Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 25, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-36180 | |
Entity Registrant Name | CHEGG, INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3237489 | |
Entity Address, Address Line One | 3990 Freedom Circle | |
Entity Address, City or Town | Santa Clara | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95054 | |
City Area Code | 408 | |
Local Phone Number | 855-5700 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | CHGG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 144,947,411 | |
Entity Central Index Key | 0001364954 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 713,837 | $ 479,853 |
Short-term investments | 1,038,345 | 665,567 |
Accounts receivable, net of allowance of $111 and $153 at September 30, 2021 and December 31, 2020, respectively | 9,302 | 12,913 |
Prepaid expenses | 35,164 | 12,776 |
Other current assets | 29,316 | 11,846 |
Total current assets | 1,825,964 | 1,182,955 |
Long-term investments | 813,500 | 523,628 |
Textbook library, net | 15,834 | 34,149 |
Property and equipment, net | 156,121 | 125,807 |
Goodwill | 290,499 | 285,214 |
Intangible assets, net | 43,573 | 51,249 |
Right of use assets | 19,520 | 24,226 |
Other assets | 22,484 | 24,030 |
Total assets | 3,187,495 | 2,251,258 |
Current liabilities | ||
Accounts payable | 10,518 | 8,547 |
Deferred revenue | 49,983 | 32,620 |
Accrued liabilities | 73,320 | 68,565 |
Total current liabilities | 133,821 | 109,732 |
Long-term liabilities | ||
Convertible senior notes, net | 1,676,749 | 1,506,922 |
Long-term operating lease liabilities | 14,137 | 19,264 |
Other long-term liabilities | 8,271 | 5,705 |
Total long-term liabilities | 1,699,157 | 1,531,891 |
Total liabilities | 1,832,978 | 1,641,623 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value per share: 400,000,000 shares authorized; 144,901,435 and 129,343,524 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 145 | 129 |
Additional paid-in capital | 1,717,421 | 1,030,577 |
Accumulated other comprehensive (loss) income | (1,552) | 1,530 |
Accumulated deficit | (361,497) | (422,601) |
Total stockholders' equity | 1,354,517 | 609,635 |
Total liabilities and stockholders' equity | $ 3,187,495 | $ 2,251,258 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 111 | $ 153 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock, shares issued (in shares) | 144,901,435 | 129,343,524 |
Common stock, shares outstanding (in shares) | 144,901,435 | 129,343,524 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net revenues | $ 171,942 | $ 154,018 | $ 568,798 | $ 438,617 |
Cost of revenues | 67,102 | 62,370 | 199,194 | 148,284 |
Gross profit | 104,840 | 91,648 | 369,604 | 290,333 |
Operating expenses: | ||||
Research and development | 43,269 | 44,041 | 130,995 | 123,956 |
Sales and marketing | 27,239 | 24,625 | 75,139 | 60,621 |
General and administrative | 33,971 | 40,784 | 111,560 | 98,221 |
Total operating expenses | 104,479 | 109,450 | 317,694 | 282,798 |
Income (loss) from operations | 361 | (17,802) | 51,910 | 7,535 |
Interest expense, net and other income (expense), net: | ||||
Interest expense, net | (1,633) | (17,468) | (5,263) | (44,320) |
Other income (expense), net | 8,670 | (804) | (66,618) | 7,396 |
Total interest expense, net and other income (expense), net | 7,037 | (18,272) | (71,881) | (36,924) |
Income (loss) before provision for income taxes | 7,398 | (36,074) | (19,971) | (29,389) |
Provision for income taxes | 747 | 1,066 | 5,793 | 2,875 |
Net income (loss) | $ 6,651 | $ (37,140) | $ (25,764) | $ (32,264) |
Earnings Per Share [Abstract] | ||||
Basic (in dollars per share) | $ 0.05 | $ (0.29) | $ (0.18) | $ (0.26) |
Diluted (in dollars per share) | $ 0.05 | $ (0.29) | $ (0.18) | $ (0.26) |
Weighted average shares used to compute net income (loss) per share | ||||
Basic (in shares) | 144,746 | 126,194 | 140,775 | 124,162 |
Diluted (in shares) | 146,699 | 126,194 | 140,775 | 124,162 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 6,651 | $ (37,140) | $ (25,764) | $ (32,264) |
Other comprehensive (loss) income | ||||
Change in net unrealized (loss) gain on investments, net of tax | (455) | (1,642) | (1,974) | 1,922 |
Change in foreign currency translation adjustments, net of tax | (127) | 1,125 | (1,108) | 507 |
Other comprehensive (loss) income | (582) | (517) | (3,082) | 2,429 |
Total comprehensive income (loss) | $ 6,069 | $ (37,657) | $ (28,846) | $ (29,835) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In CapitalCumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment |
Beginning balance (in shares) at Dec. 31, 2019 | 121,584,000 | |||||||
Beginning balance at Dec. 31, 2019 | $ 498,829 | $ (88) | $ 122 | $ 916,095 | $ (1,096) | $ (416,292) | $ (88) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity component on conversions | 237,462 | 237,462 | ||||||
Purchase of 2026 convertible senior notes capped call | (103,400) | (103,400) | ||||||
Equity component related to conversions of 2023 convertible senior notes | (345,552) | (345,552) | ||||||
Issuance of common stock upon conversion of 2023 convertible senior notes (in shares) | 4,182,000 | |||||||
Issuance of common stock upon conversion of 2023 convertible senior notes | 327,141 | $ 4 | 327,137 | |||||
Net proceeds from capped call related to conversions | 57,414 | 57,414 | ||||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 778,000 | |||||||
Issuance of common stock upon exercise of stock options and ESPP | 9,234 | $ 1 | 9,233 | |||||
Net share settlement of equity awards (in shares) | 2,110,000 | |||||||
Net share settlement of equity awards | (65,222) | $ 2 | (65,224) | |||||
Share-based compensation expense | 59,409 | 59,409 | ||||||
Other comprehensive income (loss) | 2,429 | 2,429 | ||||||
Net income (loss) | (32,264) | (32,264) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 128,654,000 | |||||||
Beginning balance at Sep. 30, 2020 | 645,392 | $ 129 | 1,092,574 | 1,333 | (448,644) | |||
Beginning balance (in shares) at Dec. 31, 2019 | 121,584,000 | |||||||
Beginning balance at Dec. 31, 2019 | $ 498,829 | (88) | $ 122 | 916,095 | (1,096) | (416,292) | (88) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Accounting standards update | Accounting Standards Update 2020-06 | |||||||
Ending balance (in shares) at Dec. 31, 2020 | 129,343,524 | 129,344,000 | ||||||
Beginning balance at Dec. 31, 2020 | $ 609,635 | (378,138) | $ 129 | 1,030,577 | $ (465,006) | 1,530 | (422,601) | 86,868 |
Beginning balance (in shares) at Jun. 30, 2020 | 124,123,000 | |||||||
Beginning balance at Jun. 30, 2020 | 498,378 | $ 124 | 907,908 | 1,850 | (411,504) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Equity component on conversions | 237,462 | 237,462 | ||||||
Purchase of 2026 convertible senior notes capped call | (103,400) | (103,400) | ||||||
Equity component related to conversions of 2023 convertible senior notes | (345,552) | (345,552) | ||||||
Issuance of common stock upon conversion of 2023 convertible senior notes (in shares) | 4,182,000 | |||||||
Issuance of common stock upon conversion of 2023 convertible senior notes | 327,141 | $ 4 | 327,137 | |||||
Net proceeds from capped call related to conversions | 57,414 | 57,414 | ||||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 106,000 | |||||||
Issuance of common stock upon exercise of stock options and ESPP | 1,197 | $ 1 | 1,196 | |||||
Net share settlement of equity awards (in shares) | 243,000 | |||||||
Net share settlement of equity awards | (11,120) | (11,120) | ||||||
Share-based compensation expense | 21,529 | 21,529 | ||||||
Other comprehensive income (loss) | (517) | (517) | ||||||
Net income (loss) | (37,140) | (37,140) | ||||||
Ending balance (in shares) at Sep. 30, 2020 | 128,654,000 | |||||||
Beginning balance at Sep. 30, 2020 | $ 645,392 | $ 129 | 1,092,574 | 1,333 | (448,644) | |||
Beginning balance (in shares) at Dec. 31, 2020 | 129,343,524 | 129,344,000 | ||||||
Beginning balance at Dec. 31, 2020 | $ 609,635 | $ (378,138) | $ 129 | 1,030,577 | $ (465,006) | 1,530 | (422,601) | $ 86,868 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock in connection with equity offering, net of offering costs (in shares) | 10,975,000 | |||||||
Issuance of common stock in connection with equity offering, net of offering costs | 1,091,466 | $ 11 | 1,091,455 | |||||
Equity component on conversions | (236,920) | (236,920) | ||||||
Issuance of common stock upon conversion of 2023 convertible senior notes (in shares) | 2,983,000 | |||||||
Issuance of common stock upon conversion of 2023 convertible senior notes | 235,521 | $ 3 | 235,518 | |||||
Net proceeds from capped call related to conversions | 67,769 | 67,769 | ||||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 178,000 | |||||||
Issuance of common stock upon exercise of stock options and ESPP | 5,371 | 5,371 | ||||||
Net share settlement of equity awards (in shares) | 1,421,000 | |||||||
Net share settlement of equity awards | (89,337) | $ 2 | (89,339) | |||||
Share-based compensation expense | 77,996 | 77,996 | ||||||
Other comprehensive income (loss) | (3,082) | (3,082) | ||||||
Net income (loss) | $ (25,764) | (25,764) | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 144,901,435 | 144,901,000 | ||||||
Beginning balance at Sep. 30, 2021 | $ 1,354,517 | $ 145 | 1,717,421 | (1,552) | (361,497) | |||
Beginning balance (in shares) at Jun. 30, 2021 | 144,621,000 | |||||||
Beginning balance at Jun. 30, 2021 | 1,337,882 | $ 145 | 1,706,855 | (970) | (368,148) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock upon exercise of stock options and ESPP (in shares) | 14,000 | |||||||
Issuance of common stock upon exercise of stock options and ESPP | 106 | 106 | ||||||
Net share settlement of equity awards (in shares) | 266,000 | |||||||
Net share settlement of equity awards | (14,697) | (14,697) | ||||||
Share-based compensation expense | 25,157 | 25,157 | ||||||
Other comprehensive income (loss) | (582) | (582) | ||||||
Net income (loss) | $ 6,651 | 6,651 | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 144,901,435 | 144,901,000 | ||||||
Beginning balance at Sep. 30, 2021 | $ 1,354,517 | $ 145 | $ 1,717,421 | $ (1,552) | $ (361,497) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Operating activities | |||||
Net loss | $ 6,651 | $ (37,140) | $ (25,764) | $ (32,264) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||
Print textbook depreciation expense | 9,024 | 10,699 | |||
Other depreciation and amortization expense | 46,273 | 33,088 | |||
Share-based compensation expense | 76,157 | 59,409 | |||
Amortization of debt discount and issuance costs | 4,509 | 42,910 | |||
Repayment of convertible senior notes attributable to debt discount | 0 | (14,912) | |||
Loss on early extinguishment of debt | 0 | 3,315 | 78,152 | 3,315 | |
Loss on change in fair value of derivative instruments, net | 0 | 0 | 7,148 | 0 | |
Loss from write-off of property and equipment | 1,857 | 1,057 | |||
Loss from impairment of strategic equity investment | 0 | 10,000 | |||
Gain on sale of strategic equity investments | (7,158) | 0 | (12,496) | 0 | |
Loss (gain) on textbook library, net | 8,765 | (2,028) | |||
Operating lease expense, net of accretion | 4,527 | 3,400 | |||
Restructuring charges | 1,851 | 0 | |||
Other non-cash items | 498 | (102) | |||
Change in assets and liabilities, net of effect of acquisition of businesses: | |||||
Accounts receivable | 3,593 | 106 | |||
Prepaid expenses and other current assets | (31,070) | (6,178) | |||
Other assets | 9,472 | (2,638) | |||
Accounts payable | 1,820 | (1,634) | |||
Deferred revenue | 17,363 | 32,239 | |||
Accrued liabilities | 10,552 | 34,276 | |||
Other liabilities | (4,108) | (2,088) | |||
Net cash provided by operating activities | 208,123 | 168,655 | |||
Investing activities | |||||
Purchases of property and equipment | (67,126) | (57,457) | |||
Purchases of textbooks | (10,666) | (49,641) | |||
Proceeds from disposition of textbooks | 7,815 | 7,012 | |||
Purchases of investments | (1,574,060) | (968,106) | |||
Maturities of investments | 893,315 | 412,046 | |||
Purchase of strategic equity investment | 0 | (2,000) | |||
Proceeds from sale of strategic equity investments | 16,076 | 0 | |||
Acquisition of businesses, net of cash acquired | (7,891) | (92,796) | |||
Net cash used in investing activities | (742,537) | (750,942) | |||
Financing activities | |||||
Proceeds from common stock issued under stock plans, net | 5,373 | 9,236 | |||
Payment of taxes related to the net share settlement of equity awards | (89,339) | (65,224) | |||
Proceeds from issuance of convertible senior notes, net of issuance costs | 0 | 984,096 | |||
Purchase of convertible senior notes capped call | 0 | (103,400) | |||
Proceeds from equity offering, net of offering costs | 1,091,466 | 0 | |||
Repayment of convertible senior notes | (300,755) | (159,677) | |||
Proceeds from exercise of convertible senior notes capped call | 69,005 | 57,414 | |||
Payment of escrow related to acquisition | (7,451) | 0 | |||
Net cash provided by financing activities | 768,299 | 722,445 | |||
Net increase in cash, cash equivalents and restricted cash | 233,885 | 140,158 | |||
Cash, cash equivalents and restricted cash, beginning of period | 481,715 | 389,432 | $ 389,432 | ||
Cash, cash equivalents and restricted cash, end of period | 715,600 | 529,590 | 715,600 | 529,590 | 481,715 |
Supplemental cash flow data: | |||||
Interest | 1,053 | 1,546 | |||
Income taxes, net of refunds | 5,610 | 2,450 | |||
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases | 5,934 | 5,174 | |||
Right of use assets obtained in exchange for lease obligations, operating lease | 0 | 1,713 | |||
Non-cash investing and financing activities: | |||||
Accrued purchases of long-lived assets | 1,837 | 6,102 | |||
Accrued escrow related to acquisition | 0 | 7,451 | |||
Issuance of common stock related to repayment of convertible senior notes | 235,521 | 327,141 | |||
