stockcam 2023 was a year full of surprises. 2023 established the "Magnificent Seven", saw banks such as Silicon Valley Bank collapse, while interest rates continued to climb at a historic pace. As an investor, I also experienced some surprises in my own portfolio. Today, I'd like to discuss one my stocks which is a founder-led company which excelled in 2023 as it beat the S&P 500 and grew by over 200%. That company is Duolingo (NASDAQ:DUOL). Let's dig in the company, recent financials, and why I think this ...

Financial Data and Key Metrics Changes - The company reported a 63% year-over-year increase in Daily Active Users (DAU) to 24.2 million and a 47% increase in Monthly Active Users (MAU) to 83.1 million [17] - Total paid subscribers increased by 60% to 5.8 million, driving bookings and revenue growth of 49% and 43% year-over-year, respectively [17] - Net income totaled $2.8 million compared to a net loss of $18.4 million in the same quarter last year, with an adjusted EBITDA of $22.5 million, reflecting a 16.3% adjusted EBITDA margin, a roughly 14-point expansion year-over-year [18] Business Line Data and Key Metrics Changes - The integration of math and music courses into the main app is expected to enhance user engagement and monetization, similar to language courses [12][41] - The company has seen strong growth in non-US markets, contributing to the overall user and subscriber growth [23] Market Data and Key Metrics Changes - The company experienced higher-than-expected conversions in non-US countries, which helped maintain year-over-year changes in Average Revenue Per User (ARPU) [23] - The user growth has been broad-based, with significant contributions from various global markets [124] Company Strategy and Development Direction - The company is focused on continuous product improvements and innovative marketing strategies, which have significantly contributed to user growth [33][34] - The strategy includes integrating new subjects into the main app to enhance user engagement and retention [12][41] - The company is committed to maintaining its leadership in language education while exploring opportunities in math and music education [104] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong top-line growth and improving margins, despite acknowledging that user growth may not accelerate indefinitely [28] - The company plans to continue investing in its core app and enhancing user experience through ongoing experimentation [43][60] Other Important Information - The company raised its full-year guidance to reflect 40% year-over-year bookings growth and updated its adjusted EBITDA margin range to 16.6% to 16.9% [20] - The company is cautious about the impact of foreign exchange rates on its financial performance [20] Q&A Session Summary Question: What has driven the significant outperformance in growth? - Management attributed growth to product improvements and enhanced marketing strategies, including unexpected brand moments like the Barbie movie [34] Question: How will the integration of math and music affect experiments and monetization? - The integration allows for faster growth of these subjects within the main app, leveraging existing engagement strategies [41] Question: How does the company view competition, particularly with Google entering the space? - Management sees Google as a potential partner rather than a competitor, emphasizing the unique engagement and motivation strategies that differentiate Duolingo [51][52] Question: What are the key investment areas for 2024? - The focus will remain on enhancing the core app, with significant investments in product development and user engagement strategies [43][60] Question: How has free-to-pay conversion improved in recent quarters? - The company optimized its marketing strategies and localized messaging, which significantly improved conversion rates [111]

