Duolingo (DUOL) 6 Nov 242024 Q3 Earnings call transcript

Good evening, everyone, and welcome to Duolingo's Third Quarter 2024 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, we have -- on today's call, we have Luis von Ahn, our Co-Founder and CEO; and Matt Skaruppa, our CFO. We'll begin with some brief remarks before taking questions. Please note that this evening's event is being recorded. Instructions] [Operator

we'll which statements risks are that and future and some performance, financial subject make reminder regarding forward-looking events uncertainties. Quick to material

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

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

guess. Hi, everyone. Debbie, Thanks, I

than You to get into him. kind I'd our details grown me we next Luis XX% just quarter? our at judge this since well especially over and the just me. XX% them. asked lets usual had thing. And year. It AI Plan product in just eye quarter, into products a excited. So last Family that do and year-over-year, much. we new and hitting users, look investing of good did stuff. Don't We How minute. of year has generative the help He'll goals. character to more this I is we to off? right? the efficient our yes, cover and worry, I He's say. improvements we're we're cool, up at we're and stuff, know, Pretty running Anyway, guidance. active important to going that's neat, pretty did Pretty here in Max the future, Duolingo Yes, me, year. of grand Daily subs XX% going okay, automation. Matt's the Call call. done. Over launch with get finale, won't an so AI faster. guess. try we marketing. about sound feature that which, Lucky full end did mean, this roll to users probably I'm more And compared to accelerated this learners me. let's social feel Maybe Matt. we better works. an and to all did pull the expected with. metrics. I good, Since be in raising the Anyway, So is there. How Lucky chat for last Video animated Oh, way us

Thanks, Lily. I'll do my best.

effective through about and the of internal like automate Call be in step processes Now Lily. took an We're impacting more like minutes you because features Luis. make using more to only By for we we generative using give the example with place. to creation. and of Lily put wondering the that that and video how Video to our Well, AI may is it create of way, infrastructure why product it tools fun, we And our aspects wanted content engaging to X business. positively had we're more in

the on Now to numbers.

came last and posted XX% by a lapped an EBITDA comps. highlighted, XX% which tougher respectively, grew even margin XX.X%. plus And grew impressive was of As we revenue quarter. year's and XX% we're considering DAU as we Bookings year-over-year, QX is Lily growth. lapping year-over-year, strong which adjusted XX%

in This Duolingo the strength was Max. we're driven seeing part quarter's in by performance

the available expected. Max is faster our than Max is to tier more Max end DAU, and rolled about now reminder, to of AI-powered new our points we now Android, a executed by XX highest by well expect or scale increase and primarily subscription roughly so includes and as Video feature. We year. we we half the As Call out will it of on our this users,

with gain that more Video run also down strong for demand eventually We Lily. into a of find bookings that onetime signs when predictable saw settle features, rate. we early a We Call we introduce see new

the driven increase bookings this Some quarter Max by of effect. type this likely was of

ahead, full bookings guide Video our year guiding full Looking we're of around New growth our guidance. and Call's to our into about experiments the year. and XX%, respectively, And promotion. account impact We're XX% and Year's estimated raising QX revenue for takes

decline feature. basis its gross GenAI and XXX Call higher which quarter-over-quarter margin, Video Our due amortization scaling points of QX and costs guide to Max is in has to about sequential related

dollars tier long-term Max Duolingo to our target our than XXXX, higher also of adjusted XX% continue towards guidance adjusted profit margin We're XX.X% at range roughly EBITDA tier. EBITDA. make to lower progress reminder, gross which midpoint, yields gross XXXX a points raising X than our more a but is the As to we as Super margin percentage XX% our

looks million shares at price. basis G&A. ended Luis year. of net leverage and is expect to the XX.X% XX little with quarter-over-quarter similar midpoint dilution about in offset like adjusted for diluted using we fully a Ah, operating outstanding for approximately than We last the points For basis more And and our XX.X R&D, close back. good points timing. quarter QX, X%, end It some S&M, reflects of guide deleverage slight of XX QX that's EBITDA by

Lily to glad me. for was cover I'm Matt. Thanks, able

questions, and Now some Debbie will let's manage the queue. take

All right.

first Sounds comes good. from Patterson KeyBanc. [Operator Instructions] So at Justin question your

from earnings in faster just baby with who's you [ puts sub to ] walk will calls. project crossing right think Luca started an I period you probably subs subbed and million in here, Lily, Nothing for with his nap now. But X- to X-year year you're current out sleep since than since Luis, XX goes, him next XXXX within if or how even about about monetizing. trends and I your

apps more about to what it philosophically. expanding Would million Is about you million, new next does the hear just ahead, think you marketing, XX take monetizing? really as XX tiers? to Is that reach you're love So for that subs? thinking how price add that

question. terms a there's to a been generally, well. few because we're we're going things what we've that great doing monetization, Yes, And I it's of doing mean, doing. really working continue it's in

