MMM: Duolingo Q3 2023 Earnings Recap; Crypto Trading App Performance

Duolingo's 3Q23 earnings surpassed expectations, prompting a 20% increase in share price. Sensor Tower data shows that Duolingo's user growth and in-app purchase revenue aligned with reported metrics. The integration of music and math into its app may be successful as US users often spend more time on music gaming and music apps vs the average smartphone user. On the other hand, major crypto apps like Binance, Robinhood, Crypto.com, and Coinbase experienced a decline in users.

Key Takeaways:

Duolingo’s 3Q23 EPS and revenue smashed street estimates, with the company posting its first ever profitable quarter, sending shares soaring more than 20%. Per ST data, Duolingo DAUs and MAUs increased 56% and 37% YoY, respectively, inline with growth in the company’s reported DAUs (+63%), MAUs (+47%), and paid subscribers (+60%). Additionally, 3Q23 QoQ growth in ST IAP revenue for the Duolingo app (+10%) aligned with the company’s reported total bookings growth (+12% QoQ)
- Duolingo also announced its continued plans to integrate both music and math courses into its flagship app. Per ST audience insights, US Duolingo users (across the past 90 days) spend 22% and 10% more time on Music gaming apps and Music apps than the general population of smartphone users, respectively. The over indexed interest and time spent around music gaming apps and music apps by US Duolingo users indicates that the company’s music course will definitely have an audience among existing and prospective users
Robinhood’s share price slipped ~15% after reporting 3Q23 revenue that missed street estimates as declines in trading and transaction volume weighed on top line growth. Per ST data, Robinhood’s Sep’23 MAUs fell 19% YoY, in line with a decline in the company’s reported MAUs (-16% YoY)
- Since 3Q22, Binance, Robinhood, Coinbase, and Crypto.com have posted negative YoY growth in MAUs. Per ST data, 3Q23 MAUs for Binance, Robinhood, Coinbase, and Crypto.com were down an average of 27% YoY as the price of bitcoin has yet to rebound to previous heights
- Further illustrating the exodus of users and the corresponding trading volume associated with those users, ST churn analysis data shows that user churn is up materially on Binance, Robinhood, Coinbase, and Crypto.com. As of 3Q23, user churn on Coinbase (+15pps), Binance (+13pps), Robinhood (+8pps), and Crypto.com (+5pps) was up significantly compared to 3Q21

For more information, request the full report from reports@sensortower.com.

Sensor Tower's platform is an enterprise-level offering. Interested in learning more?

Written by: Abraham Yousef, Senior Insights Analyst

Date: November 2023