Market Newsdesk

Chegg Reports Second Quarter 2026 Earnings

SAN FRANCISCO–(BUSINESS WIRE)–
Chegg, Inc. (NYSE:CHGG), a global learning and workforce skilling company, today reported financial results for the quarter ended June 30, 2026.

“In Q2 we outperformed our expectations on revenue, adjusted EBITDA, and cash, reflecting our ability to execute against our priorities while investing for future growth,” said Dan Rosensweig, CEO and Executive Chairman of Chegg. “Our long-term goal remains the same: return Chegg to growth with high margins and strong free cash flow.”

Second Quarter 2026 Highlights

• Total Net Revenues of $51.8 million, a decrease of 51% year-over-year
• Chegg Skilling Revenues of $17.5 million, an increase of 2% year-over-year
• Gross Margin of 55%
• Non-GAAP Gross Margin of 57%
• Net Loss was $3.0 million
• Non-GAAP Net Loss was $2.5 million
• Adjusted EBITDA was $9.1 million

For more information about non-GAAP gross margin, non-GAAP net loss, and adjusted EBITDA, as well as a reconciliation of gross margin to non-GAAP gross margin, net loss to non-GAAP net loss, and net loss to adjusted EBITDA, see the sections of this press release titled, “Use of Non-GAAP Measures,” “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” and “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Business Outlook

Third Quarter 2026

• Total Net Revenues in the range of $43 million to $44 million
• Gross Margin between 48% and 49%
• Adjusted EBITDA in the range of $1 million to $2 million

As we execute on our expanded opportunity focused on building an employability platform, our Academic Services and Chegg Skilling businesses are becoming increasingly integrated, and we believe total net revenues and adjusted EBITDA are the most meaningful ways to measure progress. Beginning this quarter, we are providing guidance for total net revenues rather than separate revenue guidance.

For more information about the use of forward-looking non-GAAP measures, a reconciliation of forward-looking net loss to EBITDA and adjusted EBITDA for the second quarter 2026, see the below sections of the press release titled “Use of Non-GAAP Measures,” and “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA.”

An updated investor presentation and an investor data sheet can be found on Chegg’s Investor Relations website https://investor.chegg.com (such items are not incorporated into any filings Chegg may make with the Securities and Exchange Commission, unless otherwise noted).

Prepared Remarks – Dan Rosensweig, CEO & Executive Chairman Chegg, Inc.

Thank you, Tracey, and thanks everyone for joining Chegg’s second quarter 2026 earnings call. We outperformed our expectations on revenue, adjusted EBITDA, and cash, reflecting our ability to execute against our priorities while investing for future growth. The goal remains the same: return Chegg to growth with high margins and strong free cash flow. Starting last fall, we embarked on our next big chapter, rearchitecting the company to be AI-first, building a sustainable cost structure, and strengthening our balance sheet so we could accelerate our bigger vision.

Chegg’s mission, to put students first and help them move from learning to earning, has never wavered. For almost twenty years, we have evolved to meet students’ most important needs. From inventing the textbook rental model to make higher education more affordable, then providing 24/7 learning support through Chegg Study, and then adding skills-based courses to help learners build the skills needed to advance their careers. Each transition has opened up a new chapter of growth for Chegg, and the foundation we have built across our products, technology, and data now positions us to expand our focus on employability. We will help students build the skills, confidence, and connections needed to graduate, find internships, and transition to the workforce.

Higher education continues to evolve, but one thing will never change; after completing whatever path they pursue, students need a job. For the nearly twenty million students entering today’s job market over the next few years, that transition is filled with challenges and uncertainty.

Beginning in Q3, we are soft launching the next generation of Chegg. By combining our proprietary data, AI, and deep insight into how students learn and build careers, we will reduce the friction for students to get internships and then jobs. The new Chegg will help automate job search and matching, while adding coaching that will help students pick the right major, the right courses, and evaluate the right skills. Our plan is to automate the search, the match, and add coaching, so students build the right skills, take the right courses, and make the right connections. Chegg will handle the hard parts of applying: tailoring resumes, drafting cover letters, auto-filling and submitting applications, and even initiating alumni outreach on behalf of students. We will then add the ability for students to get company-specific interview prep, personalized feedback, and targeted skill-building courses to close any gaps standing between them and the job. The result is a platform that takes a student from “I need a job” to “I am prepared, applied, and connected” all in one place.

It’s this convergence of everything we have built – our academic platform, our skilling business, and our language learning capability – into one service that addresses one of the most pressing needs students face today. We have already had more than 10,000 students use the beta and provide feedback, and we will begin rolling out the new service across both Chegg and our site Internships.com, starting in the third quarter and all throughout 2027.

As we expand our focus on employability, our skilling business remains an important part of the opportunity ahead. By helping organizations build workforce capabilities and helping learners develop and apply relevant skills, we are creating a platform that connects learning, skills development, and career outcomes. Chegg Skills has been built as a multi-channel platform – spanning enterprise, institutional, employer, and marketplace channels – to create a more diversified foundation for growth. We have already signed six new partners this year, including OpenSesame and Dale Carnegie, and those launches will take place over the second half of the year. We will continue to expand into enterprises and schools over the next few years using AI and data to dramatically expand and personalize our catalog while making our courses even more affordable.

Our language skills are an important component of employability, helping people expand career opportunities and communicate more effectively in an increasingly global workforce. As a result, we are transforming our language offering from a language-learning app into a performance platform – helping people communicate with confidence and impact, in any language, when it counts. Our new agentic coach, which understands each learner’s goals and the context of each interaction, helps you prepare for the moments that matter, like a client call, a presentation, or an interview. Early next year, we plan to have a seamless integration of our agentic coach into the learner’s actual workflow – learning that shows up exactly when, where and how you need it. We are also expanding our Skills offerings into Europe, combining language learning with broader workforce capabilities.

Underlying all of this has been the restructuring of our workforce to become AI-first. AI allows us to personalize learning, improve outcomes, and scale more efficiently and affordably, giving us a much leaner operating model that can scale much faster, which allows us to return to being a growth business with high margins. When I look at the arc of what we have built and where we are headed, I feel genuinely confident. AI created real headwinds for this company, and we responded by strengthening our balance sheet, rebuilding an AI-first cost structure, and expanding our vision toward a much larger opportunity. We are becoming an employability business – one that helps students develop skills, find internships, land jobs, and grow throughout their careers. That is a more durable market, and we are uniquely positioned to own it. The financial foundation David will walk you through is what makes this all possible, and we look forward to updating you on our progress next quarter.

With that, I’ll turn it over to David.

Prepared Remarks – David Longo, CFO Chegg, Inc.

Thank you, Dan and good morning.

Today, I will review our financial performance for the second quarter of 2026, along with the company’s outlook for the third quarter.

Our second-quarter results exceeded our expectations, reflecting continued execution against our priorities. We are excited to take Chegg into its next chapter by expanding our focus on employability, addressing students’ evolving needs while helping employers build a more skilled workforce, creating what we believe is a significant opportunity for long-term, profitable growth. As we execute on our strategy, AI is improving operational efficiency across the company and driving meaningful gains in profitability and cash generation. We also repurchased shares during the quarter, reflecting our confidence in the company’s long-term value while maintaining a disciplined approach to capital allocation.

In the quarter, Total Revenue was $51.8 million, exceeding our expectations. We expanded our distribution partnerships, which we expect to contribute more meaningfully later this year, while remaining focused on efficiently managing our academic services products to maximize cash generation. Chegg Study monthly retention continued to be very strong, reinforcing its long-term cash-generating potential.

