CHEGG, INC, 10-K filed on 3/4/2016
Annual Report
Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2015
Feb. 29, 2016
Jun. 30, 2015
Document And Entity Information [Abstract]
 
 
 
Entity Registrant Name
CHEGG, INC 
 
 
Entity Central Index Key
0001364954 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2015 
 
 
Document Fiscal Year Focus
2015 
 
 
Document Fiscal Period Focus
FY 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
89,956,930 
 
Entity Public Float
 
 
$ 610,176,271 
Entity Well-known Seasoned Issuer
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Voluntary Filers
No 
 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Current assets
 
 
Cash and cash equivalents
$ 67,029 
$ 56,117 
Short-term investments
17,800 
33,346 
Accounts receivable, net of allowance for doubtful accounts of $378 and $559 at December 31, 2015 and December 31, 2014, respectively
13,157 
14,396 
Prepaid expenses
3,117 
3,091 
Other current assets
31,732 
3,864 
Total current assets
132,835 
110,814 
Long-term investments
4,229 
1,451 
Textbook library, net
29,728 
80,762 
Property and equipment, net
19,971 
18,369 
Goodwill
91,301 
91,301 
Intangible assets, net
8,865 
13,626 
Other assets
4,427 
1,804 
Total assets
291,356 
318,127 
Current liabilities
 
 
Accounts payable
5,860 
10,945 
Deferred revenue
14,971 
24,591 
Accrued liabilities
35,280 
31,183 
Total current liabilities
56,111 
66,719 
Long-term liabilities
 
 
Total other long-term liabilities
4,170 
4,365 
Total liabilities
60,281 
71,084 
Commitments and contingencies (Note 11)
   
   
Stockholders' equity:
 
 
Preferred stock, $0.001 par value – 10,000,000 shares authorized, no shares issued and outstanding
0 
0 
Common stock, $0.001 par value 400,000,000 shares authorized; 88,099,983 and 84,008,043 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively
88 
84 
Additional paid-in capital
560,242 
516,845 
Accumulated other comprehensive loss
(172)
(13)
Accumulated deficit
(329,083)
(269,873)
Total stockholders' equity
231,075 
247,043 
Total liabilities and stockholders' equity
$ 291,356 
$ 318,127 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts receivable, current
$ 378 
$ 559 
Preferred stock, par value
$ 0.001 
$ 0.001 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.001 
$ 0.001 
Common stock, shares authorized
400,000,000 
400,000,000 
Common stock, shares issued
88,099,983 
84,008,043 
Common stock, shares outstanding
88,099,983 
84,008,043 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Net revenues:
 
 
 
Rental
$ 120,365,000 
$ 181,570,000 
$ 189,004,000 
Services
131,996,000 
87,460,000 
51,958,000 
Sales
49,012,000 
35,804,000 
14,613,000 
Net revenues:
301,373,000 
304,834,000 
255,575,000 
Cost of revenues:
 
 
 
Rental
98,162,000 
145,760,000 
140,033,000 
Services
43,794,000 
31,158,000 
18,522,000 
Sales
47,893,000 
34,067,000 
16,505,000 
Cost of revenues:
189,849,000 
210,985,000 
175,060,000 
Gross profit
111,524,000 
93,849,000 
80,515,000 
Operating expenses:
 
 
 
Technology and development
59,391,000 
49,386,000 
41,944,000 
Sales and marketing
64,082,000 
72,315,000 
50,302,000 
General and administrative
45,209,000 
41,837,000 
40,486,000 
Restructuring charges
4,868,000 
0 
0 
Gain on liquidation of textbooks
(4,326,000)
(4,555,000)
(1,186,000)
Total operating expenses
169,224,000 
158,983,000 
131,546,000 
Loss from operations
(57,700,000)
(65,134,000)
(51,031,000)
Interest expense and other income (expense), net:
 
 
 
Interest expense, net
(247,000)
(317,000)
(3,818,000)
Other income (expense), net
216,000 
879,000 
(359,000)
Total interest expense and other income (expense), net
(31,000)
562,000 
(4,177,000)
Loss before provision for income taxes
(57,731,000)
(64,572,000)
(55,208,000)
Provision for income taxes
1,479,000 
186,000 
642,000 
Net loss
(59,210,000)
(64,758,000)
(55,850,000)
Deemed dividend to preferred stockholders
0 
0 
(102,557,000)
Net loss attributable to common stockholders
$ (59,210,000)
$ (64,758,000)
$ (158,407,000)
Net loss per share, attributable to common stockholders, basic and diluted (in dollars per share)
$ (0.68)
$ (0.78)
$ (7.58)
Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted (in shares)
86,818 
83,205 
20,902 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
 
 
 
Net loss
$ (59,210)
$ (64,758)
$ (55,850)
Other comprehensive loss:
 
 
 
Change in unrealized (loss) gain on available for sale investments
(8)
2 
(18)
Change in foreign currency translation adjustments, net of tax
(151)
(9)
(38)
Other comprehensive loss
(159)
(7)
(56)
Total comprehensive loss
$ (59,369)
$ (64,765)
$ (55,906)
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Convertible Preferred Stock
Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance at Dec. 31, 2012
$ (86,127)
$ 207,201 
$ 12 
$ 63,076 
$ 50 
$ (149,265)
Preferred stock, beginning balance, shares at Dec. 31, 2012
 
62,815,000 
 
 
 
 
Common stock, beginning balance, shares at Dec. 31, 2012
 
 
12,247,000 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Issuance of common stock upon exercise of stock options, shares
 
 
931,000 
 
 
 
Issuance of common stock upon exercise of stock options
3,366 
 
1 
3,365 
 
 
Issuance of preferred stock and common stock upon exercise of stock warrants, shares
 
5,000 
10,000 
 
 
 
Issuance of preferred stock and common stock upon exercise of stock warrants
118 
37 
 
118 
 
 
Conversion of preferred stock to common stock, shares
 
(62,820,000)
53,912,000 
 
 
 
Conversion of preferred stock to common stock
207,238 
(207,238)
54 
207,184 
 
 
Issuance of common stock for settlement of restricted stock units (RSUs), shares
 
 
307,000 
 
 
 
Shares withheld related to net share settlement of RSUs, shares
 
 
(115,000)
 
 
 
Shares withheld related to net share settlement of RSUs
(1,034)
 
 
(1,034)
 
 
Issuance of common stock, net, shares
 
 
14,400,000 
 
 
 
Issuance of common stock, net
162,883 
 
15 
162,868 
 
 
Deemed dividend to preferred stockholders
102,557 
 
 
102,557 
 
 
Accretion of deemed dividend to preferred stockholders
(102,557)
 
 
(102,557)
 
 
Vesting of common stock warrants
130 
 
 
130 
 
 
Issuance of common stock upon exercise of common stock warrants, shares
 
 
16,000 
 
 
 
Conversion of preferred stock warrants to common stock warrants
7,097 
 
 
7,097 
 
 
Stock-based compensation expense
36,475 
 
 
36,475 
 
 
Other comprehensive loss
(56)
 
 
 
(56)
 
Net loss
(55,850)
 
 
 
 
(55,850)
Beginning balance at Dec. 31, 2013
274,240 
 
82 
479,279 
(6)
(205,115)
Common stock, ending balance, shares at Dec. 31, 2013
 
 
81,708,000 
 
 
 
Preferred stock, ending balance, shares at Dec. 31, 2013
 
0 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Issuance of common stock upon exercise of stock options and ESPP, shares
 
 
1,004,000 
 
 
 
Issuance of common stock upon exercise of stock options and ESPP
2,713 
 
1 
2,712 
 
 
Issuance of common stock for settlement of restricted stock units (RSUs), shares
 
 
873,000 
 
 
 
Net issuance of common stock for settlement of restricted stock units (RSUs)
(3,979)
 
1 
(3,980)
 
 
Issuance of common stock upon exercise of common stock warrants, shares
 
 
104,000 
 
 
 
Warrant exercises
0 
 
 
0 
 
 
Conversion of preferred stock warrants to common stock warrants
0 
 
 
 
 
 
Issuance of common stock in connection with acquisition, shares
 
 
408,000 
 
 
 
Issuance of common stock in connection with acquisition
2,585 
 
 
2,585 
 
 
Repurchase of common stock, shares
 
 
(89,000)
 
 
 
Repurchase of common stock
(604)
 
 
(604)
 
 
Stock-based compensation expense
36,853 
 
 
36,853 
 
 
Other comprehensive loss
(7)
 
 
 
(7)
 
Net loss
(64,758)
 
 
 
 
(64,758)
Beginning balance at Dec. 31, 2014
247,043 
0 
84 
516,845 
(13)
(269,873)
Common stock, ending balance, shares at Dec. 31, 2014
84,008,043 
 
84,008,000 
 
 
 
Preferred stock, ending balance, shares at Dec. 31, 2014
0 
0 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Issuance of common stock upon exercise of stock options, shares
1,745,616 
 
 
 
 
 
Issuance of common stock upon exercise of stock options and ESPP, shares
 
 
2,165,000 
 
 
 
Issuance of common stock upon exercise of stock options and ESPP
13,696 
 
2 
13,694 
 
 
Issuance of common stock for settlement of restricted stock units (RSUs), shares
 
 
1,624,000 
 
 
 
Net issuance of common stock for settlement of restricted stock units (RSUs)
(8,710)
 
2 
(8,712)
 
 
Issuance of common stock upon exercise of common stock warrants, shares
 
 
368,000 
 
 
 
Warrant exercises
0 
 
 
0 
 
 
Conversion of preferred stock warrants to common stock warrants
0 
 
 
 
 
 
Issuance of common stock in connection with acquisition, shares
 
 
125,000 
 
 
 
Issuance of common stock in connection with acquisition
825 
 
 
825 
 
 
Repurchase of common stock, shares
 
 
(190,000)
 
 
 
Repurchase of common stock
(1,185)
 
 
(1,185)
 
 
Stock-based compensation expense
38,775 
 
 
38,775 
 
 
Other comprehensive loss
(159)
 
 
 
(159)
 
Net loss
(59,210)
 
 
 
 
(59,210)
Beginning balance at Dec. 31, 2015
$ 231,075 
$ 0 
$ 88 
$ 560,242 
$ (172)
$ (329,083)
Common stock, ending balance, shares at Dec. 31, 2015
88,099,983 
 
88,100,000 
 
 
 
Preferred stock, ending balance, shares at Dec. 31, 2015
0 
0 
 
 
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Cash flows from operating activities
 
 
 
Net loss
$ (59,210)
$ (64,758)
$ (55,850)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
 
 
 
Textbook library depreciation expense
43,553 
70,147 
64,759 
Amortization of warrants and deferred loan costs
151 
187 
1,545 
Other depreciation and amortization expense
11,511 
11,159 
10,078 
Share-based compensation expense
38,775 
36,888 
36,958 
(Release) provision for bad debts
(77)
234 
206 
Gain on liquidation of textbooks
(4,326)
(4,555)
(1,186)
Loss from write-offs of textbooks
5,297 
10,534 
5,874 
Deferred income taxes
0 
(1,291)
0 
Realized gain on sale of securities
0 
(21)
0 
Loss from disposal of property and equipment
967 
0 
0 
Revaluation of preferred stock warrants
0 
0 
622 
Impairment of intangible assets
0 
1,552 
0 
Change in assets and liabilities net of effect of acquisition of businesses:
 
 
 
Accounts receivable
712 
(1,709)
(1,474)
Prepaid expenses and other current assets
(27,878)
(2,981)
(1,661)
Other assets
(592)
(155)
209 
Accounts payable
(4,236)
5,037 
(30)
Deferred revenue
(9,620)
1,657 
2,772 
Accrued liabilities
5,237 
7,448 
771 
Other liabilities
(346)
(898)
113 
Net cash (used in) provided by operating activities
(82)
68,475 
63,706 
Cash flows from investing activities
 
 
 
Purchases of textbooks
(32,297)
(112,814)
(122,247)
Proceeds from liquidations of textbooks
38,260 
58,119 
37,946 
Purchases of marketable securities
(35,610)
(70,706)
(61,420)
Proceeds from sale of marketable securities
350 
46,358 
0 
Maturities of marketable securities
47,840 
50,700 
0 
Purchases of property and equipment
(8,253)
(5,083)
(7,369)
Acquisition of businesses, net of cash acquired
0 
(53,872)
0 
Release of cash from escrow
0 
(52)
0 
Purchase of strategic equity investment
(2,019)
0 
0 
Net cash provided by (used in) investing activities
8,271 
(87,350)
(153,090)
Cash flows from financing activities
 
 
 
Proceeds from debt obligations
0 
0 
31,000 
Payments of debt obligations
0 
0 
(51,000)
Common stock issued under stock plans, net
13,696 
2,712 
3,369 
Payment of taxes related to the net share settlement of RSUs
(8,710)
(3,980)
(1,034)
Proceeds from initial public offering, net of issuance costs
0 
0 
162,883 
Repurchase of common stock
(2,263)
(604)
0 
Net cash provided by (used in) financing activities
2,723 
(1,872)
145,218 
Net increase (decrease) in cash and cash equivalents
10,912 
(20,747)
55,834 
Cash and cash equivalents, beginning of period
56,117 
76,864 
21,030 
Cash and cash equivalents, end of period
67,029 
56,117 
76,864 
Supplemental cash flow data:
 
 
 
Interest
95 
114 
2,541 
Income taxes
827 
625 
429 
Non-cash investing and financing activities:
 
 
 
Accrued purchases of long-lived assets
1,771 
5,132 
3,215 
Conversion of preferred stock warrants to common stock warrants
0 
0 
7,097 
Conversion of preferred stock warrants into common stock
0 
0 
207,238 
Issuance of common stock upon exercise of stock warrants
0 
0 
118 
Deemed dividend to preferred stockholders
0 
0 
102,557 
Issuance of common stock warrants in connection with consulting services
0 
0 
130 
Issuance of common stock related to prior acquisition
825 
2,585 
0 
Common stock offering costs not yet paid
$ 0 
$ 0 
$ 769 
Background and Basis of Presentation
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 on July 29, 2005. Chegg is the leading student-first connected learning platform, empowering students to take control of their education to save time, save money, and get smarter. We help students study more effectively for college admissions exams, accomplish their goals, get better grades and test scores while in school and find internships that allow them to gain valuable skills to help them enter the workforce after college. Our connected learning platform offers products and services that students need throughout the college lifecycle, from choosing a college through graduation and beyond. We strive to improve the overall return on investment in education.

Basis of Presentation

Our fiscal year ends on December 31 and in this report we refer to the year ended December 31, 2015, December 31, 2014, and December 31, 2013 as 2015, 2014, and 2013, respectively.
Significant Accounting Policies
Significant Accounting Policies
Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, determination of the useful lives and salvage value assigned to our textbook library, restructuring charges, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, and the valuation of acquired intangible assets. We base our estimates on historical experience, knowledge of current business conditions and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations.

Principles of Consolidation

The consolidated financial statements include the accounts of Chegg and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. GAAP.

Cash and Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity date of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents, which consist of cash, money market accounts, commercial paper, corporate securities and agency bonds at financial institutions, are stated at cost, which approximates fair value.

We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.

At December 31, 2015 and 2014, we had approximately $0.8 million and $1.8 million, respectively, of restricted cash that consisted of a deposit pledged as security for our corporate credit cards and a letter of credit pledged as a security deposit for our headquarters and a sales office. Additionally, as of December 31, 2014, restricted cash consisted of a letter of credit pledged as a security deposit for our warehouse facilities leases. The deposit pledged as security for our corporate credit cards of approximately $0.3 million as of December 31, 2015 and 2014, respectively, is classified in other current assets in our consolidated balance sheets due to the short-term nature of the restriction. The amounts related to the security deposits of approximately $0.5 million and $1.5 million as of December 31, 2015 and 2014, respectively, are classified in other assets in our consolidated balance sheets as these amounts are restricted for periods that exceed one year from the balance sheet dates.

Investments

We hold investments in marketable securities, consisting of corporate securities, commercial paper and agency bonds. We classify our marketable securities as available-for-sale investments that are either short or long-term based on the nature of each security based on the contractual maturity of the investment when purchased. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Unrealized losses are charged against other income (expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charges in the periods presented. We determine realized gains or losses on the sale of marketable securities on a specific identification method, and record such gains or losses as other income (expense), net. For the years ended December 31, 2015, 2014 and 2013, the Company's gross realized gains and losses on short-term investments were not significant.

Accounts Receivable    

Accounts receivable are recorded at the invoiced amount and are non-interest bearing. We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers, and marketing services customers, and maintain an allowance for doubtful accounts to account for potentially uncollectible receivables.

Allowance for Doubtful Accounts    

We assess the creditworthiness of our customers based on multiple sources of information, and analyze such factors as our historical bad debt experience, industry and geographic concentrations of credit risk, economic trends, and customer payment history. This assessment requires significant judgment. Because of this assessment, we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of certain customers to make all of their required payments. In making this estimate, we analyze historical payment performance and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off as a decrease to the allowance for doubtful accounts when all collection efforts have been exhausted and an account is deemed uncollectible.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and marketable securities invested in highly liquid instruments in accordance with our investment policy. We place the majority of our cash and cash equivalents and restricted cash with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments. Certain of our cash balances held with financial institutions are in excess of Federal Deposit Insurance Corporation limits. Our investment portfolio consists of investment-grade securities diversified among security types, industries and issuers. Our investments are held and managed by recognized financial institutions that follow our investment policy with the main objective of preserving capital and maintaining liquidity.

Concentrations of credit risk with respect to trade receivables exist to the full extent of amounts presented in the financial statements. We had two textbook wholesalers that represented 16% and 11% of our net accounts receivable balance as of December 31, 2015 and two textbook wholesalers that represented 16% and 12% of our net accounts receivable balance as of December 31, 2014, respectively. No customers represented over 10% of net revenues in 2015, 2014 or 2013.

Textbook Library

We consider our print textbook library to be a long-term productive asset and, as such, classify it as a non-current asset in our consolidated balance sheets. Cash outflows for the acquisition of our print textbook library, net of changes in related accounts payable and accrued liabilities historically was classified as cash flows from investing activities in our consolidated statements of cash flows. As a result of our strategic partnership with Ingram, since May 1, 2015, Ingram has made all new investments in the print textbook library and we will also provide Ingram with extended payment terms through 2016 for the purchase of textbooks, before moving to normal payment terms in 2017. As such, we have recorded any cash outflows as a result of this partnership as an operating activity in our consolidated statements of cash flows as we are no longer purchasing print textbooks but rather providing extended payments terms to Ingram to facilitate their purchase of new textbooks. Cash inflows received from the liquidation of print textbooks are classified as cash flows from investing activities in our consolidated statements of cash flows, consistent with other long-term asset classification of our existing print textbook library. The gain or loss from the liquidation of print textbooks previously rented is recorded as a component of operating expenses in our consolidated statement of operations and is classified as cash flow from operating activities.

All print textbooks in our textbook library are stated at cost, which includes the purchase price less accumulated depreciation. We record allowances for lost or damaged print textbooks in cost of revenues in our consolidated statements of operations based on our assessment of our print textbook library on a book-by-book basis. Write-offs result from lost or damaged books, books no longer considered to be rentable, or when books are not returned to us after the rental period by our customers.

We depreciate our print textbooks, less an estimated salvage value, over an estimated useful life of three years using an accelerated method of depreciation, as we estimate this method most accurately reflects the actual pattern of decline in the economic value of the assets. The salvage value considers the historical trend and projected liquidation proceeds for print textbooks. The useful life is determined based on the time period in which the print textbooks are held and rented before liquidation. In accordance with our policy, we review the estimated useful lives of our print textbook library on an ongoing basis.

Depreciation expense and write-offs of print textbooks are recorded in cost of revenues in our consolidated statements of operations. During 2015, 2014 and 2013, print textbook depreciation expense was approximately $43.6 million, $70.1 million and $64.8 million, respectively, and write-offs were approximately $5.3 million, $10.5 million and $5.9 million, respectively.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of the assets:

Classification
 
Useful Life
Computers and equipment
 
3 years
Software
 
3 years
Furniture and fixtures
 
5 years
Leasehold improvements
 
Shorter of the remaining lease term or the estimated useful life of 5 years
Content
 
5 years


We capitalize costs related to the purchase or development of Chegg Study and Test Prep content and amortize these costs over a period of five years.

Depreciation and amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories in our consolidated statement of operations. Depreciation and amortization expense for 2015, 2014 and 2013 were approximately $6.8 million, $6.2 million and $5.7 million, respectively.

The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in loss from operations.

Software Development Costs

We capitalize costs related to software developed or obtained for internal use when certain criteria have been met. Costs incurred during the application development stage for internal-use software are capitalized in property and equipment and amortized over the estimated useful life of the software, generally up to three years.

We had no capitalized software development costs as of December 31, 2015. As of December 31, 2014, software development costs, net, were approximately $0.5 million which were recorded as software in property and equipment. In 2015, 2014 and 2013, the amortization of software development costs capitalized totaled approximately $0.5 million, $0.5 million and $1.0 million, respectively.

