Duolingo (DUOL) 7 Aug 222022 Q2 Earnings call transcript

Good afternoon and welcome to Duolingo's Second Quarter 2022 Earnings Webcast. Today after market close, we released our quarterly shareholder letter with our Q2 results and commentary which you can find on our IR website at investors.duolingo.com. With me today are Luis von Ahn, our Co-founder and CEO; Matt Skaruppa, our CFO; and Bob Meese, our Chief Business Officer. They'll begin with some brief remarks before opening the call to Q&A. [Operator Instructions]. event recorded. this that note is being Please been And statements performance, regarding reminder our that SEC and which factors the make forward-looking we will have uncertainties future and subject filings. material just forth of to in risk a are risks set events and financial events. believe information as we These obligation have forward-looking we to statements or a as reasonable update on based be are statements result no new of of future that these assumptions to today, and we both measures present additionally, on today's financial And and non-GAAP will GAAP call. a be analyzing These when for non-GAAP intended GAAP you not to measures encourage results, measures all our superior are performance. considered to to in and consider we isolation from, or our substitute And with I to turn that, will the call Luis. over

everyone. welcome, and Debbie, you, Thank

of which just and year it. that, people for to person progress has every to through just the life spend a in vision thing letter I of plan not to but It part getting want And are on planet best this future went building wrote a time said a I I a learning. technology, process, we lot their Duolingo future that worked which do. have dedicate short quality And thing that education. whole this letter only ago. is access in building that started. know that Since to out just I'm So to made letter, the and we vision. a was for main future, platform that we company towards will of public need lay The to this. as the what my is a read my to going you over

year, about substantially. increased public went million active we our user daily When we We users. have had X base last

monthly active Now had over XX million. We users. XX million about we have

in $XXX now year, have million. nearly first had this have we of $XXX about of We paying first the million. last half million. And million we we in In bookings. X.X we half subscribers, X million less year, XX had nearly than and the had Now

we've But company message the spirit and We numbers XXX that at or a last company durable. beginning believe I We we want in more a these letter ever. well years. that build and are surpassed than show, the achieved is journey, As now executed of of IPO that that iconic our want to was my build to our targets. and

on to about we and while focused with to the macro our always talk So on future. near-term that, attention Matt outlook. the to environment, financial term over it pay turn we the And long stay I'll

our to results we guidance our the consecutive remaining Thank the prudent We quarter, fourth year profitable user uncertainty you, given was current strong over Luis. delivered beating expectations. quarter were growth. in appropriately confidence XX%, at line full the also adjusted EBITDA and increase us basis. grew This It with an the the on second gives top accelerating in while macro environment. We

$X.X bookings, million $XX XXXX So is revenue, and negative $X.X million EBITDA adjusted million million for an $XX in $XX to total QX million in our guidance to of to negative million. $XX

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

fact estimate guidance. on I call. XX% year-over-year make guided year-over-year impact to strengthening of basket up up against higher. growth our year over This earnings last bookings past currencies the rates been X% our of exchange have half year the that outside is a QX constant currency the last the U.S. also dollar our a growth, foreign year, that Our and the just on come of they QX XX% we We of just XXXX from XX% full basis nearly and guidance how that to X% discuss want result the compared would that XX% to over our reflects bookings bookings from to to our bookings over

takes the half $X and assumes the account dollar every first the guidance the the exchange the the value increase second Note in on strengthening would year year. of in Our impact about total of of currencies have half foreign rates. basket our bookings X% in into current updated versus dollar that of the prevailing a of million

since revenue Sales will then start of the in marketing down on QX, year-to-date. where QX. fiscal anticipate revenue new seeing slightly QX with will discipline we slight founding. in of continue And manage university a and should And as second most a percentage back to R&D it starting We half it back settle have does as percent years increase of the In our as the has XXXX, in increase business leverage we we'll we that been half bring hires. in as the we to in as year. G&A some of

and Luis. million that Finally, want note outstanding the average using And for dilution ended hit shares to now fully I guidance it we diluted the on track we X% turn the are that price. year X% with quarter to of our to QX back I'll approximately to closing XX.X

