Duolingo(US:DUOL)2025-08-06 22:51Financial 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]