Duolingo Inc (DUOL)
Interest coverage
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 11,699 | -13,259 | -36,206 | -51,698 | -61,867 | -65,195 | -64,458 | -72,996 | -58,440 |
| Interest expense (ttm) | US$ in thousands | 0 | 182 | 4,455 | 7,707 | 7,837 | 7,934 | 3,661 | 409 | 279 |
| Interest coverage | — | -72.85 | -8.13 | -6.71 | -7.89 | -8.22 | -17.61 | -178.47 | -209.46 |
March 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $11,699K ÷ $0K
= —
Duolingo Inc's interest coverage ratio has been consistently negative in recent quarters, indicating that the company is unable to cover its interest expenses with its earnings before interest and taxes (EBIT). The negative values suggest that Duolingo's EBIT is insufficient to meet its interest obligations, raising concerns about the company's financial health and ability to service its debt. The declining trend in the interest coverage ratio from less negative figures to more negative figures over the periods under consideration is alarming, as it indicates a worsening ability to service interest expenses over time. Investors and creditors may view this as a significant risk, as it implies a higher likelihood of default on debt payments. Duolingo Inc may need to take actions to improve its profitability or reduce its debt burden to enhance its ability to cover interest expenses in the future.
Peer comparison
Mar 31, 2024