Thank you, Matt.

serve I'm mission your talented my today. Duolingo got order put I every guess take I'd of our to everyone our express I in got learners gratitude to through change collective who also to their hearts their it. into supposed do group we lessons I questions, their remind education. our it. lives to day and Before employees to like

like your XX, Okay. is to all things Okay. conference Anyways, for to annual questions. be happy to also to We're our which remind we Duolingo. Duocon manage would And now watch to take it queue. everyone turn August on going back our to the do okay? I'll lessons, Debbie I'd

Luis. Thanks, All right.

question So from first Andrew Securities. JMP of your comes Boone

for to stepping growth we on DAU, about go-forward that. Hi taking with my as questions. And understand we love kind for start start then MAU outperformance strong basis of XXXX IPO? about on I'd for think XX% was think at just I the Can of a growth, results. in with to the guys, bit fair think just congrats and MAU finer thanks which XX% and it kind the to of at we of to of point Is soft XX% DAU the to And look the kind of and a back growth XX% little guidance point pencil.

let your outperformance, guidance. about thank Andrew, question. current mean little talk going a our bit Matt our for Well, then you, I'll talk I and to I'm about

I IPO-ed, me, still which just still days in our we've in days the early of the something the we're for factors, time of look, number if but think growth. from We're it's We're in days the is main our early we journey. factor our revenue DAU the growth. So the ask is outperformance early a you of mean of I still said

And so we're still the of a in curve. nice part

say that is that. -- environment the one you there's crazy, should thing, macro so I which know. as pretty is And

Matt, So our crazy. But the talk weakness whatever about immune pretty I if numbers. know, far, in environment. expect macro things I you And can't no strong we're going want to guidance. you and But we that going tell seen have the in no weakness so in to forever far, are on whatsoever, don't be numbers. is our numbers we to

Yes. sure. Yes, for

and that But So grew and did grew as outperformed or back, we between this times historically, don't data. numbers are XX% years XX% and earlier to you've long guide XX%. between MAU XX% pretty those MAU Andrew, DAU When looking explicitly. seen year, went we numbers. DAU mention we've And public, dated we those

to changed. in the are We've numbers I just fundamentally think not but we're it, But data, again, at are range. certainly had numbers guide that times those don't formally those to long So you outperformance here. years look the of if nice going

again guys years, kind the and opportunity the maybe to could just now live are right, not over so there possibly term, China. mean of in medium? Can you near speak three much. you five business then what more Thanks for that but And to

Thanks Yes. the question for China. about

in in So back live China. said we letter, shareholder the we're

stores that we could that Duolingo, current the taken few users in months new use China users down was ago. still were download happened what that what it. from was So couldn't meant And app but a

and we we levels and are we're down. in back revenue app to before taken that the We been stores, back had had the DAU

is lot potential of in to revenue. but It's little our of X% China and country. still a for under our a an it's market small -- us, DAUs interesting about and X% a MAUs there's China, Now it's of X% and

world, think the to market companies it's for I learning to thing English. for of very well China particular, the -- in language hard is course, But there. is largest the it in Western do say learning about

with happen is it. Chinese the going it. way We're is as And yours what's to about we betting investing we're see not on landscape. company the guess in So good as my it the

Goldman your from Okay, Eric comes great. Sheridan And next of question Sachs.

the the taking in the Great Thanks highlight for I'm there so you always to to on everyone. intrigued put question. stuff see Anything the testing. you've much A/B where letter when the seen they're of the either testing driving excited side move on the app of the testing elements side. and into most about mode out monetization A/B that you're usage the or

Thanks one. it move business? get from would sense number a cycle we And as some a and into so better launching number any can product, implementation out math on think as it bridging how in be both we much. widely into two, quarters? future investment on Just That about update you behind testing the the of the of more

you, for Eric, Thank the questions.

