Pittsburgh, PA – August 4, 2022 – Duolingo, Inc. (NASDAQ: DUOL), the world’s leading mobile learning  platform, announced results for the second quarter ended June 30, 2022 in a shareholder letter that is  posted at investors.duolingo.com. 

“Our second quarter results exceeded expectations, driven by accelerating user growth and strength  across our entire business,” said Luis von Ahn, Co-Founder and CEO of Duolingo. “I’m very proud that we  delivered over 50% growth in bookings and revenue from the prior year quarter, despite a challenging  macroeconomic environment. We see this growth as a result of our relentless focus on constant product  improvement. Through continuous experimentation, we are driving organic growth, deeper user  engagement, and stronger free-to-paid user conversion.”  

Second Quarter 2022 Highlights  

• Total bookings were $97.5 million, an increase of 51% from the prior year quarter; • Subscription bookings were $74.1 million, an increase of 51% from the prior year quarter; • Paid Subscribers totaled 3.3 million at quarter end, an increase of 71% from the prior year  quarter;  
• Monthly active users (MAUs) grew 31% to 49.5 million from the prior year quarter and Daily active  users (DAUs) grew 44% to 13.2 million from the prior year quarter; 
• Total revenues were $88.4 million, an increase of 50% from the prior year quarter; • Net loss totaled $15.0 million, compared to a net loss of $0.2 million in the prior year quarter, with  the majority of the change driven by an increase in stock-based compensation; 
• Adjusted EBITDA was $4.2 million, compared to $3.7 million in the prior year quarter. 

Financial and Operating Metrics 

The following table summarizes our financial and operating highlights for the quarter ended June 30,  2022. 

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Three Months Ended June 30, 

(In millions) 2022 2021%  

Change 

Operating Metrics 

Monthly active users (MAUs) …………………………………………………… 49.5 37.9 31 % Daily active users (DAUs)………………………………………………………… 13.2 9.1 44 % Paid subscribers (at period end)………………………………………………. 3.3 1.9 71 % 

Three Months Ended June 30, 

(In thousands) 2022 2021%  

Change 

Operating Metrics 

Subscription bookings ……………………………………………………………… $ 74,123 $ 48,941 51 % Total bookings………………………………………………………………………….. $ 97,467 $ 64,538 51 % 

Financial Measures 

Total revenues (GAAP)…………………………………………………………….. $ 88,386 $ 58,803 50 % Net loss (GAAP)………………………………………………………………………. $ (15,045) $ (176) 8448 % Adjusted EBITDA (Non-GAAP)………………………………………………… $ 4,198 $ 3,702 13 % 

The following table provides revenues by product type: 

Three Months Ended June 30, 

(in thousands) 2022 2021 Change % Change Subscription………………………………………………. $ 65,194 $ 43,502 $ 21,692 50 % Advertising………………………………………………… $ 11,218 $ 9,056 2,162 24 % Duolingo English Test……………………………….. $ 8,036 $ 4,833 3,203 66 % Other…………………………………………………………. $ 3,938 $ 1,412 2,526 179 % Total revenues…………………………………………… $ 88,386 $ 58,803 $ 29,583 50 % 

Financial Outlook 

Duolingo is providing the following guidance for the third quarter ending September 30, 2022 and the full  year ending December 31, 2022: 

Third Quarter 2022 Full Year 2022 

(in millions) Low High Low High Total Bookings…………………………………………… $94.0 $97.0 $404.0 $410.0 Revenues………………………………………………….. $93.0 $96.0 $361.0 $367.0 Adjusted EBITDA………………………………………. $(4.5) $(1.5) $4.0 $7.0 

With regards to the Non-GAAP Adjusted EBITDA outlook provided above, a reconciliation to GAAP net  loss, the most directly comparable financial measure presented in accordance with GAAP, has not been  provided as the quantification of certain items included in the calculation of GAAP net loss cannot be  calculated or predicted at this time without unreasonable efforts. For example, the non-GAAP adjustment  for stock-based compensation expenses related to equity awards requires additional inputs such as  number of shares granted and market price that are not currently ascertainable, and the non-GAAP  

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adjustment for certain legal, tax and regulatory reserves and expenses depends on the timing and  magnitude of these expenses and cannot be accurately forecasted. For the same reasons, we are unable  to address the probable significance of the unavailable information, which could have a potentially  unpredictable, and potentially significant, impact on our future GAAP financial results. 