Reconciliation of cash, cash equivalents and restricted cash: | |||||
Cash and cash equivalents | 713,837 | 527,541 | 713,837 | 527,541 | 479,853 |
Restricted cash included in other current assets | 0 | 313 | 0 | 313 | |
Restricted cash included in other assets | 1,763 | 1,736 | 1,763 | 1,736 | |
Total cash, cash equivalents and restricted cash | $ 715,600 | $ 529,590 | $ 715,600 | $ 529,590 | $ 481,715 |
Background and Basis of Present
Background and Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
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. Millions of people Learn with Chegg. We strive to improve educational outcomes by putting the student first. We support students on their journey from high school to college and into their career with tools designed to help them learn their course materials, succeed in their classes, save money on required materials, and learn the most in-demand skills. Our services are available online, anytime and anywhere. Basis of Presentation The accompanying condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, and the related footnote disclosures are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2021, our results of operations, results of comprehensive income (loss), and stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. Our results of operations, results of comprehensive income (loss), stockholders' equity, and cash flows for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year. We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2020 as 2020. The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC). Except for our policies on convertible senior notes, net, share-based compensation expense, and net income (loss) per share, there have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K. Our policies on convertible senior notes, net and net income (loss) per share were updated as a result of our adoption of Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity on January 1, 2021 under the modified retrospective method. For further information on ASU 2020-06, see the section below titled “Recent Accounting Pronouncements” of this Note 1, “Background and Basis of Presentation.” Convertible Senior Notes, net In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes) and in April 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total gross proceeds of $800 million. In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2026 notes, 2025 notes, and the 2023 notes are referred to as the “notes.” The notes, including the embedded conversion features, are accounted for under the traditional convertible debt accounting model entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets; otherwise, we classify it as a long-term liability as we retain the election to settle conversion requests in shares of our common stock. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative; otherwise, they are classified as derivative instruments and recorded at fair value with changes in fair value recorded in other income (expense), net on our condensed consolidated statements of operations. The fair value of any derivative instruments related to the notes are determined utilizing Level 2 inputs. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. In accounting for conversions of the notes, the carrying amount of the converted notes is reduced by the total consideration paid or issued for the respective converted notes and the difference is recorded to additional paid-in capital on our condensed consolidated balance sheets. In accounting for extinguishments of the notes, the reacquisition price of the extinguished notes is compared to the carrying amount of the respective extinguished notes and a gain or loss is recorded in other income (expense), net on our condensed consolidated statements of operations. Share-based Compensation Expense Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs) with either a market-based condition or financial performance targets, and the employee stock purchase plan (ESPP) is accounted for under the fair value method based on the grant-date fair value of the award. Share-based compensation expense for RSUs and PSUs with financial performance targets is measured based on the closing fair market value of the Company’s common stock, PSUs with a market-based condition is estimated using a Monte Carlo simulation model, and the ESPP is estimated using the Black-Scholes-Merton option pricing model. We recognize share-based compensation expense, subject to continuing service over the requisite service period, which is generally the vesting period, on a straight-line basis for RSUs and the ESPP and on a graded basis for PSUs. Share-based compensation expense for PSUs with a market-based condition is recognized regardless of whether the market condition is satisfied whereas share-based compensation expense for PSUs with financial performance targets is recognized upon estimated or actual achievement of such targets. 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. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by adjusting net income (loss) for all related interest expense and gains and losses recognized during the period, net of tax, and giving effect to all potential shares of common stock, including stock options, PSUs, RSUs, and shares related to convertible senior notes, to the extent dilutive. This assumes that all stock options and dilutive convertible shares were exercised or converted and is computed by applying the treasury stock method for outstanding stock options, PSUs, and RSUs, and the if-converted method for outstanding convertible senior notes. Under the treasury stock method, options, PSUs, and RSUs are assumed to be exercised or vested at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible senior notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. 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. Except for estimates related to the grant-date fair value of PSUs with a market-based condition, there have been no material changes in our use of estimates during the nine months ended September 30, 2021 as compared to the use of estimates disclosed in Part II, Item 8 “Consolidated Financial Statements and Supplementary Data” contained in our Annual Report on Form 10-K for the year ended December 31, 2020. Reclassification of Prior Period Presentation In order to conform with current period presentation, $6.6 million of current operating lease liabilities have been reclassified to accrued liabilities on our condensed consolidated balance sheet as of December 31, 2020. This change in presentation does not affect previously reported results. Condensed Consolidated Statements of Operations Details Other income (expense), net consists of the following (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Loss on early extinguishment of debt (1) $ — $ (3,315) $ (78,152) $ (3,315) Loss on change in fair value of derivative instruments, net (1) — — (7,148) — Gain on sale of strategic equity investments (2) 7,158 — 12,496 — Interest income 1,485 2,539 5,385 10,588 Other 27 (28) 801 123 Total other income (expense), net $ 8,670 $ (804) $ (66,618) $ 7,396 (1) For further information, see Note 7, “Convertible Senior Notes.” (2) For further information, see Note 4, “Cash and Cash Equivalents, and Investments.” Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In May 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . ASU 2021-04 aims to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange based on the economic substance of the modification or exchange. Early adoption is permitted and the guidance must be applied prospectively to all modifications or exchanges that occur on or after the date of adoption. The guidance is effective for annual periods beginning after December 15, 2021, and we are currently in the process of evaluating the impact of this guidance. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity . ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options . Under ASU 2020-06, convertible instruments with embedded conversion features, that are not required to be accounted for as a derivative or that do not result in a substantial premium, are no longer required to be separated from the host contract thereby eliminating the cash conversion feature model. Instead, these convertible debt instruments will be accounted for as a single liability measured at amortized cost under the traditional convertible debt accounting model. ASU 2020-06 also requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. We adopted ASU 2020-06 on January 1, 2021 under the modified retrospective method applied to convertible senior notes outstanding as of January 1, 2021 and have not changed previously disclosed amounts or provided additional disclosures for comparative periods. Adoption of ASU 2020-06 resulted in an increase to convertible senior notes of $378.1 million and a decrease to additional paid-in capital of $465.0 million due to the application of the traditional convertible debt model and no longer separating the embedded conversion feature. Accumulated deficit also decreased by $86.9 million due to the reduction in non-cash interest expense related to the debt discount and we expect interest expense to decrease in future periods. Refer to Note 7, “Convertible Senior Notes” for more information. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. The majority of our revenues are recognized over time as services are performed, with certain revenues being recognized at a point in time. The following tables set forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages): Three Months Ended Change 2021 2020 $ % Chegg Services $ 146,790 $ 118,895 $ 27,895 23 % Required Materials 25,152 35,123 (9,971) (28) Total net revenues $ 171,942 $ 154,018 $ 17,924 12 Nine Months Ended Change 2021 2020 $ % Chegg Services $ 482,654 $ 345,258 $ 137,396 40 % Required Materials 86,144 93,359 (7,215) (8) Total net revenues $ 568,798 $ 438,617 $ 130,181 30 During the three and nine months ended September 30, 2021, we recognized $31.3 million and $32.6 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each reporting period. During the three and nine months ended September 30, 2020, we recognized $25.4 million and $18.0 million, respectively, of revenues that were included in our deferred revenue balance at the beginning of each reporting period. During the three and nine months ended September 30, 2021, we recognized a reduction of revenues of an immaterial amount and $3.4 million, respectively, from performance obligations satisfied in previous periods primarily due to a change in the estimated variable consideration ascribed to Thinkful. During the three and nine months ended September 30, 2020, we recognized an immaterial amount of previously deferred revenues recognized from performance obligations satisfied in previous periods. During the three and nine months ended September 30, 2021, we recognized $6.2 million and $26.9 million, respectively, of operating lease income from print textbook rentals that we own. During the three and nine months ended September 30, 2020, we recognized $12.0 million and $35.4 million, respectively, of operating lease income from print textbook rentals that we own. Contract Balances The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages): Change September 30, December 31, 2020 $ % Accounts receivable, net $ 9,302 $ 12,913 $ (3,611) (28) % Deferred revenue 49,983 32,620 17,363 53 Contract assets 16,358 13,243 3,115 24 During the nine months ended September 30, 2021, our accounts receivable, net balance decreased by $3.6 million, or 28%, primarily due to timing of billings and seasonality of our business. During the nine months ended September 30, 2021, our deferred revenue balance increased by $17.4 million, or 53%, primarily due to increased bookings and seasonality of our business. During the nine months ended September 30, 2021, our contract assets balance increased by $3.1 million, or 24%, primarily due to our Thinkful service. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity We adopted ASU 2020-06 on January 1, 2021 under the modified retrospective method applied to convertible senior notes outstanding as of January 1, 2021 and have not changed previously disclosed amounts or provided additional disclosures for comparative periods. ASU 2020-06 requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. Under the if-converted method, outstanding convertible senior notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2020 (1) 2021 2020 (1) Basic Numerator: Net income (loss) $ 6,651 $ (37,140) $ (25,764) $ (32,264) Denominator: Weighted average shares used to compute net income (loss) per share, basic 144,746 126,194 140,775 124,162 Net income (loss) per share, basic $ 0.05 $ (0.29) $ (0.18) $ (0.26) Diluted Numerator: Net income (loss), diluted $ 6,651 $ (37,140) $ (25,764) $ (32,264) Denominator: Weighted average shares used to compute net income (loss) per share, basic 144,746 126,194 140,775 124,162 Options to purchase common stock 485 — — — PSUs and RSUs 1,462 — — — Employee stock purchase plan 6 — — — Weighted average shares used to compute net income (loss) per share, diluted 146,699 126,194 140,775 124,162 Net income (loss) per share, diluted $ 0.05 $ (0.29) $ (0.18) $ (0.26) (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net income (loss) per share because including them would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Options to purchase common stock — 865 515 977 PSUs and RSUs 849 3,394 2,210 3,425 Shares related to convertible senior notes 22,875 8,721 23,876 4,422 Employee stock purchase plan — 9 2 4 Total common stock equivalents 23,724 12,989 26,603 8,828 |
Cash and Cash Equivalents, and
Cash and Cash Equivalents, and Investments | 9 Months Ended |