Okay.

of XXX first we of in terms per about in all, A/B the testing, A/B So we tests run letter, mentioned as quarter.

really testing So all things. kinds of we're

are Some tiny. things pretty

one some letter tab. about. features. large Some pretty that particularly and are excited of word in some are pretty the highlighted in I'm just Quests tests Two the that like of is A/B One, button of change the we

basically who more every in tab they going the use is and know days they more. people app. induce it's use time we are in more it. they more app to it is, app on to also use And to the So it, app that more actions thing use whole a generally the about likely spend day more [indiscernible] row, using That's the And subscribe. the that users a to

That's really really that we're one we So excited about. like that.

of characters you going we letter tap to that called language. Another in to little be this particularly home able going animated kind thing practice is you're which to screen give one Quests, also, fun excited these Side to the obviously app, the mini your the games I'm -- that that's the and of mentioned on are new in about

something think next going for to economy we now, gems. points. be with can particularly we're us on Now investing couple And a is think grow with for pay Right just purchases, geographies is going revenue love excited on that's small. Duolingo gem help in-app It's And people about quite in interesting, percentage which recurring to to play the don't you're years. relatively purchases going the pretty them, we of where is certain to we have our a that it's few paying we're very to that for something in-app that because But bit. subscriptions.

mean, So that's I But That's -- A/B people And kind like an ABC, Language still everyone asked for a the very Duolingo opportunity. language we're app, math literacy after surface. thank and of math, the about you about. even and about scratching which I'd something we really company. for a Learning or our I us that year, the learning excited question. certainly, when this next ask you is that, test. We're to remind year the are that only primarily year is foreseeable massive future,

going the and call to majority the So of to our investment the come X are years. from X for revenues next, language majority it, our learning of

put -- likely to it, the we're the put practicing app, to it's to with a fourth out going beta so out turns the and -- for going But grade the on to have I is at like and -- to math me. still third pretty pretty every fun. use it phone. we're app my year. of day. single we're plan, Now according fun, It Math it have out whole it turns It least nerds world version -- we we're is plan going I this

particularly I'm excited it's going it. to according about So And still plan.

next comes Blair. Schackart great. question William Okay, from your And of Ralph

question. for everybody. good also taking the And see Great. Thanks to

Just two could. if I

just Just regional question in the going? talked how an you're Maybe screen, seeing just there engagement. on you effort with the [Technical an terms really excitement And home update then there about testing. of pricing, is what the additional that Difficulty]. to improve

Thank you, Ralph.

Okay.

asked question home you first the was about the -- screen. So

are we which screen of home home remind the pretty the is So just everyone, a screen to large completely change. changing Duolingo,

a where So -- basically lot thing users linear screen the to next next. still path home about We're -- them. the is with used pretty this. users call that it's usually we've to talked we what this that tree learn be that we be large about to being we're being options to careful such had guiding of where going currently a This And are currently learn -- careful we're something users changes, to what very with tested. where

fraction So we're web. and live for testing of iPhones, it, but our Androids users a it's currently on

So put currently optimized optimized. these with metrics. versus we we The in this expected. on able good optimize remind achieve highly far live. an that to unoptimized is what been brand-new all our we version in we I of or was that. thing The the we we This like version then crazy. hasn't results. sort X, new home can exactly years, platforms, it X a hugely previous one parity a had great expected don't maximum because to that looking to of of when what optimized. we're And unoptimized If it's position home is the is there everyone so results many it's this be with years all brand version local and This And then take just a for before, was metrics of something with years. the know really screen screen is there screen. how And were home like are for it parity new that

