Q4 2023 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$195.51Last close (Feb 28, 2024)
Post-Earnings Price$240.61Open (Feb 29, 2024)
Price Change
$45.10(+23.07%)
- Duolingo's Family Plan has grown over 100% year-over-year and now accounts for 18% of subscribers, with materially higher retention rates and higher LTV compared to the annual plan. The company plans to dedicate more resources to capitalize on its organic momentum, potentially boosting future revenue.
- The company is expanding its advanced English courses to tap into the 80% of the language learning market comprised of English learners. With 17 courses now offering advanced English content and plans to market this offering, Duolingo aims to significantly increase its user base and revenue in the coming years.
- Duolingo continues to experience broad-based and high-quality user growth, primarily driven by word of mouth due to continuous product improvements. This leads to strong and predictable growth, even as the user base becomes larger, indicating sustained user acquisition at low cost.
- Duolingo expects a deceleration in user growth to the mid-50% range after ten consecutive quarters of acceleration, suggesting that sustaining high user growth rates may become challenging as the user base increases.
- The company is forecasting lower incremental adjusted EBITDA margins in 2024 compared to 2023 due to increased investments in R&D for new offerings like math and music, which may pressure profitability without immediate returns.
- Alternative revenue streams such as in-app purchases and advertising are expected to grow more slowly in 2024, indicating potential reliance on subscription revenue and possible challenges in diversifying revenue sources.