Duolingo (DUOL) 28 Feb 242023 Q4 Earnings call transcript

Good evening, everyone, and welcome to Duolingo's Fourth Quarter and Full Year 2023 Earnings Webcast. Today after market close, we released this quarter's shareholder letter, a copy of which you can find on our IR website at investors.duolingo.com. On today's call, we will have Luis von Ahn, our Co-Founder and CEO; and Matt Skaruppa, our CFO. They'll begin with some brief remarks before opening the call to questions.

note, is please recorded. And Instructions] this being event [Operator risks make reminder regarding which [Operator material a we'll are uncertainties. forward-looking to performance, Instructions] Just financial that statements and future subject and events

of of on obligation risks today, have result and as as information These forth risk the Some of to believe future statements events. our are to a been with based these filings statements of no update we or in these we set new the have factors assumptions forward-looking reasonable SEC. be

to call. to non-GAAP a Additionally, our analyzing to are Luis. non-GAAP both we over superior be with consider GAAP And we'll GAAP performance. you intended for, substitute present financial I'll all and measures not measures our turn from, on it today's And to These when considered that, or isolation in results. measures encourage

Debbie, Thank free This record we bookings everyone. in XXXX, expectations a delivered ambitious revenue, user beginning you, the the quarter. fourth the the for flow and surpassing and by profitability a welcome, at and capped off of out stellar set cash growth, We ourselves was year.

like I'd over by of about the EBITDA our profitable EBITDA over and over our In a business. out we've XX% a to XX% far growth to operating an increasing XXXX point, to XX%. took been ability inflection performance rapid In incredible into about points with margin talking public in that When get breakeven XXXX can in respectively, profitability delivered last time. reached adjusted short, XXXX, adjusted added and we've product context demonstrating come we we and year-over-year turn years. In margins. demonstrate That we laid to we our XXXX, had able we margin. put leverage, our how few and went back, July Stepping revenue in growth, plan XXXX, showing XX

and this did learners our learners more attract more do the effective, The Now learners engaging this? more more and encourages how in so make by about We which the to convert fun, friends app more subscribers making them did we family courses their invest us. our money to platform, we engaging the to tell have on. our we we And and effective, to even more have, fun, and we subscribers. to

Since we've and cost-effective, of strategy, growth organic active with our word most about billion that which year marketing over XX social supplemented million us XX to platform impressions added of come social-first monthly a alone. active have IPO, earned daily We've users our through users, million whom last mouth. media X

forever. straight growth of for mid-XXs, large proud which Now is accelerated user how XX that. before, XXXX, through user we we This base QX be said impressive to become. DAU expect quarters still can't our QX, has DAU we growth to accelerate and But QX XXXX given growth we've as closer I'm from the

from the expect continued line and For year free-to-paid rapid improvements conversion. performance user top XXXX, full strong we in growth

monetization this and we're the to As select free an help year, for users plan conversion we're subscription doing with work example experimenting the them. around of ways best

subscriber and higher started momentum. Plan will on we putting retention look our Max has this Family has test base. increases which free, to of a We're Super year, between team help tiers. our Plan, subscription organic choose Family grown will to names, platform packages different our also We resources LTV. users appearances our to its and and And behind Family who Plan dedicated about XX% capitalize Today, our more

drive growth. long-term make will additional also to We strategic investments

up for of learners who content We the will part make continue market. largest our English advanced developing addressable

effective making develop continue also them learners for their all and by of courses engaging content and and music to expanding ages. fun, math our will even We more

Last year, milestone. an reached we incredible

learners hundreds online learners that to is us. sign potential And language, of learning we their about and winning out millions have yet, more MAUs. Our math There XX% global have XXX share more opportunity impressive so Duolingo, even working language and much billionth Perhaps we completed lesson. still yet them music who of are there up we're of and over. ahead of on for see

faster. works proud Matt. when Duolingo in that's to to impact we we beyond We're build XXX-year come, have us for far turn to And as more want that, we're it our getting we've while speak So how say, want at XXXX we I'll you'll And and of company. what with I I see everyone continue move just and from over to who started.

