Greetings, and welcome to Chegg Inc.'s Second Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tracey Ford. Thank you. You may begin. Good afternoon. Thank you for joining Chegg's Second Quarter 2025 Conference Call. On today's call are Nathan Schultz, President and CEO, and David Longo, Chief Financial Officer. A copy of our earnings press release, along with our investor presentation, is available on our investor relations website, investor.chegg.com. A replay of this call will also be available on our website. We routinely post information on our website and intend to make important announcements on our media center website at chegg.com/mediacenter. We encourage you to make use of these resources. Before we begin, I would like to point out that during the course of this call, we will make forward-looking statements regarding future events, including the future financial and operating performance of the company. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statement. We caution you to consider the important factors that could cause actual results to differ materially from those in the forward-looking statement. In particular, we refer you to the cautionary language included in today's earnings release and the risk factors described under Chegg's annual report on Form 10-K for the year ended December 31st, 2024, filed with the Securities and Exchange Commission on February 24th, 2025, as well as our other filings with the SEC. Any forward-looking statements we make today are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. Our GAAP results and GAAP to non-GAAP reconciliations can be found in our earnings press release on the investor slide deck on our IR website, investor.chegg.com. We also recommend you review the investor data sheet, which is also posted on our IR website. Now, I will turn the call over to Nathan. Thank you, Tracey. Hello and thank you for joining Chegg's Second Quarter 2025 Earnings Call. Today's call will be structured in two areas. First, an update on the strategic review process, and second, deeper in depth on our transformation to profitable growth, specifically within Skills and Busuu, which we believe will be the growth engines for Chegg going forward. As part of the strategic review process, in conjunction with our advisors, we have undertaken a comprehensive evaluation of both our internal operations and the broad market landscape to drive the best possible outcome for our stockholders and maximize long-term shareholder value. As a reminder, we are exploring a range of outcomes, including being acquired, undertaking a go-private transaction, or remaining a public standalone company. We continue to engage with a select group of parties. Q2 was a good quarter for Chegg. We surpassed their guidance and delivered $105 million in revenue and $23 million in adjusted EBITDA. I'm pleased by our continued focus on disciplined expense management, having identified an additional $17 million in CapEx and expense savings that will be realized in 2026. Additionally, I'm encouraged by the revenue growth in Busuu and the reinvention of Chegg Study into a Personalized Learning Assistant that continues to get less expensive to run thanks to AI. We remain firmly on track to achieve the targets outlined in our previously announced restructuring efforts and reduce our non-GAAP expense by $165 million- $175 million in 2025, and now expect the total non-GAAP expense savings in 2026 to be between $110 million and $120 million. As we look towards 2026, Chegg is evolving into a skills-focused organization, investing in two large growth areas: language learning and workplace readiness and upskilling. These businesses, Busuu and Skills respectively, represent the future of our company and will serve as the primary growth engines, while our core academic product, Chegg Study, will remain a valuable service for millions of students and generate meaningful cash that will support our investments in Busuu and Skills. Busuu is our language learning business that caters to adults who need to learn a new language to better their life or career. This is an enormous market of 78 million success-seeking learners with a $3.2 billion market opportunity. Our recent investments are paying off, and if you haven't tried Busuu yet, now is a great time. We encourage you to explore the new AI-powered features, including our new Speaking Bites product. Busuu continues on a strong path, achieving a 15% year-over-year revenue increase in Q2, with good performance in both the B2C and B2B segments. Busuu's B2C revenue increased 6% year-over-year, and in the second half of the year, B2C focus will be on product innovation, with continued emphasis on AI as a driver for personalization. Busuu's B2B business achieved an even more impressive 39% year-over-year revenue growth, continuing a robust double-digit growth trajectory, including retention improving by 22 percentage points year-over-year. Throughout H2, we will continue our rollout with Guild into the English language learning vertical and expand our offering with Learning Pathways, which offers personalized courses focused on key language and professional skills for specific roles and industries. We've had significant B2B traction in the DACH region as well, with new partners such as HSF Fenster & Turen and Hubert Berta Media. We remain confident that Busuu will achieve $48 million in revenue in 2025 and will be adjusted EBITDA positive in the first quarter of 2026. Our Skills business focuses on the $40 billion market serving workplace readiness and upskilling for professional adults looking to move ahead in their careers. We've spent the last 12 months modernizing our product offering and prioritizing three growth areas: AI programs, career fundamentals, and professional upskilling. We're really excited to see exactly what we want. Enrollments have increased 16% quarter- over- quarter and an 11% increase in monthly active users across our new programs quarter over quarter. Looking ahead to Q3, we'll continue to invest in and expand our go-to-market strategies for Skills. Here are the priorities. We're focusing on growing our direct B2B presence, as well as deepening our relationship with distribution partners such as Guild. We are also pursuing ACE credit recommendations for several of our Skills programs to count for college credits, helping to support those seeking degrees and creating a bridge for us to monetize students as they transition from our academic services to our career services. Finally, we are continuing to strengthen and broaden our programs, expanding our reach into the enormous upskilling market opportunity. For a complete view of our Skills catalog, please reference our investor deck. We're optimistic about the potential for our Skills business