And it's so looking that. far, like

metrics looking parity have metrics. it's much that pretty far, So like we the of

users going like is it's will it to basically, by wanted. That's that quarter. don't And end really, the to no be our so that users out there what all My exactly have of it estimate. rolling we the be we're estimate my

most this same every just to with geography. everyone, something And again, and home looking the Western in in is was good but we're price was Europe, for maybe so the was pretty price great for the good the countries had really The price States screen. not remind the that we else IPO-ed, a world. pricing, when regional that it And a -- United price single we

in regionalized run last year, a to prices, our the subscriptions, to does everything. prices the change prices. most do Over countries. because long-term measure of kind that's what going for renewals are value trying when we we're and what we've it to and trying for this while we us to the really bookings the users recurring see and lifetime changed for do basically we're It experiment digital took so looking of to We've

it prices while given now, So us example. this. each took as most do for for would of you to the what a countries they by But the are pretty expect GDP are good country, in

countries. what the all down poor didn't like of to good. the And for the the need see step big be first that's went much, countries is prices poor to the that we countries, for U.S., did many bit. of monetize change were so changes most Now that taken quite And a that prices a as that usually then

monetize Brazil to would need well Europe. a that. monetize we we things monetize Western something Peru in those the or think or like in countries Vietnam So or of We country better really lot there like a countries, number -- or in like a than countries poor just obviously happen. I to in And the order like monetize U.S.

to is price needs did step that that. first The be right. your We

XXx, it -- was an have and Oh, bookings, so like increased that sometimes but price. you it think, a the was now like win, right in it wasn't And a people increase

or like didn't and in to just to something happen in a what XXx things Brazil because Brazil or places happened bookings other something of like that you're So in that that. or India we like happen to need expect number going not

as people paying example, to For subscriptions. for are recurring used digital just not

payment. we need more form that, payment So another to of that improve right forms the need improve just probably carte à of have is sometimes also to thing people in-app la do of we work need to To that don't we on kind purchases. probably

this of to that this step was number one. and So we a things is just need do, number

Thanks, Luis.

Ryan question next from MacDonald your of And comes Needham.

some stronger if question. on platform? the taking that seeing first growth to of strong English curious Luis, Or whether what Test. IR you're on just there I start for with Duolingo Obviously, between you basis. really Thanks it's my of year-over-year the domestically? I'm result a accelerated number this that increase mix international in of the a is universities of back sort in have a enrollments wanted

my that Yes. because and Thank excited a about. it's near the about to project you and -- is something something dear for asking we're that Test Duolingo English it's it's heart, very very

to again know and to English stage people Test. kind about not the Duolingo many of the Just as remind because everyone set

So Most app. our is us It's language this the is Test Duolingo for English know standardized a proficiency learning product. English largest The largest product. our exam. second people second

and the out, you is. website tells test for a good English to those exam. your English you things, a how used standardized take you and So our go turns of lot it It are

One standardized of users, main admissions. but one is English the number the uses users, for exams the of one not main university

foreign So students. for

people So Duke speak can to when they want Stanford come U.S. prove to something, or to they study have the they say, or apply English. have to that to and

-- can really it's us. Test take nicely Duolingo main can And business place a that institutions, the to lot accepting more growing our really, That of for they So prove we're they speak English adoption is just growing. English. It's the test. getting just where

about universities and U.S. our universities. how means universities. by So Historically, measure, accepting it with on you test. it's depending started XX% U.S. but are mainly And -- now, we of

of efforts our efforts those our Australia. to are But that's that's U.K. and like Canada, we'd increasing markets XXX%, the also again. get increasing proficiency exams, what We in get. And to were other obviously, increasing U.S., English the in big we're to

test institutions our the people lot a what so is more has more the test. taking combo led just to of accepting And

have The a acceptance. other now in has the is U.S., led bit thing that because just -- we of to that quite

to English the you Test. the U.S. in for them, the terms international Duolingo of example, universities accepted top XX of XXX% U.S., apply in of student If enrollment top XX XX

now, if take you're will by U.S. So the Test. those is applying English it universities the Duolingo to that likely

the doing other this this countries getting case, or quite is which out helped a that a word are in bit that, has tests as the helped of continue getting think just the And I bit. the just like India where quite word we're that China are we the the will most test out and So that is accepted thing has other takers as happening. is that

helpful color. just Super then from maybe And follow-up a perspective.

