Q4 2021 Duolingo Inc Earnings Call
[music].
Good day, and welcome to the Duolingo fourth quarter 2021 earnings call.
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I would now like to turn the conference over to Duffy Sullivan head of Investor Relations. Please go ahead.
Thank you operator, and welcome everyone to dueling goes fourth quarter and full year 2021 earnings call today. After market close we released a shareholder letter with our results and commentary, which you can find on our IR website at investors Dot Duolingo dotcom.
With me on the call today are Luis amount on co founder and CEO , Matt Skorupa, CFO and Bob <unk>, our Chief business Officer.
We will begin with some brief remarks before opening the call to Q&A.
Just to remind everyone that during this call we will make forward looking statements regarding our future events and financial performance, which are subject to material risks and uncertainties that could cause actual results to differ materially. We caution you to review the risk factors contained in our SEC filings. These forward looking statements are based on assumptions that we believe to be reasonable as of today and we undertake no obligation.
To update these statements as a result of new information or future events.
Additionally, we will present, both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation from a substitute for or superior to our GAAP results and we encourage you to consider all the measures when analyzing our performance and with that I'd now like to turn the call over to Luis.
Thank you Debbie and welcome everyone.
We are a global company that serves learners in every country in the world.
I want to start by acknowledging the horrible situation in Ukraine, saying that we stand with all of those working towards peace and that our hearts are with the Ukrainian people.
Since our shareholder letter contains an in depth discussion of our performance. We will just provide some brief remarks, and then get right into Q&A.
First as I always do I'd like to start out by reminding everyone about our mission.
Since we started the company our mission has been to develop the best education in the world and make it universally available EVAR.
Everything we do is guided by this mission, we started out with languages to help reduce economic Macquarie.
We are expanding into other areas of education in order to touch even more people's lives.
Proud to say that we've made tremendous progress towards our mission, but we are just getting started.
I'd also like to congratulate our entire team on the amazing performance they delivered in 2021.
Not only do we take the company public, but we also delivered incredible user and subscriber growth.
Our total bookings and revenue both grew by 55%.
Our team continued its unwavering focus on creating quality products that are fun and effective in 2021, we rolled out a number of new product innovations that further increase the user engagement and retention and ultimately drove more conversions to our premium subscription in fact during the fourth quarter. We had the highest number of da use and they use a net new subscriber stepper.
We also continued to build our beloved brand that is synonymous with language learning the vast majority of our growth comes organically through word of mouth as we move into 2022, we'll continue building upon this momentum.
We're planning to introduce an entirely new define of the dueling go App home screen that we believe will further drive user engagement.
We will continue making dwelling a more social with features that allow learners to interact with each other.
We will continue to grow acceptance of the duolingo English desperate institutions around the world.
We will refine the dwellings, ABC app with a fresh designed to drive engagement and learning efficacy.
And we are excited to launch a math out towards the end of the year.
And now Matt will discuss our outlook for 2022.
Thanks, Luis first I'd like to reiterate that it was a great year for our business and we are very proud of our performance our product and marketing initiatives paid off and we surpassed our own high expectations, resulting in record metrics and accelerating growth in the fourth quarter.
Looking ahead to 2022, we plan to continue prioritizing our investment in R&D in order to fuel growth to make our products, even better and increase our monetization opportunities for.
For Q1, 2022, we're guiding to $92 million to $95 million for total bookings seven.
$75 five to $78 5 million for revenue and adjusted EBITDA of negative $5 five to negative $2 5 million and for the full year 2022, we are guiding to $372 million to $382 million for total bookings.
$332 million to $342 million for revenue and adjusted EBITDA of negative five to negative $1 million.
I want to make sure to point out that our full year guidance takes into account our typical booking seasonality with Q1 and Q4 being our strongest quarters. This seasonality was confirmed in the fourth quarter of last year.
We plan to invest significantly in R&D this year in engineering product and design and for us that means investing in talent. We believe we have been a beneficiary of the great resignation that started last year as we have added some very talented new employees to our team while keeping the talent we have.
Our attrition rate was less than 6% last year.
We believe this trend will continue and we want to seize the opportunity we have been able to attract talent because of our mission driven and fun culture, and we believe that that has helped us grow.
This approach to growth through investment in our product is consistent with how we've grown historically.
And that's what we plan to do in our language learning App and the Det ABC and in our math product.
On the marketing side, we plan to continue to spend on Influencers and innovative brand marketing and Underpenetrated markets and to continue to invest in highly efficient performance marketing like our global da you campaign.
We also plan to expand our marketing efforts related to bringing in new test takers to the Det.
As we have since our founding we plan to continue to manage the business with cost and capital discipline. As we did last year, which is why we're confident in our adjusted EBITDA guidance that is nearly breakeven.
And now I'll turn it back to Luis.
Thank you, Matt before we wrap up I'd like to take this opportunity to thank each and every team member for all your hard work this year.
I think our learners, who put their trust in us and to thank our shareholders for all your support and we.
We look forward to sharing more with you in the coming quarters and now we would be happy to take your questions.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble our roster.
And our first question will come from Mario Lu of Barclays. Please go ahead.
Great. Thanks for taking the questions. So the first one is on conversion.
Coming in at six 2%.
Big improvement from the third quarter.
Just curious if you could.
Identify what kind of drove this improvement.
And what conversion percentage is implied into fiscal 'twenty guidance.
And then secondly.
With then the EBITDA margin guidance of flat for 2002.
I was wondering if you could talk a bit about each of the cost items should we expect.
<unk> costs due to the Google play changes and also in sales and marketing G&A and that being offset fully by marketing any color there would help thanks.
Yes.
Hi, Mario obviously Luis.
So first you asked what drove the increase in the conversion.
As you saw we increased conversion by about two percentage points in the year.
And Thats basically we've seen increases in conversion ever since we launched duolingo plethora subscription package in 2017, we were increasing about one percentage point per year, we seem to have increased by about two percentage points in the lab.
Last year and the way we've been increasing it. This whole time is just by running literally hundreds of AB test to get more people to convert.
Types of.
Some of these are very small ABB.
And that just.
Changes to the purchase page some of them are bigger things like new features.
To the premium package.
Basically we have been a lot of things a couple of things that were particularly weak.
This year one of them was legendary feature which is basically just the changing color.
If you for some of the skills. So the red circles in our in our home screen, they're called skills and before lesson. There you can only basically go around that circle five times, we added a sixth time.
And you can only do that if you were up plus subscriber and that added.
That added more commercial so theres stuff like that.
I'll, let Matt.
Answered the couple of other questions, including the <unk>.
Right.
Yeah. Thanks, Thanks, Mario for that when it comes to cost and gross margin that you mentioned.
Sure.
