Duolingo Q4 Revenue Surpasses Expectations, Stock Declines
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy DUOL?
Source: stocktwits
- Quarterly Revenue Growth: Duolingo's quarterly revenue rose 35% year-over-year to $282.9 million, exceeding Wall Street's expectations of $276 million, indicating strong performance in user growth and subscription conversion rates, despite a more than 21% drop in stock price post-earnings release.
- Future Expectations: The company anticipates fiscal 2026 bookings to grow 10% to 12% year-over-year, with first-quarter bookings expected to rise nearly 11%, reflecting a strategic focus on expanding its user base, although profitability may decline in the short term.
- User Growth Strategy: CEO Luis von Ahn emphasized that Duolingo will prioritize user growth, planning to expand its active learner base through AI-driven features and improved teaching methods, even as daily active user growth may decelerate.
- Market Reaction: Despite a 62% decline in stock price over the past year, retail investor sentiment towards Duolingo has shifted to 'extremely bullish', suggesting that the current selloff is an overreaction and reflecting confidence in the company's long-term strategy.
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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: 111.650
Low
160.00
Averages
260.36
High
330.00
Current: 111.650
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.
Duolingo Reports Q4 Net Income of $42M with 35% Revenue Growth
- Strong Financial Performance: Duolingo reported a Q4 net income of $42 million, representing a 35% year-over-year growth, exceeding market expectations by $6.95 million, highlighting its robust growth potential in the edtech sector.
- Revenue Growth Drivers: The total revenue reached $282.9 million, indicating an expanding user base and enhanced product appeal, although the stock price fell by 9%, the long-term growth outlook remains optimistic.
- Market Reaction Analysis: Despite the earnings report surpassing expectations, the stock price declined due to market misunderstandings regarding the 'SaaS apocalypse', indicating investor concerns about the company's future profitability.
- Portfolio Adjustments: ClearBridge Small-Cap Growth trimmed its positions in Duolingo and Biohaven in Q4, reflecting a cautious market sentiment towards short-term performance while increasing investments in other companies, showcasing shifts in market dynamics.
See More
Duolingo Q4 Revenue Surpasses Expectations, Stock Declines
- Quarterly Revenue Growth: Duolingo's quarterly revenue rose 35% year-over-year to $282.9 million, exceeding Wall Street's expectations of $276 million, indicating strong performance in user growth and subscription conversion rates, despite a more than 21% drop in stock price post-earnings release.
- Future Expectations: The company anticipates fiscal 2026 bookings to grow 10% to 12% year-over-year, with first-quarter bookings expected to rise nearly 11%, reflecting a strategic focus on expanding its user base, although profitability may decline in the short term.
- User Growth Strategy: CEO Luis von Ahn emphasized that Duolingo will prioritize user growth, planning to expand its active learner base through AI-driven features and improved teaching methods, even as daily active user growth may decelerate.
- Market Reaction: Despite a 62% decline in stock price over the past year, retail investor sentiment towards Duolingo has shifted to 'extremely bullish', suggesting that the current selloff is an overreaction and reflecting confidence in the company's long-term strategy.
See More
Duolingo Q4 2025 Earnings Call Insights
- Management Change: CFO Matt Skaruppa's resignation and Gilian Munson's appointment signify a critical leadership shift during a strategic transition, potentially impacting investor confidence.
- User Growth Target: Duolingo surpassed 50 million daily active users in 2025, with a projected 20% year-over-year growth in 2026, indicating a strong focus on long-term growth despite short-term profitability challenges.
- Financial Outlook: The 2026 guidance anticipates revenue growth of 15% to 18% and an adjusted EBITDA margin around 25%, reflecting pressures from rising costs and declining profitability while pursuing user expansion.
- Share Buyback Plan: The announcement of a $400 million share buyback underscores management's confidence in the business's future, potentially creating long-term value for shareholders.
See More
Duolingo's Q1 Bookings Forecast Falls Short of Expectations
- User Growth Strategy Shift: Duolingo plans to accelerate user growth by expanding access to its AI-powered 'Video Call with Lily' feature in the Super Duolingo subscription, although this will negatively impact bookings growth and profitability this year.
- Financial Forecast Downgrade: The company forecasts first-quarter bookings of approximately $301.5 million, falling short of market expectations of $329.7 million, with full-year bookings expected between $1.27 billion and $1.30 billion, below the $1.39 billion analyst estimate.
- Profitability Decline: Due to increased investments in AI features and marketing, Duolingo's adjusted core profit margin is projected to decline to about 25%, indicating a potential sacrifice of short-term profitability in pursuit of user growth.
