DUOL
Duolingo, INC
NASDAQ
10-Q: Duolingo Reports Strong Q1 2025 Results, Driven by User Growth and Subscription Revenue
Sentiment:
Quarterly Report
1 May 2025 10:40 PM
Duolingo's Q1 2025 shows significant growth in users and revenue, driven by subscription services and increased user engagement.
Better than expected
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.
Summary
- Duolingo reported its Q1 2025 financial results, showing substantial growth in several key areas.
- Monthly active users (MAUs) increased by 33% year-over-year, reaching 130.2 million.
- Daily active users (DAUs) saw an even larger increase of 49%, reaching 46.6 million.
- The number of paid subscribers grew by 40% to 10.3 million.
- Subscription bookings increased by 44% to $232.2 million.
- Total bookings rose by 38% to $271.6 million.
- Revenue increased by 38% to $230.7 million.
- Net income was $35.1 million, up from $27.0 million in the same quarter last year.
- Adjusted EBITDA increased to $62.8 million from $44.0 million.
- Free cash flow was $103.0 million, compared to $78.5 million in the prior year period.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with strong growth across key metrics, indicating a healthy and expanding business. The only negative is a slight decrease in gross margin.
Positives
- Significant growth in monthly and daily active users indicates strong user acquisition and engagement.
- Substantial increase in paid subscribers demonstrates effective monetization strategies.
- Strong growth in subscription and total bookings suggests healthy future revenue streams.
- Increased revenue and net income reflect improved financial performance.
- Higher adjusted EBITDA indicates efficient operational management.
- Increased free cash flow provides greater financial flexibility.
- The increase in the DAU/MAU ratio indicates higher user engagement.
Negatives
- Total gross margin decreased to 71.1% from 73.0% due to increased generative AI costs related to the expansion of the Duolingo Max subscription tier.
Risks
- The company acknowledges risks related to retaining and growing users, competition, maintaining profitability, managing growth, predicting operating results, reliance on third-party platforms, and the success of AI and machine learning technologies.
- Fluctuations in foreign currency exchange rates could adversely affect financial results.
- Inflationary pressures could increase costs and impact profitability.
- The company's user metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may negatively affect the company's reputation and business.
Future Outlook
The company believes that its existing cash and cash equivalents, short-term investments, and cash flow from operations will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.
Management Comments
- We grew MAUs through product initiatives designed to make the app more social and engaging, through marketing, and through improving our courses, all of which we believe helped us attract new users, retain existing users, and reengage the millions of former users who return to our Duolingo App.
- We grew DAUs through many of the same marketing and product initiatives as we grew MAUs, such as making the product more fun and engaging.
- We grew paid subscribers through product initiatives designed to make Duolingo subscription offerings more appealing, which we believe helped us attract new subscribers and retain existing subscribers.
- We grew subscription bookings by selling more first-time and renewal subscriptions.
- We grew total bookings primarily through growth in subscription bookings as noted above.
Industry Context
Duolingo's strong performance reflects the growing demand for online language learning platforms. The company's freemium model and focus on user engagement have positioned it as a leader in the market, competing with other online education platforms and language learning apps.
Comparison to Industry Standards
- Duolingo's growth in MAUs and DAUs surpasses many competitors in the online education space, such as Babbel and Rosetta Stone.
- The company's subscription model is similar to other successful SaaS businesses, but its focus on language learning provides a unique value proposition.
- Duolingo's adjusted EBITDA margin of 27.2% is competitive with other high-growth tech companies.
- The company's free cash flow generation is a positive sign of financial health and sustainability.
Stakeholder Impact
- Shareholders will likely view the strong financial results and user growth positively.
- Employees may benefit from the company's continued success and expansion.
- Customers will continue to have access to a popular and effective language learning platform.
- Suppliers and creditors can expect continued business and timely payments.
Legal Proceedings
- The Company is not currently party to any material legal proceedings.
Related Party Transactions
- The Company has determined that there were no transactions with related parties as of or during the three months ended March 31, 2025 and 2024.
Key Dates
- 2011-08-18: Duolingo, Inc. was formed.
- 2012-06-19: The Duolingo App was launched to the general public.
- 2021-06-01: Date of Founder Awards grant.
- 2021-07-26: The 2021 Incentive Award Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (ESPP) became effective.
- 2024-12-31: End of the fiscal year 2024.
- 2025-01-01: The number of Class A shares available under the 2021 Plan was increased by 2,247 shares of common stock.
- 2025-02: The Board waived all future automatic share increases under the ESPP.
- 2025-03-31: End of the quarterly period.
- 2025-04-30: Date shares of Class A and Class B common stock outstanding were counted.
- 2025-05-01: Date of report filing.
Keywords
Duolingo, financial results, Q1 2025, language learning, subscription, MAU, DAU, bookings, revenue, EBITDA
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.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.