Luis von Ahn: It’s an excellent question because it’s something that we are really talking about. So just to put things in context, if you look at the larger language learning market like the market as a whole, by far, the largest number of learners and also the largest amount of spend comes from English learners. It’s like 80%, give or take. That is not quite true in our platform. So this is why we see this as a major opportunity. Now the reason that hasn’t been quite true in our platform is because our English courses have not had very advanced content. We actually have a different English course based on your native language. So we have an English course for Spanish speakers and English course for Chinese speakers, et cetera.
And they went to varying degrees of proficiency. The first thing we needed to do, if we really wanted to increase our business among English learners is take all of these courses to a more advanced levels at least have the content there. I’m very happy to say that we have now put the content there. That’s good. And we in fact see that the number of users, this is one of the nicest graphs that we have in the company is the number of users that are interacting with our advanced English learner is basically up and to the right. So we see that users are starting to interact with it. And we think there’s a lot more room there. Now adding the content was just the first step in a multi-step strategy because first you have to add the content. The second thing – the second problem we needed to solve and that is one we are currently solving.
It has not yet been solved is it turns out English learners are a little different than learners of most other languages. For most of the language, learners of French, learners of Spanish, we have a pretty good idea of what they know before they come to Duolingo and usually by the way they know very little. And they just – we have a pretty good idea of what they know. So it’s relatively easy to place them in the course. English learners, because English is such a cultural language for the world, people know this weird patchwork of knowledge where they – most of them took some amount of English in like middle school or high school but also they watch some movies but also they’ve listened to some Taylor Swift song, but also they – so they have – they just have this weird patchwork of knowledge and we have not done a great job when they come in and placing them at the right spot.
So that’s one thing that we’re working on. And when we’re able to do that I think that we’re going to be a much better product for people who come in to learn English because the vast majority of English learners have some prior proficiency in this kind of weird patchwork way. So that’s step number two and that’s what we’re working on. Step number three is what you mentioned, we do have to get the word out that we’re good for advanced English learners. That is not currently as well known as for either beginner English learners or other languages. So you’re probably going to see us do some amount of marketing for that. And then of course the last step is being able to capitalize in terms of getting them to subscribe. But we need to do the first few steps before we do that.
So my sense is that it’s going to be 2024 and 2025, where you see us kind of really grow this user base and somewhere in 2025 we’ll start really capitalizing on this. You may see some amount this year but my sense is more will come in about a year.
Alex Sklar: That’s great context. Just as a follow-up, Matt. Just given, what you’ve talked about tonight in terms of the family plan booking success you’re going to lean into that a little bit more. It sounds like in the coming year continued international growth. How should we think about the shape of the blended ARPU heading into 2024?
Matt Skaruppa: Yeah, it’s a great question. So I’ll just give you my normal disclaimer, which is we don’t run the business on ARPU. We run the business on platform LTV and experiments to drive bookings. That said ARPU, obviously, comes out of that and we pay attention to it. In 2023, the ARPU, because as I mentioned we are lapping the price change we did in 2022 ARPU about every quarter went down between 7% and 8%, more or less in 2023 except for Q4, which went down by about 4%. And then we expect Q1 to be a little closer to zero and then lap it throughout the rest of the year. So that’s roughly our trend. Now that will change depending on the experiments. So if we have a successful set of experiments on a three-tier strategy that could raise ARPU. Louis already mentioned pricing experiments as well, but that’s the current course and speed.
Ralph Schackart: Awesome. Thank you both.
Matt Skaruppa: Thank you.
Deborah Belevan: Next question comes from Ryan MacDonald of Needham.
Ryan MacDonald: Thanks for taking my question, and congrats on yet another great year. Louis I’m curious you, obviously, launched math and music into the core app late in 2023. I’m curious as you’re monitoring the progress there, I think learners have the capability to complete their Duolingo each day, not just from language but in math and music. And just curious what you’re seeing in the early days on the progress there? And if we’re getting to a stage yet especially with math where you can start to then see enough usage where you turn the screw on monetization there?
Luis von Ahn: Yes, a great question. So yes to put things in context, we did — we added math and music as courses into the main language app into our main approximately, the Duolingo approximately, really about a quarter ago. And what that means is that it’s just as you said basically all of our growth mechanics work for math and music. So you can complete your streak by doing a math lesson with math users compete in the leaderboard et cetera and musically compete. So basically all the growth mechanics come for free by having added math and music to the main app. This is why we did that. We’re very happy with the results so far. They are obviously — these courses obviously are much smaller than our language courses because we’re well-known worldwide as a language learning app.
