Financial Performance - Revenues for Q2 2025 reached $252.3 million, a 41.4% increase from $178.3 million in Q2 2024[18] - Gross profit for Q2 2025 was $182.6 million, compared to $131.0 million in Q2 2024, reflecting a gross margin improvement[18] - Net income for Q2 2025 was $44.8 million, significantly higher than $24.4 million in Q2 2024, marking an 83.7% year-over-year increase[18] - The company reported a basic net income per share of $0.98 for Q2 2025, compared to $0.56 for Q2 2024[18] - Net income for the six months ended June 30, 2025, was $79,916, compared to $51,307 for the same period in 2024, representing a 55.8% increase[27] - The company reported a net increase in cash of $190,440 for the six months ended June 30, 2025, compared to $140,630 in 2024, a 35.4% increase[27] - For the three months ended June 30, 2025, the company generated net income of $44.8 million, compared to $24.4 million for the same period in 2024, representing an increase of 83%[124] - Adjusted EBITDA for Q2 2025 was $78,680, up 63% from $48,117 in Q2 2024[108] - Free cash flow for Q2 2025 was $86,324, an increase from $53,732 in Q2 2024[108] User Engagement - Monthly active users (MAUs) and daily active users (DAUs) metrics are tracked to assess user engagement, although specific numbers were not disclosed[14] - Monthly active users (MAUs) reached approximately 128.3 million in Q2 2025, representing a 24% increase from 103.6 million in Q2 2024[110] - Daily active users (DAUs) increased to 47.7 million in Q2 2025, a 40% rise from 34.1 million in Q2 2024[113] - Paid subscribers grew to 10.9 million in Q2 2025, marking a 37% increase from 8.0 million in Q2 2024[115] Revenue Breakdown - Subscription revenue reached $210,678 for the three months ended June 30, 2025, compared to $143,909 in 2024, reflecting a 46.4% growth[62] - Subscription bookings for Q2 2025 were $227.3 million, a 45% increase from $156.5 million in Q2 2024[117] - Total bookings for Q2 2025 amounted to $268.0 million, up 41% from $190.1 million in Q2 2024[118] - Other revenue, which includes advertising and in-app purchases, increased by $7.2 million, or 21%, to $41.6 million during the three months ended June 30, 2025[151] Expenses and Investments - Operating expenses for Q2 2025 totaled $149.2 million, up from $112.3 million in Q2 2024, driven by increased investment in research and development[18] - Research and development expenses for the six months ended June 30, 2025, were $1,625, compared to $940 in 2024, showing a significant investment in innovation[67] - Research and development expenses increased by $18.5 million, or 34%, to $73.7 million for the three months ended June 30, 2025, primarily due to increased personnel costs and technology expenses[153] - General and administrative expenses rose by $9.0 million, or 24%, to $46.0 million for the three months ended June 30, 2025, mainly due to increased personnel costs[156] Assets and Cash Flow - Total current assets increased to $1.32 billion as of June 30, 2025, up from $1.10 billion at the end of 2024[17] - Total assets increased to $1.54 billion as of June 30, 2025, compared to $1.30 billion at the end of 2024, reflecting overall growth[17] - Cash provided by operating activities for the six months ended June 30, 2025, was $196,306, up from $145,902 in 2024, indicating a 34.5% growth[27] - Total cash, cash equivalents, and restricted cash at the end of the period was $978,966, compared to $890,975 at the end of June 2024, marking a 9.8% increase[27] Deferred Revenue - Deferred revenues rose to $431.2 million as of June 30, 2025, compared to $372.9 million at the end of 2024, indicating strong future revenue potential[17] - Deferred revenue increased to $58,293 for the six months ended June 30, 2025, compared to $42,285 in 2024, reflecting a 37.9% rise[27] - Deferred revenues amounted to $431.2 million as of June 30, 2025, expected to be recognized as revenue in the next 12 months[167] Stock and Compensation - The company had a total of 45,787 shares outstanding as of June 30, 2025, an increase from 43,500 shares as of June 30, 2024[24] - The Company recognized $3,963,000 of stock-based compensation expense related to performance-based RSUs for the three months ended June 30, 2025[91] - Total stock-based compensation expense for Q2 2025 was $34,592, up 29% from $26,746 in Q2 2024[92] Tax and Interest - For the three months ended June 30, 2025, the effective tax rate was 3.6%, significantly lower than the 15.2% effective tax rate for the same period in 2024[79] - The Company recorded an income tax provision of $1,669,000 for the three months ended June 30, 2025, compared to $4,363,000 for the same period in 2024[79] - Interest income rose by $0.7 million, or 7%, to $11.4 million for the three months ended June 30, 2025, and by $1.1 million, or 5%, to $21.8 million for the six months ended June 30, 2025, compared to the prior year[161]

