What happened
Shares of Duolingo (DUOL 3.64%) were up 11.9% as of 12:15 p.m. EDT Wednesday, according to data provided by S&P Global Market Intelligence, after the language-focused education technology company announced strong second-quarter 2023 results.
Duolingo's quarterly revenue climbed 44% year over year to $126.8 million, well above the $123.7 million analysts were expecting. On the bottom line, Duolingo swung to a net income of $3.7 million, or $0.08 per share, pivoting from a loss of $0.38 per share in the same year-ago period and trouncing analysts' models for a loss of $0.19 per share.
So what
"We delivered exceptional results this quarter, with our continued strong user growth helping to drive our excellent financial performance," stated Duolingo co-founder and CEO Luis von Ahn. "We believe that our focus on product-led growth propelled us to record-high daily and monthly active users and subscribers, while our disciplined execution led to increased profitability."
Indeed, paid subscribers climbed 59% year over year to a company-record 5.2 million during the quarter, monthly active users grew 50% to 74.1 million, and daily active users rose 62% to 21.4 million. Total bookings also increased 41% year over year to $137.5 million, while subscription bookings gained 43% to $106.3 million.
Now what
For the third quarter of 2023, Duolingo expects revenue of $129.5 million to $132.5 million -- whereas analysts were modeling Q3 revenue near the lower end of that range. As such, Duolingo also raised its outlook for the full-year 2023 to call for bookings of $569 million to $575 million (up from $552 million to $561 million), revenue of $510 million to $516 million (up from $500 million to $509 million), and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $71.4 million to $77.4 million (increased from prior guidance of $55 million to $61 million).
Ultimately, this was a solid beat-and-raise performance from Duolingo, and shares are responding in kind.
