Duolingo, Inc. (NASDAQ: DUOL), the world’s leading mobile learning
platform, announced results for the second quarter ended
June 30, 2024 in a shareholder letter that is posted at
investors.duolingo.com.
"We achieved significant milestones in the second
quarter, surpassing 100 million MAUs and reporting 8 million
subscribers,” said Luis von Ahn, Co-Founder and CEO of Duolingo.
“Our user growth accelerated, and we saw record levels of
engagement. Over 20% of our DAUs now have streaks longer than a
year.
We have also made steady progress on our strategic
priorities — driving increased family plan penetration and the
broader roll out of Duolingo Max. We expect these initiatives to
show more impact in the coming quarters and support our long-term
monetization strategy.”
Second Quarter
2024 Highlights
- Total bookings were
$190.1 million, an increase of 38% from the prior year
quarter;
- Subscription bookings were
$156.5 million, an increase of 47% from the prior year
quarter;
- Paid subscribers totaled 8.0 million
at quarter end, an increase of 52% from the prior year
quarter;
- Daily active users (DAUs) were 34.1
million, an increase of 59% from the prior year quarter and monthly
active users (MAUs) were 103.6 million, an increase of 40% from the
prior year quarter;
- Total revenues were
$178.3 million, an increase of 41% from the prior year
quarter;
- Net income was $24.4 million,
compared to $3.7 million in the prior year quarter;
- Adjusted EBITDA was
$48.1 million, compared to $20.9 million in the prior
year quarter, a 27.0% versus 16.5% Adjusted EBITDA margin,
respectively;
- Cash flow from operating activities
was $62.4 million compared to $37.2 million in the prior year
quarter, and free cash flow was $54.9 million compared to $34.3
million in the prior year quarter.
Financial and Key Operating
Metrics
The following table summarizes our financial and
operating highlights for the quarters ended June 30, 2024 and
2023:
|
Three Months Ended June 30, |
|
|
(In millions) |
2024 |
|
2023 |
|
% Change |
Operating Metrics |
|
|
|
|
|
Monthly active users (MAUs) |
103.6 |
|
74.1 |
|
40 |
% |
Daily
active users (DAUs) |
34.1 |
|
21.4 |
|
59 |
% |
Paid
subscribers (at period end) |
8.0 |
|
5.2 |
|
52 |
% |
|
Three Months Ended June 30, |
|
|
(In thousands) |
|
2024 |
|
|
2023 |
|
% Change |
Operating Metrics |
|
|
|
|
|
Subscription bookings |
$ |
156,484 |
|
$ |
106,254 |
|
47% |
Total bookings |
$ |
190,092 |
|
$ |
137,539 |
|
38% |
|
|
|
|
|
|
Financial Measures |
|
|
|
|
|
Total revenues (GAAP) |
$ |
178,327 |
|
$ |
126,839 |
|
41% |
Net income (GAAP) |
$ |
24,351 |
|
$ |
3,725 |
|
>100% |
Adjusted EBITDA (Non-GAAP) |
$ |
48,117 |
|
$ |
20,871 |
|
>100% |
Net cash provided by operating activities (GAAP) |
$ |
62,388 |
|
$ |
37,167 |
|
68% |
Free cash flow (Non-GAAP) |
$ |
54,867 |
|
$ |
34,340 |
|
60% |
The following table provides revenues by product
type:
|
Three Months Ended June 30, |
|
|
|
|
(in thousands) |
|
2024 |
|
|
2023 |
|
Change |
|
% Change |
Subscription |
$ |
143,909 |
|
$ |
95,158 |
|
$ |
48,751 |
|
51% |
Other |
|
34,418 |
|
|
31,681 |
|
|
2,737 |
|
9 |
Total revenues |
$ |
178,327 |
|
$ |
126,839 |
|
$ |
51,488 |
|
41% |
________________(1) Other revenue is comprised
mainly of Advertising, Duolingo English Test, and In-App
Purchases.