First, users. of we're growing number the

this paying users. nonpaying Just is and

As of for of we that everything marketing. social we subscribe. going that, do more them be grow certain that We're we doing number a making doing the fraction our subs is to that, also grow because engaging, product

years. So and saw, between that last should you users. for been growing, the increase XX% And as DAUs growing number of our X XX% are really

do. there's So a number then to users. at better we these going there's get just things that converting we're that. And can And of

going have offer of to just give new purchase Max. plan, subscribe. where But we when the more the Max, feature to we that For Video for also interesting lot or We of one, bread-and-butter basically to than to offer is English in our they're stuff the users interested very which particular, a Max And Call geographies going with our to Super. with we're there's conversation, is that what in makes page the learners, be where think Lily. improvements practicing

going So a kind of that. be coming we there's lot for from subscribers of the But it. to think philosophy generally, that's

right. All

to & Ryan Justin, question, go the thank Needham Co. we're next to you. from which is And going

you just sort learning of or more on talked intermediate letter, to driving of that -- sort the talked the -- initiative Obviously, about on shareholder using the English a platform. Maybe in higher. you are now great Congrats English Luis, this DAUs X about learning million platform of quarter. sort learners of the for the

that languages I months you're within X it ago sort you sense most last has give focused maybe a made on since you're you've attractive sort Can progress been million, of seeing of the think sort just usage? regions been most X pickup pickup what what was or about sort on or near-term that and seeing it on months of us now. X of, of

for Ryan. you question, Thank Yes. that

English We're the XX% XX%, English as a by content. to for now, the is revenue so saying, from we at major that started us. haven't we're on always the English. advanced that with learning Duolingo, you The underrepresented language content years all the of we is people We opportunity working we improving broader ago. amount of major outside learning look about Duolingo, the market within because is of pretty who there. And because English. are that because learners learners of a it that happy for So And obviously learning had in if few content opportunity have majority is the content going are at been a spend, the is so is of if reason or there's at look there. we're significantly it reason that people from there, make less but everything, than intermediate English you historically But we who very the least are continue are improving

the they English where when schools, app, users. placing because the other unlike when of most that English previous the in they a we've whole they languages because it's is done franca they knowledge some amount to most other beginners. lingua in in -- come come app, some a thing worked usually world unique learn people mostly they're we've countries, the on lot for and have language that is The to

been really users that of bit. So have place. And on the content product pretty feel good working terms to the we And this do a then placing quite on and good at in we a point, the also the right placing. of we've in job

we and good, the seeing said So like letter. we're pretty continue that feels to going in growth

users marketing most growth in comes of comes advanced active mouth. most English that's of mouth. We here cetera, word or going growing et word call now that we're the intermediate our is be get in mean our have think out I one from X out, doing word some We million over to growth thing pretty but daily content. to fast. And from of of to

that friends. it's super it. growth tell fast. People it's cheap. mouth is just for But don't of excellent word pay Now their We to in also have very not

take around to courses historically people there expect for advanced -- has hasn't that it's just really a English, that expect English and because advanced we we our Duolingo intermediate word good are to So years of that that really going or get for speakers. thought the couple haven't intermediate

going pretty we're kind opportunity. major that's happen, but a to that's So very and excited, of what's

as the to little than Android it a to bit out new more a in roll user Maybe quickly maybe continue or you're as expanding follow-up, base the have you like that past. you seems maybe starting functionality,

been to new the for users in seeing years. uptake of you're are past converting Just any if the on the and has in couple functionality how users curious of those differences terms Android maybe how relative

faster that. something And Right and the example, adding for on, Android. working Max that faster. better are Android. at getting we're It's adding. the we features way we're I Yes. call behind on -- and phones, usually, we're iPhones then months it, Android usually, where we X we put X do to we mean develop, That's on on all to getting now, features first

Max of the things that other as Android One languages. the Max It key power. the that particular, usually, This as way, expect is purchasing That's users. are thing by -- industry-wide. as is mention one just learners users is case feature of the Duolingo. -- that usually it iPhone we're don't seeing is is much to we just we not people that's features have seeing But who about just English and probably lower in as they that monetize are using Call, twice learning in interesting our Video are well

expect, we really to there's than learners going Android, more iPhone, has English that because there. uptake good expect particular, we So a be in

Okay.