Turning to expenses, Q2 non-GAAP operating expenses were $32.3 million, nearly cutting our expenses in half compared to the second quarter of last year. This significant reduction reflects our disciplined approach to expense management and enhanced use of AI to improve productivity and drive efficiencies across the company. We continue to identify opportunities to further optimize our cost structure. Adjusted EBITDA for the quarter was $9.1 million, representing a margin of 17%.

Second quarter CapEx was $3.7 million, down 49% year-over-year. For full year 2026, we are targeting a 60% reduction in CapEx.

Free cash flow in the quarter was $6.4 million, which includes approximately $1.5 million of severance payments related to prior restructuring actions. In the first half of the year, we generated $9.5 million in free cash flow despite $14.4 million in severance payments. We expect to continue to generate meaningful free cash flow in the second half of the year.

Looking at the balance sheet, we ended the quarter with $72.3 million in cash and investments and a net cash position of $38.5 million, providing us with flexibility as we execute on our priorities.

We have built a strong foundation for the future and are encouraged by:

• the continued durability of our academic services products driven by strong monthly retention;

• the progress we are making leveraging AI to meaningfully improve our cost structure;

• the early traction we are seeing with new skilling distribution partnerships;

• and the significant opportunity we see to expand through employability.

Together, these reinforce our confidence in generating meaningful cash flow and creating long-term value.

During the second quarter, we repurchased $1.7 million of our common stock and have $120.7 million remaining on our securities repurchase authorization. We believe our shares represent an attractive use of capital. Our strong balance sheet and continued ability to generate meaningful cash flow provide us with flexibility to allocate capital where we believe will create the greatest long-term value for shareholders. That includes investing behind our strategic priorities while also evaluating further share repurchases. In addition, we expect to fully repay the convertible debt in the third quarter, further strengthening our balance sheet, increasing our financial flexibility.

Moving to guidance, as we execute on our expanded opportunity focused on building an employability platform, our Academic Services and Chegg Skilling businesses are becoming increasingly integrated, and we believe Total Revenue and adjusted EBITDA are the most meaningful ways to measure progress. Beginning this quarter, we are providing guidance for Total Revenue rather than separate revenue guidance.

Looking ahead to Q3 guidance, we expect:

• Total revenue between $43 and $44 million;

• Gross margin in the range of 48% to 49%;

• And adjusted EBITDA between $1 and $2 million.

In closing, we have strengthened the business for long-term success. The company is leaner, more efficient, and well positioned to generate meaningful free cash flow in 2026. We are executing our strategy with focus and discipline while leaning into a large, new opportunity, positioning us to drive sustainable growth, improve profitability, and create long-term shareholder value. We have a strong balance sheet, which provides additional financial flexibility as we continue executing our strategy.

With that, I will turn the call over to the operator for your questions.

Conference Call and Webcast Information

To access the call, please dial 1-877-407-4018 or outside the U.S. +1-201-689-8471. A live webcast of the call will also be available at https://investor.chegg.com under the Events & Presentations menu. Participants can also access the call using the Call me™ link for instant telephone access to the event, which will be active 15 minutes before the scheduled start time.

An audio replay will be available from 11:59 p.m. Eastern Time on August 20, 2026 by calling 1-844-512-2921 or outside the U.S. +1-412-317-6671 with Access ID 13761815. An audio archive of the call will also be available at https://investor.chegg.com.

Use of Investor Relations Website for Regulation FD Purposes

Chegg also uses its Investor Relations website, https://www.chegg.com/press, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor https://www.chegg.com/press, in addition to following press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

About Chegg

Chegg is a learning and employability platform that helps students and lifelong learners build the skills, confidence, and career readiness to succeed from learning to earning, while helping businesses develop and upskill their workforce. Through AI-powered, personalized experiences, Chegg supports learners across academics, workplace readiness, professional upskilling, and language learning. By combining proprietary data, AI, and deep insight into how students learn and build their careers, Chegg remains committed to improving employability and creating better outcomes for learners and employers. Chegg is a publicly held company and trades on the NYSE under the symbol CHGG. For more information, visit www.chegg.com.

Use of Non-GAAP Measures

To supplement Chegg’s financial results presented in accordance with generally accepted accounting principles in the United States (GAAP), this press release and the accompanying tables and the related earnings conference call contain non-GAAP financial measures, including EBITDA, adjusted EBITDA, non-GAAP cost of revenues, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP (loss) income from operations, non-GAAP net (loss) income, non-GAAP weighted average shares, non-GAAP net (loss) income per share, and free cash flow. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow,” and “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA.”

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. Chegg defines (1) EBITDA as earnings before interest, taxes, depreciation and amortization; (2) Adjusted EBITDA as EBITDA adjusted for share-based compensation expense, litigation settlement (credits) charges, other income, net, restructuring (credits) charges, impairment of equity investment, impairment of lease related assets, and impairment expense; (3) non-GAAP cost of revenues as cost of revenues excluding amortization of intangible assets, share-based compensation expense, and restructuring (charges) credits; (4) non-GAAP gross profit as gross profit excluding amortization of intangible assets, share-based compensation expense, and restructuring charges (credits); (5) non-GAAP gross margin is defined as non-GAAP gross profit divided by net revenues, (6) non-GAAP operating expenses as operating expenses excluding share-based compensation expense, litigation settlement credits (charges), restructuring credits (charges), impairment of equity investment, impairment of lease related assets, and impairment expense; (7) non-GAAP (loss) income from operations as loss from operations excluding share-based compensation expense, litigation settlement (credits) charges, amortization of intangible assets, restructuring (credits) charges, impairment of equity investment, impairment of lease related assets, and impairment expense; (8) non-GAAP net (loss) income as net loss excluding share-based compensation expense, litigation settlement (credits) charges, amortization of intangible assets, gain on early extinguishment of debt, the income tax effect of non-GAAP adjustments, restructuring (credits) charges, amortization of debt issuance costs, impairment of equity investment, impairment of lease related assets, and impairment expense; (9) non-GAAP weighted average shares outstanding as weighted average shares outstanding adjusted for the effect of shares for stock plan activity and shares related to our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding; (10) non-GAAP net (loss) income per share is defined as non-GAAP net (loss) income divided by non-GAAP weighted average shares outstanding; and (11) free cash flow as net cash provided by operating activities adjusted for purchases of property and equipment. To the extent additional significant non-recurring items arise in the future, Chegg may consider whether to exclude such items in calculating the non-GAAP financial measures it uses.

Chegg believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Chegg’s performance by excluding items that may not be indicative of Chegg’s core business, operating results or future outlook. Chegg management uses these non-GAAP financial measures in assessing Chegg’s operating results, as well as when planning, forecasting and analyzing future periods and believes that such measures enhance investors’ overall understanding of our current financial performance. These non-GAAP financial measures also facilitate comparisons of Chegg’s performance to prior periods.

As presented in the “Reconciliation of Net Loss to EBITDA and Adjusted EBITDA,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” “Reconciliation of Forward-Looking Net Loss to EBITDA and Adjusted EBITDA,” and “Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow,” tables below, each of the non-GAAP financial measures excludes or includes one or more of the following items:

Share-based compensation expense.

Share-based compensation expense is a non-cash expense that varies in amount from period to period and is dependent on market forces that are often beyond Chegg’s control. As a result, management excludes this item from Chegg’s internal operating forecasts and models. Management believes that non-GAAP measures adjusted for share-based compensation expense provide investors with a basis to measure Chegg’s core performance against the performance of other companies without the variability created by share-based compensation as a result of the variety of equity awards used by other companies and the varying methodologies and assumptions used.

