Duolingo (DUOL) 11 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Deborah Belevan	VP, IR
Luis von Ahn	Co-founder, CEO and Chairman
Matthew Skaruppa	CFO
Andrew Boone	JMP Securities
Ralph Schackart	William Blair
Ryan MacDonald	Needham
Mario Lu	Barclays
Mark Mahaney	Evercore
Eric Sheridan	Goldman Sachs
Aaron Kessler	Raymond James
Nat Schindler	Bank of America
Arvind Ramnani	Piper Sandler

Call transcript

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Deborah Belevan

Good afternoon and welcome to Duolingo's Third Quarter 2022 Earnings Webcast. All attendees are in a listen-only mode. Today after market close, we released our quarterly shareholder letter with our Q3 results and commentary which you can find on our IR website at investors.duolingo.com. On today's call we have Luis von Ahn, our Co-founder and CEO; Matt Skaruppa, our CFO. They'll begin with some brief remarks before opening the call to questions. that is note recorded. Please Instructions] this being event [Operator

and forward-looking we future are Just risks that make subject statements material which a reminder performance, will regarding financial events to uncertainties. and

of both obligation been as as to set of call of will information filings to we from, superior we today's intended of all new over our we analyzing consider the based a today, the with measures with and to present believe These not risks a are no you or Some These for our statements assumptions forth and our GAAP measures I forward-looking to on when GAAP non-GAAP financial events. these to are SEC. on will And future isolation turn substitute the performance. statements And risk in call. to results, measures result update factors these be and have Luis. that or that, be have in considered reasonable additionally, encourage non-GAAP we

Luis von Ahn

users Debbie, quarter, Thank strong report XX% we growth to that everyone. accelerating all daily pleased We I'm another user with active welcome, we've year-over-year. saw the delivered year. momentum continuing and seen increasing you,

quarter Daily row, it's to and in monthly guidance little all-time continue a grow in a important active spend to which talking year XX% metrics fifth business. third also in our rates. this reaching for growth We want time bookings result, saw and and the a accelerate quarter. full highs came conversion from so I about user for we're our again. our from more not because any as users year-over-year, in signs subscription softness our growth seeing year-over-year raising We're retention steady of consumer

And efficient year in what to expect can't and and make our evidence drives R&D that coupled spend our this products strategy. This we drive bookings. on the use is which this on product because fun continue is providing of invest great even growth to growth. paywall, quarters, we year why trend is is with this effective course, our growth year in have organic a subscription we acceleration us also for free modest learners growth, joined have the marketing paying more an this portion in good but focus that help a word-of-mouth go future the forever, in to Of without to engaging, the will a strong will subscribers convert tailwind a bookings coming

help quarter. market impacted revenue, business of impact business, monetization all headwinds faced stream, parts focus this to major while other us, a purpose ad has digital a which actively to our Rather And have our is a convert served grow reason you of this this because been ads small advertising learners paying to As than that ad to has our isn't seeking know the overall subscribers. for to to for us. strategic revenue more the give

about our up But On revenue. make a the we believe room carte of with experiment maintain continue to learners manage make as in-app we we prudently. features that financial costs new à have to our increase purchases. plenty this and discipline encourage we la Overall, a to of as or than revenue X% priority ad it's us up purchase last we believe revenues, from IAPs in-app X% purchases is hand, bigger for year. Today, other in-app opportunity only

order While profitability. to implement that, of and nuts to on our have have achieve layoffs we or hiring because never freezes hiring continues gone in to controls don't like we headcount cost grow,

busy fourth uncertain. quarter is a XXXX, has quarter As I reflect it's on a and situation three for more And the our quarters stellar business as for macro been fun even the us. gotten

in our and year about financial new energy that, to just our we our all December. turn outlook. late new new excited app, innovation launched I'm to And users, and I'll look efforts forward Year's Math the to Matt promotion and over most have our talk to brings. these that with about New screen home launched launched We our it

