Duolingo(US:DUOL)2025-05-01 22:40Financial Performance - Revenues for Q1 2025 reached $230,743,000, a 37.7% increase from $167,553,000 in Q1 2024[21] - Gross profit for Q1 2025 was $164,096,000, compared to $122,362,000 in Q1 2024, reflecting a 34.1% growth[21] - Net income for Q1 2025 was $35,135,000, up from $26,956,000 in Q1 2024, representing a 30.3% increase[21] - Total revenues for the three months ended March 31, 2025, were $230,743,000, a 37.7% increase from $167,553,000 in the same period of 2024[60] - Subscription revenue reached $190,987,000, up from $131,688,000, reflecting a growth of 45% year-over-year[60] - Net income (GAAP) for the three months ended March 31, 2025, was $35.1 million, compared to $27.0 million in 2024[98] - Adjusted EBITDA for the same period was $62.8 million, an increase from $44.0 million in the prior year[98] - Free cash flow for Q1 2025 was $103.0 million, up from $78.5 million in Q1 2024, representing an increase of $24.5 million[117] User Engagement - Monthly active users (MAUs) and daily active users (DAUs) metrics are tracked to assess user engagement, although specific numbers were not disclosed[15] - The Company reported approximately 130.2 million monthly active users (MAUs) for the three months ended March 31, 2025, representing a 33% increase from 97.6 million MAUs in the same period of 2024[101] - Daily active users (DAUs) reached approximately 46.6 million, a 49% increase from 31.4 million DAUs in the prior year[103] - Paid subscribers grew to approximately 10.3 million, marking a 40% increase from 7.4 million in the same period of 2024[105] Financial Position - Total current assets increased to $1,219,657,000 as of March 31, 2025, from $1,101,588,000 at the end of 2024, marking an 11% growth[18] - Cash and cash equivalents at the end of Q1 2025 were $883,996,000, up from $785,791,000 at the end of 2024, a 12.5% increase[18] - Stockholders' equity increased to $893,826,000 as of March 31, 2025, from $824,550,000 at the end of 2024, representing an 8.4% growth[18] - As of March 31, 2025, the company had $884.0 million in cash and cash equivalents and $115.3 million in short-term investments[147] Deferred Revenue - Deferred revenues rose to $415,023,000 in Q1 2025, up from $372,884,000 at the end of 2024, indicating a 11.2% increase[18] - Deferred revenue increased to $415,023,000 as of March 31, 2025, compared to $279,313,000 at the end of March 2024, indicating a 48.6% rise[62] - Deferred revenues amounted to $415.0 million, expected to be recognized as revenue in the next 12 months[151] Operating Expenses - Operating expenses for Q1 2025 totaled $140,502,000, compared to $105,923,000 in Q1 2024, reflecting a 32.6% increase[21] - Research and development expenses increased to $756,000 in Q1 2025 from $440,000 in Q1 2024, a rise of 71.8%[65] - Sales and marketing expenses increased by $6.7 million, or 34%, to $26.7 million, primarily due to higher personnel costs and technology expenses[141] - General and administrative expenses rose by $8.3 million, or 24%, to $43.5 million, influenced by increased personnel costs[143] Market Presence - The majority of revenue is derived from subscriptions and advertising, with Apple and Google accounting for 67.7% and 16.2% of total accounts receivable as of March 31, 2025[42] - Duolingo operates as a single segment, generating revenue through time-based subscriptions, in-app advertising, and the Duolingo English Test[43] - The company has locations in the U.S., China, and Germany, indicating a diversified geographical presence[31] - Duolingo offers courses in over 40 languages, showcasing its extensive product offering in the language learning market[31] Compliance and Risk Management - The company is evaluating the impact of recently issued accounting standards on its consolidated financial statements, indicating proactive compliance measures[48] - The company has not experienced any credit losses on its financial assets historically, indicating a strong credit risk management[45] - No impairment losses were recognized during the three months ended March 31, 2025, and 2024, reflecting stable asset valuations[44] Currency and Inflation Impact - The impact of currency exchange rates is significant for understanding period-to-period comparisons[118] - International receipts may be reduced during periods of a strengthening U.S. dollar due to payment providers translating local currency into USD[162] - Inflationary factors such as increases in costs may adversely affect the company's results of operations[163] - The company does not believe inflation has had a material effect on its business or financial condition to date[163] - Significant inflationary pressures could hinder the company's ability to offset higher costs through price increases[164]