Sep. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents, and Investment | Cash and Cash Equivalents, and Investments The following tables show our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss, and fair value as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 29,338 $ — $ — $ 29,338 Money market funds 684,499 — — 684,499 Total cash and cash equivalents $ 713,837 $ — $ — $ 713,837 Short-term investments: Commercial paper $ 364,098 $ 49 $ (4) $ 364,143 Corporate debt securities 658,525 280 (122) 658,683 Agency bonds 15,501 18 — 15,519 Total short-term investments $ 1,038,124 $ 347 $ (126) $ 1,038,345 Long-term investments: Corporate debt securities $ 813,889 $ 142 $ (531) $ 813,500 Total long-term investments $ 813,889 $ 142 $ (531) $ 813,500 December 31, 2020 Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 15,054 $ — $ — $ 15,054 Money market funds 464,799 — — 464,799 Total cash and cash equivalents $ 479,853 $ — $ — $ 479,853 Short-term investments: Commercial paper $ 204,152 $ 24 $ (6) $ 204,170 Corporate debt securities 459,967 1,478 (48) 461,397 Total short-term investments $ 664,119 $ 1,502 $ (54) $ 665,567 Long-term investments: Corporate debt securities $ 484,275 $ 605 $ (283) $ 484,597 Agency bonds 38,995 36 — 39,031 Total long-term investments $ 523,270 $ 641 $ (283) $ 523,628 The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of September 30, 2021 (in thousands): Adjusted Cost Fair Value Due in 1 year or less $ 1,038,124 $ 1,038,345 Due in 1-2 years 813,889 813,500 Investments not due at a single maturity date 684,499 684,499 Total $ 2,536,512 $ 2,536,344 Investments not due at a single maturity date in the preceding table consisted of money market funds. As of September 30, 2021, we determined that the declines in the market value of our investment portfolio were not driven by credit related factors. When evaluating whether an investment's unrealized losses are related to credit factors, we review factors such as the extent to which fair value is below its cost basis, any changes to the credit rating of the security, adverse conditions specifically related to the security, changes in market interest rates and our intent to sell, or whether it is more likely than not we will be required to sell, before recovery of cost basis. We invest in highly rated securities with a minimum credit rating of A- and a weighted average maturity of less than twelve months. In addition, our investment policy limits the amount of our credit exposure to any one issuer or industry sector. The policy requires investments to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. During the three and nine months ended September 30, 2021 and 2020, we did not recognize any losses on our investments due to credit related factors. Strategic Investments We previously invested $2.0 million in TAPD, Inc., also known as Frank; a U.S.-based service that helps students access financial aid. In September 2021, we sold our investment in Frank for total consideration of $9.2 million, resulting in a $7.2 million gain included within other income (expense), net on our condensed consolidated statements of operations. We received a cash payment of $9.0 million included within cash flows from investing activities on our condensed consolidated statements of cash flows. We also previously invested $3.0 million in a foreign entity to explore expanding our reach internationally. In March 2021, we sold our investment in that foreign entity for total consideration of $8.3 million, resulting in a $5.3 million gain included within other income (expense), net on our condensed consolidated statements of operations. We received a cash payment, net of taxes withheld, of $7.1 million included within cash flows from investing activities on our condensed consolidated statements of cash flows. Aside from a $10.0 million impairment charge previously recorded in 2020 on our strategic investment in WayUp, Inc., we did not record any other impairment charges on our strategic investments during the three and nine months ended September 30, 2021 and 2020, as there were no other significant identified events or changes in circumstances that would be considered an indicator for impairment. We considered general market conditions as a result of the COVID-19 pandemic in our impairment analysis. There were no observable price changes in orderly transactions for the identical or similar investments of the same issuers during the three and nine months ended September 30, 2021 and 2020. As of September 30, 2021, we had no amounts related to strategic investments on our condensed consolidated balance sheet. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement We have established a fair value hierarchy used to determine the fair value of our financial instruments as follows: Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly through market corroboration, for substantially the full term of the financial instruments. Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value; the inputs require significant management judgment or estimation. A financial instrument’s classification within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial instruments measured and recorded at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 are classified based on the valuation technique level in the tables below (in thousands): September 30, 2021 Total Level 1 Level 2 Assets: Cash equivalents: Money market funds $ 684,499 $ 684,499 $ — Short-term investments: Commercial paper 364,143 — 364,143 Corporate debt securities 658,683 — 658,683 Agency bonds 15,519 — 15,519 Long-term investments: Corporate debt securities 813,500 — 813,500 Total assets measured and recorded at fair value $ 2,536,344 $ 684,499 $ 1,851,845 December 31, 2020 Total Level 1 Level 2 Assets: Cash equivalents: Money market funds $ 464,799 $ 464,799 $ — Short-term investments: Commercial paper 204,170 — 204,170 Corporate debt securities 461,397 — 461,397 Long-term investments: Corporate debt securities 484,597 — 484,597 Agency bonds 39,031 — 39,031 Total assets measured and recorded at fair value $ 1,653,994 $ 464,799 $ 1,189,195 We value our investments based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. Other than our money market funds, we classify our fixed income available-for-sale investments as having Level 2 inputs. The valuation techniques used to measure the fair value of our investments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques. We do not hold any investments valued with a Level 3 input. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. Financial Instruments Not Recorded at Fair Value on a Recurring Basis We report our financial instruments at fair value with the exception of the notes. The estimated fair value of the notes was determined based on the trading price of the notes as of the last day of trading for the period. We consider the fair value of the notes to be a Level 2 measurement due to the limited trading activity. For further information on the notes, refer to Note 7, “Convertible Senior Notes.” The carrying amounts and estimated fair values of the notes as of September 30, 2021 and December 31, 2020 are as follows (in thousands): September 30, 2021 December 31, 2020 (1) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2026 notes $ 987,027 $ 984,880 $ 761,930 $ 1,129,370 2025 notes 689,722 1,011,050 640,614 1,456,800 2023 notes — — 104,378 376,949 Convertible senior notes, net $ 1,676,749 $ 1,995,930 $ 1,506,922 $ 2,963,119 (1) Prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. Refer to Note 7, “Convertible Senior Notes” for more information. |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition | AcquisitionOn February 22, 2021, we completed an acquisition, accounted for as a business combination, of 100% of the outstanding shares of a company for a technology that will strengthen our content creation abilities for a purchase consideration of $8.0 million in cash. Our preliminary total allocation of purchase consideration included acquired assets of $0.4 million, acquired developed technology intangible asset of $3.3 million and goodwill of $5.8 million less assumed liabilities of $1.5 million. This acquisition did not have a material impact on our condensed consolidated financial statements and is not expected to have a material impact in future periods. |
Convertible Senior Notes
Convertible Senior Notes | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Senior Notes | Convertible Senior Notes Adoption of ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity We adopted ASU 2020-06 on January 1, 2021 under the modified retrospective method applied to convertible senior notes outstanding as of January 1, 2021 and have not changed previously disclosed amounts or provided additional disclosures for comparative periods. Under ASU 2020-06, convertible instruments with embedded conversion features, that are not required to be accounted for as a derivative or that do not result in a substantial premium, are no longer required to be separated from the host contract thereby eliminating the cash conversion feature model. Instead, these convertible debt instruments will be accounted for as a single liability measured at amortized cost under the traditional convertible debt accounting model. In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). The aggregate principal amount of the 2026 notes includes $100 million from the initial purchasers fully exercising their option to purchase additional notes. In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes) and in April 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total principal amount of $800 million. In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes and together with the 2026 notes and the 2025 notes, the notes). The aggregate principal amount of the 2023 notes included $45 million from the initial purchasers fully exercising their option to purchase additional notes. The notes were issued in private placements to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended. The total net proceeds from the notes are as follows (in thousands): 2026 Notes 2025 Notes 2023 Notes Principal amount $ 1,000,000 $ 800,000 $ 345,000 Less initial purchasers’ discount (15,000) (18,998) (8,625) Less other issuance costs (904) (822) (757) Net proceeds $ 984,096 $ 780,180 $ 335,618 During the nine months ended September 30, 2021, we settled $115.6 million of aggregate principal amount of the 2023 notes, consisting of $24.7 million related to requests for conversions and $90.9 million pursuant to our election of our option to redeem the remaining outstanding 2023 notes, for a total aggregate consideration of $351.1 million, consisting of $115.6 million in cash and 2,983,011 shares of our common stock with a value of $235.5 million. The carrying amount of the 2023 notes was $114.2 million, resulting in a $236.9 million difference that was recorded in additional paid-in capital on our condensed consolidated balance sheet. Additionally, we entered into 2023 notes capped call privately-negotiated transactions which terminated capped call transactions underlying 4,288,459 shares of our common stock and received aggregate cash proceeds of $45.2 million. As of September 30, 2021, no amounts of our 2023 notes remain outstanding and no shares remain underlying the 2023 notes capped call transactions. In March 2021, in connection with our securities repurchase program, we extinguished $100.0 million aggregate principal amount of the 2025 notes in privately-negotiated transactions for aggregate consideration of $184.9 million, which was paid in cash. Upon execution, we concluded that the 2025 notes embedded conversion features no longer met the derivative scope exception and, as a result, initially recorded a derivative liability of $176.5 million, related to the fair value of extinguished 2025 notes. We settled the derivative liability for aggregate consideration of $184.9 million resulting in a $8.4 million loss on change in fair value. The carrying amount of the 2025 notes subject to the extinguishment was $98.3 million resulting in a $78.2 million loss on early extinguishment of debt. Additionally, we entered into 2025 notes capped call privately-negotiated transactions which terminated capped call transactions underlying 1,939,560 shares of our common stock and received aggregate cash proceeds of $23.9 million. Upon execution, we concluded that the capped call transactions no longer met the derivative scope exception and, as a result recorded a derivative liability of $22.6 million related to the fair value of terminated 2025 notes capped call transactions. We settled the capped call transactions for aggregate consideration of $23.9 million resulting in a $1.3 million gain on change in fair value. The notes are our senior, unsecured obligations and are governed by indenture agreements by and between us and Wells Fargo Bank, National Association, as Trustee (the indentures). The 2026 notes bear no interest and will mature on September 1, 2026, unless repurchased, redeemed or converted in accordance with their terms prior to such date. The 2025 notes bear interest of 0.125% per year which is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2019. The 2025 notes will mature on March 15, 2025, unless repurchased, redeemed or converted in accordance with their terms prior to such date. The 2023 notes bore interest of 0.25% per year which was payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2018. Each $1,000 principal amount of the 2026 notes will initially be convertible into 9.2978 shares of our common stock. This is equivalent to an initial conversion price of approximately $107.55 per share, which is subject to adjustment in certain circumstances. Each $1,000 principal amount of the 2025 notes will initially be convertible into 19.3956 shares of our common stock. This is equivalent to an initial conversion price of approximately $51.56 per share, which is subject to adjustment in certain circumstances. Each $1,000 principal amount of the 2023 notes was initially convertible into 37.1051 shares of our common stock. This