Duolingo Reports Mixed Q4 Earnings Amid User Decline
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Should l Buy DUOL?
Source: NASDAQ.COM
- User Growth Slowdown: Duolingo reported a decline in monthly active users from 135.3 million to 133.1 million in Q4, although daily active users increased from 50.5 million to 52.7 million, indicating a positive user conversion but raising concerns about long-term growth due to a drying pipeline of new users.
- Strong Financial Performance: Despite the disappointing user metrics, Duolingo's quarterly revenue grew by 35% to $282.9 million, with a net income of $42 million, demonstrating stable profitability; however, the market's expectations for long-term growth are being negatively impacted by user decline.
- Stock Buyback Program: The company announced a $400 million share buyback program aimed at taking advantage of its undervalued stock price, reflecting management's confidence in the company's future value despite the challenges posed by slowing user growth.
- Guidance Misses Expectations: Duolingo's revenue guidance for Q1 is set at $288.5 million, representing only 2% sequential growth and falling short of the consensus estimate of $291.2 million, while the full-year revenue forecast of $1.2 to $1.22 billion also misses the average estimate of $1.26 billion, indicating market skepticism about its growth prospects.
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Analyst Views on DUOL
Wall Street analysts forecast DUOL stock price to rise
17 Analyst Rating
10 Buy
6 Hold
1 Sell
Moderate Buy
Current: 100.420
Low
160.00
Averages
260.36
High
330.00
Current: 100.420
Low
160.00
Averages
260.36
High
330.00
About DUOL
Duolingo, Inc. is a technology company. The Company is engaged in offering a mobile learning platform, as well as a digital English language proficiency assessment exam. It operates a freemium business model, namely, the app and the Website are accessible free of charge, although Duolingo also offers premium services for a subscription fee. Its solutions consist of the Duolingo App, Super Duolingo, Duolingo Max, Duolingo English Test: AI-Driven Language Assessment, Duolingo for Schools, and Duolingo ABC. The Duolingo App offers courses in over 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese and Chinese. Duolingo can also be accessed on desktop computers via a Web browser. Its subscription offering, Super Duolingo, offers learners additional features to enhance their learning experience. The Duolingo English Test is an online, on-demand, high-stakes English proficiency assessment. It also operates an animation and motion design studio.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Investment Opportunities Amid Market Volatility
- Figma's Price Decline: Figma's stock has fallen from its IPO price of $33 to $28.94, representing a 79% drop from its 52-week high of $143, although its unexpected 40% revenue growth in Q4 raises questions about future growth prospects.
- Trade Desk's Challenges: The Trade Desk reported a mere 14% revenue growth in its latest quarter, marking its weakest performance since the pandemic, and is undergoing executive turnover; however, the CEO's recent $150 million stock purchase indicates confidence in the company's future.
- Duolingo's User Growth: Despite Duolingo's stock plummeting over 80% from last year's peak, its monthly active users have increased by 30% to 52.3 million, with 77% on free ad-supported accounts, demonstrating the platform's stickiness and appeal.
- Market Rebound Potential: Despite overall market volatility, Figma, Trade Desk, and Duolingo are trading at less than 14 times projected earnings, suggesting potential investment opportunities for patient investors willing to sift through the market's retreat.
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Figma, The Trade Desk, and Duolingo Stocks Plummet
- Figma's Price Drop: Figma's stock has plummeted 79% from its peak last year, although its latest quarter saw a 40% acceleration in revenue growth, concerns about future growth persist, highlighting intensifying competition in the SaaS sector.
- Trade Desk's Challenges: The Trade Desk's stock has fallen 70%, with a mere 14% revenue growth in its latest quarter marking its weakest performance outside of the pandemic, compounded by executive turnover; however, the CEO's recent $150 million stock purchase indicates confidence in the company's future.
- Duolingo's Hard Hit: Duolingo's stock has crashed over 80%, despite a 30% increase in monthly active users, market expectations for future growth remain low, and its 2026 revenue guidance was disappointing, reflecting competitive pressures from AI tools.
- Market Volatility: A quarter of publicly traded companies have seen their market value shrink by over 50%, while only a tenth of stocks have dropped by at least 70%, indicating uncertainty in the market and a cautious sentiment among investors.
See More
Analysis of Investment Opportunities in Growth Stocks
- Robinhood Market Performance: Robinhood (HOOD) has seen its stock price drop over 30% year-to-date, yet its prediction market segment reached 2.3 billion contracts traded in Q3 2025 and 2.5 billion in October, indicating strong performance across its diversified business, particularly with net interest revenue increasing by 39% year-over-year.
- Prediction Market Catalyst: The launch of NFL and college football contracts significantly boosted Robinhood's prediction market, which traded over 12 billion event contracts throughout 2025, suggesting this segment could be a key driver for future growth and help the company regain market momentum.