Aaron Next Seaport Research. question Kessler at comes from

through learning. strong questions. strategy last of you make engage users second, A more go the of Maybe then benefiting just international Can or on Japan from couple intermediate including with kind English them a country pretty you of quarter, managers. mentioned marketing just And that? to of follow-up the the growth, think aware kind as I maybe

that updates on international quarter some any well? this as Just of growth

thank you. Yes,

So type very we marketing. of do a specific

bread-and-butter particularly It's unhinged. we English mean, not owl of our to that people is applicable content, not going our breaking we're that. seen really think type do You've convincing social not have That the is dances I right? pretty in have things marketing, and intermediate media. is applicable well. marketing just doing use be And applicable. What is It marketing. We we of influencers influencers. countries, lot and we a to -- pretty so doing the works actually having us do doing

people that paying, even videos this do well. For us there's that without very example, do,

Russia oh, stuff, it's went to trying many, go views, like, and For was himself who and of many used just really do that there And it got actually a it. lot he wow, just a a out of to recently millions learn do of for efficacy few because turned and stuff a to of type that Duolingo good able get for recorded like was example, can guy Russia. months he you to then to is views That video around. just

leaning our we're marketing. And of -- to So of in in be that's the terms going stuff type okay. on

the which reiterate for So going marketing, the what I'll one which in about that That's expect in the advanced again, to is has answer. us. worked for that said around that way we marketing, last well I'll previous thing mouth because the of we have is say what word content and intermediate to the but main get we're I word do once through so

that's going the to So be probably way. main

happy So for second for with of there's international very international your the terms far growth. results that. Then in so growth, question we're

XX%. quarter, If now, right ask about It's range. you we this reported broad our DAU growth

So every is growing single country well.

is a growing. more countries are but growing every some little -- than others, Of region it's course, basically

to ones. to Korea, in have in a Brazil, marketing managers Japan, China, cetera. et about Turkey. add in We Italy in have add number And and new We're we of about countries. We're ones country on

and typically our our humor well. a lot accounts. and there basically they X TikTok works of have We of in and kind it localizing is then what hire help that with X YouTube is, and -- individuals our we them country, really And or

country every has we've single this, it And worked. so applied where far,

Okay.

William Next question Schackart Blair. comes at from Ralph

Luis, on maybe the just macro. get an update

see fairly of XX-plus DAU. growing model of sort discretionary, you're Some investors and percent might this business

I'll to growth a So sort you next. can quiet ask and these can, maybe of bit, think since so rates. at there, you held model why Matt little the has if up And of he's a on just why kind question, think continue well you over riff grow you

learning in mean, number is the general, grow language the to we lot a opportunities billion. world see still I a are in we're X about -- people most of -- in who of

We lot have users, about of so runway a there's XXX in there. million monthly active

year, last to we XX%. to continue way, our just I expect so time, growth rest the we're certainly, by going said for be mean, the around like DAU the And growing. we've of

So we're to expect just growth. And we to years, said, going I like to X XX% last the continue so XX% for it's been strong happening. year-on-year, that continue

we Over too. subjects to term, the longer other helping, expect start

language but start over going is more are next that contributing this and more expect learning, we to and music math years. So the few

pretty feel in respect. we -- just we good macro about So that

our Yes. monthly the actual just you free, basis, entry-level or ask addition And And I'd expensive for to question, Duolingo is Ralph, just me very price that add the so Max. even a is before not is a helps. Super then Luis that on subscription

So...

your Great. reinvestment model's kind versus margins, And then letting framework just maybe, scale significantly. Matt, scaling on for business just Obviously, the of remind opportunities. pretty us of the

a and about you But off margins incremental thrown margin. You've forward? think how do lot of going cash

chance at years No, question, recent that over it well. to fact most the our we it's kind highlight bookings just line gives great top me mean guide. XX%, scaled I including a a and the incredibly X last have of the CAGR is

we million at just While midpoint, EBITDA, and X so we've XXx EBITDA. QX in $X to had guided the ago, adjusted done of adjusted we on that million quarters $XX.X

nicely, XX% we're feels growth and our that's with your that profitability and both foremost, feel scaling we're XX%, really that first and incremental long-term above opportunity. and to of we we But like target margins ton reasonable. like around a it there's doing point think of So

question first million subscribers. you to was get The how do XX

you -- macro. had question had about We've a

of lots ways DAU about opportunities growth. to questions There's of and got lots You win.

to that going continue is of into first, our through invest, word of because to to back we're kind So grow, primary mouth. way R&D

for going try profitably a scale to growth, So as continue and, to well. but think Ralph, to to I yes going continue we're we're it's invest to

Ralph. Thanks, Great.