was equivalent to an initial conversion price of approximately $26.95 per share, which was subject to adjustment in certain circumstances. Prior to the close of business on the business day immediately preceding June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 notes, the notes are convertible at the option of holders only upon satisfaction of the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2020 for the 2026 notes and June 30, 2019 for the 2025 notes, if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the respective conversion price for the notes on each applicable trading day; • during the five-business day period after any 10 consecutive trading day period (the measurement period) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; • if we call any or all of the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • upon the occurrence of certain specified corporate events described in the indentures. On or after June 1, 2026 for the 2026 notes and December 15, 2024 for the 2025 notes until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert their notes at any time, regardless of the foregoing circumstances. Upon conversion, the notes may be settled in shares of our common stock, cash or a combination of cash and shares of our common stock, at our election. If we undergo a fundamental change, as defined in the indentures, prior to the respective maturity dates, subject to certain conditions, holders of the notes may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if specific corporate events, described in the indentures, occur prior to the respective maturity dates, we will also increase the conversion rate for a holder who elects to convert their notes in connection with such specified corporate events. The conditions allowing holders of the 2026 notes to convert were not met and therefore the 2026 notes are not convertible. The first circumstance noted above allowing holders of the 2025 notes to convert was met during the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020 and therefore, the 2025 notes were and are convertible starting October 1, 2020 through December 31, 2021. Aside from the extinguishment of $100.0 million aggregate principal amount of the 2025 notes discussed above, during the three and nine months ended September 30, 2021, we received immaterial requests for conversion of the 2025 notes which we settled or intend to settle in cash. During the year ended December 31, 2020, in connection with our issuance of the 2026 notes, we exchanged $172.0 million aggregate principal amount of the 2023 notes in privately-negotiated transactions for an aggregate consideration of $501.7 million, consisting of $174.6 million in cash and 4,182,320 shares of our common stock with a value of $327.1 million. The net carrying amount of the notes is as follows (in thousands): September 30, 2021 December 31, 2020 (1) 2026 Notes 2025 Notes 2026 Notes 2025 Notes 2023 Notes Principal $ 1,000,000 $ 699,989 $ 1,000,000 $ 800,000 $ 115,576 Unamortized debt discount — — (226,732) (149,138) (9,953) Unamortized issuance costs (12,973) (10,267) (11,338) (10,248) (1,245) Net carrying amount $ 987,027 $ 689,722 $ 761,930 $ 640,614 $ 104,378 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. The following tables set forth the total interest expense recognized related to the notes (in thousands): Three Months Ended September 30, 2021 2020 (1) 2026 Notes 2025 Notes 2026 Notes 2025 Notes 2023 Notes Contractual interest expense $ — $ 221 $ — $ 252 $ 169 Amortization of debt discount — — 4,491 8,938 2,458 Amortization of issuance costs 663 749 225 614 292 Total interest expense $ 663 $ 970 $ 4,716 $ 9,804 $ 2,919 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method . Nine Months Ended September 30, 2021 2020 (1) 2026 Notes 2025 Notes 2023 Notes 2026 Notes 2025 Notes 2023 Notes Contractual interest expense $ — $ 676 $ 78 $ — $ 750 $ 599 Amortization of debt discount — — — 4,491 26,621 8,709 Amortization of issuance costs 1,970 2,297 242 225 1,829 1,035 Total interest expense $ 1,970 $ 2,973 $ 320 $ 4,716 $ 29,200 $ 10,343 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method . Capped Call Transactions Concurrently with the offering of the 2026 notes and 2025 notes, we used $103.4 million and $97.2 million, respectively, of the net proceeds to enter into privately negotiated capped call transactions which are expected to reduce or offset potential dilution to holders of our common stock upon conversion of the notes or offset the potential cash payments we would be required to make in excess of the principal amount of any converted notes. The capped call transactions automatically exercise upon conversion of the notes and as of September 30, 2021, cover 9,297,800 and 13,576,706 shares of our common stock for the 2026 notes and 2025 notes, respectively. These are intended to effectively increase the overall conversion price from $107.55 to $156.44 per share for the 2026 notes and $51.56 to $79.32 per share for the 2025 notes. The effective increase in conversion price as a result of the capped call transactions serves to reduce potential dilution to holders of our common stock and/or offset the cash payments we are required to make in excess of the principal amount of any converted notes. As these transactions meet certain accounting criteria, they are recorded in stockholders’ equity as a reduction of additional paid-in capital on our condensed consolidated balance sheets and are not accounted for as derivatives. The fair value of the capped call instrument is not remeasured each reporting period. The cost of the capped call is not expected to be deductible for tax purposes. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies From time to time, third parties may assert patent infringement claims against us in the form of letters, litigation, or other forms of communication. In addition, we may from time to time be subject to other legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of trademarks, copyrights, and other intellectual property rights; employment claims; and general contract or other claims. We may also, from time to time, be subject to various legal or government claims, disputes, or investigations. Such matters may include, but not be limited to, claims, disputes, or investigations related to warranty, refund, breach of contract, employment, intellectual property, government regulation, or compliance or other matters. On September 13, 2021, Pearson Education, Inc. (Pearson) filed a complaint captioned Pearson Education, Inc. v. Chegg, Inc. (Pearson Complaint) in the United States District Court for the District of New Jersey against the Company (Case 2:21-cv-16866), alleging infringement of Pearson’s registered copyrights and exclusive rights under copyright in violation of the United States Copyright Act. Pearson is seeking injunctive relief, monetary damages, costs, and attorneys’ fees. The Company’s answer to the Pearson Complaint is due by November 19, 2021. The Company disputes these claims and intends to vigorously defend itself in this matter. On December 1, 2020, we received notice that a class action lawsuit was filed against Chegg in New York alleging violations of the American with Disabilities Act. The claim asserted that one of Chegg’s websites is not compatible with software used by vision-impaired individuals. During the nine months ended September 30, 2021, we settled this matter for an immaterial amount. On August 18, 2020, we received notice that a class action lawsuit was filed against Chegg in California alleging violations of the Unruh Civil Rights Act. The claim asserted that one of Chegg’s websites is not compatible with software used by vision-impaired individuals. During the nine months ended September 30, 2021, we settled this matter for an immaterial amount. On July 21, 2020, VitalSource Technologies LLC (VST), which is wholly owned by Ingram Industries Inc., filed a complaint against Chegg alleging that Chegg breached its contract with VST involving the development of an eTextbook reader and eTextbook reader platform. The suit sought uncertain damages, but the complaint alleged that they exceeded $75 thousand. During the nine months ended September 30, 2021, we settled this matter for an immaterial amount. On June 18, 2020, we received a Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) to determine whether we may have violated Section 5 of the FTC Act or the Children's Online Privacy Protection Act (COPPA), as they relate to deceptive or unfair acts or practices related to consumer privacy and/or data security. We have provided the FTC with the requested responses to interrogatories and follow-up questions and have produced documents pertaining to data breach incidents and our data security and privacy practices generally. On May 12, 2020, we received notice that 15,107 arbitration demands were filed against us by individuals all represented by the same legal counsel, each individual claimant alleging to have suffered more than $25 thousand in damages as a result of the unauthorized access of certain items of their user data in April 2018 (the 2018 Data Incident). On July 1, 2020, an additional 1,007 arbitration demands were filed by the same counsel. On August 12, 2020, an additional 577 arbitration demands were filed by the same counsel; cases have been filed by the same counsel in Maryland and California. We dispute that these claimants have a valid basis for seeking arbitration, assert that they have acted in bad faith and are working with the Maryland and California courts and plaintiffs’ counsel on resolution of these claims. On August 22, 2021, Chegg and the claimaints' legal counsel, on behalf of its clients, entered into a settlement agreement (Settlement Agreement), pursuant to which each eligible claimant that signs a release agreement agrees, among other things, to dismiss with prejudice all claims against Chegg that such claimant currently maintains in exchange for such claimant's pro rata portion of the settlement amount. Claimants have until January 26, 2022 to sign their release agreements. In March 2021, we recorded a loss contingency accrual and a corresponding insurance loss recovery, the net impact of which did not materially impact our condensed consolidated statements of operations. On November 5, 2018, NetSoc, LLC (NetSoc) filed a complaint against us captioned NetSoc, LLC v. Chegg, Inc. , (Civil Action No. 1:18-CV-10262-RAC) in the U.S. District Court for the Southern District of New York (SDNY) for patent infringement alleging that the Chegg Tutors service infringes U.S. Patent No. 9,978,107 (the NetSoc Patent) and seeking unspecified compensatory damages. A responsive pleading was filed on February 19, 2019. On January 13, 2020, the SDNY issued an order dismissing the case as to Chegg. On January 30, 2020, NetSoc appealed the dismissal to the United States Court of Appeals for the Federal Circuit (the Federal Circuit). On September 24, 2021, the Federal Circuit dismissed NetSoc's appeal of the SDNY dismissal. On December 2, 2020, the U.S. Patent and Trademark Office determined that the NetSoc Patent is invalid based on two Inter Partes Review (IPR) proceedings instituted in part by Chegg, and on January 4, 2021, NetSoc filed a Notice of Appeals at the Federal Circuit appealing the IPR decisions. On October 18, 2021, Chegg filed a motion to dismiss NetSoc's appeal of the IPR decisions. |
Guarantees and Indemnifications
Guarantees and Indemnifications | 9 Months Ended |
Sep. 30, 2021 | |
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 immaterial. We have not recorded any liabilities for these agreements as of September 30, 2021. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders' Equity Equity Offering In February 2021, we entered into an underwriting agreement pursuant to which we agreed to issue and sell 10,974,600 shares of our common stock at a public offering price of $102.00 per share generating aggregate net proceeds of $1,091.5 million, after deducting underwriting discounts and commissions of $26.9 million and offering expenses of $1.1 million. Securities Repurchase Program In November 2021, our board of directors approved a $500.0 million increase to our existing securities repurchase program authorizing the repurchase of up to $1.0 billion of our common stock and/or convertible notes, through open market purchases, block trades, and/or privately negotiated transactions or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The timing, volume, and nature of the repurchases will be determined by management based on the capital needs of the business, market conditions, applicable legal requirements, and other factors. During the nine months ended September 30, 2021, we repurchased $100.0 million of aggregate principal amount of the 2025 notes in privately-negotiated transactions for an aggregate consideration of $184.9 million. $665.5 million remains under the repurchase program, which has no expiration date and will continue until otherwise suspended, terminated or modified at any time for any reason by our board of directors. Share-based Compensation Expense Total share-based compensation expense recorded for employees and non-employees is as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of revenues $ 393 $ 262 $ 1,174 $ 644 Research and development 8,917 8,433 25,976 23,044 Sales and marketing 3,051 2,431 9,625 7,053 General and administrative 12,151 10,403 39,382 28,668 Total share-based compensation expense $ 24,512 $ 21,529 $ 76,157 $ 59,409 During the three and nine months ended September 30, 2021, we capitalized share-based compensation expense of $0.6 million and $1.8 million, respectively. 