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Duolingo Stock Gains After Narrower-Than-Expected Quarterly Loss

Duolingo shares rise after reporting a narrower-than-expected third-quarter loss and revenue that topped estimates, as well as a 49% increase in subscribers.
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Shares of Duolingo  (DUOL) - Get Duolingo, Inc. Class A Report, a language learning service, rose Thursday after the company reported a third quarter net loss that was narrower than expected on revenue that topped estimates. 

The Pittsburgh-based company reported a net loss of 98 cents per share on revenue of $63.6 million, a 40% year over year increase. Analysts were expecting a loss of $1.02 per share on revenue $60.5 million. 

"Our performance during the third quarter was exceptional. We achieved record bookings and a record number of paid subscribers, with monthly and daily users also reaching all-time highs," said CEO and co-founder Luis von Ahn.

The company reported a 57% increase in total bookings while subscription bookings increase 64% year over year. Paid subscribers totaled 2.2 million at the end of the quarter, a 49% year over year increase. 

The company reported 41.7 million monthly active users and 9.8 million daily active users, both all-time highs for the company. 

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Duolingo's gross margin improved slightly year over year to 71.6% from 71.1% driven by reduced payment processing fees on subscriptions and higher advertising revenue per daily active user. 

Operating expenses more than doubled to $38.9 million. 

Duolingo debuted in July after pricing its initial public offering at $102 per share. 

Duolingo offered 5.1 million shares of Class A common stock and raised about $520 million in its debut. The company was valued above $3.4 billion following its IPO.

Shares of Duolingo jumped more than 7% in early market trading before paring gains. At last check, the stock was up 2.61% to $153.10 at last check.