As we mentioned on the last call we're still expecting.
About 150 basis points improvement.
Mainly from the Google play.
Shift in cost.
That still holds from last call and then to your point around operating leverage as we've mentioned multiple times before we plan to continue to invest in R&D. So you should not expect to see operating leverage in that as a percentage of revenue. However in sales and marketing we do expect operating leverage over the course of the year and on G&A.
Just given this is our first full year being public.
It will be pretty close not a ton of operating leverage there this year.
Yes, that's a good question.
Great. Thanks, Lee Thanks, Matt.
The next question comes from Eric Sheridan of Goldman Sachs. Please go ahead.
Thank you so much for taking the questions two if I could maybe following up on Mario's question about the margins can you help unpack where some of the dollars on the marketing side might be aimed either from a qualitative or quantitative standpoint, you talked a little bit about underpenetrated markets and sort of driving greater product adoption, but maybe we can get a little more granular.
And where those dollars could spend and how you think about the return of those dollars not just in 2022, but as the platform continues to scale in 2023. Thanks, so much.
Thank you Eric for your question. So the first thing to note. The vast majority of our growth is organic so most of our growth comes from word of mouth.
We are spending some marketing what we've decided to do it.
We think we have a number of markets that are just less penetrated in particular Asia.
Fastest growing market, but it is less penetrated.
Our other markets like Europe , and the Americas.
So what we do is we typically pick a country. There is a few that we target.
And then we try to decide which are the best ways to market. We have found that influencer marketing works pretty well in certain countries like India and Japan for example.
And then we spent some money the amount that we spent per country is not a lot. So a country the size of Japan.
It's probably we would spend maybe $1 million or $2 million in the year and then what that does is that guests are organic flywheel going the word of mouth going on than just that just takes up to pick those up.
Other examples by the way this is kind of.
The paid marketing, but actually a lot of our marketing effort has also gone on just things that are not paid for example, Arctic talk.
For those of you have seen it.
We don't spend money on that this is entirely organic.
Dr.
I've gotten literally over 500 million views just because.
<unk> is so strong that we're able to really appeal to all the over the top users. So this is the type of stuff that we do.
Great. Thank you so much for the color appreciate it.
Our next question comes from Aaron Kessler of Raymond James. Please go ahead.
Great. Thank you a couple of questions linked first if you can update us on the regional pricing initiatives the progress Youre, making there maybe along the same lines. Maybe if you can give us the updated breakout of U S versus international for revenues or bookings and paid subs.
And then maybe finally just through Lingo for schools are you starting to see this effort also drive kind of increased subscriptions as well for at home usage. Thank you.
Great question so.
In terms of.
Regional pricing just to just to give some background when we IPO right right before we IPO Ed we had the same price in every single country in the World. We knew of course that was not optimal.
And what we've done since then we started trying different prices.
Countries. So far there are four countries, where we've launched different prices.
And we are working on doing it basically for every country in the world.
The reason you can't change the Super fast is because everything we do of course, we test and these things take a little while to run because whenever whenever we run a new pricing something first of all we tried multiple prices and then what we're doing is it takes a while for people. We know whenever it may sign up on delinquency. It takes a while for them to subscribe for some of them and also we have to measure renewal rates, which take a while to measure.
So some of it is.
As you know it takes some time, but I would say throughout this year, we are going to basically probably have different prices.
Every single country now what I will say this is just one of many levers that we have for increasing conversion and also increasing bookings.
Ultimately the way, we increased our bookings and our penetration.
Paid subscribers by running again hundreds of Vista.
This is just one of those levers and I will say the only thing about.
Regional pricing, we believe that this will have an impact however is not probably not going to have the same impact.
People may believe where like double revenue or something because what's happening is that.
The countries that we get most of our bookings from usually are the developed countries. The U S. Western Europe et cetera in those places and the prices are unlikely to change too much.
In the places where the prices aren't likely to change more of these are usually more kind of developing countries are where the GDP per capita is lower there.
Sure.
We will change our progress is probably too expensive. So we will probably lower the prices will end up happening.
Theres more than one barrier and many of those countries where people just described probably.
The prices one another one is just that in many of these countries are digital subscriptions are just not that.
Mature as they are in a country like the U S or in Western Europe . So we see regional pricing is something that is a necessary condition for us to really make a lot more bookings from many of these countries, but not necessarily a sufficient condition. So that's just something that is important.
I will also answer you asked about schools.
The schools.
Initiatives. So just also to give you some context.
Now we have this thing called willing over schools.
<unk> board that teachers can use when they are students, but the students are using just the normal dwelling go App and we'll then go for schools. If you just can use to track their students progress.
We relaunched duolingo for schools in 2021.
That did really well and we're seeing it definitely getting more and more adoption in schools right now our best belief by the way, we don't know exactly how many schools use us because they don't have to tell us necessarily that they use us.
No.
<unk> got about 40% of U S language teachers use duolingo for schools and I think the U S. The other numbers internationally. So we're seeing that help with adoption so far.
Don't have any reports on what exactly it is thus for our subscriptions, but we are assuming that many of these students and then ultimately our subscribing as well. So the main thing that is helping but it's growing our user base.
And then Aaron just to jump in there on one of your questions on U S versus rest of world. It didn't change materially from 2020.
In 2021, it was about 44%, 45% in U S and the remainder of rest of world. So that stayed pretty consistent and thats bookings.
Revenue revenue that's revenue.
Great. That's helpful. Thank you.
Our next question comes from Ralph <unk> William Blair. Please go ahead.
Good evening, Thanks for taking the question on the family plan in the letter you talked about seeing some.
Early results that you were encouraged by an increasing the visibility of that this year, just curious what youre seeing and Thats, probably early but just any thoughts on that product and thoughts on converge and then how that might impact 2022 and going forward.
Yes family plan. Thank you Ralph for your question by the way. This is something that we're very excited about.
I do want to remind you.
On everyone that family plan is one of many many levers that we have to pool regional pricing is another one but ultimately the way we grow our bookings just by running hundreds and hundreds and hundreds of ADT family plan is one we're very excited about.
It's early days right now.
Percentage points.
Subscribers are in the family plan, but it is growing pretty fast actually.
And we're very excited by it for two reasons. The first one is that it really seems to increase lifetime value of our subscribers because what ends up happening. If you subscribe for a family plan for your family, but also your significant other isn't that family plan and maybe your thoughts on your daughter and our funding plan and maybe you stop using duolingo, but as long as.
Is anybody in your family still using it you still keep paying so we have data that really shows that those who are in the family plan just a significantly better retention in terms of payers. So we're very excited by that this should help with our retention quite a bit and then the other reason why im personally excited and this is more in the long the long term.
The more we can have people on a family plan. The more we know there are family.