2021 PSU Grants with Market-Based Conditions In March 2021, we granted PSUs under the 2013 Equity Incentive Plan (the 2013 Plan) with market-based conditions to certain of our key employees. The number of shares of our common stock that may be issued to settle these PSUs range from 50% at the threshold level to 150% at the maximum level of the 100% target level of the award depending on achieving a maximum average market value of the per share price of our common stock, for a period of 60 consecutive trading days, over a three-year performance period ending on the third anniversary of the date of grant. No payout will be made for performance below the 50% threshold level. The market value of the per share price of our common stock must reach $123.81, $148.58, or $173.34 at the threshold, target, or maximum levels, respectively, for achievement of the award, which could result in issuance of 244,086, 488,173, or 732,260 shares of our common stock at each respective payout level. These PSUs will vest over a four-year period, with the initial vesting of 50% of the award occurring in March 2024. The number of PSUs granted totaled 732,260 shares, which represents the maximum number of shares, and had a grant date fair value of $68.55 per share, determined under the Monte Carlo simulation approach described further below. As of September 30, 2021, the market-based conditions have not been met. Fair Value of PSUs with Market-Based Conditions PSUs with market-based conditions are converted into shares of our common stock upon vesting on a one-for-one basis. Vesting is subject to the achievement of certain per share price of our common stock targets and the employee's continuing service to us. If the targets are achieved, the awards vest over a four-year period. We estimate the fair value of the PSUs using a Monte Carlo simulation approach, which utilizes the fair value of our common stock based on an active market and requires input on the following subjective assumptions: Expected Term . The expected term for the awards is the performance period of three years. Expected Volatility . The expected volatility is based on the historical average volatility of our stock price over the expected term. 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 U.S. treasury zero-coupon issues, with a remaining term equal to the expected term. The following table summarizes the key assumptions used to determine the fair value of the awards: Expected term (years) 3.00 Expected volatility 49.04 % Expected dividends — % Risk-free interest rate 0.27 % 2021 PSU Grants with Financial and Strategic Performance Targets In March 2021, we granted PSUs under the 2013 Plan to certain of our key executives. These 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 2021. These PSUs will vest over a three-year period, with the initial vesting occurring in March 2022. The number of shares underlying these March 2021 PSUs granted totaled 278,644 shares and had a grant date fair value of $99.05 per share. As of September 30, 2021, the performance-based milestones are expected to be partially achieved during 2021. PSUs with Financial and Strategic Performance Targets and RSUs PSUs with financial and strategic performance targets and RSUs are converted into shares of our common stock upon vesting on a one-for-one basis. Vesting of PSUs is subject to our achievement of specified financial and strategic performance targets in addition to the employee's continuing service to us while vesting of RSUs is subject to the employee’s continuing service to us. PSUs typically vest over three years while RSUs typically vest over three RSU and PSU Activity Activity for RSUs and PSUs is as follows: RSUs and PSUs Outstanding Shares Outstanding Weighted Average Grant Date Fair Value Balance at December 31, 2020 4,816,000 $ 37.82 Granted 2,216,327 86.60 Released (2,391,951) 33.81 Forfeited (430,325) 44.84 Balance at September 30, 2021 4,210,051 $ 65.06 As of September 30, 2021, our total unrecognized share-based compensation expense related to RSUs and PSUs was approximately $170.2 million, which will be recognized over the remaining weighted-average vesting period of approximately 2.1 years. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party TransactionsOur Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the three and nine months ended September 30, 2021, we purchased $0.9 million and $1.9 million, respectively, of services from Adobe and during the three and nine months ended September 30, 2020, we purchased $0.3 million and $1.1 million, respectively, of services from Adobe. We had no revenues during the three and nine months ended September 30, 2021 from Adobe. We had no revenues during the three months ended September 30, 2020 and $0.1 million of revenues during the nine months ended September 30, 2020 from Adobe. We had no payables as of September 30, 2021 and $0.1 million of payables as of December 31, 2020 to Adobe. We had no outstanding receivables as of September 30, 2021 and December 31, 2020 from Adobe. The immediate family of one of our board members is a member of the Board of Directors of PayPal Holdings, Inc. (PayPal). During the three and nine months ended September 30, 2021, we incurred payment processing fees of $0.7 million and $2.1 million, respectively, and during the three and nine months ended September 30, 2020, we incurred payment processing fees of $0.5 million and $1.5 million, respectively, to PayPal. One of our board members is also a member of the Board of Directors of Zuora, Inc. (Zuora). During the three and nine months ended September 30, 2021, we purchased $1.4 million and $1.8 million, respectively, of services from Zuora and during the three and nine months ended September 30, 2020, we purchased $0.8 million and $1.2 million, respectively, of services from Zuora. We had $0.1 million of payables as of September 30, 2021 and no payables as of December 31, 2020 to Zuora. |
Restructuring Charges
Restructuring Charges | 9 Months Ended |
Sep. 30, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring ChargesIn September 2021, we changed our go-to-market strategy for our Thinkful product offering which we believe will have the most growth potential to serve learners. This resulted in a management approved restructuring plan that impacted approximately 60 full-time employees and 120 part-time employees in the United States. During the three months ended September 30, 2021, we recorded restructuring charges of $1.9 million related to one-time employee termination benefits classified on our condensed consolidated statements of operations based on the employees' job function. As of September 30, 2021, no payments have been made and the $1.9 million liability is included within accrued liabilities on our condensed consolidated balance sheets. We expect the total cost of the restructuring plan to be approximately $2.2 million and for it to be completed by the end of the second quarter of fiscal year 2022. We expect cost savings from the restructuring plan to be reinvested in future growth opportunities. |
Background and Basis of Prese_2
Background and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheet as of September 30, 2021, the condensed consolidated statements of operations, the condensed consolidated statements of comprehensive income (loss), and the condensed consolidated statements of stockholders' equity for the three and nine months ended September 30, 2021 and 2020, the condensed consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020, and the related footnote disclosures are unaudited. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, including normal recurring adjustments, necessary to present fairly our financial position as of September 30, 2021, our results of operations, results of comprehensive income (loss), and stockholders' equity for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. Our results of operations, results of comprehensive income (loss), stockholders' equity, and cash flows for the nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the full year. We operate in a single segment. Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2020 as 2020. The condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the Annual Report on Form 10-K) filed with the U.S. Securities and Exchange Commission (SEC). Except for our policies on convertible senior notes, net, share-based compensation expense, and net income (loss) per share, there have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report on Form 10-K. Our policies on convertible senior notes, net and net income (loss) per share were updated as a result of our adoption of Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity on January 1, 2021 under the modified retrospective method. For further information on ASU 2020-06, see the section below titled “Recent Accounting Pronouncements” of this Note 1, “Background and Basis of Presentation.” |
Convertible Senior Notes, net | Convertible Senior Notes, net In August 2020, we issued $1.0 billion in aggregate principal amount of 0% convertible senior notes due in 2026 (2026 notes). In March 2019, we issued $700 million in aggregate principal amount of 0.125% convertible senior notes due in 2025 (2025 notes) and in April 2019, the initial purchasers fully exercised their option to purchase $100 million of additional 2025 notes for aggregate total gross proceeds of $800 million. In April 2018, we issued $345 million in aggregate principal amount of 0.25% convertible senior notes due in 2023 (2023 notes). Collectively, the 2026 notes, 2025 notes, and the 2023 notes are referred to as the “notes.” The notes, including the embedded conversion features, are accounted for under the traditional convertible debt accounting model entirely as a liability net of unamortized issuance costs. The carrying amount of the liability is classified as a current liability if we have committed to settle with current assets; otherwise, we classify it as a long-term liability as we retain the election to settle conversion requests in shares of our common stock. The embedded conversion features are not remeasured as long as they do not meet the separation requirement of a derivative; otherwise, they are classified as derivative instruments and recorded at fair value with changes in fair value recorded in other income (expense), net on our condensed consolidated statements of operations. The fair value of any derivative instruments related to the notes are determined utilizing Level 2 inputs. Issuance costs are amortized on a straight-line basis, which approximates the effective interest rate method, to interest expense over the term of the notes. In accounting for conversions of the notes, the carrying amount of the converted notes is reduced by the total consideration paid or issued for the respective converted notes and the |
Share-based Compensation Expense | Share-based Compensation Expense Share-based compensation expense for restricted stock units (RSUs), performance-based restricted stock units (PSUs) with either a market-based condition or financial performance targets, and the employee stock purchase plan (ESPP) is accounted for under the fair value method based on the grant-date fair value of the award. Share-based compensation expense for RSUs and PSUs with financial performance targets is measured based on the closing fair market value of the Company’s common stock, PSUs with a market-based condition is estimated using a Monte Carlo simulation model, and the ESPP is estimated using the Black-Scholes-Merton option pricing model. We recognize share-based compensation expense, subject to continuing service over the requisite service period, which is generally the vesting period, on a straight-line basis for RSUs and the ESPP and on a graded basis for PSUs. Share-based compensation expense for PSUs with a market-based condition is recognized regardless of whether the market condition is satisfied whereas share-based compensation expense for PSUs with financial performance targets is recognized upon estimated or actual achievement of such targets. 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. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by adjusting net income (loss) for all related interest expense and gains and losses recognized during the period, net of tax, and giving effect to all potential shares of common stock, including stock options, PSUs, RSUs, and shares related to convertible senior notes, to the extent dilutive. This assumes that all stock options and dilutive convertible shares were exercised or converted and is computed by applying the treasury stock method for outstanding stock options, PSUs, and RSUs, and the if-converted method for outstanding convertible senior notes. Under the treasury stock method, options, PSUs, and RSUs are assumed to be exercised or vested at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Under the if-converted method, outstanding convertible senior notes are assumed to be converted into common stock at the beginning of the period (or at the time of issuance, if later). |
Use of Estimates | Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. 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. |
