Yahoo Finance Duolingo, Inc. (NASDAQ:DUOL) Q3 2023 Earnings Call Transcript
Duolingo, Inc. (NASDAQ:DUOL) Q3 2023 Earnings Call Transcript November 8, 2023
Duolingo, Inc. beats earnings expectations. Reported EPS is $0.06, expectations were $-0.08.
Deborah Belevan: Good evening, everyone. If you haven't accidentally tuned into a replay of Duocon. This is actually Duolingo's Third Quarter Earnings Webcast. Today after market closed we released this quarter's shareholder letter, a copy of which you can find on our IR website at investor.duolingo.com. On today's call we 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. [Operator Instructions] Please note that this event is being recorded and all attendees are in a listen-only mode. And just a reminder we will 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 in our filings with the SEC. These forward-looking statements are based on assumptions that 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 will 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 now, I will turn over to Luis.
Luis von Ahn: Thank you, Debbie, and welcome, everyone. We had another fantastic quarter. We surpassed our expectations and had impressive user bookings and revenue growth. And it was a fun quarter two with the Barbie campaign and also preparing for our Best Duocon. We also feel very good about the coming quarter which is why we're raising our full year guidance to now reflect 40% year-over-year bookings growth. And we're also materially raising our full year adjusted EBITDA margin. Matt will share more details on our results and outlook shortly. Every year we run thousands of experiments to make our product more fun, engaging and effective. A lot of these experiments result in small wins that add up over time. If you look back at the past two years you can see evidence of this in action.
In Q3, 2021, we had about 10 million DAUs. And this past quarter we had over 24 million. In Q3 of 2021, we had 2.2 million subscribers. In this past quarter, we had nearly 6 million. The way we have done this has been through our process of making small changes, running a test to see how users react and then doubling down where we see gains. We've also hit some exceptional home runs. For example, our marketing has been a source of extraordinary wins that were fantastic for the business even though they are hard to predict. Think of our partnership with HBO's House of the Dragon and most recently our Barbie social campaign built around the inclusion of our trademark Bing in the Barbie movie. The campaign generated 140 million organic social impressions which is a record for us.
To create the opportunity for both incremental improvement and home runs every so often we make bolder moves that open up entirely new areas for experimentation. For example, last year we redesigned the home screen of the app to give us more room to experiment with engagement, efficacy and monetization. And earlier this year we set out to create a multi-subject app experience by integrating our existing math course and a new music course into our flagship app. This change adding math and music to the main app is a good example to highlight. We did this to give our users an even more engaging experience. By adding new subjects into the main app, we believe we can more rapidly scale these new subjects with our gamification mechanics like streaks, leaderboards and quests that have been so effective in the language learning app.
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