and believe it is on a path to profitability and positive double-digit growth in 2026. Chegg Study continues to serve millions of students, and our investments in AI have transformed Chegg Study into a personalized learning coach that helps students succeed and improve their opportunity to graduate. Earlier this year, we launched Solution Scout and AI-powered practicing flashcard generators. We're getting really positive feedback with students reporting a 23% lift in the statement, "Chegg helped me learn today," and a 17% lift in students who intend to use Chegg in the next 30 days. Most importantly, our monthly retention rate is up 117 basis points in Q2. For the rest of 2025, we'll continue to push the differentiated and personalized nature of our product. Research from the Pew Center confirms that the freshman class of 2025 is expected to be the biggest, most diverse ever. This September, we'll introduce two new core capabilities into the existing user interface, pushing Chegg Study into a personalized learning coach for the modern learner. First, we are building a smart planning tool to help students set learning goals, organize their work, and stay on track with personalized step-by-step guidance. Second, we are introducing a voice interface which, combined with visual aids and a thoughtful AI agent, will deepen learning across topics and disciplines. Voice matters for learning because it improves comprehension and memory, clarifies thinking, and increases engagement. Finally, our business institution pilot program continues to expand, moving from five active pilot programs at the start of the year to now 23. With many pilots in place, we are now focusing on efficacy studies, validating what we have always known: students who use Chegg perform better academically. We believe there is a tremendous opportunity to support a broad range of students in achieving their academic goals while increasing persistence in graduation rates. To wrap this up, we continue to make progress towards the strategic alternatives process and are pleased with the positive trends we are seeing in Busuu and Skills and the technology investments we've made in Chegg Study to allow the business to run efficiently and be the investment vehicle for the company in 2026. With that, I'll turn it over to David. Thank you, Nathan, and good afternoon. Today, I will be presenting our financial performance for the second quarter of 2025, along with the company's outlook for the third quarter. We delivered a good second quarter, exceeding our guidance on both revenue and adjusted EBITDA. We continue to prioritize disciplined cost management in line with our business outlook. We are on target to fully realize the non-GAAP expense savings objectives we previously announced of $165 million- $175 million in 2025 and $100 million- $110 million in 2026. As Nathan highlighted earlier, we are not stopping there. We have identified an additional $10 million of operating expense savings and $7 million in CapEx savings in 2026. Expense discipline is now in our DNA, and we are committed to unlocking each and every opportunity to strengthen cash flow and create shareholder value. In the second quarter, total revenue was $105 million, a decrease of 36% year-over-year. This includes subscription services revenue of $90 million. We had 2.6 million subscribers during the quarter, representing a year-over-year decline of 40% as we continue to feel the impact of lower traffic, largely due to Google AI overviews. Despite the traffic trends, retention in our pool increased year-over-year, demonstrating that when students find Chegg, they value the service and are retaining as well as ever. Skills and other revenue was $15 million in the quarter, which includes approximately $7 million of revenue from content licensing. As we outlined last quarter, these content licensing agreements are non-exclusive and for a small percentage of our content. Non-GAAP operating expenses were $64 million in the quarter, a reduction of approximately $31 million or 33% year-over-year, driven by the execution of our multiple restructurings. Our second quarter adjusted EBITDA was $23 million, representing a margin of 22%. Capital expenditures for the quarter were $7 million, a decrease of 60% year-over-year. We anticipate full-year 2025 CapEx of approximately $30 million, with a targeted further reduction of approximately 50% in 2026. Through innovative use of AI, we are on track to reduce content and software development CapEx by over $50 million in 2026 versus 2024, while still delivering a high-quality experience that our students expect from us. Free cash flow for the second quarter was negative $12 million, which was impacted by severance payments of $12.5 million related to our restructuring, as well as our annual prepayment for hosting expenses. Looking at the balance sheet, we concluded the quarter with cash and investments of $114.1 million and a net cash balance of $52 million. Looking ahead for Q3 guidance, we expect total revenue between $75 million and $77 million, with subscription services revenue between $67 million and $69 million. Gross margin to be in the range of 56%- 57% and adjusted EBITDA between $7 million and $8 million. In closing, we have adapted our business in response to evolving consumer expectations and ongoing market turbulence. We are especially encouraged by the momentum we are seeing in Busuu, as well as the strong potential of Skills, and for both to be significant growth drivers in our portfolio. We are investing in these platforms to accelerate growth and ensure they remain key drivers of long-term shareholder value. At the same time, we continue to align our cost structure to support our priorities of generating cash flow and maximizing value for shareholders. Finally, I am pleased to announce that we have successfully cured our stock price deficiency during the quarter and regained compliance with the NYSE's price listing requirements. With that, I will turn the call over to the operator for your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star then one on your telephone keypad. A confirmation sound will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question we have is from Ryan MacDonald of Needham. Please go ahead. Hey, thanks for taking the question. This is Matt Shea on for Ryan. Maybe starting with Busuu, nice to see the strong growth there, particularly in the B2B segment. As we think about the durability of the B2B segment within Busuu, it seems like partners are key to driving further growth. Do you guys think you can continue to grow at this rate with your current set of channel partners, or how do you think about adding incremental partners versus going deeper with existing as you put together that growth algorithm? Hey, Matt. Thanks