A lot of the products that we're working on for example, we're working on a map App for elementary school math.
We launched duolingo, ABC already which is <unk>.
<unk> to learn how to read agent call it three to six.
Those are people who belong in our family and the more we have people walk in our family plan subscription onto a single the more the more we will be able to cross promote these other products. There. So the way we see it I mean, we're not yet doing that but the way we see assembly plant is going to be a really.
Strong Q4 for many of our new products. So this is why we are excited by it.
Great. Thanks, So just maybe just add one more just as you talk.
Talk about broadening out beyond languages, maybe specifically math just curious how the testing is going and how you do quite a bit of testing and just curious just in terms of the rollout how wide that will be it wont be focused on certain geographic areas, but just the way you plan to roll that out would be helpful. Thank you.
Great. So yeah, so the math that we're working on it.
Of course, I'm biased, but it look beautiful.
But we're working on we have not released that yet.
We're going to release it this year.
I cannot comment yet on exactly what the rollout plan.
Because we haven't quite decided on that but pretty likely that's going to be at least.
In English speaking countries.
I don't know if were going to look like to do or the English.
At the very beginning on day one.
But yes, we're going to roll it out and that's something that we're pretty excited by it I should say one thing that I think is important for people to understand.
We're going to roll it out and it's going to be great, but the way we are.
Two product dwelling noise, we have our products grow organically.
So we're going to put it out and it's going to take some time for it to really start growing and then after it has grown to a reasonable size then we're going to start monetizing it in some sort of premium manner because that is what we do at duolingo and that's going to take some time. So my sense is if youre expecting the map.
Any kind of.
A meaningful revenue this year basically that's not something you should expect and probably not even next year. My sense is we're going to launch this year. When he is next year to grow either user base quite a bit and then probably have meaningful revenue after that.
That makes sense. Thanks, So that's really helpful.
The next question comes from Justin Patterson of Keybanc. Please go ahead.
Great. Thank you very much Louise it sounds like a meaningful year for innovation in the core language App. How do you think about the impact of the redesign and more social features could have upon engagement and conversion versus prior feature Rollouts like Hearts legendary and then for Matt the transition more annual membership.
That's been very positive towards the LTV.
Given that dynamic how do you think about the pace of reinvestment.
Across marketing and engineering.
Thank you Dustin and I do think it's a great question, because I love to talk about our innovation.
Yes, we're very excited about a number of features that were pulling out this year.
One is this redefined on the home screen.
Again, I think it was beautiful we're going to start testing it and I think youre going to have a number of.
Good good effect.
I think we're in a whole.
Is that is going to improve user retention a free user retention in particular, we.
We also think it's going to help us teach better.
I mean the.
<unk> redefined has been really done with a lot of input from our learning scientist. So I think it's going to help us teach better and I also think it's going to simplify the up quite a bit.
One of the things about the drilling.
Yes.
We've become more mature and become more and more complex and we'd like to do litigation I think thats going to help quite a bit. So we have a lot of things. That's just one thing but were doing a number of other features that you'll see.
And you should probably just download the app and see how much it changes over the year.
I think Matt.
Yes.
Yeah. Thanks, Justin.
It's a great point about the.
Our focus on LTV I'm, just glad you asked that question in that way because it gives me a chance.
Just to Echo something Luis has already said, which is we run a bunch of tests hundreds of tests.
Every quarter and every year.
To experiment with ways to increase subscriber LTV.
You mentioned Hearts in health, which is a great improve.
Improver of LTV the annual plan as one family plan is another but these are just examples of some of the ways that we are continually focused on improving LTV over time.
And that's really how we think about our growth opportunities we have growth opportunities in the main language learning App, we have growth opportunities and assessment in literacy and math as Luis just mentioned so.
We are excited to deploy capital against those opportunities because we think there's high returns there and specifically to go back to something I've mentioned.
And a bit of a broken record on we really like to invest our capital.
Into talent and specifically talent in R&D, so that they can execute against all of those experiments and capitalize on the opportunities we see to have that.
Those horror high Rois.
Why this year again, you should not expect to see operating leverage in our R&D line.
And while we have gotten much more efficient in marketing and we have really innovative playbook, especially in the developing markets.
And we're going to spend in absolute dollars more in marketing, we will expect or we do expect to see operating leverage in marketing as opposed to R&D.
Yeah.
Great. Thank you.
Our next question comes from Nat Schindler of Bank of America. Please go ahead.
Yes, hi, guys.
Thanks for this and you guys did such a great job of increasing your conversion to paid.
This year obviously.
Can you walk us through and maybe break that number down a little bit by maybe a little bit by region I assume that's much higher than the U S and Europe and the developed world.
And wanted to know when do we hit.
What you would think is a functional barrier where is the pain where could it go.
Well. Thank you for this question I think.
So there's a couple of things so you're right generally payer conversion is higher in wealthier countries.
Generally the case.
I don't think we are anywhere near a kind of a wall.
As you saw there was actually an acceleration of five percentage points of how we're growing there.
It's very hard to say how high we can get base.
Basically the way we grow it again by basically just.
Running hundreds of AB test to get more and more people. Just described we have a long list of AB test still to run over the next several years, we have a lot of levers that we can pool and so we think that that's going to continue growing but it's very hard for us to know how much it's going to grow I mean, right now we're around 6% six 2% or something like that.
The active users are paid subscribers.
You can look at comps so our business model is pretty similar to the dating apps.
And there are those are right around 12%.
Our business models are pretty similar to Spotify, which is around 50% I don't actually think we're going to get to 50%, but I don't.
No reason why we can't get to something like where the data I'm, sorry, but again I really want to caution here, saying ultimately I don't know how I can get this this is just something that we're going to continue increasing over the next few years.
The last thing I would say, even though <unk> has been around for about 10 years. Our monetization is still pretty early I mean, we only started monetizing in 2017 kind of towards the end of 2017 that we started in earnest.
So there's just a lot that.
We don't know.
What are opportunities bill.
Yes, the only thing I would add to that is just to go back.
To what I said on the last earnings call about our growth framework and so it's not just.
User penetration, obviously, that's an important metric that we track and we are driving that up.
Remember we saw a return.
The pre COVID-19 level user growth rates, we saw reacceleration of user growth as well. So we have we have multiple ways to increase our monetization. These are growth obviously growing nicely is great.
Heartened by that the other two things.
They are really underlying that metric or retention and conversion both of which we saw.
Really strong trends in Q4.
We will continue on so.
It's really on all three of those dimensions user growth retention, our user growth conversion and retention.
We're just doing really well on.
Okay, and then to just follow up on this just a tiny bit.
Bob.
On top of just the demographic shift towards.
Geographic shifts.