Luis. some then our I'll provide the discuss quarter, outperformance color I'll and what for guidance drove this additional our Thanks, year. on

we throughout Luis Plan shared, bookings had our because fourth off and in bookings promotion. because in of capped we a the exceeded profitability Year's saw year, we QX. As continued with fantastic Family saw in in the record strength because forecast New and our better-than-expected part in growth the user in quarter, performance quarter, We our acceleration

growth revenue user and respectively, in growth on constant a XX% and XX% and and XX% strength subscriber drove or basis. currency continued bookings year-over-year, of Our XX%

XXXX. turning to Now

extraordinary XXXX. bookings our to As momentum, has This which our to year-over-year outlook, feel Luis QX bit bookings guiding midpoint. growth comes we XX% XXXX why a of give we XXXX. are of the even said, year in growth about as what outlook, growth we detail more bookings And about which good doing year-over-year. worked we To we a lap have want at growth had so we on XX% the this really is in continue well strong

will year bookings. as of our usual, QX bookings rate the expect be we that step quarter down to gradually to throughout We in QX from QX. expect terms biggest growth And our dollar

to QX rates. full expect lap XXXX no continue target. At And long-term X More currency about on from we exceptional foreign have bookings rates, to progress growth impact as bookings exchange we to growth specifically, our expect towards from on current we'll we results make down last step year QX QX, points profit to our material by year. prevailing or

margin adjusted year XX.X% XXX EBITDA We the add points basis reach this expect to midpoint. an to of additional at

EBITDA Our vary our hiring will bookings and given margin a quarter-to-quarter bit adjusted seasonality.

we EBITDA for about Specifically, lower QX, QX, QX same to the to highest. QX as than margin be be to and expect the be QX adjusted

getting For adjusted non-GAAP or all the our full year, long-term we targeting leverage are X margin incremental slightly of EBITDA our target to cost expansion we margin above categories expect This an OpEx. across margin year, at achieve adjusted by of operating EBITDA XX%.

R&D effective growth lever word-of-mouth this because our how fun, As make for we user to those us, that effectively remain will we and several which our year, areas is R&D acquisition time. a drives because engaging of category over categories in largest have more and to spend, it's app invest

X-second and social this the spent continue improving our plan earned call sales with being media total opening marketing, which $XXX,XXX Bowl that For efficiency yet ad. creative saw by at evidence impressions. We of we on over and XX to scrappy, million you Super of and in

For get as operating G&A, continue to to expect we leverage we scale.

to our the our of see given expect QX, As we'll QX. operating seasonality to will we QX bookings. mostly see R&D, again revenue OpEx in our in sequentially, of In de-lever timing of and a in non-GAAP leverage we both by starting QX compared QX, percentage and leverage year how to XXXX. slight the And of to spread as hiring the total couple plan in throughout points, a leverage then

about Finally, the net dilution the the we back employees, price. similar dilution end outstanding shares with approximately million to closing XXXX. it I'll is XX to X% ended had expect the diluted with year with In year we equity year-end fully to from in Luis. issued And that, we using to turn XXXX, which

and design of cheekily lot Super close queue. department insert would most now I'll Bowl ad, I for love. take the marketing turn our to U.S. into television happy team brand manage back watched history Matt. program And and be Debbie by our us to we which their Thank to congratulating social our you, questions. buzz generated your with in to the want it to a ingenuity

Schackart William Ralph The [Operator comes Blair. Instructions] of question first from

questions, could. the call, couple and the about tier. the a letter family I Just you talked if of In on

higher and a frame retention forward then rest more if retention in the Maybe rates had broadly, having And we I business? think think how should rates. going the you versus about talked the of about trended can of you kind XX% have versus about here I you now how Then follow-up. retention we XXXX?

Yes, happy retention to rate. Plan talk about the Family

you manage So business know, Ralph, as to the LTV. we

higher Family does -- Plan plan. why a basis materially rate annual retention have the other important. compared on that's to annual to an retention the The is So

price has And and higher so it point. also -- a

product. it's just around higher So LTV all a

time. over of do we're Plan, year. optimize shift a the So to just And there's platform of this really as Family opportunity the trying we we LTV lot more that to think towards

sort that And us give think of you it this country? historically, color about Just you've be add of a approach? I rollout Will Maybe of talked phased any would Will for reminder be then it year. your the Great. Matt, a sort be country strategy by regional adjusting pricing. great. could on

Yes.