Matthew Skaruppa

Thanks on profitability. and are year outperformance, Luis. outperforming on another exceptional we our quarter, the our had expectations We guidance. our And topline given raising full

outside During delivered of quarter, of we third growth revenue year-over-year. total And comes a half our reminder, the bookings as XX% over US. from the

bookings a XX%. basis, have constant would on currency nearly been So, growth

million breakeven. in for and an to million to to $XX we XXXX, million million EBITDA to QX guidance, our guiding adjusted of $X $XXX million in total As to $XXX revenue are bookings, $XXX negative

million guidance to increasing $XX to full our $XXX year bookings, and positive revenue million. we an the adjusted $XXX $XXX million of million to $XXX total in million XXXX, in $X For are EBITDA to million

to Our to up year-over-year full call. XX% bookings growth, reflects our guidance from XX% to year growth we year-over-year last XX% guided XX% the on earnings

of foreign and quarter that the Our versus basket in rates increase updated guidance note bookings the value currencies impact on $X.X exchange about the dollar has current assumes million our every year. of the final of X% in

Luis as As we products of above, the manage fun, to we continue as making revenue expect a expenses. quarter, invest how percentage in In more our R&D in disciplined non-GAAP to we continue we and mentioned our fourth engaging, be will effective. increase

expected as and percentage flat. roughly expense slightly marketing G&A and sales of stay increase non-GAAP is a to non-GAAP should Our revenue

two QX with to to For we last year the the end expect to average dilution closing operating to the we and X% million achieve to outstanding using approximately XX.X compared shares full approximately equity diluted of points approximately fully leverage ended three with employees. expect price, issued We year. year, QX from

and everyone in on believe I'd But we year early full like call. efforts remind our have our that we still fourth growth of provide are our believe in will topline monetization to meantime, us. we the quarter earnings guidance strong XXXX We ahead

to margins. And to on measurable in focused I'll Test, turn we We long-term as and target the more efforts even that, Duolingo will continue invest invest and Math. making stay But back drive it progress user Duolingo like and XX% each will of EBITDA Duolingo R&D our to we growth in that, will to do to Luis. early-stage adjusted year with we monetization XX% English ABC profitability

Luis von Ahn

know I to Lilly. to up this. funny, you Very put

Okay.

Now, I? was Yes. where

to reach helping to fun Before we and would the deliver continue Debbie get their goals they creating Q&A, manage I'll ultimately that converting are now, happy our everything effective, to your take do, we who and I'd like be learners questions. excellence back more mission. in entire thank the apps team our into to And queue. engaging who subscribers to turn it support

Deborah Belevan

Boone Luis. Andrew. Go Securities. Instructions] All And first at [Operator Thanks question JMP from ahead Andrew comes right. the

Andrew Boone

going a about how can And then secondly, towards been a And to margins just more you much pricing. this much. steady was Can is localized about sorry, long-term of taking in XX% Thanks terms cadence we expanding are remarks focused localized benefits? profitability, a to of towards just think you help just guys. break down go Thanks your shift FX versus I'd out of forward, there? in Bookings what out year-over-year. profitability any there's XX% our are though those seeing driving terms Matt, guys as guys year-over-year thinking that numbers terms us a on then the us update versus margins. about for of conversion Hi and roll just that so my to in greater way per you down think sub, in bookings there as mentioned like was you Is you question. it shift pricing? you that

Luis von Ahn

Sure. Yes.

this an a better period that QX we your to true. really of the lowering out, of year, was time of in when last And getting first more that on thoroughly those subscribers. the saw just as that an increase in to rolled on in value And power the impact but feel we monetization, lifetime increase the for question markets. in pricing, international when localized broadly we price we So towards regional net roll pricing it a to sure long testing and we did we bookings was year those but confident akin what's of that, were make ultimately step out local everyone, more remind pricing first the purchasing starting because

So, bigger revenue on point, over This metric then and flowing revenue quarter past impacted has pricing, is bookings not our your ultimate to FX. by bookings, quarter, an of the was our impact LTV through the while per subscriber, per time. impact a be that probably preferred which will

So, that was per another headwind subscriber. to revenue

we're down confident So, the choices the LTV that long-term we of any in the making goes feel that, right quarter. pricing on for even if particular business

through shift your profitability, that second to in how is actually good around been burning is The the disciplined so a increase going to forever revenue not run business change. profitable there and fact we cash The through so over is we continue business. leverage news will As bottom-line weren't run it's the point operating is flow expenses. of become no to will than That time. faster to more we're the the really matter

Andrew Boone

Thank you.

