Financial Performance - Total revenues for Q3 2025 reached $271.7 million, a 41.1% increase from $192.6 million in Q3 2024[17] - Gross profit for Q3 2025 was $196.9 million, up 40.2% from $140.4 million in Q3 2024[17] - Net income for Q3 2025 was $292.2 million, significantly higher than $23.4 million in Q3 2024[17] - Net income for the nine months ended September 30, 2025, was $372,111, a significant increase from $74,667 in 2024, representing a growth of 398%[26] - Adjusted EBITDA for the three months ended September 30, 2025, was $80.0 million, up from $47.5 million in the prior year[110] - Net income for the three months ended September 30, 2025, was $292.2 million, compared to $23.4 million in 2024, representing a significant increase[150] User Metrics - Monthly active users (MAUs) and daily active users (DAUs) are key operating metrics tracked, although specific numbers were not disclosed[12] - As of September 30, 2025, the Company reported 135.3 million monthly active users (MAUs), a 20% increase from 113.1 million MAUs in the same period of 2024[108][113] - Daily active users (DAUs) reached approximately 50.5 million, representing a 36% increase from 37.2 million DAUs in the prior year[110][115] - The number of paid subscribers increased to 11.5 million, up 34% from 8.6 million in the same period of 2024[110][118] Revenue Breakdown - Subscription revenue for the nine months ended September 30, 2025, was $631,156,000, up 45.7% from $433,214,000 in 2024[65] - Subscription revenue for the three months ended September 30, 2025, was $229.5 million, a 46% increase from $157.6 million in the same period of 2024[137] - Other revenue, primarily from advertising, increased by $7.2 million, or 21%, to $42.2 million during the three months ended September 30, 2025[155] Expenses and Costs - Research and development expenses for Q3 2025 were $82.7 million, a 31.6% increase from $62.9 million in Q3 2024[17] - Total operating expenses increased by $34.9 million, or 28%, to $161.8 million for the three months ended September 30, 2025, compared to $126.8 million in 2024[150] - Sales and marketing expenses rose by $9.5 million, or 37%, to $35.1 million for the three months ended September 30, 2025, compared to $25.6 million for the same period in 2024[161] - General and administrative expenses increased by $5.6 million, or 15%, to $44.0 million for the three months ended September 30, 2025, from $38.4 million in the prior year[161] Cash Flow and Assets - Net cash provided by operating activities increased to $280,545 for the nine months ended September 30, 2025, compared to $202,169 in 2024, reflecting a growth of 39%[26] - Cash paid for income taxes rose to $11,722 in 2025 from $6,797 in 2024, indicating a 73% increase[28] - Cash, cash equivalents, and restricted cash at the end of the period reached $1,014,277 in 2025, up from $857,144 in 2024, indicating an increase of 18%[26] - The company had $1,011.5 million in cash and cash equivalents and $109.9 million in short-term investments as of September 30, 2025[168] Deferred Revenue - Deferred revenues increased to $441.7 million as of September 30, 2025, up from $372.9 million at the end of 2024[15] - Deferred revenue as of September 30, 2025, was $441,728,000, an increase from $310,603,000 at the end of September 2024[68] - Deferred revenues amounted to $441.7 million as of September 30, 2025, expected to be recognized as revenue in the next 12 months[173] Acquisitions and Investments - The company made acquisitions totaling $33,100 in 2025, compared to $6,595 in 2024, representing a substantial increase of 402%[26] - The company completed an acquisition in July 2025 for a total consideration of $34,500,000, with $33,100,000 allocated to intangible assets and goodwill[62] - The company incurred $1,285,000 in acquisition costs related to due diligence and valuation during 2025[62] Stock-Based Compensation - Stock-based compensation expense rose to $101,175 in 2025 from $80,690 in 2024, reflecting a 25% increase[26] - Total stock-based compensation expense for the three months ended September 30, 2025, was $35.6 million, compared to $29.0 million in the same period of 2024[97] - The Company had approximately $338.6 million of unrecognized stock-based compensation expense related to RSUs as of September 30, 2025[92] Future Outlook - The company plans to continue investing in infrastructure to enhance platform capabilities, which may impact future cost of revenues[140] - The company expects continued investment in research and development to drive user engagement and monetization, impacting future growth[144]