Financial Outlook
Duolingo is providing the following guidance for
the third quarter ending September 30, 2024 and updating its
guidance for the full year ending December 31, 2024:
|
Third Quarter 2024 |
|
Full Year 2024 |
(in millions) |
Low |
|
High |
|
Low |
|
High |
|
|
|
|
|
|
|
|
Total Bookings |
$ |
194.5 |
|
|
$ |
197.5 |
|
|
$ |
820.5 |
|
|
$ |
827.5 |
|
Revenues |
$ |
186.7 |
|
|
$ |
189.7 |
|
|
$ |
731.3 |
|
|
$ |
738.3 |
|
Adjusted EBITDA |
$ |
40.1 |
|
|
$ |
42.7 |
|
|
$ |
175.5 |
|
|
$ |
184.6 |
|
Adjusted EBITDA Margin |
|
21.5 |
% |
|
|
22.5 |
% |
|
|
24 |
% |
|
|
25 |
% |
With regards to the non-GAAP Adjusted EBITDA and
Adjusted EBITDA margin outlook provided above, a reconciliation to
GAAP net income, the most directly comparable financial measure
presented in accordance with GAAP, has not been provided as the
quantification of certain items included in the calculation of GAAP
net income cannot be calculated or predicted at this time without
unreasonable efforts. For example, the non-GAAP adjustment for
stock-based compensation expenses related to equity awards requires
additional inputs such as number of shares granted and market price
that are not currently ascertainable, and the non-GAAP adjustment
for certain legal, tax and regulatory reserves and expenses depends
on the timing and magnitude of these expenses and cannot be
accurately forecasted. For the same reasons, we are unable to
address the probable significance of the unavailable information,
which could have a potentially unpredictable, and potentially
significant, impact on our future GAAP financial results.
Dilutive Securities
Duolingo has various dilutive securities. The table
below details these securities (shares in millions; rounding
differences may occur):
(Amounts in millions, except share price) |
Price as of June 30,
2024 |
|
Weighted-averageexerciseprice |
|
Shares |
Share price |
$208.67 |
|
|
|
|
Common stock outstanding as of June 30, 2024 |
|
|
|
|
43.5 |
Founder awards (1) |
|
|
|
|
1.6 |
Dilutive effect of stock options outstanding (2) |
|
|
$ |
16.42 |
|
2.2 |
RSUs outstanding |
|
|
|
|
2.0 |
Total estimated diluted shares outstanding |
|
|
|
|
49.4 |
________________(1) Includes
1.4 million underlying performance-based Restricted Stock Units
("RSUs") where performance criteria has not been satisfied.
(2) The Company has 2.4 million
options outstanding as of June 30, 2024. The estimated
dilutive effect is calculated as the number of shares expected to
be issued upon vesting or exercise, adjusted for the strike price
proceeds that are received by the Company and assumed to be used to
repurchase shares of Duolingo common stock.
Video Webcast Duolingo will
host a video webcast to discuss its quarterly results today,
August 7, 2024 at 5:30 p.m. ET. This live webcast and related
materials will be publicly available and can be accessed at
investors.duolingo.com. A replay will be available on the Investor
Relations section of our website two hours following completion of
the webcast and will remain available for a period of one year.
About DuolingoDuolingo is the
leading mobile learning platform globally. Its flagship app has
organically become the world's most popular way to learn languages
and the top-grossing app in the Education category on both Google
Play and the Apple App Store. With technology at the core of
everything it does, Duolingo has consistently invested to provide
learners a fun, engaging, and effective learning experience while
remaining committed to its mission to develop the best education in
the world and make it universally available.
Definitions
Monthly Active Users (MAUs). MAUs
are defined as unique users who engage with our Duolingo App or the
learning section of our website each month. MAUs are reported for a
measurement period by taking the average of the MAUs for each
calendar month in that measurement period. The measurement period
for MAUs is the three months ended June 30, 2024 and the same
period in the prior year where applicable, and the analysis of
results is based on those periods. MAUs are a measure of the size
of our global active user community on Duolingo.
Daily Active Users (DAUs). DAUs
are defined as unique users who engage with our Duolingo App or the
learning section of our website each calendar day. DAUs are
reported for a measurement period by taking the average of the DAUs
for each day in that measurement period. The measurement period for
DAUs is the three months ended June 30, 2024 and the same
period in the prior year where applicable, and the analysis of
results is based on those periods. DAUs are a measure of the
consistent engagement of our global user community on Duolingo.
Paid Subscribers. Paid subscribers
are defined as users who pay for access to any Duolingo
subscription offering and had an active subscription as of the end
of the measurement period. Each unique user account is treated as a
single paid subscriber regardless of whether such user purchases
multiple subscriptions, and the count of paid subscribers does not
include users who are currently on a free trial or who are
non-paying members of a family plan.
Subscription Bookings and Total
Bookings. Subscription bookings represent the amounts we
receive from a purchase of any Duolingo subscription offering.
Total bookings include subscription bookings, income from
advertising networks for advertisements served to our users,
purchases of the Duolingo English Test, and in-app purchases of
virtual goods. We believe bookings provide an indication of trends
in our operating results, including cash flows, that are not
necessarily reflected in our revenues because we recognize
subscription revenues ratably over the lifetime of a subscription,
which is generally from one to twelve months.