Financial Performance - Revenues for Q3 2023 reached $137.6 million, a 43% increase from $96.1 million in Q3 2022[23] - Gross profit for Q3 2023 was $101.4 million, compared to $69.8 million in Q3 2022, reflecting a gross margin improvement[23] - The company reported a net income of $2.8 million for Q3 2023, contrasting with a net loss of $18.4 million in Q3 2022[23] - Net income for the nine months ended September 30, 2023, was $3,950,000, a significant improvement compared to a net loss of $45,644,000 for the same period in 2022[32] - Total revenues for the three months ended September 30, 2023, were $137,624, a 43.3% increase from $96,065 in the same period of 2022[66] - Subscription revenue for the nine months ended September 30, 2023, was $287,230, up 47.0% from $195,376 in 2022[66] - The company reported a net income of $2.8 million in Q3 2023, compared to a net loss of $18.4 million in Q3 2022, marking a significant improvement[145][149] - Adjusted EBITDA for Q3 2023 was $22.501 million, compared to $2.130 million in Q3 2022, showing a substantial increase[104] User Metrics - The total number of monthly active users (MAUs) and daily active users (DAUs) is a key operating metric, although specific numbers were not disclosed in the provided content[15] - The company reported 83.1 million monthly active users (MAUs) for the three months ended September 30, 2023, up from 56.5 million in the same period of 2022, representing a year-over-year increase of 47.5%[101] - Daily active users (DAUs) increased to 24.2 million in Q3 2023, compared to 14.9 million in Q3 2022, reflecting a growth of 62.4%[104] - Paid subscribers reached 5.8 million at the end of Q3 2023, up from 3.7 million in Q3 2022, indicating a growth of 56.8%[104] Expenses and Investments - Research and development expenses increased to $50.3 million in Q3 2023, up from $42.0 million in Q3 2022, indicating a focus on innovation[23] - Operating expenses totaled $106.0 million in Q3 2023, compared to $89.9 million in Q3 2022, reflecting increased investment in growth[23] - Stock-based compensation expense increased to $70,219,000 for the nine months ended September 30, 2023, from $53,188,000 in the same period of 2022, reflecting a rise of 31.9%[32] - Sales and marketing expenses rose by 26% to $22.3 million for the three months ended September 30, 2023, mainly due to increased direct marketing expenses[158] Cash Flow and Assets - Cash and cash equivalents at the end of September 2023 totaled $701,737,000, up from $608,180,000 at the end of September 2022, representing an increase of approximately 15.3%[32] - Operating cash flow for the nine months ended September 30, 2023, was $104,421,000, compared to $42,048,000 for the same period in 2022, indicating a substantial increase of 148.5%[32] - Free cash flow for Q3 2023 was $33.472 million, up from $6.055 million in Q3 2022, reflecting improved financial health[104] - Total assets as of September 30, 2023, were $870.7 million, up from $747.3 million at the end of 2022[21] Deferred Revenue - Deferred revenues increased to $208.9 million as of September 30, 2023, compared to $157.6 million at the end of 2022, indicating strong future revenue potential[21] - Deferred revenue for the nine months ended September 30, 2023, was $51,338,000, compared to $36,677,000 in 2022, marking an increase of 40%[32] - Deferred revenues amounted to $208.9 million as of September 30, 2023, expected to be recognized as revenue in the next 12 months[170] Market and Economic Factors - The company has not entered into any hedging arrangements for foreign currency risk but may consider it in the future[181] - Inflationary factors, such as increases in costs, may adversely affect the company's results of operations[182] - The company does not believe inflation has had a material effect on its business or financial condition to date[182] - Significant inflationary pressures could hinder the company's ability to offset higher costs through price increases[183]

Duolingo, Inc. (NASDAQ:DUOL) Q2 2023 Earnings Conference Call August 8, 2023 5:30 PM ET Company Participants Deborah Belevan - Head of Investor Relations Luis von Ahn - Co-Founder and Chief Executive Officer Matt Skaruppa - Chief Financial Officer Conference Call Participants Ryan MacDonald - Needham Mario Lu - Barclays Ralph Schackart - William Blair Eric Sheridan - Goldman Sachs Andrew Boone - JMP Securities Arvind Ramnani - Piper Sandler Mark Mahaney - Evercore ISI Justin Patterson - KeyBanc Zach Morriss ...

