Looking back on consumer subscription stocks’ Q2 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 mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $252.3 million, up 41.5% year on year. This print exceeded analysts’ expectations by 4.8%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Duolingo pulled off the biggest analyst estimates beat and fastest revenue growth of the whole group. The company reported 128.3 million users, up 23.8% year on year. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 6.6% since reporting and currently trades at $321.50.
Best Q2: Roku (NASDAQ: ROKU)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.11 billion, up 14.8% year on year, outperforming analysts’ expectations by 3.8%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $93.99.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: Match Group (NASDAQ: MTCH)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $863.7 million, flat year on year, exceeding analysts’ expectations by 1.2%. Still, it was a softer quarter as it posted a decline in its users and a slight miss of analysts’ number of payers estimates.
Interestingly, the stock is up 10.3% since the results and currently trades at $37.18.
Read our full analysis of Match Group’s results here.
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 $105.1 million, down 35.6% year on year. This number beat analysts’ expectations by 3.8%. Taking a step back, it was a slower quarter as it recorded a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
Chegg had the slowest revenue growth among its peers. The company reported 2.62 million users, down 39.9% year on year. The stock is flat since reporting and currently trades at $1.29.
Read our full, actionable report on Chegg here, it’s free.
Bumble (NASDAQ: BMBL)
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $248.2 million, down 7.6% year on year. This result topped analysts’ expectations by 1.3%. Taking a step back, it was a mixed quarter as it also recorded a solid beat of analysts’ EBITDA estimates but a decline in its buyers.
The company reported 3.78 million active buyers, down 8.7% year on year. The stock is down 17% since reporting and currently trades at $6.35.
Read our full, actionable report on Bumble here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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