Duolingo Stock Climbs 30% on Q1 Earnings Beat

  • Duolingo (NASDAQ:DUOL) stock is up more than 40% today after announcing strong earnings results
  • The language-learning app reported better-than-expected revenue, earnings and subscriber growth
  • The company is now adjusting its full-year 2022 earnings expectations to account for its accelerated performance
DUOL stock: A phone displaying the duolingo logo in front of a computer screen displaying the duolingo site
Source: dennizn / Shutterstock

Duolingo (NASDAQ:DUOL) recorded a triumphant Q1 earnings beat, and DUOL stock is up nearly 40% as a result. It seems investors can’t get enough of the language-learning app after it managed to surpass revenue and booking expectations.

On Thursday, Duolingo offered its financial results for its fiscal first quarter, ended March 31. The company posted revenue of $81.2 million, handily beating analyst estimates of $77.6 million. It also reported an adjusted loss of just 31 cents, nearly twice as narrow as the consensus-predicted 57 cent loss. Additionally, the company experienced 55% year-over-year increase in bookings for the quarter, earning $102.1 million compared to expected $94 million.

Luis von Ahn, co-founder and chief executive of Duolingo, commented on the company’s strong performance.

“All elements of our business performed well this quarter and we saw accelerating user growth, record quarterly bookings, and strong margins. We believe these results come from the investments we’ve made in R&D to drive innovation and continuously make our products more effective, more fun, more engaging, and more social. Thanks to our strong results this quarter, we are increasing our guidance for bookings, revenue, and adjusted EBITDA for the full-year 2022.”

The company even managed to increase its total paid subscribers more than 60% YoY as its monthly and daily active active users jumped 23% and 31%, respectively, from the same quarter last year. The company is seeing gains in nearly every aspect of its business model, despite this year’s undeniably bearish market conditions.

Duolingo Stock Reclaims Lost Ground With Earnings Triumph

Duolingo’s earnings call Thursday comes as the latest bullish indicator for the company. In an otherwise brutal earnings season, Duolingo came out of the gate with a surprisingly optimistic future outlook.

In the call, von Ahn even laid out expectations to reach profitability as soon as this year on an adjusted basis. This is likely what pushed DUOL stock today as investors clamored over the potentially undervalued language learning startup. According to von Ahn, Q1 2022 was the company’s best quarter ever.

“Approximately 80% of our users in the United States were not in the language learning market before Duolingo. So they were not learning a language before us. And so, in certain countries, we really are just expanding the market. And I think the reason that happens is we have a really iconic brand that a lot of people talk about.”

Duolingo stock traded as low as $60.53 yesterday, very close to its 52-week low of $60.50. Today the company is trading for $94 at the time of writing as investors seemingly can’t get enough.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines


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