Amortization of intangible assets.

Chegg amortizes intangible assets, including those that contribute to generating revenues, that it acquires in conjunction with acquisitions, which results in non‑cash expenses that may not otherwise have been incurred. Chegg believes excluding the expense associated with intangible assets from non-GAAP measures allows for a more accurate assessment of its ongoing operations and provides investors with a better comparison of period-over-period operating results. No corresponding adjustments have been made related to revenues generated from acquired intangible assets.

Amortization of debt issuance costs.

The difference between the effective interest expense and the contractual interest expense are excluded from management’s assessment of our operating performance because management believes that these non-cash expenses are not indicative of ongoing operating performance. Chegg believes that the exclusion of the non-cash interest expense provides investors with a better comparison of period-over-period operating results.

Income tax effect of non-GAAP adjustments.

We utilize a non-GAAP effective tax rate for evaluating our operating results, which is based on our current mid-term projections. This non-GAAP tax rate could change for various reasons including, but not limited to, significant changes resulting from tax legislation, changes to our corporate structure and other significant events. Chegg believes that the inclusion of the income tax effect of non-GAAP adjustments provides investors with a better comparison of period-over-period operating results.

Restructuring (credits) charges.

Restructuring (credits) charges represent expenses incurred in conjunction with a reduction in workforce. Chegg believes that it is appropriate to exclude them from non-GAAP financial measures because they are nonrecurring and the result of an event that is not considered a core-operating activity. Chegg believes that it is appropriate to exclude the restructuring charges from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.

Impairment expense.

Impairment expense represents the impairment of property and equipment. Chegg believes that it is appropriate to exclude it from non-GAAP financial measures because it is the result of discrete events that are not considered core-operating activities and are not indicative of our ongoing operating performance. Chegg believes that it is appropriate to exclude the impairment expense from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.

Impairment of lease related assets.

The impairment of lease related assets represents impairment charge recorded on the ROU asset and leasehold improvements associated with the closure of our offices. The impairment of lease related assets is the result of an event that is not considered a core-operating activity and we believe its exclusion provides investors with a better comparison of period-over-period operating results.

Litigation settlement (credits) charges.

Litigation settlement (credits) charges represent discrete events that are not considered core-operating activities, and as such, are excluded from non-GAAP financial measures because it provides investors with a better comparison of period-over-period operating results.

Impairment of equity investment.

The impairment of equity investment represents a one-time event to record an impairment charge on our equity investment. The impairment of equity investment is a non-cash expense and we believe the exclusion from non-GAAP financial measures provides investors with a better comparison of period-over-period results.

Gain on early extinguishment of debt.

The difference between the carrying amount of early extinguished debt and the reacquisition price is excluded from management’s assessment of our operating performance because management believes that these non-cash gains are not indicative of ongoing operating performance. Chegg believes that the exclusion of the gain on early extinguishment of debt provides investors with a better comparison of period-over-period operating results.

Effect of shares for stock plan activity.

The effect of shares for stock plan activity represents the dilutive impact of outstanding stock options, RSUs, and PSUs, to the extent such shares are not already included in our weighted average shares outstanding.

Effect of shares related to convertible senior notes.

The effect of shares related to convertible senior notes represents the dilutive impact of our convertible senior notes, to the extent such shares are not already included in our weighted average shares outstanding.

Free cash flow.

Free cash flow represents net cash provided by operating activities adjusted for purchases of property and equipment. Chegg considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property and equipment, which can then be used to, among other things, invest in Chegg’s business and make strategic acquisitions. A limitation of the utility of free cash flow as a measure of financial performance is that it does not represent the total increase or decrease in Chegg’s cash balance for the period.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which include, without limitation, statements regarding customer retention, the growth of the skilling market and our Skilling business, development and customer adoption of our products, development of new partnerships and distribution channels, our ability to manage expenses and maintain profitability, expectations regarding cash flow, repayment of debt, and utilization of our balance sheet, including future repurchases of debt or equity securities under our existing securities repurchase program, our ability to utilize AI tools to enhance and differentiate our product offerings and control costs, all statements about Chegg’s outlook under “Business Outlook”, including our Q3 2026 guidance, including total revenue, gross margin, and adjusted EBITDA, our ability to transform our business, as well as those included in the investor presentation referenced above and those included in the “Prepared Remarks” sections above. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “project,” “endeavor,” “will,” “should,” “future,” “transition,” “outlook” and similar expressions, as they relate to Chegg, are intended to identify forward-looking statements. These statements are not guarantees of future performance, and are based on management’s expectations as of the date of this press release and assumptions that are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to differ materially from any future results, performance or achievements. Important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements include the following: the effects of AI technology on Chegg’s business and the economy generally; Chegg’s ability to attract new learners and retain existing learners in light of declining revenue and user traffic; Chegg’s ability to innovate and offer new products and services in response to competitive technology and market developments, including AI; Chegg’s ability to diversify its revenue streams with business-to-institution programs and other enterprise offerings; the uncertainty surrounding the evolving educational landscape; Chegg’s ability to build and maintain strong brands and reputation; Chegg’s ability to develop new product and service offerings and their adoption by customers; competition in all aspects of Chegg’s business, including with respect to AI and Chegg’s expectation that such competition will increase; challenges related to Chegg’s international operations; Chegg’s ability to maintain its services and systems without interruption, including as a result of technical issues, cybersecurity threats, or cyber-attacks; disruptions of services provided to us by third parties, including web hosting and payment processing services; changes in regulation, in particular those concerning privacy, marketing, and education; risks related to our ability to comply with regulations, obligations and policies related to data privacy; the outcome of any current litigation and investigations, including our litigation against Google and litigation against us; misuse of Chegg’s platform and content; the effectiveness of Chegg’s restructuring activities and disruptions related to them; changes in the education market, including as a result of AI technology; the possibility that the NYSE may delist our common stock; and general economic, political and industry conditions, including inflation, recession and war. All information provided in this release and in the conference call is as of the date hereof, and Chegg undertakes no duty to update this information except as required by law. These and other important risk factors are described more fully in documents filed with the Securities and Exchange Commission, including Chegg’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission, which could cause actual results to differ materially from expectations.

CHEGG, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except for number of shares and par value) (unaudited)
	June 30, 2026				December 31, 2025
Assets
Current assets
Cash and cash equivalents	$	44,623			$	31,146
Short-term investments		27,691				41,674
Accounts receivable, net of allowance of $93 and $156 at June 30, 2026 and December 31, 2025, respectively		10,734				15,604
Prepaid expenses		11,352				16,331
Other current assets		14,301				16,857
Total current assets		108,701				121,612
Long-term investments		—				12,392
Property and equipment, net		94,948				115,168
Intangible assets, net		3,957				6,041
Right of use assets		11,505				13,188
Other assets		8,514				9,613
Total assets	$	227,625			$	278,014
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	4,775			$	3,258
Deferred revenue		26,570				29,675
Accrued liabilities		27,770				54,249
Current portion of convertible senior notes, net		33,845				53,765
Total current liabilities		92,960				140,947
Long-term liabilities
Long-term operating lease liabilities		12,600				15,205
Other long-term liabilities		3,451				2,239
Total long-term liabilities		16,051				17,444
Total liabilities		109,011				158,391
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value per share, 10,000,000 shares authorized, no shares issued and outstanding		—				—
Common stock, $0.001 par value per share: 400,000,000 shares authorized; 110,913,557 and 110,985,562 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively		111				111
Additional paid-in capital		1,148,192				1,145,371
Accumulated other comprehensive loss		(34,104	)			(32,997	)
Accumulated deficit		(995,585	)			(992,862	)
Total stockholders’ equity		118,614				119,623
Total liabilities and stockholders’ equity	$	227,625			$	278,014