Core Insights - Duolingo Inc surpassed Wall Street expectations for third-quarter revenue and increased its annual revenue forecast, driven by a rise in paying subscribers for its AI-powered language-learning app [1] Financial Performance - The company reported third-quarter revenue that exceeded analyst estimates, indicating strong demand for its services [1] - Duolingo raised its annual revenue forecast, reflecting confidence in continued growth and subscriber acquisition [1] Subscriber Growth - The increase in paying subscribers is a key factor contributing to the company's positive financial performance [1]

Core Insights - Duolingo forecasts fourth-quarter bookings between $329.5 million and $335.5 million, below Wall Street estimates of $343.6 million, leading to a 20% drop in shares [1][2] - The company is shifting focus towards user growth and teaching quality, while still aiming for monetization [2] - Despite lower profit margins due to AI features, the company reported a 34% increase in paid users, reaching 11.5 million in the third quarter [4] Financial Performance - Duolingo's third-quarter revenue was $271.7 million, exceeding estimates of $260.3 million, marking a consistent trend of beating revenue estimates since going public in 2021 [6] - The annual revenue forecast has been raised to between $1.028 billion and $1.032 billion, up from a previous range of $1.01 billion to $1.02 billion, with analysts expecting $1.02 billion [6] User Growth and Monetization Strategy - The company operates on a "freemium" model, converting free users to paid subscriptions, including "Super Duolingo" and "Duolingo Max" [3] - A partnership with Luckin Coffee in China has enhanced visibility and contributed to user growth [4]

shareholder letter Q3 2025 our mission is to develop the best education in the world and make it universally available. DUOLINGO Q3 / FY 2025 2 Q3 Highlights | User Metrics | Q3 2024 | Q3 2025 | | --- | --- | --- | | Daily Active Users | 37.2M | 50.5M | | | | 36% YoY | | Monthly Active Users | 113.1M | 135.3M | | | | 20% YoY | | Paid Subscribers | 8.6M | 11.5M | | at period end | | 34% YoY | | Paid Subscriber Penetration | 8.5% | 9.0% | | as % of LTM MAUs | | | | Financial Metrics | Q3 2024 | Q3 2025 | | -- ...

Core Insights - Duolingo has achieved a significant milestone with over 50 million daily active users, indicating strong engagement and growth potential [2] - The company reported a 40% increase in both daily active users and revenue for the first nine months of 2025 compared to the same period in 2024, while also expanding profitability [2] - Duolingo aims to enhance its product's engagement and effectiveness, believing it is still in the early stages of its growth journey [2] Company Overview - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular method for language learning and the top-grossing app in the Education category on both Google Play and the Apple App Store [4] - The company is committed to providing a fun, engaging, and effective learning experience, with a mission to develop the best education in the world and make it universally accessible [4]

Core Insights - Duolingo, Inc. is a language-learning platform that offers interactive courses in over 40 languages, utilizing AI to enhance user experience [1] Company Overview - Duolingo is a technology company focused on language education, providing engaging and interactive lessons [1] Technology and Innovation - The company employs artificial intelligence to personalize the learning experience for users, aiming to improve engagement and effectiveness [1]

Core Insights - Duolingo, Inc. is a language-learning platform that offers interactive courses in over 40 languages, utilizing AI to enhance user experience [1] Company Overview - Duolingo operates as a technology company focused on language education, providing engaging and personalized learning experiences [1] Technology and Innovation - The company leverages artificial intelligence to tailor the learning experience for users, aiming to improve engagement and effectiveness [1]

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgency to invest now [1] - The energy demands of AI technologies are immense, with data centers consuming as much energy as small cities, leading to concerns about power grid capacity and rising electricity prices [2] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for supporting the anticipated surge in energy demand from AI [3][7] Investment Opportunity - The company in question is positioned as a "toll booth" operator in the AI energy boom, benefiting from the increasing demand for electricity driven by AI advancements [4][5] - It is involved in the U.S. LNG exportation sector, which is expected to grow significantly under the current administration's energy policies [7] - The company is noted for being debt-free and having substantial cash reserves, equating to nearly one-third of its market capitalization, which provides a strong financial foundation for growth [8] Market Position - The company is recognized for its capability to execute large-scale engineering, procurement, and construction projects across various energy sectors, including oil, gas, and renewable fuels [7] - It has an equity stake in another AI-related company, offering investors indirect exposure to multiple growth opportunities in the AI sector without the associated high premiums [9] - The stock is described as undervalued, trading at less than seven times earnings, which presents a compelling investment case given its ties to both AI and energy [10] Future Outlook - The ongoing AI infrastructure supercycle, combined with the onshoring boom and a surge in U.S. LNG exports, positions the company favorably for future growth [14] - The influx of talent into the AI sector is expected to drive continuous innovation and advancements, further solidifying the importance of energy infrastructure in supporting this growth [12] - The company is seen as a critical player in the transition to clean and reliable power sources, particularly through its nuclear energy assets [7][14]