Financial Data and Key Metrics Changes - The company reported a 40% year-over-year growth in Daily Active Users (DAUs) for Q2, which is a decrease from the 60% growth in the same quarter last year [10][11] - The company raised its full-year guidance due to record profitability and strong top-line growth [5] Business Line Data and Key Metrics Changes - The percentage of subscribers using the Max subscription increased from 5% to 8% over the past few quarters, indicating growth in this segment [20][21] - The Super subscription is performing better than expected, contributing to the slower growth of Max [21] Market Data and Key Metrics Changes - The Chinese market is identified as the fastest-growing market for the company, with successful partnerships, such as with Luckin Coffee, enhancing brand visibility [15][16] - The company has not yet launched its Max feature in China due to regulatory constraints [16][17] Company Strategy and Development Direction - The company is investing in new areas such as chess, math, and music, which are expected to drive long-term growth [5] - The company plans to start spending on marketing in the U.S. to counteract slower growth rates compared to other markets [120][122] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a temporary slowdown in DAU growth due to social media sentiment issues but expressed confidence in future recovery [12][96] - The company is optimistic about the impact of new features like the energy system, which has shown positive effects on user engagement and revenue [66][78] Other Important Information - The company is testing a web purchase flow to bypass the App Store, which could significantly increase profit margins [25][27] - The energy system has replaced the previous hearts mechanic, leading to increased daily active users and time spent on the app [66][78] Q&A Session Summary Question: Can you break down the primary drivers behind DAU growth moderation? - Management noted that DAU growth was 40%, slightly lower than expected due to negative social media sentiment, which has since improved [10][12] Question: Can you provide an update on the Max subscription? - The Max subscription has grown to 8% of total subscribers, but its growth was slower than expected due to challenges for beginner users [20][21][22] Question: What are the early learnings from the energy system? - The energy system has increased DAUs and revenue by rewarding users for correct answers rather than penalizing mistakes [66][78] Question: How is the company addressing engagement issues in the U.S.? - Management plans to start spending on marketing in the U.S. to improve engagement, as historical growth has been strong without marketing efforts [120][122] Question: What is the outlook for the Duolingo English Test? - The company expects lower demand for the Duolingo English Test due to macro trends affecting international student applications [95][96] Question: How is the video call feature performing? - The video call feature is seeing increased engagement, particularly among English learners, and improvements are being made to enhance user experience [90][108]