Deborah Belevan

next William Ralph question from All Schackart right. Thanks comes And Andrew. at Blair. your

Ralph Schackart

Good evening. taking the Thanks for question.

question I you broadly, or edges grow. to sort the to durability it of of Should the I give but it small macro, seen And the just there or stiffening First at I sense have might And follow-up. then haven't guess, you're for on be help on least a said the that be Luis, it headwinds? curious a maybe you any seeing continue even macro if product able know Thanks. in signals. us case use

Luis von Ahn

Yes.

situation. macro we're course, aware of So the of

seen for anything mean So, in the if been Like our we've we've product, said, even I haven't you we for of small it's haven't numbers. see any that, ad we revenue, just seen I just but seen us. looking softness in geographically, subscriptions terms

mainly seen this a convert in convert a also usually no quarters just said, strong in year, several we I softness. So, -- growth. over growth, we subscription we like and like terms that good in just the of have will next our pretty and and pretty it strong product, about have bookings will user -- we're -- pretty just main And feel terms seen

saying far, through never there's of because major major so gone recession, So, in don't anything also of mean, know been seen terms single I in happen but company, I've softness. course, recession haven't will I every any call, so a a as so we or far, if what a we, just good. like have

Ralph Schackart

the us would for there Great. more? focus think, you having an some this you. called just be Are give us And in like added shareholder give sense, sort purchases, then letter. this a Maybe is sense company? in helpful. exceptional an terms of Gems, in-app with, it the product? sort success of I Just seems you the just a out Is Gems of Thank merchandising that you're

Luis von Ahn

that's Yes, question. great a

on in-app at this growing purchases. more point, focused we are that revenues it that We on of recently team really a about when That's something where had spending in-app we're our purchases. until really are -- wasn't And effort we that. X%

be as revenue. the And know. subtraction I that But can ask XX% don't Tinder like in-app big people a of you Sometimes answer purchases. is something from us look how if has the of honest our comparables, at revenue about

room a So, virtual for to is main we're which to we building features lot we're from And more that that there's which be through And grow see years. These to encourage economy, users a this encourage is X%. think way you're building be gamified Gem features a more usually in several and more of to doing over the us Gems. are purchases mainly, going in-app of going currency users. Duolingo. those next going their lot to The spend

Ralph Schackart

Appreciate Luis. Thanks, it. Great.

Luis von Ahn

Thank you.

Deborah Belevan

And at Needham. question MacDonald Ryan next your Ralph. comes from Thanks

Ryan MacDonald

Obviously, you I taking point year the earlier it my international. big which was English one China. Thanks thought question want this interesting a as Hi. for launches, then quarter here. new learner we for congrats two Duocon, to been well focal speakers, start I But populations sort really about for for India on talked Cantonese nice business entering that and that's and Mandarin unlocks a China. at large two speakers Bengali and of in

you're what seeing there? languages in maybe and quarter So, just those internationally business what's how really or progress new drove that happening the curious

Luis von Ahn

of a Thank you on. for Yes. lot the are spending we something effort question that it's because

cetera. of English-speaking countries, grow we -- lot half again, room our are, UK, revenue subscriptions a think et comes to remind to a there's We US, everyone, from of and business internationally. mainly Just about

the If little spend like the look the -- market learning learning internationally, we're you offline market, which language the in is language a at particular, vast of it, different. learning is English, -- majority

you online, spend app. UK, places of would the because -- or we're We're offline, getting internationally. we of are a spend like still the an US majority are coming the from the the lot see but We

you be exactly So, we what a next opportunity, and there's said. us going We're doing think over for major several that's quarters. a to the focus

teach teach to English to We users. are different adding typically importantly, to expanding them not courses populations, but really only those making to more courses not them, and only adding advanced courses but more

that. also lot are preferred. And effort a on going like where in-app be of purchases spending to because are that us not So, there regions things subscriptions for helping are certain

So, are payments be kind of for to us probably that. helping one-time going

say So, us, for years. I I that again mean, working on is to we're be next and the this going several is would major main focus thing the a for that

Ryan MacDonald

That's on from a sporting area really is that. major of of end Thrones efficient. up really an potential made campaigns, people coming a event and It opportunity Duolingo brings of different the advertising seems nice But the natural you've for there's millions the see this capitalize helpful. And that maybe you to like together been collaboration. at month maybe all languages. great marketing then It where of up was to progress the Game on

