Duolingo Inc (DUOL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Gross profit margin | 73.24% | 73.09% | 72.41% |
| Operating profit margin | -2.50% | -17.64% | -23.93% |
| Pretax margin | 3.35% | -15.87% | -23.91% |
| Net profit margin | 3.03% | -16.12% | -23.98% |
Duolingo Inc's profitability ratios exhibit a mixed performance over the past three years. The gross profit margin has remained relatively stable, indicating consistent control over the cost of goods sold. However, the operating profit margin shows fluctuation, with a notable improvement from -17.64% in 2022 to -2.50% in 2023, suggesting better efficiency in managing operating expenses.
The pretax margin has also shown improvement, moving from negative figures in 2021 and 2022 to a positive 3.35% in 2023. This indicates a better ability to generate profits before accounting for taxes. Similarly, the net profit margin has shown a positive trend, improving from -23.98% in 2021 to 3.03% in 2023, reflecting an upward trajectory in profitability after experiencing significant losses in the past.
Overall, while there are signs of progress in the company's profitability ratios, it is important to continue monitoring and analyzing these metrics to ensure sustained growth and financial health in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Operating return on assets (Operating ROA) | -1.39% | -8.72% | -9.07% |
| Return on assets (ROA) | 1.68% | -7.97% | -9.09% |
| Return on total capital | -2.02% | -12.03% | -11.70% |
| Return on equity (ROE) | 2.45% | -10.99% | -11.72% |
Duolingo Inc's profitability ratios show mixed performance over the past three years.
- Operating return on assets (Operating ROA) improved from -9.07% in 2021 to -1.39% in 2023, indicating that the company's operating efficiency has been gradually bettering.
- Return on assets (ROA) has also shown improvement, moving from negative figures in the previous two years to a positive 1.68% in 2023. This suggests that Duolingo has been more effective in generating profits from its assets.
- Return on total capital has shown a significant improvement, with the ratio moving from -11.70% in 2021 to -2.02% in 2023, indicating that the company has been able to utilize its total capital more efficiently to generate returns.
- Return on equity (ROE) has also shown improvement, with the ratio increasing from negative figures in the previous two years to a positive 2.45% in 2023, signaling that Duolingo has been able to generate better returns for its shareholders.
Overall, the improving trend in profitability ratios, especially ROA, Return on total capital, and ROE, suggests that Duolingo Inc has been more efficient in managing its resources and generating profits for its stakeholders. However, the company still has room for further improvement to enhance its overall profitability.