year, another pricing the will lever time with. again, I So to be around we story is pricing think less that pricing. use regional we experiment time This from

the perspective But regional remember, we overall of lapped rolled will XXXX. X to time change throughout bigger year a -- out year, that you be for a this prices We've change in tiers. will if we through change price experiment we as with experiments. course basically from revenue around-the-world a So this time XXXX. with broad-based the we pretty pricing in the If

Max pricing would a what year year that's out. that saw where on lot So and going to we throughout more offering. see expect and to we demand we're at with our I prices the higher impact happens, as And for of experiment that see roll this

And of next from comes Seaport the Ralph. question Research. Aaron Kessler Thanks,

should you well thinking questions. some just be advertising? and the of there on -- for ways XXXX? your we conversion of us just the can couple well growth other on maybe that that, paid purchases, for how as within as give be revenue maybe should XXXX then we if Duolingo we including A Test Maybe and about about be as sub English in-app anything thoughts thinking should And lines first

can Sure. I'm happy in. to start, and Luis jump

but item then subscriptions. That's going growth the this to So the know, also business resourcing. bookings line is our growth, year, revenue to biggest continue Aaron, of both focus, again, of you be as

And see in be growth ads we up to I look speed don't at subscriptions relatively kind of subscription ads, XXXX. grew a slower to XXXX. similar lot our that I picking in so product. expect ads when delta ad than compared

grew it its journey. our subscriptions than It's early as forecast, impressively. a In last It's the several growth DET really but IAP XXx-ed. harder the bit And grow had enormous well. little still remaining slower is piece. It's to XXXX, is past years. typically in over it's then

expect grew And in other But so would in as as I fast don't XXXX, rapidly it grow that, probably in all like to it well. I'd grow XXXX, with percent. I nicely it so as expect grow the can it think lines. of to revenue more line hundreds

XXXX? that for Great. way to paid And any sub that think just about conversion,

Yes.

paid a way higher So XXXX, free-to-paid sub essentially And cohort had users we basis. is the internally new conversion. throughout think cohort about on of conversion every

users much So high-quality you the that the how likely that adding publish, as we this I MAU has of XX given change move base in do felt aggregate that, scaled. months -- any if expect that's reason our see of that We to that at a that level MAU we that rapidly subs What just to was now. means platform. year don't kind to evidence XXXX wouldn't ratio all really last of the on the to

question Wolfe. of from Morrissey next comes Your Zach

as been things, expecting of only on just of like events the one-off just House for Historically, tailwind a seen outlook nice users. the deceleration. you've on of we've a of Barbie The first, XXXX out Dragon Of kind guess, -- or kind user I called slight these side kind

going the So to of of just of comfort sustaining you're what curious kind year line kind of forward? today gives kind on growth these user really throughout rates the have or growth you that kind of strong the sight seeing of course

Thanks the for Yes. question.

of I our it's word better perfectly because mean, just our it's that, our from actually majority quite mouth. that it's better. it's predictable. getting of not keeps the making of but quite just product predictable, -- know predictable growth I we're we product and better. So just comes And mainly mean because

anymore, to this we're of in we kind but fact of we kind the going case user row, that -- of XX -- thinking, in surprising quarters this a be we kept of -- not So accelerated we growth. throughout what's that accelerate the very to we in row. XX always We're, user growth expect quarters year. on well, course, for this And for proud that did that's just maybe is that a

expect mid-XXs this the a thing a just going And around, so kind people mean helps feel of of -- in us part comfortable about more time learning X that we billion forward. this about of And much we're TAM. language. we I foreign also have is the world there's

to so lot have under room We close XXX more slightly MAUs, but there's grow. a just million to

pretty So that. we about good feel

just Great. on I AI you're help of of And -- one think into kind content of these leaning creation kind of personalization then generate courses. and to some

kind a in there. were I terms efficiencies that of -- of cost update press business also progress of kind Just this curious of year think And the for earlier there in helping kind well. drive like as reports

from to kind AI leverage opportunities of kind further the of about thinking you're how kind see there. of curious Just

kind we're but by AI. can layoffs employee of not did first use something opportunity. on the the force, layoffs I in force, some biggest anything for are these -- that reported always force contractor actually like that The or of point translation the We full-time a we if doing this stuff is me. hourly done We've the the Well, the content. like of of contractor mean probably be that. had our take of contractor they're And AI. like did some our to based a and reports, we we was not reduce -- of reduction like was reason company, wherever workers trigger what stuff happened. so Yes. can AI, we for the going press yes, press That all, for are

just allows reducing faster. do us importantly, And But to One AI, more faster. And even lot what's we're is that content things places. is we're able The about there. places creation. where to we our costs using are of experiment there's big also kind -- not in just X good we're probably a only it