Just look you Olympics or drive soccer tournaments, Thanks. around to perhaps major curious, anything this doing as when to sort a of at learners you catalyst have like event? And are the other we platform? more that previously seen

Luis von Ahn

Yes, it's a question. great

lot I of mean you've following been So, our particularly we social do at it. -- kind our have media. of definitely planned, quite social we're we mean stuff good we I social media. if media, really strike-a-cord with a

So, see with silly in doing you'll of a our Duo lot planned. Mascot things soccer Certainly, fields. there's stuff

lot So, a we stuff for have of that. planned

were in in these sales, to allow cheers mean, we're terrible see teams our that be But the Cup either also going on like something be You're -- not think languages. not things to these insult, able people World are a entire efficient like other to us not to they're insults going allows to are things We're well, doing that to lot marketing. do that sponsor going would, I to very send capitalize that, in like or I clean this. -- view, or

campaigns we like So, media. social have on marketing that

pretty we're cool. So, going to -- be it's

excited that. about pretty I'm So,

Ryan MacDonald

Thanks for great. congrats Sounds again. Well the questions.

Deborah Belevan

next And Barclays. comes the Ryan. Thanks Lu at Mario from question

Mario Lu

Great. Thanks for taking questions.

first purchases. The is on one in-app

like do continue to between new features you you Match learning As Madness, and monetization? build for efficiency optimizing balance these out strike a how

Luis von Ahn

That's a question. great

things whether feature three it is feature to that to cases, all whether -- And does well, not with build, three usually, that there's every that try others. things at, but in what with really and engaging, whether helps do we For each one helps it it's we're do teaching. monetization, hurt the it we try helps looking with thing, we

mainly most be for -- learning. So, features in-app the probably purchase stuff, are that to and but building to of that to be engagement we're don't hurt don't want we also with sure they monetization, hurt going helping just going make

head. of actually in aspect like there, get there seem it's bit kind So, to even tries put Match something we cemented generally, a of quite a if what game silly the it, more out whenever basically may Madness, there's like time your the words learning like from value to

trying just decrease be outcomes. make any learning does going not to it So, to we're sure that

Mario Lu

new on it Anything for last pretty shareholder the monitor? time promo, different year's maybe since we this guys are at letter, especially that excited should that be makes you That around, one around sense. really about may And year's this after the to Great. out look then success. time from

Luis von Ahn

these. We December the quite hell of start, We've best start. know a the to when XX, out Year's it. like to to it. gotten all it's start in at We We've row. New We've the promotion know AB good years done day of day several tested basically which that's

previous new called look included whereas of Super the every and than it because because Duolingo for subscription. hadn't we're of pretty be years, And plan. It in And different graphics. looks one to plan, family called We're example, Plus of different. be a to the previous test, Duolingo to out it's with we're much course, see to better also a well. going used years we look so we're going going It's try new feel now our number we including the excited thing, to AB it year, you're family changed -- works going pretty --

But do because allows We of us year's but growth users we're to is resolutions, just really time new promotion see for like Duolingo. a during So, year. year Not generally, we get an the there's that. of it money excited for only of because influx exciting in every stuff new that. really capitalize year's of new it terms

So, we're excited by pretty it.

Mario Lu

Great. Thank you.

Deborah Belevan

And from your next comes Mahaney Evercore. Mark. Go ahead at question Mark

Mark Mahaney

Okay.

is things the one number interesting -- the think print of I most MAUs. in of the this

I X I think million, a high. that's think record

convert MAUs are read well these lifetime the with they of you could Thanks. whether source into likely subscribers So, any value MAUs early And record were? to high us is? of those as the into what tell

Luis von Ahn

Thanks.

