DUOL
Duolingo, INC
NASDAQ
10-K: Duolingo Achieves Profitability, Driven by Subscriber Growth in 2024
Sentiment:
Annual Results
27 February 2025 11:27 PM
Duolingo's 2024 annual report reveals a profitable year marked by significant growth in monthly active users, paid subscribers, and overall bookings.
Better than expected
The company's net income increased significantly from $16.1 million in 2023 to $88.6 million in 2024.
Adjusted EBITDA nearly doubled from $93.7 million in 2023 to $191.9 million in 2024.
The company's monthly active users (MAUs) reached 116.7 million for the three months ended December 31, 2024, a 32% increase year-over-year.
Daily active users (DAUs) increased by 51% to 40.5 million for the same period.
Paid subscribers grew to 9.5 million as of December 31, 2024, a 43% increase from the previous year.
Subscription bookings for 2024 totaled $730.7 million, a 47% increase year-over-year.
Total bookings for 2024 reached $870.6 million, a 40% increase year-over-year.
Summary
- Duolingo's 2024 annual report highlights the company's mission to provide accessible, high-quality education.
- The company's flagship app offers over 40 languages to more than 100 million monthly active users.
- Duolingo's freemium model allows users to access content for free, with paid subscriptions offering additional features.
- As of December 31, 2024, approximately 9% of monthly active users were paid subscribers.
- The company launched math and music courses integrated into the Duolingo App to diversify its platform.
- The Duolingo English Test is accepted by over 5,600 education programs worldwide.
- Total revenues for 2024 were $748.0 million, a 41% increase from 2023.
- The company reported net income of $88.6 million for 2024, a significant increase from $16.1 million in 2023.
- Adjusted EBITDA for 2024 was $191.9 million, compared to $93.7 million in 2023.
- The company's future outlook includes continued investment in product innovation and data analytics.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with strong growth in key metrics and a clear path to continued success. The achievement of profitability and effective monetization strategies contribute to a very favorable sentiment.
Positives
- Significant growth in MAUs, DAUs, and paid subscribers indicates strong user engagement and platform adoption.
- Substantial increase in subscription and total bookings reflects effective monetization strategies.
- The company achieved profitability in 2024, demonstrating improved financial performance.
- Expansion into math and music courses diversifies the platform and expands the addressable market.
- The Duolingo English Test's widespread acceptance enhances the company's credibility and revenue streams.
- The company's freemium model enables significant user scale.
Negatives
- The company relies on third-party platforms like Apple App Store and Google Play Store for distribution and payment collection, posing a risk if these relationships deteriorate.
- The company faces intense competition in the online language learning industry.
- Fluctuations in operating results and other operating metrics may make these metrics difficult to predict.
- The company is subject to complex and evolving U.S. and international laws and regulations.
Risks
- Failure to retain or attract new users could harm revenue and financial results.
- Competition in the online language learning industry may disrupt the business.
- Changes to existing brands and products, or the introduction of new brands or products, could fail to attract or keep users or generate revenue and profits.
- Inaccuracies in user metrics could negatively affect the company's reputation and business.
- Reliance on third-party hosting and cloud computing providers poses risks of service disruptions.
- Security breaches of IT systems could compromise confidential information and disrupt services.
- Economic downturns may adversely affect consumer discretionary spending and demand for the company's products and services.
- The company's development, implementation and use of AI and machine learning technologies may not be successful.
Future Outlook
Duolingo plans to continue investing in product innovation, data analytics, and expanding its platform to additional learning subjects.
Management Comments
- The company aims to build the most sophisticated education platform in the world.
- Management believes that by using modern technology, the very best talent, and a mission-driven approach, they can create better learning experiences and meaningful improvements in efficacy.
Industry Context
The online language learning market is expected to reach $123 billion by 2027, according to HolonIQ.
Comparison to Industry Standards
- Duolingo is the top-grossing Education app in the app stores.
- Duolingo's brand has become part of pop culture, appearing in internet memes and in sketches on late night comedy shows.
- According to an internal study, learners who completed five sections of Duolingo achieved proficiency comparable to five university semesters of language education.
- Independent studies corroborate this finding: Duolingo learners speaking skills were found to match those of university students, and users learning English on Duolingo outperformed students in traditional classroom settings on standardized language proficiency tests.
