0001562088-22-000039 | 10-K | XBRL Viewer

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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION	DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Duolingo, Inc. (the “Company” or “Duolingo”) was formed on August 18, 2011 and the Duolingo app was launched to the general public on June 19, 2012. The Company’s headquarters are located in Pittsburgh, Pennsylvania. On July 30, 2021, Duolingo completed its Initial Public Offering (“IPO”) of 5,872 shares of its Class A common stock at a price to the public of $102.00 per share, 4,466 of which were sold by the Company and 1,406 of which were sold by certain selling stockholders, which includes the exercise in full by the underwriters of their option to purchase from the Company an additional 766 shares of the Company’s Class A common stock. The gross proceeds to the Company from the IPO were $455,532, before deducting underwriting discounts and commissions and offering expenses payable by the Company. The Company did not receive any proceeds from the sale of shares of Class A common stock in the offering by the selling stockholders. Immediately prior to the completion of the IPO, all convertible preferred stock outstanding, totaling approximately 19,074 shares, was automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis and their carrying value of $182,609 was reclassified to additional paid-in capital within stockholders’ equity (deficit) . Additionally, on July 15, 2021, 6,930 shares held by our founders were exchanged from Class A common stock into Class B common stock. Duolingo is a US-based language-learning website and mobile app, as well as a digital language proficiency assessment exam. The Company has a freemium business model: the app and the website are accessible free of charge, although Duolingo also offers a premium service, Duolingo Plus, for a subscription fee. As of the date of this filing, Duolingo offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. We have locations in the United States, China and Germany. Principles of Consolidation—The Consolidated Financial Statements include the accounts of the Company and subsidiaries over which the Company has control. All intercompany transactions and balances have been eliminated. Basis of Presentation—The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) from the Company’s accounting records and reflect the consolidated financial position and results of operations for the years ended December 31, 2021 and 2020. Unless otherwise specified, all dollar amounts are referred to in thousands. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash flows from operating activities:
Net loss	$ (60,135)	$ (15,776)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	2,726	2,256
Stock-based compensation	40,804	17,031
Changes in assets and liabilities:
Deferred revenue	43,475	28,485
Accounts receivable	(12,713)	(10,445)
Deferred cost of revenues	(10,634)	(6,653)
Prepaid expenses and other current assets	(4,048)	(1,712)
Accounts payable	5,622	(1,615)
Accrued expenses and other current liabilities	3,708	6,213
Noncurrent assets and liabilities	365	(76)
Net cash provided by operating activities	9,170	17,708
Cash flows from investing activities:
Capitalized software	(2,620)	(638)
Purchase of property and equipment	(3,586)	(3,376)
Net cash used for investing activities	(6,206)	(4,014)
Cash flows from financing activities:
Issuance of common stock in connection with the initial public offering, net of underwriting discounts and issuance costs	426,191	0
Net proceeds from issuance of convertible preferred stock	0	44,923
Proceeds from exercise of stock options	12,480	2,030
Repurchases of stock options	(7,335)	0
Repurchase of common stock	(868)	0
Net cash provided by financing activities	430,468	46,953
Net increase in cash and cash equivalents	433,432	60,647
Cash and cash equivalents - Beginning of period	120,490	59,843
Cash and cash equivalents - End of period	553,922	120,490
Supplemental disclosure of cash flow information:
Cash paid for interest	0	0
Cash paid for income taxes	132	0
Supplemental disclosure of noncash operating activities:
Implementation costs for cloud computing included in Current liabilities	64	0
Supplemental disclosure of noncash investing activities:
Capitalized software included in Current liabilities	342	500
Property and equipment included in Current liabilities	$ 230	$ 0

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities

The company has the following deferred tax assets (liabilities) as of December 31, 2021 and 2020:


	2021		2020
Net operating loss carryforwards	$	61,605	$	20,912
Equity compensation	1,881		1,063
Research and development credits	14,480		4,936
Lease liability	7,335		2,184
Other DTA	56		65
Sales tax / VAT reserve	277		544
Valuation allowance	(76,293)		(26,236)
Total deferred tax assets	9,341		3,468

ROU asset	(6,389)		(1,908)
Property and equipment	(1,894)		(1,014)
Capitalized software	(1,057)		(543)
Other DTL	(1)		(3)
Total deferred tax liabilities	(9,341)		(3,468)

Net deferred taxes	$	—	$	—

Summary of Valuation Allowance

The following table represents the activity in our valuation allowance for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021		2020
Beginning balance—January 1	$	(26,236)	$	(23,851)
Valuation allowances established	(50,057)		(2,928)
Release of valuation allowances	—		543
Ending balance—December 31	$	(76,293)	$	(26,236)

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the years ended December 31, 2021 and 2020:


	2021		2020
Federal statutory rate	21.0	%	21.0	%
State taxes	6.5		1.8
Sec. 162(m) limitation	(13.5)		—
Stock options	53.8		(18.4)
Other permanent adjustments	(0.5)		(1.8)
Research and development credit	15.9		10.2
Valuation allowance	(83.5)		(13.2)
Effective income tax rate	(0.3)	%	(0.4)	%

INCOME TAXES - Effective Income Tax Rate Reconciliation (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Federal statutory rate	21.00%	21.00%
State taxes	6.50%	1.80%
Sec. 162(m) limitation	(13.50%)	0.00%
Stock options	53.80%	(18.40%)
Other permanent adjustments	(0.50%)	(1.80%)
Research and development credit	15.90%	10.20%
Valuation allowance	(83.50%)	(13.20%)
Effective income tax rate	(0.30%)	(0.40%)

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2021

Other Liabilities Disclosure [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	2021		2020
Sales and VAT tax accrual	$	2,319	$	2,301

Obligations under current leases	3,336		1,111
Employee-related benefits	2,075		889

Marketing related accruals	1,078		1,513
Other	4,125		2,820
Total	$	12,933	$	8,634

PROPERTY and EQUIPMENT, net - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2,033	$ 1,624

CAPITALIZED SOFTWARE, net (Tables)

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Capitalized Software

Capitalized software consists of the following as of December 31, 2021 and 2020:


	2021		2020
Capitalized software	$	11,144	$	8,181
Less: accumulated amortization	(6,578)		(5,885)
Capitalized software, net	$	4,566	$	2,296

Finite-lived Intangible Assets Amortization Expense

Amortization expense is included within the following financial statement line items within the Company’s Consolidated Statement of Operations and Comprehensive Loss:



	2021		2020
Cost of revenues	$	—	$	86
Sales and marketing	693		546
Total	$	693	$	632

REVENUE - Narrative (Details) - Revenue from Contract with Customer Benchmark - Geographic Concentration Risk	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
United States
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	44.00%	44.00%
United Kingdom
Disaggregation of Revenue [Line Items]
Concentration risk, percentage	10.00%	9.00%

REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	$ 250,772	$ 161,696
Subscription
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	180,698	117,501
Advertising
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	38,501	27,043
Duolingo English Test
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	24,658	15,155
Other
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	6,915	1,997
Over time
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	180,698	117,501
Point in time
Disaggregation of Revenue [Line Items]
Revenue from contract with customer, excluding assessed tax	$ 70,074	$ 44,195

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

PROPERTY and EQUIPMENT, net

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

PROPERTY and EQUIPMENT, net

Property and equipment consists of the following as of December 31, 2021 and 2020:



	2021		2020
Leasehold improvements	$	10,258	$	7,536
Furniture, fixtures and equipment	3,053		1,959
Total property and equipment	13,311		9,495
Less: accumulated depreciation	(5,100)		(3,067)
Total property and equipment, net	$	8,211	$	6,428

Depreciation expense was $2,033 for the year ended December 31, 2021 and $1,624 for the year ended December 31, 2020, and is predominately included within General and administrative, with nominal amounts in Cost of revenues, Research and development and Sales and marketing in the Company’s Consolidated Statement of Operations and Comprehensive Loss.

INCOME TAXES - Narrative (Details) - USD ($)	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Provision for income taxes	$ 177,000	$ 68,000
Foreign income taxes	97,000	26,000
State income taxes	80,000	42,000
Provision for income taxes		68,000
Decrease in valuation allowance	50,057,000
Unrecognized tax benefits	0	$ 0
General Business Tax Credit Carryforward
Operating Loss Carryforwards [Line Items]
Business credits	14,480,000
Federal
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	257,115,000
State
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 98,131,000

CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Convertible preferred stock beginning balance (in shares) at Dec. 31, 2019	18,247,000
Convertible preferred stock beginning balance at Dec. 31, 2019	$ 137,686
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of Series G and H convertible preferred stock, net of fees (in shares)	827,000
Issuance of Series G and H convertible preferred stock, net of fees	$ 44,923
Convertible preferred stock ending balance (in shares) at Dec. 31, 2020	19,074,000
Convertible preferred stock ending balance at Dec. 31, 2020	$ 182,609
Beginning balance (in shares) at Dec. 31, 2019		12,406,000
Beginning balance at Dec. 31, 2019	(83,976)	$ 1	$ 11,026	$ (95,003)
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Stock-based compensation	17,031		17,031
Stock options exercised (in shares)		388,000
Stock options exercised	2,030		2,030
Net loss	(15,776)			(15,776)
Ending balance (in shares) at Dec. 31, 2020		12,794,000
Ending balance at Dec. 31, 2020	$ (80,691)	$ 1	30,087	(110,779)
Increase (Decrease) in Temporary Equity [Roll Forward]
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (in shares)	(19,074,000)
Conversion of redeemable convertible preferred stock to Class A common stock in connection with initial public offering	$ (182,609)
Convertible preferred stock ending balance (in shares) at Dec. 31, 2021	0
Convertible preferred stock ending balance at Dec. 31, 2021	$ 0
Increase (Decrease) in Stockholders' Deficit [Roll Forward]
Issuance of common stock in connection with initial public offering, net of underwriting discounts and issuance costs (in shares)		4,466,000
Issuance of common stock in connection with the initial public offering, net of underwriting discounts and issuance costs	426,192	$ 1	426,191
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering (in shares)		19,074,000
Conversion of redeemable convertible preferred stock to Class A common stock in connection with initial public offering	182,609	$ 2	182,607
Stock-based compensation	$ 40,804		40,804
Stock options exercised (in shares)	1,882,000	1,882,000
Stock options exercised	$ 12,480		12,480
Common stock repurchased and retired (in shares)		(23,000)
Common stock repurchased and retired	(868)		(868)
Options repurchased	(7,335)		(7,335)
Release of restricted stock units (in shares)		79,000
Net loss	(60,135)			(60,135)
Ending balance (in shares) at Dec. 31, 2021		38,272,000
Ending balance at Dec. 31, 2021	$ 513,056	$ 4	$ 683,966	$ (170,914)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Useful Life (Details)	12 Months Ended
	Dec. 31, 2021
Furniture, fixtures and equipment \| Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	5 years
Furniture, fixtures and equipment \| Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	7 years
Leasehold improvements \| Minimum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	4 years
Leasehold improvements \| Maximum
Property, Plant and Equipment [Line Items]
Estimated Useful Life	6 years

