LEASES

12 Months Ended

Dec. 31, 2023

The Company has entered into various operating leases for its office space expiring between fiscal 2024 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.

The Company assumed a new lease for office space as part of the Gunner acquisition in 2022. The term of the newly acquired lease was 68 months beginning on October 3, 2022 and expiring on May 31, 2028. The Company has the option to extend the lease for one additional term of five years and one additional term of four years which the Company has not included in the lease term. The Company also signed an agreement to sublease a portion of the acquired lease. The term of the sublease was 68 months beginning on October 3, 2022 and expiring on May 31, 2028. The remaining receivable related to this sublease agreement as of December 31, 2023 was approximately $295.

In December 2023, the Company signed an extension for the office space assumed in the prior year as part of the Gunner acquisition. The term of the amended lease is 73 months beginning on December 4, 2023 and expiring on December 31, 2029. The remaining payments related to this lease agreement as of December 31, 2023 are approximately $1,380.

The following represents the components of lease cost for the years ended December 31, 2023, 2022 and 2021 along with supplemental disclosures of cash flow information, lease term and discount rate:


	Year Ended December 31,
	2023			2022			2021
Operating lease cost	$	7,459		$	7,076		$	1,919
Short term lease cost	48			125			1,266
Variable lease cost	252			63			28
Total lease cost	$	7,759		$	7,264		$	3,213

Cash paid for amounts included in the measurement of lease liabilities	$	7,512		$	5,168		$	1,819
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	909		$	22,274
Right of use assets disposed or adjusted, modifying operating leases liabilities	$	2,024		$	(1,586)		$	(235)
Gain from termination of leases	$	—		$	—		$	31
Weighted-average remaining lease term	9 years			9 years			9 years
Weighted-average discount rate	7.38		%	6.92		%	5.77		%

Sublease income was immaterial for the years ended December 31, 2023, 2022, and 2021.

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, 2023:


Fiscal year
2024	$	5,607
2025	3,386
2026	3,399
2027	3,463
2028	3,528
Thereafter	15,735
Total undiscounted lease payments	$	35,118
Present value adjustment	(10,080)
Operating lease liabilities	$	25,038

Current lease liabilities of $3,944 and $4,903 are presented within Accrued expenses and other liabilities while non-current lease liabilities of $21,094 and $23,503 are presented within Long-term obligation under operating leases on the Consolidated Balance Sheets for the years ended December 31, 2023 and 2022 respectively.

On December 18, 2023, Duolingo, Inc. entered into an Agreement of Sub-Sublease, with Spotify USA Inc., as Sub-Sublandlord for 85,666 square feet of office space in the building located at 4 World Trade Center, 150 Greenwich Street, New York, New York 10007 for use as additional office space.

The term of the Sub-Sublease commenced on January 8, 2024 and will expire on April 29, 2034

The initial base rent is $442 per month on a triple net basis, increasing to $478 per month at the beginning of the sixth year of the lease term. Payment of rent will commence 20 months after commencement of the Sub-Sublease.

In lieu of a security deposit, the Company is obligated to provide an irrevocable stand-by letter of credit to the Sub-Sublandlord. This letter of credit acts as security for the faithful performance by the Company of all terms, covenants and conditions of the lease agreement. The cash collateral and deposits for the letters of credit have been recognized as restricted cash in the consolidated balance sheets and totaled $2,735 and $0 as of December 31, 2023 and December 31, 2022, respectively.

As the lease’s commencement date is January 2024, it is not included within the Consolidated Balance Sheet for the year ended December 31, 2023.