Duolingo(DUOL) First Shanghai Securities·2024-11-12 05:08Investment Rating - The report assigns a strong investment rating to Duolingo, highlighting its robust financial performance in Q3 2024 [1]. Core Insights - Duolingo's total bookings reached 176 million and non-subscription bookings at 193 million, with subscription revenue at 129 million [1]. - The company reported a gross profit of 47.5 million, reflecting a profit margin of 24.7%, indicating strong growth in profitability [1]. User Growth Performance - Daily Active Users (DAU) grew by 54% year-over-year, reaching 37.2 million, showcasing effective user acquisition and retention strategies [1]. - Monthly Active Users (MAU) also saw a significant increase of 36% to 113 million, indicating successful efforts in enhancing user experience and engagement [1]. - The proportion of family plan users increased from 18% to 21%, reflecting growing market interest in this subscription service [1]. International Market Expansion - Duolingo plans to expand into Italy and Turkey after successful operations in Japan, South Korea, and France, employing localized marketing strategies to attract diverse users [1]. Financial Guidance - For the full year, Duolingo expects bookings and revenue to grow by approximately 36% and 40%, respectively [1]. - Q4 bookings are projected to reach 205 million, a 36% increase [1]. - The company anticipates a slight decline in gross margin due to increased costs associated with the expansion of Duolingo Max and its generative AI features [1]. - Adjusted EBITDA margin guidance for 2024 has been raised to 25.5%, up approximately 8 percentage points from 2023, moving towards a long-term target of 30% to 35% [1].