- Duolingo Stock Volatility: Despite Duolingo (DUOL) experiencing a stock price decline of over 40% year-to-date, its revenue grew by 35% year-over-year in Q4, indicating continued market share expansion in the edtech sector, with net income tripling, reflecting robust fundamentals.
- Stock Buyback Initiative: Duolingo has authorized a $400 million stock repurchase program, representing nearly 10% of its outstanding shares, signaling management's optimism about the undervaluation of its stock and potentially providing a favorable buying opportunity for investors.
See More
Duolingo Faces User Growth Challenges Amid Market Pressures
- User Growth Milestone: Duolingo recently achieved a milestone of 50 million daily active users, which signifies growth in its user base; however, its stock has plummeted by 41% due to market pressures, highlighting a disconnect between user growth and stock performance.
- Slowing Revenue Growth: Despite generating a record $1 billion in revenue last year, nearly double the $531 million reported two years ago, the company anticipates a slowdown in revenue growth in the upcoming quarters, which could undermine investor confidence and lead to disappointing financial results.
- Strategic Shift Impact: Duolingo's decision to focus on user growth and enhance its free tier may result in short-term financial performance deterioration, yet management believes this strategy will help achieve 100 million active users in the medium term, enhancing long-term growth potential.
- Increased Market Risks: With geopolitical tensions, economic uncertainty, and rising oil prices affecting the market, Duolingo's stock may face further declines, leading investors to adopt a cautious stance until there is clear evidence that the new strategy is effective.
See More
Arthedge Capital Increases Stake in Duolingo
- Stake Increase: Arthedge Capital Management disclosed in an SEC filing dated February 17, 2026, that it increased its stake in Duolingo by 30,500 shares, with an estimated transaction value of approximately $7.19 million, indicating confidence in the company despite a $1.13 million decline in quarter-end value.
- Asset Allocation: This purchase brings Duolingo to 8.6% of Arthedge Capital's 13F reportable assets, highlighting its significance in a diversified portfolio, even as its stock price has fallen 67.4% over the past year.
- User Growth: Duolingo's daily active users (DAUs) surged by 30% to surpass 50 million, although the stock has been punished due to market concerns over AI disruptions, showcasing its potential and demand in the digital education sector.
- Future Outlook: Management anticipates reaching 100 million DAUs by 2028, while expecting revenue growth to slow to 15%-18% in 2026; however, improving the free experience rather than relying on ads may lay a foundation for long-term growth.
See More
Gilder Gagnon Howe & Co LLC Reduces Duolingo Holdings
- Share Reduction Details: According to an SEC filing dated February 17, 2026, Gilder Gagnon Howe & Co LLC sold 66,397 shares of Duolingo during Q4 2025, with an estimated transaction value of $15.65 million, indicating a decline in confidence in the stock.
- Decline in Holding Value: The fund's Duolingo holdings decreased by $95.44 million over the quarter, reflecting not only the share sale but also the impact of stock price fluctuations, suggesting a lack of market confidence in the company.
- Change in Holding Proportion: Following this sale, Duolingo now represents 0.9375% of the fund's 13F reportable assets, indicating a reduced significance in the investment portfolio, which may influence future investment strategies.
- Market Performance Analysis: As of February 13, 2026, Duolingo's share price stood at $112.57, down 73.84% year-over-year, significantly underperforming the S&P 500 by 85.63 percentage points, highlighting the challenges faced by the company and investor concerns.
See More
Investment Opportunities Amid Market Volatility
- Figma's Price Decline: Figma's stock has fallen from its IPO price of $33 to $28.94, representing a 79% drop from its 52-week high of $143, although its unexpected 40% revenue growth in Q4 raises questions about future growth prospects.
- Trade Desk's Challenges: The Trade Desk reported a mere 14% revenue growth in its latest quarter, marking its weakest performance since the pandemic, and is undergoing executive turnover; however, the CEO's recent $150 million stock purchase indicates confidence in the company's future.
- Duolingo's User Growth: Despite Duolingo's stock plummeting over 80% from last year's peak, its monthly active users have increased by 30% to 52.3 million, with 77% on free ad-supported accounts, demonstrating the platform's stickiness and appeal.
- Market Rebound Potential: Despite overall market volatility, Figma, Trade Desk, and Duolingo are trading at less than 14 times projected earnings, suggesting potential investment opportunities for patient investors willing to sift through the market's retreat.
See More
Figma, The Trade Desk, and Duolingo Stocks Plummet
- Figma's Price Drop: Figma's stock has plummeted 79% from its peak last year, although its latest quarter saw a 40% acceleration in revenue growth, concerns about future growth persist, highlighting intensifying competition in the SaaS sector.