Smilek JPMorgan. of comes from question Bryan Next

from when a start understand funnel? differ cycle quarter. just becomes go XX% you I when does last they how just -- to XX% of conversion like from to the available subscriber guess the to that DAUs, us of Can Max help on versus I And up Max, guess available down it Super?

way been Max. our increasing daily and active of couple a to it around there's is -- adding to -- we've we're say. point, We've Max, At more yes, courses. by this increasing more of it. we've by users XX% in been the The access countries So things have way, to

have that the By wealthy is by XX%. One but to that, bought at will mean that is they be tail and Now it of buy the point mainly long countries, we're say added. adding important thing countries, the left. to we've year, they access the doesn't it, of somewhere between it. kind end about way, but countries the XX% this All that's

funnel anything. to the terms seeing we're lot time the are a subscribe they of of in Max how Now people is, first who buying

Max. a they So were And just they're seeing we're Max. people go to who -- upgrade and Super were who free a to directly subscribers able user not of to they're bunch also

of seeing we're So both these.

bit feature of a early it's features some new, months. with has because know for key And in the of math. Max the Lily. feature in been going lot really of that where purchases is Call are has And around this The to settle is very to kind a unlocked exactly X of feature Video the that particularly late only

what's don't really that a to vary but to exactly I going So this happen, I is geographically. know get going sense

the guessing, not the is like better. but things the there that how So for for U.S., it in there -- will do could that poor usually -- package it's this because where English pay whereas pay countries main countries, some a where is package Super converse going convenience, be be will learning the don't like to Max -- main is for people be they convenience, to I'm some because package the be learning countries, that ones, particularly

more We to have be that's will Super I we'll so exactly And how packages happen. but countries packages. there cases, what of yet, don't know think some some going kind just Max be where it's actually may than

I growth. more, guess if one And just Awesome. on could, I DAU

As growth? Or can TAM be into it I where more we English are to us walk you mean, 'XX? talking DAU do the the go is growth strong the in blocks I of Will mean we through expansion learning? from? in just XX%, come XXXX, more realistically off coming think building you going still non-English

think we we're far very that, nice to just regions. I growth there all mean country thing our from no see really, growth slowly. It's of where going they're growing about pretty growing so all fast. I are the is kind is

to year, think next going I And going growth. -- see be continue more markets growth penetrated layering English to going we're the we're in more I U.S. a like think we're So our to seeing lot

about of So the And -- that only kind believe just not that learning. XX% that we in it's learning of we example, not the really market fast billion scratching They in market. growing to to the there's it's United a before. the language X reason people mean, learning. addition both. And countries, again, are going were the users for who market people be mean that, X language. people are is I can we we continue is in learning, growing are our some States, completely billion for the I weren't in

don't there's that. some just is that that nothing us -- anything is see or we like anything So to we pointing see cap like that

question Next Barclays. Sandler comes at Ross from

Great.

is feature, Call you because make just makes COGS on recently. subscriber of Matt, level job at we the could economics is just And go you you guys. I margin. way. which got versus for So a said that Video But that it's Nice But to I right, podcast cost? both that of unit sense. Max guys And were of to just think the mentioned guess you the going sure kind question by the had you Decoder overall Luis, those accretive up

like now. guess, XX% Luis, then importantly, AI inference costs And I down more right in are

change that Lily, rollout that and cheaper cetera? subsequent about And things in how Video Max How does so et thinking cheaper that with gets future years, are or either as more like the rollout, the potentially Call you broadly?

the answer me question. let question answer and I'll let then first first, second your Yes, Matt

It's going So down models the also lot be And of to going about to is down. case models a we going naturally cost large worry that's costs. query. expectation. for I cost will large mean going is continue That's cheaper because are our down. yes, language the that directive continue optimizing have to have not that spent time costs ourselves because going only moment our teams language not too much don't at all go the to

you over or we that if to going the develop we're LLMs ourselves. can, optimizing all maybe that to -- just going time, down not and So in much features the best see are cost we're start going something,

So cost believe we that really will down. go do

What it We even at mean, country good do like I some to more have is -- sometime the certain year, attractive allow going reasonable at price point, India. But in don't price in will States. things for like it cannot it Lily offer price. the that of we is think will in with the that Call moment to I We We have that it India, moment, United Video prices think countries. at for we're for a next the us the that be -- think but attractive. price will the pretty at offer probably, a don't

just to to offer in it people So allow countries. will us poor it

exactly exactly in learn the to And to are Now are to people about ones learn who English English. more the that those their want conversation. so is who thing the ones poor countries want want the people practice

unlock, this in So pretty going price. is the major to a think decrease we be

Super. at And to price. that Yes. a Xx to add Ross. that first there had And like We price the demand we for was features charge launched higher Luis for that us us Duolingo that to Max example, part, the allowed follow-up enabled And just of it's price. the U.S., said, because in belief on GenAI roughly a tier to

price, to that gross have profit plenty have of play when dollars with. So Xx you you of

gross But definitely flow profit and to margin Super. on making for The in set dollars, free app we're -- cash gross we the adjusted And EBITDA when -- Luis there's dollars for a LLM addition make calls. that's was more. Max store subscriber per fees, the because is so margin the of percentage than podcast, lower more

point Luis And feel good still to it. The about applies price. we making on cost also so was that

with We wonderful that an a pricing example have something costs. still the on charged just or of you making the haven't optimized the this the all saw beginning call. and on like -- that team of way product. We And

so well. we'll help as margins will that And do and time, over that

Okay.