So it a generation the case requires that's that example, used for -- to feature called this have be That data. out we we're rolling the of DuoRadio. of bunch

asked I XX had take going ago, It's generate you're DuoRadio do to would data. to told somebody If them, to years years crazy. me us have that X

take Now we months us know data. will a generate few that it to that

now we're based actually feature to So a it. willing on create

doors That's one place So I'm for it's the lot fact of opens about. stuff. that most a just we've excited accelerated the That's what AI. this for

is interactive based place or putting are other AI. the that generating And up features on just features

Roleplay. we So have

really We one have having We're Answer. with Explain experiment characters, My starting actually it's our of to a feature. spoken a with and cool conversation

that So of and that's us see this, a very it's hard leaning technology. do. type on we're the stuff you'll I great mean

Next Andrew of question JMP from Securities. comes Boone

ask trends growth Understood everything to top-of-funnel mid-XXs had Great. the terms in into you 'XX Matt. gave. I to guidance as guys versus metric 'XX top-of-funnel guys Barbie maybe download you else, then of beginning. moments the that wanted it top and you of 'XX? relates that and just about a relates clip want, year, you it Whatever extrapolate growth about last zeitgeist bunch at percent and of showed as talk Can the funnel you to

is just constant. the of like friend the from And some it I word Matt they're of mean Duolingo. events And a that, talk still, about are just the nice comes feel comes their like of about case these of I funnel. our but Barbie people let download -- some there's Like family good good. just remains the Yes. and stuff, most of to telling majority from we I top and pretty vast pretty member But stuff that said, mouth. or growth it can that

see, we anything you know, looks if we see -- have don't to just it I Matt, strong. very what else say. So from

No, that's I right. think

to not we I is from think that seeing we're or mid-XXs. getting point are obviously range -- that's to up and trying accelerate just the to And have the XX% down, here. make being visibility into QX, and going that the it's in go always we XX%

of call think day. resurrected. we XX using proportion we and which to top are Those I there's users come haven't like that the back but of -- any then I'd users, folks given equal an the the remind terms funnel, about folks there's for who platform brand call on just platform been resurrected past In new everyone days,

And then been a for that using it's talked big so that's but back a about, it's And mouth Luis haven't that word and of that while, just making they they sure even also like are if come reminded of this. Duolingo. portion it folks they'll

that don't now to that we're like it. different So feel about. going what about be it's we right pretty we talking anything -- Luis good than I says like see don't And all said,

to then do standard, guys just you testing. a that I tiers for opportunity about you that of I -- understood take understood guys I that premium, the are you free are price wanted more what the broadly And demand? where kind guys within model. you the you to of a kind think U.S. have about and the But U.S., ask guys pricing guys to seeing going are were right? regionally strong how about

Yes, return generally, that. remind and investment. mean you, mean, pull. Pricing with to a order we by just is in in try just kind monetization, have I I of And price we we can open pricing, lever. experimentation pretty terms do experiment. to levers to to improvements we on lot our of of them we're And going we're where one

as another strategy lever. multi-tier the have We

Family lever. the Plan have We another as

these. all We have

this teams ordered by so investment things, on return have of are it's on pricing. and that the working list And a long

for are what you But the experiment You know I us the because don't myself. I results can't pricing, sure. but of U.S. just see be to experiment in not will see experiments you'll those tell going just just probably And us worldwide.

James. from comes Sklar Raymond question Alex Next

the advanced to but from letter, bit of that English that English And you the have now courses How grow it's early kind that? the contents talked the think awareness a advanced formal now you plans that -- available. I XX monetization about of about Luis, the then with talk do in it? of plan having know marketing in had you behind Any English to results there. about some broader shareholder

it's because question are really we excellent talking an It's that about. something

also number English to the is our in language give you like market, context, as XX%, quite take. by comes amount learners. So the learners of largest if and like put learning larger of whole, in spend largest from just It's look the or market things a at true not far, the platform. That

So this a major this as is why we see opportunity.

