Looking back on consumer subscription stocks’ Q1 earnings, we examine this quarter’s best and worst performers, including Duolingo (NASDAQ: DUOL) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was in line.
Luckily, consumer subscription stocks have performed well with share prices up 24.5% on average since the latest earnings results.
Best Q1: Duolingo (NASDAQ: DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ: DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $230.7 million, up 37.7% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Duolingo pulled off the fastest revenue growth and highest full-year guidance raise of the whole group. The company reported 130.2 million users, up 33.4% year on year. Unsurprisingly, the stock is up 17.9% since reporting and currently trades at $471.57.
Coursera (NYSE: COUR)
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $179.3 million, up 6.1% year on year, outperforming analysts’ expectations by 2.3%. The business had a strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 8.9% since reporting. It currently trades at $8.36.
Is now the time to buy Coursera? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Roku (NASDAQ: ROKU)
Spun out from Netflix, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.02 billion, up 15.8% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 20.3% since the results and currently trades at $80.99.
Read our full analysis of Roku’s results here.
Netflix (NASDAQ: NFLX)
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Netflix reported revenues of $10.54 billion, up 12.5% year on year. This print was in line with analysts’ expectations. It was a strong quarter as it also produced EPS guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
The company reported 305.6 million users, up 13.3% year on year. The stock is up 26.2% since reporting and currently trades at $1,231.
Read our full, actionable report on Netflix here, it’s free.
Chegg (NYSE: CHGG)
Started as a physical textbook rental service, Chegg (NYSE: CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $121.4 million, down 30.4% year on year. This result topped analysts’ expectations by 5.8%. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ EBITDA estimates but a decline in its users.
Chegg achieved the biggest analyst estimates beat but had the slowest revenue growth among its peers. The company reported 3.19 million users, down 31.5% year on year. The stock is up 103% since reporting and currently trades at $1.38.
Read our full, actionable report on Chegg here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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