Goodwill

Goodwill represents the excess of the fair value of consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized but rather tested for impairment at least annually on October 1, or more frequently if certain events or indicators of impairment occur between annual impairment tests. We completed our annual impairment test on October 1 of 2015 and 2014, which did not result in any impairment.

For our annual goodwill impairment test, we perform a quantitative test of our single reporting unit. In the first step of this test, goodwill is tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. The fair value of the reporting unit was estimated using a market approach. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to measure the amount of impairment loss, if any. In step two, the implied fair value of goodwill is calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities. In the event we determine that the fair value of our single reporting unit is less than the reporting unit’s carrying value, we will record an impairment charge for the amount of the impairment in the period in which the determination is made.

Acquired Intangible Assets and Other Long-Lived Assets

Acquired intangible assets with finite useful lives, which include developed technology, customer lists, trade names and non-compete agreements, are amortized over their estimated useful lives. We assess the impairment of acquired intangible assets and other long-lived assets when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets that will continue to be used in operations by comparing the carrying value of the asset grouping to the estimate of the related total future undiscounted net cash flows. If an asset grouping’s carrying value is not recoverable through the related undiscounted cash flows, the asset grouping is measured for impairment. The impairment is measured by comparing the difference between the asset grouping’s carrying value and its fair value.

Indefinite-Lived Intangibles

We make judgments about the recoverability of purchased indefinite-lived intangible assets at least annually on October 1st or more frequently whenever events or changes in circumstances indicate that an impairment may exist to determine whether it is more likely than not that the carrying value of the assets may not be recoverable. Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to the future undiscounted cash flows that the asset is expected to generate. If we determine that an individual asset is impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We completed our annual impairment test on October 1, 2015 and 2014, which did not result in any impairment.

Revenue Recognition and Deferred Revenue

We derive our revenues, net of allowances, for refunds or charge backs from our payment processors who process payments from credit cards, debit cards and PayPal. Revenues are recognized when the four basic criteria for revenue recognition have been met as follows: persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, the sale price is fixed or determinable, and collection is reasonably assured.

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

We primarily generate revenues from our Required Materials including the rental of print textbooks and eTextbooks and, to a lesser extent, through the sales of print textbooks through our website purchased by us on a just-in-time basis. Rental revenues are recognized ratably over the term of the rental period, generally two to five months. Revenues from selling textbooks on a just-in-time basis are recognized upon shipment. We do not hold an inventory of textbooks for sale. Our customers pay for the rental and sale of print textbooks on our website primarily by credit card, resulting in immediate settlement of our accounts receivable. Shipping costs charged to customers in the sale or rental of textbooks are recorded in revenues and the related expenses are recorded as cost of revenues.

We also generate revenues from our Chegg Services including supplemental course materials, online tutoring and our Chegg Study service that we offer to students. These services are offered to students through monthly or annual subscriptions and we recognize revenues ratably over the subscription period. Our Chegg Services also include enrollment marketing services and brand advertising, which we offer either on a subscription or on an a la carte basis. Enrollment marketing services connect colleges and graduate schools with students seeking admission or scholarship opportunities at these institutions. Brand advertising offers brands unique ways to connect with students. Revenues are recognized ratably or as earned over the subscription service, generally one year. Revenues from enrollment marketing services or brand advertising delivered on an a la carte basis, without a subscription, is recognized when delivery of the respective lead or service has occurred. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our enrollment marketing services and brand advertising customers with normal credit terms, typically 30 days.

Some of our customer arrangements for enrollment marketing services include multiple deliverables, which include the delivery of student leads as well as other services to the end customer. We have determined these deliverables qualify as separate units of accounting, as they have value to the customer on a standalone basis and our arrangements do not contain a right of return. For these arrangements that contain multiple deliverables, we allocate the arrangement consideration based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence of fair value (VSOE), when available; (2) third-party evidence of selling price (TPE), if VSOE does not exist; and (3) estimated selling price (ESP), if neither VSOE nor TPE is available.

We determine VSOE based on our historical pricing and discounting practices for the specific solution when sold separately and when a substantial majority of the selling prices for these services fall within a narrow range. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally our go-to-market strategy differs from that of our peers, and our offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. If we have not established VSOE or TPE for our enrollment marketing services, we have used ESP in our allocation of arrangement consideration. Additionally, we limit the amount of revenues recognized for delivered elements to the amount that is not contingent on future delivery of services or other future performance obligations.

Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions that have not been recognized, and marketing services that have yet to be performed. Deferred revenue is recognized as revenues ratably over the term or when the services are provided and all other revenue recognition criteria have been met.

We evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount and related costs as revenues or the net amount earned as commissions from the sale of third party products. Our determination is based on our evaluation of certain indicators including whether we are the principal in the transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, none of which is presumptive or determinative. We generally operate as the principal and so in those instances revenues are recorded at the gross sale price. We generally record the net amounts as commissions earned when such amounts are determined using a fixed percentage of the transaction price, we are not subject to inventory risk or responsible for the fulfillment of the textbooks. We operate as an agent in our strategic partnership with Ingram and therefore our revenues include a commission on the total revenues that we earn from Ingram upon their fulfillment of a rental transaction using books for which Ingram has title and risk of loss.

We also present our revenues separately for rental, services and sales. Rental revenue includes the rental of print textbooks for which we take title and bear the risk of loss; service revenue includes Chegg Study, brand advertising, eTextbooks, tutoring, enrollment marketing, and commissions we earn from Ingram and other e-commerce partners; sale revenue includes just-in-time sale of print textbooks and the sale of other required materials.

Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Cost of revenues include print textbook depreciation expense, shipping and other fulfillment costs, the cost of textbooks sold, payment processing costs, write-offs and allowances related to the print textbook library, and all expenses associated with our distribution and customer service centers, including personnel and warehousing costs. The cost of textbooks sold, shipping and other fulfillment costs and payment processing expenses are recognized upon shipment, while print textbook depreciation is recognized under an accelerated method over the life of the textbook. We believe this method most accurately reflects the actual pattern of decline in the economic value of the assets, resulting in higher costs earlier in the textbook lifecycle. Cost of revenues also includes the depreciation of our eTextbook Reader software, publisher content fees for eTextbooks, content amortization expense related to content that we develop or license, including publisher agreements for which we pay one-time license fees for published content, enrollment marketing services leads purchased from third-party suppliers to fulfill leads that we are unable to fulfill through our internal database, personnel costs and other direct costs related to providing the content or services. In addition, cost of revenues includes allocated information technology and facilities costs.

Technology and Development Costs

Technology and development expenses consist primarily of salaries, benefits and share-based compensation expense for employees on our product and web design, engineering and technical teams who are maintaining our website, developing new products and improving existing products. Technology and development costs also include web hosting costs, third-party development costs and allocated information technology and facilities costs. We expense substantially all of our technology and development costs as they are incurred.

Advertising Costs

Advertising costs are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures. During 2015, 2014 and 2013, advertising costs were approximately $25.0 million, $22.4 million, and $16.4 million, respectively.

Share-based Compensation

Share-based compensation expense for stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs) and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of employee share-based compensation awards based on the grant-date fair value of the award. Share-based compensation expense for stock options and our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while expense for RSUs and PSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. We recognize compensation cost for all employee share-based compensation awards that are expected to vest on a straight-line basis over the requisite service period of the awards, which is generally the option vesting period. These amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Equity awards issued to non-employees are recorded at their fair value on the measurement date and are subject to adjustment each period as the underlying awards vest or consulting services are performed.

Income Taxes

We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Restructuring Charges

Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on our policies and practices and negotiated settlements. Restructuring charges for employee workforce reductions are recorded upon employee notification for employees whose required continuing service period is 60 days or less and ratably over the employee’s continuing service period for employees whose required continuing service period is greater than 60 days.

Strategic Investments

We have entered into an equity investment in a privately-held business to achieve certain strategic business objectives. Our investment in equity securities of this privately-held business is accounted for under the cost method. We periodically review these investments for other-than-temporary declines in fair value based on the specific identification method and write down investments when an other-than-temporary decline has occurred. Any fair value estimates are made based on consideration of the current cash position, recent operational performance, and forecasts of the investees.

Net Loss Per Share

Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture. Net loss attributable to common stockholders includes the issuance of 11,667,254 shares of our common stock in the form of a deemed stock dividend to the holders of our Series D and Series E convertible preferred stock of approximately $102.6 million during the year ended December 31, 2013. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potential shares of common stock, including stock options, warrants, RSUs and convertible preferred stock prior to its conversion in our IPO, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.

The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Numerator:
 
 
 
 
 
Net loss
$
(59,210
)
 
$
(64,758
)
 
$
(55,850
)
Deemed dividend to preferred stockholders
—

 
—

 
(102,557
)
 
$
(59,210
)
 
$
(64,758
)
 
$
(158,407
)
Denominator:
 
 
 
 
 
Weighted-average common shares outstanding
86,818

 
83,241

 
21,121

Less: Weighted-average unvested common shares subject to repurchase or forfeiture
—

 
(36
)
 
(219
)
Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted
86,818

 
83,205

 
20,902

 
 
 
 
 
 
Net loss per share, attributed to common stockholders, basic and diluted
$
(0.68
)
 
$
(0.78
)
 
$
(7.58
)


The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share attributable to common stockholders because including them would have been anti-dilutive (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Options to purchase common stock
11,446

 
14,253

 
17,972

RSUs and PSUs
200

 
289

 
1,480

Common stock subject to repurchase or forfeiture
—

 
—

 
100

Warrants to purchase common stock
299

 
996

 
1,118

Total common stock equivalents
11,945

 
15,538

 
20,670



Foreign Currency Translation

The functional currency of our foreign subsidiaries is the local currency. Adjustments resulting from the translation of foreign currencies into U.S. dollars for balance sheet amounts are based on the exchange rates as of the consolidated balance sheet date. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. Revenues and expenses are translated at average exchange rates during the period. Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets. Gains or losses resulting from foreign currency transactions, which are denominated in currencies other than the entity’s functional currency, are included in other income (expense), net in the consolidated statements of operations and were not material during 2015, 2014 or 2013.

Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (ASU 2015-17). This standard requires companies to classify deferred income tax assets and liabilities as non-current in a classified statement of financial position. ASU 2015-17 provides companies with two implementation methods; prospective or retrospective application to all deferred tax assets and liabilities. Both applications require the disclosure in the first interim and first annual period of change and the nature of and reason for the change in accounting principle. Prospective application requires a disclosure that prior periods were not retrospectively adjusted. Retrospective application requires quantitative information about the effects of the accounting change on prior periods. The guidance is effective for annual periods beginning after December 15, 2016 with earlier application permitted as of the beginning of an interim or annual reporting period. We have elected to early adopt this standard with prospective application beginning with our deferred tax assets and liabilities reporting on our consolidated balance sheet for the year ended December 31, 2015 to simplify reporting as well as to ensure proper accounting in accordance with U.S. GAAP. As we have applied this prospectively, we will not retrospectively adjust prior periods.

In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (ASU 2014-9). This standard outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-9 provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). In August 2015, an update to ASU 2014-9 was issued to defer the effective date by one year. The FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14) which defers the effective date to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently in the process of evaluating this new guidance.
Cash and Cash Equivalents, Investments and Restricted Cash
Cash and Cash Equivalents, Investments and Restricted Cash
Cash and Cash Equivalents, Investments and Restricted Cash

The following table shows our cash and cash equivalents, restricted cash and investments’ adjusted cost, unrealized gain (loss) and fair value as of December 31, 2015 and December 31, 2014 (in thousands):
 
 
December 31, 2015
 
December 31, 2014
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
Cash
$
52,905

 
$
—

 
$
52,905

 
$
49,836

 
$
—

 
$
49,836

Money market funds
6,672

 
—

 
6,672

 
5,828

 
—

 
5,828

Commercial paper
5,453

 
—

 
5,453

 
453

 
—

 
453

Corporate securities
600

 
(1
)
 
599

 
—

 
—

 
—

Agency bond
1,400

 
—

 
1,400

 
—

 
—

 
—

Total cash and cash equivalents
$
67,030

 
$
(1
)
 
$
67,029

 
$
56,117

 
$
—

 
$
56,117

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
$
3,746

 
$
—

 
$
3,746

 
$
13,435

 
$
—

 
$
13,435

Corporate securities
10,572

 
(12
)
 
10,560

 
18,426

 
(15
)
 
18,411

Certificate of deposit
—

 
—

 
—

 
1,499

 
1

 
1,500

Agency bonds
3,494

 
—

 
3,494

 
—

 
—

 
—

Total short-term investments
$
17,812

 
$
(12
)
 
$
17,800

 
$
33,360

 
$
(14
)
 
$
33,346

Long-term investments:
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
3,241

 
$
(10
)
 
$
3,231

 
$
1,453

 
$
(2
)
 
$
1,451

Agency bond
1,001

 
(3
)
 
998

 
—

 
—

 
—

Long-term corporate securities
$
4,242

 
$
(13
)
 
$
4,229

 
$
1,453

 
$
(2
)
 
$
1,451

 
 
 
 
 
 
 
 
 
 
 
 
Short-term restricted cash
$
300

 
$
—

 
$
300

 
$
300

 
$
—

 
$
300

Long-term restricted cash
478

 
—

 
478

 
1,480

 
—

 
1,480

Total restricted cash
$
778

 
$
—

 
$
778

 
$
1,780

 
$
—

 
$
1,780


 
The amortized cost and fair value of available-for-sale investments as of December 31, 2015 by contractual maturity were as follows (in thousands):

 
Cost
 
Fair Value
Due in 1 year or less
$
25,265

 
$
25,252

Due in 1-2 years
4,242

 
4,229

Investments not due at a single maturity date
6,672

 
6,672

Total
$
36,179

 
$
36,153


 
Investments not due at a single maturity date in the preceding table consist of money market fund deposits and commercial paper.

As of December 31, 2015, we considered the declines in fair value of our investment portfolio to be temporary in nature and did not consider any of our investments to be other-than-temporarily impaired. We typically invest in highly-rated securities with a minimum credit rating of A- and a weighted average maturity of four months, and our investment policy generally limits the amount of credit exposure to any one issuer. The policy requires investments generally to be investment grade, with the primary objective of preserving capital and maintaining liquidity. Fair values were determined for each individual security in the investment portfolio. When evaluating an investment for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and our intent to sell, or whether it is more likely than not it will be required to sell, the investment before recovery of the investment’s cost basis. During the years ended December 31, 2015, we did not recognize any impairment charges.

Strategic Investment

During the year ended December 31, 2015 we invested $2.0 million in a third party to expand our customer reach. This investment is included in other assets on our consolidated balance sheet. We did not record other-than-temporary impairment charges on this investment during the year ended December 31, 2015 as there were no significant identified events or changes in circumstances that would be considered an indicator for impairment.
Fair Value Measurement
Fair Value Measurement
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 December 31, 2015 and December 31, 2014 are classified based on the valuation technique level in the tables below (in thousands):
 
 
December 31, 2015
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant
Other Observable
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
6,672

 
$
6,672

 
$
—

Commercial paper
5,453

 
—

 
5,453

Corporate securities
599

 
—

 
599

Agency bond
1,400

 
—

 
1,400

Short-term investments:
 
 
 
 
 
Commercial paper
3,746

 
—

 
3,746

Corporate securities
10,560

 
—

 
10,560

Agency bonds
3,494

 
—

 
3,494

Long-term investments:
 
 
 
 
 
Corporate securities
3,231

 
—

 
3,231

Agency bond
998

 
—

 
998

Total assets measured and recorded at fair value
$
36,153

 
$
6,672

 
$
29,481


 
December 31, 2014
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant 
Other Observable 
Inputs (Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
5,828

 
$
5,828

 
$
—

 
$
—

Commercial paper
453

 
—

 
453

 
—

Short-term investments:
 
 
 
 
 
 
 
Commercial paper
13,435

 
—

 
13,435

 
—

Corporate securities
18,411

 
—

 
18,411

 
—

Certificate of deposit
1,500

 
—

 
1,500

 
—

Long-term investments, corporate securities
1,451

 
—

 
1,451

 
 

Total assets measured and recorded at fair value
$
41,078

 
$
5,828

 
$
35,250

 
$
—

Liabilities:
 
 
 
 
 
 
 
Put option liability
$
1,079

 
$
—

 
$
—

 
$
1,079


 
We value our marketable securities based on quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. We classify all of our fixed income available-for-sale securities as having Level 2 inputs. The valuation techniques used to measure the fair value of our financial instruments having Level 2 inputs were derived from non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models such as discounted cash flow techniques.

The following table summarizes the change in the fair value of our Level 3 liabilities (in thousands):

 
Level 3
 
December 31, 2015
 
December 31, 2014
Beginning balance
$
1,079

 
$
1,521

Vesting of put options
—

 
271

Exercise of put options
(1,079
)
 
(460
)
Fair value adjustment related to put options
—

 
(253
)
Total financial liabilities
$
—

 
$
1,079



As of December 31, 2014, we did not have observable inputs for the valuation of our put option liability, which relates to a previous acquisition, and provided certain employees of the acquired company the right to require us to acquire vested common shares at a stated contractual price. As shares associated with these put options vested, the liability was recognized as share-based compensation expense in our consolidated statements of operations and results in a change in our Level 3 liabilities. The liability had been fully exercised and the shares were repurchased from employees in the first quarter of 2015. We no longer hold any Level 3 assets or liabilities as of December 31, 2015.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Long-Lived Assets
Long-Lived Assets
Note 5. Long-Lived Assets

Textbook Library, Net

Textbook library, net consisted of the following (in thousands):

 
December 31,
 
2015
 
2014
Textbook library
$
100,783

 
$
169,463

Less accumulated depreciation
(71,055
)
 
(88,701
)
Textbook library, net
$
29,728

 
$
80,762



Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

 
December 31,
 
2015
 
2014
Computer and equipment
$
1,313

 
$
1,083

Software
2,591

 
3,842

Furniture and fixtures
1,652

 
2,259

Leasehold improvements
4,983

 
5,153

Content
27,359

 
21,262

 
37,898

 
33,599

Less accumulated depreciation and amortization
(17,927
)
 
(15,230
)
Property and equipment, net
$
19,971

 
$
18,369

Acquisitions
Acquisitions
Acquisitions

On October 1, 2014, we acquired 100% of the business of internships.com, a division of CareerArc Group, headquartered in Burbank, California. With this acquisition, we aimed to expand our user base and expose new users to our services. We see the acquisition of internships.com as a method to connect the ending of the student life cycle to the beginning of their career. The total fair value of the purchase consideration was $10.0 million in cash, and $1.0 million in stock that was placed into escrow, for indemnification against breaches of general representations and warranties, and will be released 18 months from the closing date of the acquisition.

On June 5, 2014, we acquired 100% of the outstanding shares and voting interest of InstaEDU, Inc. (InstaEDU), headquartered in San Francisco, California. With this acquisition, we aimed to expand our digital offerings to help students excel in school by including real time tutoring services. We see the acquisition of InstaEDU as a method to connect the textbook offering and service offerings of Chegg together. The total fair value of the purchase consideration was $31.1 million in cash. This included $4.5 million that was placed into escrow, for indemnification against breaches of general representations and warranties, and was released during the year ended December 31, 2015.

On April 9, 2014, we acquired 100% of the outstanding shares and voting interest of The Campus Special, LLC and The Campus Special Food, LLC (together, the Campus Special), headquartered in Duluth, Georgia for a total fair value purchase consideration of $16.0 million, consisting of $14.0 million in cash and 250,000 shares of our common stock, and all of such shares of our common stock were placed in escrow for indemnification against breaches of general representations and warranties that were released on the one year anniversary of the closing date, and a fair value contingent consideration of additional shares of common stock, which is payable on the attainment of certain performance metrics in 2014 and 2015. The metrics related to 2014 were not met and as such those shares were not released. The shares associated with the 2015 metrics were released as a result of our exit from the print coupon business.

On March 7, 2014, we acquired certain assets from Bookstep LLC, (Bookstep) to expand our technical resources and research and development capabilities. The total fair value of the purchase consideration was $0.5 million. The acquisition agreement requires us to pay approximately $2.5 million in cash, payable over two years, contingent upon the continuation of services by a certain number of consultants during the period after acquisition. The fair value of these subsequent payments was $2.5 million, which is being accounted for as post-combination compensation expense.

The acquisition date fair value of the consideration for the above four transactions consisted of the following as of December 31, 2014 (in thousands):
Cash consideration
$
55,537

Fair value of stock escrow consideration
2,585

Fair value of stock contingent consideration
193

Fair value of purchase consideration
$
58,315


The fair value of the intangible assets acquired was determined under the acquisition method of accounting for business combinations. The excess of purchase consideration paid over the fair value of identifiable intangible assets acquired was recorded as goodwill.

