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- Duolingo has posted its fifth straight profitable quarter.
- Its user growth in the past year could be attributed to its marketing tactics.
- Duolingo stock is down over 24% year-to-date due to inconsistent performance.
Gen Z's favorite language-learning app is on a streak of its own.
Duolingo just posted its fifth straight profitable quarter. It posted a net income of $24.4 million, an over 500% increase compared to the same period last year. Daily active users, one of the company's most important metrics, grew 59%, while paid subscribers grew by 52%, the company said in its second-quarter earnings report.
"We also achieved two milestones: surpassing 100 million monthly active users, and reaching 8 million paying subscribers," Luis von Ahn, the company's CEO, said in an earnings call on Wednesday.
The company's stock gained about 5.5% in after hours trading.
A very specific marketing approach
Duolingo's user growth in the past year could be attributed to its marketing tactics.
The company is famous for its guilt-inducing in-app and email marketing messages, asking users to continue their learning on the app. Despite their controversial nature, experts think it's the right approach for gen Z users.
"They're looking for something that comes across more like a person," Brian Honigman, a marketing consultant based in Philadelphia, told Business Insider last month. "Duolingo does a fantastic job of not coming across like many other brands."
The app's iconic green owl mascot is also perceived as authentic and consistent by users. Whether it's on TV or Youtube ads, or on TikTok, where Duolingo has over 12.5 million followers, the owl displays its smug and hilarious personality.
The mascot and the Duolingo app alike have become a cultural icon, making appearances in user-generated content and even Hollywood.
"Our signature 'ding' was featured in the 'Barbie' movie, providing an incredible brand boost, and in many ways, that was indicative of our commanding presence in the zeitgeist last year," Matt Skaruppa, Duolingo's chief financial officer, said in the call.
The brand is also doubling down on country-specific marketing.
Duolingo's social media accounts in India, Germany, and France feature content based on viral memes, news events, and social media trends, amassing hundreds of thousands of followers in each country.
But the app's success on social media has not been enough to calm investors.
It beat analyst expectations when it reported fourth-quarter 2023 earnings in February, but missed them in the March quarter and saw shares slip because it gained new users at the slowest rate since 2022.
Duolingo stock is down over 24% year to date.