Now advanced that very English been English language. quite hasn't course a have platform the in our content. is have courses on reason true our your actually We had native not because different based

an English course have we And they English of an Spanish varying cetera. Chinese So for speakers, to et went speakers, course degrees proficiency. for

increase first is business do, our have content we The to take we levels, really English needed thing these all to courses to more the among wanted of if advanced least learners, there. at

learners. that I'm this -- And are company the have our interacting we, we right. number content the That's to see of now and one users the English fact, there. in that is up number of is very graphs the have that to that users say in put we basically happy with the the good. It's advanced nicest of

see it. more lot we And starting users that think a interact are there. we So room there's to with

the multistep the content. a content the in Now first, first because, just have to was you adding strategy add step

problem it most solved, than are a it the to languages. of thing solve, out and is different been is little English solving, that learners are second learners currently turns not we needed yet other second we one has -- The

amount come know, -- good know French, the idea learners little. by relatively And For such a weird school. also, some some just they movies. of usually, where because patchwork this But we of But in also, what like they most English for good people to listened of idea school watch Swift Taylor English to songs. took And of pretty in is middle -- have language they've just very -- most the they they know placing a But Duolingo. or at high them of world, some knowledge they of languages, weird we have -- to have we course. also, learners come so done when and them before patchwork the and not English Spanish, they spot. so a place knowledge, of know way, they the have they easy what they they right pretty of it's a job cultural this them in learners, great they have other

we're proficiency English better to think thing English product one much be vast that's for when going prior the to learners I we're learn come able this that weird on. a people in kind majority some that who we're do And have So that, working of patchwork to of way. because in

English what and #X, what do we're for English beginner is We that learners you the well get that's working for as not step or on. That that's known word have to Step good as is mentioned. learners. either we're our So #X languages. other advanced out currently

marketing for So going do amount capitalize step of to to getting probably to then, subscribe. of course, us them terms last being the in able you're of And some that. is see

few But that. we to do do we the steps need before first

really is sense XXXX that where XXXX, you kind of my us it's this user base. to going grow and see be So

really start we'll XXXX, in somewhere capitalizing on this. And

year, come about in some this my but amount You more may see a sense will is year.

context. great That's

a follow-up, as Matt. Just

like, what about tonight year. the -- sounds lean that you're little given Plan bit going Family coming a in booking in talked of to more, it terms success, Just the that you've into

Continued the think shape international of into of XXXX? about we heading How growth. kind ARPU should the blended

great it's a Yes, question.

That more said, mentioned, about closer throughout or I'll the on to as are year. a And because QX lap platform went ARPU to about we the XXXX, So don't is to the of In drive did ARPU X, X% and to attention and little my out then it. less obviously run every for we the we give down disclaimer, we the it ARPU lapping ARPU. comes that, you then X%. and in business which we expect the which business pay just except rest We LTV I of experiments and -- price run be bookings. in on quarter normal went by change X% QX, down XXXX, XXXX, between

that's So roughly trend. our

change if -- a could raise of that So well, will experiments X-tier but right? so a successful Luis the we already ARPU. the current depending Now I mentioned Luis pricing and set and that experiments experiments, have on speed. course on that's strategy, as --

Next question comes Needham. from of MacDonald Ryan

Congrats on curious. another great yet I'm year. Luis,

launched days the you're what So and early complete seeing core enough late a curious kind screw app and to of there? stage in start there? on music. you progress have the sort can And math, with if of the you getting obviously see monitoring where monetization just day, to music of in then especially I'm usage the we're where here not 'XX. the you capability And of into each the turn math in language progress to on curious think for their as sort just learners you're I there, math but Duolingo sort

Yes, a great question.

