The growth rate for MAUs has accelerated in six straight quarters. If this is the key to success, then Duolingo is succeeding. Therefore, it's abundantly clear the key to success is growing and retaining paying subscribers. However, the company generated $274 million in revenue from subscriptions compared to a paltry $45 million from advertising.
After all, the difference between these two revenue streams - subscriptions and advertising - is extreme.ĭuolingo ended 2022 with 60.7 million monthly active users (MAUs), but only 4.2 million were paying subscribers. This will likely be the biggest contributing factor to its long-term success.
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But it made a punctuated move higher after reporting financial results for 2022, showing really important progress.įor context, Duolingo needs to entice people to pay for a subscription even though its apps are available for free with ads. The gain for Duolingo stock has been steady in 2023. Is Duolingo truly a winner in the making?
If this company is truly a winner, it behooves investors to keep it firmly planted in the flowerbed. Therefore, selling Duolingo stock just to lock in strong year-to-date gains isn't a good reason to sell. That would leave investors with a weedy garden devoid of flowers. This is why part of the Motley Fool investment philosophy is "Let your portfolio's winners keep winning." Like Buffett counsels, it's bad to sell winners too soon.
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