an On it's consumer great on to But potential from? the far. thus seeing recession think of you do a impacts reason price do the learning the a are hour offline discretionary the shift to person I negative core versus of -- to we potential ask research that your an it's given in users that's of subscription. online, is obviously, in nearly from acceleration where tutor much for language there a $XX no app, tightening as annual budget, see obviously, language here an of the macro learning about language And or coming $XX

thoughts there? your curious Just Thanks.

I be basically that. learning And is the But to I know I at night in Yes, still the Brazil because believe language going We something believe people wish hypothesis, recession, one really a is if mean, just were offline, shift recession. true. market vast majority majority to English not. the think, market that actually just a over of or that of that's billion classes that. that least think terms in year. that. good we online. more remind learn we -- time, where $XX to to And not the hit that's you, paying to the about I language I learning the it just take a market, for The believe don't Like like going are of really is we market. true haven't or it's

happening. because that we've will, is helped to it the it's And case, with I lot seen basically this years, help We're a we've more but question The And stands will learning just I recession is reason the off-line the shift. -- lot online that is that online. the expensive. Over slightly the continue going with will that be but it a whether way, answer the don't I'm honest good a if don't just about a hoping know. shift by language know

the for color. Congrats Thanks again.

Thank you.

comes Patterson And from Justin question your of next KeyBanc.

about like improved of Luis, more there's Great, thank very innovation secondly, about to on a more you DAU as the resulted it just excited variance MAU then as that hear of features has test. how Duocon, love recently. been more as much. Eric's a lot mentioned particularly base A/B consumer you up? looks pace Perhaps user-facing products, you're question, Thank iteration anything and at And I'd coming you. it

Okay.

So first, pace terms innovation. of of in the

of users things two pace of So affect we innovation. have to that One is our the number experiment with.

they helps. run As can at time. more a That we increase, experiments

is thing the other on that the of helps, people number product. The course, of working

product number managers help have experiments. working number the of we run And product so of the the the on number more designers of that and us engineers,

so what's happening. And basically that's

We more more are hiring people. and

prudently. course, are we Of hiring

You're innovation. increases for the But see or not that's what time. basically anything pace as prudently that. we We're hiring like of the have going layoffs whole doing us pretty to

working are case them. every much Every we quarter, -- the quarter right, on run A/B you the just And are A/B we so have we test And tests. more it's more more quarter. people previous running than it's that pretty

testing. that's really just of up. Duocon, a coming So cool the you A/B in. stuff terms -- There's in of tune in And should lot coming

opportunity a in just DUO for you lock missed behind again. to great You

reminding to their once, Duo job. has be lessons. everywhere Santa everybody do very has like a hard Claus. He to It's at

know don't where he is. I So

Thank you.

the question Kessler of from And right. comes Aaron James. Raymond next All

of the coming are the talk maybe apparently down Can maybe a One, leverage bit. a Should bit little marketing about just you. we quarter. rates you half expect side nice on thank marketing back that? kind Great, some deleverage with in ad you in and shared the

helping that's efficiency on if you marketing the side. wondering Just

hand, kind you advertising other seen negative your are performance-based lower seeing from quarter? any you. implications the this of revenues advertising that on we've Thank On

happy that. take to I'm Yes,

shift So part by was in of driven a spend. the advertising just leverage this quarter

we around to shake will We're $X to this spend it $X about spend next So million were out going be to That's to -- quarter. it it going quarter. million. between

that. half the in year, said we shift. would back expect I back in be So where it of it But should of just But see QX this deleveraging the of then kind to there's to was some that because some of QX in what right quarter-ish.

