Duolingo, Inc. (NASDAQ:DUOL) Q1 2024 Earnings Call Transcript May 8, 2024
Duolingo, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Deborah Belevan: Good evening, everyone and welcome to Duolingo’s First Quarter 2024 Earnings Webcast. Just a fun fact before we get started, that catchy song, Spanish or Vanish, is already 1 million listens on Spotify, if you can believe it. Today after markets close, we released this quarter’s shareholder letter, a copy of which you can find on our IR website at investors.duolingo.com. On today’s call we will have Luis von Ahn, our Co-Founder and CEO; and Matt Skaruppa, our CFO. They’ll begin with some brief remarks before opening the call to questions. Analysts will be able to ask a question by using the raise hand feature. Please note this event is being recorded and all attendees are in listen-only mode. Just a reminder we’ll make forward-looking statements regarding future events and financial performance, which are subject to material risks and uncertainties.
Some of these risks have been set forth in the risk factors of our filings with the SEC. These forward-looking statements are based on assumptions we believe to be reasonable as of today and we have no obligation to update these statements as a result of new information or future events. Additionally we’ll present both GAAP and non-GAAP financial measures on today’s call. These non-GAAP measures are not intended to be considered in isolation from a substitute for or superior to our GAAP results and we encourage you to consider all measures when analyzing our performance. And with that I’ll turn it over to Luis.
Luis von Ahn: Thank you, Debbie, and welcome everyone. We’ve started 2024 on a strong note with another stellar quarter. In Q1, we grew revenue and bookings by 45% and 41% respectively, delivered record profitability, and grew DAUs 54% year-over-year. These results show how powerful our product-driven flywheel is. Our excellent product fuels word-of-mouth growth, which in turn provides data to continuously improve the product, ultimately driving higher engagement and subscriber conversion. Our three-pronged approach of teaching better, growing users, and converting them to subscribers continues to be a winning strategy for us. This year, our monetization efforts are focused on optimizing our subscription offerings, including our Family Plan and our third-tier Duolingo Max.
We feel good about the progress we’ve made on Max based on the results of our experiments to date. Because of that, we rolled out Max more broadly in April, and today, roughly 5% to 10% of our DAUs have access to it. We will make it available to more countries and courses in the next few months. We’re also improving our Family Plan experience by streamlining the invite flow and having more engaging social features. Our progress on these initiatives, alongside other monetization initiatives and our current trends give us the confidence to raise our full-year guidance. Finally, our English Learner initiative will lay the foundation for long-term user and monetization growth. Although the vast majority of global language learners are learning English, English learners represent less than half of our DAUs, which is why we see a substantial opportunity to expand into this part of the market to grow users and bookings over the next couple of years.
This growth area, along with the continued momentum in our core product, highlights the massive opportunity ahead of us. With less than 1% of the language learning market, which is estimated to reach $115 billion by next year, you can see that we are just getting started. Our continued execution against our strategy is why we are confident that we can sustain rapid growth for years to come. And with that, I’ll turn it over to Matt.
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