The following table summarizes the fair value of the net identifiable assets acquired in the year ended December 31, 2014 (in thousands):
 
2014
 
 
Cash
$
1,665

Other acquired assets
595

Acquired intangible assets:
 
Developed technology
4,174

Customer lists
3,770

Trade names
5,990

Non-compete agreements
1,630

Corporate partnerships
243

Master services agreements
1,030

Total acquired intangible assets
16,837

Total identifiable assets acquired
19,097

Liabilities assumed
(2,538
)
Net identifiable assets acquired
16,559

Goodwill
41,756

Net assets acquired
$
58,315



For the year ended December 31, 2014, we incurred $0.7 million of acquisition-related expenses associated with the four acquisitions which have been included in general and administrative expenses in the consolidated statements of operations.

The results of operations of the above acquisitions have been included in our consolidated results of operations from the date of acquisition and were not material to our results of operations.

The amounts recorded for goodwill related to the Bookstep, Campus Special and internships.com transactions are expected to be deductible for tax purposes. The amount recorded for goodwill related to the InstaEDU transaction is not deductible for tax purposes.
Goodwill and Intangible Assets
Goodwill and Intangible Assets
Intangible Assets

Goodwill consists of the following (in thousands):

 
December 31, 2015
 
December 31, 2014
Beginning balance
$
91,301

 
$
49,545

Additions due to acquisition
—

 
41,756

Ending balance
$
91,301

 
$
91,301



Intangible assets as of December 31, 2015 and December 31, 2014 consist of the following (in thousands, except weighted-average amortization period):
 
December 31, 2015
 
Weighted-Average Amortization
Period
(in months)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies
52

 
$
9,417

 
$
(6,702
)
 
$
2,715

Customer lists
20

 
2,820

 
(2,239
)
 
581

Trade names
48

 
2,343

 
(920
)
 
1,423

Non-compete agreements
28

 
1,220

 
(832
)
 
388

Master service agreements
21

 
1,030

 
(872
)
 
158

Indefinite-lived trade name
—

 
3,600

 
—

 
3,600

Total intangible assets
 
 
$
20,430

 
$
(11,565
)
 
$
8,865

 
 
December 31, 2014
 
Weighted-Average Amortization
Period
(in months)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Impairment
 
Net
Carrying
Amount
Developed technologies
50

 
$
9,792

 
$
(5,000
)
 
$
(194
)
 
$
4,598

Customer lists
15

 
4,363

 
(1,816
)
 
(829
)
 
1,718

Trade names
44

 
3,132

 
(1,085
)
 
(39
)
 
2,008

Non-compete agreements
21

 
1,637

 
(421
)
 
(278
)
 
938

Master service agreements
21

 
1,030

 
(266
)
 
—

 
764

Corporate partnerships
0

 
243

 
(31
)
 
(212
)
 
—

Indefinite-lived trade name
—

 
3,600

 
—

 
—

 
3,600

Total intangible assets
 
 
$
23,797

 
$
(8,619
)
 
$
(1,552
)
 
$
13,626


During the years ended December 31, 2015, 2014 and 2013, amortization expense related to our acquired intangible assets totaled approximately $4.8 million, $5.0 million and $4.4 million, respectively.

During the fourth quarter of 2014, we determined that we would not continue to support or look to expand our print coupon business, resulting in a significant decrease in the expected future cash flows. As a result an impairment analysis was performed based on a discounted cash flow analysis with key assumptions based on the future revenues expected until the services were removed from our website. The analysis indicated that the carrying amounts of the intangible assets acquired will not be fully recoverable, resulting in an impairment charge totaling $1.6 million, which is included as an operating expense within sales and marketing on our consolidated statements of operations.

As of December 31, 2015, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
2016
$
2,238

2017
1,701

2018
1,018

2019
308

2020
—

Total
$
5,265



As part of our acquisition of internships.com in October 2014, we acquired an indefinite-lived trade name intangible asset valued at $3.6 million. We will assess this asset for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Balance Sheet Details
Balance Sheet Details
Note 8. Balance Sheet Details

Other Current Assets

Other current assets consist of the following (in thousands):

 
December 31,
 
2015
 
2014
Reimbursement from Ingram
$
28,875

 
$
751

Other
2,857

 
3,113

 
$
31,732

 
$
3,864



Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

 
December 31,
 
2015
 
2014
Accrued shipping for cycle returns
$
3,355


$
539

Refund reserve
4,538


6,174

Taxes payable
3,913


4,851

Other
23,474


19,619

 
$
35,280


$
31,183

Debt Obligations
Debt Obligations
Debt Obligations

In August 2013, we entered into a revolving credit facility with an aggregate principal amount of $50.0 million (the Revolving Credit Facility).  In June 2014, we amended the Revolving Credit Facility to reduce the aggregate principal amount to $40.0 million with an accordion feature that, subject to certain financial criteria, allows us to borrow up to a total of $75.0 million. In August 2015, we amended the Revolving Credit Facility to reduce the financial covenant consolidated EBITDA requirements beginning the quarter ended June 30, 2015 and to reduce the aggregate principal amount to $30.0 million with an accordion feature that, subject to certain financial criteria, allows us to borrow up to a total of $65.0 million beginning the quarter ended December 31, 2015. The Revolving Credit Facility carries, at our election, a base interest rate of the greater of the Federal Funds Rate plus 0.5% or one-month LIBOR plus 1% or a LIBOR based interest rate plus additional interest of up to 4.5% depending on our leverage ratio. The Revolving Credit Facility will expire in August 2016. The Revolving Credit Facility requires us to repay the outstanding balance at expiration, or to prepay the outstanding balance, if certain reporting and financial covenants are not maintained. These financial covenants are as follows: (1) maintain specified quarterly levels of consolidated EBITDA, which is defined as net income (loss) before tax plus interest expense, provision for (benefit from) income taxes, depreciation and amortization expense, non-cash share-based compensation expense and costs and expenses not to exceed $2.0 million in closing fees related to the revolving credit facility; and (2) maintain a leverage ratio greater than 1.5 to 1.0 as of the end of each quarter, based on the ratio of the consolidated outstanding debt balance to consolidated EBITDA for the period of the four fiscal quarters most recently ended. As of December 31, 2015, we were in compliance with these financial covenants.
Stock Warrants
Stock Warrants
Note 10. Stock Warrants

In connection with our IPO in November 2013, our previously outstanding convertible preferred stock warrants were converted into 1,118,282 common stock warrants at a weighted average exercise price of $5.16 per share.

At the time of conversion, the common stock warrants were valued using the Black-Scholes Merton option-pricing valuation model using the following weighted average key assumptions:

Expected term
5.9 years

Expected volatility
55.5
%
Dividend yield
—
%
Risk-free interest rate
1.61
%
Weighted-average fair value per share
$
6.35


The conversion of the preferred stock warrants into common stock warrants resulted in a gain of $3.3 million during the year ended December 31, 2013 and is included in other income (expense), net in our consolidated statements of operations.
During the year ended December 31, 2015, 795,549 common stock warrants were exercised at a weighted average exercise price of $4.12. During the year ended December 31, 2014, 122,733 common stock warrants were exercised at a weighted average exercise price of $0.82. No common stock warrants were exercised in the year ended December 31, 2013.

The remaining 200,000 common stock warrants are exercisable at a weighted average exercise price of $12.00.
Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies

We lease our office and warehouse facilities under operating leases, which expire at various dates through 2021. Our primary operating lease commitments at December 31, 2015 related to our headquarters in Santa Clara, California, our office in San Francisco, California, and our warehouse in Shepherdsville, Kentucky. We recognize rent expense on a straight-line basis over the lease period. Where leases contain escalation clauses, rent abatements, or concessions, such as rent holidays and landlord or tenant incentives or allowances, we apply them in the determination of straight-line rent expense over the lease term. On April 10, 2015, we signed an agreement to sublease effectively one half of our warehouse in Kentucky. We expect this sublease agreement to generate $0.1 million of sublease income per month through the end of November 2016. Rental expense, net of sublease income, was approximately $2.5 million, $3.3 million and $2.9 million in the years ended December 31, 2015, 2014 and 2013, respectively.

The aggregate future minimum lease payments as of December 31, 2015, are as follows (in thousands):

2016
$
4,047

2017
1,602

2018
1,541

2019
880

2020
526

Thereafter
87

Total
$
8,683



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.

In July 2010, the Kentucky Tax Authority issued a property tax assessment of approximately $1.0 million related to our textbook library located in our Kentucky warehouse for the 2009 and 2010 tax years under audit. In March 2011, we filed a protest with the Kentucky Board of Tax Appeals that was rejected in March 2012. In September 2012, we filed a complaint seeking declaratory rights against the Commonwealth of Kentucky in the Bullitt Circuit Court of Kentucky, and that case was subsequently dismissed in favor of administration remedies with the Kentucky Tax Authority. We received a final Notice of Tax due in October 2012 from the Kentucky Tax Authority and we appealed this notice in November 2012 with the Kentucky Board of Tax Appeals. In May 2013, we presented an Offer in Judgment to the Kentucky Tax Authority of approximately $150,000, excluding tax and penalties, an amount that we have accrued for the two years under audit. We accrued this amount as of December 31, 2012. We appealed to the Kentucky Board of Tax Appeals in July 2013 and the Board issued a ruling in favor of the Kentucky Department of Revenue in January 2014 maintaining the property tax assessment. In February 2014, we filed an appeal to the Franklin Circuit Court in Kentucky and in June 2014 the Circuit Court held in abeyance our motion to appeal. In October 2014 the Franklin Circuit Court in Kentucky issued its opinion and order reversing the Board of Tax Appeal's decision, setting aside the Kentucky Department of Revenue's tax assessments against us and further vacating all penalties and interest. The Kentucky Department of Revenue has appealed the Circuit Court ruling. On March 4, 2016, the Kentucky Court of Appeals ruled unanimously in our favor, affirming our position that no property tax was owed on the textbooks. The State has 30 days to ask the Kentucky Supreme Court to hear the case for appeal. Due to the uncertainties related to the appeal, we are unable to evaluate the likelihood of either a favorable or unfavorable outcome. We believe that it is possible that we will incur a loss; however, we cannot currently estimate a range of any possible losses we may experience in connection with this case. Accordingly, we are unable at this time to estimate the effects of this matter on our financial condition, results of operations, or cash flows.

We are not aware of any other pending legal matters or claims, individually or in the aggregate, that are expected to have a material adverse impact on our consolidated financial position, results of operations, or cash flows. However, our determination of whether a claim will proceed to litigation cannot be made with certainty, nor can the results of litigation be predicted with certainty. Nevertheless, defending any of these actions, regardless of the outcome, may be costly, time consuming, distract management personnel, and have a negative effect on our business. An adverse outcome in any of these actions, including a judgment or settlement, may cause a material adverse effect on our future business, operating results, and/or financial condition.
Guarantees and Indemnifications
Guarantees and Indemnifications
Guarantees and Indemnifications

We have agreed to indemnify our directors and officers for certain events or occurrences, subject to certain limits, while such persons are or were serving at our request in such capacity. We may terminate the indemnification agreements with these persons upon termination of employment, but termination will not affect claims for indemnification related to events occurring prior to the effective date of termination. We have a directors’ and officers’ insurance policy that limits our potential exposure up to the limits of our insurance coverage. In addition, we also have other indemnification agreements with various vendors against certain claims, liabilities, losses, and damages. The maximum amount of potential future indemnification is unlimited.

We believe the fair value of these indemnification agreements is minimal. We have not recorded any liabilities for these agreements as of December 31, 2015.
Convertible Preferred Stock and Common Stock
Convertible Preferred Stock and Common Stock
Note 13. Convertible Preferred Stock and Common Stock

In November 2013, we completed our IPO, whereby 14,400,000 shares of common stock were sold to the public at a price of $12.50 per share. We received net proceeds of $162.9 million after deducting underwriting discounts and commissions of $12.6 million and incurred offering costs of $4.5 million. In connection with our IPO:

•
All of our outstanding shares of convertible preferred stock were automatically converted into 53,912,261 shares of our common stock;
•
All of our outstanding convertible preferred stock warrants were automatically converted into warrants to purchase 1,118,282 shares of our common stock (see Note 10);
•
We reclassified our outstanding preferred stock warrant liability to additional paid-in capital and recorded a gain of $3.3 million, which occurred on the closing of our IPO (see Note 10);
•
We recognized share-based compensation expense related to the vesting of RSUs granted prior to the IPO that were outstanding as of the IPO date (see Note 14); and
•
We granted 931,791 options and 472,644 RSUs under our Designated IPO Equity Incentive Program (see Note 14)

Upon conversion of our preferred stock outstanding we issued 11,667,254 shares of our common stock in the form of a deemed stock dividend to the holders of our Series D and Series E convertible preferred stock, valued at approximately $102.6 million. The terms of our Series D and Series E convertible preferred stock provided that the ratio at which shares of such series of preferred stock would automatically convert into shares of common stock upon the completion of our IPO would increase if the IPO was below approximately $26 per share. Because the offering price was below the indicated conversion threshold price for the Series D and Series E convertible preferred stock, the conversion ratio for such series of preferred stock was adjusted, which resulted in additional shares of our common stock being issued in the form of a deemed stock dividend upon conversion of our Series D and Series E preferred stock.

We are authorized to issue 400.0 million shares of common stock, with a par value per share of $0.001. As of December 31, 2015, we have reserved the following shares of common stock for future issuance:

 
December 31, 2015
Warrants to purchase common stock
200,000

Outstanding stock options
12,415,492

Outstanding RSUs
13,322,611

Shares available for grant under the stock plans
8,111,562

Shares available for issuance under employee stock purchase plan
4,897,408

Total common shares reserved for future issuance
38,947,073



Stock Plans

2005 Stock Incentive Plan

On August 22, 2005, the Board of Directors and our stockholders approved the 2005 Stock Incentive Plan (the 2005 Plan). Under the 2005 Plan, the Company issued shares of common stock and options to purchase stock to employees, directors and consultants. Awards granted under the 2005 Plan were either incentive stock options, non-qualified stock options or RSUs to officers, employees, directors, consultants and other key persons. Incentive stock options were only granted to employees with exercise prices of no less than the fair market value of the common stock on the date of grant, and non-qualified stock options were granted to employees, and consultants at exercise prices of not less than 85% of the fair market value of the common stock on the grant date, as determined by the Board of Directors, provided however, that (i) the exercise price of an incentive stock option and non-qualified stock (option was not less than 100% and 85% of the deemed fair value of the common stock on the grant date, respectively, and (ii) the exercise price of an incentive stock option or non-qualified stock option granted to a 10% stockholder was not less than 110% of the fair market value of a common stock on the date of grant. Options granted under the 2005 Plan generally expire no later than ten years and in general vest over four years from the date of grant. However, an incentive stock option granted to a 10% stockholder may have only a maximum term of five years from the date of grant. The Board of Directors determined that no further grants of awards under the 2005 Plan would be made effective as of November 10, 2013.

Designated IPO Equity Incentive Program

On February 15, 2012, the Board of Directors approved the Designated IPO Equity Incentive Program, or the IPO Equity Incentive Program. The purpose of the IPO Equity Incentive Program was to provide incentives to certain individuals who provided services to the Company or any Company subsidiary to (i) incentivize and motivate them, including in the event of our IPO, and (ii) continue in the employment of the Company through and after the closing of our IPO. In connection with our IPO, on November 12, 2013, we granted 931,791options and 472,644 RSUs under the IPO Equity Incentive Program at the IPO price of our common stock under the 2005 Stock Incentive Plan. No further grants of awards may be made under the IPO Equity Incentive Program.

2013 Equity Incentive Plan

On June 6, 2013, the Board of Directors adopted our 2013 Equity Incentive Plan (the 2013 Plan), which was subsequently approved by our stockholders on August 29, 2013. The 2013 Plan became effective on November 11, 2013 and replaced the 2005 Plan. On the effective date of the 2013 Plan, 12,000,000 shares of our common stock were reserved for issuance, plus an additional 3,838,985 shares reserved but not issued or subject to outstanding awards under our 2005 Plan on the effective date of the 2013 Plan, plus, on and after the effective date of the 2013 Plan, (i) shares that are subject to outstanding awards under the 2005 Plan which cease to be subject to such awards, (ii) shares issued under the 2005 Plan that are forfeited or repurchased at their original issue price and (iii) shares subject to awards under the 2005 Plan that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any award. As of December 31, 2015 there were 8,111,562 available for grant under the 2013 Plan. The 2013 Plan permits the granting of incentive stock options, non-qualified stock options, RSUs, stock appreciation rights, restricted shares of common stock and performance share awards. The exercise price of stock options may not be less than the 100% of the fair market value of the common stock on the date of grant. Options granted pursuant to the 2013 Plan generally expire no later than ten years.

2013 Employee Stock Purchase Plan

On June 6, 2013, our board of directors adopted our 2013 Employee Stock Purchase Plan (the 2013 ESPP) and our stockholders subsequently approved the 2013 ESPP Plan on August 29, 2013 in order to enable eligible employees to purchase shares of our common stock at a discount following the date of our IPO. The 2013 ESPP permits eligible employees to acquire shares of our common stock by accumulating funds through periodic payroll deductions of up to 15% of base salary. Our 2013 ESPP is intended to qualify as an ESPP under Section 423 of the Code and employees will receive a 15% discount to the lesser of the fair market value of our common stock on (i) the first trading day of the applicable offering period or (ii) the last day of each purchase period in the applicable offering period. Each offering period may run for no more than six months. We have reserved 4,000,000 shares of our common stock under our 2013 ESPP. The aggregate number of shares issued over the term of our 2013 ESPP will not exceed 20,000,000 shares of our common stock. As of December 31, 2015, there were 4,897,408 shares of common stock available for future issuance under the 2013 ESPP.
Stockholders' Equity
Stockholders' Equity
Stockholders' Equity

Share-based Compensation

Total share-based compensation expense recorded for employees and non-employees, is as follows (in thousands):
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Cost of revenues
$
262

 
$
617

 
$
1,185

Technology and development
11,992

 
10,451

 
9,414

Sales and marketing
7,901

 
11,300

 
7,107

General and administrative
18,620

 
14,520

 
19,252

Total share-based compensation expense
$
38,775

 
$
36,888

 
$
36,958


 
Fair Value of Stock Options

We estimate the fair value of each stock option award using the Black-Scholes-Merton option-pricing model, which utilizes the fair value of our common stock based on active market and requires input on the following subjective assumptions:

Expected Term. The expected term for options granted to employees, officers, and directors is calculated as the midpoint between the vesting date and the end of the contractual term of the options. The expected term for options granted to consultants is determined using the remaining contractual life.

Expected Volatility. The expected volatility was historically based on the average volatility of public companies within our peer group as our common stock had previously not been publicly trading for a long enough period to rely on our own expected volatility. Beginning with stock options granted during the fourth quarter of 2015, we have based the expected volatility on the average volatility of our stock price as we now have over two years of trading history.

Expected Dividends. The dividend assumption is based on our historical experience. To date we have not paid any dividends on our common stock.

Risk-Free Interest Rate. The risk-free interest rate used in the valuation method is the implied yield currently available on the United States treasury zero-coupon issues, with a remaining term equal to the expected life term of our options.

The following table summarizes the key assumptions used to determine the fair value of our stock options granted to employees, officers and directors:
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Expected term (years)
5.50-6.00

 
6.07

 
5.08-6.63

Expected volatility
50.68%-51.69%

 
55.91%-56.83%

 
55.72%-73.18%

Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
1.75%-1.86%

 
1.88%-2.02%

 
0.81%-1.92%

Weighted-average grant-date fair value per share
$
3.54

 
$
3.82

 
$
6.20



Fair Value of Restricted Stock Units (RSUs) and of Performance-Based Restricted Stock Units (PSUs)

RSUs and PSUs are converted into shares of our common stock upon vesting on a one-for-one basis. Vesting of RSUs is subject to the employee’s continuing service to us, while vesting of PSUs is subject to our achievement of specified corporate financial performance objectives in addition to the employee's continuing service to us. The compensation expense related to RSUs and PSUs is determined using the fair value of our common stock on the date of grant and the expense is recognized on a straight-line basis over the vesting period. RSUs are typically fully vested at the end of three or four years while PSUs vest subject to the achievement of performance objectives and if achieved, typically vest over two to three years. We assess the achievement of performance objectives on a quarterly basis and adjust our share-based payment expense as appropriate.

Fair Value of 2013 ESPP
 
Under the 2013 ESPP, rights to purchase shares are generally granted during the second and fourth quarter of each year. We estimate the fair value of rights granted under the 2013 ESPP at the date of grant using the Black-Scholes-Merton option-pricing model. The following table summarizes the key assumptions used to determine the fair value of rights granted under the 2013 ESPP:

 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Expected term (years)
0.50

 
0.50

 
0.50

Expected volatility
36.20%-49.59%

 
40.54%-46.42%

 
45.00
%
Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
0.09%-0.31%

 
0.05%-0.07%

 
0.10
%
Weighted-average grant-date fair value per share
$
1.98

 
$
1.68

 
$
3.44



There were 419,137 shares purchased under the 2013 ESPP for the year ended December 31, 2015 at an average price per share of $5.81 with cash proceeds from the issuance of shares of $2.4 million.