Reclassification of Prior Period Presentation | Reclassification of Prior Period Presentation In order to conform with current period presentation, $6.6 million of current operating lease liabilities have been reclassified to accrued liabilities on our condensed consolidated balance sheet as of December 31, 2020. This change in presentation does not affect previously reported results. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In May 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . ASU 2021-04 aims to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange based on the economic substance of the modification or exchange. Early adoption is permitted and the guidance must be applied prospectively to all modifications or exchanges that occur on or after the date of adoption. The guidance is effective for annual periods beginning after December 15, 2021, and we are currently in the process of evaluating the impact of this guidance. Recently Adopted Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity's Own Equity . ASU 2020-06 simplifies the guidance in Accounting Standards Codification (ASC) 470-20, Debt - Debt with Conversion and Other Options . Under ASU 2020-06, convertible instruments with embedded conversion features, that are not required to be accounted for as a derivative or that do not result in a substantial premium, are no longer required to be separated from the host contract thereby eliminating the cash conversion feature model. Instead, these convertible debt instruments will be accounted for as a single liability measured at amortized cost under the traditional convertible debt accounting model. ASU 2020-06 also requires the if-converted method to be applied for all convertible instruments when calculating diluted earnings per share. We adopted ASU 2020-06 on January 1, 2021 under the modified retrospective method applied to convertible senior notes outstanding as of January 1, 2021 and have not changed previously disclosed amounts or provided additional disclosures for comparative periods. Adoption of ASU 2020-06 resulted in an increase to convertible senior notes of $378.1 million and a decrease to additional paid-in capital of $465.0 million due to the application of the traditional convertible debt model and no longer separating the embedded conversion feature. Accumulated deficit also decreased by $86.9 million due to the reduction in non-cash interest expense related to the debt discount and we expect interest expense to decrease in future periods. Refer to Note 7, “Convertible Senior Notes” for more information. |
Background and Basis of Prese_3
Background and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Other Nonoperating Income (Expense) | Other income (expense), net consists of the following (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Loss on early extinguishment of debt (1) $ — $ (3,315) $ (78,152) $ (3,315) Loss on change in fair value of derivative instruments, net (1) — — (7,148) — Gain on sale of strategic equity investments (2) 7,158 — 12,496 — Interest income 1,485 2,539 5,385 10,588 Other 27 (28) 801 123 Total other income (expense), net $ 8,670 $ (804) $ (66,618) $ 7,396 (1) For further information, see Note 7, “Convertible Senior Notes.” (2) For further information, see Note 4, “Cash and Cash Equivalents, and Investments.” |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables set forth our total net revenues for the periods shown disaggregated for our Chegg Services and Required Materials product lines (in thousands, except percentages): Three Months Ended Change 2021 2020 $ % Chegg Services $ 146,790 $ 118,895 $ 27,895 23 % Required Materials 25,152 35,123 (9,971) (28) Total net revenues $ 171,942 $ 154,018 $ 17,924 12 Nine Months Ended Change 2021 2020 $ % Chegg Services $ 482,654 $ 345,258 $ 137,396 40 % Required Materials 86,144 93,359 (7,215) (8) Total net revenues $ 568,798 $ 438,617 $ 130,181 30 |
Schedule of Accounts Receivable | The following table presents our accounts receivable, net, deferred revenue, and contract assets balances (in thousands, except percentages): Change September 30, December 31, 2020 $ % Accounts receivable, net $ 9,302 $ 12,913 $ (3,611) (28) % Deferred revenue 49,983 32,620 17,363 53 Contract assets 16,358 13,243 3,115 24 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2020 (1) 2021 2020 (1) Basic Numerator: Net income (loss) $ 6,651 $ (37,140) $ (25,764) $ (32,264) Denominator: Weighted average shares used to compute net income (loss) per share, basic 144,746 126,194 140,775 124,162 Net income (loss) per share, basic $ 0.05 $ (0.29) $ (0.18) $ (0.26) Diluted Numerator: Net income (loss), diluted $ 6,651 $ (37,140) $ (25,764) $ (32,264) Denominator: Weighted average shares used to compute net income (loss) per share, basic 144,746 126,194 140,775 124,162 Options to purchase common stock 485 — — — PSUs and RSUs 1,462 — — — Employee stock purchase plan 6 — — — Weighted average shares used to compute net income (loss) per share, diluted 146,699 126,194 140,775 124,162 Net income (loss) per share, diluted $ 0.05 $ (0.29) $ (0.18) $ (0.26) (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net income (loss) per share because including them would have been anti-dilutive (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Options to purchase common stock — 865 515 977 PSUs and RSUs 849 3,394 2,210 3,425 Shares related to convertible senior notes 22,875 8,721 23,876 4,422 Employee stock purchase plan — 9 2 4 Total common stock equivalents 23,724 12,989 26,603 8,828 |
Cash and Cash Equivalents, an_2
Cash and Cash Equivalents, and Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | The following tables show our cash and cash equivalents, and investments’ adjusted cost, unrealized gain, unrealized loss, and fair value as of September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 29,338 $ — $ — $ 29,338 Money market funds 684,499 — — 684,499 Total cash and cash equivalents $ 713,837 $ — $ — $ 713,837 Short-term investments: Commercial paper $ 364,098 $ 49 $ (4) $ 364,143 Corporate debt securities 658,525 280 (122) 658,683 Agency bonds 15,501 18 — 15,519 Total short-term investments $ 1,038,124 $ 347 $ (126) $ 1,038,345 Long-term investments: Corporate debt securities $ 813,889 $ 142 $ (531) $ 813,500 Total long-term investments $ 813,889 $ 142 $ (531) $ 813,500 December 31, 2020 Adjusted Cost Unrealized Gain Unrealized Loss Fair Value Cash and cash equivalents: Cash $ 15,054 $ — $ — $ 15,054 Money market funds 464,799 — — 464,799 Total cash and cash equivalents $ 479,853 $ — $ — $ 479,853 Short-term investments: Commercial paper $ 204,152 $ 24 $ (6) $ 204,170 Corporate debt securities 459,967 1,478 (48) 461,397 Total short-term investments $ 664,119 $ 1,502 $ (54) $ 665,567 Long-term investments: Corporate debt securities $ 484,275 $ 605 $ (283) $ 484,597 Agency bonds 38,995 36 — 39,031 Total long-term investments $ 523,270 $ 641 $ (283) $ 523,628 |
Schedule of Available-for-sale Securities Reconciliation | The following table shows our cash equivalents and investments' adjusted cost and fair value by contractual maturity as of September 30, 2021 (in thousands): Adjusted Cost Fair Value Due in 1 year or less $ 1,038,124 $ 1,038,345 Due in 1-2 years 813,889 813,500 Investments not due at a single maturity date 684,499 684,499 Total $ 2,536,512 $ 2,536,344 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | Financial instruments measured and recorded at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 are classified based on the valuation technique level in the tables below (in thousands): September 30, 2021 Total Level 1 Level 2 Assets: Cash equivalents: Money market funds $ 684,499 $ 684,499 $ — Short-term investments: Commercial paper 364,143 — 364,143 Corporate debt securities 658,683 — 658,683 Agency bonds 15,519 — 15,519 Long-term investments: Corporate debt securities 813,500 — 813,500 Total assets measured and recorded at fair value $ 2,536,344 $ 684,499 $ 1,851,845 December 31, 2020 Total Level 1 Level 2 Assets: Cash equivalents: Money market funds $ 464,799 $ 464,799 $ — Short-term investments: Commercial paper 204,170 — 204,170 Corporate debt securities 461,397 — 461,397 Long-term investments: Corporate debt securities 484,597 — 484,597 Agency bonds 39,031 — 39,031 Total assets measured and recorded at fair value $ 1,653,994 $ 464,799 $ 1,189,195 |
Fair Value Measurements, Nonrecurring | The carrying amounts and estimated fair values of the notes as of September 30, 2021 and December 31, 2020 are as follows (in thousands): September 30, 2021 December 31, 2020 (1) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value 2026 notes $ 987,027 $ 984,880 $ 761,930 $ 1,129,370 2025 notes 689,722 1,011,050 640,614 1,456,800 2023 notes — — 104,378 376,949 Convertible senior notes, net $ 1,676,749 $ 1,995,930 $ 1,506,922 $ 2,963,119 (1) Prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. Refer to Note 7, “Convertible Senior Notes” for more information. |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The total net proceeds from the notes are as follows (in thousands): 2026 Notes 2025 Notes 2023 Notes Principal amount $ 1,000,000 $ 800,000 $ 345,000 Less initial purchasers’ discount (15,000) (18,998) (8,625) Less other issuance costs (904) (822) (757) Net proceeds $ 984,096 $ 780,180 $ 335,618 |
Schedule of Debt | The net carrying amount of the notes is as follows (in thousands): September 30, 2021 December 31, 2020 (1) 2026 Notes 2025 Notes 2026 Notes 2025 Notes 2023 Notes Principal $ 1,000,000 $ 699,989 $ 1,000,000 $ 800,000 $ 115,576 Unamortized debt discount — — (226,732) (149,138) (9,953) Unamortized issuance costs (12,973) (10,267) (11,338) (10,248) (1,245) Net carrying amount $ 987,027 $ 689,722 $ 761,930 $ 640,614 $ 104,378 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method. |
Schedule Of Interest Expense Recognized | The following tables set forth the total interest expense recognized related to the notes (in thousands): Three Months Ended September 30, 2021 2020 (1) 2026 Notes 2025 Notes 2026 Notes 2025 Notes 2023 Notes Contractual interest expense $ — $ 221 $ — $ 252 $ 169 Amortization of debt discount — — 4,491 8,938 2,458 Amortization of issuance costs 663 749 225 614 292 Total interest expense $ 663 $ 970 $ 4,716 $ 9,804 $ 2,919 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method . Nine Months Ended September 30, 2021 2020 (1) 2026 Notes 2025 Notes 2023 Notes 2026 Notes 2025 Notes 2023 Notes Contractual interest expense $ — $ 676 $ 78 $ — $ 750 $ 599 Amortization of debt discount — — — 4,491 26,621 8,709 Amortization of issuance costs 1,970 2,297 242 225 1,829 1,035 Total interest expense $ 1,970 $ 2,973 $ 320 $ 4,716 $ 29,200 $ 10,343 (1) As noted above, prior period amounts have not been adjusted due to the adoption of ASU 2020-06 under the modified retrospective method . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation Expense for Employees and Non-Employees | Total share-based compensation expense recorded for employees and non-employees is as follows (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Cost of revenues $ 393 $ 262 $ 1,174 $ 644 Research and development 8,917 8,433 25,976 23,044 Sales and marketing 3,051 2,431 9,625 7,053 General and administrative 12,151 10,403 39,382 28,668 Total share-based compensation expense $ 24,512 $ 21,529 $ 76,157 $ 59,409 |
Schedule of Share-based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | The following table summarizes the key assumptions used to determine the fair value of the awards: Expected term (years) 3.00 Expected volatility 49.04 % Expected dividends — % Risk-free interest rate 0.27 % |
Summary of Restricted Stock Unit Activity | Activity for RSUs and PSUs is as follows: RSUs and PSUs Outstanding Shares Outstanding Weighted Average Grant Date Fair Value Balance at December 31, 2020 4,816,000 $ 37.82 Granted 2,216,327 86.60 Released (2,391,951) 33.81 Forfeited (430,325) 44.84 Balance at September 30, 2021 4,210,051 $ 65.06 |
Background and Basis of Prese_4
Background and Basis of Presentation - Convertible Notes (Details) - Senior Notes - USD ($) | 1 Months Ended | |||||
Aug. 31, 2020 | Apr. 30, 2019 | Apr. 30, 2018 | Sep. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2019 | |
2026 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face value | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | |||
Interest rate, stated percentage | 0.00% | |||||
Proceeds from issuance of debt | $ 1,000,000,000 | |||||
2025 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face value | $ 100,000,000 | $ 699,989,000 | 800,000,000 | $ 700,000,000 | ||
Interest rate, stated percentage | 0.125% | |||||
Proceeds from issuance of debt | $ 800,000,000 | |||||
2023 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Face value | $ 345,000,000 | $ 115,576,000 | ||||
Interest rate, stated percentage | 0.25% | |||||
Proceeds from issuance of debt | $ 345,000,000 |
Background and Basis of Prese_5
Background and Basis of Presentation - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Jan. 01, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Accrued liabilities | $ 73,320 | $ 68,565 | |||||
Equity | 1,354,517 | $ 1,337,882 | 609,635 | $ 645,392 | $ 498,378 | $ 498,829 | |
Additional Paid-In Capital | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | 1,717,421 | 1,706,855 | 1,030,577 | 1,092,574 | 907,908 | 916,095 | |
Accumulated Deficit | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | $ (361,497) | $ (368,148) | (422,601) | $ (448,644) | $ (411,504) | (416,292) | |
Cumulative Effect, Period of Adoption, Adjustment | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | (378,138) | (88) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Additional Paid-In Capital | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | (465,006) | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | 86,868 | $ (88) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | Additional Paid-In Capital | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | $ (465,000) | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | Accumulated Deficit | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | 86,900 | ||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2020-06 | Senior Notes | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Equity | $ 378,100 | ||||||
Revision of Prior Period, Reclassification, Adjustment | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Current operating lease liabilities | (6,600) | ||||||
Accrued liabilities | $ 6,600 |
Background and Basis of Prese_6
Background and Basis of Presentation - Other Income (Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Loss on early extinguishment of debt | $ 0 | $ (3,315) | $ (78,152) | $ (3,315) |
Loss on change in fair value of derivative instruments, net | 0 | 0 | (7,148) | 0 |
Gain on sale of strategic equity investments | 7,158 | 0 | 12,496 | 0 |
