TLDR
- Duolingo stock rose 12.8% to $144.44 in late trading Tuesday after closing down 5.4%.
- Daily active users grew 29% to 64.9 million, up from 23% growth in Q2.
- Q3 EPS of 54 cents missed estimates, while revenue of $309 million beat.
- Q4 revenue is guided to $322 million and bookings to $382 million.
- Operating margin fell to 7.8% from 12.9% a year ago.
Duolingo (DUOL) stock climbed 12.8% to $144.44 in late trading Tuesday. That wiped out a 5.4% drop in the regular session, when it closed at $128.00.
The language app reported third-quarter earnings of 54 cents a share. Analysts were looking for 57 cents.
Revenue came in at $309 million, up 13.7% from last year. Wall Street expected about $303 million.
Users were the headline. Daily active users rose 29% from a year ago to 64.9 million.
That is faster than the 23% growth reported in the second quarter. The pace picked up even as the company leaned on teaching quality over quick wins.
CEO Luis von Ahn said Duolingo is prioritizing teaching better and user growth this year. He added that the strategy is paying off.
Bookings and Guidance
Total bookings rose 12% to $316 million. Adjusted EBITDA hit $78.7 million, a 25.5% margin.
Analysts had expected EBITDA of $76.16 million. That is a beat of about 3%.
For the fourth quarter, Duolingo guided revenue to $322 million. The Street was at $314.8 million.
Bookings are expected to reach $382 million. That would be 13% growth, a step up from the 12% just reported.
Full-year adjusted EBITDA is guided to $323 million. Analysts had penciled in $319.9 million.
The Softer Spots
Operating margin slipped to 7.8% from 12.9% a year ago. Profit did not keep pace with sales.
Free cash flow was $75.34 million, a 24.4% margin. That compares with 26.3% in the previous quarter.
Revenue has grown at a 34.7% annual rate over the past three years. Duolingo’s market cap sits at $6.33 billion.
In Wednesday premarket trading, the stock was indicated near $147. That is about 15% above Tuesday’s close.
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