CHEGG, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Net revenues	$	51,849			$	105,120			$	115,111			$	226,507
Cost of revenues(1)		23,567				35,478				48,941				89,451
Gross profit		28,282				69,642				66,170				137,056
Operating expenses:
Research and development(1)		7,398				28,717				16,537				58,145
Sales and marketing(1)		9,468				17,417				20,074				43,031
General and administrative(1)		14,591				59,966				33,771				99,340
Impairment expense		—				—				—				2,000
Total operating expenses		31,457				106,100				70,382				202,516
Loss from operations		(3,175	)			(36,458	)			(4,212	)			(65,460	)
Interest expense, net and other income, net:
Interest expense, net		(22	)			(41	)			(53	)			(508	)
Other income, net		638				2,059				1,794				15,056
Total interest expense, net and other income, net		616				2,018				1,741				14,548
Loss before provision for income taxes		(2,559	)			(34,440	)			(2,471	)			(50,912	)
Provision for income taxes		(392	)			(1,223	)			(252	)			(2,235	)
Net loss	$	(2,951	)		$	(35,663	)		$	(2,723	)		$	(53,147	)
Net loss per share, basic and diluted	$	(0.03	)		$	(0.33	)		$	(0.02	)		$	(0.50	)
Weighted average shares used to compute net loss per share, basic and diluted		111,422				106,908				111,573				106,039
(1) Includes share-based compensation expense as follows:
Cost of revenues	$	15			$	131			$	35			$	369
Research and development		235				1,584				681				4,796
Sales and marketing		103				413				255				1,474
General and administrative		1,971				5,784				4,064				12,530
Total share-based compensation expense	$	2,324			$	7,912			$	5,035			$	19,169

CHEGG, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
	Six Months Ended June 30,
		2026				2025
Cash flows from operating activities
Net loss	$	(2,723	)		$	(53,147	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Share-based compensation expense		5,035				19,169
Depreciation and amortization expense		26,992				48,320
Deferred tax assets		(11	)			149
Operating lease expense, net of accretion		1,076				2,019
Amortization of debt issuance costs		53				418
Loss from write-offs of property and equipment		48				558
Gain on early extinguishment of debt		(523	)			(7,360	)
Realized gain on sale of investments		(5	)			(752	)
Impairment expense		—				2,000
Impairment of lease related assets		—				3,004
Impairment of equity investment		—				6,000
Litigation settlement (credits) charges		(3,000	)			7,500
Other non-cash items		(298	)			325
Change in assets and liabilities:
Accounts receivable		4,816				6,114
Prepaid expenses and other current assets		7,572				(941	)
Other assets		260				928
Accounts payable		1,376				(6,038	)
Deferred revenue		(2,839	)			(5,945	)
Accrued liabilities		(22,846	)			(1,113	)
Other liabilities		(822	)			(1,522	)
Net cash provided by operating activities		14,161				19,686
Cash flows from investing activities
Purchases of property and equipment		(4,700	)			(15,895	)
Purchases of investments		—				(793	)
Maturities of investments		20,031				107,710
Proceeds from sale of investments		5,679				181,158
Net cash provided by investing activities		21,010				272,180
Cash flows from financing activities
Repayment of convertible senior notes		(19,450	)			(416,492	)
Repurchase of common stock		(1,721	)			—
Payment of taxes related to the net share settlement of equity awards		(774	)			(1,037	)
Proceeds from common stock issued under stock plans		68				391
Net cash used in financing activities		(21,877	)			(417,138	)
Effect of exchange rate changes		(451	)			491
Net increase (decrease) in cash, cash equivalents and restricted cash		12,843				(124,781	)
Cash, cash equivalents and restricted cash, beginning of period		33,411				164,359
Cash, cash equivalents and restricted cash, end of period	$	46,254			$	39,578

CHEGG, INC. RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Net loss	$	(2,951	)		$	(35,663	)		$	(2,723	)		$	(53,147	)
Depreciation and amortization expense		13,045				16,226				26,992				48,320
Provision for income taxes		392				1,223				252				2,235
Interest expense, net		22				41				53				508
EBITDA		10,508				(18,173	)			24,574				(2,084	)
Share-based compensation expense		2,324				7,912				5,035				19,169
Litigation settlement (credits) charges		(3,000	)			7,500				(3,000	)			7,500
Other income, net		(638	)			(2,059	)			(1,794	)			(15,056	)
Restructuring (credits) charges		(143	)			18,922				(308	)			21,842
Impairment of equity investment		—				6,000				—				6,000
Impairment of lease related assets		—				3,004				—				3,004
Impairment expense		—				—				—				2,000
Adjusted EBITDA	$	9,051			$	23,106			$	24,507			$	42,375

CHEGG, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands, except percentages and per share amounts) (unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Cost of revenues	$	23,567			$	35,478			$	48,941			$	89,451
Amortization of intangible assets		(1,007	)			(1,076	)			(2,084	)			(2,153	)
Share-based compensation expense		(15	)			(131	)			(35	)			(369	)
Restructuring (charges) credits		—				(741	)			26				(741	)
Non-GAAP cost of revenues	$	22,545			$	33,530			$	46,848			$	86,188
Gross profit	$	28,282			$	69,642			$	66,170			$	137,056
Amortization of intangible assets		1,007				1,076				2,084				2,153
Share-based compensation expense		15				131				35				369
Restructuring charges (credits)		—				741				(26	)			741
Non-GAAP gross profit	$	29,304			$	71,590			$	68,263			$	140,319
Gross margin %		55	%			66	%			57	%			61	%
Non-GAAP gross margin %		57	%			68	%			59	%			62	%
Operating expenses	$	31,457			$	106,100			$	70,382			$	202,516
Share-based compensation expense		(2,309	)			(7,781	)			(5,000	)			(18,800	)
Litigation settlements credits (charges)		3,000				(7,500	)			3,000				(7,500	)
Restructuring credits (charges)		143				(18,181	)			282				(21,101	)
Impairment of equity investment		—				(6,000	)			—				(6,000	)
Impairment of lease related assets		—				(3,004	)			—				(3,004	)
Impairment expense		—				—				—				(2,000	)
Non-GAAP operating expenses	$	32,291			$	63,634			$	68,664			$	144,111
Loss from operations	$	(3,175	)		$	(36,458	)		$	(4,212	)		$	(65,460	)
Share-based compensation expense		2,324				7,912				5,035				19,169
Amortization of intangible assets		1,007				1,076				2,084				2,153
Litigation settlement (credits) charges		(3,000	)			7,500				(3,000	)			7,500
Restructuring (credits) charges		(143	)			18,922				(308	)			21,842
Impairment of equity investment		—				6,000				—				6,000
Impairment of lease related assets		—				3,004				—				3,004
Impairment expense		—				—				—				2,000
Non-GAAP (loss) income from operations	$	(2,987	)		$	7,956			$	(401	)		$	(3,792	)

	Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Net loss	$	(2,951	)		$	(35,663	)		$	(2,723	)		$	(53,147	)
Share-based compensation expense		2,324				7,912				5,035				19,169
Amortization of intangible assets		1,007				1,076				2,084				2,153
Income tax effect of non-GAAP adjustments		204				2,009				322				2,537
Amortization of debt issuance costs		22				41				53				418
Litigation settlement (credits) charges		(3,000	)			7,500				(3,000	)			7,500
Gain on early extinguishment of debt		—				—				(523	)			(7,360	)
Restructuring (credits) charges		(143	)			18,922				(308	)			21,842
Impairment of equity investment		—				6,000				—				6,000
Impairment of lease related assets		—				3,004				—				3,004
Impairment expense		—				—				—				2,000
Non-GAAP net (loss) income	$	(2,537	)		$	10,801			$	940			$	4,116
Weighted average shares used to compute net loss per share		111,422				106,908				111,573				106,039
Effect of shares for stock plan activity		—				455				3,153				617
Effect of shares related to convertible senior notes		—				583				359				3,585
Non-GAAP weighted average shares used to compute non-GAAP net (loss) income per share		111,422				107,946				115,085				110,241
Net loss per share	$	(0.03	)		$	(0.33	)		$	(0.02	)		$	(0.50	)
Non-GAAP net (loss) income per share	$	(0.02	)		$	0.10			$	0.01			$	0.04

CHEGG, INC. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (in thousands) (unaudited)
	Six Months Ended June 30,
		2026				2025
Net cash provided by operating activities	$	14,161			$	19,686
Purchases of property and equipment		(4,700	)			(15,895	)
Free cash flow	$	9,461			$	3,791

CHEGG, INC. RECONCILIATION OF FORWARD-LOOKING NET LOSS TO EBITDA AND ADJUSTED EBITDA (in thousands) (unaudited)
	Three Months Ending September 30, 2026
Net loss	$	(12,800	)
Depreciation and amortization expense		12,500
Provision for income taxes		600
EBITDA		300
Share-based compensation expense		1,900
Other income, net		(700	)
Adjusted EBITDA	$	1,500

*	Adjusted EBITDA guidance for the three months ending September 30, 2026 represents the midpoint of the range of $1 million to $2 million, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260806916599/en/

Media Contact: [email protected]

Investor Contact: Tracey Ford, [email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Education Technology Software Other Education Internet University Training

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BlackRock TCP Capital Corp. Announces Second Quarter 2026 Financial Results and $523 Million Portfolio Sale

Transaction Accelerates Portfolio Repositioning, Significantly Reduces Leverage and Enhances Investment Capacity

SANTA MONICA, Calif.–(BUSINESS WIRE)–
BlackRock TCP Capital Corp. (“we,” “us,” “our,” “TCPC” or the “Company”), a business development company (NASDAQ: TCPC), today announced its financial results for the second quarter ended June 30, 2026 and a $523 million portfolio sale transaction that meaningfully accelerates its ongoing efforts to strengthen its financial position and reshape its investment portfolio.

SECOND QUARTER FINANCIAL HIGHLIGHTS

• On a GAAP basis, net investment income for the quarter ended June 30, 2026 was $18.1 million, or $0.22 per share on a diluted basis, which exceeded the regular dividend of $0.17 per share paid on June 30, 2026. Adjusted net investment income⁽¹⁾ for the quarter ended June 30, 2026 was $17.5 million, or $0.21 per share on a diluted basis.

• Net increase in net assets from operations on a GAAP basis for the quarter ended June 30, 2026 was $1.7 million, or $0.02 per share, compared to a $16.3 million, or $0.19 per share, net decrease in net assets from operations for the quarter ended March 31, 2026.

• Net asset value per share was $6.58 as of June 30, 2026, compared to $6.72 as of March 31, 2026.

• As of June 30, 2026, investments on non-accrual status represented 1.6% of the portfolio at fair value and 7.4% at cost, compared to 2.8% of the portfolio at fair value and 7.6% at cost as of March 31, 2026.

• Net leverage (inclusive of SBA debentures) was 1.38x as of June 30, 2026, compared to 1.48x as of March 31, 2026.

• On August 6, 2026, our Board of Directors (the “Board”) declared a third quarter dividend of $0.17 per share, payable on September 30, 2026 to stockholders of record as of the close of business on September 16, 2026.

PORTFOLIO SALE TRANSACTION HIGHLIGHTS

• On August 4, the Company entered into a definitive agreement to sell 95% of the equity interests in a vehicle (the “Continuation Vehicle”) holding approximately $523 million of investments across 78 portfolio companies to funds and accounts sponsored by Pantheon, a global leader in private credit secondaries.

• The Continuation Vehicle assets have sector, lien and credit characteristics broadly similar to those of the Company’s pre-transaction debt portfolio.

• The Continuation Vehicle assets represent approximately 48% of the fair market value of the Company’s debt portfolio immediately prior to the transaction and include all collateral underlying our recently issued BlackRock DLF 2026-C CLO, as well as additional contributed investments.

• We retained a direct investment in substantially all of the portfolio companies and transferred, on average, approximately two-thirds of each investment position to the Continuation Vehicle. We will retain a 5% interest in the vehicle, and our advisor will manage the assets on the vehicle’s behalf without compensation.

• The base purchase price for the investments sold was 95% of the gross fair value as of December 31, 2025, subject to customary pre-closing adjustments, allowing TCPC to realize a substantial premium relative to the value implied by its current share price. The Board obtained a fairness opinion from Lincoln International regarding the fairness, from a financial point of view, of the consideration to be received by the Company in the transaction.

• The transaction is expected to result in a NAV decline of approximately 10.4%, or $0.68 per share, based on June 30, 2026 NAV.

• The transaction materially reduces our leverage and unfunded commitments, significantly enhancing our investment capacity. Inclusive of the transaction and already completed post-quarter-end repayment activity, we expect our pro forma net leverage ratio to be approximately 0.4x (with a further reduction to less than 0.3x following an announced portfolio company paydown) and unfunded commitments to be below $40 million.

• The Company and the Board believe these outcomes provide substantially greater financial, investment and operational flexibility, creating a stronger foundation from which to evaluate and pursue strategic alternatives that can deliver greater long-term shareholder value.

• The Board has engaged Keefe, Bruyette & Woods, a Stifel company (“KBW”), to support a strategic review process as it evaluates how best to use TCPC’s enhanced financial flexibility and increased investment capacity to create long-term shareholder value.

• Moelis & Company LLC acted as financial advisor to the Company in connection with the portfolio sale transaction.

MANAGEMENT COMMENTARY

“The transaction we announced today represents a major milestone that accelerates our progress in repositioning TCPC,” said Phil Tseng, Chairman, Chief Executive Officer and Co-Chief Investment Officer of BlackRock TCP Capital Corp. “It meaningfully increases our financial flexibility by significantly lowering leverage and enhancing liquidity, while realizing a substantial premium relative to the value implied by the Company’s current share price. Most importantly, it provides us greater strategic optionality to deliver long-term value to our shareholders.”