So nothing kind of seminal or crazy line. going on in the S&M

if down dollars net that news that to of true. The because of XX% go for out like second business, DAU question your per dollars for marketing part still side revenue down so of is relatively see grew the the taking who average us on effect I DAUs folks the -- The We nicely saw. just turned be other good much, marketing was order the are went in advertising up that the did went quarter. in think

the of That does with throughout we're that. still could can going revenue rest we said, something to monitoring year per user seem growth, is be But like I down. DAU average the So that persist offset that. that

DAU per advertising. revenue Average on

Yes, advertising. On exactly.

Great, thank you.

next Barclays. your from Lu of question comes Mario And

taking for questions. thanks the Great,

the the believe is by second on beat the midpoint. at bookings So you fee quarter. first your the in one guide I XX%

color drivers some Any into, acquisition you if out wondering provide there? channels could for outperformance. user were the the main can you just what call So

part the outperformance and appropriately a well early user we in was we metrics that prudent. performed being were in that driven on when was we even like There also retention. growth and the we so guide there quarter, conversion over fact of on the were on expectations lot beat macro by internal certain the on really was issued uncertainty, so guide, Yes,

core really what of to components the led And are so beat. those bookings the

and the prudent those so Luis account also, rest a so when into mentioned. given outlook -- uncertainty, to much we're still as is outperformance taking forward, But look year. for we then we're there And going layering then of the guidance on all

a the increase Quests. I is at both level, is what still revenue, guess a Side Those on tested? just then or to terms is us incentive Quests you. increase users app, Got in Side in and guess look engagement. it, being thank exciting. I Quests language follow-up you And have of you gems spin very of I But order kind Quests remind said that to being a more just to guess high can

it's of Duolingo. terms a ecosystem. whole spending more In pretty gamification get And People it. into it's of gems, the really complex just

get they minute, Quests that more like per way happens more enjoy kind So the the they're Side so to figure get out the per out using XX, really more X fee, user to really top A and journey in And there. They people. and the Duolingo, people then you would they top try or of give And And then it And X fee The you're something and increase random that really to XX people things is one next league, people of of them turns by of then cetera. well, be a you're this. these points things you're in number are groups how the minute. is et leaderboards. get user really that. into if the trying the like leaderboards, good actually -- if it's XX random into that.

And so they enjoy it and fees. them gives a of X also lot

that to So them gems. spend get will

So gets this. that people to really it's stuff that, do like

tight gamification of a it's basically loop. kind So

Well, like make too games. some just don't Great. much pay-to-win,

to learning you're fee lot X the a end, we do too. learning We is you're how earning to make it we for We that good try of spend we basically, sure Side -- getting. make want effort I fee, in spend everything proportional a you're that effort making of sure really that Quests to do Don't so on that that is this many really worry. mean that. lot the X when

you. thank Great,

Arvind right. at And question Sandler. All Piper Ramnani from next comes the

Hey, thanks guys.

this So sort first the couple this I'm have of cycle. questions. of just you'll macro time is prior you're potential about Certainly, impact of seen And talking if a sure macro. not

will we macro that at a did when the you business maybe a some mid-teen do private assuming from on company hit were think or on -- to impact But see more different you the do So funnel be company of growth that perspective, where you sort impact of the the the on anticipate time. conversion to of kind top first you or more the be?

I I weakness hard mean, don't no to in I Arvind, great so know. know. seen our very far, mean have it's we numbers. question.

hard is like not if are I be it they guess it's users to economically, -- it, having about to to likely less think people probably tough going going growth basically, example, about could that my time and And equally. our to And may so continue then know theorize is subscribe. are for user real if free free

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have Duolingo, cetera. make and grow. use product people also and can that actually better, Now because friends, we test this because more that's we good is more run for when tell the we people don't mind we whole how users us A/B and And their et

So we very it's But don't -- hard mind what's it's that. happen. ultimately, to just to going know

far, So seen numbers though. in we no have our weakness

one then when of like you model. -- And had Perfect. back a like you private go you from are pricing perspective, pricing years two kind even

to more starting Now you have pricing multiple -- you're introduce models.