from question JMP. Boone at Andrew comes Next

to wanted to testing base product those now user kind X as base behind you. curve, guys about I are gains more testing And product is go I offsetting is pace back retention but features? whether doubled you the Can of and what right? basically that of how testing? that's users tests and main on X a the about years, about of with think you driver platform, have what if testing you faster so for think the seeing years last given and Or do faster the that's larger whether that's and today of I more talk guys also

so we're running increasing, news tests The that about Yes. of tests about the running quarter we're the And success quarter. are funny XX%. exactly running per -- for is same. almost the it's is good number The a It's actually we per thing. rate test is more

we that increase. do it succeeding, has of I to it did increased XX% wanted test to by whatever that to we it -- And what chance mean wanted about we like metric do, every So run succeeding. a

good number the for pretty have So months months. feel the X feel visibility. tests. next -- is we that We number I about of of terms up we and pace over about about the the the have we pretty visibility coming in of good have X next for of increasing, things we that test have things

do enable speed from up data to Yes. just to the And is other that Andrew, to more teams like try the themselves, time to experiments own get to their experiments analyze frequency, would thing time rapidly. to the I run experimental it add faster,

so -- to going quarter, for this we're run running going We're example. to -- of to sort those. run some we're always And trying

we can So up. things think speed

if is for And recently Adventures of then driving, so can Calls, if maybe terms Video what testing streaks is similar of benchmark helpful. question products, have framework a that you within a area about I in terms about the successful again, as I think been of guys the launched That's and that curve? maybe leaderboard what products surface past versus in or think

what it's main bit. taking cover next hundreds, app run have -- how many streak, and things I a little The Duolingo in we and for guess we the a thousands, want we experiments areas that so a there's example, We monetize on main that working that months. of be the going back to have is to we related know way And to feature I we different improve. the the on maybe is possibly several more is to step things that are improve. number better. area streak want basically to is the have want we app better. make don't And we -- for We depending and way more teach want X more engaging. are And we to the it to on up the something want engaging, coming makes operate running

the are to from run experiments. better. these the they're of of And to they're kind do the And each Call, have bunch roughly is engagement, that say last teaching continue those people same. teaching of the on one with a is Video that thing usually and to running being better, main Adventure number have areas monetization, like we I'll goal and -- teach so better these is that of working going of Features the

working of of one on we people them. about number So equal each have

Okay.

Nagle Curtis comes from BofA. question Next at

product in one, XX% of I the of first versus the up guess of terms the It maybe just ticked features little on guess contribution new subs. a focusing Family bit you said, I in to Plan. you've of added some at, think evolve or X? do in of months? say, visibility the product, of next contribution what's can over you this increase let's just -- think maybe tier And of XX to terms trying mix, been where the total addition those the I

things So to added things that weren't things we've couldn't fixed Plan better parents the and the the XX, in where you're right. Family their some as One is for Family features it we've Plan, kids done see bugs, name. like we've made exactly under X or

can. they Now

what So visible. that, term the of features in making the had most it also it majority visible. The more of Plan, the more then stuff Family The the over we've more of long we've done in like the are help making visible contribution and is that made just terms probably retention generally is will but and contribution. actually it good, has

of that. honestly year, be say. up, to over penetration expect I to I In it but continue next I just the hard exactly very know speed. what mean terms don't the just don't answer I what at to the will it's going know

it. Got

And we follow-up, Okay. But -- it you're think user, for the touched the was resurrected quarter, just there. maybe shareholder I I the in it. progress focusing the last letter. a missed making don't which and was focus then the

measure whether in contribution So how of to do in how you XQ look? terms the relative to subs did XQ, want DAUs, that it, it's or

users hiatus. opportunity to top pretty look basically or back Resurrected coming way time are us. are the is big in Yes. for brand top as a users on, either What's coming That's -- app new that at that performance. long happening after funnel a are if we of the goes users

So new one is users.

new. app, users. Obviously, an all launch users resurrected one's you your other new The brand you're are users when because of just

that than goes half of where point the users. time this we users gotten resurrected point, and of is higher funnel have top your to users. At the fraction As of higher are on, more top resurrected the a of funnel the from are

natural back day, to a after a -- product. of hiatus new for users are that's app coming there a users. And number the long than larger So on given just a are

where United also haven't this come India, for when of in longer, haven't maybe course, we've per too of pretty versus is, case. fraction resurrected varies like that operating country because is people opportunity operating penetrated where been we I long. mean, in how users States, back. been depending the higher the This on the a on worked for much for major there's just a this Of we experience us geography a just

pretty good that, and of be a going So we good feel about area to that's growth.