we things quarter music. as the Duolingo you put it's all just in we really math added growth the into language courses our main means is a mechanics about app, work did that main said. So And what our -- and to app, yes, app, ago. that Basically, music as context, into of and for math

by doing streak complete can even leaderboards, cetera, you your users [ math Math lesson. et and compete the a ]. in musically So

or by that. they're learn our are obviously, math with yet the why language been a for This for happy app. as app are we're We're known our did our X courses, these and if so main come as music among like to belief added a But language much learning than language -- months, than free obviously We're of very well largest in if much music courses mechanics math results we that's all smaller the can you terms is even even we're the basically, so courses. the music. having the either worldwide because only well-known not is smaller the far. They top app, So or app. already where that of it's and math DAUs apps largest as a or case, growth

the that our and power shows platform. -- So of just you

language see XX years in a get smaller we're won't though for is And not The for the to we learning. will us after the better learning. sense language XX are music, my even so mean whole few I mean get Now just years. results to there a to bit. are growing this probably is much are oven, that's that for learning for It these lot year, than took it you're quite these results hope years of we the still impact. take happy far, math us so we going that true, us are there have had probably language and things but I but a the it take these with. they very much than launched --

language courses years ahead. learning, are way rewind So XX and ago at just look these you if you

So oven. are in the happy things we're again, that. these But very still with

Maybe this that highly But moments -- 'XX anticipated, better those moments had maybe this up say, into year. more and got you Maybe week -- sort forward? that any you're be to to Obviously, one of strategy from by the a That's creating in applying success qualitative, to coming chance, helpful. viral moving guess. that of let's of yourself this more be bit you with came past are that strategic. being of over some some talked or I moments about the you've And learnings cultural is a proactive release taking position that some that large and Dune for marketing 'XX? try how seemed you've around in large

an question. Yes. excellent I mean it's

a from things, -- of it just that comes just we control. can't true some I think I there these of it's We lot is inbound. mean us. get

of involved, a happens. That planned things it's us, others, to but just said, of just other where the And much, some We control, position can't of in -- comment team many what that blue may they nice were where think our to on, TV many things of we awesome shows movies that so and that come that are very has or even were they or that, we brands knowing marketing control out can't fully us. were our We at just to gotten the to though marketing team. like these that seem what get things can. by good

just I we're to surprises, the -- plan viral I terms in don't there year I've that. so of the I seen doing robust of the going plans. we have And moments. rest want but for to spoil continue mean the a mean

and very probably feel flop, try all We'll will not but Now work. good some that will stuff some about that. will we of it work, them of

just So the in really team zeitgeist. has I gotten at being think just the good

CMO I'm so our And me really usually happy that videos that. things My very awesome yes, to funny has show always because he are preparing. they're meetings with with of

next Mark Mahaney from Evercore. And the of comes question

X ask please. I'll questions,

update as growth First, new U.S. how terms a the Is margins. business your growth disclosures are that of in secondly, for given global upcoming you're most growth something the They on with in in are bookings the could whole? into this lower areas guiding growth anything and U.S. bookings requirements business you've your with this like to mature structural that? year of so that of or sort Is American the change -- of EBITDA there terms compares cost for in Any interesting than XX%, that margins incremental the XXXX. provide or what Like those did bookings read any there you of compare very And robust in North the on on of intrinsically markets, average. that? to revenue how in the then past there? does you

Thanks, Mark.

long-term towards our in at comment make So year do margin. every above margin. that, belief is in the To be terms our look, the want margin to have progress EBITDA -- adjusted incremental of or you your adjusted we long-term that guide, to incremental

And we're that's so this what year. doing

talked profitable calls that we from usually profitable, year, margins are year their we of go first As about big incremental on some the that jump lot higher. in make a kind being a our to in industry, materially last then respect where companies not

towards long-term then down And usually their comes that margin. back

think new there. don't I So we're ground paving

I think normal that's course.

reason music. the to in about investment though, is is adding have our because our function. core excited want of we we're terms R&D remind and I we're Like of of in just markets, just a In that ton and math us And you. that ahead runway why

opportunity really going to invest of progress every there's we're about in else continue though excited and core make towards our the to year R&D ahead read us, so we're And business to long-term kind and margin. it still regard our than in into nothing that in of other and

the remind you can second around me then disclosure Oh, it question? the And was geography. of

is talked what historically, usually the So growth. about we've DAU

are so we're meaning rapidly, they And and we can over way call are quality looking rates or countries, U.S. the conversion consider how they so and trending they rate high quality is growth still time, based? cohorts that what us free from grow to when close close. that not? Broad-based, some those is European broad to or And are the like look we those -- and the big And we countries been. growth high what average the right are at or users then have at for globally are see paid those to

