DUOL
Duolingo, INC
NASDAQ
8-K: Duolingo Soars: User Growth and Premium Subscriptions Drive 38% Revenue Increase in Q1 2025
Sentiment:
Earnings Release
1 May 2025 4:02 PM
Duolingo reports a record number of daily active users and surpasses 10 million paid subscribers, fueling a 38% year-over-year revenue growth in the first quarter of 2025.
Better than expected
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.
Summary
- Duolingo announced its Q1 2025 results, showcasing significant growth in user engagement and financial performance.
- Daily Active Users (DAUs) reached 46.6 million, a 49% increase year-over-year, marking the largest quarterly increase in the company's history.
- Monthly Active Users (MAUs) grew to 130.2 million, a 33% increase year-over-year.
- The company surpassed 10.3 million paid subscribers, a 40% increase year-over-year.
- Total revenue for Q1 2025 was $230.7 million, a 38% increase compared to $167.6 million in Q1 2024.
- Total bookings increased by 38% to $271.6 million.
- Net income rose to $35.1 million, compared to $27.0 million in the same quarter last year.
- Adjusted EBITDA was $62.8 million, representing a 27.2% margin, up from $44.0 million and a 26.3% margin in the prior year quarter.
- The company is raising its full-year bookings guidance to 29% year-over-year growth and its Adjusted EBITDA margin guidance to 28%.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with strong growth in users, subscribers, revenue, and profitability. The company is also raising its full-year guidance, indicating confidence in its future performance. The sentiment is very optimistic.
Positives
- Strong user growth, with DAUs increasing by 49% year-over-year.
- Significant subscriber growth, exceeding 10 million paid subscribers.
- Robust revenue growth of 38% year-over-year.
- Improved profitability, with an Adjusted EBITDA margin of 27.2%.
- Successful marketing campaigns driving user engagement.
- Expansion into new learning areas like Chess.
- AI-driven cost optimization measures showing early progress.
- Increased adoption of higher-priced subscription tiers like Duolingo Max.
- Raised full-year bookings and Adjusted EBITDA margin guidance.
Negatives
- Gross margin declined year-over-year, mainly due to increased generative AI costs related to the expansion of Duolingo Max, but is expected to improve in the second half of the year.
- Free cash flow margin decreased from 46.8% to 44.6%.
Risks
- The company's ability to retain and grow its user base and sustain engagement.
- Competition in the online language learning industry.
- Reliance on third-party platforms for distribution and revenue collection.
- The ability to successfully develop and implement AI and machine learning technologies.
- The ability to adequately protect intellectual property rights.
- Potential impact of macroeconomic conditions on the business.
Future Outlook
Duolingo expects Q2 2025 bookings to grow 29% year-over-year and now expects FY 2025 bookings to grow 29% year-over-year. The company is raising its full-year Adjusted EBITDA margin guidance to 28%.
Management Comments
- Luis von Ahn, Co-Founder and CEO of Duolingo, stated that Q1 was an outstanding start to the year, highlighting the continued strength of the product and brand.
- Luis von Ahn mentioned excitement about the momentum with Duolingo Max and its potential to drive innovation and growth.
- Luis von Ahn noted that investments in AI have helped accelerate content creation.
Industry Context
Duolingo's strong performance reflects the continued growth in the online learning market, driven by increasing demand for accessible and engaging educational content. The company's focus on mobile learning and gamification positions it well to capture a significant share of this market.
Comparison to Industry Standards
- Duolingo's 38% revenue growth in Q1 2025 is strong compared to other publicly traded online education companies.
- Coursera reported 15% revenue growth in their most recent quarter.
- Udemy reported 16% revenue growth in their most recent quarter.
- Duolingo's Adjusted EBITDA margin of 27.2% is also competitive within the industry.
- This indicates Duolingo is performing well relative to its peers in terms of both growth and profitability.
Stakeholder Impact
- Shareholders will benefit from the company's strong financial performance and increased guidance.
- Employees will benefit from the company's growth and success.
- Customers will benefit from the company's continued investment in improving its learning platform.
- Suppliers and creditors will benefit from the company's strong financial position.
Next Steps
- Duolingo will host a video webcast to discuss its first quarter results on May 1, 2025.
- The company will continue to focus on driving subscription bookings through user growth and conversion gains.
- Duolingo will continue to use AI to enhance Video Call and scale content.
- The company will continue to focus on growing profitably with operational discipline.
- Duolingo will be rolling out its Chess course in the coming weeks.
- Duolingo will launch feature enhancements to Duolingo Max, including a new Video Call practice tab.
Key Dates
- December 31, 2024: Date of the Unaudited Condensed Consolidated Balance Sheets
- March 31, 2025: End of the first quarter for which financial results are reported.
- May 1, 2025: Date of the press release and shareholder letter announcing Q1 2025 results; video webcast to discuss quarterly results.
- June 30, 2025: End of the second quarter; guidance provided for this period.
- December 31, 2025: End of the full year; guidance provided for this period.
Keywords
Duolingo, language learning, online education, subscription, AI, DAU, MAU, revenue, EBITDA, bookings, growth
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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