Shares of Duolingo (NASDAQ: DUOL) soared as much as 17.4% this week, according to data from S&P Global Market Intelligence. The language-learning application posted strong growth across all its key metrics and is starting to generate healthy cash flow, leading investors to bid up its shares. As of 1:23 p.m. ET on Friday, May 12, shares of Duolingo are up 15.2% this week.

Duolingo released its Q1 earnings earlier this week on May 9, and all its key numbers looked incredibly strong. Monthly active users (MAUs) grew 47% to 72.6 million, and daily active users (DAUs) grew 62% to 20.3 million. This led to a strong 63% bump in paying subscribers to 4.8 million, which drove bookings growth of 37% to $140.1 million in the quarter.

The company reported a net loss of $2.6 million, but this understates the company's true profitability. Since Duolingo sells subscriptions, it has to recognize revenue over the life of these contracts, even though it collects the cash up front. This is why it reports bookings, which is a top-line sales number based on cash collections, instead of GAAP revenue (generally accepted accounting principles). 

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Source Fool.com