SELECTED FINANCIAL HIGHLIGHTS⁽¹⁾

		Three months ended June 30,
		2026							2025
		Amount				Per Share			Amount				Per Share
Net investment income		$	18,142,378			0.22			$	27,594,675			0.32
Less: Purchase accounting discount amortization			613,650			0.01				1,293,521			0.01
Adjusted net investment income		$	17,528,728			0.21			$	26,301,154			0.31
Net realized and unrealized gain (loss)		$	(16,392,590	)		(0.20	)		$	(43,501,259	)		(0.51	)
Less: Realized gain (loss) due to the allocation of purchase discount			3,392,923			0.04				4,000,208			0.05
Less: Net change in unrealized appreciation (depreciation) due to the allocation of purchase discount			(4,006,573	)		(0.05	)			(5,293,729	)		(0.06	)
Adjusted net realized and unrealized gain (loss)		$	(15,778,940	)		(0.19	)		$	(42,207,738	)		(0.50	)
Net increase (decrease) in net assets resulting from operations		$	1,749,788			0.02			$	(15,906,584	)		(0.19	)
Less: Purchase accounting discount amortization			613,650			0.01				1,293,521			0.01
Less: Realized gain (loss) due to the allocation of purchase discount			3,392,923			0.04				4,000,208			0.05
Less: Net change in unrealized appreciation (depreciation) due to the allocation of purchase discount			(4,006,573	)		(0.05	)			(5,293,729	)		(0.06	)
Adjusted net increase (decrease) in assets resulting from operations		$	1,749,788			0.02			$	(15,906,584	)		(0.19	)

(1) Excluding amortization of purchase discount recorded in connection with the Merger (defined herein), adjusted net investment income for the quarter ended June 30, 2026 was $17.5 million, or $0.21 per share on a diluted basis.

On March 18, 2024, the Company completed its previously announced merger (the “Merger”) with BlackRock Capital Investment Corporation (“BCIC”). The Merger has been accounted for as an asset acquisition of BCIC by the Company in accordance with the asset acquisition method of accounting as detailed in ASC 805-50 (“ASC 805”), Business Combinations-Related Issues. The Company determined the fair value of the shares of the Company’s common stock that were issued to former BCIC shareholders pursuant to the Merger Agreement plus transaction costs to be the consideration paid in connection with the Merger under ASC 805. The consideration paid to BCIC shareholders was less than the aggregate fair values of the BCIC assets acquired and liabilities assumed, which resulted in a purchase discount (the “purchase discount”). The consideration paid was allocated to the individual BCIC assets acquired and liabilities assumed based on the relative fair values of net identifiable assets acquired other than “non-qualifying” assets and liabilities (for example, cash) and did not give rise to goodwill. As a result, the purchase discount was allocated to the cost basis of the BCIC investments acquired by the Company on a pro-rata basis based on their relative fair values as of the effective time of the Merger. Immediately following the Merger, the investments were marked to their respective fair values in accordance with ASC 820 which resulted in immediate recognition of net unrealized appreciation in the Consolidated Statement of Operations as a result of the Merger. The purchase discount allocated to the BCIC debt investments acquired will amortize over the remaining life of each respective debt investment through interest income, with a corresponding adjustment recorded to unrealized appreciation or depreciation on such investment acquired through its ultimate disposition. The purchase discount allocated to BCIC equity investments acquired will not amortize over the life of such investments through interest income and, assuming no subsequent change to the fair value of the equity investments acquired and disposition of such equity investments at fair value, the Company may recognize a realized gain or loss with a corresponding reversal of the unrealized appreciation on disposition of such equity investments acquired.

As a supplement to the Company’s reported GAAP financial measures, we have provided the following non-GAAP financial measures that we believe are useful:

• “Adjusted net investment income” – excludes the amortization of purchase accounting discount from net investment income calculated in accordance with GAAP;

• “Adjusted net realized and unrealized gain (loss)” – excludes the unrealized appreciation resulting from the purchase discount and the corresponding reversal of the unrealized appreciation from the amortization of the purchase discount from the determination of net realized and unrealized gain (loss) determined in accordance with GAAP; and

• “Adjusted net increase (decrease) in net assets resulting from operations” – calculates net increase (decrease) in net assets resulting from operations based on Adjusted net investment income and Adjusted net realized and unrealized gain (loss).

We believe that the adjustment to exclude the full effect of purchase discount accounting under ASC 805 from these financial measures is meaningful because of the potential impact on the comparability of these financial measures that we and investors use to assess our financial condition and results of operations period over period. Although these non-GAAP financial measures are intended to enhance investors’ understanding of our business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The aforementioned non-GAAP financial measures may not be comparable to similar non-GAAP financial measures used by other companies.

PORTFOLIO AND INVESTMENT ACTIVITY

As of June 30, 2026, our consolidated investment portfolio consisted of debt and equity positions in 134 portfolio companies with a total fair value of approximately $1.3 billion, of which 91.5% was in senior secured debt. 89.8% of the total portfolio was first lien. Equity positions, which include equity interests in diversified debt portfolios, represented approximately 8.5% of the portfolio. 93.9% of our debt investments were floating rate, 94.8% of which had interest rate floors.

As of June 30, 2026, the weighted average annual effective yield of our debt portfolio was approximately 11.2%⁽¹⁾ and the weighted average annual effective yield of our total portfolio was approximately 10.5%, compared to 10.9% and 10.1%, respectively, as of March 31, 2026. Investments in thirteen portfolio companies were on non-accrual status as of June 30, 2026, representing 1.6% of the consolidated portfolio at fair value and 7.4% at cost, down from 2.8% of the portfolio at fair value and 7.6% at cost as of March 31, 2026.

During the three months ended June 30, 2026, we invested approximately $25.0 million, across new and existing portfolio companies. Of these investments, $24.5 million, or 98.0%, were in first lien senior secured loans. The remaining $0.5 million, or 2.0%, were comprised of equity investments. Additionally, we received approximately $111.6 million in proceeds from sales or repayments of investments during the three months ended June 30, 2026. New investments during the quarter had a weighted average effective yield of 9.4%. Investments we exited had a weighted average effective yield of 10.9%.

As of June 30, 2026, total assets were $1.5 billion, net assets were $552.0 million and net asset value per share was $6.58, as compared to $1.5 billion, $565.1 million, and $6.72 per share, respectively, as of March 31, 2026.

____________________
(1)		Weighted average annual effective yield includes amortization of deferred debt origination and accretion of original issue discount, but excludes market discount and any prepayment and make-whole fee income. The weighted average effective yield on our debt portfolio excludes non-accrual and non-income producing loans.

CONSOLIDATED RESULTS OF OPERATIONS

Total investment income for the three months ended June 30, 2026 was approximately $40.0 million, or $0.48 per share. Investment income for the three months ended June 30, 2026 included $0.01 per share from prepayment premiums and related accelerated original issue discount and exit fee amortization, $0.03 per share from amendment fees, $0.02 per share from recurring portfolio investment original issue discount and exit fee amortization, $0.04 per share from interest income paid in kind and $0.03 per share in dividend income. This reflects our policy of recording interest income, adjusted for amortization of portfolio investment premiums and discounts, on an accrual basis. Origination, structuring, closing, commitment, and similar upfront fees received in connection with the outlay of capital are generally amortized into interest income over the life of the respective debt investment.

Total operating expenses for the three months ended June 30, 2026 were approximately $21.9 million, or $0.26 per share, including interest and other debt expenses of $15.0 million, or $0.18 per share, and base management fees of $4.2 million, or $0.05 per share. As of June 30, 2026, the Company’s cumulative total return did not exceed the total return hurdle, and as a result, no incentive compensation was accrued for the three months ended June 30, 2026. Excluding interest and other debt expenses, annualized second quarter expenses were 4.9% of average net assets.

