Duolingo(US:DUOL)2025-11-05 23:27Financial 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]