I understand. that is even That user to which left, think, a Usually, is back. come users with ask important rare Duolingo. models, I comes times leaves days. think XX stopped they thing but other they user see well, I just a long themselves it is lot usually resurrected thing. Duolingo, they about and thing that years Duolingo, funny The stop pretty never Duolingo is stopped, when haven't been this a A of The X common is thing. And people has them, that They when users with will most after later, using subscription they'll these just don't the tidbit. mention people about should for they not how back. months see case back. or interestingly, Duolingo as is come later, to XX a et never users a for around is using not you an that's though still they common I why days have may X know exactly interesting answer when cetera, take it mean,

Davidson. from Swanson at comes question Wyatt And D.A. next

in differences for like seeing any roll any trends you're in in what Just maybe you seeing are changes discuss terms retention Super then as out features? you additional versus retention? of retention subscriber Max? And plan overall you Could subscriber

the overall on Yes. enough it really we on since The to point. No, yet pretty That have or last is Blended the scale could Max retention how data that's the time. retain. at before. actually don't over appreciate quarter I We at going know about talked stable to change platform question. hasn't retention this last quarter changed

be LTV that where the enough comfortable that's run Super. makes data the know stabilize stabilize. top don't But like we have to line just that know to where will rate exactly We don't feel superior like going we us will

know watching major so been all there's platform far, the changes trending. you it's and retention. But no we're how on let we'll So and

Arvind next And Ramnani Piper comes at from question Sandler.

By the but this was quite cool animation. enjoyable. Luis, way, really I yes, Lily I really you, was to -- like listening --

job what, and can she's of to part I doing she's time, job, know You and just my Over going now. do more retire. more of my

earnings and sort job that, of was to several most I her core The see enjoyable at part had quarters. in like of one calls just probably the of least enjoyable that Yes. very

Good.

Yes.

growth the at should think like the quick it should lot is, because and there than like about really, think of gotten about how impressive the like way a mean, a to unusual term, in we've have it's revenue extensively normalized big about long That's a to last DAUs, DAUs long level. be DAUs? years, past, as term, X we like for that talked I was and of talked relationship think factors higher we more kind really growth? we Just on like I with But longer a investors, focus about some question as comfortable I right? think point, a revenue

sense the don't for exactly mean really it a answer DAU been to XX% X is where has over growth every is little our my XX%. between single question. I quarter, know that years -- somewhere last I to how

in I my mean we rest least are strong is this also our while improving going won't saying a word continue sense the the won't improvements we will grow is for really to -- a forever. of that which it more Now planned. set have be features. or growth for are And because just features of DAU way year, the adding XX%. It But and the main good we of seeing we forever. at to last obviously mouth last just

what that sure what that anything the I'm I don't that. while. question. I means. be and know state even don't So you have for But if, steady answer case know will to know how steady be, a I don't that not I will state about think Matt,

remind No, just Yes. to have that I perfect grow me that ratio, a the we several can that I do everyone ways we gives not But users. have chance think Arvind. just don't

or we levers back. have already then pricing. shift paid to would the the I lot that paid. I you, a away month, experiments vectors throughout coming of conversion about to then experiments talked resurrected above there's bore of then DAU but to between revenue many and plans, hundreds environments. have And to that grow then to the really platform, XX%, that growth we where vectors sustain give retained of a different grow nice user many users a platform there's there's There's free has from retain funnel experiments, has from confidence new have won't say, me subscribers free lot from we subscriber users. And can we users So better, for Luis quarter been And there's and in every mix and just say there's that

Now I agree with Luis.

We have a users grow we'll nicely some bunch But a able time. ton of for that of lever. there's I be think to beliefs

for that's time. long that rate feel growth revenue stay why we a strong comfortable should yes, our So

Duocon, compare we're follow-up I like was really don't mean, really I how from enjoyable. question. Yes. other, looking the don't insight does a right? one we to your really one Day product. just Perfect. Consumer mean today, your have And Certainly, have -- I get we But at investment of any

kind Day any Duocon from metrics year's there are this year? can versus -- so from like like incremental this you or And share of anecdotes metrics anecdotes? Any year versus of or kind a Consumer last

particular? in Duocon For

Yes.