Net investment income for the three months ended June 30, 2026 was approximately $18.1 million, or $0.22 per share. Net realized loss on investments and foreign currency for the three months ended June 30, 2026 was $14.8 million, or $0.18 per share. Net realized loss for the three months ended June 30, 2026 was comprised primarily of $10.0 million in losses from the exit of our investment in AutoAlert, partially offset by a $2.4 million realized gain due to paydown activities at par in Thras.io. Net unrealized gain for the three months ended June 30, 2026 was $1.3 million, or $0.01 per share. Net unrealized gain for the three months ended June 30, 2026 primarily reflects an $8.0 million reversal of previously recognized unrealized losses from the exit of our investment in AutoAlert, a $3.3 million reversal of previously recognized unrealized losses related to paydown activities at par on our investment in Thras.io, a $2.9 million unrealized gain on our investment in Job and Talent, partially offset by a $4.3 million unrealized loss on our investment in Pluralsight, a $3.3 million unrealized loss on our investment in PVHC, and a $2.1 million unrealized loss on our investment in Zilliant. Net increase in net assets resulting from operations for the three months ended June 30, 2026 was $1.7 million, or $0.02 per share.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2026, available liquidity was approximately $533.7 million, comprised of approximately $376.2 million in available capacity under our leverage program and $157.5 million in cash and cash equivalents.

The combined weighted-average interest rate on debt outstanding at June 30, 2026 was 6.03%.

Total debt outstanding at June 30, 2026, including debt assumed as a result of the Merger, was as follows:

		Maturity		Rate			Carrying Value (1)				Available				Total Capacity
Operating Facility		2029		SOFR+2.00%	(2)		$	134,833,287			$	165,166,713			$	300,000,000		(3)
Merger Sub Facility(4)		2028		SOFR+2.00%	(5)			54,000,000				211,000,000				265,000,000		(6)
2029 Notes ($325 million par)		2029		6.95%				322,739,642				—				322,739,642
Class A-1 Notes(7)		2034		SOFR+1.55%				270,600,000				—				270,600,000
Class A-2 Notes(7)		2034		SOFR+1.80%				54,100,000				—				54,100,000
Class B Notes(7)		2034		SOFR+2.15%				54,100,000				—				54,100,000
Class C Notes ($27.1 million par)(7)		2034		SOFR+2.70%				26,617,764				—				26,617,764
Total leverage								916,990,693			$	376,166,713			$	1,293,157,406
Unamortized issuance costs								(6,408,756	)
Debt, net of unamortized issuance costs							$	910,581,937

____________________
(1)		Except for the 2029 Notes and Secured Notes Class C, all carrying values are the same as the principal amounts outstanding.
(2)		As of June 30, 2026, $128.0 million of the outstanding amount was subject to a SOFR credit adjustment of 0.10%. $2.9 million of the outstanding amount bore interest at a rate of EURIBOR + 2.00%. $3.9 million of the outstanding amount bore interest at a rate of CORRA + 2.00% with a credit adjustment of 0.30%.
(3)		Operating Facility includes a $100.0 million accordion which allows for expansion of the facility to up to $400.0 million subject to consent from the lender and other customary conditions.
(4)		Debt assumed by the Company as a result of the Merger with BCIC.
(5)		The applicable margin for SOFR-based borrowings could be either 1.75% or 2.00% depending on a ratio of the borrowing base to certain committed indebtedness, and is also subject to a credit spread adjustment of 0.10%. If Merger Sub elects to borrow based on the alternate base rate, the applicable margin could be either 0.75% or 1.00% depending on a ratio of the borrowing base to certain committed indebtedness.
(6)		Merger Sub Facility includes a $60.0 million accordion which allows for expansion of the facility to up to $325.0 million subject to consent from the lender and other customary conditions.
(7)		Secured Notes offered in the CLO Transaction that closed on May 27, 2026.

For the three months ended June 30, 2026, approximately $0.6 million of cash distributions were reinvested for electing participants through purchase of shares in the open market in accordance with the terms of the DRIP.

On April 29, 2026, our Board of Directors re-approved our stock repurchase plan to acquire up to $50.0 million in the aggregate of our common stock at prices at certain thresholds below our net asset value per share, in accordance with the guidelines specified in Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934 (the “Company Repurchase Plan”), to be in effect through the earlier of April 30, 2027, unless further extended or terminated by the Company’s Board of Directors, or such time as the approved $50.0 million repurchase amount has been fully utilized, subject to certain conditions.

The following table summarizes the total shares repurchased and amounts paid by the Company under the Company Repurchase Plan, including broker fees, for the six months ended June 30, 2026:

		Shares Repurchased				Price Per Share*				Total Cost
Company Repurchase Plan			661,803			$	4.34			$	2,871,849
____________________
* Weighted-average price per share

RECENT DEVELOPMENTS

On August 4, 2026, TCPC, through its wholly-owned subsidiary Special Value Continuation Partners LLC, entered into a definitive agreement (the “Transaction Agreement”) providing for the sale of 95% of the limited liability company interests in the Continuation Vehicle, to a group of investment funds and accounts managed by Pantheon, and retained a 5% interest (the “Transaction”). The Transaction generated approximately $152 million in gross proceeds and, together with investment repayments received post June 30, 2026, is expected to reduce net leverage from 1.38x to approximately 0.4x (with a further reduction to less than 0.3x following an already announced portfolio company paydown).

The Company believes the Transaction meaningfully accelerates its ongoing efforts to strengthen its financial position and reshape its investment portfolio. As a result of the Transaction, the Company will have materially lower leverage, reduced investment position sizes, and significantly enhanced investment capacity, while realizing a substantial premium relative to the value implied by the Company’s current share price. The Company and its Board believe these outcomes provide substantially greater financial, investment, and operational flexibility, creating a stronger foundation from which to evaluate and pursue additional transactions or other strategic alternatives that can deliver greater long-term value to shareholders.

On August 6, 2026, we announced that the Board has engaged KBW to consider strategic alternatives to maximize shareholder value. These could include, but are not limited to, using newly available leverage capacity to reinvest in the portfolio and/or return capital to shareholders through share repurchases, pursuing potential strategic combinations in the public or private markets, completing an orderly realization of portfolio assets, or some combination thereof.

On August 6, 2026, our Board of Directors declared a third quarter dividend of $0.17 per share, payable on September 30, 2026 to stockholders of record as of the close of business on September 16, 2026.

CONFERENCE CALL AND WEBCAST

BlackRock TCP Capital Corp. will host a conference call at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) on Thursday, August 6, 2026 to discuss its financial results and the portfolio sale transaction. All interested parties are invited to participate in the conference call by dialing (833) 461-5787; international callers should dial (585) 542-9983. All participants should reference the access code 917145064. For a slide presentation that we intend to refer to on the earnings conference call, please visit the Investor Relations section of our website (www.tcpcapital.com) and click on the Second Quarter 2026 Investor Presentation under Events and Presentations. The conference call will be webcast simultaneously in the investor relations section of our website at http://investors.tcpcapital.com/. An archived replay of the call will be available approximately two hours after the live call. For the replay, please visit https://investors.tcpcapital.com/events-and-presentations.

