A leading mobile learning platform is among the highly anticipated IPOs of the week. Here’s what investors should know about Duolingo, a company synonymous with language learning.
The Offering: Duolingo Inc DUOL is offering 5.1 million shares at a price point of $95 to $100. Shares are expected to open for trading on Wednesday, July 28.
About Duolingo: A free app offered by Duolingo has been downloaded by more than 500 million people. Duolingo is the top-grossing app in the education segment for both Apple’s iOS and the Google Play Store.
Duolingo offers 40 language learning courses on its app.
More people in the U.S. are learning a language on Duolingo than in high school foreign language classes nationwide.
Duolingo offers a premium, ad-free platform called Duolingo Plus, which launched in 2017 and has seen a steady rise in users, according to the company. As of March 31, around 5% of the company’s subscribers were Plus users.
In 2020, Duolingo had 37 million monthly active users, including 1.6 million Duolingo Plus users. At the end of March 2021, Duolingo had 40 million monthly active users including 1.8 million Duolingo Plus users.
Related Link: A Look At Upcoming IPOs For The Week: Robinhood, Powerschool, Duolingo
Growth Ahead: More than 1.8 billion people are seeking to learn a new language, representing a $61 billion addressable market for Duolingo.
The language learning market is expected to grow to $115 billion by 2025, according to the company’s filing.
Online language learning is the fastest-growing portion of the segment, representing $12 billion in 2019 and an expected $47 billion in 2025.
Duolingo lists growth plans of expanding beyond language learning, converting free users to paid subscribers, increasing the lifetime value of a user and offering new premium features.
Financials: Duolingo’s revenue rose 129% to $161.7 million in fiscal 2020.
First-quarter revenue was $55.4 million, year-over-year growth of 97%. Second-quarter projections see revenue in a range of $57.3 million to $58.5 million, representing year-over-year growth of 45% at the mid-point of the range.
The company’s revenue was split 72% subscriptions, 17% advertising and 11% Duolingo English Test in the first quarter of the fiscal year.
The company reported a net loss of $15.8 million in fiscal 2020 and a net loss of $13.5 million in the first quarter of the current fiscal year.
Photo: Couretsy Duolingo
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