Financial Data and Key Metrics Changes - The company reported a 40% year-over-year growth in Daily Active Users (DAUs) for Q2, which is a decrease from the 60% growth seen in the same quarter last year [9][10] - The company raised its full-year guidance due to record profitability and strong top-line growth [4] Business Line Data and Key Metrics Changes - The percentage of subscribers using the Max subscription increased from 5% to 8% over the past few quarters, indicating growth in this segment [19][20] - The Super subscription is performing better than expected, contributing to the slower growth of Max [20] Market Data and Key Metrics Changes - The Chinese market is identified as the fastest-growing market for the company, with successful partnerships, such as with Luckin Coffee, enhancing brand visibility [14][15] - The company is facing regulatory challenges in China regarding the use of local language models, which is delaying the rollout of certain features [15][16] Company Strategy and Development Direction - The company is investing in new areas such as chess, math, and music, which are expected to drive long-term growth [4][41] - The company plans to start spending on marketing in the U.S. to counteract slower growth rates compared to other markets [118][120] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming recent challenges related to social media sentiment and user engagement, indicating that the negative impact is expected to be temporary [11][94] - The company is optimistic about the future growth of the Max subscription and the overall user engagement metrics [50][88] Other Important Information - The company is transitioning from a "hearts" mechanic to an "energy" system for free users, which has shown positive impacts on DAUs and engagement metrics [62][65] - The company is testing a web purchase flow to bypass app store fees, which could significantly increase profit margins in the future [26][27] Q&A Session Summary Question: Can you break down the primary drivers behind DAU growth moderation? - Management noted that DAU growth was 40%, slightly lower than expected due to negative sentiment from social media regarding AI comments [9][10][11] Question: Can you provide an update on the Max subscription? - The Max subscription has grown to 8% of total subscribers, but its growth was slower than expected due to challenges for beginner users with the video call feature [19][20][21] Question: What are the early learnings from the energy system? - The energy system has increased DAUs, time spent, and subscriber conversion, although some users have expressed dissatisfaction with the change [62][73] Question: How is the company addressing user engagement in the U.S.? - Management indicated plans to start spending on marketing in the U.S. to improve user engagement, as historical growth has been slower compared to other markets [118][120] Question: What is the outlook for the Max subscription and video call feature? - Management is seeing growth in English learners using the Max subscription and video call feature, with positive early signals [86][87]

shareholder letter Q2 2025 | User Metrics | Q2 2024 | Q2 2025 | | --- | --- | --- | | Daily Active Users | 34.1M | 47.7M | | | | 40% YoY | | Monthly Active Users | 103.6M | 128.3M | | | | 24% YoY | | Paid Subscribers | 8.0M | 10.9M | | at period end | | 37% YoY | | Paid Subscriber Penetration | 8.6% | 9.0% | | as % of LTM MAUs | | | our mission is to develop the best education in the world and make it universally available. DUOLINGO Q2 / FY 2025 2 Q2 Highlights | Financial Metrics | Q2 2024 | Q2 2025 | | -- ...

Core Insights - Duolingo exceeded its own high expectations for bookings and revenue in Q2 2025 while expanding profitability [2] - The company reported strong user engagement and positive early signals from new product initiatives, including the Energy mechanic and Chess course [2] - Duolingo remains focused on long-term user growth and engagement through innovation and investment in its core product [2] Financial Performance - The second quarter results were announced for the period ending June 30, 2025, with details available on the Investor Relations website [1] - The company highlighted strong performance across all subscription tiers, contributing to overall profitability [2] Company Overview - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular for language learning and the top-grossing app in the Education category on major app stores [4] - The company is committed to providing an engaging and effective learning experience while aiming to make quality education universally accessible [4]

Group 1 - Vontier Corporation (VNT) is currently rated 2 (Buy) by Zacks Rank, while Duolingo, Inc. (DUOL) is rated 4 (Sell), indicating a stronger earnings outlook for VNT [3] - VNT has a forward P/E ratio of 12.82, significantly lower than DUOL's forward P/E of 117.01, suggesting VNT is more attractively priced [5] - VNT's PEG ratio is 1.37, compared to DUOL's PEG ratio of 2.60, indicating VNT's expected earnings growth is more favorable relative to its valuation [5] Group 2 - VNT has a P/B ratio of 4.9, while DUOL has a P/B ratio of 17.22, further highlighting VNT's relative undervaluation [6] - Based on various valuation metrics, VNT holds a Value grade of B, whereas DUOL has a Value grade of F, reinforcing VNT's position as the superior value option [6]

