Duolingo, Inc. reported significant financial growth in its latest 10-Q filing for the three and nine months ended September 30, 2024. The company achieved revenues of $192.6 million for Q3 2024, marking a 40% increase from $137.6 million in Q3 2023. For the nine-month period, revenues reached $538.5 million, a 42% increase from $380.1 million in the same period last year. Subscription revenues were a key driver, totaling $157.6 million in Q3 2024, up 49% year-over-year, and $433.2 million for the nine months, reflecting a 51% increase.

Gross profit for Q3 2024 was $140.4 million, a 39% increase from $101.4 million in Q3 2023, while gross profit for the nine months was $393.8 million, up 41% from $278.6 million. The company reported income from operations of $13.6 million for Q3 2024, compared to an operating loss of $4.7 million in Q3 2023. For the nine months, income from operations was $48.7 million, reversing a loss of $18.1 million in the prior year.

Net income for Q3 2024 was $23.4 million, significantly higher than $2.8 million in Q3 2023, and for the nine months, net income reached $74.7 million, compared to $4.0 million in the same period last year. The net income per share for Q3 2024 was $0.53 (basic) and $0.49 (diluted), compared to $0.07 and $0.06, respectively, in Q3 2023.

Duolingo's user base also expanded, with monthly active users (MAUs) increasing to 113.1 million in Q3 2024, up from 83.1 million a year earlier, and daily active users (DAUs) rising to 37.2 million, a 54% increase. Paid subscribers grew to 8.6 million, a 47% increase from 5.8 million in Q3 2023.

The company completed two acquisitions in July 2024 for a total of $7.5 million, which included $6.6 million in cash. These acquisitions are expected to enhance Duolingo's product offerings, although the financial impact remains uncertain.

Despite the positive financial performance, Duolingo faces challenges, including rising costs and competition in the online language learning market. The company reported an increase in operating expenses, particularly in research and development, which rose to $62.9 million for Q3 2024, up from $50.3 million in Q3 2023. Sales and marketing expenses also increased, reflecting ongoing efforts to attract and retain users.

As of September 30, 2024, Duolingo had cash and cash equivalents of $854.4 million, up from $747.6 million at the end of 2023. The company continues to navigate a complex regulatory environment and relies heavily on third-party platforms for distribution, which poses additional risks to its operations.