So, the DAU word better with getting think, keep that. that. we're our stuff yes, and basically and The seen we've friends tell and to better flywheel basically, so more able and very their is features the both And uses MAU product just mouth. that's add through social this growth keeps keeps source quarter, throughout retain We're keeps -- of and better, same I I just mainly more better. accelerated getting they like we when so better more mean because thing of it and the organic we and happy is growth -- been most

that. there's So,

In how are terms they of to likely convert.

steady or time. Our increasing conversion rates pretty are staying over

So they're past. about that the likely have been in all to ones convert as as the

growth then So gets the think kind of excited subscribers, users, more us revenue. us, the why that makes which funnel which gets more this it's us for top we because very we're general user is with of more us

Mark Mahaney

more And then questions. two

Just like just that asking anything people number, then X.X in to it's I geographically wise those over switch those came people interesting Duo Is And from? where million MAUs Math, can where big though. I'm Beijing? came from a from? Just -- of so terms

downloaded haven't So and I've yet. enough used do app, I'll the it I it.

be you the Just I But mind it. there you've do to path think that is you a getting you in don't Do as monetization skill Math just stuff language? the be skill. want language, critical language organic don't about critical know. it. will saw been growth monetizing date? a of to talk, you you forward, monetize about how has as stuff quickly than it think critical as for path And there, adult as But a to think as monetize early how I app Thanks. arguably It's if well it training. you about its done out may talk is it just not path more have the and Duolingo

Luis von Ahn

Sure.

Okay.

the from question all coming kind is Generally, across first we're the geographic and So of in geographies. the and the where that of terms geography kind we're of MAUs growing new are spread. seeing

Of are others. faster growing course, than some

continues cetera. we mean, It's growth above-average seeing China be fastest-growing that's but countries China. India, growing Asia has et not But our been it's countries mean actually I in monetize fastest-growing We're well. reason. to really the some, I -- like Vietnam, place. where

So -- and US XX% whatever, I us all growing Western MAU or XX% are growth. for US, above average, above UK are growth average guess, Europe DAU above UK, the that. growing

there's of and So doing it's little a all in regions, math terms across monetization. that -- The few regions but are a better.

the so ago. we with far. We're two launched expected. Everything product. So this very We're the of or happy first weeks than as better all, expected launch happy has gone very app with

children, for for we noticed, also As the adults of stuff that is have things you one interesting. and

certain this. third it's adult more early, be to that's been have app this than the perimeter users is what we of turns math. content et more the adults far, so grade if think of adults It angles, means, is And in math and so shapes, it's it's there so users children it, geometric at two but what out certain I like And you far. cetera. And we that weeks, content multiplication, area of really Again, think. forgotten I shapes, have fourth by geometric you that app the only have fractions, if basically actually So look used than children. kind going

Duolingo. again, In And this terms this about something be future. able to will confident is to -- we'll in happen quite pretty talking the I of similarly think monetization, going -- what I'm that's and to pretty happen app I'm monetize

the So end of I But take Duolingo a and what is apps plan think this. it own. math to the We end help ad to doing lesson, family we'll which of the itself with probably going subscription, with by up its is going salt. then stand we'll going at on we're but up Super to going to across an think our to end putting a have that grain this, shared also we is be help that monetize is that the think

Mark Mahaney

Luis. you, Thank Okay.

Luis von Ahn

Sure.

Deborah Belevan

And Thanks, at next Mark. question the Sheridan from Sachs. comes Eric Goldman

Eric Sheridan

more strength Matt in by think apps? spend well, XXXX the top on there terms XXXX think invest to individual to long bring layer Thanks, product maybe cases what breadth monetization use we to XXXX investments, should bit. cases a taking of building had you out outing medium you those Duolingo the long follow user Duolingo get much then platform versus lift against Thanks had for use the that and how which broaden platform, you When term of guys. and mine How how more just about about discussion the be experiences leaning margin think should how into we more on up about potentially and the think are into you I'll more do And a building about that over and we math, more and like elements core virality, or in question. and about more and of Mark into question with Maybe we as so for but term? more to marketing original platform and building additional thinking today to we and growth as with the out about did the the little strength and should you app? utilizing additional apps