There were 340,617 shares purchased under the 2013 ESPP for the year ended December 31, 2014 at an average price per share of $4.46 with cash proceeds from the issuance of shares of $1.5 million.

Stock Option Activity

Stock option activity under our equity incentive plans was as follows:
 
Options Outstanding
 
Number of
Options
Outstanding
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-Average Remaining Contractual Term in Years
 
Aggregate
Intrinsic
Value
Balance at December 31, 2014
14,962,099

 
$
8.53

 
7.11
 
$
6,646,629

Granted
253,901

 
7.34

 
 
 
 
Exercised
(1,745,616
)
 
6.45

 
 
 
 
Canceled
(1,054,892
)
 
9.96

 
 
 
 
Balance at December 31, 2015
12,415,492

 
$
8.68

 
6.24
 
$
5,082,489

 
 
 
 
 
 
 
 
As of December 31, 2015
 
 
 
 
 
 
 
Options exercisable
10,278,919

 
$
8.39

 
5.95
 
$
5,067,905

Options vested and expected to vest
12,243,418

 
$
8.66

 
6.21
 
$
5,080,276



The total intrinsic value of options exercised during 2015, 2014 and 2013, was approximately $3.2 million, $3.1 million and $4.9 million, respectively.

As of December 31, 2015, our total unrecognized compensation expense for stock options granted to employees, officers, directors, and consultants was approximately $9.9 million, which will be recognized over a weighted-average vesting period of approximately 1.1 years.

We recognize only the portion of the stock options granted to employees that is ultimately expected to vest as compensation expense. Estimated forfeitures are determined based on historical data and management’s expectation of exercise behaviors. Forfeiture rates and the resulting compensation expense are revised in subsequent periods if actual forfeitures differ from the estimate.

No stock options were granted to consultants during the year ended December 31, 2015 and 2014. We granted 110,886 option awards to consultants in the years ended December 31, 2013. Total share-based compensation expense for consultants was $0.4 million, $0.7 million and $0.9 million in the years ended December 31, 2015, 2014 and 2013, respectively.

There was no capitalized share-based compensation expense as of December 31, 2015, 2014 or 2013.

RSU and PSU Activity
 
 
RSUs and PSUs Outstanding
 
Number of RSUs and PSUs
Outstanding
 
Weighted 
Average Grant Date 
Fair Value
Balance at December 31, 2014
9,125,190

 
$
6.25

Granted
8,132,727

 
6.88

Released
(2,746,644
)
 
6.41

Canceled
(1,188,662
)
 
6.64

Balance at December 31, 2015
13,322,611

 
$
6.57


During the year ended December 31, 2014, 1,305,377 RSUs granted prior to our IPO vested, and were settled for shares of our common stock.  Of those shares, we withheld 535,348 shares valued at approximately $3.6 million in satisfaction of tax withholding obligations for employees who elected to net settle, i.e., surrender shares of common stock to satisfy their tax obligations. Payment of taxes related to this net share settlement of RSUs is reflected as a financing activity in our consolidated statements of cash flows. The shares withheld by us as a result of the net settlement are no longer considered issued and outstanding, thereby reducing our shares outstanding used to calculate earnings per share. These shares are returned to the reserves and are available for future issuance under the 2013 Plan.

In February 2014, we granted PSUs under the 2013 Plan to certain of our executive officers. The PSUs entitle the executives to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2014 (the 2014 Performance Period). Based on the achievement of the performance conditions during the 2014 Performance Period for the February grants, the final settlement of the PSU awards was 120% of the target shares underlying the PSU awards based on a specified objective formula approved by the Compensation Committee. These PSUs will vest annually over a three year period, with the first year vesting in February 2015. In June 2014, we granted PSUs under the 2013 Plan to the employees of InstaEDU, which are based on achieving certain revenue targets in 2014 and 2015.

The target number of shares underlying the 2014 Performance Period PSUs that were granted to certain executive officers during the year ended December 31, 2014 totaled 1,208,560 shares and had a weighted average grant date fair value of $6.37 per share. As of December 31, 2014, 120% of the PSUs vested. The target number of shares underlying the PSUs that were granted to certain employees of our InstaEDU acquisition during the year ended December 31, 2014 totaled 2,280,081 and had a weighted average grant date fair value of $6.00 per share. As of December 31, 2015, metrics related to the 2014 and 2015 periods were not achieved and the shares will be subsequently canceled once the attainment is certified by our compensation committee.

In February 2015, we granted PSUs under the 2013 Plan to certain of our key employees. The PSUs entitle the employees to receive a certain number of shares of our common stock based on our satisfaction of certain financial and strategic performance targets during 2015 (the 2015 Performance Period). Based on the achievement of the performance conditions during the 2015 Performance Period for the February 2015 grants, the final settlement met the minimum threshold for the 2015 Performance Period based on a specified objective formula approved by the Compensation Committee of the Board of Directors.  These PSUs will vest annually over a one or three year period depending on the employee, with the initial vesting in February 2016.

The target number of shares underlying the PSUs that were granted to certain key employees during the year ended December 31, 2015 totaled 2,300,824 shares and had a weighted average grant date fair value of $6.59 per share.
 
As of December 31, 2015, we had a total of approximately $41.7 million of unrecognized compensation costs related to RSUs and PSUs that is expected to be recognized over the remaining weighted average period of 1.6 years.

Acquisition-related Stock Awards

In connection with an acquisition in 2010, acquired employees had the option to sell any vested shares back to us at a fixed price of $11.94 per share prior to or 90 days after termination. The vested portion of the 189,516 restricted shares has been classified as a liability in accrued liabilities on the 2014 consolidated balance sheets, as our obligation to purchase the shares from the employees is outside our control. During 2014 and 2013, we recorded compensation expense of approximately $0.4 million and $0.5 million, respectively, due to the vesting of the restricted stock and a resulting liability of approximately $1.1 million as of December 31, 2014 related to the employees’ option to sell the vested shares back to the Company. As of December 31, 2014, all employees had exercised their right to sell the vested shares back to the Company. During the year ended December 31, 2015 all employees were paid and therefore we no longer have a liability related to these awards.
Income Taxes
Income Taxes
Income Taxes

We recorded an income tax provision of approximately $1.5 million, $0.2 million and $0.6 million for the years ended December 31, 2015, 2014 and 2013, respectively. The income tax provision for the year ended December 31, 2015 was primarily due to state and foreign income tax expense and federal tax expense related to tax amortization of acquired indefinite lived intangible assets. The income tax provision for year ended December 31, 2014 was primarily the result of foreign and state income taxes offset by the release of valuation allowance of $1.3 million resulting from our acquisition of InstaEDU. The income tax provision for the year ended December 31, 2013 was due to state and foreign income tax expense offset by the release of certain income tax benefits. Our income tax provision consisted of the following (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Current income taxes:
 
 
 
 
 
Federal
$
—

 
$
—

 
$
—

State
263

 
304

 
282

Foreign
778

 
871

 
358

Total current income taxes
1,041

 
1,175

 
640

 
 
 
 
 
 
Deferred income taxes:
 
 
 
 
 
Federal
484

 
(1,003
)
 
—

State
56

 
33

 
—

Foreign
(102
)
 
(19
)
 
2

Total deferred income taxes
438

 
(989
)
 
2

Total income tax provision
$
1,479

 
$
186

 
$
642



Loss before provision for income taxes consisted of (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
United States
$
(59,376
)
 
$
(65,930
)
 
$
(55,974
)
Foreign
1,645

 
1,358

 
766

Total
$
(57,731
)
 
$
(64,572
)
 
$
(55,208
)


The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Tax at U.S. statutory rate
34.0
 %
 
34.0
 %
 
34.0
 %
State, net of federal benefit
3.7

 
5.1

 
2.7

Share-based compensation
(7.0
)
 
(6.5
)
 
(7.7
)
Non-deductible expenses
(0.2
)
 
(0.4
)
 
(0.1
)
Other
—

 
(0.5
)
 
0.9

Change in valuation allowance
(33.1
)
 
(32.0
)
 
(31.0
)
Total
(2.6
)%
 
(0.3
)%
 
(1.2
)%


A summary of our deferred tax assets is as follows (in thousands):

 
Year Ended December 31,
 
2015
 
2014
Deferred tax assets:
 
 
 
Accrued expenses and reserves
$
7,351

 
$
6,291

Share-based compensation
21,676

 
18,391

Deferred revenue
1,488

 
4,589

Net operating loss carryforwards
58,664

 
36,847

Property and equipment, textbooks and intangibles assets
7,577

 
10,754

Other items
1,612

 
2,277

Gross deferred tax assets
98,368

 
79,149

Valuation allowance
(98,209
)
 
(79,093
)
Total deferred tax assets
159

 
56

 
 
 
 
Deferred tax liabilities:
 
 
 
Intangible asset
862

 
321

Total deferred tax liabilities
862

 
321

 
 
 
 
Net deferred tax liabilities
$
(703
)
 
$
(265
)


At December 31, 2015 and 2014 the deferred tax liability is created by the tax amortization of acquired indefinite lived intangible assets. Under the accounting guidance this deferred tax liability cannot be used as a source of income for recognition of deferred tax assets when determining the amount of valuation allowance to be recorded.

Realization of the deferred tax assets is dependent upon future taxable income, the amount and timing of which are uncertain. Accordingly, the federal and state gross deferred tax assets have been fully offset by a valuation allowance. The net valuation allowance increased by approximately $19.1 million and $20.7 million during 2015 and 2014, respectively.

As of December 31, 2015, we had net operating loss carryforwards for federal and state income tax purposes of approximately $159.0 million and $120.0 million, respectively, which will begin to expire in years beginning 2028 and 2016, respectively. As of December 31, 2014, we have net operating loss carryforwards for federal and state income tax purposes of approximately $96.9 million and $56.5 million, respectively.

As of December 31, 2015, we had tax credit carryforwards for federal and state income tax purposes of approximately $3.7 million and $4.0 million, respectively. The federal credits expire in various years beginning in 2030. The state credits do not expire. As of December 31, 2014, we had tax credit carryforwards for federal and state income tax purposes of approximately $2.5 million and $2.7 million, respectively.

Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitations due to ownership change limitations provided by the Internal Revenue Code of 1986, as amended (IRC), and similar state provisions. Such annual limitations could result in the expiration of the net operating losses and tax credit carryforwards before utilization.

As of December 31, 2015 and 2014, we have permanently reinvested approximately $4.4 million and $3.4 million of earnings from our international subsidiaries, respectively, and have not provided for U.S. federal income and foreign withholding taxes. If we were to distribute these earnings, such earnings could be subject to income or other taxes upon repatriation. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable.

During the year ended December 31, 2015, we settled an audit relating to an examination by the tax authorities in India for the fiscal filing period 2010/11 for which we had received a notice of proposed adjustment relating to our transfer pricing between the US and our Indian subsidiary. Additionally, during the year ended December 31, 2015 we were informed that we would be under examination by the tax authorities in India for the fiscal filing period 2011/12 relating to our transfer pricing between the United States and our Indian subsidiary. This settlement may or may not result in changes to our contingencies related to position on tax filings in years through 2015. We have accrued for any additional taxes that may be owed for the Indian tax audit ranging from zero to $0.1 million for the year assessed excluding interest and penalties.

We recognize interest and penalties related to uncertain tax positions as a component of income tax expense. During 2015, 2014 and 2013, we recognized $0.1 million, $0.1 million and $0.1 million of interest and penalties, respectively. Accrued interest and penalties as of December 31, 2015 and 2014 were approximately $0.7 million and $0.5 million, respectively.

We file tax returns in U.S. federal, state, and certain foreign jurisdictions with varying statutes of limitations. Due to net operating loss and credit carryforwards, all of the tax years since inception through the 2015 tax year remain subject to examination by the U.S. federal and some state authorities. Foreign jurisdictions remain subject to examination up to approximately seven years from the filing date.

A reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Beginning balance
$
4,272

 
$
2,994

 
$
1,942

Increase in tax positions for prior years
82

 
406

 
318

Decrease in tax positions for prior years
(416
)
 
(284
)
 
(2
)
Decrease in tax positions for prior year settlement
(61
)
 
—

 
(16
)
Increase in tax positions for current year
948

 
1,172

 
742

Change due to translation of foreign currencies
24

 
(16
)
 
10

Ending balance
$
4,849

 
$
4,272

 
$
2,994



We recorded unrecognized tax benefits of approximately $0.6 million and $1.3 million during the years ended December 31, 2015 and 2014, respectively, and had a cumulative unrecognized tax benefit balance of approximately $4.8 million and $4.3 million as of December 31, 2015 and 2014, respectively. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlement. The amount of unrecognized tax benefits, if recognized, that would affect the effective tax rate is $1.4 million for the year ended December 31, 2015. One or more of these unrecognized tax benefits could be subject to a valuation allowance if and when recognized in a future period, which could impact the timing of any related effective tax rate benefit.

We have adopted ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes. This ASU requires companies to classify deferred income tax assets and liabilities as non-current in a classified statement of financial position. We have elected to early adopt this standard with a prospective application beginning with our deferred tax assets and liabilities reporting on our consolidated balance sheet for the year ended December 31, 2015.
Restructuring Charges
Restructuring Charges
Restructuring Charges

2015 Restructuring Plan

For the year ended December 31, 2015, we recorded restructuring charges of $4.9 million related to our exits from our print coupon business and our Kentucky warehouse. The charges include one-time employee termination benefits for 71 employees of $1.9 million during the year ended December 31, 2015 and lease termination and other costs of $3.0 million for the year ended December 31, 2015. As a result of our strategic partnership with Ingram, we have successfully exited our warehouse facilities in the year ended December 31, 2015. Costs incurred to date related to employee termination benefits are expected to be paid within the next three months. Costs incurred to date related to the lease termination and other costs are expected to be fully paid by 2021.

The following table summarizes the activity related to the accrual for restructuring charges (in thousands):
 
Workforce Reduction Costs
 
Lease Termination and Other Costs
 
Total
Balance at January 1, 2015
$
—

 
$
—

 
$
—

Restructuring charges
1,885

 
2,983

 
4,868

Cash payments
(1,830
)
 
(675
)
 
(2,505
)
Write-offs
—

 
(317
)
 
(317
)
Other
—

 
472

 
472

Balance at December 31, 2015
$
55

 
$
2,463

 
$
2,518



As of December 31, 2015, the $2.5 million liability was comprised of a short-term accrual of $2.2 million included within accrued liabilities and a long-term accrual of $0.3 million included within other liabilities on the consolidated balance sheet.
Related-Party Transactions
Related-Party Transactions
Related-Party Transactions

Our Chief Executive Officer is a member of the Board of Directors of Adobe Systems Incorporated (Adobe). During the years ended December 31, 2015, 2014 and 2013 we had purchases of $2.9 million, $0.9 million and $0.4 million, respectively. We had $0.1 million, $1.0 million and $0.2 million in revenues in the years ended December 31, 2015, 2014 and 2013, respectively, from Adobe. We had $0.4 million and $0.1 million in payables as of December 31, 2015 and 2014, respectively, to Adobe.

One of our board members is also a member of the Board of Directors of Cengage Learning, Inc. (Cengage).  During the years ended December 31, 2015 and 2014 we had purchases of $11.5 million and $12.4 million, respectively.  We had $0.1 million in revenues from Cengage in the year ended December 31, 2015 and no revenues in the year ended December 31, 2014. We had an immaterial amount and $0.1 million in payables as of December 31, 2015 and 2014, respectively, to Cengage. We had no outstanding accounts receivables as of December 31, 2015 and $0.1 million in outstanding accounts receivables from Cengage as of December 31, 2014.

One of our board members was the Chief Executive Officer of Shutterfly Inc. (Shutterfly) until February 19, 2016. During the year ended December 31, 2015, we had purchases of $1.1 million of products from Shutterfly. We had $0.1 million in revenues from Shutterfly in the year ended December 31, 2015. We had an immaterial amount in outstanding accounts receivables from Shutterfly as of December 31, 2015.

One of our board members is also a member of the Board of Directors of Synack Inc. (Synack). During the year ended December 31, 2015, we had purchases of $0.1 million of services from Synack.

Transactions with the above related parties have been conducted on an arms length basis and the terms of our contracts are consistent with our contracts with other independent parties.
Employee Benefit Plan
Employee Benefit Plan
Note 18. Employee Benefit Plan

We sponsor a 401(k) savings plan for eligible employees and their beneficiaries. Contributions by us are discretionary. Participants may contribute, on a pretax basis, a percentage of their annual compensation, but not to exceed a maximum contribution amount pursuant to Section 401(k) of the IRC. During 2015, 2014 and 2013, our matching contributions totaled approximately $0.8 million, $0.8 million and $0.3 million, respectively.
Segment Information
Segment Information
Note 19. Segment Information

Our chief operating decision-maker is our Chief Executive Officer who makes resource allocation decisions and reviews financial information presented on a consolidated basis. Accordingly, we have determined that we have a single operating and reporting segment and operating unit structure.

Product Information

We derive our revenues from our Required Materials and Chegg Services product lines. Required Materials includes all products that are essential for students to meet the requirements of their coursework and Chegg Services includes all other products we provide to supplement the requirements and help students with their coursework. Chegg Services also includes our marketing services which help to complete our offering of services to students. Required Materials includes the rental and sale of print textbooks, our web-based, multiplatform eTextbook Reader, eTextbooks and supplemental course materials from approximately 120 publishers as of December 31, 2015 and the commissions earned through our Ingram partnership. Chegg Services primarily includes our connected learning platform, our test preparation service currently covering the ACT and SAT exams, online tutoring, our Chegg Study service, College Admissions, Scholarship Services, Internship Services, Enrollment Marketing Services and our Brand Partnership services. Revenues by product line as follows (in thousands):

 
December 31,
 
2015
 
2014
 
2013
Required Materials
$
207,088

 
$
236,717

 
$
213,746

Chegg Services
94,285

 
68,117

 
41,829

Total net revenues
$
301,373

 
$
304,834

 
$
255,575



Geographic Information

Our headquarters and most of our operations are located in the United States. We conduct our sales, marketing and customer service activities primarily in the United States. Geographic revenues information is based on the location of the customer. In 2015, 2014 and 2013, substantially all of our revenues and long-lived assets are located in the United States.
Selected Quarterly Financial Data (unaudited)
Selected Quarterly Financial Data (unaudited)
Note 20. Selected Quarterly Financial Data (unaudited)

 
Three Months Ended
 
March 31, 2015
 
June 30, 2015
 
September 30, 2015
 
December 31, 2015
Total net revenues
$
84,872

 
$
67,061

 
$
81,286

 
$
68,154

Gross profit
$
19,379

 
$
30,805

 
$
19,566

 
$
41,774

Net (loss) income
$
(28,542
)
 
$
(10,131
)
 
$
(24,167
)
 
$
3,630

Weighted average shares used to compute net (loss) income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
84,794

 
86,741

 
87,706

 
87,993

Diluted
84,794

 
86,741

 
87,706

 
93,225

Net (loss) income per share, attributable to common stockholders:
 
 
 
 
 
 
 
Basic
$
(0.34
)
 
$(0.12)
 
$(0.28)
 
$0.04
Diluted
$
(0.34
)
 
$(0.12)
 
$(0.28)
 
$0.04

 
Three Months Ended
 
March 31, 2014
 
June 30, 2014
 
September 30, 2014
 
December 31, 2014
Total net revenues
$
74,393

 
$
64,492

 
$
81,532

 
$
84,417

Gross profit
$
8,908

 
$
25,896

 
$
13,251

 
$
45,794

Net (loss) income
$
(25,759
)
 
$
(8,246
)
 
$
(32,441
)
 
$
1,688

Weighted average shares used to compute net (loss) income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
82,181

 
83,209

 
83,688

 
83,925

Diluted
82,181

 
83,209

 
83,688

 
86,543

Net (loss) income per share, attributable to common stockholders:
 
 
 
 
 
 
 
Basic
$
(0.31
)
 
$(0.10)
 
$(0.39)
 
$0.02
Diluted
$
(0.31
)
 
$(0.10)
 
$(0.39)
 
$0.02


We recorded restructuring charges of $1.6 million, $0.3 million, $0.5 million and $2.5 million in the three months ended December 31, 2015, September 30, 2015, June 30, 2015 and March 31, 2015, respectively. We did not record any restructuring charges in any of the three months ended in 2014.
Significant Accounting Policies (Policies)
Use of Estimates 
Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (U.S. GAAP) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities; the disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are used for, but not limited to: revenue recognition, recoverability of accounts receivable, determination of the useful lives and salvage value assigned to our textbook library, restructuring charges, share-based compensation expense including estimated forfeitures, accounting for income taxes, useful lives assigned to long-lived assets for depreciation and amortization, impairment of goodwill and long-lived assets, and the valuation of acquired intangible assets. We base our estimates on historical experience, knowledge of current business conditions and various other factors we believe to be reasonable under the circumstances. These estimates are based on management’s knowledge about current events and expectations about actions we may undertake in the future. Actual results could differ from these estimates, and such differences could be material to our financial position and results of operations.
Principles of Consolidation 
Principles of Consolidation

The consolidated financial statements include the accounts of Chegg and our wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared in accordance with U.S. GAAP.
Cash and Cash Equivalents and Restricted Cash 
Cash and Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity date of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents, which consist of cash, money market accounts, commercial paper, corporate securities and agency bonds at financial institutions, are stated at cost, which approximates fair value.

