Duolingo(US:DUOL)2025-11-05 23:30Financial Data and Key Metrics Changes - The company reported a strong Q3 with bookings expected to reach nearly $1,200 million for the year, reflecting a 33% growth and an adjusted EBITDA margin of 29% [4][80] - Daily active users (DAUs) grew by 36% year-over-year in Q3, with September and October showing around 30% year-over-year growth [11][12] Business Line Data and Key Metrics Changes - The chess course is the fastest-growing course, surpassing both math and music in user engagement and retention [30] - The company is focusing on enhancing teaching efficacy, which is expected to drive user growth over time [15][16] Market Data and Key Metrics Changes - The company has seen significant user growth in Asia, aided by partnerships such as the one with Luckin [10] - The retention rate for chess users is slightly higher than that of language learners, indicating strong engagement [30] Company Strategy and Development Direction - The company is prioritizing long-term investments in AI to fundamentally transform education and improve teaching efficacy [5][14] - There is a strategic shift towards user growth over immediate monetization, with a focus on enhancing the freemium experience [36][88] Management's Comments on Operating Environment and Future Outlook - Management believes that the current moment presents a unique opportunity for growth in the education sector, driven by advancements in AI [41][42] - The company is optimistic about future initiatives, including improved video calls and expanded content for existing courses [22][23] Other Important Information - The company is not currently focused on optimizing costs, as the priority is to enhance user experience and engagement [73] - AI costs have decreased, allowing the company to invest in innovation while maintaining profitability [82] Q&A Session Summary Question: What are the underlying drivers of DAU growth into Q4? - The company reported a 36% year-over-year growth for Q3, with positive impacts from partnerships and product improvements, although some social media strategies temporarily affected growth [8][11] Question: Can you elaborate on the decision to shift investments towards long-term growth? - The company sees a significant opportunity in AI and education, leading to a strategic focus on teaching efficacy and user growth, which may have a lag in monetization [12][16] Question: How is the new chess course performing? - The chess course is growing rapidly, with higher retention rates compared to language courses, and player versus player features are being rolled out [30][31] Question: What is the impact of price increases on user growth? - The company is testing various pricing strategies, including potential discounts, while focusing on user growth over immediate monetization [86][90] Question: How is the company addressing advanced English learners? - The company has made significant improvements in teaching English, with a steady increase in advanced English learners, particularly in fast-growing regions like Asia [118][120] Question: What is the status of the family plan? - The family plan has grown to about 29% of subscribers and is expected to continue growing, especially during promotional periods [122]