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United States securities and exchange commission logo
June 24, 2021
Luis von Ahn
Chief Executive Officer
Duolingo, Inc.
5900 Penn Avenue
Pittsburgh, PA 15206
Re: Duolingo, Inc.
Amendment No. 1 to
Draft Registration Statement on Form S-1
Submitted June 7,
2021
CIK: 0001562088
Dear Dr. von Ahn:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
May 27, 2021 letter.
Amendment No. 1 to Draft Registration Statement on Form S-1
Selected Consolidated Financial and Other Data
Consolidated Statements of Operations Data, page 73
1. Note (a) to your
computation of unaudited pro forma basic and diluted net loss per share
indicates that you have
adjusted the numerator to reflect stock-based compensation
expense related to RSUs
for which the service-based vesting condition and performance-
based vesting condition
have been satisfied in connection with the offering. However note
(b) appears to indicate
that you have also included other stock based awards in the
adjustment to the
denominator. Please clarify the awards that are included in this
adjustment and why it
is appropriate to include them as a pro forma adjustment. Please
Luis von Ahn
FirstName LastNameLuis von Ahn
Duolingo, Inc.
Comapany
June NameDuolingo, Inc.
24, 2021
June 24,
Page 2 2021 Page 2
FirstName LastName
also clarify how you considered including the compensation expense
associated with these
awards in the numerator to your pro forma calculation.
2. Note (b) to your computation of unaudited pro forma basic and diluted
net loss per share
indicates that your adjustment includes 1,788,000 RSUs that vested as
of March 31, 2021
for which the performance-based vesting condition will be satisfied in
connection with
this offering. However, your disclosure on page F-37 indicates that
there were only 34,000
RSUs outstanding as of January 1, 2021 and 8 RSUs granted during the
three months
ended March 31, 2021. Please reconcile these disclosures.
Non-GAAP Financial Measures, page 77
3. You disclose a Free Cash Flow that is adjusted for the Tender
offer-related costs. Please
tell us what consideration was given to the guidance in Item
10(e)(1)(ii)(A) of Regulation
S-K, which states that non-GAAP liquidity measures must not exclude
charges or
liabilities that required, or will require, cash settlement absent an
ability to settle in
another manner. Please explain or revise your disclosure accordingly.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Subscription, page 82
4. We note your response to prior comment 4. Please disclose the renewal
rates and any
known material trends related to renewal rates for each of the
subscription plans for all
periods presented.
Unaudited Condensed Consolidated Financial Statements
Notes to Unaudited Condensed Consolidated Financial Statements
2. Summary of Significant Accounting Policies
Contributors, page F-31
5. Please further clarify the nature of your volunteer program whereby
contributors became
eligible to receive a $5,098,000 award. Clarify if the contributors
are employees and the
terms of the arrangement, including specific services provided and
eligibility criteria. Tell
us how you determined it was appropriate to recognize expenses during
the quarter ended
March 31, 2021 rather than prior periods as services were provided.
Please also clarify if
other parties will perform these services in the future and if you
expect to incur increased
expenses as a result. If so, please clarify your disclosure on page
92. Lastly, tell us why it
is appropriate to exclude these expenses from your Adjusted EBITDA
calculation
disclosed on page 76, and how you took into consideration Rule 100(b)
or Regulation G.
You may contact Laura Veator, Senior Staff Accountant, at (202) 551-3716
or Stephen
Krikorian, Accounting Branch Chief, at (202) 551-3488 if you have questions
regarding
comments on the financial statements and related matters. Please contact
Matthew Derby, Staff
Attorney, at (202) 551-3334 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Luis von Ahn
Duolingo, Inc.
June 24, 2021
Page 3
Sincerely,
FirstName LastNameLuis von Ahn
Division of Corporation Finance
Comapany NameDuolingo, Inc.
Office of Technology
June 24, 2021 Page 3
cc: Alison Haggerty
FirstName LastName