Interest income | 1,485 | 2,539 | 5,385 | 10,588 |
Other | 27 | (28) | 801 | 123 |
Total other income (expense), net | $ 8,670 | $ (804) | $ (66,618) | $ 7,396 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 171,942 | $ 154,018 | $ 568,798 | $ 438,617 |
Change, Total net revenues | $ 17,924 | $ 130,181 | ||
Change, Total net revenues, percent | 12.00% | 30.00% | ||
Chegg Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 146,790 | 118,895 | $ 482,654 | 345,258 |
Change, Total net revenues | $ 27,895 | $ 137,396 | ||
Change, Total net revenues, percent | 23.00% | 40.00% | ||
Required Materials | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net revenues | $ 25,152 | $ 35,123 | $ 86,144 | $ 93,359 |
Change, Total net revenues | $ (9,971) | $ (7,215) | ||
Change, Total net revenues, percent | (28.00%) | (8.00%) |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Contract with customer, liability, revenue recognized | $ 31,300 | $ 25,400 | $ 32,600 | $ 18,000 |
Contract with customer, liability, revenue recognized, prior period | 0 | 3,400 | ||
Accounts receivable, net | $ (3,611) | |||
Accounts receivable, net, percent | (28.00%) | |||
Deferred revenue | $ 17,363 | |||
Deferred revenue, percent | 53.00% | |||
Contract assets | $ 3,115 | |||
Contract assets, percent | 24.00% | |||
Textbook Library | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating lease income | $ 6,200 | $ 12,000 | $ 26,900 | $ 35,400 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable, net | $ 9,302 | $ 12,913 |
Change, Accounts receivable, net | $ (3,611) | |
Change, Accounts receivable, net, percent | (28.00%) | |
Deferred revenue | $ 49,983 | 32,620 |
Change, Deferred revenue | $ 17,363 | |
Change, Deferred revenue, percent | 53.00% | |
Contract assets | $ 16,358 | $ 13,243 |
Change, Contract assets | $ 3,115 | |
Change, Contract assets, percent | 24.00% |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income (loss) | $ 6,651 | $ (37,140) | $ (25,764) | $ (32,264) |
Denominator: | ||||
Weighted average shares used to compute net income (loss) per share, basic (in shares) | 144,746 | 126,194 | 140,775 | 124,162 |
Weighted average shares used to compute net income (loss) per share, diluted (in shares) | 146,699 | 126,194 | 140,775 | 124,162 |
Net income (loss) per share, basic (in dollars per share) | $ 0.05 | $ (0.29) | $ (0.18) | $ (0.26) |
Net income (loss) per share, diluted (in dollars per share) | $ 0.05 | $ (0.29) | $ (0.18) | $ (0.26) |
Options to purchase common stock | ||||
Denominator: | ||||
Incremental common shares attributable to dilutive effect (in shares) | 485 | 0 | 0 | 0 |
PSUs and RSUs | ||||
Denominator: | ||||
Incremental common shares attributable to dilutive effect (in shares) | 1,462 | 0 | 0 | 0 |
Employee stock purchase plan | ||||
Denominator: | ||||
Incremental common shares attributable to dilutive effect (in shares) | 6 | 0 | 0 | 0 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Shares Excluded From Computation Of Diluted Net Loss Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents (in shares) | 23,724 | 12,989 | 26,603 | 8,828 |
Options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents (in shares) | 0 | 865 | 515 | 977 |
PSUs and RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents (in shares) | 849 | 3,394 | 2,210 | 3,425 |
Shares related to convertible senior notes | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents (in shares) | 22,875 | 8,721 | 23,876 | 4,422 |
Employee stock purchase plan | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total common stock equivalents (in shares) | 0 | 9 | 2 | 4 |
Cash and Cash Equivalents, an_3
Cash and Cash Equivalents, and Investments - Schedule of Available For Sale Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | $ 2,536,512 | |
Fair Value | 2,536,344 | |
Cash and cash equivalents: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 713,837 | $ 479,853 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | 713,837 | 479,853 |
Short-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 1,038,124 | 664,119 |
Unrealized Gain | 347 | 1,502 |
Unrealized Loss | (126) | (54) |
Fair Value | 1,038,345 | 665,567 |
Long-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 813,889 | 523,270 |
Unrealized Gain | 142 | 641 |
Unrealized Loss | (531) | (283) |
Fair Value | 813,500 | 523,628 |
Commercial paper | Short-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 364,098 | 204,152 |
Unrealized Gain | 49 | 24 |
Unrealized Loss | (4) | (6) |
Fair Value | 364,143 | 204,170 |
Corporate debt securities | Short-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 658,525 | 459,967 |
Unrealized Gain | 280 | 1,478 |
Unrealized Loss | (122) | (48) |
Fair Value | 658,683 | 461,397 |
Corporate debt securities | Long-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 813,889 | 484,275 |
Unrealized Gain | 142 | 605 |
Unrealized Loss | (531) | (283) |
Fair Value | 813,500 | 484,597 |
Agency bonds | Short-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 15,501 | |
Unrealized Gain | 18 | |
Unrealized Loss | 0 | |
Fair Value | 15,519 | |
Agency bonds | Long-term investments: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 38,995 | |
Unrealized Gain | 36 | |
Unrealized Loss | 0 | |
Fair Value | 39,031 | |
Cash | Cash and cash equivalents: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 29,338 | 15,054 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | 29,338 | 15,054 |
Money market funds | Cash and cash equivalents: | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost | 684,499 | 464,799 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Fair Value | $ 684,499 | $ 464,799 |
Cash and Cash Equivalents, an_4
Cash and Cash Equivalents, and Investments - Contractual Maturity (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Adjusted Cost | |
Due in 1 year or less, Adjusted Cost | $ 1,038,124 |
Due in 1-2 years, Adjusted Cost | 813,889 |
Investments not due at a single maturity date, Adjusted Cost | 684,499 |
Adjusted Cost | 2,536,512 |
Fair Value | |
Due in 1 year or less, Fair Value | 1,038,345 |
Due in 1-2 years, Fair Value | 813,500 |
Investments not due at a single maturity date, Fair Value | 684,499 |
Total, Fair Value | $ 2,536,344 |
Weighted average maturity | 12 months |
Cash and Cash Equivalents, an_5
Cash and Cash Equivalents, and Investments - Strategic Investment (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2017 | |
Schedule of Investments [Line Items] | |||||||||
Gain on sale of strategic equity investments | $ 7,158 | $ 0 | $ 12,496 | $ 0 | |||||
Proceeds from sale of strategic equity investments | 16,076 | 0 | |||||||
Impairment charge | $ 0 | $ 10,000 | |||||||
TAPD, Inc. | |||||||||
Schedule of Investments [Line Items] | |||||||||
Cost method investment | $ 2,000 | ||||||||
Consideration received on sale | $ 9,200 | ||||||||
Gain on sale of strategic equity investments | 7,200 | ||||||||
Proceeds from sale of strategic equity investments | $ 9,000 | ||||||||
Foreign Entity | |||||||||
Schedule of Investments [Line Items] | |||||||||
Cost method investment | $ 3,000 | ||||||||
Consideration received on sale | $ 8,300 | ||||||||
Gain on sale of strategic equity investments | 5,300 | ||||||||
Proceeds from sale of strategic equity investments | $ 7,100 | ||||||||
WayUp, Inc. | |||||||||
Schedule of Investments [Line Items] | |||||||||
Impairment charge | $ 10,000 |
Fair Value Measurement - Financ
Fair Value Measurement - Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | $ 1,038,345 | $ 665,567 |
Long-term investments | 813,500 | 523,628 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 2,536,344 | 1,653,994 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 684,499 | 464,799 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 1,851,845 | 1,189,195 |
Commercial paper | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 364,143 | 204,170 |
Commercial paper | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Commercial paper | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 364,143 | 204,170 |
Corporate debt securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 658,683 | 461,397 |
Long-term investments | 813,500 | 484,597 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | 0 |
Long-term investments | 0 | 0 |
Corporate debt securities | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 658,683 | 461,397 |
Long-term investments | 813,500 | 484,597 |
Agency bonds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 15,519 | |
Long-term investments | 39,031 | |
Agency bonds | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 0 | |
Long-term investments | 0 | |
Agency bonds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments | 15,519 | |
Long-term investments | 39,031 | |
Money market funds | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 684,499 | 464,799 |
Money market funds | Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 684,499 | 464,799 |
Money market funds | Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 0 | $ 0 |
Fair Value Measurement - Debt (
Fair Value Measurement - Debt (Details) - Senior Notes - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Carrying Amount | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 1,676,749 | $ 1,506,922 |
Estimated Fair Value | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,995,930 | 2,963,119 |
2026 notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unamortized issuance costs | (12,973) | (11,338) |
Unamortized debt discount | 0 | (226,732) |
2026 notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 987,027 | 761,930 |
2026 notes | Estimated Fair Value | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 984,880 | 1,129,370 |
2025 notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unamortized issuance costs | (10,267) | (10,248) |
Unamortized debt discount | 0 | (149,138) |
2025 notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 689,722 | 640,614 |
2025 notes | Estimated Fair Value | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 1,011,050 | 1,456,800 |
2023 notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Unamortized issuance costs | (1,245) | |
Unamortized debt discount | (9,953) | |
2023 notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | 0 | 104,378 |
2023 notes | Estimated Fair Value | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible senior notes | $ 0 | $ 376,949 |
Acquisition (Details)
Acquisition (Details) - USD ($) $ in Thousands | Feb. 22, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 290,499 | $ 285,214 | |
Technology Company | |||
Business Acquisition [Line Items] | |||
Ownership percent of stock acquired | 100.00% | ||
Initial cash consideration | $ 8,000 | ||
Acquired assets | 400 | ||
Intangible assets | 3,300 | ||
Goodwill | 5,800 | ||
Liabilities assumed | $ 1,500 |
Convertible Senior Notes - Addi
Convertible Senior Notes - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2021USD ($)shares | Aug. 31, 2020USD ($) | Apr. 30, 2019USD ($) | Apr. 30, 2018USD ($)day | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)shares | Mar. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Repayments of convertible senior notes | $ 300,755,000 | $ 159,677,000 | ||||||||
Equity component on conversions of 2023 notes and 2025 notes | $ 237,462,000 | (236,920,000) | 237,462,000 | |||||||
Proceeds from exercise of convertible senior notes capped call | 69,005,000 | 57,414,000 | ||||||||
Loss on early extinguishment of debt | $ 0 | $ 3,315,000 | 78,152,000 | $ 3,315,000 | ||||||
Senior Notes | Sale Price Is Greater Or Equal 130% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 20 | |||||||||
Threshold consecutive trading days | day | 30 | |||||||||
Threshold percentage of stock price trigger | 130.00% | |||||||||
Senior Notes | Trading Price Per $1,000 Principal Amount Less Than 98% | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 5 | |||||||||
Threshold consecutive trading days | day | 10 | |||||||||
Senior Notes | Trading Price Per $1,000 Principal Amount Less Than 98% | Maximum | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold percentage of stock price trigger | 98.00% | |||||||||
Senior Notes | Fundamental Change Scenario | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold percentage of stock price trigger | 100.00% | |||||||||
Senior Notes | 2026 Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face value | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | $ 1,000,000,000 | ||||||
Interest rate, stated percentage | 0.00% | |||||||||
Proceeds from issuance of debt | $ 1,000,000,000 | |||||||||
Conversion ratio | 0.0092978 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 107.55 | $ 107.55 | ||||||||
Senior Notes | 2026 Notes | Capped Call | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ / shares | $ 156.44 | $ 156.44 | ||||||||
Senior Notes | 0% Convertible Senior Notes Due 2026, Additional Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face value | $ 100,000,000 | |||||||||
Senior Notes | 2025 Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face value | $ 100,000,000 | $ 699,989,000 | $ 699,989,000 | 800,000,000 | $ 700,000,000 | |||||
Interest rate, stated percentage | 0.125% | |||||||||
Proceeds from issuance of debt | $ 800,000,000 | |||||||||
Repurchased principal amount | $ 100,000,000 | 100,000,000 | ||||||||
Repayments of convertible senior notes | $ 184,900,000 | $ 184,900,000 | ||||||||
Carrying amount | 98,300,000 | |||||||||
Debt extinguished | 100,000,000 | |||||||||
Derivative liability | 176,500,000 | |||||||||
Gain (loss) in change in fair value | (8,400,000) | |||||||||
Loss on early extinguishment of debt | $ 78,200,000 | |||||||||
Conversion ratio | 0.0193956 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 51.56 | $ 51.56 | ||||||||
Senior Notes | 2025 Notes | Capped Call | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, convertible, shares terminated (in shares) | shares | 1,939,560 | |||||||||