Forward-Looking Statements
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. We intend such forward-looking statements to be
covered by the safe harbor provisions for forward-looking
statements contained in Section 27A of the Securities Act of 1933,
as amended (the “Securities Act”) and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). All
statements other than statements of historical facts contained in
this press release, including without limitation, statements
regarding our business model and strategic priorities, including
the expected impact of our product initiatives on our long-term
monetization strategy and the scaling of our user base, and our
financial outlook are forward-looking statements. Without limiting
the generality of the foregoing, you can identify forward-looking
statements because they contain words such as “may,” “will,”
“shall,” “should,” “expects,” “plans,” “anticipates,” “could,”
“intends,” “target,” “projects,” “contemplates,” “believes,”
“estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,”
or “continue” or the negative of these words or other similar terms
or expressions that concern our expectations, strategy, plans, or
intentions. Such forward-looking statements are neither promises
nor guarantees, but involve a number of known and unknown risks,
uncertainties and assumptions that may cause our actual results,
performance or achievements to differ materially from those
expressed or implied in the forward-looking statements due to
various factors, including, but not limited to: our ability to
retain and grow our users and sustain their engagement with our
products; competition in the online language learning industry; our
limited operating history; our ability to maintain profitability;
our ability to manage our growth and operate at such scale; the
success of our investments; our reliance on third-party platforms
to store and distribute our products and collect revenue; our
reliance on third-party hosting and cloud computing providers; our
ability to compete for advertisements; acceptance by educational
organizations of technology-based education; changes in our
business and macroeconomic conditions; our ability to access,
collect, and use personal data about our users and payers, and to
comply with applicable data privacy laws; regulatory and
legislative developments on the use of artificial intelligence and
machine learning; potential intellectual property-related
litigation and proceedings; our ability adequately obtain, protect
and maintain our intellectual property rights; and the other
important factors more fully detailed under the caption "Risk
Factors" in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, as any such factors may be updated
from time to time, including without limitation in our Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
2024 and in our other filings with the SEC, accessible on the SEC’s
website at www.sec.gov and the Investor Relations section of the
Company’s website at investors.duolingo.com. All forward-looking
statements speak only as of the date of this press release. While
we may elect to update such forward-looking statements at some
point in the future, we disclaim any obligation to do so, even if
subsequent events cause our views to change.
Limitation of Key Operating Metrics and
Other DataWe manage our business by tracking several
operating metrics, including MAUs, DAUs, paid subscribers, and
subscription and total bookings. While these metrics are based on
what we believe to be reasonable estimates of our user base for the
applicable period of measurement, there are inherent challenges in
measuring how our platform is used. These metrics are determined by
using internal data gathered on an analytics platform that we
developed and operate and have not been validated by an independent
third party. This platform tracks user account and session
activity. If we fail to maintain an effective analytics platform,
our metrics calculations may be inaccurate. We believe that these
metrics are reasonable estimates of our user base for the
applicable period of measurement, and that the methodologies we
employ and update from time-to-time to create these metrics are
reasonable bases to identify trends in user behavior. Because we
update the methodologies we employ to create metrics, our operating
metrics may not be comparable to those in prior periods. Other
companies, including companies in our industry, may calculate these
metrics differently.
Non-GAAP Financial MeasuresWe use
certain non-GAAP financial measures to supplement our Unaudited
Condensed Consolidated Financial Statements, which are presented in
accordance with GAAP. These non-GAAP financial measures include
Adjusted EBITDA; Adjusted EBITDA margin; Free cash flow, and Free
cash flow margin. Please refer to the definitions and
reconciliation at the end of this press release. We use these
non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period
comparisons. By excluding certain items that may not be indicative
of our recurring core operating results, we believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance. Accordingly, we believe
these non-GAAP financial measures are useful to investors and
others because they allow for additional information with respect
to financial measures used by management in its financial and
operational decision-making and they may be used by our
institutional investors and the analyst community to help them
analyze the health of our business. However, there are a number of
limitations related to the use of non-GAAP financial measures, and
these non-GAAP financial measures should be considered in addition
to, not as a substitute for or in isolation from, our financial
results prepared in accordance with GAAP. Other companies,
including companies in our industry, may calculate these non-GAAP
financial measures differently or not at all, which reduces their
usefulness as comparative measures.