Payers versus non pairs so as heavily in first world countries not surprising isn't there also a demographic shift I'll tell you. Your family plan do many of those kids who are doing this for school pay or is it mostly adults who are using it.
Self improvement.
Learning before they go on a trip or something.
Yes, I mean thats a great question one of the interesting things about working on building our.
Our user base is just so why we really have we really have kids, aged six using duolingo two adults aged literally 100 that we get storefront.
Pretty much.
The main thing that tells you whether somebody is going to pay or not so far is kind of how much money they have.
That's basically it.
I think theres a much of a I don't think we have seen much in terms of.
Kind of age distributions et cetera.
Great. Thank you.
Our next question comes from Andrew Burd of JMP Securities. Please go ahead.
Good afternoon, guys and thanks for taking my question two please.
Following up on Justin's questions, you guys offered some compelling metrics and the growth of congratulatory messages can you talk about increasing social interaction on the platform and just help us understand the benefits that that brings is that usage engagement or anything else and then question number two is just talk about the impact from omicron in December and January .
Is there anything to call out there and is there anything else to think about it as we think about additional variance or just broadly to preopening. Thanks, so much.
Great Great. Thank you. Thank you for the question so okay, so social social life.
In the shareholder letter social is one of the thing I'm most excited about.
We've been we really started working on social in earnest over roughly the last year.
We have a team behind it but it's a very high performing team and what they've done.
Well they've added basically a soc.
Social layer behind Duolingo worry people can follow each other and self congratulatory messages.
We've had a lot of growth on that.
I said in our shareholder letter at the beginning of the year, we probably had about 1% of our daily active users were spending congratulatory messages to each other by now its about 10%.
We also have the number of people that follow at least the number of daily active users that follow at least three other learners on dual language now 25%. So we really are a much more social than we were even a year ago, that's going to continue happening.
And the way, we're going to continue increasing that is by basically letting people do more with their connections. So.
I can't really tell you exactly what these things are because we are testing a lot of different things, but we're going to be letting them do more things with with their friends and we've seen that that actually moves our kpis.
Gets people to spend more time on the App.
Gets people to come back to the App more.
More and more day, so it increases user retention.
It also.
They are spending more time and retain better are also it's also increasing the fraction of the people that actually pay for a subscription so the social the social component really having an impact on the kpis. The only thing that I really like about the social component is that network.
Network effects.
So it's something that now that your friends are also on duolingo.
Yeah.
The language I've got better the more people that use it and that's something that we're very proud of.
And then you also asked so thats. The first social you asked about omicron honestly, we didn't see much of that.
For us we're not.
Theres some theres some product for something like a humongous quadruple boom or something whenever that was.
We did get a boom in 2021.
Yes.
The first kind of wave of going after that.
Like really strict lockdowns, we don't see much of an impact so what has happened to our to our growth rate. If we were growing organically before COVID-19 and just growing this whole time when COVID-19 came in for the FERC two or three months ago, and we did see an increase then after that we saw a slight decrease when the world open back up.
Since then we've basically been going back to pre Covid growth rates and this is what we are observing now and this is why you saw for example, an acceleration of the growth rate of our MAA and views in the fourth quarter, because basically we're now back to growth.
Pre COVID-19 growth rates.
Great. Thank you.
Again, if you have a question. Please press Star then one.
And our next question will come from Mark Mahaney of Evercore ISI. Please go ahead.
Thanks, two questions. Please first maybe you covered it earlier I didn't hear the call.
You added 700000 and may use that seem like a big number last two December quarters, you actually had a sequential decline. So just talk to that like what is was there something unusual in the corner this quarter that caused us <unk> growth to be so strong and just thinking about how we want to extrapolate that going forwards and maybe it's just we shouldnt rely on that.
Prior years, because the company was too small, but just is there any color behind that 700000.
Yes, that's a great question.
Just a lot of things that are working really well.
One of the things that I think is unique to the fourth quarter, but I think we're going to see it in every park every fourth quarter going forward.
The year end review campaign that is something that we kind of.
Discovered over the last couple of years, where the idea is that it.
Round call. It December 15, Theres nothing that basically shows up in your App that tells you. The here's how you did the whole year and then you can share that it turns out a lot of people like sharing this because they feel good telling everybody that this year, they learn Italian or they learn German or something.
Good thing so when we put that out there.
Really.
We got literally millions and millions of shares in social media, we became a top 10 trending topic on Twitter.
Duolingo aspect dwelling of $3 55, or something became a trending topic on Twitter because the specific fourth quarter thing that we are probably going to be seeing there.
Another thing that has worked really well for us in the fourth quarter with our top again.
Clearly unpaid.
Marketing things is basically we have I think Dr channel and because our brand is so strong and we really have we've done a lot of really good stuff with our mascot and picked up it appeals to a lot of people with essentially no marketing spend I mean, we're not spending any marketing all of them.
The salary of the people were doing this.
We've gotten over 500 million video views on Tictoc.
Follow up I know, we're probably the brand that gets the most interaction something all brands. So I think that's another thing that has been.
Pretty pretty good I mean in addition to that of course, the thing that always helps us which is just continuous improvement.
Okay.
And Mark as you asked about extrapolation.
Go forward.
We had said historically, our pre Covid Mou growth rate was about anywhere between 10 and 15% in our growth.
Growth rate was around 20% plus or minus.
That's kind of what we're seeing and so as you think about the forward. We don't have any reason to believe we're not back at those levels of growth.
And then our historical seasonality is probably at play as well.
The 2020, and so on slide 21 seasonality was a little bit.
Model because of the Covid spikes, but we think we're back to the normal.
Not only growth rates, but also seasonality throughout the course of the year.
Okay, and if I could just ask one more question on the math.
So Luis what.
Can you just give us just a tease of what this thing is I mean are we doing.
Basic elementary math or we do it.
Calculus are we doing sophisticated wall Street math.
It was a joke, but but just.
Who is the market going to be for this math product when it comes out.
Mark It is a slide rule.
King.
So within the App of course, that's what we do.
We're going to start with elementary school math.
So think of it.
I use the App every single day.
But every single day I have gotten very good a fraction I will tell you.
So it's basically one metric format.
Okay. If I could just put in a request if you could if you were to launch it to it before September I'm, just asking on behalf of a friend, but thats what it is.
Okay I appreciate that.
On behalf of a third greater that you may not got it yeah. Okay. Thank you I am good.
This concludes our question and answer session I would now like to turn the conference back over to Lewis.
For any closing remarks.
Thank you very much I, just wanted to say really great questions.
To everybody.
Yes, we're very proud of the great quarter that we had.
Hopefully we will talk.
And next quarter.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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Good day and welcome to the Joy Lingo fourth quarter 2021 earnings call.
Participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After management's opening remarks, there will be an opportunity to ask questions.