Stakeholder Impact
- Shareholders: Positive impact due to increased profitability and growth.
- Employees: Positive impact due to company success and potential for career advancement.
- Customers: Positive impact due to continued investment in product innovation and improved learning experiences.
- Suppliers: Positive impact due to increased business and potential for long-term partnerships.
Next Steps
- Continue to expand the platform to additional learning subjects.
- Continue to invest in product innovation and data analytics.
- Continue to improve existing features and introduce new ones to drive engagement and efficacy.
Legal Proceedings
- From time to time we may be involved in claims and proceedings arising in the course of our business.
- The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain.
- We are not currently party to any material legal proceedings.
Key Dates
- 1995: Reference to the Private Securities Litigation Reform Act of 1995.
- 2011: Duolingo, Inc. was formed on August 18, 2011.
- June 19, 2012: The Duolingo App was launched to the general public.
- 2016: Duolingo launched the Duolingo English Test.
- 2017: Duolingo launched its paid subscription.
- 2018: Revenue has increased each quarter since the first quarter of 2018.
- 2020: California enacted the CCPA.
- January 1, 2021: The current Plan, effective January 1, 2021, provides for Company safe harbor matching contributions.
- April 2021: Apple released an update of iOS that requires its users, on an app-by-app basis, to explicitly opt-in to the use of identifier-for-advertising.
- July 26, 2021: Duolingo adopted the 2021 Incentive Award Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (ESPP), each of which became effective on July 26, 2021 in connection with the IPO.
- July 28, 2021: The first day Duolingo's Class A common stock began trading.
- December 7, 2021: An outage of the AWS platform caused Duolingo to go offline for over 5 hours.
- January 2022: Effective January 2022, the option to deduct these expenditures currently was eliminated and instead requires taxpayers to capitalize and amortize them pursuant to Internal Revenue Code Section 174.
- May 2022: Duolingo was reinstated in most app stores in China.
- October 2022: Duolingo completed the acquisition for the assets of Gunner Made LLC (Gunner).
- 2022: Duolingo launched a math course.
- 2023: Duolingo launched a new music course.
- 2023: Duolingo also launched a new music course that's designed to teach music literacy, including how to read music notes and play songs.
- 2023: Duolingo Max is a premium subscription tier launched in 2023 and offered to a portion of our user base and priced higher than Super Duolingo.
- July 2024: Duolingo completed the acquisition of Hobbes, an animation and motion design studio based in Detroit, Michigan.
- August 2, 2024: The EU Artificial Intelligence Act (EU AI Act), which establishes a risk-based governance framework for AI in the EU market, entered into force on August 2, 2024, and the majority of the substantive requirements will apply two years later.
- July 17, 2024: The UK government announced on July 17, 2024 that it would introduce legislation to regulate AI.
- January 2025: In January 2025 the Trump administration has rescinded an executive order relating to the development of AI technologies that was previously implemented by the Biden administration in 2023.
- February 26, 2025: As of February 26, 2025, 39,044,190 shares of the registrant's Class A common stock were outstanding, and 6,198,612 shares of the registrant's Class B common stock were outstanding.
- February 26, 2025: As of February 26, 2025, there were 9 stockholders of record of our Class A common stock.
- February 26, 2025: As of February 26, 2025, there were 3 stockholders of record of our Class B common stock.
Keywords
Duolingo, language learning, online education, subscriptions, English Test, MAUs, DAUs, bookings, profitability, AI
DUOL
Duolingo, INC
NASDAQ
Sector: TBD
Filings with Classifications
Better than expected
1 May 2025 10:40 PM
Quarterly Report
- The company's MAUs, DAUs, paid subscribers, subscription bookings, total bookings, revenue, net income, adjusted EBITDA, and free cash flow all increased year-over-year.
Better than expected
1 May 2025 4:02 PM
Earnings Release
- Bookings growth exceeded prior guidance.
- Profitability for Q1 was above expectations.
- The company is raising the midpoint of its full-year bookings guidance to 29% YoY growth.
- The company is raising the midpoint of its full-year Adjusted EBITDA margin to 28% YoY growth.
Better than expected
25 April 2025 4:04 PM
Proxy Statement
- Duolingo's financial results for 2024, including bookings, revenue, net income, and adjusted EBITDA, exceeded expectations and prior-year performance.