potentially ones additional bit pricing expect they over creative coming How like, I you as we of headwinds, newest pricing? about next on be should I mean, about, to being is or some little think kind probably model. models? more Are months family some plan the macro a the are your of six we Should that going the anticipate kind like pricing so? think of you

not pricing the we're say in of family plan in about of we're always packages, only the terms geographies plan different of is versus experimenting. always and first the monthly, is thing the year individual pricing levers, the and experimenting that -- So relative to in terms price versus the what

way, see you're not experimenting. short-term wins something but So going if just means by wins, that and continue wins, we And the long-term. to us see

next but hard there's new to whenever experimenting. the in do it, have, you may think any fundamentally we it's because actual and see say see the -- hard what something see the you'll because new happen you'll or fundamentally will mean will plan, packages change happen we to thing, the the monthly, very to working going anything experiments, any don't of you'll see you're I monthly Whenever annual the going I that. wins, we're could prices. they different but we that try So to just continue it's value really kind which like And don't say actually see I very we're six be us lifetime months. yearly. I not think what users. of that see different just anything on increase to don't yearly think packages

do of has I impact Great. And part one your Of you the just of margins? potential XXX think testing. last to sort sort you've, think, or question. revenue A/B which XXX, those, Certainly, your biggest

of I'm are excited Out the the two I'm don't think put do our the going most which Quests has at single I most Side that the most potential? I that know. running, about you XXX mean shareholder to ones letter. the tests one predicting about excited I that the we're really good what's in big. Quests those two, tab. But be sometimes am I and all

predicting to And going sometimes, really I'm actually what's really be big. bad

I that that I ones those -- put are like. the there So

perfect. right, All

Looking seeing to turning forward to at you Duocon. Duocon,

is going be to good. It

Yes, I'm sure. Thanks.

Arvind. Thanks,

Mahaney at from right. Evercore. All comes question next The Mark

because Two the couple years go rates that you get thought for of at something certainly asked the the where penetration you ago, question -- of could I MAUs. the app, percentage the like could dating on IPO think questions, you please. said subscribers a market don't of that. a looking to thought at time I some One I or maybe I maybe think of can you if double-digits. know as

would may that at look be you shareholder have Like is letter, my good. that you even If your chart I -- know than guess that have pretty you going faster thought. in that curve looks don't it darn

don't to somebody about So just way. necessarily India, question term? you but about you've and I there China have seems new phrase I so I you risk talked I capital asked thoughts go to that I country intensive. could on launches long markets, then know penetration secondly, this I being asymmetric want about reward And think just not think to ask you may -- India. two where the me. The before know, dramatically already don't want

be But and in number growth just markets. You've would offering. seem out had for so of to what the subscribers viral MAUs many dramatic, of you're especially China potential

update quick India, But regulatory one I things growth just because wanted some And there. your I think issues to little opportunity just a all you in and are but think allowed been there. I had seems of asymmetric a And where markets. that being have may also talk but bit. markets, I so think also us that's the allowed the not give better understand I so about you ask to volatility just on about

So any update on that.

questions. three you. are the So Thank those

Great, okay.

penetration. So

been right. I'd happen. thought we outperformed of year. had a growth definitely would you're fraction has to percentage of per our we When I So paying what IPO-ed, point say subscribers seeing penetration the one of MAUs kind

it to go couple each IPO, it The from to like X% X%. So points year, seems to percentage -- since X%, from would year. two per last X% we're about up

is high get? mid-teens. reason a that. know. expected. think this it's a we're why So reason still see I hard happen. say. why is that And don't can't I this very question happy And very I see to don't I more the don't I can We than how with But your it can't get to

really people don't thing, inside of versus concentrate say have And metric increase is to a trying because This we're of our to MAUs. is of metric, But metric be quite improve on metric which for a price trying of part Now to We're revenues. long-term bookings. way to is company not not percentage this may think the we I'll of improve lower kind one metric. a the this reason other subscribers go that lot paying operate a up trying easy And We for could we some example, what And that less significantly. that against. stuff, team I one to do is bit. making that.