Video Webcast  

Duolingo will host a video webcast to discuss its quarterly results today, August 4, 2022 at 5:30 p.m. ET.  This live webcast and related materials will be publicly available and can be accessed at  investors.duolingo.com. A replay will be available on the Investor Relations website two hours following  completion of the call and will remain available for a period of one year. 

About Duolingo  

Duolingo is the leading mobile learning platform globally. Its flagship app has organically become the  world’s most popular way to learn languages and the top-grossing app in the Education category on both  Google Play and the Apple App Store. With technology at the core of everything it does, Duolingo has  consistently invested to provide learners a fun, engaging, and effective learning experience while  remaining committed to its mission to develop the best education in the world and make it universally  available. 

Definitions 

Subscription Bookings and Total Bookings. Subscription bookings represent the amounts we receive  from a purchase of a subscription to Super Duolingo (formerly called Duolingo Plus). Total bookings  represent the amounts we receive from a purchase of a subscription to Super Duolingo, a purchase of a  Duolingo English Test, an in-app purchase for a virtual good and from advertising networks for  advertisements served to our users. We believe bookings provide an indication of trends in our operating  results, including cash flows, that are not necessarily reflected in our revenues because we recognize  subscription revenues ratably over the lifetime of a subscription, which is generally from one to twelve  months. 

Monthly Active Users (MAUs). MAUs are defined as unique Duolingo users who engage with our mobile  language learning application or the language learning section of our website each month. MAUs are  reported for a measurement period by taking the average of the MAUs for each calendar month in that  measurement period. MAUs are a measure of the size of our global active user community on Duolingo.  

Daily Active Users (DAUs). DAUs are defined as unique Duolingo users who engage with our mobile  language learning application or the language learning section of our website each calendar day. DAUs  are reported for a measurement period by taking the average of the DAUs for each day in that  measurement period. DAUs are a measure of the consistent engagement of our global user community  on Duolingo. 

Paid Subscribers. Paid subscribers are defined as users who pay for access to Super Duolingo,  including subscribers who pay for a family plan, and had an active subscription as of the end of the  measurement period. Each unique user account is treated as a single paid subscriber regardless of  whether such user purchases multiple subscriptions, and the count of paid subscribers does not include  users who are currently on a free trial or who are non-paying members of a family plan.

Forward-Looking Statements 

This press release 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 press  release, including without limitation, statements regarding our business model and strategic plans and our  financial outlook for the third quarter and fiscal year 2022 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 subject to a number of  known and unknown risks, uncertainties and assumptions, and actual results may differ materially from  those expressed or implied in the forward-looking statements due to various factors, including, but not  limited to: our ability to retain and grow our users and sustain their engagement with our products;  competition in the online language learning industry; our limited operating history; our ability to achieve  profitability; our ability to manage our growth and operate at such scale; the success of our investments;  our reliance on third-party platforms to store and distribute our products and collect revenue; our reliance  on third-party hosting and cloud computing providers; our ability to compete for advertisements;  acceptance by educational organizations of technology-based education; our ability to access, collect,  and use personal data about our users and payers, and to comply with applicable data privacy laws;  potential intellectual property-related litigation and proceedings, our ability adequately obtain, protect and  maintain our intellectual property rights; and the other important factors more fully detailed under the  caption “Risk Factors” in our Annual report on Form 10-K for the fiscal year ended December 31, 2021,  as any such factors may be updated from time to time, including in our Quarterly Report on Form 10-Q for  the quarterly period ended March 31, 2022 and in our other filings with the SEC, accessible on the SEC’s  website at www.sec.gov and the Company’s Investor Relations website at https://investors.duolingo.com.  All forward-looking statements speak only as of the date of this press release and, except as required by  applicable law, we have no obligation to update or revise any forward-looking statements contained  herein, whether as a result of any new information, future events, changed circumstances or otherwise. 

