Duolingo, Inc. (NASDAQ: DUOL), the leading mobile language learning platform, reported impressive third-quarter 2024 results, showcasing robust user growth, subscriber gains, and strong financial performance. Despite the solid results and raised guidance, the company's stock plunged in pre-market trading, potentially due to missing expectations on paid subscriber numbers.

In the quarter ended September 30, 2024, Duolingo witnessed remarkable user engagement, with Daily Active Users (DAUs) surging 54% year-over-year to 37.2 million, and Monthly Active Users (MAUs) climbing 36% to 113.1 million. This strong user growth translated into impressive financial performance, with total bookings soaring 38% to $211.5 million, driven by a 45% increase in subscription bookings to $176.3 million.

Duolingo's revenue for the quarter rose 40% year-over-year to $192.6 million, exceeding analyst estimates. The company's profitability also improved significantly, with net income of $23.4 million, adjusted EBITDA of $47.5 million (representing a 24.7% margin), and free cash flow of $52.7 million.

A key driver behind Duolingo's strong performance has been the success of its AI-powered "Video Call with Lily" feature, part of the company's premium Duolingo Max subscription tier. This feature has been particularly popular among English learners, contributing to a 47% year-over-year growth in Duolingo's paid subscriber base, reaching 8.6 million at the end of the quarter.

Encouraged by the impressive results, Duolingo raised its full-year 2024 guidance, projecting total bookings of $843.5 million to $846.5 million, up from its previous range of $820.5 million to $827.5 million. The company also raised its revenue guidance to $741.0 million to $744.0 million, compared to the previous range of $731.3 million to $738.3 million.