experiments. little will lowered happen. that it's we that countries, are So we regional Certainly, faster faster. some go price not did probably pricing, little exactly it in what go made and our There a because clear a many when it made a

about. So stuff just seems to care we seems it's -- something it is Wall that But obsessed Street something it like that about, certainly, that. it's but not necessarily like

it. So we talk about

on that penetration rate. second Yes, one

from annual seeing, So it now. we have acceleration of Mark, that the a part mix that an higher you're plans acceleration and came fact of that is

increased we've which mix as big the past that what as a over mentioned, the Xx because of view as four So we Luis the annual plan. monthly LTV is -- plan Xx quarters,

so part of that of the impact penetration mix X% shift. natural going that was And from rate to X%

almost X% that would now that towards back XX% to the over X% so plan to we're And of range. at trend expect time, you since middle annual

I is is about, effects example Luis it increasing the paid which of think LTV care we is an is are which penetration. and the the But So talking about derivative has these what metric that's LTV. metric

was China and then next question about so your Great, India.

think I easier. Let me little talk about a India first it's because

had haven't been very had. ever just we've India that something not India. in issues regulatory has us. we any That's to nice So

for a is is It in one ago, India ton India now it country in at world it is fastest, been if And XX. times, is it there's in don't is of top in just is of the a terms user -- thing markets. growth daily It of So the the one top the our of very people us. know -- us I our today market has growing. that growth, is while even particular. users. fastest. keeps wasn't X now for user It for but A times, with fastest-growing free at fastest India interesting it the active whole great the in it

It we had turned it turning are why you on. out in while, freemium process And consumers reason that to off. of And have have the revenue For the not not tell actually turned just in just revenue, in we monetized it. for very fact, off models. India. we used I'll turns Indian And we're it a back the

we of like, And paywall to so using would the offer stop here. they that a subscribe, hard when they were was would give out Duolingo. thought and we're it getting They

we what that So did is off. temporarily turned

of were in money making lot back -- of like companies I those we're to This but But on -- either is And we users. making be -- India. we're while. India -- so is just India the is money -- so a already back. of great There's think And lot we're one think either to people for lot challenge with we're back be to a no of that. from things I about I we're getting a think far, I opportunity. time pay a hard it's a And think have with experimenting

So that's in India. office an have China, so we China.

opened an I market. was app China got before China stores high in a started growing in Beijing. in mean very job. as to have in was really off reason The good we office our a really the quite bit fastest-growing are And We turned originally They they that we grow we office China. performing. did

that pay other nice world. is it thing market The consumers actually the China also English about largest is and in the learning

it continue to suddenly be in it lot and us But million but will $XXX foolish that going just happen. would think to invest I to be a growing. will China, we're continue for China, we're that's investing to it unlikely grow in going to having has us to in, it foolish seen just the invest mean majority prudent. all companies something for continue Western investing is think of happened we're So I I what

Now organically. thing it Duolingo the that about nice grows is

So just or from and some spend maybe grow where and influencer needed we It million a in we go over. haven't -- on do or something market spend flywheel on marketing something then million to given we the $XX $X to anything. takes

the that much -- going to spend it grow. have see then to hopefully we're we nice we're and So thing to don't going is see

So be will I think very foolish it. about it's cautious about think we're we're a not but to about pretty be I China, it nice And it. cautious excited --

Mark. Thanks,

Thanks, Matt, Debbie. thanks Luis, thanks

are no like looks it other Great, questions. and there

So I'll just turn it back to Luis.

remember that's kidnap you questions. just otherwise, lessons for Duocon August the going my watch And I Thank here your do to on once Thank all XX. Duo's back Well, and family. think again, And come to it. please so much. you