QX still high-quality. in and was growth our broad-based so And

improve interesting U.S. markets there -- do. some markets? can countries you as But such on I is need our would growth want English. organic showing a you'd be outside interesting people a one for for -- are of earnings impact material then out Duolingo? of such multiple question. have here language last Would -- in international generation the out can any And call particular call to know to I international you English us particularly

X -- has Asia Europe our and of then well segments those Europe. and The growth. of as Japan Japan, really into including a is of robust the in shown segments. grow We've Yes. have then Southeast and And one countries Both particular, nicely. grown world nicely. we kind of in big China lot bucket seen really

it's say, a past to one grown hard just the country, been. how are nicely I'd it's over year. single But particular given So those out have broad-based couple, really

KeyBanc, of is Patterson be Our understand and not video. next from I on driving to going who comes Justin question

for also while call allowing marketing with cheekily into to I'd myself Luis's to like the me echo in insert to this team I'm thanks the transit. avatar

you a Luis. picture for and big just one So

growth user and think the ceiling You've a now. you canvas a just you at How past with much teams, out more do much for just had year over the go the product test interface you here to have new grown larger feels broader as you the a A/B base to like also over and the much that's improve to KPIs? have have against, opportunity you It DAU look year.

-- we're -- an up cylinders. kind you'll firing faster figure the lot that a teams -- try end we question. us are small all Yes. on you'll excellent approach It's out tests portfolio A/B just to a see They grow to how mean they're of really -- what see to where that are -- see a these have I of lot. trying dedicated us you'll compounding

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Chris from comes question Next UBS. of Kuntarich

Plan should learners learners? that of Great. non-English XQ? English from saw Family Plan strength what more as Can far as maybe adoption about the the unpack all little talk just just or how just we color can a Family And we think seeing about you in versus -- some are yes, bit in you the strength on you

one. I'm last happy jump you Luis, and on Yes. start the to can in then

resources talk the we adding the had that doing when been of that a ton on were it, a really did as as subscription it's or a it, testing bucket. grown naturally released tier What organically. was A/B excited about Plan, is what's devoted normal about and haven't and we strength in we surprising actually Family we that product So to taking we and our

about QX, so fun enormous organic into So strength it's when for of we demand just XXX% over a product it an product. grew that because year-over-year, talk amount

and want to Duolingo friends family. You with do

math seeing with specific what just to It's why that beyond friends a it road organic resources and lay just of do Luis has a making year, natural more the to And it about than devoted that's talked this and and year, that music generally, could more fit. making to social, like maps more gives out above engaging which want demand I family. grow experience. other already You this kind that nicely kind it platform. confidence going even of us But really it in we're we're have can't

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just that -- Family in but see Plan, For example, dumb. your were children their is just couldn't you we was That name. just was solved that really the a there bug dumb actually

we has U.S. learners countries. from penetration. learners of subscription Plan. rest difference with English So this asked of about mean anything there's the the a in is adoption or in making higher but the come us much I I product. And it usually, just see you the see -- are in think we're countries. of just Family between going robust terms different wealthy penetration subscriptions. versus our wealthier generally, that, starting Plan English we to of Certainly, higher more of don't terms not less And Family

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about Got think Any sales it. throughout spend shape of and follow-up. the expense way to one of helpful. Very the marketing Maybe marketing or year? kind just

Yes, sure. for

you things sales spend. I mean, marketing in expect and general, X So our continue from should to

dollars, grow than first bookings. that obviously slower increase it is should The should one on it absolute but

a year. be that would anything year this And perspective so historically, I don't that than last different think all seasonality be from there's going to

spend you typically past roughly That's it our sales -- summer in see for QX example. for in has area. the go marketing years. like think couple campaign, and bit But should a time grow back-to-school of usually I So us more seasonality frame, as the the should

Curtis camera. question next BofA, our also be at who comes able And not Nagle on is to from

the Curtis? so Did I Okay. don't see queue lose last question. in that we looks our like Curtis anymore,

Luis to to it turn back I'll wrap up. think I

forward Debbie, and just Please Well, quarter. to speaking all thank you you for joining you, to next lessons. and thank your Duolingo we us, do look

evening. expect to We next Have quarter. have a a streak perfect you great

Thanks, everyone.

you, Thank guys.