Chegg 2013 Annual Report Download - page 59

Our ability to fully integrate these new products and services with our textbook offerings or achieve
satisfactory financial results from them is unproven. Because we have a limited operating history and the market
for our products and services, including newly acquired or developed products and services, is rapidly evolving,
it is difficult for us to predict our operating results, particularly with respect to our non-print products and digital
services, and the ultimate size of the market for our products and services. If the market for a connected learning
platform does not develop as we expect, or if we fail to address the needs of this market, our business will be
harmed.
You should consider our business and prospects in light of the risks, expenses and difficulties typically
encountered by companies in their early stage of development, including, but not limited to our ability to
successfully:
• execute on our relatively new, evolving and unproven business model;
• develop new products and services, both independently and with developers or other third parties;
• attract and retain students and increase their engagement with our connected learning platform;
• attract and retain colleges, universities and other academic institutions, which we refer to collectively
as “colleges,” and brands to our marketing services;
• manage the growth of our business, including increasing or unforeseen expenses;
• develop and scale a high performance technology infrastructure to efficiently handle increased usage
by students, especially during peak periods prior to each academic term;
• compete with companies that offer similar services or products;
• expand into adjacent markets;
• develop a profitable business model and pricing strategy;
• navigate the ongoing evolution and uncertain application of regulatory requirements, such as privacy
laws, to our innovative business;
• maintain relationships with strategic partners, including publishers, wholesalers, distributors, colleges
and brands; and
• expand into foreign markets.
We have encountered and will continue to encounter these risks and if we do not manage them successfully,
our business, financial condition, results of operations and prospects may be materially and adversely affected.
We have a history of losses and we may not achieve or sustain profitability in the future.
We have experienced significant net losses since our incorporation in July 2005, and we may continue to
experience net losses in the future. Our net losses for the years ended December 31, 2013, 2012 and 2011 were
$55.9 million, $49.0 million and $37.6 million, respectively. As of December 31, 2013, we had an accumulated
deficit of $205.1 million. We expect to make significant investments in the development and expansion of our
business and anticipate that our cost of revenues and operating expenses will increase. We may not succeed in
increasing our revenue sufficiently to offset these higher expenses, and our efforts to grow the business may
prove more expensive than we currently anticipate. We may incur significant losses in the future for a number of
reasons, including slowing demand for print textbook rentals, slowing demand for our other products and
services, increasing competition, particularly for the price of textbooks, decreased spending on education and
other risks described in this Annual Report on Form 10-K. We may encounter unforeseen expenses, difficulties,
complications and delays and other unknown factors as we pursue our business plan and our business model
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