Website InformationWe routinely
post important information for investors on the Investor Relations
section of our website, investors.duolingo.com, and also from time
to time may use social media channels, including our X (formerly
Twitter) account (x.com/duolingo) and our LinkedIn account
(linkedin.com/company/duolingo/), as an additional means of
disclosing public information to investors, the media and others
interested in us. It is possible that certain information we post
on our website and on social media could be deemed to be material
information, and we encourage investors, the media and others
interested in us to review the business and financial information
we post on our website and on the social media channels identified
above, in addition to following our press releases, SEC filings,
public conference calls, presentations and webcasts. The
information contained on, or that may be accessed through, our
website and our social media channels is not incorporated by
reference into, and is not a part of, this document.
|
DUOLINGO, INC. AND SUBSIDIARIES UNAUDITED
CONDENSED CONSOLIDATED BALANCE
SHEETS(Amounts in thousands) |
|
|
June 30, 2024 |
|
December 31, 2023 |
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
888,240 |
|
$ |
747,610 |
Accounts receivable |
|
77,722 |
|
|
88,975 |
Deferred cost of revenues |
|
63,285 |
|
|
53,931 |
Prepaid expenses and other current assets |
|
12,317 |
|
|
7,282 |
Noncurrent assets |
|
97,879 |
|
|
56,159 |
Total assets |
$ |
1,139,443 |
|
$ |
953,957 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Deferred revenues |
$ |
291,477 |
|
$ |
249,192 |
Accounts payable |
|
3,405 |
|
|
2,447 |
Other current liabilities |
|
22,842 |
|
|
25,723 |
Long-term obligation under operating leases |
|
54,775 |
|
|
21,094 |
Total liabilities |
|
372,499 |
|
|
298,456 |
Total stockholders’ equity |
|
766,944 |
|
|
655,501 |
Total liabilities and stockholders' equity |
$ |
1,139,443 |
|
$ |
953,957 |
|
DUOLINGO, INC. AND SUBSIDIARIESUNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (Amounts in thousands, except per
share amounts) |
|
|
Three Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
Revenues |
$ |
178,327 |
|
|
$ |
126,839 |
|
Cost of revenues |
|
47,349 |
|
|
|
33,788 |
|
Gross profit |
|
130,978 |
|
|
|
93,051 |
|
Operating expenses: |
|
|
|
Research and development |
|
55,147 |
|
|
|
47,947 |
|
Sales and marketing |
|
20,174 |
|
|
|
17,734 |
|
General and administrative |
|
36,957 |
|
|
|
32,235 |
|
Total operating expenses |
|
112,278 |
|
|
|
97,916 |
|
Income (loss) from operations |
|
18,700 |
|
|
|
(4,865 |
) |
Other expense, net of other income |
|
(707 |
) |
|
|
(268 |
) |
Income (loss) before interest income and income taxes |
|
17,993 |
|
|
|
(5,133 |
) |
Interest income |
|
10,721 |
|
|
|
7,543 |
|
Income before income taxes |
|
28,714 |
|
|
|
2,410 |
|
Provision (benefit) for income taxes |
|
4,363 |
|
|
|
(1,315 |
) |
Net
income and comprehensive income |
$ |
24,351 |
|
|
$ |
3,725 |
|
Net
income per share attributable to Class A and Class B common
stockholders, basic |
$ |
0.56 |
|
|
$ |
0.09 |
|
Net
income per share attributable to Class A and Class B common
stockholders, diluted |
$ |
0.51 |
|
|
$ |
0.08 |
|
|
DUOLINGO, INC. AND SUBSIDIARIESUNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(Amounts in thousands) |
|
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
Net income |
$ |
51,307 |
|
|
$ |
1,143 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
4,317 |
|
|
|
3,396 |
|
Stock-based compensation expense |
|
51,731 |
|
|
|
44,787 |
|
Gain on sale of capitalized software |
|
— |
|
|
|
(100 |
) |
Changes in assets and liabilities: |
|
38,547 |
|
|
|
17,545 |
|
Net cash provided by operating activities |
|
145,902 |
|
|
|
66,771 |
|
Net cash used for investing activities |
|
(13,677 |
) |
|
|
(4,683 |
) |
Net cash provided by financing activities |
|
8,405 |
|
|
|
8,397 |
|
Net increase in cash, cash equivalents and restricted cash |
|
140,630 |
|
|
|
70,485 |
|
Cash, cash equivalents and restricted cash - Beginning of
period |
|
750,345 |
|
|
|
608,180 |
|
Cash, cash equivalents and restricted cash - End of period |
$ |
890,975 |
|
|
$ |
678,665 |
|
|
DUOLINGO, INC. AND
SUBSIDIARIESADJUSTED EBITDA
RECONCILIATION(Amounts in thousands)
Adjusted EBITDA. Adjusted EBITDA
is defined as net income excluding interest income, income taxes,
depreciation and amortization, stock-based compensation expenses
related to equity awards, transaction costs related to
acquisitions, and acquisition earn-out costs. Adjusted EBITDA
margin is defined as Adjusted EBITDA as a percentage of revenues.
