstanding, Ending (shares) | 8,066,846 | 11,333,624 |
Weighted-Average Exercise Price per Share | ||
Weighted Average Exercise Price per Share, Outstanding, Beginning (in dollars per share) | $ 8.60 | |
Weighted Average Exercise Price per Share, Granted (in dollars per share) | 0 | |
Weighted-Average Exercise Price per Share, Exercised (in dollars per share) | 7.13 | |
Weighted-Average Exercise Price per Share, Canceled (in dollars per share) | 12.23 | |
Weighted Average Exercise Price per Share, Outstanding, Ending (in dollars per share) | $ 8.97 | $ 8.60 |
Options outstanding, weighted-average remaining contractual term | 4 years 7 months 21 days | 5 years 2 months 19 days |
Options outstanding, aggregate intrinsic value | $ 59,318,983 | $ 6,608,611 |
Options exercisable, number outstanding | 8,033,749 | |
Options exercisable, Weighted Average Exercise Price (in dollars per share) | $ 8.98 | |
Options exercisable, Weighted Average Remaining Contractual Term | 4 years 7 months 17 days | |
Options exercisable, Aggregate Intrinsic Value | $ 59,002,312 | |
Options vested and expected to vest, Number Outstanding | 8,064,829 | |
Options vested and expected to vest, Weighted Average Exercise Price (in dollars per share) | $ 8.97 | |
Options vested and expected to vest, Weighted Average Remaining Contractual Term | 4 years 7 months 21 days | |
Options vested and expected to vest, Aggregate Intrinsic Value | $ 59,299,650 |
Stockholders' Equity - Summar72
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - RSUs and PSUs | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Restricted Stock Units Outstanding | |
Number of Restricted Stock Units Outstanding, Beginning (in shares) | shares | 14,142,109 |
Number of Restricted Stock Units, Granted (in shares) | shares | 6,800,381 |
Number of Restricted Stock Units, Released (in shares) | shares | (5,362,478) |
Number of Restricted Stock Units, Canceled (in shares) | shares | (1,244,897) |
Number of Restricted Stock Units Outstanding, Ending (in shares) | shares | 14,335,115 |
Weighted-Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value, Beginning balance (in dollars per share) | $ / shares | $ 5.20 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 9.10 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 5.73 |
Weighted Average Grant Date Fair Value, Canceled (in dollars per share) | $ / shares | 6.16 |
Weighted Average Grant Date Fair Value, Ending balance (in dollars per share) | $ / shares | $ 6.78 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Loss Carryforwards [Line Items] | ||||
Provision for income taxes | $ 1,802 | $ 1,707 | $ 1,479 | |
Tax Cuts And Jobs Act Of 2017, incomplete accounting, transition tax for accumulated foreign earnings, provisional Income tax expense (benefit) | 100 | |||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, transition tax for accumulated foreign earnings, withholding tax | 1,200 | |||
Tax Cuts And Jobs Act Of 2017, incomplete accounting, change in tax rate, deferred tax asset, provisional income tax expense | 42,000 | |||
Increase in valuation allowance | 18,900 | (11,800) | ||
Undistributed earnings of international subsidiaries | 6,000 | |||
Interest and penalties related to uncertain tax positions | 200 | 0 | 100 | |
Interest and penalties accrued related to uncertain tax positions | 800 | 600 | ||
Unrecognized tax benefits | 5,772 | $ 4,882 | $ 4,849 | $ 4,272 |
Unrecognized tax benefits that would impact the effective tax rate | 1,200 | |||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 257,000 | |||
Tax credit carryforwards | 5,600 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | 195,000 | |||
Tax credit carryforwards | $ 6,400 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income taxes: | |||
Federal | $ (103) | $ (18) | $ 0 |
State | 100 | 321 | 263 |
Foreign | 1,523 | 959 | 778 |
Total current income taxes | 1,520 | 1,262 | 1,041 |
Deferred income taxes: | |||
Federal | (992) | 503 | 484 |
State | 75 | 48 | 56 |
Foreign | 1,199 | (106) | (102) |
Total deferred income taxes | 282 | 445 | 438 |
Total income tax provision | $ 1,802 | $ 1,707 | $ 1,479 |
Income Taxes - Loss before Prov
Income Taxes - Loss before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (20,983) | $ (42,687) | $ (59,376) |
