shareholder letter Q2 2025 | User Metrics | Q2 2024 | Q2 2025 | | --- | --- | --- | | Daily Active Users | 34.1M | 47.7M | | | | 40% YoY | | Monthly Active Users | 103.6M | 128.3M | | | | 24% YoY | | Paid Subscribers | 8.0M | 10.9M | | at period end | | 37% YoY | | Paid Subscriber Penetration | 8.6% | 9.0% | | as % of LTM MAUs | | | our mission is to develop the best education in the world and make it universally available. DUOLINGO Q2 / FY 2025 2 Q2 Highlights | Financial Metrics | Q2 2024 | Q2 2025 | | -- ...

Core Insights - Duolingo exceeded its own high expectations for bookings and revenue in Q2 2025 while expanding profitability [2] - The company reported strong user engagement and positive early signals from new product initiatives, including the Energy mechanic and Chess course [2] - Duolingo remains focused on long-term user growth and engagement through innovation and investment in its core product [2] Financial Performance - The second quarter results were announced for the period ending June 30, 2025, with details available on the Investor Relations website [1] - The company highlighted strong performance across all subscription tiers, contributing to overall profitability [2] Company Overview - Duolingo is recognized as the leading mobile learning platform globally, with its app being the most popular for language learning and the top-grossing app in the Education category on major app stores [4] - The company is committed to providing an engaging and effective learning experience while aiming to make quality education universally accessible [4]

Group 1: Earnings and Revenue Forecast - Duolingo, Inc. is predicted to post quarterly earnings of $0.55 per share, reflecting a 7.8% increase year-over-year [1] - Revenues are forecasted to be $240.54 million, representing a year-over-year increase of 34.9% [1] Group 2: Analyst Revisions and Consensus Estimates - There has been a downward revision of 0.7% in the consensus EPS estimate for the quarter over the past 30 days, indicating a reappraisal by analysts [2] - Analysts' projections for 'Revenues- Subscription' are estimated at $203.58 million, a change of +41.5% from the year-ago quarter [5] - Total bookings are expected to reach $246.34 million, compared to $190.09 million in the same quarter last year [5] Group 3: User Metrics Forecast - Daily active users (DAUs) are projected to reach 48.37 million, up from 34.10 million year-over-year [5] - Monthly active users (MAUs) are estimated at 132.93 million, compared to 103.60 million in the previous year [6] - Paid subscribers at period end are forecasted to reach 10.89 million, an increase from 8.00 million in the same quarter last year [6] Group 4: Subscription Bookings - Subscription bookings are expected to arrive at $209.76 million, compared to $156.48 million in the same quarter of the previous year [7] Group 5: Stock Performance - Over the past month, Duolingo shares have recorded returns of -11.6%, while the Zacks S&P 500 composite has changed by +2.3% [7] - Based on its Zacks Rank 4 (Sell), Duolingo is expected to underperform the overall market in the upcoming period [7]

Core Insights - Figma has officially gone public on the New York Stock Exchange, marking the largest IPO in the U.S. tech sector this year, with shares priced at $33 and closing up 250%, resulting in a market capitalization of $56.3 billion (approximately 400 billion RMB) [2][3] - The company was founded by Dylan Field, a dropout from Brown University, who aimed to create an online collaborative design platform to challenge Adobe's dominance in graphic design software [4][6] - Figma's revenue model includes free access for individual and educational users, while enterprise users are charged based on different pricing tiers [8] Company Background - Dylan Field, born in 1992, demonstrated early mathematical talent and pursued computer science and mathematics at Brown University before dropping out to start Figma [4][6] - The initial concept of Figma faced challenges, including unclear product direction and business model, leading to difficulties in securing investment [6][7] - The company gained traction after launching its first official version in 2016 and capitalized on the remote work trend during the COVID-19 pandemic, generating $75 million in revenue in 2020 [9] Financial Performance - Figma's revenue is projected to reach $749 million in 2024, a 48% increase year-over-year, with Q1 2025 revenue at $228 million, up 46% [11] - The company reported a net income of $44.9 million for Q1 2025, with a significant increase in high-paying clients, totaling 1,031 clients paying over $100,000 annually, a 47% increase [11] Investment and Valuation - Figma has attracted significant venture capital investment, with early funding from Index Ventures and subsequent rounds leading to a valuation of $10 billion before the IPO [13][14] - The IPO has created substantial wealth for investors, with the total value of shares held by major venture capital firms estimated at around $24 billion [16] - The IPO is seen as a potential indicator for future valuations of other tech unicorns, as it reflects a renewed optimism in the market for venture capital exits [16][17]

Core Viewpoint - Figma's IPO on July 31 marked the largest IPO in the U.S. tech sector since 2021, with shares priced at $33 and closing up 250%, resulting in a market capitalization of $5.63 billion (approximately 40 billion RMB) [1][3][21]. Company Background - Figma was founded by Dylan Field, a college dropout, aiming to challenge Adobe by creating an online graphic design platform [2][5]. - The company has received backing from numerous venture capital firms over its 13-year history [2][6]. Financial Performance - Figma's revenue for 2024 is projected to be $749 million, a 48% increase year-over-year, with Q1 2025 revenue at $228.2 million, up 46% [12]. - The company has over 1,031 annual paying customers exceeding $100,000, a 47% increase, including major clients like Netflix and Duolingo [12]. Investment and Valuation - Figma's journey includes multiple funding rounds, with significant investments from firms like Index Ventures and Greylock Partners, leading to a valuation of $10 billion by 2021 [17][18]. - The latest funding round before the IPO raised $416 million, with major stakeholders including Durable Capital and Morgan Stanley [19]. Wealth Creation - The IPO generated substantial wealth for early investors, with the potential for returns exceeding 10 times their initial investments [22][23]. - Dylan Field's net worth surged to $6.1 billion post-IPO, reflecting the financial success of the venture [21][22]. Market Impact - Figma's IPO is seen as a bellwether for future valuations of other tech unicorns, indicating a potential resurgence in the IPO market [23][24]. - The overall sentiment in the venture capital and private equity markets is improving, with a notable increase in IPO activity in 2025 [24][25].