We classify certain restricted cash balances within other current assets and other assets on the accompanying consolidated balance sheets based upon the term of the remaining restrictions.

A
Investments 
Accounts Receivable    

Accounts receivable are recorded at the invoiced amount and are non-interest bearing. We generally grant uncollateralized credit terms to our customers, which include textbook wholesalers, and marketing services customers, and maintain an allowance for doubtful accounts to account for potentially uncollectible receivables.

Investments

We hold investments in marketable securities, consisting of corporate securities, commercial paper and agency bonds. We classify our marketable securities as available-for-sale investments that are either short or long-term based on the nature of each security based on the contractual maturity of the investment when purchased. Our available-for-sale investments are carried at estimated fair value with any unrealized gains and losses, net of taxes, included in accumulated other comprehensive loss in stockholders’ equity. Unrealized losses are charged against other income (expense), net when a decline in fair value is determined to be other-than-temporary. We have not recorded any such impairment charges in the periods presented. We determine realized gains or losses on the sale of marketable securities on a specific identification method, and record such gains or losses as other income (expense), net.
Accounts Receivable and Allowance for Doubtful Accounts 
Allowance for Doubtful Accounts    

We assess the creditworthiness of our customers based on multiple sources of information, and analyze such factors as our historical bad debt experience, industry and geographic concentrations of credit risk, economic trends, and customer payment history. This assessment requires significant judgment. Because of this assessment, we maintain an allowance for doubtful accounts for estimated losses resulting from the inability of certain customers to make all of their required payments. In making this estimate, we analyze historical payment performance and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. Accounts receivable are written off as a decrease to the allowance for doubtful accounts when all collection efforts have been exhausted and an account is deemed uncollectible.
Concentration of Credit Risk 
Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and marketable securities invested in highly liquid instruments in accordance with our investment policy. We place the majority of our cash and cash equivalents and restricted cash with financial institutions in the United States that we believe to be of high credit quality, and accordingly minimal credit risk exists with respect to these instruments. Certain of our cash balances held with financial institutions are in excess of Federal Deposit Insurance Corporation limits. Our investment portfolio consists of investment-grade securities diversified among security types, industries and issuers. Our investments are held and managed by recognized financial institutions that follow our investment policy with the main objective of preserving capital and maintaining liquidity.

C
Textbook Library 
Textbook Library

We consider our print textbook library to be a long-term productive asset and, as such, classify it as a non-current asset in our consolidated balance sheets. Cash outflows for the acquisition of our print textbook library, net of changes in related accounts payable and accrued liabilities historically was classified as cash flows from investing activities in our consolidated statements of cash flows. As a result of our strategic partnership with Ingram, since May 1, 2015, Ingram has made all new investments in the print textbook library and we will also provide Ingram with extended payment terms through 2016 for the purchase of textbooks, before moving to normal payment terms in 2017. As such, we have recorded any cash outflows as a result of this partnership as an operating activity in our consolidated statements of cash flows as we are no longer purchasing print textbooks but rather providing extended payments terms to Ingram to facilitate their purchase of new textbooks. Cash inflows received from the liquidation of print textbooks are classified as cash flows from investing activities in our consolidated statements of cash flows, consistent with other long-term asset classification of our existing print textbook library. The gain or loss from the liquidation of print textbooks previously rented is recorded as a component of operating expenses in our consolidated statement of operations and is classified as cash flow from operating activities.

All print textbooks in our textbook library are stated at cost, which includes the purchase price less accumulated depreciation. We record allowances for lost or damaged print textbooks in cost of revenues in our consolidated statements of operations based on our assessment of our print textbook library on a book-by-book basis. Write-offs result from lost or damaged books, books no longer considered to be rentable, or when books are not returned to us after the rental period by our customers.

We depreciate our print textbooks, less an estimated salvage value, over an estimated useful life of three years using an accelerated method of depreciation, as we estimate this method most accurately reflects the actual pattern of decline in the economic value of the assets. The salvage value considers the historical trend and projected liquidation proceeds for print textbooks. The useful life is determined based on the time period in which the print textbooks are held and rented before liquidation. In accordance with our policy, we review the estimated useful lives of our print textbook library on an ongoing basis.

De
Property and Equipment 
Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of the assets:

Classification
 
Useful Life
Computers and equipment
 
3 years
Software
 
3 years
Furniture and fixtures
 
5 years
Leasehold improvements
 
Shorter of the remaining lease term or the estimated useful life of 5 years
Content
 
5 years


We capitalize costs related to the purchase or development of Chegg Study and Test Prep content and amortize these costs over a period of five years.

Depreciation and amortization expense are generally classified within the corresponding cost of revenues and operating expenses categories in our consolidated statement of operations. Depreciation and amortization expense for 2015, 2014 and 2013 were approximately $6.8 million, $6.2 million and $5.7 million, respectively.

The cost of maintenance and repairs is expensed as incurred. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation and amortization are removed from their respective accounts, and any gain or loss on such sale or disposal is reflected in loss from operations.

Software Development Costs 
Software Development Costs

We capitalize costs related to software developed or obtained for internal use when certain criteria have been met. Costs incurred during the application development stage for internal-use software are capitalized in property and equipment and amortized over the estimated useful life of the software, generally up to three years.

Goodwill 
Goodwill

Goodwill represents the excess of the fair value of consideration paid over the estimated fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized but rather tested for impairment at least annually on October 1, or more frequently if certain events or indicators of impairment occur between annual impairment tests. We completed our annual impairment test on October 1 of 2015 and 2014, which did not result in any impairment.

For our annual goodwill impairment test, we perform a quantitative test of our single reporting unit. In the first step of this test, goodwill is tested for impairment at the reporting unit level by comparing the reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. The fair value of the reporting unit was estimated using a market approach. If the carrying amount of the reporting unit exceeds its fair value, a second step is performed to measure the amount of impairment loss, if any. In step two, the implied fair value of goodwill is calculated as the excess of the fair value of a reporting unit over the fair values assigned to its assets and liabilities. In the event we determine that the fair value of our single reporting unit is less than the reporting unit’s carrying value, we will record an impairment charge for the amount of the impairment in the period in which the determination is made.

Acquired Intangible Assets, and Other Long-Lived Assets 
Acquired Intangible Assets and Other Long-Lived Assets

Acquired intangible assets with finite useful lives, which include developed technology, customer lists, trade names and non-compete agreements, are amortized over their estimated useful lives. We assess the impairment of acquired intangible assets and other long-lived assets when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We measure the recoverability of assets that will continue to be used in operations by comparing the carrying value of the asset grouping to the estimate of the related total future undiscounted net cash flows. If an asset grouping’s carrying value is not recoverable through the related undiscounted cash flows, the asset grouping is measured for impairment. The impairment is measured by comparing the difference between the asset grouping’s carrying value and its fair value.

Indefinite-Lived Intangibles 
Indefinite-Lived Intangibles

We make judgments about the recoverability of purchased indefinite-lived intangible assets at least annually on October 1st or more frequently whenever events or changes in circumstances indicate that an impairment may exist to determine whether it is more likely than not that the carrying value of the assets may not be recoverable. Recoverability of indefinite-lived intangible assets is measured by comparing the carrying amount of the asset to the future undiscounted cash flows that the asset is expected to generate. If we determine that an individual asset is impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. We completed our annual impairment test on October 1, 2015 and 2014, which did not result in any impairment.

Revenue Recognition and Deferred Revenue 
Revenue Recognition and Deferred Revenue

We derive our revenues, net of allowances, for refunds or charge backs from our payment processors who process payments from credit cards, debit cards and PayPal. Revenues are recognized when the four basic criteria for revenue recognition have been met as follows: persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, the sale price is fixed or determinable, and collection is reasonably assured.

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

We primarily generate revenues from our Required Materials including the rental of print textbooks and eTextbooks and, to a lesser extent, through the sales of print textbooks through our website purchased by us on a just-in-time basis. Rental revenues are recognized ratably over the term of the rental period, generally two to five months. Revenues from selling textbooks on a just-in-time basis are recognized upon shipment. We do not hold an inventory of textbooks for sale. Our customers pay for the rental and sale of print textbooks on our website primarily by credit card, resulting in immediate settlement of our accounts receivable. Shipping costs charged to customers in the sale or rental of textbooks are recorded in revenues and the related expenses are recorded as cost of revenues.

We also generate revenues from our Chegg Services including supplemental course materials, online tutoring and our Chegg Study service that we offer to students. These services are offered to students through monthly or annual subscriptions and we recognize revenues ratably over the subscription period. Our Chegg Services also include enrollment marketing services and brand advertising, which we offer either on a subscription or on an a la carte basis. Enrollment marketing services connect colleges and graduate schools with students seeking admission or scholarship opportunities at these institutions. Brand advertising offers brands unique ways to connect with students. Revenues are recognized ratably or as earned over the subscription service, generally one year. Revenues from enrollment marketing services or brand advertising delivered on an a la carte basis, without a subscription, is recognized when delivery of the respective lead or service has occurred. For these services, we bill the customer at the inception, over the term of the customer arrangement or as the services are performed. Upon satisfactory assessment of creditworthiness, we generally grant credit to our enrollment marketing services and brand advertising customers with normal credit terms, typically 30 days.

Some of our customer arrangements for enrollment marketing services include multiple deliverables, which include the delivery of student leads as well as other services to the end customer. We have determined these deliverables qualify as separate units of accounting, as they have value to the customer on a standalone basis and our arrangements do not contain a right of return. For these arrangements that contain multiple deliverables, we allocate the arrangement consideration based on the relative selling price method in accordance with the selling price hierarchy, which includes: (1) vendor-specific objective evidence of fair value (VSOE), when available; (2) third-party evidence of selling price (TPE), if VSOE does not exist; and (3) estimated selling price (ESP), if neither VSOE nor TPE is available.

We determine VSOE based on our historical pricing and discounting practices for the specific solution when sold separately and when a substantial majority of the selling prices for these services fall within a narrow range. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally our go-to-market strategy differs from that of our peers, and our offerings contain a significant level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. If we have not established VSOE or TPE for our enrollment marketing services, we have used ESP in our allocation of arrangement consideration. Additionally, we limit the amount of revenues recognized for delivered elements to the amount that is not contingent on future delivery of services or other future performance obligations.

Deferred revenue primarily consists of advanced payments from students related to rentals and subscriptions that have not been recognized, and marketing services that have yet to be performed. Deferred revenue is recognized as revenues ratably over the term or when the services are provided and all other revenue recognition criteria have been met.

We evaluate whether we are acting as a principal or an agent, and therefore would record the gross sales amount and related costs as revenues or the net amount earned as commissions from the sale of third party products. Our determination is based on our evaluation of certain indicators including whether we are the principal in the transaction, are subject to inventory risk, have latitude in establishing prices and selecting suppliers, none of which is presumptive or determinative. We generally operate as the principal and so in those instances revenues are recorded at the gross sale price. We generally record the net amounts as commissions earned when such amounts are determined using a fixed percentage of the transaction price, we are not subject to inventory risk or responsible for the fulfillment of the textbooks. We operate as an agent in our strategic partnership with Ingram and therefore our revenues include a commission on the total revenues that we earn from Ingram upon their fulfillment of a rental transaction using books for which Ingram has title and risk of loss.

We also present our revenues separately for rental, services and sales. Rental revenue includes the rental of print textbooks for which we take title and bear the risk of loss; service revenue includes Chegg Study, brand advertising, eTextbooks, tutoring, enrollment marketing, and commissions we earn from Ingram and other e-commerce partners; sale revenue includes just-in-time sale of print textbooks and the sale of other required materials.

C
Cost of Revenues 
Cost of Revenues

Our cost of revenues consists primarily of expenses associated with the delivery and distribution of our products and services. Cost of revenues include print textbook depreciation expense, shipping and other fulfillment costs, the cost of textbooks sold, payment processing costs, write-offs and allowances related to the print textbook library, and all expenses associated with our distribution and customer service centers, including personnel and warehousing costs. The cost of textbooks sold, shipping and other fulfillment costs and payment processing expenses are recognized upon shipment, while print textbook depreciation is recognized under an accelerated method over the life of the textbook. We believe this method most accurately reflects the actual pattern of decline in the economic value of the assets, resulting in higher costs earlier in the textbook lifecycle. Cost of revenues also includes the depreciation of our eTextbook Reader software, publisher content fees for eTextbooks, content amortization expense related to content that we develop or license, including publisher agreements for which we pay one-time license fees for published content, enrollment marketing services leads purchased from third-party suppliers to fulfill leads that we are unable to fulfill through our internal database, personnel costs and other direct costs related to providing the content or services. In addition, cost of revenues includes allocated information technology and facilities costs.

T
Technology and Development Costs 
Technology and Development Costs

Technology and development expenses consist primarily of salaries, benefits and share-based compensation expense for employees on our product and web design, engineering and technical teams who are maintaining our website, developing new products and improving existing products. Technology and development costs also include web hosting costs, third-party development costs and allocated information technology and facilities costs. We expense substantially all of our technology and development costs as they are incurred.

A
Advertising Costs 
Advertising Costs

Advertising costs are expensed as incurred and consist primarily of online advertising and marketing promotional expenditures.
Share-based Compensation 
Share-based Compensation

Share-based compensation expense for stock options, restricted stock units (RSUs), performance-based restricted stock units (PSUs) and employee stock purchase plan (ESPP) are accounted for under the fair value method, which requires us to measure the cost of employee share-based compensation awards based on the grant-date fair value of the award. Share-based compensation expense for stock options and our ESPP is estimated at the date of grant using the Black-Scholes-Merton option pricing model while expense for RSUs and PSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. We recognize compensation cost for all employee share-based compensation awards that are expected to vest on a straight-line basis over the requisite service period of the awards, which is generally the option vesting period. These amounts are reduced by estimated forfeitures, which are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Equity awards issued to non-employees are recorded at their fair value on the measurement date and are subject to adjustment each period as the underlying awards vest or consulting services are performed.

Income Taxes 
Income Taxes

We account for income taxes under an asset and liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and the tax basis of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when necessary, to reduce deferred tax assets to an amount that is more likely than not to be realized. We recognize the benefit from a tax position only if it is more likely than not that the position would be sustained upon audit based solely on the technical merits of the tax position. Our policy is to include interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Restructuring Charges 
Restructuring Charges

Restructuring charges are primarily comprised of severance costs, contract and program termination costs, asset impairments and costs of facility consolidation and closure. Restructuring charges are recorded upon approval of a formal management plan and are included in the operating results of the period in which such plan is approved and the expense becomes estimable. To estimate restructuring charges, management utilizes assumptions of the number of employees that would be involuntarily terminated and of future costs to operate and eventually vacate duplicate facilities. Severance and other employee separation costs are accrued when it is probable that benefits will be paid and the amount is reasonably estimable. The rates used in determining severance accruals are based on our policies and practices and negotiated settlements. Restructuring charges for employee workforce reductions are recorded upon employee notification for employees whose required continuing service period is 60 days or less and ratably over the employee’s continuing service period for employees whose required continuing service period is greater than 60 days.

Strategic Investments 
Strategic Investments

We have entered into an equity investment in a privately-held business to achieve certain strategic business objectives. Our investment in equity securities of this privately-held business is accounted for under the cost method. We periodically review these investments for other-than-temporary declines in fair value based on the specific identification method and write down investments when an other-than-temporary decline has occurred. Any fair value estimates are made based on consideration of the current cash position, recent operational performance, and forecasts of the investees.

Net Loss Per Share 
Net Loss Per Share

Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less the weighted-average unvested common stock subject to repurchase or forfeiture. Net loss attributable to common stockholders includes the issuance of 11,667,254 shares of our common stock in the form of a deemed stock dividend to the holders of our Series D and Series E convertible preferred stock of approximately $102.6 million during the year ended December 31, 2013. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potential shares of common stock, including stock options, warrants, RSUs and convertible preferred stock prior to its conversion in our IPO, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common shares outstanding would have been anti-dilutive.
Foreign Currency Translations 
Foreign Currency Translation

The functional currency of our foreign subsidiaries is the local currency. Adjustments resulting from the translation of foreign currencies into U.S. dollars for balance sheet amounts are based on the exchange rates as of the consolidated balance sheet date. Non-monetary balance sheet items denominated in a currency other than the applicable functional currency are translated using the historical rate. Revenues and expenses are translated at average exchange rates during the period. Foreign currency translation gains or losses are included in accumulated other comprehensive loss as a component of stockholders’ equity on the consolidated balance sheets. Gains or losses resulting from foreign currency transactions, which are denominated in currencies other than the entity’s functional currency, are included in other income (expense), net in the consolidated statements of operations and were not material during 2015, 2014 or 2013.

Recent Accounting Pronouncements 
Recent Accounting Pronouncements

In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes (ASU 2015-17). This standard requires companies to classify deferred income tax assets and liabilities as non-current in a classified statement of financial position. ASU 2015-17 provides companies with two implementation methods; prospective or retrospective application to all deferred tax assets and liabilities. Both applications require the disclosure in the first interim and first annual period of change and the nature of and reason for the change in accounting principle. Prospective application requires a disclosure that prior periods were not retrospectively adjusted. Retrospective application requires quantitative information about the effects of the accounting change on prior periods. The guidance is effective for annual periods beginning after December 15, 2016 with earlier application permitted as of the beginning of an interim or annual reporting period. We have elected to early adopt this standard with prospective application beginning with our deferred tax assets and liabilities reporting on our consolidated balance sheet for the year ended December 31, 2015 to simplify reporting as well as to ensure proper accounting in accordance with U.S. GAAP. As we have applied this prospectively, we will not retrospectively adjust prior periods.

In May 2014, the FASB issued ASU 2014-9, Revenue from Contracts with Customers (ASU 2014-9). This standard outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. ASU 2014-9 provides companies with two implementation methods. Companies can choose to apply the standard retrospectively to each prior reporting period presented (full retrospective application) or retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application (modified retrospective application). In August 2015, an update to ASU 2014-9 was issued to defer the effective date by one year. The FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date (ASU 2015-14) which defers the effective date to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently in the process of evaluating this new guidance.
Significant Accounting Policies (Tables)
Schedule of Useful Lives For Property And Equipment 
Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives of the assets:

Classification
 
Useful Life
Computers and equipment
 
3 years
Software
 
3 years
Furniture and fixtures
 
5 years
Leasehold improvements
 
Shorter of the remaining lease term or the estimated useful life of 5 years
Content
 
5 years
Computation of Basic and Diluted Net Loss Per Share 
The following table sets forth the computation of historical basic and diluted net loss per share (in thousands, except per share amounts):
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Numerator:
 
 
 
 
 
Net loss
$
(59,210
)
 
$
(64,758
)
 
$
(55,850
)
Deemed dividend to preferred stockholders
—

 
—

 
(102,557
)
 
$
(59,210
)
 
$
(64,758
)
 
$
(158,407
)
Denominator:
 
 
 
 
 
Weighted-average common shares outstanding
86,818

 
83,241

 
21,121

Less: Weighted-average unvested common shares subject to repurchase or forfeiture
—

 
(36
)
 
(219
)
Weighted average shares used to compute net loss per share attributable to common stockholders, basic and diluted
86,818

 
83,205

 
20,902

 
 
 
 
 
 
Net loss per share, attributed to common stockholders, basic and diluted
$
(0.68
)
 
$
(0.78
)
 
$
(7.58
)
Common Shares Outstanding Excluded from Computation of Diluted Net Loss Per Share 
The following potential weighted-average shares of common stock outstanding were excluded from the computation of diluted net loss per share attributable to common stockholders because including them would have been anti-dilutive (in thousands):
 
Year Ended December 31,
 
2015
 
2014
 
2013
Options to purchase common stock
11,446

 
14,253

 
17,972

RSUs and PSUs
200

 
289

 
1,480

Common stock subject to repurchase or forfeiture
—

 
—

 
100

Warrants to purchase common stock
299

 
996

 
1,118

Total common stock equivalents
11,945

 
15,538

 
20,670

Cash and Cash Equivalents, Investments and Restricted Cash (Tables)
Cash and Cash Equivalents, Restricted Cash and Investments 
The following table shows our cash and cash equivalents, restricted cash and investments’ adjusted cost, unrealized gain (loss) and fair value as of December 31, 2015 and December 31, 2014 (in thousands):
 
 
December 31, 2015
 
December 31, 2014
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
 
Cost
 
Net Unrealized Gain/(Loss)
 
Fair Value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
Cash
$
52,905

 
$
—

 
$
52,905

 
$
49,836

 
$
—

 
$
49,836

Money market funds
6,672

 
—

 
6,672

 
5,828

 
—

 
5,828

Commercial paper
5,453

 
—

 
5,453

 
453

 
—

 
453

Corporate securities
600

 
(1
)
 
599

 
—

 
—

 
—

Agency bond
1,400

 
—

 
1,400

 
—

 
—

 
—

Total cash and cash equivalents
$
67,030

 
$
(1
)
 
$
67,029

 
$
56,117

 
$
—

 
$
56,117

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
Commercial paper
$
3,746

 
$
—

 
$
3,746

 
$
13,435

 
$
—

 
$
13,435

Corporate securities
10,572

 
(12
)
 
10,560

 
18,426

 
(15
)
 
18,411

Certificate of deposit
—

 
—

 
—

 
1,499

 
1

 
1,500

Agency bonds
3,494

 
—

 
3,494

 
—

 
—

 
—

Total short-term investments
$
17,812

 
$
(12
)
 
$
17,800

 
$
33,360

 
$
(14
)
 
$
33,346

Long-term investments:
 
 
 
 
 
 
 
 
 
 
 
Corporate securities
$
3,241

 
$
(10
)
 
$
3,231

 
$
1,453

 
$
(2
)
 
$
1,451

Agency bond
1,001

 
(3
)
 
998

 
—

 
—

 
—

Long-term corporate securities
$
4,242

 
$
(13
)
 
$
4,229

 
$
1,453

 
$
(2
)
 
$
1,451

 
 
 
 
 
 
 
 
 
 
 
 
Short-term restricted cash
$
300

 
$
—

 
$
300

 
$
300

 
$
—

 
$
300

Long-term restricted cash
478

 
—

 
478

 
1,480

 
—

 
1,480

Total restricted cash
$
778

 
$
—

 
$
778

 
$
1,780

 
$
—

 
$
1,780

Contractual Maturity of Available-for-Sale Investments 
The amortized cost and fair value of available-for-sale investments as of December 31, 2015 by contractual maturity were as follows (in thousands):

 
Cost
 
Fair Value
Due in 1 year or less
$
25,265

 
$
25,252

Due in 1-2 years
4,242

 
4,229

Investments not due at a single maturity date
6,672

 
6,672

Total
$
36,179

 
$
36,153

Fair Value Measurement (Tables)
Financial Instruments Measured and Recorded at Fair Value on Recurring Basis 
Financial instruments measured and recorded at fair value on a recurring basis as of December 31, 2015 and December 31, 2014 are classified based on the valuation technique level in the tables below (in thousands):
 
 
December 31, 2015
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant
Other Observable
Inputs (Level 2)
Assets:
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market funds
$
6,672

 
$
6,672

 
$
—

Commercial paper
5,453

 
—

 
5,453

Corporate securities
599

 
—

 
599

Agency bond
1,400

 
—

 
1,400

Short-term investments:
 
 
 
 
 
Commercial paper
3,746

 
—

 
3,746

Corporate securities
10,560

 
—

 
10,560

Agency bonds
3,494

 
—

 
3,494

Long-term investments:
 
 
 
 
 
Corporate securities
3,231

 
—

 
3,231

Agency bond
998

 
—

 
998

Total assets measured and recorded at fair value
$
36,153

 
$
6,672

 
$
29,481


 
December 31, 2014
 
Total
 
Quoted Prices
in Active
Markets for Identical
Assets
(Level 1)
 
Significant 
Other Observable 
Inputs (Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets:
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
Money market funds
$
5,828

 
$
5,828

 
$
—

 
$
—

Commercial paper
453

 
—

 
453

 
—

Short-term investments:
 
 
 
 
 
 
 
Commercial paper
13,435

 
—

 
13,435

 
—

Corporate securities
18,411

 
—

 
18,411

 
—

Certificate of deposit
1,500

 
—

 
1,500

 
—

Long-term investments, corporate securities
1,451

 
—

 
1,451

 
 

Total assets measured and recorded at fair value
$
41,078

 
$
5,828

 
$
35,250

 
$
—

Liabilities:
 
 
 
 
 
 
 
Put option liability
$
1,079

 
$
—

 
$
—

 
$
1,079

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation 

The following table summarizes the change in the fair value of our Level 3 liabilities (in thousands):

 
Level 3
 
December 31, 2015
 
December 31, 2014
Beginning balance
$
1,079

 
$
1,521

Vesting of put options
—

 
271

Exercise of put options
(1,079
)
 
(460
)
Fair value adjustment related to put options
—

 
(253
)
Total financial liabilities
$
—

 
$
1,079

Long-Lived Assets (Tables)
Schedule of textbook library 

 
December 31,
 
2015
 
2014
Textbook library
$
100,783

 
$
169,463

Less accumulated depreciation
(71,055
)
 
(88,701
)
Textbook library, net
$
29,728

 
$
80,762

Property, plant and equipment 
 
December 31,
 
2015
 
2014
Computer and equipment
$
1,313

 
$
1,083

Software
2,591

 
3,842

Furniture and fixtures
1,652

 
2,259

Leasehold improvements
4,983

 
5,153

Content
27,359

 
21,262

 
37,898

 
33,599

Less accumulated depreciation and amortization
(17,927
)
 
(15,230
)
Property and equipment, net
$
19,971

 
$
18,369

Acquisitions (Tables)
Schedule of Fair Value of Consideration 
The acquisition date fair value of the consideration for the above four transactions consisted of the following as of December 31, 2014 (in thousands):
Cash consideration
$
55,537

Fair value of stock escrow consideration
2,585

Fair value of stock contingent consideration
193

Fair value of purchase consideration
$
58,315

Summary of Fair Value of Identifiable Intangible Assets Acquired 
The following table summarizes the fair value of the net identifiable assets acquired in the year ended December 31, 2014 (in thousands):
 
2014
 
 
Cash
$
1,665

Other acquired assets
595

Acquired intangible assets:
 
Developed technology
4,174

Customer lists
3,770

Trade names
5,990

Non-compete agreements
1,630

Corporate partnerships
243

Master services agreements
1,030

Total acquired intangible assets
16,837

Total identifiable assets acquired
19,097

Liabilities assumed
(2,538
)
Net identifiable assets acquired
16,559

Goodwill
41,756

Net assets acquired
$
58,315

Goodwill and Intangible Assets (Tables)
Goodwill 
Goodwill consists of the following (in thousands):

 
December 31, 2015
 
December 31, 2014
Beginning balance
$
91,301

 
$
49,545

Additions due to acquisition
—

 
41,756

Ending balance
$
91,301

 
$
91,301

Intangible Assets 
Intangible assets as of December 31, 2015 and December 31, 2014 consist of the following (in thousands, except weighted-average amortization period):
 
December 31, 2015
 
Weighted-Average Amortization
Period
(in months)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Net
Carrying
Amount
Developed technologies
52

 
$
9,417

 
$
(6,702
)
 
$
2,715

Customer lists
20

 
2,820

 
(2,239
)
 
581

Trade names
48

 
2,343

 
(920
)
 
1,423

Non-compete agreements
28

 
1,220

 
(832
)
 
388

Master service agreements
21

 
1,030

 
(872
)
 
158

Indefinite-lived trade name
—

 
3,600

 
—

 
3,600

Total intangible assets
 
 
$
20,430

 
$
(11,565
)
 
$
8,865

 
 
December 31, 2014
 
Weighted-Average Amortization
Period
(in months)
 
Gross
Carrying
Amount
 
Accumulated
Amortization
 
Impairment
 
Net
Carrying
Amount
Developed technologies
50

 
$
9,792

 
$
(5,000
)
 
$
(194
)
 
$
4,598

Customer lists
15

 
4,363

 
(1,816
)
 
(829
)
 
1,718

Trade names
44

 
3,132

 
(1,085
)
 
(39
)
 
2,008

Non-compete agreements
21

 
1,637

 
(421
)
 
(278
)
 
938

Master service agreements
21

 
1,030

 
(266
)
 
—

 
764

Corporate partnerships
0

 
243

 
(31
)
 
(212
)
 
—

Indefinite-lived trade name
—

 
3,600

 
—

 
—

 
3,600

Total intangible assets
 
 
$
23,797

 
$
(8,619
)
 
$
(1,552
)
 
$
13,626


Estimated Future Amortization Expense Related to Intangible Assets 
As of December 31, 2015, the estimated future amortization expense related to our finite-lived intangible assets is as follows (in thousands):
2016
$
2,238

2017
1,701

2018
1,018

2019
308

2020
—

Total
$
5,265

Balance Sheet Details (Tables)
Schedule of Other Current Assets 
Other current assets consist of the following (in thousands):

 
December 31,
 
2015
 
2014
Reimbursement from Ingram
$
28,875

 
$
751

Other
2,857

 
3,113

 
$
31,732

 
$
3,864

Schedule of Accrued Liabilities 
Accrued liabilities consist of the following (in thousands):

 
December 31,
 
2015
 
2014
Accrued shipping for cycle returns
$
3,355


$
539

Refund reserve
4,538


6,174

Taxes payable
3,913


4,851

Other
23,474


19,619

 
$
35,280


$
31,183

Stock Warrants (Tables)
Summary of Assumptions Used to Determine Fair Value of Stock Warrants
At the time of conversion, the common stock warrants were valued using the Black-Scholes Merton option-pricing valuation model using the following weighted average key assumptions:

Expected term
5.9 years

Expected volatility
55.5
%
Dividend yield
—
%
Risk-free interest rate
1.61
%
Weighted-average fair value per share
$
6.35


The following table summarizes the key assumptions used to determine the fair value of our stock options granted to employees, officers and directors:
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Expected term (years)
5.50-6.00

 
6.07

 
5.08-6.63

Expected volatility
50.68%-51.69%

 
55.91%-56.83%

 
55.72%-73.18%

Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
1.75%-1.86%

 
1.88%-2.02%

 
0.81%-1.92%

Weighted-average grant-date fair value per share
$
3.54

 
$
3.82

 
$
6.20

Commitments and Contingencies (Tables)
Schedule of Future Minimum Rental Payments for Operating Leases
The aggregate future minimum lease payments as of December 31, 2015, are as follows (in thousands):

2016
$
4,047

2017
1,602

2018
1,541

2019
880

2020
526

Thereafter
87

Total
$
8,683

Convertible Preferred Stock and Common Stock (Tables)
Schedule Of Common Stock Reserved For Future Issuance
 
December 31, 2015
Warrants to purchase common stock
200,000

Outstanding stock options
12,415,492

Outstanding RSUs
13,322,611

Shares available for grant under the stock plans
8,111,562

Shares available for issuance under employee stock purchase plan
4,897,408

Total common shares reserved for future issuance
38,947,073

Stockholders' Equity (Tables)
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):
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Cost of revenues
$
262

 
$
617

 
$
1,185

Technology and development
11,992

 
10,451

 
9,414

Sales and marketing
7,901

 
11,300

 
7,107

General and administrative
18,620

 
14,520

 
19,252

Total share-based compensation expense
$
38,775

 
$
36,888

 
$
36,958

Summary of Assumptions Used to Determine Fair Value of Stock Options Granted 
At the time of conversion, the common stock warrants were valued using the Black-Scholes Merton option-pricing valuation model using the following weighted average key assumptions:

Expected term
5.9 years

Expected volatility
55.5
%
Dividend yield
—
%
Risk-free interest rate
1.61
%
Weighted-average fair value per share
$
6.35


The following table summarizes the key assumptions used to determine the fair value of our stock options granted to employees, officers and directors:
 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Expected term (years)
5.50-6.00

 
6.07

 
5.08-6.63

Expected volatility
50.68%-51.69%

 
55.91%-56.83%

 
55.72%-73.18%

Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
1.75%-1.86%

 
1.88%-2.02%

 
0.81%-1.92%

Weighted-average grant-date fair value per share
$
3.54

 
$
3.82

 
$
6.20

Summary of assumptions used to determine fair value of ESPP 
The following table summarizes the key assumptions used to determine the fair value of rights granted under the 2013 ESPP:

 
Year Ended 
 December 31,
 
2015
 
2014
 
2013
Expected term (years)
0.50

 
0.50

 
0.50

Expected volatility
36.20%-49.59%

 
40.54%-46.42%

 
45.00
%
Dividend yield
—
%
 
—
%
 
—
%
Risk-free interest rate
0.09%-0.31%

 
0.05%-0.07%

 
0.10
%
Weighted-average grant-date fair value per share
$
1.98

 
$
1.68

 
$
3.44

Summary of Stock Option Activity 
Stock option activity under our equity incentive plans was as follows:
 
Options Outstanding
 
Number of
Options
Outstanding
 
Weighted-
Average
Exercise
Price per
Share
 
Weighted-Average Remaining Contractual Term in Years
 
Aggregate
Intrinsic
Value
Balance at December 31, 2014
14,962,099

 
$
8.53

 
7.11
 
$
6,646,629

Granted
253,901

 
7.34

 
 
 
 
Exercised
(1,745,616
)
 
6.45

 
 
 
 
Canceled
(1,054,892
)
 
9.96

 
 
 
 
Balance at December 31, 2015
12,415,492

 
$
8.68

 
6.24
 
$
5,082,489

 
 
 
 
 
 
 
 
As of December 31, 2015
 
 
 
 
 
 
 
Options exercisable
10,278,919

 
$
8.39

 
5.95
 
$
5,067,905

Options vested and expected to vest
12,243,418

 
$
8.66

 
6.21
 
$
5,080,276

Summary of Restricted Stock Unit Activity 
RSU and PSU Activity
 
 
RSUs and PSUs Outstanding
 
Number of RSUs and PSUs
Outstanding
 
Weighted 
Average Grant Date 
Fair Value
Balance at December 31, 2014
9,125,190

 
$
6.25

Granted
8,132,727

 
6.88

Released
(2,746,644
)
 
6.41

Canceled
(1,188,662
)
 
6.64

Balance at December 31, 2015
13,322,611

 
$
6.57


Income Taxes (Tables)
Schedule of Income Tax Provision 
The income tax provision for the year ended December 31, 2013 was due to state and foreign income tax expense offset by the release of certain income tax benefits. Our income tax provision consisted of the following (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Current income taxes:
 
 
 
 
 
Federal
$
—

 
$
—

 
$
—

State
263

 
304

 
282

Foreign
778

 
871

 
358

Total current income taxes
1,041

 
1,175

 
640

 
 
 
 
 
 
Deferred income taxes:
 
 
 
 
 
Federal
484

 
(1,003
)
 
—

State
56

 
33

 
—

Foreign
(102
)
 
(19
)
 
2

Total deferred income taxes
438

 
(989
)
 
2

Total income tax provision
$
1,479

 
$
186

 
$
642

Schedule of Loss before Provision for Income Taxes 
Loss before provision for income taxes consisted of (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
United States
$
(59,376
)
 
$
(65,930
)
 
$
(55,974
)
Foreign
1,645

 
1,358

 
766

Total
$
(57,731
)
 
$
(64,572
)
 
$
(55,208
)
Schedule of Effective Income Tax Rate Reconciliation 
The differences between our income tax provision as presented in the accompanying consolidated statements of operations and the income tax expense computed at the federal statutory rate consists of the items shown in the following table as a percentage of pretax loss (in percentages):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Tax at U.S. statutory rate
34.0
 %
 
34.0
 %
 
34.0
 %
State, net of federal benefit
3.7

 
5.1

 
2.7

Share-based compensation
(7.0
)
 
(6.5
)
 
(7.7
)
Non-deductible expenses
(0.2
)
 
(0.4
)
 
(0.1
)
Other
—

 
(0.5
)
 
0.9

Change in valuation allowance
(33.1
)
 
(32.0
)
 
(31.0
)
Total
(2.6
)%
 
(0.3
)%
 
(1.2
)%
Schedule of Deferred Tax Assets and Liabilities 
A summary of our deferred tax assets is as follows (in thousands):

 
Year Ended December 31,
 
2015
 
2014
Deferred tax assets:
 
 
 
Accrued expenses and reserves
$
7,351

 
$
6,291

Share-based compensation
21,676

 
18,391

Deferred revenue
1,488

 
4,589

Net operating loss carryforwards
58,664

 
36,847

Property and equipment, textbooks and intangibles assets
7,577

 
10,754

Other items
1,612

 
2,277

Gross deferred tax assets
98,368

 
79,149

Valuation allowance
(98,209
)
 
(79,093
)
Total deferred tax assets
159

 
56

 
 
 
 
Deferred tax liabilities:
 
 
 
Intangible asset
862

 
321

Total deferred tax liabilities
862

 
321

 
 
 
 
Net deferred tax liabilities
$
(703
)
 
$
(265
)
Schedule of Reconciliation of Unrecognized Tax Benefits 

A reconciliation of the beginning and ending balances of the total amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows (in thousands):

 
Year Ended December 31,
 
2015
 
2014
 
2013
Beginning balance
$
4,272

 
$
2,994

 
$
1,942

Increase in tax positions for prior years
82

 
406

 
318

Decrease in tax positions for prior years
(416
)
 
(284
)
 
(2
)
Decrease in tax positions for prior year settlement
(61
)
 
—

 
(16
)
Increase in tax positions for current year
948

 
1,172

 
742

Change due to translation of foreign currencies
24

 
(16
)
 
10

Ending balance
$
4,849

 
$
4,272

 
$
2,994

Restructuring Charges (Tables)
Schedule of Restructuring Reserve by Type of Cost
The following table summarizes the activity related to the accrual for restructuring charges (in thousands):
 
Workforce Reduction Costs
 
Lease Termination and Other Costs
 
Total
Balance at January 1, 2015
$
—

 
$
—

 
$
—

Restructuring charges
1,885

 
2,983

 
4,868

Cash payments
(1,830
)
 
(675
)
 
(2,505
)
Write-offs
—

 
(317
)
 
(317
)
Other
—

 
472

 
472

Balance at December 31, 2015
$
55

 
$
2,463

 
$
2,518

Segment Information (Tables)
Schedule of Revenue by Product Line
 
December 31,
 
2015
 
2014
 
2013
Required Materials
$
207,088

 
$
236,717

 
$
213,746

Chegg Services
94,285

 
68,117

 
41,829

Total net revenues
$
301,373

 
$
304,834

 
$
255,575

Selected Quarterly Financial Data (unaudited) (Tables)
Schedule of Quarterly Financial Information
 
Three Months Ended
 
March 31, 2015
 
June 30, 2015
 
September 30, 2015
 
December 31, 2015
Total net revenues
$
84,872

 
$
67,061

 
$
81,286

 
$
68,154

Gross profit
$
19,379

 
$
30,805

 
$
19,566

 
$
41,774

Net (loss) income
$
(28,542
)
 
$
(10,131
)
 
$
(24,167
)
 
$
3,630

Weighted average shares used to compute net (loss) income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
84,794

 
86,741

 
87,706

 
87,993

Diluted
84,794

 
86,741

 
87,706

 
93,225

Net (loss) income per share, attributable to common stockholders:
 
 
 
 
 
 
 
Basic
$
(0.34
)
 
$(0.12)
 
$(0.28)
 
$0.04
Diluted
$
(0.34
)
 
$(0.12)
 
$(0.28)
 
$0.04

 
Three Months Ended
 
March 31, 2014
 
June 30, 2014
 
September 30, 2014
 
December 31, 2014
Total net revenues
$
74,393

 
$
64,492

 
$
81,532

 
$
84,417

Gross profit
$
8,908

 
$
25,896

 
$
13,251

 
$
45,794

Net (loss) income
$
(25,759
)
 
$
(8,246
)
 
$
(32,441
)
 
$
1,688

Weighted average shares used to compute net (loss) income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
82,181

 
83,209

 
83,688

 
83,925

Diluted
82,181

 
83,209

 
83,688

 
86,543

Net (loss) income per share, attributable to common stockholders:
 
 
 
 
 
 
 
Basic
$
(0.31
)
 
$(0.10)
 
$(0.39)
 
$0.02
Diluted
$
(0.31
)
 
$(0.10)
 
$(0.39)
 
$0.02
Significant Accounting Policies - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Accounting Policies [Abstract]
 
 
 
Textbook library depreciation expense
$ 43,553,000 
$ 70,147,000 
$ 64,759,000 
Loss from write-offs of textbooks
5,297,000 
10,534,000 
5,874,000 
Advertising costs
$ 25,000,000 
$ 22,400,000 
$ 16,400,000 
Significant Accounting Policies - Restricted Cash (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Restricted cash
$ 0.8 
$ 1.8 
Other current assets |
Certificate of Deposit and Escrow Funds
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Restricted cash
0.3 
0.3 
Other noncurrent assets |
Security Deposit
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Restricted cash
$ 0.5 
$ 1.5 
Significant Accounting Policies - Concentration Risk (Details) (Customer Concentration Risk, Accounts Receivable)
12 Months Ended
Dec. 31, 2015
wholesaler
customer
Dec. 31, 2014
wholesaler
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Number of significant wholesalers
2 
2 
Number of significant customers
0 
 
Largest Wholesaler One
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Concentration risk, percentage
16.00% 
 
Largest Wholesaler Three
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Concentration risk, percentage
11.00% 
 
Largest Wholesaler Four
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Concentration risk, percentage
 
16.00% 
Largest Wholesaler Five
 
 
Restricted Cash and Cash Equivalents Items [Line Items]
 
 
Concentration risk, percentage
 
12.00% 
Significant Accounting Policies - Property Plant and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Depreciation and amortization
$ 6,800,000 
$ 6,200,000 
$ 5,700,000 
Software development costs
19,971,000 
18,369,000 
 
Amortization of software development costs capitalized
17,927,000 
15,230,000 
 
Computer and equipment
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
3 years 
 
 
Software
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Software development costs
 
500,000 
 
Amortization of software development costs capitalized
$ 500,000 
$ 500,000 
$ 1,000,000 
Software |
Minimum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
2 years 
 
 
Software |
Maximum
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
3 years 
 
 
Furniture and fixtures
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Leasehold improvements
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Content
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Significant Accounting Policies - Computation of Basic and Diluted Net Loss Per Share (Details) (USD $)
3 Months Ended 12 Months Ended 1 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Nov. 30, 2013
Common Stock
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Deemed stock dividend, stock
 
 
 
 
 
 
 
 
 
 
 
11,667,254 
Deemed dividend to preferred stockholders
 
 
 
 
 
 
 
 
 
 
 
$ 102,600,000 
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
3,630,000 
(24,167,000)
(10,131,000)
(28,542,000)
1,688,000 
(32,441,000)
(8,246,000)
(25,759,000)
(59,210,000)
(64,758,000)
(55,850,000)
 
Deemed dividend to preferred stockholders
 
 
 
 
 
 
 
 
0 
0 
(102,557,000)
 
Net loss attributable to common stockholders
 
 
 
 
 
 
 
 
$ (59,210,000)
$ (64,758,000)
$ (158,407,000)
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding
87,993,000 
87,706,000 
86,741,000 
84,794,000 
83,925,000 
83,688,000 
83,209,000 
82,181,000 
86,818,000 
83,241,000 
21,121,000 
 
Less: Weighted-average unvested common shares subject to repurchase of forfeiture
 
 
 
 
 
 
 
 
0 
(36,000)
(219,000)
 
Weighted-average common shares used in computing basic and diluted net loss per share
 
 
 
 
 
 
 
 
86,818,000 
83,205,000 
20,902,000 
 
Net loss per share attributable to common stockholders, basic and diluted.
 
 
 
 
 
 
 
 
$ (0.68)
$ (0.78)
$ (7.58)
 
Significant Accounting Policies - Common Shares Outstanding Excluded From Computation Of Diluted Net Loss Per Share (Details)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Total common stock equivalents
11,945 
15,538 
20,670 
Options to purchase common stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Total common stock equivalents
11,446 
14,253 
17,972 
Restricted stock units
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Total common stock equivalents
200 
289 
1,480 
Common stock subject to repurchase or forfeiture
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Total common stock equivalents
0 
0 
100 
Warrants |
Common Stock
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Total common stock equivalents
299 
996 
1,118 
Cash and Cash Equivalents, Investments and Restricted Cash (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
$ 67,030 
$ 56,117 
Net Unrealized Gain/(Loss)
(1)
0 
Fair Value
67,029 
56,117 
Short-term Investments
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
17,812 
33,360 
Net Unrealized Gain/(Loss)
(12)
(14)
Fair Value
17,800 
33,346 
Short-term Investments |
Corporate securities
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
10,572 
18,426 
Net Unrealized Gain/(Loss)
(12)
(15)
Fair Value
10,560 
18,411 
Long-term Investments
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
4,242 
1,453 
Net Unrealized Gain/(Loss)
(13)
(2)
Fair Value
4,229 
1,451 
Long-term Investments |
Corporate securities
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
3,241 
1,453 
Net Unrealized Gain/(Loss)
(10)
(2)
Fair Value
3,231 
1,451 
Long-term Investments |
Agency bond
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
1,001 
0 
Net Unrealized Gain/(Loss)
(3)
0 
Fair Value
998 
0 
Cash |
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
52,905 
49,836 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
52,905 
49,836 
Money market funds |
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
6,672 
5,828 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
6,672 
5,828 
Commercial paper |
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
5,453 
453 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
5,453 
453 
Commercial paper |
Short-term Investments
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
3,746 
13,435 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
3,746 
13,435 
Corporate securities |
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
600 
0 
Net Unrealized Gain/(Loss)
(1)
0 
Fair Value
599 
0 
Agency bond |
Cash and Cash Equivalents
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
1,400 
0 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
1,400 
0 
Agency bond |
Short-term Investments
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
3,494 
0 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
3,494 
0 
Certificate of deposit |
Short-term Investments
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
0 
1,499 
Net Unrealized Gain/(Loss)
0 
1 
Fair Value
0 
1,500 
Short-term restricted cash
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
300 
300 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
300 
300 
Long-term restricted cash
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
478 
1,480 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
478 
1,480 
Total restricted cash
 
 
Schedule Of Available For Sale Securities [Line Items]
 
 
Cost
778 
1,780 
Net Unrealized Gain/(Loss)
0 
0 
Fair Value
$ 778 
$ 1,780 
Cash and Cash Equivalents, Investments and Restricted Cash - Contractual Maturity of Available-for-Sale Investments (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 3 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Equity Investments
Amortized Cost
 
 
 
 
Due in 1 year or less
$ 25,265 
 
 
 
Due in 1 year or less
4,242 
 
 
 
Investments not due at a single maturity date
6,672 
 
 
 
Total
36,179 
 
 
 
Fair Value
 
 
 
 
Due in 1 year or less
25,252 
 
 
 
Due in 1 year or less
4,229 
 
 
 
Investments not due at a single maturity date
6,672 
 
 
 
Total
36,153 
 
 
 
Weighted average maturity of investment securities
4 months 
 
 
 
Investments in non-marketable equity investments
$ 2,019 
$ 0 
$ 0 
$ 2,000 
Fair Value Measurement - Financial Instruments Measured and Recorded at Fair Value on Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Assets:
 
 
Short-term investments
$ 17,800 
$ 33,346 
Fair Value on Recurring Basis
 
 
Assets:
 
 
Total assets measured and recorded at fair value
36,153 
41,078 
Liabilities:
 
 
Put option liability
 
1,079 
Fair Value on Recurring Basis |
Corporate securities
 
 
Assets:
 
 
Short-term investments
10,560 
18,411 
Long-term investments
3,231 
1,451 
Fair Value on Recurring Basis |
Agency bond
 
 
Assets:
 
 
Short-term investments
3,494 
 
Long-term investments
998 
 
Fair Value on Recurring Basis |
Money market funds
 
 
Assets:
 
 
Cash equivalents
6,672 
5,828 
Fair Value on Recurring Basis |
Commercial paper
 
 
Assets:
 
 
Cash equivalents
5,453 
453 
Short-term investments
3,746 
13,435 
Fair Value on Recurring Basis |
Corporate securities
 
 
Assets:
 
 
Cash equivalents
599 
 
Fair Value on Recurring Basis |
Agency bond
 
 
Assets:
 
 
Cash equivalents
1,400 
 
Fair Value on Recurring Basis |
Certificate of deposit
 
 
Assets:
 
 
Short-term investments
 
1,500 
Fair Value on Recurring Basis |
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
 
Assets:
 
 
Total assets measured and recorded at fair value
6,672 
5,828 
Fair Value on Recurring Basis |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Money market funds
 
 
Assets:
 
 
Cash equivalents
6,672 
5,828 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2)
 
 
Assets:
 
 
Total assets measured and recorded at fair value
29,481 
35,250 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Corporate securities
 
 
Assets:
 
 
Short-term investments
10,560 
18,411 
Long-term investments
3,231 
1,451 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Agency bond
 
 
Assets:
 
 
Short-term investments
3,494 
 
Long-term investments
998 
 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Commercial paper
 
 
Assets:
 
 
Cash equivalents
5,453 
453 
Short-term investments
3,746 
13,435 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Corporate securities
 
 
Assets:
 
 
Cash equivalents
599 
 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Agency bond
 
 
Assets:
 
 
Cash equivalents
1,400 
 
Fair Value on Recurring Basis |
Significant Other Observable Inputs (Level 2) |
Certificate of deposit
 
 
Assets:
 
 
Short-term investments
 
1,500 
Fair Value on Recurring Basis |
Significant Unobservable Inputs (Level 3)
 
 
Liabilities:
 
 
Put option liability
 
$ 1,079 
Long-Lived Assets - Textbook Library, Net (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
 
 
Textbook library
$ 100,783 
$ 169,463 
Less accumulated depreciation
(71,055)
(88,701)
Textbook library, net
$ 29,728 
$ 80,762 
Fair Value Measurement - Liabilities Level 3 Roll Forward (Details) (Put Option, Derivative Financial Instruments, Liabilities, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Put Option |
Derivative Financial Instruments, Liabilities
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
Beginning balance
$ 1,079 
$ 1,521 
Vesting of put options
0 
271 
Exercise of put options
(1,079)
(460)
Fair value adjustment related to put options
0 
(253)
Total financial liabilities
$ 0 
$ 1,079 
Long-Lived Assets - Property, Plant and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 37,898 
$ 33,599 
Less accumulated depreciation and amortization
(17,927)
(15,230)
Property and equipment, net
19,971 
18,369 
Computer and equipment
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
1,313 
1,083 
Software
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
2,591 
3,842 
Furniture and fixtures
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
1,652 
2,259 
Leasehold improvements
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
4,983 
5,153 
Content
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment, gross
$ 27,359 
$ 21,262 
Acquisitions - Additional Information (Details) (USD $)
12 Months Ended 0 Months Ended 0 Months Ended
Dec. 31, 2014
Oct. 1, 2014
Internships.Com
Oct. 1, 2014
Internships.Com
Jun. 5, 2014
InstaEDU
Apr. 9, 2014
Campus Special
Mar. 7, 2014
Bookstep L L C
Business Acquisition [Line Items]
 
 
 
 
 
 
Outstanding shares and voting interest
 
 
100.00% 
100.00% 
100.00% 
 
Fair value of purchase consideration
 
$ 10,000,000 
 
$ 31,100,000 
$ 16,000,000 
$ 500,000 
Portion of purchase price held as an escrow deposit
 
 
1,000,000 
4,500,000 
 
 
Business acquisition payment period
 
18 months 
 
 
1 year 
2 years 
Purchase consideration, cash
 
 
 
 
14,000,000 
 
Purchase consideration, shares
 
 
 
 
250,000 
 
Contingent purchase consideration, cash
 
 
 
 
 
2,500,000 
Fair value of subsequent payments
 
 
 
 
 
2,500,000 
Acquisition related expenses
$ 700,000 
 
 
 
 
 
Acquisitions - Summary of Fair Value of the Consideration (Details) (Internships.com, Campus Special, InstaEDU and Bookstep, USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Internships.com, Campus Special, InstaEDU and Bookstep
 
Business Acquisition [Line Items]
 
Cash consideration
$ 55,537 
Fair value of stock escrow consideration
2,585 
Fair value of stock contingent consideration
193 
Fair value of purchase consideration
$ 58,315 
Acquisitions - Summary of Fair Value of Identifiable Intangible Assets Acquired (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Business Acquisition [Line Items]
 
 
 
Goodwill
$ 91,301 
$ 91,301 
$ 49,545 
Internships.com, Campus Special, InstaEDU and Bookstep
 
 
 
Business Acquisition [Line Items]
 
 
 
Cash
 
1,665 
 
Other acquired assets
 
595 
 
Intangible asset
 
16,837 
 
Total identifiable assets acquired
 
19,097 
 
Liabilities assumed
 
(2,538)
 
Net identifiable assets acquired
 
16,559 
 
Goodwill
 
41,756 
 
Net assets acquired
 
58,315 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Developed technologies
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
4,174 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Customer lists
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
3,770 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Trade names
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
5,990 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Non-compete agreements
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
1,630 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Corporate partnerships
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
243 
 
Internships.com, Campus Special, InstaEDU and Bookstep |
Master services agreement
 
 
 
Business Acquisition [Line Items]
 
 
 
Intangible asset
 
$ 1,030 
 
Goodwill and Intangible Assets - Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Goodwill [Roll Forward]
 
 
Beginning balance
$ 91,301 
$ 49,545 
Additions due to acquisition
0 
41,756 
Ending balance
$ 91,301 
$ 91,301 
Goodwill and Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Finite Lived Intangible Assets [Line Items]
 
 
Accumulated Amortization
$ (11,565)
$ (8,619)
Impairment
 
(1,552)
Net Carrying Amount
5,265 
 
Indefinite-lived trade name
3,600 
3,600 
Total intangible assets, gross carrying amount
20,430 
23,797 
Intangible assets, net
8,865 
13,626 
Developed technologies
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
52 months 
50 months 
Gross Carrying Amount
9,417 
9,792 
Accumulated Amortization
(6,702)
(5,000)
Impairment
 
(194)
Net Carrying Amount
2,715 
4,598 
Customer lists
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
20 months 
15 months 
Gross Carrying Amount
2,820 
4,363 
Accumulated Amortization
(2,239)
(1,816)
Impairment
 
(829)
Net Carrying Amount
581 
1,718 
Trade names
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
48 months 
44 months 
Gross Carrying Amount
2,343 
3,132 
Accumulated Amortization
(920)
(1,085)
Impairment
 
(39)
Net Carrying Amount
1,423 
2,008 
Non-compete agreements
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
28 months 
21 months 
Gross Carrying Amount
1,220 
1,637 
Accumulated Amortization
(832)
(421)
Impairment
 
(278)
Net Carrying Amount
388 
938 
Master service agreements
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
21 months 
21 months 
Gross Carrying Amount
1,030 
1,030 
Accumulated Amortization
(872)
(266)
Impairment
 
0 
Net Carrying Amount
158 
764 
Corporate partnerships
 
 
Finite Lived Intangible Assets [Line Items]
 
 
Weighted-Average Amortization Period (in months)
 
0 months 
Gross Carrying Amount
 
243 
Accumulated Amortization
 
(31)
Impairment
 
(212)
Net Carrying Amount
 
$ 0 
Intangible Assets - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Finite Lived Intangible Assets [Line Items]
 
 
 
Impairment
 
$ (1,552,000)
 
Indefinite-lived trade name
3,600,000 
3,600,000 
 
Acquisition-Related Intangible Assets
 
 
 
Finite Lived Intangible Assets [Line Items]
 
 
 
Amortization expense of acquisition related to acquired intangible assets
4,800,000 
5,000,000 
4,400,000 
Internships.Com
 
 
 
Finite Lived Intangible Assets [Line Items]
 
 
 
Indefinite-lived trade name
 
$ 3,600,000 
 
Intangible Assets - Estimated Future Amortization Expense Related to Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
2016
$ 2,238 
2017
1,701 
2018
1,018 
2019
308 
2020
0 
Net Carrying Amount
$ 5,265 
Balance Sheet Details (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Current assets
 
 
Reimbursement from Ingram
$ 28,875 
$ 751 
Other
2,857 
3,113 
Other current assets
31,732 
3,864 
Current liabilities
 
 
Accrued shipping for cycle returns
3,355 
539 
Refund reserve
4,538 
6,174 
Taxes payable
3,913 
4,851 
Other
23,474 
19,619 
Accrued liabilities
$ 35,280 
$ 31,183 
Debt Obligations - Additional Information (Details) (Revolving Credit Facility, USD $)
12 Months Ended
Dec. 31, 2015
Jun. 30, 2015
Jun. 30, 2014
Aug. 31, 2013
Debt Instrument [Line Items]
 
 
 
 
Line of credit facility, current borrowing capacity
 
$ 30,000,000.0 
$ 40,000,000.0 
$ 50,000,000.0 
Credit facility, maximum borrowing capacity
 
65,000,000.0 
75,000,000.0 
 
Consolidated EBITDA
$ 2,000,000.0 
 
 
 
Ratio of total debt outstanding to EBITDA
1.5 
 
 
 
Base Interest Rate
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Marginal interest rate
0.50% 
 
 
 
One-Month LIBOR
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Marginal interest rate
1.00% 
 
 
 
Maximum |
LIBOR Rate
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Marginal interest rate
4.50% 
 
 
 
Stock Warrants - Black-Scholes Merton Option-Pricing Valuation Model (Details) (Common Stock Warrant, USD $)
12 Months Ended
Dec. 31, 2015
Common Stock Warrant
 
Class of Warrant or Right [Line Items]
 
Expected term
5 years 10 months 24 days 
Expected volatility
55.50% 
Dividend yield
0.00% 
Risk-free interest rate
1.61% 
Weighted-average fair value per share
$ 6.35 
Stock Warrants - Additional Information (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Nov. 30, 2013
Class of Warrant or Right [Line Items]
 
 
 
Number of common stock warrants converted from preferred stock warrants
200,000 
 
 
Weighted average exercise price
$ 12.00 
 
 
Common stock warrants remaining
200,000 
 
 
Common Stock Warrant
 
 
 
Class of Warrant or Right [Line Items]
 
 
 
Number of common stock warrants converted from preferred stock warrants
 
 
1,118,282 
Weighted average exercise price
$ 4.12 
$ 0.82 
$ 5.16 
Common stock warrants exercised
795,549 
122,733 
 
Other Income (Expense) |
Common Stock Warrant
 
 
 
Class of Warrant or Right [Line Items]
 
 
 
Gain on conversion of preferred stock warrants into common stock warrants
$ 3.3 
 
 
Commitments and Contingencies - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Apr. 10, 2015
Dec. 31, 2012
Jul. 31, 2010
Commitments and Contingencies Disclosure [Abstract]
 
 
 
 
 
 
Future sublease income per month (through November 2016)
 
 
 
$ 100,000 
 
 
Rental expense
2,500,000 
3,300,000 
2,900,000 
 
 
 
Property tax assessment
 
 
 
 
 
1,000,000 
Offer to the tax authority excluding tax and penalties
 
 
 
 
150,000 
 
Aggregate Future Minimum Lease Payments [Abstract]
 
 
 
 
 
 
2016
4,047,000 
 
 
 
 
 
2017
1,602,000 
 
 
 
 
 
2018
1,541,000 
 
 
 
 
 
2019
880,000 
 
 
 
 
 
2020
526,000 
 
 
 
 
 
Thereafter
87,000 
 
 
 
 
 
Total
$ 8,683,000 
 
 
 
 
 
Convertible Preferred Stock and Common Stock (Details) (USD $)
12 Months Ended 12 Months Ended 1 Months Ended 0 Months Ended 1 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
2005 Stock Incentive Plan
Nov. 11, 2013
2005 Stock Incentive Plan
Dec. 31, 2015
2013 Plan
Nov. 11, 2013
2013 Plan
Dec. 31, 2015
2013 Employee Stock Purchase Plan
Nov. 30, 2013
Common Stock Warrant
Nov. 30, 2013
Common Stock
Nov. 12, 2013
IPO
Designated IPO Equity Incentive Program
Nov. 30, 2013
IPO
Common Stock Warrant
Nov. 30, 2013
IPO
Common Stock
Nov. 30, 2013
IPO
Series D and Series E Preferred Stock
Dec. 31, 2015
Restricted Stock Units (RSUs)
Nov. 12, 2013
Restricted Stock Units (RSUs)
IPO
Designated IPO Equity Incentive Program
Dec. 31, 2015
Stock Options
2005 Stock Incentive Plan
Dec. 31, 2015
Employees and Consultants
Stock Options
2005 Stock Incentive Plan
Dec. 31, 2015
Employees and Consultants
Non-qualified stock
2005 Stock Incentive Plan
Dec. 31, 2015
Employees and Consultants
Incentive stock options or Non-qualified stock
2005 Stock Incentive Plan
Dec. 31, 2015
10% stockholder
Stock Options
2005 Stock Incentive Plan
Dec. 31, 2015
10% stockholder
Incentive stock options or Non-qualified stock
2005 Stock Incentive Plan
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock issued during period, shares
 
 
 
 
 
 
 
 
 
 
 
 
14,400,000 
 
1,305,377 
 
 
 
 
 
 
 
Price per share
 
 
 
 
 
 
 
 
 
 
 
 
$ 12.50 
 
 
 
 
 
 
 
 
 
Issuance of common stock, net
 
 
$ 162,883,000 
 
 
 
 
 
 
 
 
 
$ 162,900,000 
 
 
 
 
 
 
 
 
 
Underwriting discount and commissions
 
 
 
 
 
 
 
 
 
 
 
 
12,600,000 
 
 
 
 
 
 
 
 
 
Incurred offering costs
 
 
 
 
 
 
 
 
 
 
 
 
4,500,000 
 
 
 
 
 
 
 
 
 
Shares issued upon conversion of preferred stock
 
 
 
 
 
 
 
 
 
 
 
 
53,912,261 
 
 
 
 
 
 
 
 
 
Number of common stock warrants converted from preferred stock warrants
200,000 
 
 
 
 
 
 
 
1,118,282 
 
 
1,118,282 
 
 
 
 
 
 
 
 
 
 
Gain on conversion of preferred stock warrants into common stock warrants
 
 
 
 
 
 
 
 
 
 
 
3,300,000 
 
 
 
 
 
 
 
 
 
 
Number of options, granted
253,901 
 
 
 
 
 
 
 
 
 
931,791 
 
 
 