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Please note this event is being recorded.
I would now like to turn the conference over to Doug Sullivan head of Investor Relations. Please go ahead.
Thank you operator, and welcome everyone to do anything goes fourth quarter and full year 2021 earnings call today. After market close we released a shareholder letter with our results and commentary, which you can find on our IR website at investors Dot Duolingo Dot Com with me on the call today are Luis Mount on co founder and CEO .
Matt Skorupa, CFO and Bob <unk>, our Chief business Officer.
We will begin with some brief remarks before opening the call to Q&A.
Just to remind everyone that during this call we will make forward looking statements regarding future events and financial performance, which are subject to material risks and uncertainties that could cause actual results to differ materially. The caution you to review the risk factors contained in our SEC filings. These forward looking statements are based on assumptions that we believe to be reasonable as of today and we undertake no obligation.
To update these statements as a result of new information or future events.
Additionally, we will present, both GAAP and non-GAAP financial measures on today's call. These non-GAAP measures are not intended to be considered in isolation from a substitute for or superior to our GAAP results and we encourage you to consider all the measures when analyzing our performance and with that I'd now like to turn the call over to Louise.
Thank you Debbie and welcome everyone.
We are a global company that serves learners in every country in the world.
I want to start by acknowledging the horrible situation in Ukraine, saying that we stand with all of those working towards peace and that our hearts are with the Ukrainian people.
Since our shareholder letter contains an in depth discussion of our performance. We will just provide some brief remarks, and then get right into Q&A.
First as I always do I'd like to start out by reminding everyone about our mission.
Since we started the company our mission has been to develop the best education in the world and make it universally available.
Everything we do is guided by this mission, we started out with languages to help reduce economic Macquarie.
We are expanding into other areas of education in order to touch even more people's lives.
I'm very proud to say that we've made tremendous progress towards our mission, but we are just getting started.
I'd also like to congratulate our entire team on the amazing performance they delivered in 2021.
Not only do we take the company public, but we also delivered incredible user and subscriber growth.
Total bookings and revenue both grew by 55%.
Our team continued its unwavering focus on creating quality products that are fun and effective in 2021, we rolled out a number of new product innovations that further increase the user engagement and retention and ultimately drove more conversions to our premium subscription in fact during the fourth quarter. We had the highest number of D. A use and they use a net new subscribers.
<unk>.
We also continued to build our beloved brand that is synonymous with language learning the vast majority of our growth comes organically through word of mouth as.
As we move into 2022, we will continue building upon this momentum.
We're planning to introduce an entirely new define of the duolingo App home screen that we believe will further drive user engagement.
We will continue making duolingo more social with features that allow learners to interact with each other.
We will continue to grow acceptance of the dueling go English test about institutions around the world.
We will refine the dwelling go ABC app with a fresh designed to drive engagement and learning efficacy and we are excited.
Added to launch a math out towards the end of the year.
And now Matt will discuss our outlook for 2022.
Thanks, Luis first I'd like to reiterate that it was a great year for our business and we are very proud of our performance our product and marketing initiatives paid off and we surpassed our own high expectations, resulting in record metrics and accelerating growth in the fourth quarter.
Looking ahead to 2022, we plan to continue prioritizing our investment in R&D in order to fuel growth and make our products, even better and increase our monetization opportunities.
For Q1, 2022, we are guiding to 92% to $95 million for total bookings.
$75 five to $78 5 million for revenue and adjusted EBITDA of negative $5 five to negative $2 5 million and for the full year of 2022, we are guiding to $372 million to $382 million for total bookings.
$332 million to $342 million for revenue and adjusted EBITDA of negative five to negative $1 million.
I want to make sure to point out that our full year guidance takes into account our typical booking seasonality with Q1 and Q4 being our strongest quarters. This seasonality was confirmed in the fourth quarter of last year.
We plan to invest significantly in R&D this year in engineering product and design and for us that means investing in talent. We believe we've been a beneficiary of the great resignation that started last year as we have added some very talented new employees to our team while keeping the talent we have our attrition rate was less than 6% last year.
We believe this trend will continue and we want to seize the opportunity.
We have been able to attract talent because of our mission driven and fund culture, and we believe that that has helped us grow.
This approach to growth through investment in our product is consistent with how we've grown historically.
And that's what we plan to do in our language learning App and the Det ABC and our math product.
On the marketing side, we plan to continue to spend on Influencers and innovative brand marketing and under penetrated markets and they continue to invest in highly efficient performance marketing like a global campaign.
We also plan to expand our marketing efforts related to bringing in new test takers to the Det.
We have since our founding we plan to continue to manage the business with cost and capital discipline. As we did last year, which is why we are confident in our adjusted EBITDA guidance that is nearly breakeven.
Now I'll turn it back to Luis.
Thank you, Matt before we wrap up I'd like to take this opportunity to thank each and every team member for all your hard work this year.
I think our learners, who put their trust in us and to thank our shareholders for all your support and we look forward to sharing more with you in the coming quarters and now we would be happy to take your questions.
We will now begin the question and answer session.
Ask any question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
If you have any follow up questions you may reenter the question queue.
At this time, we will pause momentarily to assemble our roster.
And our first question will come from Mario Lu of Barclays. Please go ahead.
Great. Thanks for taking the questions. So the first one is on that conversion.
Coming in at six 2%.
Big improvement from the third quarter.
Just curious if you could.
Identify what kind of drove this improvement.
And what conversion percentage is implied in the fiscal 'twenty guidance.
And then secondly.
With then the EBITDA margin guidance of flat for 'twenty two.
I was wondering if you could talk a bit about each of the cost items should we expect.
Average Cogs due to Google play changes and also in sales and marketing G&A and that being offset fully by marketing any color there would help thanks.
Yes.
Hi, Mario this is luis.
So firstly what drove the increase in the conversion.
As you saw we increased conversion by about two percentage points in the year.
And Thats basically we've seen increases in conversion and ever since we launched duolingo plus our subscription package in 2017, we were increasing about one percentage point per year, we seem to have increased by about two percentage points in the last year and the way we've been increasing it. This whole time, just by running literally hundreds of AB tests to get more people.
The convert.
Some of these are very small AG. There just things that are just changes to the purchase page some of them are bigger things like new features.
To the premium package. So it's just basically we didn't win a lot of things a couple of things that were particularly weak. This.
This year.
One of them, what's called legendary feature which is basically just the changing color.
If you for some of the skills. So the red circles in our in our home screen, they're called skills and before lesson. There you can only basically go around that six five times, we added a sixth time and you can only do that if you were a plus subscriber and that added.
That added more compression on so there's stuff like that.
Drove it I'll, let Matt.
Answered the couple of other questions, including the.
The implied rate.