STOCK-BASED COMPENSATION - Schedule of Payment Pricing Model (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate, minimum	1.04%	0.32%
Risk-free interest rate, maximum	1.14%	0.68%
Expected life	5 years 10 months 24 days	6 years 3 days
Expected volatility, minimum	48.90%	45.50%
Expected volatility, maximum	49.12%	49.38%
Dividend yield	0.00%	0.00%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of common stock (in usd per share)	$ 38.08	$ 14.42
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of common stock (in usd per share)	$ 52.80	$ 38.08

CONVERTIBLE PREFERRED STOCK (Tables)

12 Months Ended

Dec. 31, 2021

Temporary Equity Disclosure [Abstract]

Temporary Equity

The following table summarizes the convertible preferred stock outstanding immediately prior to the conversion into common stock and as of December 31, 2020:


	Shares
Series	Authorized	Outstanding	Per share price at issuance		Aggregate liquidation preference		Funds received		Fees incurred		Carrying value of convertible preferred stock
A	3,865	3,865	$	0.85	$	3,300	$	3,300	$	52	$	3,248
B	6,298	6,298	2.38		15,000		15,000		60		14,940
C	2,948	2,948	6.78		20,000		20,000		112		19,888
D	3,154	3,154	14.27		45,000		45,000		146		44,853
E	1,224	1,224	20.43		25,000		25,000		92		24,909
F	758	758	39.57		30,000		30,000		153		29,848
G	241	241	41.38		10,000		10,000		24		9,976
H	586	586	59.77		35,000		35,000		52		34,947
Total	19,074	19,074			$	183,300	$	183,300	$	691	$	182,609

PROPERTY and EQUIPMENT, net (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment


Asset Class			Estimated Useful Life
Furniture, fixtures and equipment			5 to 7 years
Leasehold improvements			4 to 6 years

Property and equipment consists of the following as of December 31, 2021 and 2020:



	2021		2020
Leasehold improvements	$	10,258	$	7,536
Furniture, fixtures and equipment	3,053		1,959
Total property and equipment	13,311		9,495
Less: accumulated depreciation	(5,100)		(3,067)
Total property and equipment, net	$	8,211	$	6,428

LEASES - Narrative (Details) $ in Thousands	Nov. 06, 2021 tranche	Dec. 31, 2021 USD ($)	Dec. 23, 2021	Nov. 16, 2021	Dec. 31, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Renewal term		5 years
Written notice, option to cancel				12 months
Number of extension options \| tranche	2
Total undiscounted lease payments		$ 44,391
Operating lease liabilities		32,460
Obligations under current leases		3,336			$ 1,111
Operating lease liability, noncurrent		$ 29,124			$ 8,131
Operating lease, liability, current, statement of financial position, [extensible enumeration]		Accrued expenses and other current liabilities			Accrued expenses and other current liabilities
Obligation
Lessee, Lease, Description [Line Items]
Operating lease liability, noncurrent		$ 29,124			$ 8,131
Accounts expenses and other liabilities
Lessee, Lease, Description [Line Items]
Obligations under current leases		3,336
New Office Space
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract				162 months
Option to extend				5 years
Total undiscounted lease payments		24,261
Existing Office Space
Lessee, Lease, Description [Line Items]
Lessee, operating lease, term of contract			30 months
Total undiscounted lease payments		$ 7,772

REVENUE - Deferred Revenue Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Revenue from Contract with Customer, Liability [Roll Forward]
Beginning balance	$ 54,792	$ 26,307
Amount from beginning balance recognized into revenue	(54,792)	(26,307)
Recognition of deferred revenue	(139,371)	(91,193)
Deferral of revenue	237,638	145,985
Ending balance	$ 98,267	$ 54,792

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Prior to the automatic conversion of all of its convertible preferred stock outstanding into Class B common stock upon the IPO, the Company considered all series of its convertible preferred stock to be participating securities.

Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the holders of the convertible preferred stock do not have a contractual obligation to share in the Company’s losses. Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The diluted net loss per share

attributable to common stockholders is calculated by giving effect to all potential dilutive common stock equivalents outstanding for the period.


	Year Ended December 31,
(In thousands, except per share data)	2021		2020
Numerator:
Net loss attributable to Class A and Class B common shareholders	$	(60,135)	$	(15,776)


Denominator:
Weighted-average shares in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted	23,433		12,735




Basic loss per common share	$	(2.57)	$	(1.24)
Diluted loss per common share	$	(2.57)	$	(1.24)

The rights, including the liquidation and dividend rights, of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to 20 votes per share. Each share of Class B common stock is convertible into a share of Class A common stock voluntarily at any time by the holder, and automatically upon certain events. The Class A common stock has no conversion rights. As the liquidation and dividend rights are identical for Class A and Class B common stock, the undistributed earnings are allocated on a proportional basis and the resulting net loss per share attributable to common stockholders will, therefore, be the same for both Class A and Class B common stock on an individual or combined basis.

Since the Company was in a net loss position for the years ended December 31, 2021 and 2020, there is no difference between the number of shares used to calculate basic and diluted loss per share. The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the period presented because including them would have been antidilutive are as follows:


	Year Ended December 31,
	2021	2020
Convertible preferred stock	—	19,074
Founder awards where performance has been met	180	—
Vested RSUs	4	—
Stock options	4,420	4,191
Total	4,604	23,265

Founder awards where performance has not been met of 1,620 are excluded from the above table because the stock-price hurdles for those awards had not been met as of December 31, 2021.

STOCK-BASED COMPENSATION - Schedule of Weighted Average Pricing Model (Details) - $ / shares		12 Months Ended
	Jun. 28, 2021	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected life		5 years 10 months 24 days	6 years 3 days
Dividend yield		0.00%	0.00%
Founder awards where performance has been met
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.48%
Expected life	9 years 11 months 23 days
Expected volatility	51.67%
Dividend yield	0.00%
Fair value of common stock (in usd per share)	$ 95.00

REVENUE

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE

The Company has three predominant sources of revenues; time-based subscriptions, in-app advertising placement by third parties, and the Duolingo English Test. Revenue is recognized upon transfer of control of promised products or services to users in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company does not enter into contracts with a customer that contain multiple promises that result in multiple performance obligations. Revenue is recorded net of taxes assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between us and our users.

Revenue from time-based subscriptions includes a stand-ready obligation to provide hosting services that are consumed by the customer over the subscription period. Users can purchase Duolingo monthly or they can purchase a six-month or year-long subscription and pay for the subscription at the time of purchase. Under the year-long subscription, users can also purchase a single plan or a family plan. The family plan includes up to six users to be on one subscription. Such payments are initially recorded to deferred revenue. The user has the ability to download limited content offline. However, as there is a significant level of integration and interdependency with the online functionality, the Company considers the service to be a single performance obligation for the online and offline content.

The Company enters into arrangements with advertising networks to monetize the in-app advertising inventory. Revenue from in-app advertising placement is recognized at a point in time when the advertisement is placed and is based upon the amount received.

Duolingo English Test revenue is generally recognized once the tests have gone through the proctoring process and a certification decision has been made. This process usually takes less than 48 hours after the test has been completed and uploaded. Customers have 21 days from the date of purchase to take the exam or their purchase will expire and revenue will be recognized. Virtually all customers complete their exams prior to expiration. Sometimes organizations may purchase tests in bulk via coupons with a

one year expiration date. The Company will defer revenue from all tests that haven’t been proctored nor expired.

The Company’s users have the option to purchase consumable in-app virtual goods. The Company recognizes revenue over the period in which the user consumes the virtual good, which is generally within a month.

Principal Agent Considerations—The Company makes its application available to be downloaded through third-party digital distribution service providers. Users who purchase subscriptions also pay through the respective app stores. The Company evaluates the purchases via third-party payment processors to determine whether its revenues should be reported gross or net of fees retained by the payment processor. The Company is the principal in the transaction with the end user as a result of controlling, hosting, and integrating the delivery of the virtual items to the end user. The Company records revenue gross as a principal and records fees paid to third-party payment processors as Cost of revenues.

Contract Balances—Deferred revenue mostly consists of payments we receive in advance of revenue recognition, and is mostly related to time-based subscriptions, which will be recognized into revenue over the course of the upcoming year (recognized over 12 months or less). Additionally, the Duolingo English Test has deferred revenue related to tests that have been purchased, but will not be recognized until the tests have been proctored.

Disaggregation of Revenue

In accordance with ASC 606, Revenue from Contracts with Customers, the Company disaggregates revenue from contracts with customers into source of revenue, which most closely depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Information regarding source of revenues:



	2021		2020
Over time	$	180,698	$	117,501
Point in time	70,074		44,195
Total revenue	$	250,772	$	161,696

Information regarding revenue by stream:



	2021		2020
Revenues:
Subscription	$	180,698	$	117,501
Advertising	38,501		27,043
Duolingo English Test	24,658		15,155
Other (1)	6,915		1,997
Total revenues	$	250,772	$	161,696

________________

(1) Other revenue is mainly comprised of in-app purchases of virtual goods.

Information regarding geography of revenues is based upon the location where the users are located or, in the case of the Duolingo English Test, where the tests are taken:


	2021		2020
United States	$	109,163	$	70,978
United Kingdom	25,163		15,245
Rest of World	116,446		75,473
Total	$	250,772	$	161,696

Customers located in the United States accounted for 44% of total revenues for both of the years ended December 31, 2021 and 2020, respectively, and customers located in the United Kingdom accounted for 10% and 9% for the years ended December 31, 2021 and 2020, respectively. No other country accounted for more than 10% of revenue in the periods presented.

Changes in deferred revenues were as follows:



	2021		2020
Beginning balance—January 1	$	54,792	$	26,307
Amount from beginning balance recognized into revenue	(54,792)		(26,307)
Recognition of deferred revenue	(139,371)		(91,193)
Deferral of revenue	237,638		145,985
Ending balance—December 31	$	98,267	$	54,792

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

LEASES (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Summary of Components of Lease Cost

The following represents the components of lease cost for the years ended December 31, 2021 and 2020 along with supplemental disclosures of cash flow information, lease term and discount rate:


	Year Ended December 31,
	2021			2020
Operating lease cost	$	1,919		$	1,721
Short term lease cost	1,266			317
Variable lease cost	28			—
Total lease cost	$	3,213		$	2,038

Cash paid for amounts included in the measurement of lease liabilities	$	1,819		$	—
Operating lease assets obtained in exchange for new lease liabilities	$	22,274		$	—
Right-of-use assets disposed modifying operating lease liabilities	$	235		$	—
Gain from termination of leases	$	31		$	—
Weighted average remaining lease term	9 years			8 years, 11 months
Weighted average discount rate	5.77		%	6.70		%

Schedule of Future Minimum Rental Payments for Operating Leases

The following table reconciles future minimum undiscounted rental commitments for operating leases to operating lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2021:


Fiscal year
2022	$	5,153
2023	6,624
2024	4,572
2025	3,106
2026	3,173
Thereafter	21,763
Total undiscounted lease payments	$	44,391
Present value adjustment	(11,931)
Operating lease liabilities	$	32,460

STOCK-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands	1 Months Ended		3 Months Ended	12 Months Ended
	Jun. 30, 2021 shares	Feb. 28, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) day shares	Dec. 31, 2021 USD ($) tranche day $ / shares shares	Dec. 31, 2020 USD ($) $ / shares	Jul. 30, 2021 $ / shares	Jul. 26, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value, exercised				$ 194,513	$ 6,058
Compensation expense				40,804	$ 17,031
Unrecognized compensation cost, options			$ 13,428	13,428
Unrecognized compensation cost			$ 65,906	$ 65,906
Closing trading price, specified calendar \| day			60	60
Weighted average grant date fair value (in usd per share) \| $ / shares				$ 24.61	$ 9.77
Fair market value of share price (in usd per share) \| $ / shares		$ 38.08
Payments for repurchase of stock options				$ 7,335	$ 0
Options repurchased				(7,335)
Common stock repurchased and retired				868
Additional Paid-In Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options repurchased				(7,335)
Common stock repurchased and retired				868
Tender Offer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense		$ 5,275
Sale Of Stock, Percentage Sold, Maximum		0.10
Sale of stock, price per share (in usd per share) \| $ / shares		$ 59.77
Payments for repurchase of stock options		$ 13,479
Options recycled back into option pool (in shares) \| shares		220,000
Common stock repurchased and retired (in shares) \| shares		23,000
Common stock repurchased and retired		$ 868
Tender Offer \| Additional Paid-In Capital
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options repurchased		$ 7,335
IPO \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Sale of stock, price per share (in usd per share) \| $ / shares						$ 102.00
Performance Based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, excluding options			$ 110,817	$ 110,817
Performance Based RSUs \| Share-Based Payment Arrangement, Founders
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value (in usd per share) \| $ / shares				$ 61.56
Performance Based RSUs \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award service period				3 years 6 months 29 days
Performance Based RSUs \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award service period				5 years 11 months 1 day
Performance Based RSUs \| Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense				$ 16,463
Performance Based RSUs \| Founders
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares) \| shares	1,800,000
Settlement period after vesting	1 year
Award vesting percentage	25.00%
Number of tranches \| tranche				10
Award service period	10 years
Performance Based RSUs \| IPO \| Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense				$ 5,574
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost, weighted-average period of recognition				2 years
Number of options available for grant (in shares) \| shares			7,754,000	7,754,000
Vested RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense			$ 2,035	$ 2,035
Unrecognized compensation cost, weighted-average period of recognition				3 years
Unrecognized compensation expense, excluding options			$ 52,478	$ 52,478
Equity instruments other than options, grants in period (in shares) \| shares				787,000
2011 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period				4 years
Share-based compensation, term of award				10 years
Incentive stock options, minimum exercise price, percent				100.00%
2021 Plan \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares) \| shares							7,946,000
Employee Stock Purchase Plan \| Common Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance (in shares) \| shares							1,119,000

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	Jul. 30, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Jul. 15, 2021 shares
Business And Organization [Line Items]
Issuance of common stock in connection with the initial public offering, net of underwriting discounts and issuance costs \| $	$ 455,532	$ 426,191	$ 0
Conversion ratio	1
Common stock carrying value \| $		$ 4	$ 1
Common stock, shares outstanding (in shares)			12,794,000
Common Class A
Business And Organization [Line Items]
Common stock, shares outstanding (in shares)		16,645,000
Common Class A \| IPO
Business And Organization [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	4,466,000
Sale of stock, price per share (in usd per share) \| $ / shares	$ 102.00
Common Class A \| IPO \| Stockholders
Business And Organization [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	1,406,000
Common Class A \| Over-Allotment Option
Business And Organization [Line Items]
Sale of stock, number of shares issued in transaction (in shares)	766,000
Common Class B
Business And Organization [Line Items]
Convertible preferred stock, shares issued upon conversion (in shares)	19,074,000
Conversion ratio	1
Common stock carrying value \| $	$ 182,609
Common stock, shares outstanding (in shares)		21,627,000
Common Class B \| Founders
Business And Organization [Line Items]
Common stock, shares outstanding (in shares)				6,930,000

INCOME TAXES - Valuation Allowance (Details) - USD ($)	12 Months Ended
INCOME TAXES - Valuation Allowance (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Beginning balance	$ (26,236,000)
Valuation allowances established	(50,057,000)	$ (2,928,000)
Release of valuation allowances	0	543,000
Ending balance	$ (76,293,000)	$ (26,236,000)

CONVERTIBLE PREFERRED STOCK

12 Months Ended

Dec. 31, 2021

Temporary Equity Disclosure [Abstract]

CONVERTIBLE PREFERRED STOCK

Immediately prior to the completion of the IPO on July 30, 2021, all convertible preferred stock outstanding, totaling approximately 19,074 shares, was automatically converted into an equivalent number of shares of Class B common stock on a one-to-one basis and their carrying value of $182,609 was reclassified to additional paid-in capital within stockholders’ equity (deficit).

The following table summarizes the convertible preferred stock outstanding immediately prior to the conversion into common stock and as of December 31, 2020:


	Shares
Series	Authorized	Outstanding	Per share price at issuance		Aggregate liquidation preference		Funds received		Fees incurred		Carrying value of convertible preferred stock
A	3,865	3,865	$	0.85	$	3,300	$	3,300	$	52	$	3,248
B	6,298	6,298	2.38		15,000		15,000		60		14,940
C	2,948	2,948	6.78		20,000		20,000		112		19,888
D	3,154	3,154	14.27		45,000		45,000		146		44,853
E	1,224	1,224	20.43		25,000		25,000		92		24,909
F	758	758	39.57		30,000		30,000		153		29,848
G	241	241	41.38		10,000		10,000		24		9,976
H	586	586	59.77		35,000		35,000		52		34,947
Total	19,074	19,074			$	183,300	$	183,300	$	691	$	182,609

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

12 Months Ended

Dec. 31, 2021

Other Liabilities Disclosure [Abstract]

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:


	2021		2020
Sales and VAT tax accrual	$	2,319	$	2,301

Obligations under current leases	3,336		1,111
Employee-related benefits	2,075		889

Marketing related accruals	1,078		1,513
Other	4,125		2,820
Total	$	12,933	$	8,634

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

Share-based Payment Arrangement, Option, Activity

Stock option activity as of December 31, 2021 is set forth below:


	Number of options	Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value





Options outstanding at January 1, 2021	8,365	$	10.68	7.47	$	230,596
Granted	72	52.80
Exercised	(1,882)	6.63
Repurchased	(220)	4.81
Forfeited and expired	(80)	14.75
Options outstanding at December 31, 2021	6,255	$	12.53	6.92	$	585,339
Options exercisable at December 31, 2021	4,420	$	10.61	6.41	$	422,076

Share-based Payment Arrangement, Option, Valuation Assumptions

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:


	2021	2020
Risk-free interest rate	1.04 – 1.14%	0.32 – 0.68%
Expected life	5.90 years	6.01 years
Expected volatility	48.90 – 49.12%	45.50 – 49.38%
Dividend yield	—%	—%
Fair value of common stock	$38.08 – $52.80	$14.42 – $38.08

Share-based Payment Arrangement, RSU, Activity

RSU activity as of December 31, 2021 is set forth below:


	Restricted stock units	Weighted- average grant date fair value per share





Outstanding at January 1, 2021	34	$	38.08
Granted	787	77.41
Released	(79)	59.76
Forfeited	(12)	99.06
Outstanding at December 31, 2021	730	$	77.09

Share-based Payment Arrangement, Payment Award


Tranche	Company Stock Price Hurdle		Number of RSUs Eligible to Vest
1	$	127.50	90
2	$	153.00	90
3	$	178.50	90
4	$	204.00	180
5	$	255.00	180
6	$	306.00	180
7	$	357.00	180
8	$	408.00	180
9	$	612.00	270
10	$	816.00	360

The weighted-average grant date fair value of the Founder Awards was estimated to be $61.56 per share using the below inputs.


Input			Assumption
Valuation Date			June 28, 2021
Risk-free interest rate			1.48%
Expected life			9.98
Expected volatility			51.67%
Dividend yield			0.00%
Fair value of common stock			$95.00

Share-based Payment Arrangement, Expensed, Amount

Stock based compensation expense is included in the Consolidated Statement of Operations and Comprehensive Loss as shown in the following table:


	Year Ended December 31,
	2021		2020
Cost of revenues	$	8	$	6
Research and development	9,298		2,773
Sales and marketing	881		348
General and administrative	30,617		13,904
Total	$	40,804	$	17,031

LEASES

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

LEASES

The Company has entered into various operating leases for its office space expiring between fiscal 2023 and 2035. Certain lease agreements contain an option for the Company to renew a lease for a term of up to five years. The Company considers these options, which may be elected at the Company’s sole discretion, in determining the lease term on a lease-by-lease basis.

In November 2021, the Company signed a new lease for office space. The term of the newly executed lease is 162 months beginning on November 16, 2021 and expiring on April 30, 2035. The Company has the option to cancel the lease with at least twelve months prior written notice starting April 30, 2030. Additionally there are two five year extension options in the lease which the Company has not included in the lease term. The remaining payments related to this lease agreement as of December 31, 2021 are approximately $24,261.

In December 2021, the Company signed an extension for existing office space. The term of the amended lease is 30 months beginning on December 23, 2021 and expiring on May 31, 2024. The remaining payments related to this lease agreement as of December 31, 2021 are approximately $7,772.

The following represents the components of lease cost for the years ended December 31, 2021 and 2020 along with supplemental disclosures of cash flow information, lease term and discount rate:


	Year Ended December 31,
	2021			2020
Operating lease cost	$	1,919		$	1,721
Short term lease cost	1,266			317
Variable lease cost	28			—
Total lease cost	$	3,213		$	2,038

Cash paid for amounts included in the measurement of lease liabilities	$	1,819		$	—
Operating lease assets obtained in exchange for new lease liabilities	$	22,274		$	—
Right-of-use assets disposed modifying operating lease liabilities	$	235		$	—
Gain from termination of leases	$	31		$	—
Weighted average remaining lease term	9 years			8 years, 11 months
Weighted average discount rate	5.77		%	6.70		%

The following table reconciles future minimum undiscounted rental commitments for operating leases to operating lease liabilities recorded on the Consolidated Balance Sheet as of December 31, 2021:


Fiscal year
2022	$	5,153
2023	6,624
2024	4,572
2025	3,106
2026	3,173
Thereafter	21,763
Total undiscounted lease payments	$	44,391
Present value adjustment	(11,931)
Operating lease liabilities	$	32,460

Current lease liabilities of $3,336 and $1,111 are presented within Accrued expenses and other liabilities while non-current lease liabilities of $29,124 and $8,131 are presented within Long-term obligation under operating leases on the Consolidated Balance Sheets for the years ended December 31, 2021 and 2020 respectively.

INCOME TAXES

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company has incurred $177 provision for income taxes for the year ended December 31, 2021, of which $97 was related to foreign income taxes and $80 for state income taxes. For the year ended December 31, 2020, the Company incurred $68 provision for income taxes, of which $26 was related to foreign income taxes and $42 for state income taxes.

The company has the following deferred tax assets (liabilities) as of December 31, 2021 and 2020:


	2021		2020
Net operating loss carryforwards	$	61,605	$	20,912
Equity compensation	1,881		1,063
Research and development credits	14,480		4,936
Lease liability	7,335		2,184
Other DTA	56		65
Sales tax / VAT reserve	277		544
Valuation allowance	(76,293)		(26,236)
Total deferred tax assets	9,341		3,468

ROU asset	(6,389)		(1,908)
Property and equipment	(1,894)		(1,014)
Capitalized software	(1,057)		(543)
Other DTL	(1)		(3)
Total deferred tax liabilities	(9,341)		(3,468)

Net deferred taxes	$	—	$	—

The Company has provided a valuation allowance for the net deferred tax asset as it is not more likely than not that the asset will be realized. The movement in valuation allowance of $50,057 is primarily related to the generation of additional net operating losses and research and development credits.

The following table represents the activity in our valuation allowance for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021		2020
Beginning balance—January 1	$	(26,236)	$	(23,851)
Valuation allowances established	(50,057)		(2,928)
Release of valuation allowances	—		543
Ending balance—December 31	$	(76,293)	$	(26,236)

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the years ended December 31, 2021 and 2020:


	2021		2020
Federal statutory rate	21.0	%	21.0	%
State taxes	6.5		1.8
Sec. 162(m) limitation	(13.5)		—
Stock options	53.8		(18.4)
Other permanent adjustments	(0.5)		(1.8)
Research and development credit	15.9		10.2
Valuation allowance	(83.5)		(13.2)
Effective income tax rate	(0.3)	%	(0.4)	%

The 2021 and 2020 effective tax rate is less than the statutory rate primarily as a result of the valuation allowance for net deferred tax assets.

The Company has approximately $257,115 in federal net operating loss carryforwards and approximately $98,131 in state net operating loss carryforwards. Certain of these loss carryforwards have an indefinite

life and other amounts are available to offset future taxable income through 2041. The Company has approximately $14,480 in federal general business credits that are available to offset future taxable income through 2041. The Company has analyzed the impact of Internal Revenue Code (“IRC”) Sections 382 and 383 on these tax attributes and has determined that no prior ownership changes have occurred which would limit the Company’s ability to utilize the NOLs and research and development tax credits.

The Company’s tax years through the 2021 tax year remain subject to examination by federal and state tax authorities.

No uncertain tax benefits have been recorded in 2021 and 2020, respectively.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 553,922	$ 120,490
Accounts receivable	33,163	20,450
Deferred cost of revenues	24,219	13,585
Prepaid expenses and other current assets	7,967	3,855
Total current assets	619,271	158,380
Assets, Noncurrent
Property and equipment, net	8,211	6,428
Capitalized software, net	4,566	2,296
Operating lease right-of-use assets	28,369	8,073
Other assets	894	562
Total assets	661,311	175,739
Current liabilities
Accounts payable	7,818	2,196
Deferred revenues	98,267	54,792
Income tax payable	113	68
Accrued expenses and other current liabilities	12,933	8,634
Total current liabilities	119,131	65,690
Liabilities, Noncurrent
Long-term obligation under operating leases	29,124	8,131
Total liabilities	148,255	73,821
Commitments and contingencies (Note 10)
Convertible preferred stock, $0.0001 par value, no shares issued and outstanding at December 31, 2021 and 19,074 shares issued and outstanding at December 31, 2020.	0	182,609
Stockholders’ equity (deficit)
Common stock, $0.0001 par value; 2,000,000 shares of Class A common stock authorized and 16,645 issued and outstanding at December 31, 2021; 30,000 shares of Class B common stock authorized and 21,627 issued and outstanding at December 31, 2021; 42,800 authorized shares of common stock; 12,794 issued and outstanding at December 31, 2020.	4	1
Additional paid-in capital	683,966	30,087
Accumulated deficit	(170,914)	(110,779)
Total stockholders’ equity (deficit)	513,056	(80,691)
Total liabilities, convertible preferred stock and stockholders' equity (deficit)	$ 661,311	$ 175,739

CONVERTIBLE PREFERRED STOCK - Narrative (Details) $ in Thousands	Dec. 31, 2021 USD ($)	Jul. 30, 2021 USD ($) shares	Dec. 31, 2020 USD ($)
Temporary Equity [Line Items]
Conversion ratio		1
Common stock carrying value	$ 4		$ 1
Common Class B
Temporary Equity [Line Items]
Preferred stock outstanding \| shares		19,074,000
Conversion ratio		1
Common stock carrying value		$ 182,609

STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Number of options
Options outstanding, beginning balance (in shares)	8,365,000	8,365,000
Granted (in shares)		72,000
Exercised (in shares)		(1,882,000)
Repurchased (in shares)		(220,000)
Forfeited and expired (in shares)		(80,000)
Options outstanding, ending balance (in shares)		6,255,000	8,365,000
Number of options exercisable (in shares)		4,420,000
Weighted- average exercise price
Outstanding, beginning balance (in usd per share)	$ 10.68	$ 10.68
Granted (in usd per share)		52.80
Exercised (in usd per share)		6.63
Repurchased (in usd per share)		4.81
Forfeited and expired (in usd per share)		14.75
Outstanding, ending balance (in usd per share)		12.53	$ 10.68
Weighted average exercise price, options exercisable (in usd per share)		$ 10.61
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Weighted average remaining contractual term (in years), outstanding	7 years 5 months 19 days	6 years 11 months 1 day
Weighted average remaining contractual term (in years), exercisable		6 years 4 months 28 days
Aggregate intrinsic value, outstanding		$ 585,339	$ 230,596
Aggregate intrinsic value, exercisable		$ 422,076

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Other Liabilities Disclosure [Abstract]
Sales and VAT tax accrual	$ 2,319	$ 2,301
Obligations under current leases	3,336	1,111
Employee-related benefits	2,075	889
Marketing related accruals	1,078	1,513
Other	4,125	2,820
Total	$ 12,933	$ 8,634

EARNINGS PER SHARE - Narrative (Details)	12 Months Ended
EARNINGS PER SHARE - Narrative (Details)	Dec. 31, 2021 vote_per_share shares
Performance Based RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Founder awards where performance not met \| shares	1,620,000
Common Class A
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Voting rights, per share	1
Common Class B
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Voting rights, per share	20

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Convertible preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares issued (in shares)	0	19,074,000
Convertible preferred stock, shares outstanding (in shares)	0	19,074,000
Common stock, shares authorized (in shares)		42,800,000
Common stock, shares issued (in shares)		12,794,000
Common stock, shares outstanding (in shares)		12,794,000
Common Class A
Common stock, par value (in usd per share)	$ 0.0001
Common stock, shares authorized (in shares)	2,000,000,000
Common stock, shares issued (in shares)	16,645,000
Common stock, shares outstanding (in shares)	16,645,000
Common Class B
Common stock, shares authorized (in shares)	30,000,000
Common stock, shares issued (in shares)	21,627,000
Common stock, shares outstanding (in shares)	21,627,000