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what So is practice you that, is, you conversation. think -- about and what that -- if just

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right. All

from question of Raymond Sklar comes Next James. Alex

per term. or I'm the a session on Luis, period, growing higher Max greater to or longer has if I terms kind of now early curious so notable time translate terms in there's of you you up And want Video to adoption launch, like conversation. follow limited the that, far, might retention of usage. any in better had What been Call uptick street I trial mean that data that told retention

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calls do spending in or topics whenever more of of time it the the see realistic or with that they're number we conversation So the are have that we amount better. it increases make we'll

conversation we're a better actual The going to be topics. getting with other thing the lot is

if where, be. currently is going happen But -- happened have for call should about it's how you that's to What world a a right have that is Lily example, election. lives have talked about should news now, doesn't Lily talked example, today. But something happening. in should the months, in she For her, that really not -- few today that's

pretty good think question. I So we're about that. feeling your that answers Hopefully,

from a And outlook? standpoint any there. rollout? maybe approaching of away. month Year of in No, changes you Matt, have planning a follow-up year color in remarks assumptions little promotional embedded still this Any but timing a are great Yes. kind to your different you, that prepared New season on holiday how a Max kind referenced you're the for over given just you'll a wider

X bit Yes. January. around launch our No, in always obviously outlook the X month a year uncertain the the is it and of has and of we days promo December fact that the then

we and in So are same do things run them differently, usually in that's tougher start past. We in to promote running bit been then ways, the we'll experiments year to years predict. it's and as early those a December to launch run different -- it service Those them. every

incorporated that's So the that's all guide. but into --

Shweta from Wolfe Khajuria Research. at our And next comes question

try is international One on I'll X, please. guess markets. I

If Korea, in you managers had you X post marketing quarter, mentioned as those and adding success in France Japan. last your talked about

That's strategy. managers? So second marketing with question on you how added your is countries that marketing tracking? And question is then have the more one. And international

anything seeing social ROIs quarter pricing to that date? seeing that and this comment have media platforms, the you're seeing you're on if -- Anything you're quarter in on If could trended over how past you? in you the for particular

Okay. Great.

for like So is weeks. recently very longer, Korea Korea. international months, markets, is managers marketing a maybe France added a and little and we really yes, France And few

follow others, than working say It's it's ends longer we are to is it we that It it looking time just, again, may after up So working. a already up very but good. it Korea. every playbook, in France in few in ends some France. take a seeing the countries early And working little months. too

are also, Italy Turkey. mentioned, and I add We about like to

have And we're to adding for we others going be year. that. considering a we're that So next doing few

prices, media we don't known social like that. videos a performance cetera, for et like for Shorts, terms mean, little stuff. that majority you said the social pay of don't TikTok marketing I is mean In do of things but strategy, vast YouTube pay our social where organic. We media et of our media our I marketing, or that cetera. bit all the for, We we're

the cost And the of each it. it, that's majority make to So make those them, hundred of a videos it. it's like and of one is to cost of the dollars couple

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Okay.

Next question Mahaney comes from Mark at Evercore.

mature growth as U.S. or revenue That's of in or Okay. market kind Could global rate? most terms of is as questions or MAUs your I DAUs, of with The run by growth question of bookings the the you? that of oldest one. pretty consistent that a couple still market

sustainably of to of in seeing of those it? And greater at Secondly, now. pieces you access want to now forwards? ARPU said early But average but ask any going Max? grow you about an if lot cause disclosure and question. did and just to base those what of I covered factors that Are you're the know sub, about of you I I'm there's has you're percentage you Super sorry is Max. ARPU of kind I to Have about kind on. this moving kind big talked a average then enough traction it per user for adoption bookings third, provide traction actually one And of of anything what it Matt, seeing for kind all know what

me acronyms. with take -- answers then Matt take first Let anything and Matt the X, will

Okay.

disparity a the U.S. are overall the the it's similar not to huge country, So market the not the not similar average. And U.S. of Most the and our is U.S. is growing also market, but yes, growth that growing the countries. country. It Again, have also it's rates, most it's case kind in in countries. that to is fastest-growing case between it's good. we slowest countries similar rate

is know it where roughly U.S. is don't So average. I the exactly somewhere, but

good the U.S. So about pretty we feel growth.

