Q2 Consumer Subscription Earnings: Duolingo (NASDAQ:DUOL) Earns Top Marks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how consumer subscription stocks fared in Q2, starting with Duolingo (NASDAQ:DUOL).
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a weaker Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 2.9% below.
Stocks, especially growth stocks with cash flows further into the future, had a good end of 2023. On the other hand, this year has seen more volatile stock market swings due to mixed inflation data. However, consumer subscription stocks have held steady amidst all this with share prices up 1.1% on average since the latest earnings results.
Best Q2: Duolingo (NASDAQ:DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $178.3 million, up 40.6% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with impressive growth in its users and exceptional revenue growth.
"We achieved significant milestones in the second quarter, surpassing 100 million MAUs and reporting 8 million subscribers,” said Luis von Ahn, Co-Founder and CEO of Duolingo.
Duolingo scored the fastest revenue growth and highest full-year guidance raise of the whole group. The company reported 103.6 million users, up 39.8% year on year. Unsurprisingly, the stock is up 27.3% since reporting and currently trades at $206.01.
Roku (NASDAQ:ROKU)
Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $968.2 million, up 14.3% year on year, outperforming analysts’ expectations by 3.2%. It was a decent quarter for the company with solid growth in its users but slow revenue growth.
The market seems happy with the results as the stock is up 12% since reporting. It currently trades at $61.92.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Chegg (NYSE:CHGG)
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $163.1 million, down 10.8% year on year, exceeding analysts’ expectations by 2%. It was a weak quarter for the company with a decline in its users and slow revenue growth.
Chegg posted the slowest revenue growth in the group. The company reported 4.37 million users, down 9.1% year on year. As expected, the stock is down 23.8% since the results and currently trades at $2.24.
Read our full analysis of Chegg’s results here.
Udemy (NASDAQ:UDMY)
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Udemy reported revenues of $194.4 million, up 9% year on year, in line with analysts’ expectations. Taking a step back, it was a weak quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.
Udemy had the weakest full-year guidance update among its peers. The company reported 16,595 active buyers, up 11% year on year. The stock is down 16% since reporting and currently trades at $7.77.
Read our full, actionable report on Udemy here, it’s free.
Netflix (NASDAQ:NFLX)
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Netflix reported revenues of $9.56 billion, up 16.8% year on year, in line with analysts’ expectations. More broadly, it was a slower quarter for the company with underwhelming revenue guidance for the next quarter and slow revenue growth.
The company reported 277.6 million users, up 16.5% year on year. The stock is up 7.1% since reporting and currently trades at $688.24.
Read our full, actionable report on Netflix here, it’s free.
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