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Limitation of Key Metrics and Other Data 

We manage our business by tracking several operating metrics, including MAUs, DAUs, paid subscribers,  and bookings. While these metrics are based on what we believe to be reasonable estimates of our user  base for the applicable period of measurement, there are inherent challenges in measuring how our  platform is used. These metrics are determined by using internal data gathered on an analytics platform  that we developed and operate and have not been validated by an independent third party. This platform  tracks user account and session activity. If we fail to maintain an effective analytics platform, our metrics  calculations may be inaccurate. Because we update the methodologies we employ to create metrics, our  operating metrics may not be comparable to those in prior periods. Other companies, including  companies in our industry, may calculate these metrics differently. 

Non-GAAP Financial Measures 

We use certain non-GAAP financial measures to supplement our consolidated financial statements, which  are presented in accordance with GAAP. These non-GAAP financial measures include Adjusted EBITDA.  Please refer to the definitions and reconciliation at the end of this press release. We use these non-GAAP  

financial measures for financial and operational decision-making and as a means to evaluate period-to period comparisons. By excluding certain items that may not be indicative of our recurring core operating  results, we believe that Adjusted EBITDA provides meaningful supplemental information regarding our  performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and  others because they allow for additional information with respect to financial measures used by  management in its financial and operational decision-making and they may be used by our institutional  investors and the analyst community to help them analyze the health of our business. However, there are  a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP  measures should be considered in addition to, not as a substitute for or in isolation from, our financial  results prepared in accordance with GAAP. Other companies, including companies in our industry, may  calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as  comparative measures. 

Website Information 

We routinely post important information for investors on the Investor Relations section of our website,  investors.duolingo.com and also from time to time may use social media channels, including our Twitter  account (twitter.com/duolingo) and our LinkedIn account (linkedin.com/company/duolingo/), as an  additional means of disclosing public information to investors, the media and others interested in us. It is  possible that certain information we post on our website and on social media could be deemed to be  material information, and we encourage investors, the media and others interested in us to review the  business and financial information we post on our website and on the social media channels identified  above, in addition to following our press releases, SEC filings, public conference calls, presentations and  webcasts. The information contained on, or that may be accessed through, our website and our social  media channels is not incorporated by reference into, and is not a part of, this document. 

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DUOLINGO, INC. AND SUBSIDIARIES 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 

(Amounts in thousands, except par value amounts)  

June 30, 2022 December 31, 2021 

ASSETS 

Cash and cash equivalents …………………………………………………………….. $ 591,160 $ 553,922  Accounts receivable………………………………………………………………………… 28,209 33,163  Deferred cost of revenues……………………………………………………………….. 29,218 24,219  Prepaid expenses and other current assets ……………………………………. 6,563 7,967  Noncurrent Assets…………………………………………………………………………… 45,900 42,040  Total assets…………………………………………………………………………………… $ 701,050 $ 661,311  

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND  

STOCKHOLDERS’ EQUITY 

Accounts payable……………………………………………………………………………. $ 1,504 $ 7,818  Deferred revenues ………………………………………………………………………….. 128,194 98,267  Accrued expenses and other current liabilities………………………………… 17,628 13,046  Long-term obligation under operating leases ………………………………….. 25,505 29,124  Total liabilities……………………………………………………………………………….. 172,831 148,255  Total stockholders’ equity……………………………………………………………. 528,219 513,056  Total liabilities, convertible preferred stock and stockholders’  

equity………………………………………………………………………………………….. $ 701,050 $ 661,311  6

DUOLINGO, INC. AND SUBSIDIARIES 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND  COMPREHENSIVE LOSS 

(Amounts in thousands, except per share amounts) 