for the question. Missing your Ryan's voice, but nice for the question. Around the B2B side, I want to clarify a couple of things on this. You know, our efforts around B2B and why we continue to grow is definitely a two-sided element there. There is our own direct and our sales force, which we've been really proud of over the last 12 months, really growing that, getting that, I think, humming, getting the metrics going, getting the sales team cranking. That is really driving a lot of that. It is also the great relationship that we have with Guild at the moment, growing from the foreign language category and now into the English language category. We are not beholden to a reseller market to grow. We own a lot of our own destiny within our own sales structure. We are really proud of what the team has done over there, and we are going to continue to see that grow. Do we think this growth is going to continue? Absolutely. The lever really is continuing to drive into the traditional kind of enterprise sales metrics, making sure those sales reps continue to drive in new leads and continue to convert those leads and continuing to convert renewals at a higher rate. We own a lot of our own destiny in that. I am really excited to see what the future does there. Okay, great. It sounds like a lot of optimism there. Maybe on the Chegg Study side, nice to see the traction in the business-to-institution pilots increasing from that 5 to 23 programs now. As you look to the fall, is there potential for incremental partners to join before the fall back-to-school season, or how do you think about incremental adds ahead of that? Longer term, how do you anticipate these pilots evolving into more meaningful relationships, and what might a timeline for something like that look like? Yeah, we're real pleased with the success of growing from 5 to 23. The secret to unlocking the institutional market is to prove you're valued. With the 23 we have now, we're going to continue to add some logos as we go throughout the year. The focus really is proving out what we believe we've always known: students that use Chegg perform better in school. The more we get schools behind us, the more that wave builds and builds and builds. Turning this into a business that drives significant revenue in 2026 and 2027 really depends on us working with these schools. We've focused on getting these efficacy reports, which we plan on doing throughout the second half of this year. By the time we get into 2026, we've got really, really verified and viable statistics around our performance in helping students make connections to the classroom and ultimately perform better from a persistence and graduation rate. That's the key to unlocking more predictable growth within the B2B market. Got it. Thanks for all the color. Appreciate it. The next question we have is from Devin Au of KeyBanc Capital Markets. Please go ahead. Hi, Nathan. Hi, David. Thanks for taking my questions. I also want to ask about Busuu as well, maybe on the B2C portion of the business. It seems like that's been holding up nicely. Could you just talk about what's been driving that steady performance? Have you seen perhaps broad consumer sentiment improve quarter- over- quarter, or was the strength mainly driven by some of the new features you've been launching in the past couple of quarters? Yeah, it's two things I'll talk about. One is focusing on the right persona. We've talked about this a couple of times, I believe, in some past calls around this persona we call a success seeker. These are people who need to learn a language, not just dabbling and interested in a language. They need to learn a language for their job, for their life. By focusing on who should really be buying our product versus trying to go out after everyone in the general market in language learning, it has allowed us to identify the right people, drive them into the right conversion funnels, and convert, frankly. That's a big driver. The second is our product and our product enhancements. We've really focused on integrating AI to take away some of the fear that people have about speaking a language, because the best way to learn a language is to actually practice and to engage with speaking that language. AI gives us a great ability to do that in a non-threatening environment versus having to talk to another person who is a native speaker in that tongue. AI allows people to practice, make it very interactive, and it has been a great kind of driver. We call that the Speaking Bites and Speaking Practice within the product. We actually encourage everyone to go try it because we're really proud of it. It's those two categories, it's those two factors really driving in on who should be buying our product and identifying them, then going and tracking them and getting them to the right conversion funnels, and the innovation that the team has produced leveraging AI to make the product a lot stickier and get people into, again, to get to a point of like knowing why they should buy the product. Got it. I appreciate the context. It seems like it's doing well for sure. I want to switch gears a little bit and ask about Chegg Skills just because there's news of some of the big tech and hyperscalers kind of stepping up their initiatives around AI education. I know it's still kind of early efforts by these large corporations, but curious to hear how do you view your Chegg Skills business kind of position in that marketplace to maybe capture some of the spend coming down in the future? Thank you. Yeah, great follow-up. As we saw in some of our prepared remarks, we're very optimistic about the Skills business. We took a 12-month period of time to really think about what the Skills business should be for us and transition it from the traditional boot camps. If you recall that market was red-hot at one moment, it isn't so red-hot these days, and now we're into the world of upskilling or reskilling that we're doing. We took that time to really transition the platform from one that was, I'm going to call it long-form in nature, really long hours, the really long courses, to one that is more aligned to what people want today, which is kind of these micro-learning moments. Whether that is the AI fundamentals that we're working on or any of the other categories that we're building out, we really feel the package that we've built and the container that we've built for our courses is something that's very modern and something that very much meets the demands that's going to be in the market. We're very excited to see where this is going to go in 2026 and beyond. Great. Thank you. Thank you. We have no further questions at this time. With that, this concludes today's conference. Thank you for joining us. You may now disconnect your lines.