So I think when people look how to value this company, we’ve got a company that’s going to do nearly $220 million in EBITDA, $170 million in free cash flow, with a big growth opportunity ahead of it. And as we see those opportunities like we did in Skills, we invested in it, like we transformed the company to all digital. We invested in it like we are doing now with AI. We’re not holding anything back from AI. We’re just able to re-purpose a number of the costs of things that were higher cost of content creation to now more efficient cost of content creation. So I will tell you that when we see opportunities to move faster and grow, we will. It’s very hard to replicate what Chegg does. These are complicated systems and processes and learning taxonomies, and we want to get it right.
So we don’t have the situation that AI has where students don’t trust it. We want to be in a situation where our accuracy and relevancy and user experience are designed the way students expect it, and that’s why we continue to get such high results and such high retention. I’ll let Andy sort of address any other parts of that.
Andy Brown: No. Dan, I think you nailed it. And I think the key thing here is we’re not starving the business at all. We’re making massive investments. We made a big investment in scale AI that we talked about last quarter. And it’s something I remind our team frequently, and that is to Dan’s point, we’re driving more EBITDA and free cash flow than many of our competitors are doing in revenue. And so when we need to deploy capital, we can do it, and we will do it, and we are doing it in our new generative AI product. So we’re absolutely beating the business, and we – our goal, like Dan said earlier, is to get back on a growth track, and we will make the appropriate investments to do that.
Brent Thill: Thank you.
Operator: Next question, Jason Celino with KeyBanc Capital Markets. Please go ahead.
Jason Celino: Great. Thanks for taking my questions. Just a couple for me. Nice to hear the initiatives on the skill side. Can you just talk about the go-to-market there, particularly as you try to target some corporate customers like Indeed?
Dan Rosensweig: Yes. So, I think it’s sort of fascinating. One of the things that I am not sure that we even understood the value of was that, over the last bunch of years, we have had as many as 22 million students subscribe to Chegg and many more used free versions of our writing product and others, so we have had tens of millions of students that have gone into the workplace. So, our brand is actually quite popular. And so as we were working with Guild and as we saw that Guild business grow, and then we saw that our completion rates got beyond 50%, which is really hard to do with online courses, we began to be approached by people like, well, can you do this for us. But we don’t necessarily want to take the whole situation with Guild because Guild does online education as well as Skills.
And so that prompted us to build a tiger team that is going into corporations that know Chegg, that have a lot of employees that have used Chegg, that value Chegg. And so that is how we got started. We hired Colin Coggins, who is now running that group. And so he is responsible for all of those efforts, and he is making immediate progress, to be honest with you. Indeed is just the first of what we imagine will be many over time. There is a lot of large companies. The difference that we do versus other companies out there that do skills, so if you take some companies, they have a marketplace of skills and they package it and they sell what they have. Other companies have a very limited scope of what they build their content for, and their content may or may not be updated regularly.
Chegg has become a bespoke content creator in the skills space because we are creating for students as well as for Guild, which is frontline workers, and now as well as for corporation. The corporations come to us and they say, look, the single most important thing that we need to reeducate or train our employees on is this. Originally, the Skills businesses grew B2B because it was a benefit being offered, come to our company and you can train on this stuff. Now, it’s becoming an imperative, with the corporation is saying, this is exactly what we need to do. And one of the benefits of AI has been we have gone from 13 weeks of creating a course, and hundreds of thousands of dollars to five weeks or six weeks and maybe $40,000. So, our ability to do it at a much greater speed and much bigger scale, personalized specifically to the needs of those corporations has improved.
And so that’s why we are starting to make real good progress on our own corporate B2B.
Jason Celino: Okay. Great. Helpful. And then when I think about the stabilization you are seeing on the retention side, how much of partnerships come into play? And then when we think about future partners, like what are the types of characteristics or things you look for in that? Thanks.
Dan Rosensweig: Jason, you broke up a little bit. You are talking about retention in partnerships, is that what you were asking about?
Jason Celino: Yes.
Dan Rosensweig: So look, we have really great partnerships so far with Calm and now Tinder and DoorDash are examples, and others are looking to work with us. We use it in two different ways. One of them is to help increase conversion and the other is to help improve retention. Because the way the deals work is the students can’t get access to the free DoorDash or the free Tinder or the free Calm if they don’t retain on Chegg. And as you have seen, our retention numbers are going up. It’s for a whole host of reasons, quality being the single most important thing, but the overall value of which these partnerships are adding to it. So yes, we are being approached by and we are in discussions with a number of people and different ways to offer a Chegg premium pack, and other things that we can do because students value the ability to get access to the things that they want through Chegg.
