Duolingo (DUOL.US), US company developing learning apps, is trading 19% higher today and eyes a test of record highs from September 2021. Surge in company's share price comes following release of Q3 2023 results, which showed company beat sales and earnings expectations.
Duolingo reported a 43% YoY increase in Q3 revenue, to $137.6 million (exp. $131.5 million), as well as over-tenfold increase in adjusted EBITDA compared to a year ago quarter. Company reported an unexpected net profit of $2.807 million (exp. -$3.07 million), which translated into EPS per share of $0.06 (exp. -$0.10). Such strong results came on the back of solid user growth with the number of paid subscribers jumping almost 60% year-over-year while the number of monthly active users increased almost 50% year-over-year.
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Open account Try demo Download mobile app Download mobile appApart from solid Q3 earnings, the company has also issued an upbeat forecast for Q4 2023 as well as full-2023. Duolingo expects Q4 sales to climb 39.7-42.6% YoY with adjusted EBITDA coming in at positive $28.7-30.7 million compared to -$16.6 million in Q4 2022. Full-year forecasts were boosted and now company expects sales to reach $525-528 million and adjusted EBITDA to reach $87.2-89.2 million over the course of the full year.
Earnings release from Duolingo has been hailed by analysts as much better than expected and showing improvements in monetization and user engagement. Duolingo continues to achieve high rates of user growth even as its total user base increase significantly in recent periods.
Q3 2023 earnings
- Revenue: $137.6 million vs $131.5 million expected (+43% YoY)
- Adjusted EBITDA: $22.5 million vs $18 million expected ($2.13 million a year ago)
- Net income: $2.807 million vs -$3.07 million expected
- EPS: $0.06 vs -$0.10 expected (-$0.46 a year ago)
- Monthly active users: 83.1 million vs 75.6 million expected (+47% YoY)
- Daily active users: 24.2 million vs 22.1 million expected (+62% YoY)
- Paid subscribers: 5.8 million (+57% YoY)
Q4 2023 forecasts
- Revenue: $145-148 million (exp. $141.1 million)
- Adjusted EBITDA: $28.7-30.7 million (exp. $22 million)
Full-2023 forecasts
- Revenue: $525-528 million, up from previous guidance of $510-516 million (exp. $515 million)
- Adjusted EBITDA: $87.2-89.2 million, up from previous guidance of $71.4-77.4 million (exp. $76.4 million)
Taking a look at Duolingo (DUOL.US) chart at D1 interval, we can see that the stock launched today's trading with a big bullish price gap and continued to gain during the Wall Street cash session. Stock is now up almost 20% on the day. The first attempt to break above the psychological $200 area turned out to be a failure but stock remains close and another try cannot be ruled out. A record high close of $202.69 from September 2021 can be found just slightly above it.
Source: xStation5
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