Yeah. Thanks, Thanks, Mario for that when it comes to cost and gross margin that you mentioned.
As we mentioned on the last call, we're still expecting about 150 basis points improvement.
Finally from the Google play.
Shift in cost.
That still holds from last call and then to your point around operating leverage as we mentioned multiple times before we plan to continue to invest in R&D. So you should not expect to see operating leverage in that as a percentage of revenue. However in sales and marketing we do expect operating leverage over the course of the year and on DNA.
Just given this is our first full year being public it.
It will be pretty close not a ton of operating leverage there this year.
So yes, that's a good question.
Great. Thanks, Lee Thanks, Matt.
The next question comes from Eric Sheridan of Goldman Sachs. Please go ahead.
Thank you so much for taking the questions two if I could maybe following up on Mario's question about the margins can you help unpack where some of the dollars on the marketing side might be aimed either from a qualitative or quantitative standpoint, you talked a little bit about underpenetrated markets and sort of driving greater product adoption, but maybe we can get a little more granular.
Where those dollars get spent and how you think about the return of those dollars not just in 2022, but as the platform continues to scale in 2023. Thanks, so much.
Thank you Eric for your question. So the first thing to note. The vast majority of our growth is organic so most of our growth comes from word of mouth.
We are spending some marketing what we've decided to do it.
We think we have a number of markets that are just less penetrated in particular Asia is the fastest growing market, but it is less penetrated.
And all our other markets like Europe and the Americas.
So where what we do is we typically pick a country. There is a few that we target.
And then we try to decide which are the best ways to market. We have found that influencer marketing works pretty well in certain countries like India and Japan for example.
And then we spent some money the amount that we spent per country is not a lot. So a country the size of Japan.
It's probably we would spend maybe $1 million or $2 million in the year and then what that does.
That gets our organic flywheel going the word of mouth going on than just that just takes up picks up. Another example by the way. This is kind of the paid marketing, but actually a lot of our marketing effort has also gone on just things that are not paid for example, Arctic talk.
For those of you have seen it.
Don't spend money on that this is entirely organic.
Sure.
Have gotten literally over 500 million views just because our brand is so strong that we are able to really appeal to all the over the top users. So this is the type of stuff that we do.
Great. Thank you so much for the color appreciate it.
Our next question comes from Aaron Kessler of Raymond James. Please go ahead.
Great. Thank you a couple of questions first if you can update us on the regional pricing initiatives kind of the progress you're making there maybe along the same lines. Maybe if you can give us the updated breakout of U S versus international for revenues or bookings and paid subs.
And then maybe finally just through Lingo for schools are you starting to see this effort also drive kind of increased subscriptions as well for at home usage. Thank you.
Great question so.
In terms of.
Regional pricing just to just to give some background when we IPO right before we IPO. We had the same price in every single country in the World. We knew of course that was not optimal.
And what we've done since then we started trying different pricing.
So far there are four countries, where we've launched different prices.
And we are working on doing it basically for every country in the world.
The reason you can't change the Super fast is because everything we do of course, we a b test and maybe take a little while to run because whenever whenever we run a new pricing something first of all to try multiple prices and then what we're doing is it takes a while for people. We know whenever it may sign up on the Orlando. It takes a while for them to subscribe for some of them and also we have to measure renewal rates, which take a while to measure.
So some of this.
As you know it takes some time, but I would say throughout this year, we are going to basically probably have different prices.
Single country now what I will say if this is just one of many levers that we have a four increasing conversion and also increasing bookings.
Ultimately the way, we increase our bookings on our penetration.
Paid subscribers by running again hundreds of AB test. This is this is just one of those levers and I will say the other thing about.
Regional pricing, we believe that this will have an impact however is not probably not going to have the same impact.
Some people may believe were likely you're not going to double revenue or something because what's happening is that.
The countries that we get most of our bookings from usually are the developed countries. So the U S Western Europe et cetera, and those places and the prices are unlikely to change too much.
In the places where the prices are unlikely to change more of these are usually more kind of developing countries are where the GDP per capita is lower.
Sure.
We will change our progress is probably too expensive. So we'll probably lower the prices will end up happening.
Theres more than one barrier and many of those countries where people just described probably.
Even though the prices one another one is just that in many of these countries are digital subscriptions are just not that.
Mature as they are in a country like the U S or in Western Europe . So we see regional pricing is something that is a necessary condition for us to really make a lot more bookings from for many of these countries, but not necessarily a sufficient condition. So that's just something that is important.
I will also answer you asked about schools.
The schools.
Initiatives. So just also to give you some context.
We have this thing called willing for schools.
<unk> board that teachers can use when they are students that the students are using just the normal duolingo app and duolingo for schools, if that's where they can use to track their students progress.
We relaunched duolingo for schools in 2021.
That did really well and we're seeing it definitely getting more and more adoption in schools right now our best belief by the way, we don't know exactly how many schools use us because they don't have to tell us necessarily that they use us.
No.
That belief is that about 40% of U S language teachers use duolingo for schools and I think the U S. But other numbers internationally. So we're seeing that help with adoption so far.
Don't have any reports.
What exactly does thus for our subscriptions.
We are assuming that many of these students and then ultimately our subscribing as well. So the main thing that is helping but it's growing our user base.
Sure.
And then Aaron just to jump in there on one of your questions on U S versus rest of world that didn't change materially from 2020.
2021 it was about 44%, 45% in U S and the remainder of rest of world. So that stayed pretty consistent and thats bookings.
Revenue revenue that's revenue.
Great. That's helpful. Thank you.
Our next question comes from Ralph <unk> William Blair. Please go ahead.
Good evening, Thanks for taking the question on the family plan in the letter you talked about seeing some.
Early results that you were encouraged by an increasing the visibility of that this year, just curious what youre seeing and Thats, probably early but just any thoughts on that product and thoughts on conversion and how that might impact 2022 and going forward.
Yes family plan. Thank you Ralph for your question by the way. This is something that we're very excited about.
I do want to remind you.
Are you on everyone that family plan is one of many many levers that we have to pull regional pricing is another one but ultimately the way we grow our bookings just by running 100 Clinic book 100, 155 family plan is one we're very excited about.
It's early days right now.
Percentage points.
Subscribers are in the family plan, but it is growing pretty fast actually.
And we're very excited by it for two reasons. The first one is that it really seems to increase lifetime value of our subscribers because what ends up happening is you described for a family plan for your family, but also your significant other isn't that family plan and maybe your thought on your daughter and our funding plan and maybe you stop using duolingo, but as long as.
Is anybody in your family still using it you still keep paying so we have data that really shows that those who are in the family plan.
And if we can be better retention in terms of payers. So we're very excited by that this should help with our retention quite a bit and then the other reason why im personally excited and this is more on the long the long term.