Core Insights - Duolingo, Inc. (DUOL) is expected to report quarterly earnings of $0.72 per share, a 46.9% increase year over year, with revenues forecasted at $260.52 million, reflecting a 35.3% year-over-year growth [1] Earnings Projections - Analysts have revised the consensus EPS estimate 1.8% lower over the last 30 days, indicating a reevaluation of initial estimates [1][2] - The importance of earnings estimate revisions is highlighted as they serve as a critical gauge for predicting investor behavior [2] Revenue and User Metrics - The consensus estimate for 'Revenues- Subscription' is projected to be $220.91 million, representing a 40.2% year-over-year increase [4] - Total bookings are expected to reach $272.06 million, up from $211.46 million reported in the same quarter last year [4] - Subscription bookings are estimated at $231.89 million, compared to $176.31 million in the same quarter last year [5] - Daily active users (DAUs) are projected to be 51.21 million, up from 37.20 million in the same quarter last year [5] - Monthly active users (MAUs) are expected to reach 136.20 million, compared to 113.10 million in the same quarter last year [6] - Paid subscribers at period end are estimated to be 11.51 million, an increase from 8.60 million year over year [6] Stock Performance - Duolingo shares have decreased by 16% in the past month, contrasting with a 2.1% increase in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 2 (Buy), indicating expectations of outperforming the overall market in the near future [6]

Core Insights - The education technology (EdTech) sector is experiencing a transformation, with companies like Chegg and Duolingo showcasing different trajectories within this shift [1][2] - Chegg is facing challenges with declining subscriptions and revenues, while Duolingo is demonstrating strong growth and profitability [7][8] Chegg Overview - Chegg's core business is under pressure, with subscriptions dropping 40% year over year to 2.6 million in Q2 2025, leading to a 36% decline in total revenues to $105 million [3][6] - The company is focusing on two emerging businesses: Busuu, which saw a 15% year-over-year revenue increase, and Skills, targeting a $40 billion market [4][6] - Chegg is undergoing a major restructuring, including a 45% workforce reduction, to improve cash flow and focus on skilling initiatives, with expected revenues of $70 million in 2025 [6][12] - Despite the challenges, Chegg's adjusted EBITDA was $23 million at a 22% margin, indicating strong cost control [3][6] Duolingo Overview - Duolingo reported a 41% revenue increase to $252.3 million in Q2 2025, with daily active users rising 40% to 47.7 million [7][8] - The company is successfully upselling users into higher subscription tiers, benefiting from AI enhancements [9][10] - Duolingo's financial guidance remains strong, with bookings growth expected to exceed 32% for the full year 2025 [11][19] - The company is expanding its total addressable market with new subjects, such as a Chess course, which has surpassed one million daily active users [10][19] Stock Performance and Valuation - Chegg's stock has risen 44.2% in the past six months due to restructuring efforts, while Duolingo shares are down 31.8% amid market pressures [12][15] - Chegg's market capitalization is approximately $113.7 million, trading at 0.32X forward sales, reflecting investor caution [15][22] - In contrast, Duolingo has a market cap of around $12.5 billion, trading at 10.09X forward sales, indicating confidence in its growth trajectory [15][22] Analyst Expectations - Analysts maintain cautious expectations for Chegg, forecasting a 36.7% revenue decline in 2025 and a projected loss per share of 11 cents [17][19] - Duolingo's estimates show a projected EPS of $3.16 for 2025, with revenue expected to climb 36.2% [19][21] - The contrasting analyst sentiment highlights the divergent paths of the two companies, with Duolingo seen as a high-visibility growth compounder [19][22] Investment Outlook - Chegg is viewed as a turnaround story with potential upside, but revenue stability remains uncertain [22][24] - Duolingo is recognized for its robust operating performance and expanding profitability, making it a more favorable long-term investment [23][24]