last Call good be yet, is a this and the so Max Lily. And to hard feel X Roleplay we're terms that Lily, happens that." Max of with to like, seconds, yes, Lily, like features good say feel a so months, very can about we you that I over it for users. But understand "Oh, Within were think to good we and really we released And in we traction good particular, traction, Max in that Video talk don't just the want us the Max. had to the allowing because talk well, what numbers people feature, with of buying ARPU? the feel with get which yes, of couple my better I then, very understand. and is but people you just is seeing about actually traction. we one to is Matt, easy to we you this idea want it. And answer explained much previous added Max Call reason really way terms is little Video In advertise extra about And because, in precise get about

year-over-year, word our it X% plan we year-over-year. of which it's think you It's we've in now, are There said. bit couple a it I as higher. The Yes, things numbers, basically for I the this past so go ARPU, quarters see used. impact I trended And talking towards the can to for -- Mark, us so I'm can think, not flattish, are on getting so ARPU X% do revenue, about a technically part And you conversation. flattish. actually guess, about was not that mix. bookings But about the talked of ARPU what

the only that past right a material months, quarter. impact pricing or really revenue price. the obviously in Family will of is ARPU And So up Family, being the over forward, is and ARPU. Xx has so because the XX Plan mix the we've given not historically again, scale showing Max it's amortized seen going Right in is materially with definitely that really Max impact higher now, it changed Super is then now

then through. And that that expect other come foreign country to I currencies, ARPU So the change things are regional mix.

now, So we'll Plan, go bit feel year-over-year all good this how It's stay we or you can quarter and right probably I forward there on about trend. that, Family Super trending update on gone higher. to negative from the think But a are X% growth Max from ARPU. little going and

through X UBS. Kuntarich Chris have more questions We've We get from to got X in minutes.

on Maybe just one here Max. another

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put Yes, this. for Max expensive is it's more than price. some on example, I'll maybe takes the significantly U.S., twice the In Super.

more, push some wealthier is that would -- are and that you expect adopting there's countries So there. Max

that Max twice they On are the other is we that much English seeing to Call when learners, which feature countries, main with hand, access are as predominantly it. which for have use the Video poor in Lily,

would a towards push give Max. So that learners/poor countries adopting English

on very know it's Max in push learning it's don't right side. in pull English for now, either this is example, settle going for pull Like some -- and So to available example. not I large where because, available there's not India countries.

happen put to we're So over that and will going time. there, it

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to Max from noticed bookings Got in Like a Any be I was sort that XQ we XQ. that now over there sort contribution the of about growth about the it. maybe believe as the framework should press here. that there? just low don't release was out meaningful contribution call quarter? to be thinking in within kind of I total of thinking a And single-digit

in as really was what will the I in does I think that's QX Call the change terms incorporate we was of in and And QX. Max mean, guide then Yes. the we with Video called out, why believe out I Max called QX it guide, materiality. happen QX

the is now initial the with it -- a Call. I we're think our So don't meaningful of in Video guide again, performance. We especially this, of and part that stages still

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think that probably think as I in that's all incorporated I of we'll But well. see some in the guide. QX yes,

a discount just or with clarification Max not earlier. And should Year's it be be expecting Did the Would included? it. we whether you Got from offering? say New

show have year Yes, the you'll and of but we're just in days experiments it run so going out. it, up on -- last to X to figure the

there. Be

Crystal question final at comes our from Li And CMS. Okay.

the final questions. honored Very be asking to one

exceed your Super in wondering And plan? term. AI just on paying view trend So you you how's share landscape call of the I'm the competition longer on Duolingo the ratio on could Duolingo Max Do it think that the view video will products? for more

know It's higher a it'll doing Super. it'll fraction we -- settle, don't be Yes. really whether people Max of versus where

relative country on our the to and it'll think them. depend I prices

this hard to very end. will where it's So say

gets about by have what Now of learning language us of is something in ourselves learning thing by understood things. staying is terms to of we language us mean, stand the a learning a the first I be out, or to leader all, gets category number we -- hardest ourselves what motivated. competition, that generally, in

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talk a don't to random you feature, conversation our also example, character. For

to Lily, et becoming and cetera. your talk friend, You Lily starts

that's everything do So to that stand try we us really makes out. engaging. make something we And really

us good. is that free makes tier freemium for the The users is majority vast model, free stand because our really of other Duolingo our very big our out where thing use

Now of that lot a does things.

having For and also large large one, to scale, it data to Duolingo a gives more collect allows make us a better very and engaging. scale to such teach us

is as free their more have tell efficient we we than other compared mean, as The the So that in thing we basically kind, can our users do be marketing learn people very on act how just that really about spend lot acts is languages. And history tier so does anybody little the a engine. free can apps it data our I reason They because -- marketing we marketing marketing reason engine. of our to that most the friends. and that with any

us And differentiates so competition. from think we that's what

questions. Okay. turn that's it up. wrap I'll to Luis it Well, to for back it

thank time, with I'd everyone And learning. for joining like Thank you, Debbie. enjoy Lily calling next video just you're to in language us. whatever until