Foreign | 2,502 | 2,149 | 1,645 |
Loss before provision for income taxes | $ (18,481) | $ (40,538) | $ (57,731) |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Income tax at U.S. statutory rate | 34.00% | 34.00% | 34.00% |
State, net of federal benefit | 8.30% | 1.70% | 3.70% |
Foreign rate differential | (3.80%) | (0.30%) | (0.20%) |
Share-based compensation | 38.20% | (9.10%) | (7.00%) |
Non-deductible expenses | (1.10%) | (0.20%) | (0.20%) |
Tax credits | 7.80% | (0.40%) | 1.40% |
Tax Cuts and Jobs Act impact | (220.20%) | 0.00% | 0.00% |
Other | 0.40% | (0.70%) | (1.20%) |
Change in valuation allowance | 126.60% | (29.20%) | (33.10%) |
Total | (9.80%) | (4.20%) | (2.60%) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Accrued expenses and reserves | $ 1,665 | $ 5,069 |
Share-based compensation | 14,430 | 23,864 |
Deferred revenue | 0 | 1,085 |
Net operating loss carryforwards | 71,653 | 73,708 |
Property and equipment, textbooks and intangibles assets | 3,905 | 5,168 |
Other items | 960 | 1,407 |
Gross deferred tax assets | 92,613 | 110,301 |
Valuation allowance | (91,183) | (110,045) |
Total deferred tax assets | 1,430 | 256 |
Deferred tax liabilities: | ||
Other | (2,869) | (1,413) |
Total deferred tax liabilities | (2,869) | (1,413) |
Net deferred tax liability | $ (1,439) | $ (1,157) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 4,882 | $ 4,849 | $ 4,272 |
Increase in tax positions for prior years | 280 | 478 | 82 |
Decrease in tax positions for prior years | (101) | (855) | (416) |
Decrease in tax positions for prior year settlement | (172) | (32) | (61) |
Decrease in tax positions for prior years due to statutes lapsing | (169) | (76) | 0 |
Increase in tax positions for current year | 978 | 595 | 948 |
Change due to translation of foreign currencies | 74 | (77) | 24 |
Ending balance | $ 5,772 | $ 4,882 | $ 4,849 |
Restructuring Charges (Credit79
Restructuring Charges (Credits) - Accrual For Restructuring Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | |||||||||||
Beginning Balance | $ 306 | $ 2,518 | $ 306 | $ 2,518 | |||||||
Restructuring charges (credits) | $ 24 | $ 64 | $ 59 | 900 | $ (100) | $ (100) | $ (200) | (44) | 1,047 | (423) | $ 4,868 |
Cash payments | (1,068) | (1,789) | |||||||||
Write-offs | (20) | ||||||||||
Ending Balance | 306 | 306 | 2,518 | ||||||||
2017 Restructuring Plan | Workforce Reduction Costs | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Beginning Balance | 0 | 0 | 0 | 0 | |||||||
Restructuring charges (credits) | 941 | 0 | |||||||||
Cash payments | (897) | 0 | |||||||||
Write-offs | 0 | ||||||||||
Ending Balance | 44 | 0 | 44 | 0 | 0 | ||||||
2017 Restructuring Plan | Lease Termination and Other Costs | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Beginning Balance | 0 | 0 | 0 | 0 | |||||||
Restructuring charges (credits) | 148 | 0 | |||||||||
Cash payments | (128) | 0 | |||||||||
Write-offs | (20) | ||||||||||
Ending Balance | 0 | 0 | 0 | 0 | 0 | ||||||
2015 Restructuring Plan | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Ending Balance | 265 | 265 | |||||||||
2015 Restructuring Plan | Workforce Reduction Costs | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Beginning Balance | 0 | 55 | 0 | 55 | |||||||
Restructuring charges (credits) | 0 | 0 | |||||||||
Cash payments | 0 | (55) | |||||||||
Write-offs | 0 | ||||||||||
Ending Balance | 0 | 0 | 0 | 0 | 55 | ||||||
2015 Restructuring Plan | Lease Termination and Other Costs | |||||||||||
Restructuring Reserve [Roll Forward] | |||||||||||
Beginning Balance | $ 306 | $ 2,463 | 306 | 2,463 | |||||||
Restructuring charges (credits) | (42) | (423) | |||||||||
Cash payments | (43) | (1,734) | |||||||||
Write-offs | 0 | ||||||||||
Ending Balance | $ 221 | $ 306 | $ 221 | $ 306 | $ 2,463 |
Restructuring Charges (Credit80
Restructuring Charges (Credits) - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2017USD ($)position | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges (credits) | $ 24 | $ 64 | $ 59 | $ 900 | $ (100) | $ (100) | $ (200) | $ (44) | $ 1,047 | $ (423) | $ 4,868 |
Restructuring reserve | 306 | 306 | 2,518 | ||||||||
2015 Restructuring Plan | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring reserve | 265 | 265 | |||||||||
Restructuring | 100 | 100 | |||||||||
