Why Duolingo Stock Skyrocketed This Past Week

What happened

Shares of Duolingo (DUOL 5.71%) climbed 37% over the past week, according to data from S&P Global Market Intelligence. Investors applauded the mobile learning leader's rapid subscriber and revenue growth.

So what

More people are using Duolingo's mobile app more often. The company's monthly active users jumped 43% year over year to 60.7 million in the fourth quarter, while its daily active users surged 62% to 16.3 million.

"Our user growth was strong in every region of the world," CEO Luis von Ahn said during a conference call with analysts. "We also have users of nearly all ages, of all socioeconomic statuses, and who have a variety of motivations to learn, including work, school, and travel."

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NASDAQ: DUOL

Duolingo

Today's Change

(-5.71%) $-6.30

Current Price

$103.93

Key Data Points

Market Cap

$5.2B

Day's Range

$98.52 - $108.79

52wk Range

$87.89 - $544.93

Volume

355K

Avg Vol

2.5M

Gross Margin

71.68%

Moreover, Duolingo is enticing a growing number of these users to pay for upgraded features. Its paid subscribers soared 67% to 4.2 million at the end of 2022.

All told, Duolingo's revenue increased 42% to $103.8 million. Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) improved to $5.2 million, up from $0.3 million in the fourth quarter of 2021.

Now what

Management expects revenue of $530 million to $542 million in 2023, up from $369.5 million in 2022. Duolingo also guided for adjusted EBITDA of $48.6 million to $59.8 million, up from $15.5 million last year.

"We enter 2023 in a great position to continue our momentum," von Ahn said. "The infrastructure we've built has driven our innovation and operating efficiency, and is poised to help us deliver higher incremental profits this year and beyond."

Investors were also pleased to hear about Duolingo's plans to integrate artificial intelligence (AI) into its apps. The company is rolling out Duolingo Max, a higher-tier subscription that employs the cutting-edge technology to create a more conversational experience for users. 

"Duolingo Max will give our subscribers an even more engaging way to learn by chatting with Duolingo characters and receiving personalized explanations of their mistakes," von Ahn said.