Duolingo Inc (DUOL)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 72.78% | 73.24% | 73.09% | 100.00% | 71.56% |
| Operating profit margin | 8.37% | -2.50% | -17.64% | 100.00% | -9.90% |
| Pretax margin | 13.68% | 3.35% | -15.87% | -117,564.71% | -9.71% |
| Net profit margin | 11.84% | 3.03% | -16.12% | -117,911.76% | -9.76% |
Based on the provided data for Duolingo Inc's profitability ratios, we can observe the following trends:
1. Gross Profit Margin:
- In 2021, the gross profit margin was exceptionally high at 100.00%, indicating efficient control over the cost of goods sold.
- The gross profit margin fluctuated around 71% to 73% between 2020 and 2024, showing stability in generating revenue after 2021's exceptional performance.
2. Operating Profit Margin:
- Duolingo Inc experienced significant fluctuations in operating profit margin, ranging from negative figures in 2020 and 2022 to positive figures in subsequent years.
- The company achieved a notable improvement in operating profit margin in 2024 at 8.37%, indicating better operational efficiency and cost management.
3. Pretax Margin:
- Duolingo Inc incurred negative pretax margins in 2020, 2021, and 2022, reflecting challenges in generating taxable income during these years.
- The company rebounded in 2023 and 2024, reaching positive pretax margins of 3.35% and 13.68%, respectively, showcasing improved financial performance.
4. Net Profit Margin:
- Similar to the pretax margin, Duolingo Inc faced negative net profit margins in 2020, 2021, and 2022, possibly due to significant expenses outweighing revenues.
- The company turned around its profitability in 2023 and 2024, with net profit margins of 3.03% and 11.84%, respectively, indicating enhanced bottom-line performance and better cost control.
Overall, Duolingo Inc demonstrated a mix of challenges and improvements in its profitability ratios over the years, showing variability in performance but a positive trend towards profitability in the later years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.81% | -1.39% | -8.72% | 0.01% | -9.11% |
| Return on assets (ROA) | 6.80% | 1.68% | -7.97% | -9.09% | -8.98% |
| Return on total capital | 7.59% | -1.97% | -11.97% | 0.01% | — |
| Return on equity (ROE) | 10.74% | 2.45% | -10.99% | -11.72% | — |
The profitability ratios of Duolingo Inc show a fluctuating trend over the years.
- Operating return on assets (Operating ROA) was negative in 2020 and 2022, indicating that the company's core operations were not efficiently utilizing its assets to generate profits. However, the ratio improved slightly in 2021 and significantly in 2024, reaching a positive level of 4.81%.
- Return on assets (ROA) was consistently negative from 2020 to 2022, suggesting that the overall asset utilization to generate profits was not satisfactory. However, there was a notable improvement in 2023 and 2024, with ROA turning positive and reaching 6.80% in 2024.
- Return on total capital was not available for the year 2020 and showed a negative trend in 2021 and 2022, indicating that the returns generated from the total capital employed were insufficient. Nonetheless, there was a substantial improvement in 2024, reaching 7.59% and indicating better utilization of total capital.
- Return on equity (ROE) was not available for 2020, but it was negative in 2021 and 2022, suggesting that the shareholder's equity was not effectively generating returns. However, there was a turnaround in 2024, with ROE reaching a positive 10.74%, indicating improved profitability for the shareholders.
Overall, the profitability ratios of Duolingo Inc reflect a mix of challenges and improvements in different periods, highlighting the company's efforts to enhance profitability and efficiency in utilizing its assets and capital.