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
Revenues	$ 250,772	$ 161,696
Cost of revenues	69,186	45,987
Gross profit	181,586	115,709
Operating expenses:
Research and development	103,833	53,024
Sales and marketing	59,170	34,983
General and administrative	78,590	43,713
Total operating expenses	241,593	131,720
Loss from operations	(60,007)	(16,011)
Other income, net of other expenses	49	303
Loss before provision for income taxes	(59,958)	(15,708)
Provision for income taxes	177	68
Net loss	(60,135)	(15,776)
Net comprehensive loss	$ (60,135)	$ (15,776)
Net loss per share attributable to Class A and Class B common stockholders, basic (in usd per share)	$ (2.57)	$ (1.24)
Net loss per share attributable to Class A and Class B common stockholders, diluted (in usd per share)	$ (2.57)	$ (1.24)

EMPLOYEE BENEFIT PLAN	12 Months Ended
EMPLOYEE BENEFIT PLAN	Dec. 31, 2021
Postemployment Benefits [Abstract]
EMPLOYEE BENEFIT PLAN	EMPLOYEE BENEFIT PLANThe Company sponsors a profit sharing plan with a 401(k) feature, the Duolingo Retirement Plan, (the “Plan”) for eligible employees. The current Plan, effective January 1, 2021, provides for Company safe harbor matching contributions of 100% of the first 4% of the employees’ elective deferrals and 50% of the next 2%, with vesting starting upon the first day of employment. The prior Plan provided for Company safe harbor matching contributions of 100% of the first 3% of the employees’ elective deferrals and 50% of the next 2%, with vesting starting upon the first day of employment. The Company also has the option to make discretionary matching or profit sharing contributions. The Company made safe harbor matching contributions of approximately $3,438 for the year ended December 31, 2021, and $1,796 for the year ended December 31, 2020. The Company did not make any discretionary matching or profit sharing contributions during the years ended December 31, 2021 or 2020.

CAPITALIZED SOFTWARE, net - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of capitalized computer software	$ 693	$ 632

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation—The Consolidated Financial Statements include the accounts of the Company and subsidiaries over which the Company has control. All intercompany transactions and balances have been eliminated.

Basis of Presentation and Accounting Principles

Basis of Presentation—The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) from the Company’s accounting records and reflect the consolidated financial position and results of operations for the years ended December 31, 2021 and 2020. Unless otherwise specified, all dollar amounts are referred to in thousands. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accounting Principles—The financial statements and accompanying notes are prepared in accordance with GAAP.

Use of Estimates

Use of Estimates—The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Significant estimates and assumptions reflected in the Consolidated Financial Statements include, but are not limited to, useful lives of property and equipment, valuation of deferred tax assets and liabilities, stock-based compensation, common stock valuation, operating lease right-of-use assets and liabilities, capitalization of internally developed software and associated useful lives and contingent liabilities. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s Consolidated Financial Statements will be affected.

Revenue Recognition

Revenue Recognition—The Company has three predominant sources of revenue; time-based subscriptions, in-app advertising placement by third parties, and the Duolingo English Test. See Footnote 3 for further discussion.

Deferred Revenues—Revenue is recognized over the life of the subscription, or in the case of Duolingo English Test, revenue is recognized when the test is proctored. The Company classifies deferred revenue as a short-term liability on the consolidated balance sheets as the longest subscription plan is for twelve months, and Duolingo English Test purchases must be taken within 21 days.

Cost of Revenues—Cost of revenue predominantly consists of third-party payment processing fees charged by various distribution channel and hosting fees. To a much lesser extent, includes wages and stock-based compensation for certain employees in the capacity of customer support, amortization of revenue generating capitalized software, and depreciation of certain property and equipment.

Deferred Cost of Revenues—Deferred cost of revenue includes third-party payment processing fees amortized over the subscription terms in proportion to the revenue recognized. In situations where fees are charged for subscriptions that exceed one month, costs are deferred and recognized over the life of the subscription and are classified as a current asset. The Company classifies deferred cost of revenue as a short-term asset on the Company’s consolidated balance sheets as the longest subscription plan is for twelve months.

one year expiration date. The Company will defer revenue from all tests that haven’t been proctored nor expired.

Disaggregation of Revenue

Deferred Offering Costs

Deferred Offering Costs—Deferred offering costs, which consist of direct incremental legal, accounting, and consulting fees relating to the IPO, are capitalized. Deferred offering costs related to underwriting discounts and commissions and offering expenses of $4,865 were offset against IPO proceeds upon the consummation of the IPO.

Cash and Cash Equivalents

Cash and Cash Equivalents—Cash consists primarily of cash on hand and bank deposits. Cash equivalents consist primarily of money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times.The Money market funds are considered Level 1 financial assets. Level 1 financial assets use inputs that are the unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Accounts Receivable

Accounts Receivable—Accounts receivables are reported on the consolidated balance sheets at the outstanding principal amount adjusted for any allowance for credit losses and any charge offs. The Company provides an allowance for credit losses to reduce trade receivables to their estimated net realizable value equal to the amount that is expected to be collected. This allowance is estimated based on historical collection experience, the aging of receivables, specific current and expected future macro-economic and market conditions, and assessments of the current creditworthiness and economic status of customers. The Company considers a receivable delinquent if it is unpaid after the term of the related invoice has expired. Balances that are still outstanding after management has used reasonable collection efforts are written off. The Company reviews its allowance for credit losses on a quarterly basis.

Property and Equipment

Property and Equipment—Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method.


Asset Class			Estimated Useful Life
Furniture, fixtures and equipment			5 to 7 years
Leasehold improvements			4 to 6 years

Leasehold improvements are amortized over the lesser of the life of the lease or the estimated useful life of the leasehold improvements. Costs related to maintenance and repairs that do not extend the assets’ useful life are expensed as incurred.

Capitalized software

Capitalized software—The Company develops software for internal use and capitalizes the software development costs incurred during the application development stage. Costs incurred prior to and after the application development stage are charged to expense. When the software is ready for its intended use, capitalization ceases and such costs are amortized on a straight-line basis over the estimated life, which is generally three years. Relatively minor upgrades, enhancements and maintenance to the platform are expensed as incurred.

Income Taxes

Income Taxes—The Company provides for income taxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities for financial reporting and for income tax reporting. The deferred tax asset or liability represents the future tax return consequences of those difference, which will either be taxable or deductible when the assets and liabilities are recovered or settled. A valuation allowance is established for any deferred tax asset for which it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. The Company limits the deferred tax assets recognized related to certain officers’ compensation to amounts that it estimates will be deductible in future periods based upon Internal Revenue Code Section 162(m).

The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the asset and liability method. The first step is to evaluate the tax position for recognition by determining whether evidence indicates that it is more likely than not that a position will be sustained if examined by a taxing authority.

The second step is to measure the tax benefit as the largest amount that is 50% likely of being realized upon settlement with a tax authority. There were no amounts recorded at December 31, 2021 and 2020 related to uncertain tax positions.

Foreign Currency

Foreign Currency—The functional currency of the Company and its subsidiaries is the United States dollar. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. All exchange gains or losses arising from translation of these foreign currency transactions are included in net loss for the year. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations

Fair Value of Financial Instruments

Fair Value of Financial Instruments—The Company accounts for certain assets and liabilities at fair value in accordance with the accounting guidance applicable to fair value measurements and disclosures. The carrying values of cash, cash equivalents, accounts receivable, accounts payable, and accrued expenses are deemed to be reasonable estimates of their fair values because of their short-term nature.

Research and Development Costs

Research and Development Costs—Research and development expenses are incurred as the Company maintains and enhances its software and evaluates and develops other potential applications. Such expenses include compensation of engineering, product design and testing personnel, including stock-based compensation, materials, travel and direct costs associated with the design and required testing of our platform and depreciation of certain property and equipment.

Sales and Marketing

Sales and Marketing—Sales and marketing expenses are expensed as incurred and consists primarily of brand advertising, marketing, digital and social media spend, field marketing, travel, trade show sponsorships and events, conferences and other employee related compensation, including stock-based compensation for personnel engaged in sales and marketing functions, amortization of non-revenue generating capitalized software used to promote Duolingo, and depreciation of certain property and equipment.

General and Administrative

General and Administrative—General and administrative expense primarily consists of employee related compensation (including stock-based compensation) for management and administrative functions, including our finance and accounting, legal, and people teams. General and administrative expense also includes certain professional services fees, general corporate and director and officer insurance, facilities costs, and other general overhead costs that support our operations, and depreciation of certain property and equipment.

Contributors

Contributors—On March 10, 2021, the Company announced that it was ending its non-employee volunteer program, which began in 2013 to build and improve language courses. As part of this change, those contributors who participated in the program became eligible to receive a one-time award, up to an aggregate amount of approximately $4,220, including fees paid to process payments of approximately $526. The Company accounted for this under Financial Accounting Standards Board (“FASB”) Accounting Standards Codifications (“ASC”) 958-720, Not-For-Profit Entities - Other Expenses and ASC 720-25, Contributions Made, based on the nature of this contribution, which is an unconditional promise. This amount is included within Sales and marketing in the Consolidated Statement of Operations and Comprehensive Loss.

Concentration of Credit Risk

Concentration of Credit Risk—The Company’s concentration of credit risk relates to financial institutions holding the Company’s cash and cash equivalents and platforms with significant accounts receivable balances and revenue transactions.

The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances.

Stock-Based Compensation

Stock-Based Compensation—The Company accounts for equity-based compensation using the fair value method as set forth in the ASC 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards based on estimated fair values. This method requires companies to estimate the fair value of stock-based compensation on the date of grant using an option pricing model. The Company estimates the fair value of each equity-based payment award on the date of grant using the Black-Scholes pricing model.

The Black-Scholes model determines the fair value of equity-based payment awards based on the fair value of the underlying common stock on the date of grant and requires the use of estimates and assumptions, including the fair value of the Company’s common stock, exercise price of the stock option, expected volatility, expected life, risk-free interest rate and dividend rate. The Company estimates the expected volatility of its stock options by taking the average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options; it is not practical for the Company to estimate its own volatility due to the lack of historical prices. The expected term of the options is determined in accordance with existing equity agreements as the underlying options are assumed to be exercised upon the passage of time. The risk-free interest rate is the estimated average interest rate based on US Treasury zero-coupon notes with terms consistent with the expected life of the awards. The expected dividend yield is zero as the Company does not anticipate paying any recurring cash dividends in the foreseeable future. The Company accounts for forfeitures as they occur.