Three Months Ended June 30, 

2022 2021 

Revenues ………………………………………………………………………………………………… $ 88,386 $ 58,803  Cost of revenues……………………………………………………………………………………… 23,869 16,137  Gross profit ……………………………………………………………………………………………… 64,517 42,666  Operating expenses: 

Research and development…………………………………………………………………… 34,217 21,940  Sales and marketing……………………………………………………………………………… 15,277 9,619  General and administrative……………………………………………………………………. 30,057 11,585  

Total operating expenses ………………………………………………………………….. 79,551 43,144  Loss from operations……………………………………………………………………………….. (15,034) (478)  Other income (expense), net …………………………………………………………………… 130 303  Loss before provision for income taxes……………………………………………………. (14,904) (175)  Provision for income taxes ………………………………………………………………………. 141 1  Net loss and comprehensive loss ……………………………………………………………. $ (15,045) $ (176)  

Net loss per share attributable to Class A and Class B common  

stockholders, basic ………………………………………………………………………………. $ (0.38) $ (0.01)  

Net loss per share attributable to Class A and Class B common  

stockholders, diluted…………………………………………………………………………….. $ (0.38) $ (0.01)  7

DUOLINGO, INC. AND SUBSIDIARIES 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) 

Six Months Ended June 30, 

2022 2021 

Cash flows from operating activities: 

Net loss…………………………………………………………………………………………. $ (27,199) $ (13,648)  

Adjustments to reconcile net loss to net cash provided by  

operating activities: 

Depreciation and amortization…………………………………………………….. 1,944 1,236  Stock-based compensation…………………………………………………………. 32,700 5,458  Changes in assets and liabilities 25,844 11,181  

Net cash provided by operating activities ……………………………….. 33,289 4,227  Net cash used for investing activities…………………………………………….. (5,713) (3,634)  Net cash provided by (used for) financing activities ………………………. 9,662 (6,447)  

Net increase (decrease) in cash and cash equivalents……………………. 37,238 (5,854)  Cash and cash equivalents – Beginning of period……………………………. 553,922 120,490  Cash and cash equivalents – End of period …………………………………….. $ 591,160 $ 114,636  

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DUOLINGO, INC. AND SUBSIDIARIES 

ADJUSTED EBITDA RECONCILIATION 

(Amounts in thousands) 

Adjusted EBITDA. Adjusted EBITDA is defined as net loss excluding interest (income) expense, net,  income tax provision, depreciation and amortization, IPO and public company costs, stock-based  compensation expenses related to equity awards and other expenses. Adjusted EBITDA is used by  management to evaluate the financial performance of our business and we present Adjusted EBITDA  because we believe it is helpful in highlighting trends in our operating results and that it is frequently used  by analysts, investors and other interested parties to evaluate companies in our industry. The following  table presents a reconciliation of our net loss, the most directly comparable financial measure presented  in accordance with GAAP, to Adjusted EBITDA: 

Three Months Ended June 30, 

(In thousands) 2022 2021 Net loss……………………………………………………………………………………………………. $ (15,045) $ (176)  Interest (income) expense, net………………………………………………………………… (669) (1)  Provision for income taxes ………………………………………………………………………. 141 1  Depreciation and amortization…………………………………………………………………. 1,170 636  IPO and public company costs (1)…………………………………………………………… 107 1,213  Stock-based compensation expenses related to equity awards (2)…………. 18,494 2,907  Other expenses (3)………………………………………………………………………………….. — (878)  Adjusted EBITDA…………………………………………………………………………………….. $ 4,198 $ 3,702  ________________ 

(1) IPO and public company costs include costs associated with IPO readiness incurred in 2021 and costs associated with the  establishment of our public company structure and processes, including consultant costs, a one-time fee associated with the  set-up of our initial proxy statement, and fees paid to consultants and Deloitte for work in connection with remediation of the  material weakness disclosed in our Annual Report on Form 10-K.  

(2) In addition to stock-compensation expense, this includes costs incurred related to taxes paid on equity transactions. 

(3) Represents one-time cash awards to Duolingo contributors under our non-employee volunteer program included within Sales  and marketing expenses within our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss.