Duolingo, INC. 10-Q Filing

Ticker: DUOL · Form: 10-Q · Filed: May 9, 2024

Sentiment: neutral

Filing Stats: 4,504 words · 18 min read · ~15 pages · Grade level 16 · Accepted 2024-05-08 19:27:06

Key Financial Figures

Filing Documents

Financial Information

Part I Financial Information 6

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 6

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 35

Controls and Procedures

Item 4. Controls and Procedures 36

Other Information

Part II Other Information 37

Legal Proceedings

Item 1. Legal Proceedings 37

Risk Factors

Item 1A. Risk Factors 37

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 80

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 80

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 80

Other Information

Item 5. Other Information 80

Exhibits

Item 6. Exhibits 82

Signatures

Signatures 83 1 Special Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including without limitation, statements regarding our business model and strategic plans, including the introduction of new brands or products, and our implementation thereof; statements regarding our expectations, beliefs, plans, objectives, prospects, assumptions, future events or expected performance, including our ability to compete in our industry; the sufficiency of our cash, cash equivalents and investments; and the plans and objectives of management for future operations and capital expenditures are forward-looking statements. Without limiting the generality of the foregoing, you can identify forward-looking statements because they contain words such as "may," "will," "shall," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "goal," "objective," "seeks," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are neither promises nor guarantees, but involve a number of known and unknown risks, uncertainties and assumptions that may cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to:

Financial Information

Part I Financial Information

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) DUOLINGO, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except par value amounts) March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 829,713 $ 747,610 Accounts receivable 76,421 88,975 Deferred cost of revenues 60,397 53,931 Prepaid expenses and other current assets 10,747 7,282 Total current assets 977,278 897,798 Operating lease right-of-use assets 49,785 19,103 Intangible assets, net 18,595 15,995 Property and equipment, net 13,209 11,792 Goodwill 4,050 4,050 Restricted cash 2,735 2,735 Deferred tax assets, net 766 766 Other assets 2,249 1,718 Total assets $ 1,068,667 $ 953,957 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Deferred revenues $ 279,313 $ 249,192 Accounts payable 2,625 2,447 Income tax payable 362 792 Accrued expenses and other current liabilities 21,422 24,931 Total current liabilities 303,722 277,362 Long-term obligation under operating leases 53,893 21,094 Total liabilities 357,615 298,456 Commitments and contingencies (Note 9) Stockholders' equity Class A common stock, $ 0.0001 par value; 2,000,000 shares authorized as of March 31, 2024 and December 31, 2023; 36,904 and 36,311 issued and outstanding at March 31, 2024 and December 31, 2023, respectively Class B common stock, $ 0.0001 par value; 30,000 shares authorized as of March 31, 2024 and December 31, 2023; 6,153 and 6,215 issued and outstanding at March 31, 2024 and December 31, 2023, respectively 4 4 Additional paid-in capital 898,513 869,918 Accumulated deficit ( 187,465 ) ( 214,421 ) Total stockholders' equity 711,052 655,501 Total liabilities and stockholders' equity $ 1,068,667 $ 953,957 See accompanying notes to the Unaudited Condensed Consolidated Financial Statements. 6 DUOLINGO, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Amounts in thous

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