Restricted Stock Units (RSUs)

The Company began to grant RSUs in November 2020. The fair value of RSUs is estimated based on the fair value of the Company’s common stock on the date of grant. Each RSU award granted prior to the IPO vests based upon the satisfaction, during the term of the RSUs, of two requirements: length of service and a liquidity event defined as a change in control or a qualified IPO. The service-based vesting condition for the majority of these awards is satisfied over four years. The liquidity-based vesting condition is satisfied upon the occurrence of a qualifying liquidity event. The Company measures and recognizes compensation expense for all stock-based awards based on the estimated fair value of the award. Prior to July 30, 2021, no stock-based compensation expense had been recognized for RSUs because the liquidity-based vesting condition had not been probable of being satisfied. Upon the IPO, the liquidity-

based vesting condition was satisfied and $2,035 of stock-based compensation expense was recognized related to these awards during the year ended December 31, 2021. Of that amount, $1,332, $210 and $493 was included within Research and development, Sales and marketing and General and administrative, respectively, in the Consolidated Statement of Operations and Comprehensive Loss.

Performance-based RSUs

In June 2021, the Company granted 1,800 (one million eight-hundred thousand) performance-based RSUs to the Company’s founders (“Founder Awards”). The Founder Awards are divided into ten equal tranches with each tranche becoming eligible to vest upon achievement of the specified stock-price hurdles. The Founder Awards vest upon the satisfaction of both a service-based condition and a performance-based condition and generally are settled one year after vesting. The service-based condition is satisfied as to 25% of the Founder Awards on each anniversary of the completion of the IPO, subject to the continuous service of the founders through the applicable date. The fair value of the Founder Awards is determined using a Monte Carlo simulation model. The associated stock-based compensation is recorded over the derived service period, using the accelerated attribution method. If the stock-price hurdles are met sooner than the requisite service period, the stock-based compensation expense will be adjusted to prospectively recognize the remaining expense over the remaining derived service period. Provided that the founders continue to provide services to us, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock-price hurdles are achieved. The first and second tranches were met during the year ended December 31, 2021.

Contingencies

Contingencies—The Company records accruals for contingencies and legal proceedings expected to be incurred in connection with a loss contingency when it is probable that a liability has been incurred and the amount can be reasonably estimated.

If a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, would be disclosed.

Segment

Segment—The Company operates as a single operating segment. The chief operating decision maker of the Company is its Chief Executive Officer, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information of our revenue. Accordingly, the Company has determined that it has a single reportable segment and operating segment structure, and operates as one reporting unit.

Leases

Leases—The Company accounts for leases in accordance with ASC 842, Leases, which requires virtually all leases, other than leases that meet the definition of a short-term lease, to be recorded on the balance sheet with a right-of-use (“ROU”) asset and corresponding lease liability. ROU assets are periodically reviewed for impairment whenever events or changes in circumstances arise. During the years ended December 31, 2021 and 2020, the Company incurred no impairment charges on ROU assets.

On the lease commencement date, each lease is classified as either finance or operating, depending on certain criteria. The Company determined that it only has operating leases as none of the criteria for finance lease classification were met. Operating lease expense is recognized on a straight-line basis on the Consolidated Statement of Operations and Comprehensive Loss in General and administrative expenses. On the Consolidated Statements of Changes in Cash Flows, payments for operating leases, including the interest component, are included in operating activities. As an accounting policy election, the Company has elected to not separate lease and non-lease components for all asset classes and made an

accounting policy election for short-term leases which does not require the capitalization of leases with terms of 12 months or less at lease commencement. The discount rate utilized in calculating the lease liability is the rate implicit in the lease, if known; otherwise, the incremental borrowing rate (“IBR”) for the expected lease term is used. The Company’s IBR approximates the rate the Company would have to pay, on a collateralized basis, to borrow an amount equal to the lease payments under similar terms.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued Accounting Standard Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The Company adopted this guidance on January 1, 2021 and it did not have a material impact on its Consolidated Financial Statements and related disclosures upon adoption.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions and by clarifying and amending existing guidance in order to improve consistent application of and simplify GAAP for other areas of Topic 740. The guidance will be effective for the Company beginning after December 15, 2020. The Company adopted this guidance on January 1, 2021 and it did not have a material impact on its Consolidated Financial Statements and related disclosures upon adoption.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)		3 Months Ended	12 Months Ended
	Mar. 10, 2021 USD ($)	Dec. 31, 2021 USD ($) tranche	Dec. 31, 2021 USD ($) tranche	Dec. 31, 2020 USD ($)	Jul. 30, 2021 USD ($)
Concentration Risk [Line Items]
Deferred offering costs reclassified to stockholders equity					$ 4,865,000
Advertising costs			$ 42,964,000	$ 27,352,000
Volunteer program, one-time payment to contributors		$ 4,220,000	4,220,000
Volunteer program, transaction fees	$ 526,000
Compensation expense			40,804,000	17,031,000
Impairment			$ 0	0
Capitalized Software
Concentration Risk [Line Items]
Estimated useful life			3 years
Sales and marketing
Concentration Risk [Line Items]
Compensation expense			$ 881,000	348,000
General and administrative
Concentration Risk [Line Items]
Compensation expense			30,617,000	13,904,000
Research and development
Concentration Risk [Line Items]
Compensation expense			9,298,000	$ 2,773,000
Vested RSUs
Concentration Risk [Line Items]
Compensation expense		$ 2,035,000	2,035,000
Vested RSUs \| Sales and marketing
Concentration Risk [Line Items]
Compensation expense			210,000
Vested RSUs \| General and administrative
Concentration Risk [Line Items]
Compensation expense			493,000
Vested RSUs \| Research and development
Concentration Risk [Line Items]
Compensation expense			$ 1,332,000
Performance Based RSUs \| Founders
Concentration Risk [Line Items]
Number of tranches \| tranche		10	10
Performance Based RSUs \| Tranche One
Concentration Risk [Line Items]
Compensation expense			$ 16,463,000
Accounts Receivable \| Customer Concentration Risk \| Apple
Concentration Risk [Line Items]
Concentration risk, percentage			51.10%	47.80%
Accounts Receivable \| Customer Concentration Risk \| Google
Concentration Risk [Line Items]
Concentration risk, percentage			27.90%	28.90%
Accounts Receivable \| Customer Concentration Risk \| Stripe
Concentration Risk [Line Items]
Concentration risk, percentage			10.10%	13.80%
Revenue Benchmark \| Customer Concentration Risk \| Apple
Concentration Risk [Line Items]
Concentration risk, percentage			50.50%	51.30%
Revenue Benchmark \| Customer Concentration Risk \| Google
Concentration Risk [Line Items]
Concentration risk, percentage			29.00%	26.90%
Revenue Benchmark \| Customer Concentration Risk \| Stripe
Concentration Risk [Line Items]
Concentration risk, percentage			10.10%

PROPERTY and EQUIPMENT, net - Summary (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 13,311	$ 9,495
Less: accumulated depreciation	(5,100)	(3,067)
Total property and equipment, net	8,211	6,428
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	10,258	7,536
Furniture, fixtures and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,053	$ 1,959

CAPITALIZED SOFTWARE, net - Schedule of Capitalized Software Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Amortization of capitalized computer software	$ 693	$ 632
Cost of revenues
Finite-Lived Intangible Assets [Line Items]
Amortization of capitalized computer software	0	86
Sales and marketing
Finite-Lived Intangible Assets [Line Items]
Amortization of capitalized computer software	$ 693	$ 546

INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021	Dec. 31, 2020	Jan. 01, 2020
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 61,605		$ 20,912
Equity compensation	1,881		1,063
Research and development credits	14,480		4,936
Lease liability	7,335		2,184
Other DTA	56		65
Sales tax / VAT reserve	277		544
Valuation allowance	(76,293)	$ (26,236)	(26,236)	$ (23,851)
Total deferred tax assets	9,341		3,468
ROU asset	(6,389)		(1,908)
Property and equipment	(1,894)		(1,014)
Capitalized software	(1,057)		(543)
Other DTL	(1)		(3)
Total deferred tax liabilities	(9,341)		(3,468)
Net deferred taxes	$ 0		$ 0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of Cash and Cash Equivalents

The following table shows the breakout between cash and money market funds.


	December 31,
	2021		2020
Cash	$	44,165	$	20,428
Money market funds	509,757		100,062
Total	$	553,922	$	120,490

Schedule of Useful Life


Asset Class			Estimated Useful Life
Furniture, fixtures and equipment			5 to 7 years
Leasehold improvements			4 to 6 years

Property and equipment consists of the following as of December 31, 2021 and 2020:



	2021		2020
Leasehold improvements	$	10,258	$	7,536
Furniture, fixtures and equipment	3,053		1,959
Total property and equipment	13,311		9,495
Less: accumulated depreciation	(5,100)		(3,067)
Total property and equipment, net	$	8,211	$	6,428

STOCK-BASED COMPENSATION - Schedule of Restricted Stock Unit Activity (Details) - Vested RSUs - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Restricted stock units
Beginning balance (in shares)	730,000	34,000
Granted (in shares)	787,000
Vested (in shares)	(79,000)
Forfeited (in shares)	(12,000)
Ending balance (in shares)	730,000
Weighted- average grant date fair value per share
Beginning balance (in usd per share)	$ 38.08
Granted (in usd per share)	77.41
Vested (in usd per share)	59.76
Forfeited (in usd per share)	99.06
Ending balance (in usd per share)	$ 77.09

REVENUE (Tables)

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Revenue Sources and Streams

Information regarding source of revenues:



	2021		2020
Over time	$	180,698	$	117,501
Point in time	70,074		44,195
Total revenue	$	250,772	$	161,696

Information regarding revenue by stream:



	2021		2020
Revenues:
Subscription	$	180,698	$	117,501
Advertising	38,501		27,043
Duolingo English Test	24,658		15,155
Other (1)	6,915		1,997
Total revenues	$	250,772	$	161,696

________________

(1) Other revenue is mainly comprised of in-app purchases of virtual goods.

Schedule of Deferred Revenues

Changes in deferred revenues were as follows:



	2021		2020
Beginning balance—January 1	$	54,792	$	26,307
Amount from beginning balance recognized into revenue	(54,792)		(26,307)
Recognition of deferred revenue	(139,371)		(91,193)
Deferral of revenue	237,638		145,985
Ending balance—December 31	$	98,267	$	54,792

Schedule of Revenue by Geographic Areas

Information regarding geography of revenues is based upon the location where the users are located or, in the case of the Duolingo English Test, where the tests are taken:


	2021		2020
United States	$	109,163	$	70,978
United Kingdom	25,163		15,245
Rest of World	116,446		75,473
Total	$	250,772	$	161,696

LEASES - Components of Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Leases [Abstract]
Operating lease cost	$ 1,919	$ 1,721
Short term lease cost	1,266	317
Variable lease cost	28	0
Total lease cost	3,213	2,038
Cash paid for amounts included in the measurement of lease liabilities	1,819	0
Operating lease assets obtained in exchange for new lease liabilities	22,274	0
Right-of-use assets disposed modifying operating lease liabilities	235	0
Gain from termination of leases	$ 31	$ 0
Weighted average remaining lease term	9 years	8 years 11 months
Weighted average discount rate	5.77%	6.70%

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

STOCK-BASED COMPENSATION

Prior to the IPO, the Company granted options to purchase shares of the Company’s common stock and restricted stock units in respect of shares of the Company’s common stock to employees, directors and consultants under the Company’s 2011 Equity Incentive Plan. In July 2021, Duolingo adopted the 2021 Incentive Award Plan (2021 Plan) and the 2021 Employee Stock Purchase Plan (“ESPP”), each of which became effective on July 26, 2021 in connection with the IPO. An aggregate of 7,946 shares and 1,119 shares of Class A common stock were made available for future issuance under the 2021 Plan and ESPP, respectively. The 2021 Plan permits the granting of incentive stock options and nonqualified stock options. The Company’s stock options vest based on terms in the stock option agreements and generally vest over four years and have a term of ten years subject to the continuous service to the Company by the optionee. Incentive stock options may be granted at an exercise price of not less than 100% of the estimated fair value of the underlying Class A common stock at the date of the grant.

Stock option activity as of December 31, 2021 is set forth below:


	Number of options	Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value





Options outstanding at January 1, 2021	8,365	$	10.68	7.47	$	230,596
Granted	72	52.80
Exercised	(1,882)	6.63
Repurchased	(220)	4.81
Forfeited and expired	(80)	14.75
Options outstanding at December 31, 2021	6,255	$	12.53	6.92	$	585,339
Options exercisable at December 31, 2021	4,420	$	10.61	6.41	$	422,076

The total intrinsic value of options exercised was approximately $194,513 and $6,058 for the years ended December 31, 2021 and 2020, respectively. The total weighted-average grant date fair value of options granted was $24.61 and $9.77 and for the years ended December 31, 2021 and 2020, respectively.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:


	2021	2020
Risk-free interest rate	1.04 – 1.14%	0.32 – 0.68%
Expected life	5.90 years	6.01 years
Expected volatility	48.90 – 49.12%	45.50 – 49.38%
Dividend yield	—%	—%
Fair value of common stock	$38.08 – $52.80	$14.42 – $38.08

The risk-free interest rate is based on the US treasury yield curve in effect as of the grant date. When establishing the expected life assumptions, the Company annually reviews historical employee exercise behavior of option grants and other economic data impacting the period the stock options are expected to remain outstanding. Expected volatility is determined using a benchmark index of similar public companies. The Company based the assumed dividend yield on its expectation of not paying dividends in the foreseeable future. Because the Company’s common stock was not yet publicly traded at the time the options were granted, the Company estimated the fair value of common stock. The Board estimated the fair value of the common stock at the time awards were granted based on factors such as valuations of comparable companies, the status of the Company’s development and sales efforts, revenue growth, and additional objective and subjective factors relating to the Company’s business.

RSU activity as of December 31, 2021 is set forth below:


	Restricted stock units	Weighted- average grant date fair value per share





Outstanding at January 1, 2021	34	$	38.08
Granted	787	77.41
Released	(79)	59.76
Forfeited	(12)	99.06
Outstanding at December 31, 2021	730	$	77.09

Prior to July 30, 2021, no stock-based compensation expense had been recognized for RSUs because the liquidity-based vesting condition had not been probable of being satisfied. Upon the IPO, the liquidity-

based vesting condition was met and $2,035 of stock-based compensation expense was recognized related to these awards.

As of December 31, 2021, there was approximately $13,428 of unrecognized compensation cost related to stock options granted under the plan with a weighted-average period of approximately two years. The amount of unrecognized compensation expense for RSUs as of December 31, 2021 was $52,478 with a weighted average remaining contractual life of three years, for a total unrecognized compensation expense of $65,906.

There were 7,754 shares available for grant at December 31, 2021.

Performance-based RSUs

In June 2021, the Company granted an aggregate of 1,800 performance-based RSUs (the “Founder Awards”) to the Company’s founders. The Founder Awards vest upon the satisfaction of both a service-based condition and a performance-based condition and generally are settled 1 year after vesting. The service-based condition is satisfied as to 25% of the Founder Awards on each anniversary of the completion of the IPO, subject to the continuous service of the founders through the applicable date. The performance-based condition will be satisfied with respect to each of 10 equal tranches only if the trailing 60-calendar day volume-weighted average closing trading price of the Company’s Class A common stock reaches certain stock-price hurdles for each such tranche, as set forth below, over a period of 10 years from the date of grant.

If stock-price hurdles fail to be reached prior to the tenth anniversary of the date of grant, no portion of the Founder Awards will vest. Further, any RSUs associated with stock-prices hurdle not achieved by the tenth anniversary of the date of grant will terminate and be cancelled for no additional consideration to the founders. The stock-price hurdles and number of RSUs eligible to vest will be adjusted to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications, or similar events under the 2021 Plan. The Founder Awards will be settled in shares of the Company’s Class B common stock.


Tranche	Company Stock Price Hurdle		Number of RSUs Eligible to Vest
1	$	127.50	90
2	$	153.00	90
3	$	178.50	90
4	$	204.00	180
5	$	255.00	180
6	$	306.00	180
7	$	357.00	180
8	$	408.00	180
9	$	612.00	270
10	$	816.00	360

The Company estimated the grant date fair value of the Founder Awards using a model based on multiple stock-price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the stock-price hurdles may not be satisfied. The weighted-average grant date fair value of the Founder Awards was estimated to be $61.56 per share using the below inputs.


Input			Assumption
Valuation Date			June 28, 2021
Risk-free interest rate			1.48%
Expected life			9.98
Expected volatility			51.67%
Dividend yield			0.00%
Fair value of common stock			$95.00

The Company estimates that it will recognize total stock-based compensation expense of approximately $110,817 over the derived service period of each of the ten separate tranches which is between 3.58 – 5.92 years. If the stock-price hurdles are met sooner than the requisite service period, the stock-based compensation expense will be adjusted to prospectively recognize the remaining expense over the remaining derived service period. Provided that the founders continue to provide services to the Company, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock-price hurdles are achieved. The first and second tranches were met during the year ended December 31, 2021. The Company recognized $16,463 of stock-based compensation expense related to these awards, which is included within General and administrative in the Consolidated Statement of Operations and Comprehensive Loss.

In February 2021, the Company initiated a tender offer which allowed employees to sell up to 10% of their vested options or shares back to the Company at selling price of $59.77, which was above fair market value of $38.08. The Company paid $13,479 and incurred $5,275 of additional compensation expense related to this tender representing the difference between the aggregate selling price and fair market value of the options and shares sold, and a $7,335 decrease to Additional paid-in capital. As a result of this tender, 220 options were put back into the option pool and 23 shares were retired with an $868 decrease to Additional paid-in capital.

Upon the IPO, vesting of stock option grants to certain executive officers were accelerated, which resulted in an additional $5,574 of compensation expense during the year ended December 31, 2021. This is included within General and administrative in the Consolidated Statement of Operations and Comprehensive Loss.

Total stock-based compensation expense was $40,804 for the year ended December 31, 2021, and $17,031 for the year ended December 31, 2020.

Stock based compensation expense is included in the Consolidated Statement of Operations and Comprehensive Loss as shown in the following table:


	Year Ended December 31,
	2021		2020
Cost of revenues	$	8	$	6
Research and development	9,298		2,773
Sales and marketing	881		348
General and administrative	30,617		13,904
Total	$	40,804	$	17,031

Nominal amounts of stock based compensation expense is capitalized into capitalized software for the years ended December 31, 2021 and 2020.

CAPITALIZED SOFTWARE, net - Capitalized Software (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Capitalized software	$ 11,144	$ 8,181
Less: accumulated amortization	(6,578)	(5,885)
Capitalized software, net	$ 4,566	$ 2,296

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The diluted net loss per share

attributable to common stockholders is calculated by giving effect to all potential dilutive common stock equivalents outstanding for the period.


	Year Ended December 31,
(In thousands, except per share data)	2021		2020
Numerator:
Net loss attributable to Class A and Class B common shareholders	$	(60,135)	$	(15,776)


Denominator:
Weighted-average shares in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted	23,433		12,735




Basic loss per common share	$	(2.57)	$	(1.24)
Diluted loss per common share	$	(2.57)	$	(1.24)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the period presented because including them would have been antidilutive are as follows:


	Year Ended December 31,
	2021	2020
Convertible preferred stock	—	19,074
Founder awards where performance has been met	180	—
Vested RSUs	4	—
Stock options	4,420	4,191
Total	4,604	23,265

EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	12 Months Ended
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributions by employer	$ 3,438	$ 1,796
First 4% Of Employee Elective Deferral
Defined Benefit Plan Disclosure [Line Items]
Employer matching contribution, percent of match	100.00%	100.00%
Employer matching contribution, percent of employees' gross pay	4.00%	3.00%
Next 2% Of Employee Elective Deferral
Defined Benefit Plan Disclosure [Line Items]
Employer matching contribution, percent of match	50.00%	50.00%
Employer matching contribution, percent of employees' gross pay	2.00%	2.00%

REVENUE - Revenue by Geographic Area (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Revenues	$ 250,772	$ 161,696
United States
Disaggregation of Revenue [Line Items]
Revenues	109,163	70,978
United Kingdom
Disaggregation of Revenue [Line Items]
Revenues	25,163	15,245
Rest of World
Disaggregation of Revenue [Line Items]
Revenues	$ 116,446	$ 75,473

- Definition

+ References

+ Details

EARNINGS PER SHARE - Schedule of Antidilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	4,604,000	23,265,000
Convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	0	19,074,000
Founder awards where performance has been met
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	180,000	0
Vested RSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	4,000	0
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from the computation of earnings per share (in shares)	4,420,000	4,191,000

CAPITALIZED SOFTWARE, net

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

CAPITALIZED SOFTWARE, net

Capitalized software consists of the following as of December 31, 2021 and 2020:


	2021		2020
Capitalized software	$	11,144	$	8,181
Less: accumulated amortization	(6,578)		(5,885)
Capitalized software, net	$	4,566	$	2,296

Amortization expense of $693 for the year ended December 31, 2021, and $632 for the year ended December 31, 2020 is recorded in the Company’s Consolidated Statement of Operations and Comprehensive Loss, respectively.

Amortization expense is included within the following financial statement line items within the Company’s Consolidated Statement of Operations and Comprehensive Loss:



	2021		2020
Cost of revenues	$	—	$	86
Sales and marketing	693		546
Total	$	693	$	632

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the estimated undiscounted future cash flows expected to result from the use and eventual disposition of an asset is less than the carrying amount of the asset, an impairment loss is recognized. Measurement of an impairment loss is based on the fair value of the asset. No assets were impaired during the years ended December 31, 2021 and 2020.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 553,922	$ 120,490
Cash
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	44,165	20,428
Money market funds
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 509,757	$ 100,062

LEASES - Future Minimum Rental Payment (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Leases [Abstract]
2022	$ 5,153
2023	6,624
2024	4,572
2025	3,106
2026	3,173
Thereafter	21,763
Total undiscounted lease payments	44,391
Present value adjustment	(11,931)
Operating lease liabilities	$ 32,460

CONVERTIBLE PREFERRED STOCK - Schedule of Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2021	Jul. 29, 2021	Dec. 31, 2020	Dec. 31, 2019
Temporary Equity [Line Items]
Authorized (in shares)		19,074,000	19,074,000
Outstanding (in shares)	0	19,074,000	19,074,000	18,247,000
Aggregate liquidation preference		$ 183,300	$ 183,300
Funds received		183,300	183,300
Fees incurred		691	691
Carrying value of convertible preferred stock	$ 0	$ 182,609	$ 182,609	$ 137,686
A
Temporary Equity [Line Items]
Authorized (in shares)		3,865,000	3,865,000
Outstanding (in shares)		3,865,000	3,865,000
Per share price at issuance (in usd per share)		$ 0.85	$ 0.85
Aggregate liquidation preference		$ 3,300	$ 3,300
Funds received		3,300	3,300
Fees incurred		52	52
Carrying value of convertible preferred stock		$ 3,248	$ 3,248
B
Temporary Equity [Line Items]
Authorized (in shares)		6,298,000	6,298,000
Outstanding (in shares)		6,298,000	6,298,000
Per share price at issuance (in usd per share)		$ 2.38	$ 2.38
Aggregate liquidation preference		$ 15,000	$ 15,000
Funds received		15,000	15,000
Fees incurred		60	60
Carrying value of convertible preferred stock		$ 14,940	$ 14,940
C
Temporary Equity [Line Items]
Authorized (in shares)		2,948,000	2,948,000
Outstanding (in shares)		2,948,000	2,948,000
Per share price at issuance (in usd per share)		$ 6.78	$ 6.78
Aggregate liquidation preference		$ 20,000	$ 20,000
Funds received		20,000	20,000
Fees incurred		112	112
Carrying value of convertible preferred stock		$ 19,888	$ 19,888
D
Temporary Equity [Line Items]
Authorized (in shares)		3,154,000	3,154,000
Outstanding (in shares)		3,154,000	3,154,000
Per share price at issuance (in usd per share)		$ 14.27
Aggregate liquidation preference		$ 45,000	$ 45,000
Funds received		45,000	45,000
Fees incurred		146	146
Carrying value of convertible preferred stock		$ 44,853	$ 44,853
E
Temporary Equity [Line Items]
Authorized (in shares)		1,224,000	1,224,000
Outstanding (in shares)		1,224,000	1,224,000
Per share price at issuance (in usd per share)		$ 20.43	$ 20.43
Aggregate liquidation preference		$ 25,000	$ 25,000
Funds received		25,000	25,000
Fees incurred		92	92
Carrying value of convertible preferred stock		$ 24,909	$ 24,909
F
Temporary Equity [Line Items]
Authorized (in shares)		758,000
Outstanding (in shares)		758,000	758,000
Per share price at issuance (in usd per share)		$ 39.57	$ 39.57
Aggregate liquidation preference		$ 30,000	$ 30,000
Funds received		30,000	30,000
Fees incurred		153	153
Carrying value of convertible preferred stock		$ 29,848	$ 29,848
G
Temporary Equity [Line Items]
Authorized (in shares)		241,000	241,000
Outstanding (in shares)		241,000	241,000
Per share price at issuance (in usd per share)		$ 41.38	$ 41.38
Aggregate liquidation preference		$ 10,000	$ 10,000
Funds received		10,000	10,000
Fees incurred		24	24
Carrying value of convertible preferred stock		$ 9,976	$ 9,976
H
Temporary Equity [Line Items]
Authorized (in shares)		586,000	586,000
Outstanding (in shares)		586,000	586,000
Per share price at issuance (in usd per share)		$ 59.77	$ 59.77
Aggregate liquidation preference		$ 35,000	$ 35,000
Funds received		35,000	35,000
Fees incurred		52	52
Carrying value of convertible preferred stock		$ 34,947	$ 34,947

STOCK-BASED COMPENSATION - Schedule of Payment Award (Details) - Vested RSUs	Dec. 31, 2021 $ / shares shares
1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 127.50
Number of RSUs Eligible to Vest (in shares) \| shares	90,000
2
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 153.00
Number of RSUs Eligible to Vest (in shares) \| shares	90,000
3
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 178.50
Number of RSUs Eligible to Vest (in shares) \| shares	90,000
4
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 204.00
Number of RSUs Eligible to Vest (in shares) \| shares	180,000
5
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 255.00
Number of RSUs Eligible to Vest (in shares) \| shares	180,000
6
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 306.00
Number of RSUs Eligible to Vest (in shares) \| shares	180,000
7
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 357.00
Number of RSUs Eligible to Vest (in shares) \| shares	180,000
8
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 408.00
Number of RSUs Eligible to Vest (in shares) \| shares	180,000
9
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 612.00
Number of RSUs Eligible to Vest (in shares) \| shares	270,000
10
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company Stock Price Hurdle (in usd per share) \| $ / shares	$ 816.00
Number of RSUs Eligible to Vest (in shares) \| shares	360,000

EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Numerator:
Net loss	$ (60,135)	$ (15,776)
Denominator:
Weighted-average shares in computing net loss per share attributable to Class A and Class B common stockholders, basic (in shares)	23,433	12,735
Weighted-average shares in computing net loss per share attributable to Class A and Class B common stockholders, diluted (in shares)	23,433	12,735
Basic loss per common share (in usd per share)	$ (2.57)	$ (1.24)
Diluted loss per common share (in usd per share)	$ (2.57)	$ (1.24)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
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+ Details

STOCK-BASED COMPENSATION - Schedule of Income Statement Location for Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 40,804	$ 17,031
Cost of revenues
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	8	6
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	9,298	2,773
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	881	348
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation expense	$ 30,617	$ 13,904

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESUnder the JOBS Act, emerging growth companies also can delay adopting new or revised accounting standards until such time as those standards would otherwise apply to private companies. While we have not historically delayed the adoption of new or revised accounting standards until such time as those standards would apply to private companies, we have elected to take advantage of this extended transition period and, as a result, our operating results and financial statements in the future may not be comparable to the operating results and financial statements of companies who have adopted the new or revised accounting standards.

Accounting Principles—The financial statements and accompanying notes are prepared in accordance with GAAP.

Cash and Cash Equivalents—Cash consists primarily of cash on hand and bank deposits. Cash equivalents consist primarily of money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. The following table shows the breakout between cash and money market funds.


	December 31,
	2021		2020
Cash	$	44,165	$	20,428
Money market funds	509,757		100,062
Total	$	553,922	$	120,490

The Money market funds are considered Level 1 financial assets. Level 1 financial assets use inputs that are the unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Property and Equipment—Property and equipment is stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method.


Asset Class			Estimated Useful Life
Furniture, fixtures and equipment			5 to 7 years
Leasehold improvements			4 to 6 years

amount is included within Sales and marketing in the Consolidated Statement of Operations and Comprehensive Loss.

The majority of our revenue comes through our subscriptions and advertising streams and payments are made to Duolingo through service providers. The top three, Apple, Google, and Stripe, accounted for 51.1%, 27.9%, and 10.1% of total Accounts receivable as of December 31, 2021, respectively. The top three service providers, Apple, Google and Stripe, accounted for 47.8%, 28.9% and 13.8% of total Accounts receivable as of December 31, 2020, respectively.

Three service providers, Apple, Google, and Stripe, processed 50.5%, 29.0%, and 10.1% of total Revenues for the year ended December 31, 2021. Two services providers, Apple and Google, processed 51.3% and 26.9% of total Revenues for the year ended December 31, 2020.

Restricted Stock Units (RSUs)

Performance-based RSUs

Recently Adopted Accounting Pronouncements

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Legal Proceedings— From time to time, the Company may become involved in various legal proceedings in the ordinary course of its business and may be subject to third-party infringement claims. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. The Company is not currently party to any material legal proceedings Sales and use and value-added tax (“VAT”)— The Company determined that it was required to pay sales and use and VAT taxes in various jurisdictions. The Company is in the process of filing voluntary disclosure agreements with certain jurisdictions and remitting the estimated taxes. If these jurisdictions determine that additional amounts are necessary, the Company will be required to pay accordingly. Related Parties— The Company has determined that there were no transactions with related parties as of or during the years ended December 31, 2021 and 2020.