Financial Data and Key Metrics Changes - Revenue for the quarter was $620.9 million, up 13% from the first quarter of last year [10] - Adjusted operating income increased by almost $23 million, or 39%, to $81.1 million [10] - Adjusted earnings per share were $1.52, up $0.43 from last year [11] - Gross margins for the quarter were 39%, down 20 basis points from last year [12] - Free cash flow was -$217.5 million compared to -$156.8 million in the prior year period [14] Business Line Data and Key Metrics Changes - Career Learning middle and high school revenue was $241.5 million, up more than 21% from last year [11] - Career Learning enrollments grew 20% to 110,000 [11] - General Education revenue grew over 10% to $363.1 million on enrollment growth of 5.2% to 137,700 students [11] - Total revenue per enrollment across both lines was $2,388, up 3.7% from last year [11] Market Data and Key Metrics Changes - Total enrollments for the quarter were up 11.3% from last year, setting a record for the number of students served [11] - The company expects to finish the year flattish in revenue per enrollment compared to fiscal year 2025 [12] Company Strategy and Development Direction - The company is investing in upgrading learning and technology platforms, which is expected to pay dividends in the long term despite short-term growth limitations [4][5] - The focus is on running high-quality programs, which may involve limiting enrollment growth temporarily [5] - The company aims to meet the diverse educational needs of families, providing affordable alternatives to traditional schooling [7][8] Management's Comments on Operating Environment and Future Outlook - Management indicated that while demand remains strong, in-year enrollment growth is not expected to match previous years due to platform implementation challenges [6][10] - The outlook for the business remains bullish in the long term, with a commitment to improving customer experience and operational execution [7][10] Other Important Information - Capital expenditures for the quarter were $21.7 million, up $6.9 million from last year [11] - The company expects to incur additional expenses related to the platform rollout [12] - Full-year stock-based compensation is projected to be in the range of $41 million-$44 million [13] Q&A Session Summary Question: Enrollment guidance for the year - The company did not provide full-year enrollment guidance but indicated that they do not expect the same level of in-year enrollment growth as in previous years [19] Question: Impact of platform issues on enrollments - Management believes the majority of the 10,000-15,000 fewer enrollments were due to system implementation issues, which affected customer experience and led to higher withdrawal rates [21] Question: Rationale and timing for tech implementation - The rationale for the tech implementation was to support the company's growth, but execution did not go as planned during the critical summer period [26][27] Question: Competitive landscape - The company welcomes healthy competition and believes that its growth outpaces that of its largest competitors [39] Question: Nature of platform issues - The platform issues are related to both customer-facing and back-office functions, and the company is working on a series of fixes throughout the year [43][45]

Core Insights - Duolingo's stock price surged over 34%, reaching $463.85, following strong Q2 earnings and an upward revision of its annual revenue guidance to a range of $1.01 billion to $1.019 billion, marking its first time exceeding the $1 billion threshold [1][1][1] Financial Performance - The company reported Q2 revenue of $252.3 million, a 41% year-over-year increase, significantly surpassing Wall Street's expectation of $240.7 million [1][1] - Net profit for the quarter soared to $44.8 million, or $0.91 per share, greatly exceeding the anticipated $0.59 per share and nearly doubling from the same period last year [1][1] - Total bookings increased by 84% year-over-year, indicating improved paid conversion efficiency [1][1] User Engagement - Daily active users (DAU) rose by 40% year-over-year to 47.7 million, with DAU growth outpacing monthly active users (MAU) growth of 24%, suggesting a significant enhancement in user engagement [1][1][1]