In-app purchases are now roughly 5% of Duolingo's total bookings, up from 3% in the prior year. The company recently introduced new timed challenges as well as a flashcard-type game called Match Madness that have driven a substantial increase in in-app purchases (which largely take the form of players purchasing gems to trade for extra "lives" or boost time within certain challenges). ![]() Revenue of $96.1 million also grew at a stunning 51% y/y pace, outpacing Wall Street's expectations of $95.3 million (+50% y/y).ĭuolingo's strategy of gamifying learning has continued in full force. Duolingo reported that both DAU and MAU growth accelerated for the fifth straight quarter. Key to note is that Duolingo's paid subscribers grew 68% y/y to 3.7 million, outpacing even DAU growth of 51% y/y. Here are some of the highlights in the snapshot below:ĭuolingo Q3 highlights (Duolingo Q3 shareholder letter) The company continued to deliver on its beat-and-raise cadence in its Q3 results, giving us confidence that performance will continue to shine in 2023. If there's one tech stock that has been almost entirely immune to macro headwinds, it's Duolingo. The bottom line here: there are plenty of reasons to believe that Duolingo is still in the early stages of capturing a rapidly growing, casual online-learning market. But its underlying ~70% pro forma gross margins give it ample room to scale profitably, like many other software and internet peers. Right now, Duolingo is losing money because it's focused on product development and growth. New subject matter expansions like math should also serve to broaden Duolingo's market potential. The latter, in my view, is a burgeoning market that could eventually see Duolingo turn into a language-accreditation service for languages other than English. On top of its Plus subscriptions, Duolingo makes money from advertising and from administering English proficiency tests. ![]()
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