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MD
Monday Dayton
@mondaydayton · Jul 12

Friends, I see there is still nothing about this event, what do you think about the Duolingo educational platform? $DUOL

I follow the action because I know this app and I like it every time I want to even somehow either brush up or learn, so I put it on and it has been performing nicely lately.

Duolingo is the world's leading mobile learning platform and has become the most popular way to learn languages and the top-grossing app in the education category on both Google Play and the Apple App Store. Duolingo's technology consistently invests in providing students with a fun, engaging and effective learning experience. Its P/E, for example, isn't impressive, but so far from what I've read about them, the popularity for this stock is high and it could start generating better earnings.

$DUOL is up 101% in the first half of 2023. The main driver is the growth that started back in 2022. The fourth quarter results for 2022, when revenue grew 39% year-over-year. Then on May 9, the company reported financial results for the first quarter of 2023, showing 42% growth. Another catalyst that can't be ignored was Duolingo's AI-related announcement on March 14. And as we know, OpenAI's ChatGPT has wowed investors in 2023. And on the same day that OpenAI announced the next iteration of its technology with GPT-4, Duolingo announced that its Duolingo Max product could be powered by GPT-4. That's great news for the company.

What's perhaps most impressive about Duolingo's accelerating growth is the way it's doing it. The company monetizes free users with ads, which generates relatively little revenue. The larger revenue stream comes from subscriptions. Duolingo ended 2020 with 37 million monthly active users and 1.6 million paying subscribers. By the end of 2022, it had grown to 60.7 million monthly active users and 4.2 million paying subscribers.

And it continues to grow this year, with Duolingo attracting new users in 2023. As of Q1, it had 72.6 million monthly active users, up 47% year-over-year. But the growth in paying subscribers is even better. It now has 4.8 million paying users, up 62% from the previous year. Plus, Duolingo Max will boast AI capabilities and more features overall. Oh, and people will gladly pay extra for that, too.

I'm sorry to have missed this, when a few days ago the company was still relatively lower, despite being completely on a beautiful price point at the beginning of the year. It has jumped $20 in the last 3 days. So far I'm holding back still and reading the news around it, but it has gotten into my active tracking. 😊 What about you, who are using this app and possibly who is investing here or in some alternatives of this type? 😊

BC
Bill Combs @billcombs Jul 14

Great, I didn't even know this company's stock was publicly traded.

I'm familiar with the app and the system is great and I like the focus, but I also like the direction. I mean, the potential is definitely there and I will take a closer look at this company.

Thanks for the tip.

MD
Monday Dayton @mondaydayton Jul 15

Definitely check it out, I like it, I just would like lower prices on the purchase. Maybe around $120 would be nice.

YE
Yorick Ericson @yorickericson Jul 13

This seems like a genius biz to me, make learning a game and make money on advertising/subscription:)

I've been using this app myself for a few years now, I use it daily because I don't want to lose the uninterrupted advice. Some time ago I added Japanese just out of boredom and I have to say that it gives me a hard time;)

It's a shame that I knew about them long before the IPO and I was expecting them to end up like Spotify. But I think the comparison is a bit lame, you can educate on both apps, but with SPOT it's only a part of users and it's mainly for "fun". DUOL has already started (and plans to expand) regular courses that will be internationally recognized for a fraction of the cost. I remember what the prices were for a day language course + FCE exam about 10 years ago and today it is about 2-3 times as much.

They're growing nicely, there's great use of AI, I'd personally appreciate it if the gamification could somehow be adjusted for age. With increased efficiency, adding more languages, the biz can scale up nicely and I wouldn't be surprised if in 2 years or so they'd be in profit.

They don't have much competition on the market yet, the longer they keep burning cash like this the harder it will be for someone else to jump into this segment. AI is already very good at translations, so it might lower costs/moat a bit over time, but brand strength will certainly play a role.

I hope they don't get hit by a pioneer who is then overtaken by a copycat who has perfected it;)

MD
Monday Dayton @mondaydayton Jul 13

Wow thanks for the extensive review and actually the addition. I too have known the app for longer and I'm sorry I didn't jump in sooner. It's obvious you really like it and from your opinion one would think, damn so the price is still low. The truth is exactly, they don't have much competition and they try, they stick to what they know and keep improving it somehow and make it really playful that when you get into it, it's not just like "I have to learn" but it's cool, I'm going to go make some lvl, level and compete. Plus, exactly, if maybe in two years they get that they're just profitable and even their P/E goes into positive numbers, the price could really be double what it is today. Well, I'm also watching them already and wondering when to jump in. 😊

YE
Yorick Ericson @yorickericson Jul 13

It seems like a brilliant biz to me, making learning a game and making money out of it is great. I've been using this app myself for a few years now, I use it daily because I don't want to lose the unbroken advice. Some time ago I added Japanese just out of boredom and I have to say that it's giving me a hard time;)

It's a shame that I knew about them long before the IPO and I was expecting them to end up like Spotify. But I think the comparison is a bit lame, you can educate on both apps, but with SPOT it's only a part of users and they go there mainly for "fun". DUOL has already started and plans to expand regular courses that will be internationally recognized for a fraction of the cost. I remember what the prices were for a day language course + FCE exam about 10 years ago and today it is about 2-3 times as much.

They're growing nicely, there's great use of AI, I'd personally appreciate it if the gamification could somehow be adjusted for age. With the increase in efficiency, adding more languages, the biz can scale up very nicely and I wouldn't be surprised if in about 2 years they'd be in profit.

MP
Mart Poom @martpoom Jul 13

Duolingo is a great platform, but I guess I never thought about investing. Like Spotify, for example.

MD
Monday Dayton @mondaydayton Jul 13

I don't either, just like you write, I also use the Spotify you mention and I'm happy with it, but just now when I saw the growth and read how their users are growing I thought, maybe it might not be bad, but it would be better to catch it earlier, maybe under that $100.

JB
Jason Bellier @neostonks Jul 13

It could be interesting, but I have zero experience with their platform or product, so I can't judge if they have a chance in the future. Their user numbers are growing nicely though, so maybe it makes sense.

MP
Mart Poom @martpoom Jul 13

From a user's point of view, it's great. I just don't know if the power to make the user pay is that great. That's where I find Tinder far more ingenious.

RR
Rickie Reeve @rickiereeve Jul 12

She's come a long way too, ytd. It's a great app, I used to use it before, now I don't anymore out of laziness... I should start again. 😉

MP
Mart Poom @martpoom Jul 13

I always download it after a long time, because I had the Swedish language running just for the fun of it... and then I never get around to letting it go 😂

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