Luis von Ahn

question. Eric. for the you, you Thank Thank

we think the every okay, that So it's thing emphasize first say need to in I call. to earnings is, something and

learning. being surface, we're monetization language learning learning. lot language to our in scratching a room of -- the majority the future, really believe we foreseeable grow in is days. I business early continue to is language the of have only and We mean going we're For our

you our -- learning can -- accelerating the for app growth see, is app. and as is the actually So language

it for foreseeable next at the So two, call learning. will years, mainly it, be the three language future, least

other first Now apps. math one. The the on is of course, we're working

be we're promotion -- to going probably have are on to our to to some releasing ones. apps. of able be we a other We And going quite the to be cross new bit send working users

to want a do from we such app a We of in -- it such way in very that such spend Now do math Duolingo by lose at users good our also it to, way the users. don't to we we that way, are the this. games for some Duolingo the example, want

they we exactly dealing send that. bit also a here. math on is think It's well. like a them that stay We're be we stay. kind quite promotion we quite but of double And using the that a So there. doing for starting win to to will potential we think app, team see of They start that have able cross

So -- growth. this next and happens goes what in the see we'll to X.X next the over how over terms is of see we'll early, but years, that year

Matthew Skaruppa

then, your question of investment. And around the on part the Eric, Yes. second

novo only had launch math. But from app. have the able we what we special an otherwise So makes if learning and effective that not a been one about de we've things engaging faster would that from to platform into I all really the we think app learnings than were kind language of were Duolingo port nicely really of math of the is

and so very they're But we're leveraging And product we've because to you built, when that just designers. scalable. of engineers, launch it's mechanics all be about primarily able XXXX managers it's our teams with that investment making the investment these ask the over we'll small and incredibly time, and

grown been be when me, to when I impact, in these XXXX. expect fully more about think don't think it will And we then be it's and for apps. not the you margin think marketing, much that again, organically about very much, I So

that's with fact, -- goal our what In that's them.

And small well. will impact marketing so the be as

built. that's platform power So the the that we've of

Eric Sheridan

Thanks for the color.

Deborah Belevan

comes Aaron Okay. at from The Raymond question James. next Kessler

Aaron Kessler

Great. questions. Thank you. Two

us that's ad maybe from some family of adoption rates? more little a talked promotion. doing what for if on supply can plan just First, shifting bit retention kind internal the you of update the Second, and about you

Just curious, question guess be seeing you. As subscriptions? thus if of softness well you're terms any I Thank would on you're far macro results advertising in just that seeing the as overall? driving more third

Luis von Ahn

Okay.

sorry, question. the the first -- was So question? What first

Aaron Kessler

planning. Family

Luis von Ahn

Yes, yes, yes, Family planning.

So Family we quite I single think, Plan we've last nicely. was growing digits, Plan -- crossed -- now, are we Family is the digits. double spoke, in time We've

it, course, in family much paying. you're Again, it And growing, are still people nice and growing them continue in -- Family Family going people nicely. keeps of as and So paying your the is quite you're because using to that of is long other retention as the really about thing Plan if Plan higher. of any any --

that. So feel about we good very

sure exact I don't does, done let answer one. actually In the Matt I'll retention, I'm what. that sure that. has know not terms off but of top what release overall But head, to Matt my if we -- exactly don't our of the know I I'm

Matthew Skaruppa

sure. for Yeah,

So measure. the we retention, think the think mean about two there's way I I retention to types that of

user nicely on retention, is So retention for continuing user grow to us.

focus Your was primarily -- around retention. your question subscriber

plan some more level cohort that be as biggest retention we the annual retaining, platform probably over you subset from the they we've the have to a level, platform increase not and shift retains better. big So a is percentage. even it's the and retention at dramatically past to material up seen all we annual level mix has or the and rate Plan like monthly time while so because Plan Family retains shift, take that, X real how of we Family even when subscribers are so of year better plan, that the and improved gone look expect for the

So how we're the that's really that's and with of impact retaining happy platform. to how going the LTV

next Your was ads. on question

advertising as think be impacted, slowdown. of was looks And what ad to our so industry-wide by can you see a financials, the we from revenue, kind

don't think surprising that. I in So anything there's super

think Android subscribers. of part they're as comes impact users our But of us convert there foreign not they material outside to ad to business again, free mentioned, a some because our currency the a Luis fact I lot well the us, again, on that US. of help as outside strategic was not They're ads business.

So business think forward. but that not deal of a saw we it, it's big our just for we going

Aaron Kessler

Okay. Thank you.