The more we can have people in our family plan to more we know there are a family.
A lot of the products that we're working on for example, we're working on it on a map App for elementary school math.
We launched a dual <unk> already which is a literacy afterward.
Kids to learn how to read agents call it three to six.
Those are people, who are long in our family and the more we have people in our family plan subscription on duolingo the more the more we'll be able to cross promote these other products. There. So the way we see it I mean, we're not yet doing that but the way we see it family plan is going to be a really.
Strong Blu four for many of our new products. So this is why we're excited by it.
Great. Thanks, So just maybe just add one more just as you talk.
Talk about broadening out beyond languages, maybe specifically math I'm just curious how that testing is going and how you do quite a bit of testing and just curious just in terms of the rollout how wide that will be it wont be focused on certain geographic areas, but just the way you plan to roll that out be helpful. Thank you.
Great. So yeah. So the math, we're working on it.
Of course, I'm biased, but it look beautiful.
But we are working on we have not released that yet.
We're going to release it this year.
I cannot comment yet on exactly what the rollout plan.
Because we haven't quite decided on that but pretty likely thats going to be at least.
In English speaking countries.
I don't know if were going to look like with the other English on at the very beginning on day one.
But yes, we're going to roll it out and that's something that we're pretty excited by it I should say one thing that I think it's important for people to understand.
We're going to roll it out and it's going to be great, but the way we do.
New product dwelling noise, we have our products grow organically.
We're going to put it out and it's going to take some time for it to really start growing and then after it have grown to a reasonable size then we're going to start monetizing it in some sort of premium manner because that is what we do at duolingo and thats going to take some time. So my sense is if you are expecting the map app to give any kind of.
Meaningful revenue. This year, you basically have not something you should expect probably not even next year. My sense is we're going to launch this year. When he is next year to grow either user base quite a bit and then probably have meaningful revenue after that.
That makes sense, thanks, Elyse really helpful.
The next question comes from Justin Patterson of Keybanc. Please go ahead.
Great. Thank you very much Louise it sounds like a meaningful year for innovation in the core language App. How do you think about the impact of the redesign and more social features could have upon engagement and conversion versus prior feature rollouts like hearts legendary I'll, let Matt but transition more annual.
Memberships has been very positive towards the LTV.
Given that dynamic how do you think about the pace of reinvestment.
Across marketing and engineering.
Thank you, Jeff and I do think it's a great question, because I love to talk about our innovation.
Yes, we're very excited about a number of features that were pulling out this year.
One is this redesign of the home screen.
Again, I think it was beautiful we're going to start testing it and I think youre going to have a number of.
Good good effect.
I think I.
Our hope is that is going to improve user retention a free user retention in particular.
We also think it's going to help us teach better.
I mean the.
<unk> redefined has been really done with a lot of input from our learning scientists and so I think it is going help us teach better and I also think it's going to simplify the up quite a bit.
One of the things about the drilling.
As we become more mature and become more and more complex and we'd like to in litigation I think that's going to help quite a bit. So we have a lot of things. That's just one thing but were doing a number of other features that youll see.
And you should probably just download the app and see how much it changes over the year.
I think Matt.
Yes.
Yeah. Thanks, Justin.
It's a great point about the.
Our focus on LTE Im just glad you asked that question in that way because it gives me a chance.
Just echo something Luis has already said, which is we run a bunch of tests hundreds of tests.
Every quarter and every year.
To experiment with ways to increase subscriber LTV.
You mentioned Hearts in health, which is a great.
Mover of LTV the annual plan as one family plan is another but these are just examples of some of the ways that we are continually focused on improving LTV over time.
And Thats really how we think about our growth opportunities we have growth opportunities in the main language learning App, we have growth opportunities in assessment and layers. The math as Luis just mentioned and so we're excited to deploy capital against those opportunities because we think there's high returns there and specifically to go back to something I've mentioned.
And a bit of a broken record on we really like to invest our capital.
Into talent and specifically talent in R&D, so that they can execute against all those experiments and capitalize on the opportunities we see to have.
Those horror high Rois.
This year again, you should not expect to see operating leverage in our R&D line.
And while we have gotten much more efficient in marketing and we have really innovative playbook, especially in the developing market.
And we're going to spend in absolute dollars more in marketing, we will expect or we do expect to see operating leverage in marketing as opposed to R&D.
Great. Thank you.
Our next question comes from Nat Schindler of Bank of America. Please go ahead.
Okay.
Yes, hi, guys.
Thanks for this and you guys did such a great job of increasing your conversion to paid this year obviously.
Can you walk us through and maybe break that number down a little bit by.
Maybe a little bit by region I assume that's much higher in the U S and Europe and the developed world.
And wanted to know.
When do we hit.
What you would think is a functional barrier where is the pain where could it go.
Well. Thank you for this question I think.
So okay, just a couple of things so you're right generally payer conversion is higher in well wealthier countries.
Generally the case, we don't think we are anywhere near a kind of a wall.
As you saw there is actually an acceleration of five percentage points of how we're growing there.
It's very hard to say how high we can get based.
Basically the way we grow this again, it's by basically just.
Running hundreds of AB test to get more and more people to subscribe. We have a long list of AB test still to run over the next several years, we have a lot of levers that we can pull and so we think that that's going to continue growing.
Hard for us to know how much is going to grow I mean, right now we're around 6% to 2% or something like that of our monthly active users are paid subscribers.
You could look at comps so our business model is pretty similar to the dating apps.
They are on those.
Those are right around 12%.
Our business models are pretty similar to Spotify, which is around 50%.
I don't actually think we're going to get to 50%, but I see no reason why we can't get to something like where the dating apps are but again I really want to caution here, saying ultimately I don't know how I can get this this is just something that we're going to continue increasing over the next few years.
The last thing I would say, even though <unk> has been around for about 10 years. Our monetization is still pretty early I mean, we only started monetizing.
17 kind of towards the end of 2017 that we started in earnest. So theres just a lot we don't know.
A lot of opportunities Bill.
Yes, the only thing I would add to that is just to go back.
To what I said on the last earnings call about our growth framework and so it's not just user penetration obviously, that's an important metric that we track and we are driving that up.
Remember, we saw a return to.
Pre COVID-19 level user growth rate, we saw reacceleration of user growth as well. So we have we have multiple ways to increase our monetization user growth obviously growing nicely is great.
Heartened by that the other two things.
There are really underlying that metric or retention and conversion both of which we saw.
Really strong trends in Q4 that.
So we believe we will continue on so.
It's really on all three of those dimensions user growth retention, our user growth conversion and retention.
It is doing really well on.
Okay, and then to just follow up on this just a tiny bit.
On top of just the demographic shift towards.