 
 
 
 
 
 
 
 
Number of RSUs granted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
472,644 
 
 
 
 
 
 
Deemed stock dividend, stock
 
 
 
 
 
 
 
 
 
11,667,254 
 
 
 
 
 
 
 
 
 
 
 
 
Deemed dividend to preferred stockholders
$ 0 
$ 0 
$ 102,557,000 
 
 
 
 
 
 
$ 102,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum IPO price threshold for conversion
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 26 
 
 
 
 
 
 
 
 
Common stock, shares authorized
400,000,000.0 
400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock, par value
$ 0.001 
$ 0.001 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding stock options
12,415,492 
14,962,099 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding RSUs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,322,611 
 
 
 
 
 
 
 
Shares available for grant under the stock plans
 
 
 
 
 
8,111,562 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total common shares reserved for future issuance
38,947,073 
 
 
 
3,838,985 
 
12,000,000 
4,897,408 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award exercise price as a percent of FMV of common stock on grant date, minimum threshold
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
85.00% 
85.00% 
 
110.00% 
Stockholders ownership percentage
 
 
 
10.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Award expiration period
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
 
 
 
5 years 
 
Vesting period of stock awards
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 years 
 
 
 
 
 
Maximum employee subscription rate
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee discount on applicable offering period
 
 
 
 
 
 
 
15.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Offering period (no more than 6 months)
 
 
 
 
 
 
 
6 months 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares reserved
 
 
 
 
 
 
 
4,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum aggregate number of shares to be issued
 
 
 
 
 
 
 
20,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity - Additional Information (Details) (USD $)
12 Months Ended 1 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2015
Restricted Stock Units (RSUs)
Dec. 31, 2015
Restricted Stock Units (RSUs)
Minimum
Dec. 31, 2015
Restricted Stock Units (RSUs)
Maximum
Dec. 31, 2015
Stock Options
Dec. 31, 2015
Performance-based restricted stock units
Dec. 31, 2014
Performance-based restricted stock units
Dec. 31, 2015
Performance-based restricted stock units
Minimum
Feb. 28, 2014
Performance-based restricted stock units
Maximum
Dec. 31, 2015
Performance-based restricted stock units
Maximum
Dec. 31, 2014
Performance-based restricted stock units
Maximum
Dec. 31, 2015
Employee stock purchase plan
Dec. 31, 2014
Employee stock purchase plan
Dec. 31, 2015
Restricted Stock Units (RSUs) and Performance Share Units (PSUs)
Dec. 31, 2014
Acquisition-Related Restricted Shares
Dec. 31, 2013
Acquisition-Related Restricted Shares
Dec. 31, 2010
Acquisition-Related Restricted Shares
Dec. 31, 2015
Consultant
Dec. 31, 2014
Consultant
Dec. 31, 2013
Consultant
Dec. 31, 2014
InstaEDU
Performance-based restricted stock units
Dec. 31, 2014
Accrued Liabilities
Acquisition-Related Restricted Shares
Dec. 31, 2015
2013 Plan
Performance-based restricted stock units
Minimum
Dec. 31, 2015
2013 Plan
Performance-based restricted stock units
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vesting period of stock awards
 
 
 
 
3 years 
4 years 
 
3 years 
 
2 years 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
3 years 
Stock issued under ESPP
419,137 
340,617 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average purchase price of shares purchased
$ 5.81 
$ 4.46 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from issuance of shares under ESPP
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,400,000 
$ 1,500,000 
 
 
 
 
 
 
 
 
 
 
 
Exercises in period, intrinsic value
3,200,000 
3,100,000 
4,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation expense for stock options granted to employees, officers, directors, and consultants
9,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average vesting period for recognition of compensation expense
 
 
 
 
 
 
1 year 1 month 6 days 
 
 
 
 
 
 
 
 
1 year 7 months 13 days 
 
 
 
 
 
 
 
 
 
 
Number of options, granted
253,901 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0 
0 
110,886 
 
 
 
 
Share-based compensation expense
38,775,000 
36,888,000 
36,958,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000 
500,000 
 
400,000 
700,000 
900,000 
 
 
 
 
Capitalized share-based compensation expense
0 
0 
0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock issued during period, shares
 
 
 
1,305,377 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares withheld
 
 
 
535,348 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash remitted to tax authorities related to RSU settlement
8,710,000 
3,980,000 
1,034,000 
3,600,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance based restricted stock unit award granted to executive officers
 
 
 
 
 
 
 
2,300,824 
1,208,560 
 
 
 
 
 
 
8,132,727 
 
 
 
 
 
 
2,280,081 
 
 
 
Performance based restricted stock unit award granted weighted average grant date fair value
 
 
 
 
 
 
 
$ 6.59 
$ 6.37 
 
 
 
 
 
 
$ 6.88 
 
 
 
 
 
 
$ 6.00 
 
 
 
Percentage of vesting of share-based compensation awards
 
 
 
 
 
 
 
 
 
 
 
 
120.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement of performance based restricted stock unit awards percentage
 
 
 
 
 
 
 
 
 
0.00% 
120.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Awards forfeited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,188,662 
 
 
 
 
 
 
 
 
 
 
Unrecognized compensation costs related to restricted stock units
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
41,700,000 
 
 
 
 
 
 
 
 
 
 
Fixed price per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 11.94 
 
 
 
 
 
 
 
Period to sell shares before or after termination
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
90 days 
 
 
 
 
 
 
 
Employee option to sell vested shares, number of shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
189,516 
 
 
 
 
 
 
 
 
 
Obligation to purchase shares, recorded liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,100,000 
 
 
Stockholders' Equity - Share-based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation expense
$ 38,775 
$ 36,888 
$ 36,958 
Cost of revenues
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation expense
262 
617 
1,185 
Technology and development
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation expense
11,992 
10,451 
9,414 
Sales and marketing
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation expense
7,901 
11,300 
7,107 
General and administrative
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
Share-based compensation expense
$ 18,620 
$ 14,520 
$ 19,252 
Stockholders' Equity - Summary of Assumptions (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Employee stock purchase plan
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (years)
6 months 
6 months 
6 months 
Expected volatility
 
 
45.00% 
Dividend yield
0.00% 
0.00% 
0.00% 
Risk-free interest rate
 
 
0.10% 
Weighted-average grant-date fair value per share
$ 1.98 
$ 1.68 
$ 3.44 
Employee stock purchase plan |
Minimum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
36.20% 
40.54% 
 
Risk-free interest rate
0.09% 
0.05% 
 
Employee stock purchase plan |
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected volatility
49.59% 
46.42% 
 
Risk-free interest rate
0.31% 
0.07% 
 
Stock Options
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (years)
 
6 years 26 days 
 
Dividend yield
0.00% 
0.00% 
0.00% 
Weighted-average grant-date fair value per share
$ 3.54 
$ 3.82 
$ 6.20 
Stock Options |
Minimum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (years)
5 years 6 months 
 
5 years 0 months 29 days 
Expected volatility
50.68% 
55.91% 
55.72% 
Risk-free interest rate
1.75% 
1.88% 
0.81% 
Stock Options |
Maximum
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
Expected term (years)
6 years 
 
6 years 7 months 18 days 
Expected volatility
51.69% 
56.83% 
73.18% 
Risk-free interest rate
1.86% 
2.02% 
1.92% 
Stockholders' Equity - Summary of Stock Option Activity (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Number of Options Outstanding
 
 
Number of Options Outstanding, Beginning
14,962,099 
 
Number of options, granted
253,901 
 
Number of Options, Exercised
(1,745,616)
 
Number of Options, Canceled
(1,054,892)
 
Number of Options Outstanding, Ending
12,415,492 
14,962,099 
Weighted-Average Exercise Price per Share
 
 
Weighted Average Exercise Price per Share, Outstanding, Beginning
$ 8.53 
 
Weighted Average Exercise Price per Share, Granted
$ 7.34 
 
Weighted-Average Exercise Price per Share, Exercised
$ 6.45 
 
Weighted-Average Exercise Price per Share, Canceled
$ 9.96 
 
Weighted Average Exercise Price per Share, Outstanding, Ending
$ 8.68 
$ 8.53 
Options outstanding, weighted-average remaining contractual term in years
6 years 2 months 27 days 
7 years 1 month 9 days 
Options outstanding, aggregate intrinsic value
$ 5,082,489 
$ 6,646,629 
Options exercisable, number outstanding
10,278,919 
 
Options exercisable, Weighted Average Exercise Price
$ 8.39 
 
Options exercisable, Weighted Average Remaining Contractual Term
5 years 11 months 12 days 
 
Options exercisable, Aggregate Intrinsic Value
5,067,905 
 
Options vested and expected to vest, Number Outstanding
12,243,418 
 
Options vested and expected to vest, Weighted Average Exercise Price
$ 8.66 
 
Options vested and expected to vest, Weighted Average Remaining Contractual Term
6 years 2 months 16 days 
 
Options vested and expected to vest, Aggregate Intrinsic Value
$ 5,080,276 
 
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Details) (Restricted Stock Units (RSUs) and Performance Share Units (PSUs), USD $)
12 Months Ended
Dec. 31, 2015
Restricted Stock Units (RSUs) and Performance Share Units (PSUs)
 
Restricted Stock Units Outstanding
 
Number of Restricted Stock Units Outstanding, Beginning
9,125,190 
Number of RSUs granted
8,132,727 
Number of Restricted Stock Units, Released
(2,746,644)
Number of Restricted Stock Units, Canceled
(1,188,662)
Number of Restricted Stock Units Outstanding, Ending
13,322,611 
Weighted-Average Grant Date Fair Value
 
Weighted Average Grant Date Fair Value, Beginning balance
$ 6.25 
Weighted Average Grant Date Fair Value, Granted
$ 6.88 
Weighted Average Grant Date Fair Value, Released
$ 6.41 
Weighted Average Grant Date Fair Value, Canceled
$ 6.64 
Weighted Average Grant Date Fair Value, Ending balance
$ 6.57 
Income Taxes - Additional Information (Details) (USD $)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Operating Loss Carryforwards [Line Items]
 
 
 
 
Provision for income taxes
$ 1,479,000 
$ 186,000 
$ 642,000 
 
Deferred income taxes increase (decrease)
0 
1,291,000 
0 
 
Increase in valuation allowance
(19,100,000)
(20,700,000)
 
 
Undistributed earnings of international subsidiaries
4,400,000 
3,400,000 
 
 
Interest and penalties related to uncertain tax positions
100,000 
100,000 
100,000 
 
Interest and penalties accrued related to uncertain tax positions
700,000 
500,000 
 
 
Increase in unrecognized tax benefits
600,000 
1,300,000 
 
 
Unrecognized tax benefits
4,849,000 
4,272,000 
2,994,000 
1,942,000 
Unrecognized tax benefits that would impact the effective tax rate
1,400,000 
 
 
 
Federal
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Net operating loss carryforwards
159,000,000 
96,900,000 
 
 
Tax credit carryforwards
3,700,000 
2,500,000 
 
 
State
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Net operating loss carryforwards
120,000,000 
56,500,000 
 
 
Tax credit carryforwards
4,000,000 
2,700,000 
 
 
Tax Authorities in India |
Foreign |
Minimum
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Range of possible outcomes
0 
 
 
 
Tax Authorities in India |
Foreign |
Maximum
 
 
 
 
Operating Loss Carryforwards [Line Items]
 
 
 
 
Range of possible outcomes
$ 100,000 
 
 
 
Income Taxes - Provision for Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Current income taxes:
 
 
 
Federal
$ 0 
$ 0 
$ 0 
State
263 
304 
282 
Foreign
778 
871 
358 
Total current income taxes
1,041 
1,175 
640 
Deferred income taxes:
 
 
 
Federal
484 
(1,003)
0 
State
56 
33 
0 
Foreign
(102)
(19)
2 
Total deferred income taxes
438 
(989)
2 
Total income tax provision
$ 1,479 
$ 186 
$ 642 
Income Taxes - Loss before Provision for Income Taxes (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
United States
$ (59,376)
$ (65,930)
$ (55,974)
Foreign
1,645 
1,358 
766 
Loss before provision for income taxes
$ (57,731)
$ (64,572)
$ (55,208)
Income Taxes - Effective Income Tax Reconciliation (Details)
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Income Tax Disclosure [Abstract]
 
 
 
Tax at U.S. statutory rate
34.00% 
34.00% 
34.00% 
State, net of federal benefit
3.70% 
5.10% 
2.70% 
Share-based compensation
(7.00%)
(6.50%)
(7.70%)
Non-deductible expenses
(0.20%)
(0.40%)
(0.10%)
Other
0.00% 
(0.50%)
0.90% 
Change in valuation allowance
(33.10%)
(32.00%)
(31.00%)
Total
(2.60%)
(0.30%)
(1.20%)
Income Taxes - Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2015
Dec. 31, 2014
Deferred tax assets:
 
 
Accrued expenses and reserves
$ 7,351 
$ 6,291 
Share-based compensation
21,676 
18,391 
Deferred revenue
1,488 
4,589 
Net operating loss carryforwards
58,664 
36,847 
Property and equipment, textbooks and intangibles assets
7,577 
10,754 
Other items
1,612 
2,277 
Gross deferred tax assets
98,368 
79,149 
Valuation allowance
(98,209)
(79,093)
Total deferred tax assets
159 
56 
Deferred tax liabilities:
 
 
Intangible asset
862 
321 
Total deferred tax liabilities
862 
321 
Net deferred tax liabilities
$ (703)
$ (265)
Income Taxes - Unrecognized Tax Benefits (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
 
Beginning balance
$ 4,272 
$ 2,994 
$ 1,942 
Increase in tax positions for prior years
82 
406 
318 
Decrease in tax positions for prior years
(416)
(284)
(2)
Decrease in tax positions for prior year settlement
(61)
0 
(16)
Increase in tax positions for current year
948 
1,172 
742 
Change due to translation of foreign currencies
24 
(16)
10 
Ending balance
$ 4,849 
$ 4,272 
$ 2,994 
Restructuring Charges (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
$ 1,600,000 
$ 300,000 
$ 500,000 
$ 2,500,000 
$ 0 
$ 0 
$ 0 
$ 0 
$ 4,868,000 
$ 0 
$ 0 
2015 Restructuring Plan
 
 
 
 
 
 
 
 
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2015
 
 
 
0 
 
 
 
 
0 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
4,868,000 
 
 
Cash payments
 
 
 
 
 
 
 
 
(2,505,000)
 
 
Write-offs
 
 
 
 
 
 
 
 
(317,000)
 
 
Other
 
 
 
 
 
 
 
 
472,000 
 
 
Balance at December 31, 2015
2,518,000 
 
 
 
 
 
 
 
2,518,000 
 
 
2015 Restructuring Plan |
Workforce Reduction Costs
 
 
 
 
 
 
 
 
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2015
 
 
 
0 
 
 
 
 
0 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
1,885,000 
 
 
Cash payments
 
 
 
 
 
 
 
 
(1,830,000)
 
 
Write-offs
 
 
 
 
 
 
 
 
0 
 
 
Other
 
 
 
 
 
 
 
 
0 
 
 
Balance at December 31, 2015
55,000 
 
 
 
 
 
 
 
55,000 
 
 
2015 Restructuring Plan |
Lease Termination and Other Costs
 
 
 
 
 
 
 
 
 
 
 
Restructuring Reserve [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2015
 
 
 
0 
 
 
 
 
0 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
2,983,000 
 
 
Cash payments
 
 
 
 
 
 
 
 
(675,000)
 
 
Write-offs
 
 
 
 
 
 
 
 
(317,000)
 
 
Other
 
 
 
 
 
 
 
 
472,000 
 
 
Balance at December 31, 2015
$ 2,463,000 
 
 
 
 
 
 
 
$ 2,463,000 
 
 
Restructuring Charges - Narrative (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
$ 1,600,000 
$ 300,000 
$ 500,000 
$ 2,500,000 
$ 0 
$ 0 
$ 0 
$ 0 
$ 4,868,000 
$ 0 
$ 0 
Restructuring
2,243,000 
 
 
 
 
 
 
 
2,243,000 
 
 
Restructuring reserve, noncurrent
275,000 
 
 
 
 
 
 
 
275,000 
 
 
2015 Restructuring Plan
 
 
 
 
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
4,868,000 
 
 
Restructuring reserve
2,518,000 
 
 
 
0 
 
 
 
2,518,000 
0 
 
Workforce Reduction Costs |
2015 Restructuring Plan
 
 
 
 
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
1,885,000 
 
 
Number of positions eliminated
 
 
 
 
 
 
 
 
71 
 
 
Restructuring reserve
55,000 
 
 
 
0 
 
 
 
55,000 
0 
 
Lease Termination and Other Costs |
2015 Restructuring Plan
 
 
 
 
 
 
 
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Restructuring charges
 
 
 
 
 
 
 
 
2,983,000 
 
 
Restructuring reserve
$ 2,463,000 
 
 
 
$ 0 
 
 
 
$ 2,463,000 
$ 0 
 
Related-Party Transactions - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Adobe Systems |
Chief Executive Officer
 
 
 
Related Party Transaction [Line Items]
 
 
 
Purchases from related party
$ 2.9 
$ 0.9 
$ 0.4 
Revenue from related parties
0.1 
1.0 
0.2 
Due to related parties
0.4 
0.1 
 
Cengage |
Board Of Directors Member
 
 
 
Related Party Transaction [Line Items]
 
 
 
Purchases from related party
11.5 
12.4 
 
Revenue from related parties
0.1 
 
 
Due to related parties
 
0.1 
 
Due from related parties
 
0.1 
 
Number of board members appointed to Board of Directors of related party
1 
 
 
Shutterfly Inc (Shutterfly) |
Chief Executive Officer
 
 
 
Related Party Transaction [Line Items]
 
 
 
Purchases from related party
1.1 
 
 
Revenue from related parties
0.1 
 
 
Number of board members appointed to chief executive officer of related party
1 
 
 
Synack Inc. |
Board Of Directors Member
 
 
 
Related Party Transaction [Line Items]
 
 
 
Purchases from related party
$ 0.1 
 
 
Number of board members appointed to chief executive officer of related party
1 
 
 
Employee Benefit Plan (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Compensation and Retirement Disclosure [Abstract]
 
 
 
Matching contributions
$ 0.8 
$ 0.8 
$ 0.3 
Segment Information - Additional Information (Details)
12 Months Ended
Dec. 31, 2015
segment
Segment Reporting [Abstract]
 
Number of reportable segments
1 
Number of operating units
1 
Segment Information - Revenue by Product Line (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
$ 68,154 
$ 81,286 
$ 67,061 
$ 84,872 
$ 84,417 
$ 81,532 
$ 64,492 
$ 74,393 
$ 301,373 
$ 304,834 
$ 255,575 
Required Materials
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of publishers providing supplemental materials
 
 
 
 
 
 
 
 
120 
 
 
Total Revenue
 
 
 
 
 
 
 
 
207,088 
236,717 
213,746 
Chegg Services
 
 
 
 
 
 
 
 
 
 
 
Revenue from External Customer [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total Revenue
 
 
 
 
 
 
 
 
$ 94,285 
$ 68,117 
$ 41,829 
Selected Quarterly Financial Data (unaudited) (Details) (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2015
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Dec. 31, 2014
Sep. 30, 2014
Jun. 30, 2014
Mar. 31, 2014
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net revenues
$ 68,154,000 
$ 81,286,000 
$ 67,061,000 
$ 84,872,000 
$ 84,417,000 
$ 81,532,000 
$ 64,492,000 
$ 74,393,000 
$ 301,373,000 
$ 304,834,000 
$ 255,575,000 
Gross profit
41,774,000 
19,566,000 
30,805,000 
19,379,000 
45,794,000 
13,251,000 
25,896,000 
8,908,000 
111,524,000 
93,849,000 
80,515,000 
Net (loss) income
3,630,000 
(24,167,000)
(10,131,000)
(28,542,000)
1,688,000 
(32,441,000)
(8,246,000)
(25,759,000)
(59,210,000)
(64,758,000)
(55,850,000)
Weighted average shares used to compute net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in shares)
87,993 
87,706 
86,741 
84,794 
83,925 
83,688 
83,209 
82,181 
86,818 
83,241 
21,121 
Diluted (in shares)
93,225 
87,706 
86,741 
84,794 
86,543 
83,688 
83,209 
82,181 
 
 
 
Net (loss) income per share:
 
 
 
 
 
 
 
 
 
 
 
Basic (in dollars per share)
$ 0.04 
$ (0.28)
$ (0.12)
$ (0.34)
$ 0.02 
$ (0.39)
$ (0.10)
$ (0.31)
 
 
 
Diluted (in dollars per share)
$ 0.04 
$ (0.28)
$ (0.12)
$ (0.34)
$ 0.02 
$ (0.39)
$ (0.10)
$ (0.31)
 
 
 
Restructuring charges
$ 1,600,000 
$ 300,000 
$ 500,000 
$ 2,500,000 
$ 0 
$ 0 
$ 0 
$ 0 
$ 4,868,000 
$ 0 
$ 0