Last week, the U.S. Bureau of Labor Statistics released its monthly Consumer Price Index data, and the annualized increase in inflation came in at 7.7%. While it remains much higher than the Federal Reserve's target of 2%, it has come down from the 40-year high of 9.1% back in June. 

That gave technology stocks the green light to move higher, because it indicates to investors that the recent pressures on consumer spending might be easing, and the cost of capital might not rise as much as previously feared. 

To top that off, the language education platform Duolingo (DUOL 3.73%) released its financial report for the third quarter of 2022 (ended Sept. 30) on the same day. The company's results were among its strongest this year, bucking the broader economic slowdown. With its stock down 51% from its all-time high, here's why it's a buy on the dip.

Duolingo's user base soared

Duolingo is a global leader in language education thanks to its mobile-first approach, combined with its innovative app design that makes learning fun and engaging. The company began to monetize the platform with paid subscriptions in 2018, and it has since become the highest-grossing mobile application in the education category across both Apple's App Store and Alphabet's Google Play Store.

The third quarter brought more of the same success. Duolingo grew its daily active users by 51% to an all-time high of 14.9 million. Its monthly active users soared by 35% to 56.5 million, which was also a record high. But perhaps the most notable aspect was the continued growth in its paid user base.

The platform logged 3.7 million paid subscribers in the third quarter, representing 7.4% of its monthly active user base. Both numbers, again, were records.

A chart of Duolingo's growing paid subscriber base.

Duolingo continues to focus on high-impact marketing to attract users organically. Its latest attempt involved a campaign surrounding the release of the House of the Dragon TV series, which allowed users to learn the show's High Valyrian language on its app. The company said it attracted hundreds of thousands of new users for a cost of just $150,000, and that's the benefit of centering marketing initiatives around pop culture. 

And it's growing its user base by adding new platforms. It introduced Duolingo Math, which joins its early learning app Duolingo ABC, both of which expand the company's total addressable market.

As a result, revenue is soaring

More users mean more opportunities to monetize. In the third quarter, the company booked $96.1 million in revenue, a 51% jump compared to the same period last year. It matched the highest growth rate of the last 12 months, which speaks volumes given consumers have struggled under the pressures of rising inflation and interest rates.

A chart of Duolingo's growing quarterly revenue.

Duolingo's total bookings, which are expected to convert to revenue in the future, soared 41% to a new high of $102.7 million during the quarter. That's a key metric to watch because it points to continued revenue increases in upcoming quarters.

The company continues to make net losses as it invests more in growth, particularly in research and development, which involves the delivery of new features and products. But its $18.4 million net loss was down 36% compared to the year-ago result, so it's moving in the right direction. Duolingo also has a very strong balance sheet with $600 million in cash, giving it a long runway to continue executing on its current strategy. 

Duolingo still has significant room to grow

The company is aiming to supercharge its global domination by tailoring language lessons to people in China and India, the two most populous countries on Earth. It will ramp up its efforts to teach English in each of those countries, particularly for advanced learners, and it's adding a series of one-off in-app purchases, which are preferred to subscriptions in those places.

Duolingo hinted that it has a series of marketing initiatives planned for the upcoming soccer World Cup, particularly on social media, where the company has found lots of organic success. The event will engage billions of people globally, and it's the perfect opportunity for a platform like Duolingo, which ties together languages from different cultures. It could be a powerful growth driver into the end of 2022.

This company continues to go from strength to strength, so investors might want to take advantage of the 51% dip in Duolingo stock with a long-term position.