The geographic shift.
Payers versus non pairs so as heavily in first world countries not surprising isn't there also a demographic shift I'll tell you. Your family plan do many of those kids who are doing this for school pay or is it mostly adults who are using it.
Self improvement or learning before they go on the trip or something.
Yes, I mean thats a great question one of the interesting things about working on duolingo.
User basis, just so why we really have we really have kids, aged six using duolingo two adult phase literally 100, but we get storefront.
Pretty much.
The main thing that tells you whether somebody is going to pay or not so far.
Kind of how much money they have.
That's basically but I don't think theres a much of a I don't think we have seen much in terms of.
Age distributions et cetera.
Great. Thank you.
Our next question comes from Andrew <unk> of JMP Securities. Please go ahead.
Good afternoon, guys and thanks for taking my question two please.
Following up on Justin's questions and you guys offered some compelling metrics and the growth of congratulatory messages can you talk about increasing social interaction on the platform and just help us understand the benefits that that brings is that usage engagement or anything else and then question number two is just talk about the impact from omicron in December and January .
Is there anything to call out there and is there anything else to think about as we think about additional variance or just broadly to preopening. Thanks. So much.
Great Great. Thank you. Thank you for the question so okay, so social social.
In the shareholder letter social is one of the thing I'm most excited about.
We've been we really started working on social in earnest over roughly the last year.
A team behind it.
Very high performing team and what they've done.
Well they've added basically.
Social layer behind Duolingo worry people can follow each other and self congratulatory messages.
We've had a lot of growth on that.
I said in our shareholder letter at the beginning of the year, we probably had about 1% of our daily active users were spending congratulatory messages to each other by now its about 10%.
We also have the number of people that follow at least the number of daily active users of follow at least three other learners and duolingo is now 25%. So we really are a much more social app than we were even a year ago, that's going to continue happening.
And the way, we're going to continue increasing that is by basically letting people do more with their connections. So.
I can't really tell you exactly what these things are because we are testing a lot of different things, but we're going to be letting them do more things with with their friends and we've seen that that actually moves our kpis.
Gets people to spend more time on the App. It gets people to come back to the App more.
More and more day, so it increases user retention and it also.
They are spending more time and retain better are also it's also increasing the fraction of people that actually pay for a subscription so the social the social component really is having an impact on the kpis. The other thing that I really like about the social component is that network effect.
It's something that now that your friends are also on duolingo.
Drilling will just get better the more people that use it and that's something that we're very proud of.
And then you also asked so thats the first social you asked about omicron honestly, we didn't see much effect.
For us we're not.
Theres some theres some product for something like a humongous quadruple more something whenever that was.
We did get a boom in 2021.
Sure.
The first kind of wave of Covid after that.
Like really strict lockdowns, we don't see much of an impact so what has happened to our tour growth rates. If we were growing organically before COVID-19 and just growing this whole time when COVID-19 came in for the first two or three months of Covid. We did see an increase then after that we saw a slight decrease when the world open back up.
Since then we've basically been going back to pre Covid growth rates and this is what we are observing now and this is why you saw for example, an acceleration of the growth rate of our MAA and be used in the fourth quarter, because basically we're now back to growth.
Pre COVID-19 growth rates.
Great. Thank you.
Again, if you have a question. Please press Star then one.
And our next question will come from Mark Mahaney of Evercore ISI. Please go ahead.
Thanks, two questions. Please first maybe you covered it earlier I didn't hear.
Quarter you added there were 700000 may use that seemed like a big number the last two December quarters, you actually had a sequential decline. So just talk through that like what is was there something unusual in the corner this quarter that caused us <unk> growth to be so strong and just thinking about how we want to extrapolate that going forward and maybe it's just we shouldnt rely on.
Prior years, because the company was too small, but just is there any color behind that 700000.
Yes, that's a great question.
Just a lot of things that are working really well.
One of the things that I think it's unique to the fourth quarter, but I think we're going to see it in every four and every fourth quarter going forward is our year end review campaign that is something that we kind of.
Discovered over the last couple of years, where the idea is that.
Around call. It December 15, Theres nothing that basically shows up in your App that tells you. The here's how you did the whole year and then you can share that it turns out a lot of people like sharing this because they feel good telling everybody that this year, they learn Italian or they learn German or something because it's a gut feel good thing so when we put that out there.
Really.
We got literally millions and millions of shares in social media, we became a top 10 trending topic on Twitter.
Duolingo aspect dwelling of 365 or something became a trending topic on Twitter because of the spin.
So specific fourth quarter thing that we are probably going to be seeing they are another thing.
Has worked really well for us in the fourth quarter what are the top again this is a completely unpaid.
Marketing thing its just basically we havent ticked off channel and because our brand is so strong and we really have.
We've done a lot of really good stuff with our mascot and picked up it appeals to a lot of people with essentially no marketing spend I mean, we're not spending any marketing dollars.
The salary of the people were doing this.
<unk>.
We've gotten over 500 million video views on Tictoc.
And.
Clarify nowhere, probably the brand that gets the most interaction subject of all brands.
I think.
Another thing that had been.
Pretty pretty good I mean in addition to that of course, the thing that always helps us which is just continued improvements.
Okay.
End markets as you asked about extrapolation just on the <unk>.
Go forward.
We had said historically, our pre Covid Mou growth rate was about anywhere between 10% and 15% in our growth.
The growth rate was around 20% plus or minus and that's kind of what we're seeing and so as you think about the forward. We don't have any reason to believe we're not back at those levels of growth.
And then our historical seasonality is probably at play as well.
The 2020, and some 2021 seasonality was a little bit.
Model because of the Covid spikes, but we think we're back to the normal.
Not only growth rates, but also seasonality throughout the course of the year.
Okay, and if I could ask one more question on the math.
So Luis what just give us just a piece of what this thing is I mean are we doing.
Basic elementary math or we do it.
Calculus are we doing sophisticated wall Street math.
The joke, but but just.
Who is the market going to be for this math product when it comes out.
Mark if a slide rule.
Yes.
So within the App of course, that's what we do.
We're going to start with elementary school math.
So think of.
I use the App every single day.
But everything that I have gotten very good a fraction I will tell you.
So basically that metric will map.
Okay. If I could just put in a request if you could if you were to launch it took before September I'm, just asking on behalf of our friend, but thats what it is.
Okay I appreciate that.
On behalf of a third greater that you may not got it yeah. Okay. Thank.
Thank you.
Good.
This concludes our question and answer session I would like to turn the conference back over to will Lewis Lewis.
For any closing remarks.
Thank you very much I, just wanted to say really great questions.
Everybody.
Yeah, we're very proud of the great quarter that we had.
We'll hopefully we'll talk.
<unk> next quarter.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.