Chegg 2013 Annual Report Download - page 4

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In 2013, we saw evidence that our student-first strategy is working:
• Total revenue grew 20% with digital revenue up 86%
• Revenue from our digital businesses expanded to 21% of total, up 8 percentage points from 2012.
• Textbook revenue grew 10% on unit growth of 17%
• New customers increased 22% and active members 31%
• Chegg Study customers grew 45% to more than 460,000.
• And engagement was strong in key areas, including course review where the number of student course
reviews on Chegg reached 1.1 million, an increase of 644,000 over 2012.
In our textbook rental business, unit growth of 17% indicates that we continued to grab market share in an
increasingly competitive market. Though we saw the average rental price of textbooks decline—impacting gross
margins in the fourth quarter—it helped drive stronger customer growth and the improved mix of our higher
margin digital revenue.
In 2014, we plan to expand the Chegg platform further, but will be cognizant of both cash and expense.
Following our IPO, we finished fiscal 2013 with $138 million in cash and marketable securities, zero debt, and
expect to manage the overall business to be approximately free-cash-flow breakeven in 2014. We also plan to
continue to leverage the inherent viral nature of our platform where strong word-of-mouth leads to lower
customer acquisition costs and lower operating expense as a percentage of revenue. In 2013, roughly half of our
customers came from word of mouth, helping us drive down customer acquisition costs by 40%.
I’d like to thank our shareholders for joining Chegg. We are very excited about the student-first platform we are
building, and look forward to demonstrating our continued progress throughout the year.
Sincerely,
Dan Rosensweig
President & CEO