Proceeds from exercise of convertible senior notes capped call | $ 23,900,000 | |||||||||
Derivative liability | 22,600,000 | |||||||||
Gain (loss) in change in fair value | $ 1,300,000 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 79.32 | $ 79.32 | ||||||||
Senior Notes | 2023 Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face value | $ 345,000,000 | 115,576,000 | ||||||||
Interest rate, stated percentage | 0.25% | |||||||||
Proceeds from issuance of debt | $ 345,000,000 | |||||||||
Option to purchase additional notes | $ 45,000,000 | |||||||||
Repurchased principal amount | $ 115,600,000 | $ 115,600,000 | ||||||||
Aggregate consideration | 351,100,000 | |||||||||
Repayments of convertible senior notes | $ 115,600,000 | |||||||||
Debt conversion, shares issued (in shares) | shares | 2,983,011 | |||||||||
Debt conversion, shares issued, value | $ 235,500,000 | |||||||||
Carrying amount | $ 114,200,000 | 114,200,000 | ||||||||
Equity component on conversions of 2023 notes and 2025 notes | $ 236,900,000 | |||||||||
Conversion ratio | 0.0371051 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 26.95 | $ 26.95 | ||||||||
Senior Notes | 2023 Notes | Requests For Conversions | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repurchased principal amount | $ 24,700,000 | $ 24,700,000 | ||||||||
Senior Notes | 2023 Notes | Election Of Option To Redeem Outstanding Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repurchased principal amount | $ 90,900,000 | $ 90,900,000 | ||||||||
Senior Notes | 2023 Notes | Capped Call | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, convertible, shares terminated (in shares) | shares | 4,288,459 | |||||||||
Proceeds from exercise of convertible senior notes capped call | $ 45,200,000 | |||||||||
Senior Notes | 2023 Notes | Exchange Of Aggregate Principal Amount | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repurchased principal amount | 172,000,000 | |||||||||
Repayments of convertible senior notes | $ 174,600,000 | |||||||||
Debt conversion, shares issued (in shares) | shares | 4,182,320 | |||||||||
Debt conversion, shares issued, value | $ 327,100,000 | |||||||||
Aggregate consideration for principal amount exchanged | $ 501,700,000 |
Convertible Senior Notes - Long
Convertible Senior Notes - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |||
Aug. 31, 2020 | Apr. 30, 2019 | Apr. 30, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | |||||
Net proceeds | $ 0 | $ 984,096 | |||
2026 Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 1,000,000 | ||||
Less initial purchasers’ discount | (15,000) | ||||
Less other issuance costs | (904) | ||||
Net proceeds | $ 984,096 | ||||
2025 Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 800,000 | ||||
Less initial purchasers’ discount | (18,998) | ||||
Less other issuance costs | (822) | ||||
Net proceeds | $ 780,180 | ||||
2023 Notes | Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 345,000 | ||||
Less initial purchasers’ discount | (8,625) | ||||
Less other issuance costs | (757) | ||||
Net proceeds | $ 335,618 |
Convertible Senior Notes - Net
Convertible Senior Notes - Net Carrying Amount (Details) - Senior Notes - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 | Aug. 31, 2020 | Apr. 30, 2019 | Mar. 31, 2019 | Apr. 30, 2018 |
Carrying Amount | Fair Value, Measurements, Nonrecurring | ||||||
Debt Instrument [Line Items] | ||||||
Net carrying amount | $ 1,676,749,000 | $ 1,506,922,000 | ||||
2026 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 1,000,000,000 | 1,000,000,000 | $ 1,000,000,000 | |||
Unamortized debt discount | 0 | (226,732,000) | ||||
Unamortized issuance costs | (12,973,000) | (11,338,000) | ||||
2026 Notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||||||
Debt Instrument [Line Items] | ||||||
Net carrying amount | 987,027,000 | 761,930,000 | ||||
2025 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 699,989,000 | 800,000,000 | $ 100,000,000 | $ 700,000,000 | ||
Unamortized debt discount | 0 | (149,138,000) | ||||
Unamortized issuance costs | (10,267,000) | (10,248,000) | ||||
2025 Notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||||||
Debt Instrument [Line Items] | ||||||
Net carrying amount | 689,722,000 | 640,614,000 | ||||
2023 Notes | ||||||
Debt Instrument [Line Items] | ||||||
Principal | 115,576,000 | $ 345,000,000 | ||||
Unamortized debt discount | (9,953,000) | |||||
Unamortized issuance costs | (1,245,000) | |||||
2023 Notes | Carrying Amount | Fair Value, Measurements, Nonrecurring | ||||||
Debt Instrument [Line Items] | ||||||
Net carrying amount | $ 0 | $ 104,378,000 |
Convertible Senior Notes - Inte
Convertible Senior Notes - Interest Expense Recognized (Details) - Senior Notes - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
2026 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 0 | $ 0 | $ 0 | $ 0 |
Amortization of debt discount | 0 | 4,491 | 0 | 4,491 |
Amortization of issuance costs | 663 | 225 | 1,970 | 225 |
Total interest expense | 663 | 4,716 | 1,970 | 4,716 |
2025 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 221 | 252 | 676 | 750 |
Amortization of debt discount | 0 | 8,938 | 0 | 26,621 |
Amortization of issuance costs | 749 | 614 | 2,297 | 1,829 |
Total interest expense | $ 970 | 9,804 | 2,973 | 29,200 |
2023 Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 169 | 78 | 599 | |
Amortization of debt discount | 2,458 | 0 | 8,709 | |
Amortization of issuance costs | 292 | 242 | 1,035 | |
Total interest expense | $ 2,919 | $ 320 | $ 10,343 |
Convertible Senior Notes - Capp
Convertible Senior Notes - Capped Call (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2020 | Apr. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 0 | $ 984,096 | ||
2026 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 984,096 | |||
Conversion price (in dollars per share) | $ 107.55 | |||
2025 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 780,180 | |||
Conversion price (in dollars per share) | $ 51.56 | |||
Capped Call | 2026 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 103,400 | |||
Debt instrument, convertible (in shares) | 9,297,800 | |||
Conversion price (in dollars per share) | $ 156.44 | |||
Capped Call | 2025 Notes | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from issuance of convertible senior notes, net of issuance costs | $ 97,200 | |||
Debt instrument, convertible (in shares) | 13,576,706 | |||
Conversion price (in dollars per share) | $ 79.32 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Aug. 12, 2020claim | Jul. 01, 2020claim | May 12, 2020USD ($)claim | Jul. 21, 2020USD ($) |
VitalSource Technologies LLC (VST) vs. Chegg | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Estimate of possible loss | $ | $ 75 | |||
2018 Data Incident, Arbitration Demands | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of arbitration demands filed | claim | 577 | |||
2018 Data Incident, Arbitration Demands | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, number of arbitration demands filed | claim | 1,007 | 15,107 | ||
Loss contingency, damages sought, value | $ | $ 25 |
Stockholders' Equity - Equity O
Stockholders' Equity - Equity Offering (Details) - Public Offering $ / shares in Units, $ in Millions | 1 Months Ended |
Feb. 28, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares issued and sold (in shares) | shares | 10,974,600 |
Offering price per share (in dollars per share | $ / shares | $ 102 |
Proceeds from offering | $ 1,091.5 |
Underwriting discounts and commissions | 26.9 |
Offering expenses | $ 1.1 |
Stockholders' Equity - Securiti
Stockholders' Equity - Securities Repurchase Program (Details) - USD ($) $ in Thousands | Nov. 01, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repayments of convertible senior notes | $ 300,755 | $ 159,677 | ||
Remaining under repurchase program | 665,500 | |||
2025 Notes | Senior Notes | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repurchased principal amount | 100,000 | |||
Repayments of convertible senior notes | $ 184,900 | $ 184,900 | ||
Subsequent Event | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock repurchase program, increase of authorized amount | $ 500,000 | |||
Stock repurchase program, authorized amount | $ 1,000,000 |
Stockholders' Equity - Share-ba
Stockholders' Equity - Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 24,512 | $ 21,529 | $ 76,157 | $ 59,409 |
Share-based compensation expense capitalized | 600 | 1,800 | ||
Cost of revenues | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 393 | 262 | 1,174 | 644 |
Research and development | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 8,917 | 8,433 | 25,976 | 23,044 |
Sales and marketing | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | 3,051 | 2,431 | 9,625 | 7,053 |
General and administrative | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Share-based compensation expense | $ 12,151 | $ 10,403 | $ 39,382 | $ 28,668 |
Stockholders' Equity - 2021 PSU
Stockholders' Equity - 2021 PSU Grants with Market-Based Conditions (Details) - PSUs with Market Based Conditions | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2021$ / sharesshares | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Target level of award | 100.00% | ||
Consecutive trading days achieving maximum average market value | 60 days | ||
Performance period | 3 years | ||
Grants in period (in shares) | shares | 732,260 | ||
Grant date fair value (in dollars per share) | $ / shares | $ 68.55 | ||
Conversion ratio | 1 | ||
Vesting period | 4 years | 4 years | |
Expected term (years) | 3 years | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued as percent of target level of achieving maximum average market value | 50.00% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued as percent of target level of achieving maximum average market value | 150.00% | ||
Forecast | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50.00% | ||
Threshold Level | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market value per share price minimum threshold (in dollars per share) | $ / shares | $ 123.81 | ||
Stock issued based on achieving target levels (in shares) | shares | 244,086 | ||
Target Level | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market value per share price minimum threshold (in dollars per share) | $ / shares | $ 148.58 | ||
Stock issued based on achieving target levels (in shares) | shares | 488,173 | ||
Maximum Level | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market value per share price minimum threshold (in dollars per share) | $ / shares | $ 173.34 | ||
Stock issued based on achieving target levels (in shares) | shares | 732,260 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Assumptions (Details) - PSUs with Market Based Conditions | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected term (years) | 3 years |
Expected volatility | 49.04% |
Expected dividends | 0.00% |
Risk-free interest rate | 0.27% |
Stockholders' Equity - 2021 P_2
Stockholders' Equity - 2021 PSU Grants with Financial and Strategic Performance Targets (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
PSUs with Financial and Strategic Performance Targets | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Grants in period (in shares) | shares | 278,644 |
Grant date fair value (in dollars per share) | $ / shares | $ 99.05 |
Conversion ratio | 1 |
Restricted Stock Units (RSUs) | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted Stock Units (RSUs) | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 4 years |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) - PSUs and RSUs - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Shares Outstanding | ||
Beginning balance (in shares) | 4,816,000 | |
Granted (in shares) | 2,216,327 | |
Released (in shares) | (2,391,951) | |
Forfeited (in shares) | (430,325) | |
Ending balance (in shares) | 4,210,051 | |
Weighted Average Grant Date Fair Value | ||
Weighted Average Grant Date Fair Value, outstanding balance (in dollars per share) | $ 65.06 | $ 37.82 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | 86.60 | |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | 33.81 | |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ 44.84 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - PSUs and RSUs $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation costs related to restricted stock units | $ 170.2 |
Weighted average vesting period for recognition of compensation expense | 2 years 1 month 6 days |
Related-Party Transactions (Det
Related-Party Transactions (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)board_member | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Adobe Systems | Chief Executive Officer | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related party | $ 0.9 | $ 0.3 | $ 1.9 | $ 1.1 | |
Revenue from related parties | 0 | 0 | 0 | 0.1 | |
Due to related parties | 0 | 0 | $ 0.1 | ||
Receivables from related party | 0 | $ 0 | 0 | ||
PayPal Holdings, Inc. | Immediate Family Member of Management or Principal Owner | Payment Processing Fees | |||||
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 | 0.7 | 0.5 | $ 2.1 | 1.5 | |
Zuora, Inc. | Board Of Directors Member | |||||
Related Party Transaction [Line Items] | |||||
Purchases from related party | 1.4 | $ 0.8 | 1.8 | $ 1.2 | |
Due to related parties | $ 0.1 | $ 0.1 | $ 0 | ||
Number of board members appointed to Board of Directors of related party | board_member | 1 |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2021USD ($)full_time_employee | Sep. 30, 2021USD ($)part_time_employee | Sep. 30, 2021USD ($) | |
Restructuring and Related Activities [Abstract] | |||
Number of positions impacted | 60 | 120 | |
Restructuring charges | $ 1.9 | ||
Restructuring liability | $ 1.9 | $ 1.9 | 1.9 |
Expected cost restructuring plan | $ 2.2 | $ 2.2 | $ 2.2 |
Uncategorized Items - chgg-2021
Label | Element | Value |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-13 [Member] |