Better than expected
27 February 2025 11:27 PM
Annual Results
- The company's net income increased significantly from $16.1 million in 2023 to $88.6 million in 2024.
- Adjusted EBITDA nearly doubled from $93.7 million in 2023 to $191.9 million in 2024.
- The company's monthly active users (MAUs) reached 116.7 million for the three months ended December 31, 2024, a 32% increase year-over-year.
- Daily active users (DAUs) increased by 51% to 40.5 million for the same period.
- Paid subscribers grew to 9.5 million as of December 31, 2024, a 43% increase from the previous year.
- Subscription bookings for 2024 totaled $730.7 million, a 47% increase year-over-year.
- Total bookings for 2024 reached $870.6 million, a 40% increase year-over-year.
Better than expected
27 February 2025 4:05 PM
Earnings Release
- The company's results were better than expected due to higher than anticipated growth in DAUs and paid subscribers.
- The company's results were better than expected due to strong performance of Duolingo Max.
- The company's results were better than expected due to effective marketing campaigns.
Better than expected
6 November 2024 6:29 PM
Quarterly Report
- The company's net income, adjusted EBITDA, and free cash flow all significantly exceeded the prior year's results, indicating better than expected financial performance.
- The company's user growth metrics, including MAUs, DAUs, and paid subscribers, all showed substantial year-over-year increases, indicating better than expected user engagement and adoption.
Better than expected
6 November 2024 4:04 PM
Quarterly Report
- Duolingo's results exceeded expectations across key metrics, including DAU growth, revenue, and profitability.
- The company's net income increased significantly, and adjusted EBITDA margin improved substantially.
- Duolingo also raised its full-year guidance, indicating confidence in continued strong performance.
Better than expected
7 August 2024 6:30 PM
Quarterly Report
- The company's net income, adjusted EBITDA, and free cash flow all significantly exceeded the prior year's results, indicating better than expected financial performance.
- The company's user growth metrics, including MAUs, DAUs, and paid subscribers, all showed substantial year-over-year increases, indicating better than expected user engagement and adoption.
Better than expected
7 August 2024 4:02 PM
Quarterly Report
- The company's results were better than expected due to significant growth in MAUs, DAUs, subscribers, revenue, and net income.
- The adjusted EBITDA and free cash flow also exceeded expectations, indicating improved profitability and cash generation.
Better than expected
9 May 2024 9:32 PM
Quarterly Report
- Duolingo's Q1 results exceeded expectations with significant growth in users, subscribers, revenue, and profitability.
- The company's net income of $27.0 million was a substantial improvement from a net loss in the prior year quarter.
- The company raised its full-year guidance for bookings, revenue, and profitability, indicating confidence in future performance.
Better than expected
8 May 2024 7:27 PM
Quarterly Report
- The company's net income of $27.0 million is a significant improvement from a net loss in the same quarter last year.
- Adjusted EBITDA was $44.0 million, a substantial increase from $15.1 million in the prior year.
- Free cash flow increased to $79.6 million, up from $28.8 million in the same period last year.
Better than expected
8 May 2024 4:03 PM
Quarterly Report
- Duolingo's Q1 2024 results significantly exceeded expectations with a 45% revenue growth, a net income of $27.0 million compared to a loss last year, and a substantial increase in adjusted EBITDA.
- The company's user growth metrics, including a 54% increase in DAUs and a 35% increase in MAUs, were also better than anticipated.
- The raised full-year guidance for bookings, revenue, and profitability further indicates that the company's performance is better than expected.
Better than expected
28 February 2024 6:14 PM
Annual Results
- The company's net income of $16.1 million is a significant improvement from a net loss of $59.6 million in the previous year.
- Adjusted EBITDA increased to $93.7 million, compared to $15.5 million in the previous year.
- Free cash flow increased to $144.3 million, compared to $46.2 million in the previous year.
Better than expected
28 February 2024 4:03 PM
Quarterly Report
- Duolingo's Q4 and full year results significantly exceeded expectations with record bookings, revenue, and profitability.
- The company's user growth, particularly the 65% increase in DAUs, was much higher than anticipated.
- The turnaround to net income from a net loss in the previous year was a positive surprise.
- The adjusted EBITDA and free cash flow figures were substantially better than expected.
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