BlackRock TCP Capital Corp.
Consolidated Statements of Assets and Liabilities
		June 30, 2026				December 31, 2025
		(unaudited)
Assets
Investments, at fair value:
Non-controlled, non-affiliated investments (cost of $1,225,055,609 and $1,425,285,902, respectively)		$	1,143,368,796			$	1,360,801,852
Non-controlled, affiliated investments (cost of $102,779,649 and $101,284,695, respectively)			32,172,951				34,821,907
Controlled investments (cost of $108,344,630 and $151,475,599, respectively)			114,981,601				137,678,713
Total investments (cost of $1,436,179,888 and $1,678,046,196, respectively)			1,290,523,348				1,533,302,472
Cash and cash equivalents			157,546,660				61,075,494
Interest, dividends and fees receivable			23,607,858				21,495,630
Deferred debt issuance costs			2,588,305				5,123,425
Receivable for investments sold			—				26,313,406
Prepaid expenses and other assets			2,197,356				3,050,038
Total assets			1,476,463,527				1,650,360,465
Liabilities
Debt (net of deferred issuance costs of $6,408,756 and $5,299,866, respectively)			910,581,937				1,035,542,837
Interest and debt related payables			4,375,009				7,245,830
Management fees payable			4,124,508				3,393,322
Reimbursements due to the Advisor			169,320				1,272,082
Accrued expenses and other liabilities			5,205,926				4,893,197
Total liabilities			924,456,700				1,052,347,268
Net assets		$	552,006,827			$	598,013,197
Composition of net assets applicable to common shareholders
Common stock, $0.001 par value; 200,000,000 shares authorized, 83,902,775 and 84,564,578 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively		$	83,902			$	84,564
Paid-in capital in excess of par			1,727,427,570				1,730,298,757
Distributable earnings (loss)			(1,175,504,645	)			(1,132,370,124	)
Total net assets			552,006,827				598,013,197
Total liabilities and net assets		$	1,476,463,527			$	1,650,360,465
Net assets per share		$	6.58			$	7.07

BlackRock TCP Capital Corp.
Consolidated Statements of Operations (Unaudited)
		Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Investment income
Interest income (excluding PIK):
Non-controlled, non-affiliated investments		$	32,485,660			$	41,609,217			$	67,540,767			$	85,065,954
Non-controlled, affiliated investments			445,963				338,648				905,445				676,647
Controlled investments			1,846,909				2,270,542				3,906,047				4,579,811
PIK interest income:
Non-controlled, non-affiliated investments			2,625,720				5,449,424				5,465,634				11,238,339
Non-controlled, affiliated investments			402,924				—				748,701				—
Controlled investments			—				394,202				415,331				1,075,763
Dividend income:
Non-controlled, non-affiliated investments			510,223				449,575				1,003,276				885,526
Non-controlled, affiliated investments			—				213,493				—				1,222,550
Controlled investments			1,700,000				738,497				2,614,290				2,607,357
Other income:
Non-controlled, non-affiliated investments			4,890				1,399				5,877				1,965
Total investment income			40,022,289				51,464,997				82,605,368				107,353,912
Operating expenses
Interest and other debt expenses			14,995,567				17,087,833				31,044,015				34,172,466
Management fees			4,235,490				5,461,118				8,891,551				10,944,962
Professional fees			762,127				947,452				2,243,187				1,814,899
Administrative expenses			409,939				509,930				909,733				1,151,394
Insurance expense			210,692				218,463				421,383				436,926
Director fees			182,500				192,500				375,000				385,000
Custody fees			74,243				91,348				166,199				184,533
Other operating expenses			1,009,353				1,182,050				1,935,027				2,114,708
Total operating expenses, before management fee waiver			21,879,911				25,690,694				45,986,095				51,204,888
Management fee waiver			—				(1,820,372	)			—				(3,648,320	)
Total operating expenses, after management fee waiver			21,879,911				23,870,322				45,986,095				47,556,568
Net investment income			18,142,378				27,594,675				36,619,273				59,797,344
Realized and unrealized gain (loss) on investments and foreign currency
Net realized gain (loss):
Non-controlled, non-affiliated investments			(4,783,556	)			(66,287,884	)			(26,052,389	)			(107,205,222	)
Controlled investments			(9,970,354	)			—				(21,432,370	)			—
Interest Rate Swap			—				(9,491	)			—				(9,491	)
Net realized gain (loss)			(14,753,910	)			(66,297,375	)			(47,484,759	)			(107,214,713	)
Net change in unrealized appreciation (depreciation):
Non-controlled, non-affiliated investments			(4,900,616	)			40,313,699				(17,079,205	)			66,868,692
Non-controlled, affiliated investments			(1,970,942	)			(3,203,412	)			(4,143,910	)			(2,282,254	)
Controlled investments			8,130,233				(14,296,084	)			20,433,856				(12,171,749	)
Interest Rate Swap			—				(18,087	)			—				(9,316	)
Net change in unrealized appreciation (depreciation)			1,258,675				22,796,116				(789,259	)			52,405,373
Net realized and unrealized gain (loss)			(13,495,235	)			(43,501,259	)			(48,274,018	)			(54,809,340	)
Realized loss on extinguishment of debt			(2,897,355	)			—				(2,897,355	)			—
Net increase (decrease) in net assets resulting from operations		$	1,749,788			$	(15,906,584	)		$	(14,552,100	)		$	4,988,004
Basic and diluted earnings (loss) per share		$	0.02			$	(0.19	)		$	(0.17	)		$	0.06
Basic and diluted weighted average common shares outstanding			83,915,423				85,042,931				84,124,040				85,060,179

ABOUT BLACKROCK TCP CAPITAL CORP.

BlackRock TCP Capital Corp. (NASDAQ: TCPC) is a specialty finance company focused on direct lending to middle-market companies as well as small businesses. TCPC lends primarily to companies with established market positions, strong regional or national operations, differentiated products and services and sustainable competitive advantages, investing across industries in which it has significant knowledge and expertise. TCPC’s investment objective is to achieve high total returns through current income and capital appreciation, with an emphasis on principal protection. TCPC is a publicly-traded business development company, or BDC, regulated under the Investment Company Act of 1940 and is externally managed by its advisor, an indirect subsidiary of BlackRock, Inc. For more information, visit www.tcpcapital.com.

FORWARD-LOOKING STATEMENTS

Prospective investors considering an investment in BlackRock TCP Capital Corp. should consider the investment objectives, risks and expenses of the company carefully before investing. This information and other information about the company are available in the company’s filings with the Securities and Exchange Commission (“SEC”). Copies are available on the SEC’s website at www.sec.gov and the company’s website at www.tcpcapital.com. Prospective investors should read these materials carefully before investing.

This press release may contain forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the company at the time of such statements and are not guarantees of future performance. We use words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “could,” “may,” “plan” and similar words to identify forward-looking statements. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation, changes in general economic conditions or changes in the conditions of the industries in which the company makes investments, risks associated with the availability and terms of financing, changes in interest rates, availability of transactions, and regulatory changes. Certain factors could cause actual results to differ materially from those contained in the forward-looking statements, including, but not limited to, those factors included in the “Risk Factors” section of the company’s Form 10-K for the year ended December 31, 2025, and the company’s subsequent periodic filings on Form 10-Q with the SEC. Certain factors could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with (i) the ability to realize the anticipated benefits of the Merger, including the expected accretion to net investment income and the elimination or reduction of certain expenses and costs due to the Merger; (ii) risks related to diverting management’s attention from ongoing business operations; (iii) risks related to the retention of the personnel of TCPC’s advisor; (iv) changes in the economy, financial markets and political environment; (v) risks associated with possible disruption in the operations of TCPC or the economy generally due to terrorism, war or other geopolitical conflict (including the current conflict between Russia and Ukraine and the conflict in the Middle East), trade protection or trade wars, natural disasters or public health crises and epidemics; (vi) future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); (vii) conditions in TCPC’s operating areas, particularly with respect to business development companies or regulated investment companies; and (viii) other considerations that may be disclosed from time to time in TCPC’s publicly disseminated documents and filings. Copies are available on the SEC’s website at www.sec.gov and the Company’s website at www.tcpcapital.com. Forward-looking statements are made as of the date of this press release and are subject to change without notice. The Company has no duty and does not undertake any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260806840898/en/

BlackRock TCP Capital Corp.

Alex Doll

(310) 566-1094

[email protected]

KEYWORDS: California United States North America

INDUSTRY KEYWORDS: Professional Services Finance Consulting Asset Management Banking Accounting

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