Financial Data and Key Metrics Changes - In Q4 2024, total bookings grew by 42% year-over-year, while revenue increased by 39% year-over-year [18][19] - The adjusted EBITDA margin expanded by about 8 percentage points for the full year, reaching 25.7% in 2024 [7][19] - The company expects bookings to grow by 25% year-over-year in 2025, with subscription bookings projected to grow around 31% [20][21] Business Line Data and Key Metrics Changes - Duolingo Max subscriptions contributed significantly to Q4 performance, with Max now representing about 5% of total subscribers [10][19] - The Family Plan accounted for 23% of total subscribers, showing higher retention and lifetime value compared to individual plans [11] - Daily active users (DAUs) reached 40 million, growing 51% year-over-year [9][51] Market Data and Key Metrics Changes - The growth rate of DAUs was broad-based across regions, with Latin America growing at approximately 80% year-over-year [52][53] - The company noted that growth in mature markets is not correlated with saturation, indicating ongoing opportunities for expansion [52][128] Company Strategy and Development Direction - The company aims to drive subscription bookings by increasing user growth, improving subscriber conversion, and promoting Duolingo Max [12] - Generative AI will be leveraged to enhance the Video Call experience and scale content across language, math, and music courses [13][14] - The focus remains on balancing top-line growth with long-term profitability targets, with a more moderate pace of profit growth expected compared to previous years [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum going into 2025, driven by strong adoption of Duolingo Max and the Family Plan [19] - The company anticipates a temporary impact on gross margin due to AI costs associated with Max, but expects margins to improve in the second half of 2025 [23][24] - Management highlighted the importance of ongoing marketing efforts and user engagement strategies to sustain growth [88][130] Other Important Information - The company ended 2024 with a fully diluted share count of 49.5 million and expects dilution of around 1% in 2025 [29] - Duolingo's mascot, Duo, returned after a marketing campaign that engaged users globally, reflecting the company's innovative approach to user engagement [30] Q&A Session Summary Question: Can you help us understand which cohorts are exhibiting the strongest growth by language or geo? - Management noted that Japan has a higher share of Max subscribers than Super subscribers, with strong adoption from both new subscribers and upgrades from existing Super subscribers [34][35] Question: Should we think about the AI investments this year as mainly Duo Max and Voice Calls? - Management clarified that AI investments are focused on automating internal processes and enhancing features like Video Call, with a significant increase in content generation capabilities [40][41] Question: Can you give us a sense of DAU growth and how international markets are performing? - Management reported 51% year-over-year DAU growth, with all regions experiencing growth, particularly Latin America [51][52] Question: How do you see user growth coming from next? - Management indicated that Asia represents a significant opportunity for growth, with ongoing marketing efforts to penetrate less developed markets [128][130] Question: How did Max perform during the promotional period? - Management stated that Max and the Family Plan both outperformed expectations during the promotional period, contributing to strong user growth [136] Question: What is the expected impact of AI costs on gross margins? - Management expects a temporary impact on gross margins due to AI costs but anticipates improvements as efficiencies are realized [23][55]