Duolingo(DUOL)2025-02-28 05:10Financial Data and Key Metrics Changes - Duolingo reported a record quarter in Q4 2024, with total bookings growing by 42% year-over-year and revenue increasing 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 saw stronger-than-expected growth, contributing significantly to the overall performance [9][19] - The Family Plan now accounts for 23% of total subscribers, showing higher retention and lifetime value compared to individual plans [11] Market Data and Key Metrics Changes - Daily active users (DAUs) reached 40 million, reflecting a 51% year-over-year growth [9][51] - Growth was observed across all regions, with Latin America growing at approximately 80% year-over-year [52] Company Strategy and Development Direction - The company aims to drive subscription bookings by increasing user growth, improving subscriber conversion, and promoting Duolingo Max [12] - Investments in generative AI will enhance the Video Call experience and accelerate content scaling across language, math, and music courses [13][14] - The focus remains on balancing strong top-line growth with measured progress toward long-term profitability targets [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum going into 2025, despite a more moderate pace of profit growth compared to previous years [19][24] - The company anticipates a temporary impact on gross margin due to AI costs associated with Duolingo Max, but expects margins to improve in the second half of the year [23][55] Other Important Information - Duolingo's mascot, Duo, returned after users completed 50 billion XP, highlighting user engagement [30] Q&A Session Summary Question: Can you help us understand which cohorts are exhibiting the strongest growth by language or geo for Duolingo Max? - 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 for Duolingo Max and Voice Calls? - AI investments are focused on automating internal processes and enhancing features like Video Call, with expectations for cost optimization over time [40][43] Question: Can you give us a sense of DAU growth and how international markets are performing? - DAU growth was broad-based, with every region experiencing growth, particularly Latin America [51][52] Question: How do you see user growth coming from next, and what markets are underpenetrated? - Asia is identified as a less penetrated market, with significant growth opportunities in countries like Japan, Korea, and India [128][129] Question: How did Max perform during the promotional period? - The promotional period exceeded expectations for both Max and the Family Plan, indicating strong user growth throughout the quarter [136] Question: What is the ideal number of languages available on the Duolingo Max tier? - The largest languages by demand are already available, with ongoing efforts to add more content, particularly for languages that are harder to learn [141][143]