These non-GAAP financial measures are used by management to
evaluate the financial performance of our business and we present
these non-GAAP financial measures because we believe that they are
helpful in highlighting trends in our operating results and that
they are frequently used by analysts, investors and other
interested parties to evaluate companies in our industry. The
following table presents a reconciliation of our net income, the
most directly comparable financial measure presented in accordance
with GAAP, to Adjusted EBITDA and Adjusted EBITDA margin.
|
Three Months Ended June 30, |
(In thousands) |
|
2024 |
|
|
|
2023 |
|
Net income |
$ |
24,351 |
|
|
$ |
3,725 |
|
Add (deduct): |
|
|
|
Interest income |
|
(10,721 |
) |
|
|
(7,543 |
) |
Provision (benefit) for income taxes |
|
4,363 |
|
|
|
(1,315 |
) |
Depreciation and amortization |
|
2,243 |
|
|
|
1,634 |
|
Stock-based compensation expenses related to equity awards (1) |
|
27,544 |
|
|
|
24,258 |
|
Acquisition transaction costs (2) |
|
337 |
|
|
|
— |
|
Acquisition earn-out costs (3) |
|
— |
|
|
|
112 |
|
Adjusted EBITDA |
$ |
48,117 |
|
|
$ |
20,871 |
|
|
|
|
|
Revenues |
$ |
178,327 |
|
|
$ |
126,839 |
|
Adjusted EBITDA Margin |
|
27.0 |
% |
|
|
16.5 |
% |
________________(1) In addition to
stock-based compensation expense of $26.7 million and $23.7 million
for the three months ended June 30, 2024 and 2023, this includes
costs incurred related to taxes paid on equity transactions.
(2) Represents costs incurred
related to acquisitions, including integration costs.
(3) Represents costs incurred
related to the earn-out payment on an acquisition.
DUOLINGO, INC. AND
SUBSIDIARIESFREE CASH FLOW
RECONCILIATION(Amounts in thousands)
Free Cash Flow. Free cash flow
represents net cash provided by operating activities, reduced by
capitalized software development costs and purchases of property
and equipment and increased by taxes paid related to stock-based
compensation equity awards and transaction costs related to
acquisitions as we believe they are not indicative of future
liquidity. Free cash flow margin is defined as Free cash flow as a
percentage of revenues. We believe that free cash flow is a measure
of liquidity that provides useful information to our management,
investors and others in understanding and evaluating the strength
of our liquidity and future ability to generate cash that can be
used for strategic opportunities or investing in our business. Free
cash flow has certain limitations in that it does not represent our
residual cash flow for discretionary expenditures and our
non-discretionary commitments. The following table presents a
reconciliation of net cash provided by operating activities, the
most directly comparable financial measure calculated in accordance
with GAAP, to free cash flow.
|
Three Months Ended June 30, |
(In thousands) |
|
2024 |
|
|
|
2023 |
|
Net cash provided by operating activities |
$ |
62,388 |
|
|
$ |
37,167 |
|
Less: Capitalized software development costs and purchases of
intangible assets |
|
(3,093 |
) |
|
|
(2,544 |
) |
Less: Purchases of property and equipment |
|
(5,563 |
) |
|
|
(827 |
) |
Plus: Taxes paid related to stock-based compensation equity
awards |
|
798 |
|
|
|
544 |
|
Plus: Acquisition transaction costs (1) |
|
337 |
|
|
|
— |
|
Free cash flow |
$ |
54,867 |
|
|
$ |
34,340 |
|
|
|
|
|
Revenues |
$ |
178,327 |
|
|
$ |
126,839 |
|
Free cash flow margin |
|
30.8 |
% |
|
|
27.1 |
% |
________________(1) Represents
costs incurred related to acquisitions, including integration
costs.
Contacts
Investor Relations:Deborah
Belevan, VP of Investor RelationsIR@duolingo.com
Press:Sam Dalsimer, Global Head
of Communicationspress@duolingo.com
Duolingo (NASDAQ:DUOL)
過去 株価チャート
から 8 2024 まで 9 2024
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