Group 1: Earnings and Revenue Forecast - Duolingo, Inc. is predicted to post quarterly earnings of $0.55 per share, reflecting a 7.8% increase year-over-year [1] - Revenues are forecasted to be $240.54 million, representing a year-over-year increase of 34.9% [1] Group 2: Analyst Revisions and Consensus Estimates - There has been a downward revision of 0.7% in the consensus EPS estimate for the quarter over the past 30 days, indicating a reappraisal by analysts [2] - Analysts' projections for 'Revenues- Subscription' are estimated at $203.58 million, a change of +41.5% from the year-ago quarter [5] - Total bookings are expected to reach $246.34 million, compared to $190.09 million in the same quarter last year [5] Group 3: User Metrics Forecast - Daily active users (DAUs) are projected to reach 48.37 million, up from 34.10 million year-over-year [5] - Monthly active users (MAUs) are estimated at 132.93 million, compared to 103.60 million in the previous year [6] - Paid subscribers at period end are forecasted to reach 10.89 million, an increase from 8.00 million in the same quarter last year [6] Group 4: Subscription Bookings - Subscription bookings are expected to arrive at $209.76 million, compared to $156.48 million in the same quarter of the previous year [7] Group 5: Stock Performance - Over the past month, Duolingo shares have recorded returns of -11.6%, while the Zacks S&P 500 composite has changed by +2.3% [7] - Based on its Zacks Rank 4 (Sell), Duolingo is expected to underperform the overall market in the upcoming period [7]

Group 1 - Pomerantz LLP is investigating claims on behalf of investors of Duolingo, Inc. regarding potential securities fraud or unlawful business practices by the company and its officers [1] - JMP Securities has lowered its price target on Duolingo stock from $475 to $450 due to concerns about slowing user engagement, with daily active user growth decelerating to approximately 39% year-over-year in Q2 from about 51% in Q1 [2] - Following the news of the lowered price target, Duolingo's stock price fell by $23.60 per share, or 6.48%, closing at $340.49 per share on July 28, 2025 [3]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Duolingo, Inc. due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.55 per share, reflecting a +7.8% change year-over-year, and revenues of $240.54 million, which is a 34.9% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.71% lower in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Duolingo is lower than the consensus estimate, resulting in an Earnings ESP of -1.52%, suggesting bearish sentiment among analysts [12]. Historical Performance - Duolingo has beaten consensus EPS estimates three out of the last four quarters, with a notable surprise of +38.46% in the last reported quarter [13][14]. Investment Considerations - Despite the potential for an earnings beat, the combination of a negative Earnings ESP and a Zacks Rank of 4 makes it challenging to predict a positive outcome for Duolingo [12][17].

Company: Super Micro Computer - Super Micro Computer (SMCI) has established a strong position in the AI server market by leveraging close relationships with Nvidia and AMD, allowing for quicker access to chips and faster prototyping of customized servers [5][6] - For the trailing 12 months, Supermicro reported $21.57 billion in revenue, nearly tripling its total from two years ago, although Q3 2025 net sales dropped to $4.6 billion from $5.68 billion in Q2 [6] - The company expects a rebound in Q4 with projected net sales between $5.6 billion and $6.4 billion, attributed to delayed customer orders [6] - Operating expenses surged to $293.4 million in Q3, a 34% increase from the previous year, while gross margins decreased to 9.6% from 15.5% [7] - Supermicro's modular rack systems provide a flexible solution for enterprises needing rapid deployment of AI infrastructure, potentially opening new growth channels [8][9] Company: Duolingo - Duolingo remains the world's most popular education app, reporting a 38% year-over-year revenue increase to $230.7 million in Q1 2025, with monthly active users rising to over 130 million [10][11] - The number of paid subscribers grew by 40% year-over-year to a record 10.3 million, with 7% of users opting for the premium Max subscription, indicating a willingness to pay for enhanced value [11] - Despite strong fundamentals, Duolingo's stock has faced challenges, dropping about 33% from May highs, with daily active users declining from 56% in February to 37% in June [12] - The education technology market is projected to grow to $348 billion by 2030, with the language learning market expected to reach $125 billion by 2034, suggesting significant growth potential for Duolingo [13][14] - Duolingo's position as the leading paid language-learning app positions it well to capitalize on market growth and convert more users into paid subscribers [14] Industry Outlook - Both Supermicro and Duolingo are positioned in expanding markets, with Supermicro providing essential infrastructure for the AI boom and Duolingo capitalizing on the growing demand for language learning [15]