Group 1 - Pomerantz LLP is investigating claims on behalf of investors of Duolingo, Inc. regarding potential securities fraud or unlawful business practices by the company and its officers [1] - JMP Securities has lowered its price target on Duolingo stock from $475 to $450 due to concerns about slowing user engagement, with daily active user growth decelerating to approximately 39% year-over-year in Q2 from about 51% in Q1 [2] - Following the news of the lowered price target, Duolingo's stock price fell by $23.60 per share, or 6.48%, closing at $340.49 per share on July 28, 2025 [3]

They'll always Jim, you've been talking about this from a strategic point of view, right. Interface design. You guys, hopefully everybody will be able to hear us.The crowd is going to be extremely loud. Well, I mean, uses it, Duolingo uses it, Uber uses it, JetBlue, 95% of the Fortune 500 use it. And if you have a prescript, you know, if you have a subscription to Adobe, it's much more expensive than Figma.But Figma's very good product. >> This is Figma versus Adobe, just so everyone knows. >> Yeah.So the m ...

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Duolingo, Inc. due to higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.55 per share, reflecting a +7.8% change year-over-year, and revenues of $240.54 million, which is a 34.9% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.71% lower in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Duolingo is lower than the consensus estimate, resulting in an Earnings ESP of -1.52%, suggesting bearish sentiment among analysts [12]. Historical Performance - Duolingo has beaten consensus EPS estimates three out of the last four quarters, with a notable surprise of +38.46% in the last reported quarter [13][14]. Investment Considerations - Despite the potential for an earnings beat, the combination of a negative Earnings ESP and a Zacks Rank of 4 makes it challenging to predict a positive outcome for Duolingo [12][17].

Group 1 - UBS highlights the upcoming earnings season for small and mid-cap companies focused on AI application software, recommending increased allocation to Applovin (APP.US) and The Trade Desk (TTD.US) as leaders in the "AI + digital advertising" segment [1][2] - The report emphasizes that small-cap stocks are currently more attractive compared to large-cap stocks, with the Russell 2000 index's expected P/E ratio around 15x, below historical averages [2][3] - UBS expects several small-cap AI application software companies to provide positive earnings guidance, with Applovin and The Trade Desk anticipated to exceed market expectations for Q3 [3][4] Group 2 - The integration of AI in digital advertising has accelerated since the rise of ChatGPT, with major players like Google and Meta incorporating generative AI technologies to enhance ad performance [4][5] - UBS notes that the shift in focus from hardware to software in tech investments is benefiting companies like Applovin and The Trade Desk, as demand for AI application software continues to grow [5][6] - UBS maintains an optimistic outlook on Applovin's performance, raising its Q2 2025 revenue forecast to $867 million, reflecting positive trends from App Store advertising policies and strong growth in its self-operated app business [7][8] Group 3 - The Trade Desk is also viewed positively by UBS, with expectations for steady growth in Q2, driven by its "AI + digital advertising" platform and upcoming events that could catalyze further performance [7][8] - Both companies have successfully integrated generative AI and deep learning into their advertising technologies, leading to significant revenue growth and improved operational efficiency [8]

Market Overview & Economic Factors - Markets anticipate a potentially pivotal week with major tech earnings, a Federal Reserve meeting, jobs report, economic data, and trade deals influencing market direction [2] - Monday's trading day exhibited tepid price action and lower volatility, but expectations are for increased volatility in the coming sessions [5] - The U S housing market is experiencing its worst spring selling season in 13 years, impacting related industries [25] Sector Performance - Industry groups showed more decliners than advancers, with real estate investment trusts, materials, and utilities down over 1%, while energy stocks gained over 1% due to higher oil prices, and tech and consumer discretionary sectors also performed positively [8] - Semiconductor space significantly outperformed the broader market, rising approximately 16% [9] Individual Company Highlights - Figma's IPO is anticipated to be large and is scheduled to price on Wednesday and begin trading on Thursday under the ticker AIG [3][4] - UBS analyst raised their price target on AMD to $210 from $150, maintaining a buy rating, with AMD closing up approximately 43% at $173 [10] - Tesla's stock increased by about 3% following Morgan Stanley's forecast that the self-driving vehicle market will reach $200 billion by 2030 [12] - JP Morgan upgraded Nike from neutral to overweight, raising its price target from $64 to $93, advising clients to buy [12] Earnings & Outlook - Cadence Design reported revenue of $128 billion, slightly above expectations of $125 billion, with adjusted EPS of $165 versus estimates of $156 per share, and raised its 2025 revenue outlook to 13% growth [14][15] - Whirlpool's second-quarter net sales missed estimates at $377 billion versus $385 billion, with ongoing EPS also missing consensus at $134 versus $161, and the company maintained its full-year revenue outlook at $158 billion [22][23] - Whirlpool anticipates full-year cash from operating activities of approximately $850 million and free cash flow of $400 million, revised down from a previous range of $500 million to $600 million [23] Risks & Challenges - Opendoor's stock fell 79% after postponing a shareholder vote on a reverse stock split due to recent stock price volatility [16][17] - Gilead shares declined 27% due to potential risks to its HIV preventative franchise following reports of plans to dismiss an advisory panel [18] - Duolingo's shares decreased by 65% after Citizens expressed caution regarding upcoming results, citing third-party data suggesting slowed engagement since April, and lowered the price target to $450 from $475 [20][21]