- Trade Desk's Challenges: The Trade Desk's stock has fallen 70%, with a mere 14% revenue growth in its latest quarter marking its weakest performance outside of the pandemic, compounded by executive turnover; however, the CEO's recent $150 million stock purchase indicates confidence in the company's future.
- Duolingo's Hard Hit: Duolingo's stock has crashed over 80%, despite a 30% increase in monthly active users, market expectations for future growth remain low, and its 2026 revenue guidance was disappointing, reflecting competitive pressures from AI tools.
- Market Volatility: A quarter of publicly traded companies have seen their market value shrink by over 50%, while only a tenth of stocks have dropped by at least 70%, indicating uncertainty in the market and a cautious sentiment among investors.
See More
Analysis of Investment Opportunities in Growth Stocks
- Robinhood Market Performance: Robinhood (HOOD) has seen its stock price drop over 30% year-to-date, yet its prediction market segment reached 2.3 billion contracts traded in Q3 2025 and 2.5 billion in October, indicating strong performance across its diversified business, particularly with net interest revenue increasing by 39% year-over-year.
- Prediction Market Catalyst: The launch of NFL and college football contracts significantly boosted Robinhood's prediction market, which traded over 12 billion event contracts throughout 2025, suggesting this segment could be a key driver for future growth and help the company regain market momentum.
- Duolingo Stock Volatility: Despite Duolingo (DUOL) experiencing a stock price decline of over 40% year-to-date, its revenue grew by 35% year-over-year in Q4, indicating continued market share expansion in the edtech sector, with net income tripling, reflecting robust fundamentals.
- Stock Buyback Initiative: Duolingo has authorized a $400 million stock repurchase program, representing nearly 10% of its outstanding shares, signaling management's optimism about the undervaluation of its stock and potentially providing a favorable buying opportunity for investors.
See More
Duolingo Faces User Growth Challenges Amid Market Pressures
- User Growth Milestone: Duolingo recently achieved a milestone of 50 million daily active users, which signifies growth in its user base; however, its stock has plummeted by 41% due to market pressures, highlighting a disconnect between user growth and stock performance.
- Slowing Revenue Growth: Despite generating a record $1 billion in revenue last year, nearly double the $531 million reported two years ago, the company anticipates a slowdown in revenue growth in the upcoming quarters, which could undermine investor confidence and lead to disappointing financial results.
- Strategic Shift Impact: Duolingo's decision to focus on user growth and enhance its free tier may result in short-term financial performance deterioration, yet management believes this strategy will help achieve 100 million active users in the medium term, enhancing long-term growth potential.
- Increased Market Risks: With geopolitical tensions, economic uncertainty, and rising oil prices affecting the market, Duolingo's stock may face further declines, leading investors to adopt a cautious stance until there is clear evidence that the new strategy is effective.
See More
Arthedge Capital Increases Stake in Duolingo
- Stake Increase: Arthedge Capital Management disclosed in an SEC filing dated February 17, 2026, that it increased its stake in Duolingo by 30,500 shares, with an estimated transaction value of approximately $7.19 million, indicating confidence in the company despite a $1.13 million decline in quarter-end value.
- Asset Allocation: This purchase brings Duolingo to 8.6% of Arthedge Capital's 13F reportable assets, highlighting its significance in a diversified portfolio, even as its stock price has fallen 67.4% over the past year.
- User Growth: Duolingo's daily active users (DAUs) surged by 30% to surpass 50 million, although the stock has been punished due to market concerns over AI disruptions, showcasing its potential and demand in the digital education sector.
- Future Outlook: Management anticipates reaching 100 million DAUs by 2028, while expecting revenue growth to slow to 15%-18% in 2026; however, improving the free experience rather than relying on ads may lay a foundation for long-term growth.
See More
Gilder Gagnon Howe & Co LLC Reduces Duolingo Holdings
- Share Reduction Details: According to an SEC filing dated February 17, 2026, Gilder Gagnon Howe & Co LLC sold 66,397 shares of Duolingo during Q4 2025, with an estimated transaction value of $15.65 million, indicating a decline in confidence in the stock.
- Decline in Holding Value: The fund's Duolingo holdings decreased by $95.44 million over the quarter, reflecting not only the share sale but also the impact of stock price fluctuations, suggesting a lack of market confidence in the company.
- Change in Holding Proportion: Following this sale, Duolingo now represents 0.9375% of the fund's 13F reportable assets, indicating a reduced significance in the investment portfolio, which may influence future investment strategies.
- Market Performance Analysis: As of February 13, 2026, Duolingo's share price stood at $112.57, down 73.84% year-over-year, significantly underperforming the S&P 500 by 85.63 percentage points, highlighting the challenges faced by the company and investor concerns.
See More