Financial Performance - Revenues for Q2 2023 reached $126.839 million, a 43.4% increase from $88.386 million in Q2 2022[22] - Gross profit for Q2 2023 was $93.051 million, compared to $64.517 million in Q2 2022, reflecting a gross margin improvement[22] - The company reported a net income of $3.725 million for Q2 2023, a significant improvement from a net loss of $15.045 million in Q2 2022[22] - Total revenues for the three months ended June 30, 2023, were $126,839,000, a 43.4% increase from $88,386,000 in the same period of 2022[64] - For the six months ended June 30, 2023, total revenues were $242.5 million, a 43% increase from $169.6 million in the same period of 2022[130] - Adjusted EBITDA for Q2 2023 was $20.871 million, significantly higher than $4.198 million in Q2 2022[105] - Net income for the three months ended June 30, 2023, was $3.7 million, compared to a net loss of $15.0 million in the same period of 2022[122] - Free cash flow for Q2 2023 was $34.340 million, up from $9.880 million in Q2 2022[105] User Metrics - The total number of monthly active users (MAUs) and daily active users (DAUs) is a key operating metric, although specific numbers were not disclosed in the provided content[15] - The company reported 74.1 million monthly active users (MAUs) for the three months ended June 30, 2023, up 50% from 49.5 million MAUs in the same period of 2022[102][107] - Daily active users (DAUs) increased to 21.4 million in Q2 2023, compared to 13.2 million in Q2 2022[105] - Paid subscribers reached 5.2 million at the end of Q2 2023, up from 3.3 million in Q2 2022[105] Revenue Streams - Subscription revenue for the first half of 2023 reached $181,343,000, up 47.1% from $123,204,000 in the first half of 2022[64] - The Duolingo English Test revenue for the first half of 2023 was $19,781,000, compared to $16,116,000 in the same period of 2022, reflecting a 22.0% growth[64] - Subscription bookings for Q2 2023 were $106.254 million, a 43% increase from $74.123 million in Q2 2022[105] - Total bookings for Q2 2023 were $137.539 million, compared to $97.467 million in Q2 2022, reflecting a 41% growth[105] - Subscription revenues totaled $95.2 million for the three months ended June 30, 2023, representing a 46% increase from $65.2 million in the prior year[129] Expenses - Operating expenses increased to $97.916 million in Q2 2023 from $79.551 million in Q2 2022, driven by higher research and development costs[22] - Research and development expenses increased by 40% to $47.9 million for the three months ended June 30, 2023, compared to $34.2 million in the same period of 2022[143] - Sales and marketing expenses increased by $2.5 million (16%) to $17.7 million for the three months ended June 30, 2023, and by $4.1 million (14%) to $34.3 million for the six months ended June 30, 2023[151][152] Cash and Assets - The total assets as of June 30, 2023, were $834.803 million, up from $747.347 million as of December 31, 2022[21] - The company has a cash and cash equivalents balance of $678.665 million as of June 30, 2023, an increase from $608.180 million at the end of 2022[21] - Cash provided by operating activities increased by $33.5 million (101%) to $66.8 million for the six months ended June 30, 2023, driven by net income generation and increased non-cash stock-based compensation[163] Deferred Revenue - Deferred revenues increased to $192.753 million as of June 30, 2023, compared to $157.550 million at the end of 2022, indicating growth in subscription bookings[21] - Deferred revenue as of June 30, 2023, was $192,753,000, an increase from $128,194,000 at the end of June 2022[65] Competitive Landscape - The company continues to face competitive pressures in the online language learning industry, which may impact user retention and engagement[18] Stock-Based Compensation - Stock-based compensation expense for the six months ended June 30, 2023, was $44,787,000, compared to $32,700,000 for the same period in 2022, reflecting an increase of approximately 37%[30] - The company recognized $23.714 million in total stock-based compensation expense for the three months ended June 30, 2023, compared to $18.114 million for the same period in 2022[85]

Duolingo, Inc. (NASDAQ:DUOL) Q1 2023 Earnings Conference Call May 9, 2023 5:30 PM ET Company Participants Deborah Belevan - Head of Investor Relations Luis von Ahn - Co-Founder and Chief Executive Officer Matt Skaruppa - Chief Financial Officer Conference Call Participants Mark Mahaney - Evercore Justin Patterson - KeyBanc Ralph Schackart - William Blair Andrew Boone - JMP Securities Ryan MacDonald - Needham Mario Lu - Barclays Arvind Ramnani - Piper Sandler Nat Schindler - BofA Deborah Belevan Good afterno ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-40653 Duolingo, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporatio ...

Duolingo, Inc. (NASDAQ:DUOL) Q4 2022 Earnings Conference Call February 28, 2023 5:30 PM ET Company Participants Deborah Belevan - VP, IR Luis von Ahn - Co-Founder, Chairman of the Board, President & CEO Matthew Skaruppa - CFO Conference Call Participants Ryan MacDonald - Needham & Company Justin Patterson - KeyBanc Capital Markets Andrew Boone - JMP Securities Eric Sheridan - Goldman Sachs Group Mario Lu - Barclays Bank Nathaniel Schindler - Bank of America Merrill Lynch Aaron Kessler - Raymond James & Asso ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___ Commission file number 001-40653 Duolingo, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

Financial Position - The company had $512.7 million in cash equivalents invested in money market funds as of September 30, 2022[203]. - A hypothetical 10% relative change in interest rates would not have a material impact on the company's financial statements[203]. Foreign Currency Risk - The company is exposed to foreign currency exchange risk, particularly as its international receipts could be reduced during periods of a strengthening US dollar[204]. - Operating expenses are primarily denominated in the currencies of the countries where operations are located, mainly the US and China[204]. - The company has not entered into any hedging arrangements for foreign currency risk but may consider doing so in the future[204]. Inflation Impact - Inflationary factors may adversely affect the company's results of operations, although inflation has not had a material effect to date[206]. - The company may not be able to fully offset higher costs through price increases if inflationary pressures become significant[206]. Industry Competition - The online language learning industry is highly competitive, with low switching costs and constant innovation from competitors[19]. Business Risks - The company relies on third-party platforms for product distribution and payment collection, which poses risks to its business[23]. - The dual class structure of the company's common stock concentrates voting control, limiting the influence of other stockholders[29].