Duolingo(US:DUOL)2025-11-05 21:02User Engagement Metrics - Daily Active Users (DAUs) increased to 50.5 million in Q3 2025, a 36% year-over-year growth[4] - Monthly Active Users (MAUs) reached 135.3 million, reflecting a 20% year-over-year increase[4] - Monthly Active Users (MAUs) and Daily Active Users (DAUs) metrics are tracked to measure user engagement, with the measurement period ending September 30, 2025[40][41] Financial Performance - Revenue for Q3 2025 was $271.7 million, up 41% year-over-year, with subscription revenues growing 46% to $229.5 million[4][19] - Net income surged to $292.2 million, benefiting from a one-time income-tax benefit of $222.7 million related to deferred tax assets[4][22] - Adjusted EBITDA for Q3 2025 was $80.0 million, with a margin of 29.5%, an increase of nearly five percentage points year-over-year[4][22] - Total bookings for Q3 2025 were $281.9 million, a 33% year-over-year increase[4][22] - Revenues for Q3 2025 reached $271.7 million, a 41.1% increase from $192.6 million in Q3 2024[51] - Net income for Q3 2025 was $292.2 million, significantly up from $23.4 million in Q3 2024, largely due to a one-time tax benefit of $222.7 million[52] - Free cash flow for Q3 2025 was $77,356, an increase from $51,244 in Q3 2024, with a free cash flow margin of 28.5%[66] Future Guidance - The company expects Q4 2025 revenue to be between $273 million and $277 million, representing a year-over-year growth of 30.3% to 32.2%[25] - Full-year 2025 revenue guidance is set at $1,027.5 million to $1,031.5 million, indicating a growth of 37.4% to 37.9% year-over-year[25] - The company anticipates a full-year Adjusted EBITDA margin of approximately 29.0%, reflecting an expansion of about 330 basis points over the previous year[30] Cost and Expense Management - Operating expenses for Q3 2025 totaled $161.8 million, up from $126.8 million in Q3 2024, reflecting increased investment in research and development and marketing[51] - Total GAAP Operating Expense increased to $161,752 in Q3 2025 from $126,840 in Q3 2024[61] - Non-GAAP Operating Expense for Q3 2025 was $118,521, up from $94,892 in Q3 2024[61] - Total GAAP R&D Expense for Q3 2025 was $82,707, compared to $62,878 in Q3 2024[62] - Non-GAAP R&D Expense increased to $55,281 in Q3 2025 from $45,423 in Q3 2024[62] - Total GAAP S&M Expense for Q3 2025 was $35,081, up from $25,574 in Q3 2024[63] - Non-GAAP G&A Expense for Q3 2025 was $30,220, compared to $25,449 in Q3 2024[64] Asset and Cash Position - Total assets grew from $1.3 billion as of December 31, 2024, to $1.9 billion as of September 30, 2025[50] - Cash and cash equivalents increased from $785.8 million at the end of 2024 to $1.0 billion by September 30, 2025[50] Strategic Initiatives - The company plans to enhance product offerings and explore monetization strategies to drive future growth[48] - Adjusted EBITDA for Q3 2025 is expected to reflect strong operational performance, with a focus on user growth and retention strategies[59] Currency Impact - The impact of foreign currency exchange rates is monitored, with constant currency measures used to evaluate revenue and bookings trends[46] Margin Analysis - The gross margin for FY 2025 is expected to decline by about 80 basis points year-over-year, primarily due to increased costs associated with generative AI[29] - Adjusted EBITDA margin improved to 29.5% in Q3 2025, compared to 24.7% in Q3 2024[60]