NASDAQ$DUOL

Duolingo · Q1 2023 earnings

Q1 2023 earnings · · Investor relations

Briefing

Duolingo experienced strong user and revenue growth alongside increased profitability.

Duolingo reported a strong first quarter in 2023, with significant growth in DAUs, revenue, and paid subscribers. The company also saw increased profitability and raised its full-year guidance.

  • Total bookings increased by 37% year-over-year to $140.1 million.
  • Subscription bookings grew by 40% year-over-year to $110.1 million.
  • Paid subscribers increased by 63% year-over-year, reaching 4.8 million.
  • Total revenues increased by 42% year-over-year to $115.7 million.

Headline financials

Total Revenue

$116M

Previous: $81.2M+42.4%
EPS (adj)

-$0.06

Previous: -$0.31+80.6%
Monthly Active Users

72.6M

Previous: 49.2M+47.6%
Daily Active Users

20.3M

Previous: 12.5M+62.4%
Paid Subscribers

4.8M

Previous: 2.9M+65.5%
Total Bookings

$140M

Previous: $102M+37.2%
Subscription Bookings

$110M

Previous: $78.5M+40.2%
Capital Expenditures

-$681K

Previous: -$1.33M+48.7%
Free Cash Flow

-$3.26M

Previous: -$13.5M+75.8%
Net Income

-$2.58M

Previous: -$12.2M+78.8%
Operating Income

-$8.52M

Previous: -$11.8M+28.1%
Gross Profit

$84.2M

Previous: $59.7M+40.9%
Cash & Equivalents

$641M

Previous: $577M+11.0%
Total Assets

$790M

Previous: $685M+15.5%
Stock-Based Comp

$21.1M

Previous: $14.6M+44.5%

Revenue & EPS history

Duolingo · Revenue · Quarterly

$116M

Q1 2023+42.4%vs Q1 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Duolingo · $94.1M total across 2 segments · Q1 2023

  • Subscription bookings
    $86.2M+48.6%
  • Other bookings
    $7.87M+132.7%

Forward guidance

Duolingo provided guidance for the second quarter and full year 2023. Second quarter total bookings are expected to be between $128.0 million and $131.0 million. Second quarter revenues are expected to be between $122.0 million and $125.0 million. Second quarter Adjusted EBITDA is expected to be between $13.4 million and $15.0 million. Full year total bookings are expected to be between $552.0 million and $561.0 million. Full year revenues are expected to be between $500.0 million and $509.0 million. Full year Adjusted EBITDA is expected to be between $55.0 million and $61.0 million.

Tailwinds

  • Second Quarter 2023 Total Bookings are expected to be between $128.0 million and $131.0 million.
  • Second Quarter 2023 Revenues are expected to be between $122.0 million and $125.0 million.
  • Second Quarter 2023 Adjusted EBITDA is expected to be between $13.4 million and $15.0 million.
  • Full Year 2023 Total Bookings are expected to be between $552.0 million and $561.0 million.
  • Full Year 2023 Revenues are expected to be between $500.0 million and $509.0 million.

Headwinds

  • Quantification of certain items included in the calculation of GAAP net loss cannot be calculated or predicted at this time without unreasonable efforts.
  • 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.
  • 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.
  • Duolingo is unable to address the probable significance of the unavailable information.
  • The unavailable information could have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2023

Historical avgQ1 2023

+5.3%

Avg return

Earnings day

+2.3%

Avg return

5 days after

+9.4%

Avg return

30 days after

61%

14 / 23 earnings

Positive

+42.5%

Q1 2022

Best reaction

-25.5%

Q3 2025

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-0.9%-3.0%-4.7%
Q4 2025+12.0%-18.1%-18.8%
Q3 2025-25.5%-25.0%-23.2%
Q1 2025+21.6%+23.9%+29.9%
Q4 2024-17.0%-22.1%-16.2%
Q3 2024+4.2%+5.0%+21.6%
Q2 2024+8.4%+10.1%+26.2%
Q1 2024-19.4%-27.3%-24.1%
Q4 2023+22.8%+15.5%+13.4%
Q3 2023+23.4%+29.7%+30.5%
Q2 2023+3.4%-0.9%+11.5%
Q1 2023+12.0%+7.3%+19.4%
Q4 2022+24.7%+34.0%+52.8%
Q3 2022-4.6%-4.1%-10.8%
Q2 2022-1.4%-5.9%-11.2%
Q1 2021+27.1%+18.5%+39.4%
Q1 2022+42.5%+29.0%+48.2%
Q4 2021-3.0%+3.9%+24.3%
Q3 2020-7.3%-6.8%-36.8%
Q3 2021+3.3%-4.3%-34.8%
Q2 2020+0.5%-1.8%+27.5%
Q4 2020+0.5%-1.8%+27.5%
Q2 2021-4.4%-3.6%+23.8%
Q1 2020

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