Luis von Ahn

keep of and question, it. There's think, that optimal running Part some we subscribe. some find keep And was we trying to that. we to our mix, tried -- switching I whether of yes, to ads your also we've experiments do

yes, a apps. we subscribe. It to likely lot mix experiments it's to are some the there never right that thing turns probably on So for always to give ads them, are the just is users is going are a the just users describe what them that subscribe to lot to can we see running some There more best are do essentially depends user. out them, And where better are them programmatic probably give for the mix.

Aaron Kessler

Great. you, Luis. Thank

Deborah Belevan

Schindler America. question the And next from comes Aaron. Bank of of Nat Thanks,

Nat Schindler

Yes. guys. A couple Hi, of questions.

numbers. First, on user the

is the digging a QX, when there. bit little Northern in Just at school in Hemisphere starts. least

that promotions and new this I would that the Or viral? So don't pushes have just, school number? using children there product is any helped know, to was get

Luis von Ahn

question. good a it's Well,

So to yes, We we some acquisition -- starts And run promotion, has in a run growth schools. that marketing do to we or paid of that the of see some is our year, Northern a every in related do school with back-to-school. efficient usually. either social but media kind we Hemisphere, very a -- QX bit little that do on don't is we

teachers. product, which Duolingo it it's We dashboard also a is for schools a for What is, Schools. have

normal the as having in to the look kind phone students use tracks a teachers Duolingo, go but dashboard that So of doing opposed have what are to the and every at the students person.

have had we So that product, couple but that years. product for of we've a

getting than just do just this better we better. see that so previous it, is, growth better to I year. We and is not -- had we even accelerated growth keeps more And growth doing but this the it we're something back-to-school. with organic with see guess, of guess every was but year, My that years,

Nat Schindler

annuals. question, clarity where the you're us can I Great. -- are there what time of on And you been booking, selling? second think give any average you duration change has your the on any last the it's or that few aware was what over XX% And can is that numbers? quarters us it we changed? you around were so can this be you like -- when affecting how Has last what tell been

Matthew Skaruppa

it's a question. Yes, great

is the XXs. year number when so ago, annual a And are XX% back roughly the plan. we And the you was think still answer I look in Nat, around

to quarters, six can't past, same So the can't the up of XX% plan through XXX%. up gone as went it the substantially. of to four gone go it, It we've XX% amount If quite annual percentage it XX%, course has from go right? to that the call anymore, the from

of it, way extending So my retention Luis’s in the we're question the now math…

Luis von Ahn

Maybe it I’m could I a go don't know. up XXX%, kidding.

Matthew Skaruppa

actually you you Plan, synthetic That's right? extend But like I kind use of to retention to the that. guess, way things longer the Family the we're a of like as subscribers the through phrase how lifetime the increase the extending bad is the things duration,

Nat Schindler

extending lifetime. of a is for bookings if Is No, that you're the I instead should amount big if selling not is on effect. But not months too. where I in great, the for of guess, it's That's when assume -- X.X increasing the a big months, really growth, we quarter a one have that? there everybody XX difference watch a month, annuals, quarter can The year-over-year? -- at pretty average, you're problem you looking just

Matthew Skaruppa

Yes.

course one of of growth. that. feel we be there's in that quarters we terms in XXXX, well Over And the going general, impact as able But those particular be we'll see still to to lap from some not quarter. will

Nat Schindler

you. Thank Great.

Deborah Belevan

question at The Piper Arvind comes Sandler. Ramnani next from

Arvind Ramnani

the wanted day, Hey, But for too I by ask of data question. by my taking of for early days certainly. still questions this is you're to thanks it's math. say, where kind Yes, to to go. kind and a going early couple know It's math, I the hour, of track on

just days, these want of is And product? the these us I early the of nature numbers, to users, like of us you Like have how like -- maybe the Like paying can for numbers existing a So right? signed the math who customers users Duolingo greenfield if if cohorts, fresh give think, don't folks you users? language have cohort are you adoption up or share don't give have?

