Duolingo User Growth Accelerates as Earnings Miss Estimates

Duolingo reported faster daily-user growth and higher third-quarter revenue and bookings, while adjusted earnings missed analyst estimates and paid-subscriber growth lagged user growth. Its shares moved sharply after the results, rising in after-hours trading Tuesday and again during Wednesday’s session. For the quarter ended September 30, daily active users reached 64.9 million, up 29% from a year earlier. Growth had been 23% in the second quarter, marking a second consecutive quarter of acceleration. Duolingo said user growth accelerated in eight of its 10 largest markets. Revenue increased 14% year over year to about $309 million, above analyst estimates of roughly $303 million. Bookings, which record customer commitments before they are recognized as revenue, rose 12% to $316.1 million. Subscription bookings increased 16%. Adjusted earnings were 54 cents per share, below estimates of about 57 cents. Duolingo reported 13.1 million paid subscribers, up 14% year over year, a slower rate than daily-user growth. One report said subscriber growth was below expectations. The gap leaves open whether the larger user base will translate into more paying customers. The company said...