Duolingo (DUOL) Q2 2024 earnings summary

Executive summary

• Achieved record revenue of $178.3M for Q2 2024, up 41% year-over-year, and $345.9M for the first half, up 43% year-over-year.

• Net income rose to $24.4M for Q2 2024 from $3.7M a year ago; six-month net income was $51.3M, up from $1.1M.

• Monthly active users reached 103.6M, up 40% year-over-year; paid subscribers grew 52% to 8.0M.

• Adjusted EBITDA more than doubled to $48.1M for Q2 and $92.1M for the first half; margin improved to 27%.

• Surpassed 100 million MAUs and reached 8 million paying subscribers, with over 20% of DAUs maintaining streaks longer than a year.

Financial highlights

• Subscription revenue grew 51% year-over-year to $143.9M in Q2; other revenue (ads, English Test, in-app) up 9% to $34.4M.

• Bookings grew 38% year-over-year to $190.1M in Q2; subscription bookings rose 47% to $156.5M.

• Gross margin held steady at 73.4% in Q2; six-month gross margin was 73.2%.

• Free cash flow for the first half was $134.5M, up from $63.1M year-over-year; Q2 free cash flow was $54.9M, up 60%.

• Ended the quarter with approximately 49.4 million fully diluted shares outstanding.

Outlook and guidance

• Q3 2024 guidance: bookings of $194.5–$197.5M, revenue of $186.7–$189.7M, and adjusted EBITDA of $40.1–$42.7M (margin 21.5–22.5%).

• Full-year 2024 guidance: bookings of $820.5–$827.5M, revenue of $731.3–$738.3M, and adjusted EBITDA of $175.5–$184.6M (margin 24–25%).

• 2024 Adjusted EBITDA margin guidance raised to 24.5%, seven points higher than 2023.

• Management expects existing cash and cash flow from operations to support capital needs for at least the next 12 months.

• Second half growth expected to decelerate to about 27% due to lapping extraordinary prior-year tailwinds.