Restructuring reserve, noncurrent | 200 | $ 200 | |||||||||
Workforce Reduction Costs | 2017 Restructuring Plan | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Number of positions eliminated | position | 50 | ||||||||||
Restructuring charges (credits) | $ 941 | 0 | |||||||||
Restructuring reserve | 44 | 0 | 44 | 0 | 0 | ||||||
Workforce Reduction Costs | 2015 Restructuring Plan | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges (credits) | 0 | 0 | |||||||||
Restructuring reserve | 0 | 0 | 0 | 0 | 55 | ||||||
Lease Termination and Other Costs | 2017 Restructuring Plan | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges (credits) | 148 | 0 | |||||||||
Restructuring reserve | 0 | 0 | 0 | 0 | 0 | ||||||
Lease Termination and Other Costs | 2015 Restructuring Plan | |||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||
Restructuring charges (credits) | (42) | (423) | |||||||||
Restructuring reserve | $ 221 | $ 306 | $ 221 | $ 306 | $ 2,463 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)board_member | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Adobe Systems | Chief Executive Officer | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 3,200,000 | $ 3,100,000 | $ 2,900,000 |
Revenue from related parties | 100,000 | 0 | 100,000 |
Due to related parties | 300,000 | ||
Due from related parties | 0 | 0 | |
Cengage | Board of Directors Member | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | 11,500,000 | 10,200,000 | 11,500,000 |
Revenue from related parties | 1,900,000 | 600,000 | 100,000 |
Due to related parties | 100,000 | ||
Due from related parties | $ 300,000 | 100,000 | |
Number of board members appointed to Board of Directors of related party | board_member | 1 | ||
Synack Inc. | Board of Directors Member | |||
Related Party Transaction [Line Items] | |||
Purchases from related party | $ 100,000 | 200,000 | 100,000 |
Number of board members appointed to chief executive officer of related party | board_member | 1 | ||
Payment Processing Fees | PayPal Holdings, Inc. | Immediate Family Member of Management or Principal Owner | |||
Related Party Transaction [Line Items] | |||
Number of board members appointed to Board of Directors of related party | board_member | 1 | ||
Expenses from transactions with related party | $ 1,000,000 | $ 900,000 | $ 700,000 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Retirement Benefits [Abstract] | |||
Matching contributions | $ 1.1 | $ 0.9 | $ 0.8 |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2017segments | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Number of operating units | 1 |
Segment Information - Revenue b
Segment Information - Revenue by Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue from External Customer [Line Items] | |||||||||||
Total Revenue | $ 73,507 | $ 62,640 | $ 56,317 | $ 62,602 | $ 63,057 | $ 71,343 | $ 53,036 | $ 66,654 | $ 255,066 | $ 254,090 | $ 301,373 |
Chegg Services | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total Revenue | 185,683 | 129,335 | 94,285 | ||||||||
Required Materials | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total Revenue | $ 69,383 | $ 124,755 | $ 207,088 |
Selected Quarterly Financial 85
Selected Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net revenues | $ 73,507 | $ 62,640 | $ 56,317 | $ 62,602 | $ 63,057 | $ 71,343 | $ 53,036 | $ 66,654 | $ 255,066 | $ 254,090 | $ 301,373 |
Gross profit | 54,126 | 40,284 | 39,275 | 41,206 | 42,485 | 32,644 | 31,629 | 27,731 | 174,891 | 134,489 | 111,524 |
Net (loss) income | $ 3,659 | $ (11,516) | $ (6,025) | $ (6,401) | $ (1,489) | $ (16,063) | $ (9,008) | $ (15,685) | (20,283) | (42,245) | (59,210) |
Weighted average shares used to compute net (loss) income per share: | |||||||||||
Basic (in shares) | 108,968 | 103,041 | 95,047 | 92,830 | 91,526 | 91,059 | 90,416 | 89,118 | |||
Diluted (in shares) | 121,557 | 103,041 | 95,047 | 92,830 | |||||||
Net (loss) income per share: | |||||||||||
Basic (in dollars per share) | $ 0.03 | $ (0.11) | $ (0.06) | $ (0.07) | $ (0.02) | $ (0.17) | $ (0.10) | $ (0.18) | |||
Diluted (in dollars per share) | $ 0.03 | $ (0.11) | $ (0.06) | $ (0.07) | |||||||
Restructuring charges (credits) | $ 24 | $ 64 | $ 59 | $ 900 | $ (100) | $ (100) | $ (200) | $ (44) | $ 1,047 | $ (423) | $ 4,868 |