Luis von Ahn

for Arvind, you, Thank you. question. the Thank

a say. So things there's to number of

is So we while early things days. just at I very look It's And app, that days. takes we a our mean, obviously, -- really settle hour. that's experience you much. the the the optimized you you weeks. but math to quite not for to right. an are have like not at when lot, looks can as of yes, of We this XX it that look launch just an Duolingo, it's first all, early figure the know so as far, and it It's even years. you the been data, we have all what to doing are, had it We actually really track a for good a One, of few for users but it retention two for app, if things. you out good. I app tell as by

hard with, lot So we initial certainly the of ago. it's retention to it when Duolingo XX a Duolingo is than better compete launched but years

So it's better. a lot

we pretty We having feel about feel good completely new retention. that. a good good about app So such

haven't we advertising. I of terms marketing done In not like we've not done users, much, any it's anything. paid or We've mean any done campaign the

mouth would only weeks. done written just two a There's happen. media that there's that So it -- for of word to around mouth word our happened. where the has we've of the pushes some was some users of not come the has press of that been now of from time and But lot that social and is

app that. don't so other have math there's know far, the half we than that of But know just account. So, a than know more the -- Duolingo we of not that. users We that, than more much

Arvind Ramnani

from to you've kind you of never been kind looking feedback, is been the are years have of like because Okay. we like done, then side. -- initial changing product big that and And there you product at perspective, Or see? feel a need any Duolingo XX product enhancements just right? Like

in an own anything you enhancement feel you've product, there gradual I been of will terms Or good keeping have pace? So about of like of things big identified? pretty math, flaws design, in there else but of sort sort that any understand its going be at kind

Luis von Ahn

like pretty we it's be good. same for user is We I XX we given to the like over the quarter, before it XX map on to be it's -- said, just still be last app. math and what several going feedback. years, it's mean, the the the is same doing, the road the years, like map last truth getting next to we've Duolingo though going launching, the knew better -- feel And road every all I is years, single for the the remains working you been even for going think

know years It's roughly lot I XX remind making there's -- been make going third it math, have We go sixth there, there and now, know main $XXX of terms app just. probably grade-type to to revenue, content. we're for content. math get is whatever years I grade And more a to mean took take to of I road will We're million really hopefully quarter. up. learning fourth of of years and add we need work of days, thing want just more but several language take -- we for math won't to content. XX but questions a to to get I it's map, these the catch to to a it take in the XX and while to just we Duolingo for years have fifth our type people, mean, have Similarly, do. going and about we right going to

other number we a Duolingo. -- that just that are add add we come that content, more from going to we're know to So things need and we of have

So, to for as Like streak lose of make how for surprised in is looking app a street has the as be a in sophisticated terrible sophisticated were we sophisticated. other is our example, simplistic Duolingo losing the so day, thing thing. mechanic math the is the the streak not streak Duolingo. you users app don't at That street. would their like streak, pretty because math Whereas your is the version that sure

we we're -- need these putting just know from we like that yet. math haven't start So that, into the stuff app Duolingo what we things there's all that to

Arvind Ramnani

Thanks. Yes.

on there's product. Just at one There's last no math. other When no Duolingo language, look user I question base.

have say, there this build the this, kind application would to I You tick. kind and started put that massive to plan to have user you core do like you kind of the of on Is kind of Math, engaging. promote base of a to brick-by-brick. have this actively mean button I math? use

Luis von Ahn

XXX%. We plan to do that.

the that And at get not started integration of have the we've actually we will. type talked about. all, this We of stuff -- type This can you at of really good type integration. is

But lesson, an in which So the you simplest the done thing. hey, the have The says, a simplest the simplest app. haven't that at end way, a the ad That's we thing thing. Duolingo just simplest we math even by put of can is more thing sophisticated. get

be your could So sophisticated more ad playable. is slightly

a But then app. much there more can like, integrated. for to And the can start it second. try So you you be then write you can woo, go getting

things math these certain you Daily do on where example, go have like called the lessons on cetera. be, so Duolingo a do lesson learning and Duolingo, things Quests on that Duolingo, quests do or We three doing app be it can the For your of story et or we extended streak could by one you to a have language math. make can complete now make Duolingo

So you integrations. can do better just much

these going see the next, be trying things to that. takes. going We're however, things. these over you'll all so try to us all And long We're this do

Arvind Ramnani

you Thank much. Perfect. very

Deborah Belevan

And Arvind. I'm further no Great. questions. showing Thanks,

it for you, remarks. closing So to I'll Luis, back turn any

Luis von Ahn

remember, No, yes, or want. you just the if math, vanish. keep you Spanish for But thank and all learning questions languages or

Deborah Belevan

Thanks, everyone.

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