- User Growth Slowdown: While CEO Luis von Ahn states that user growth is around 20%, daily active user growth is expected to decelerate to roughly half the pace by 2025, reflecting challenges the company faces after rapid expansion.
See More
Stock Market Movers: Nvidia, Sandisk, Salesforce, C3.ai, IonQ, Nutanix, and Others
- Stock Market Trends: Stock futures were declining on Thursday, indicating a downturn in the market.
- Nvidia's Earnings Impact: Nvidia's strong fourth-quarter earnings report was not enough to maintain the recent rebound in the tech sector.
See More
Duolingo Stock Declines Amid Investor Concerns Over Earnings and AI Competition
- Stock Price Decline: Duolingo's stock has dropped approximately 24% in January and an additional 18% in February, resulting in a year-to-date decline of 38%, indicating investor concerns about the company's future performance.
- Disappointing Earnings Guidance: The company forecasts fourth-quarter bookings between $329.5 million and $335.5 million, significantly below the analyst consensus of $344.1 million, reflecting a pessimistic market sentiment regarding its growth outlook.
- Slowing User Growth: Management noted a deceleration in daily active user (DAU) growth in Q4, prompting a strategic shift to expand its user base while ramping up investments to drive long-term growth.
- AI Competition Pressure: With increasing market concerns over AI technologies, Duolingo faces competitive pressures from alternative services like chatbots, leading to valuation pressures and a weaker outlook for future earnings growth.
See More
Duolingo Reports Q4 Net Income of $42M with 35% Revenue Growth
- Strong Financial Performance: Duolingo reported a Q4 net income of $42 million, representing a 35% year-over-year growth, exceeding market expectations by $6.95 million, highlighting its robust growth potential in the edtech sector.
- Revenue Growth Drivers: The total revenue reached $282.9 million, indicating an expanding user base and enhanced product appeal, although the stock price fell by 9%, the long-term growth outlook remains optimistic.
- Market Reaction Analysis: Despite the earnings report surpassing expectations, the stock price declined due to market misunderstandings regarding the 'SaaS apocalypse', indicating investor concerns about the company's future profitability.
- Portfolio Adjustments: ClearBridge Small-Cap Growth trimmed its positions in Duolingo and Biohaven in Q4, reflecting a cautious market sentiment towards short-term performance while increasing investments in other companies, showcasing shifts in market dynamics.
See More
Duolingo Q4 Revenue Surpasses Expectations, Stock Declines
- Quarterly Revenue Growth: Duolingo's quarterly revenue rose 35% year-over-year to $282.9 million, exceeding Wall Street's expectations of $276 million, indicating strong performance in user growth and subscription conversion rates, despite a more than 21% drop in stock price post-earnings release.
- Future Expectations: The company anticipates fiscal 2026 bookings to grow 10% to 12% year-over-year, with first-quarter bookings expected to rise nearly 11%, reflecting a strategic focus on expanding its user base, although profitability may decline in the short term.
- User Growth Strategy: CEO Luis von Ahn emphasized that Duolingo will prioritize user growth, planning to expand its active learner base through AI-driven features and improved teaching methods, even as daily active user growth may decelerate.
- Market Reaction: Despite a 62% decline in stock price over the past year, retail investor sentiment towards Duolingo has shifted to 'extremely bullish', suggesting that the current selloff is an overreaction and reflecting confidence in the company's long-term strategy.
See More
Duolingo Q4 2025 Earnings Call Insights
- Management Change: CFO Matt Skaruppa's resignation and Gilian Munson's appointment signify a critical leadership shift during a strategic transition, potentially impacting investor confidence.
- User Growth Target: Duolingo surpassed 50 million daily active users in 2025, with a projected 20% year-over-year growth in 2026, indicating a strong focus on long-term growth despite short-term profitability challenges.
- Financial Outlook: The 2026 guidance anticipates revenue growth of 15% to 18% and an adjusted EBITDA margin around 25%, reflecting pressures from rising costs and declining profitability while pursuing user expansion.
- Share Buyback Plan: The announcement of a $400 million share buyback underscores management's confidence in the business's future, potentially creating long-term value for shareholders.
See More
Duolingo's Q1 Bookings Forecast Falls Short of Expectations
- User Growth Strategy Shift: Duolingo plans to accelerate user growth by expanding access to its AI-powered 'Video Call with Lily' feature in the Super Duolingo subscription, although this will negatively impact bookings growth and profitability this year.
- Financial Forecast Downgrade: The company forecasts first-quarter bookings of approximately $301.5 million, falling short of market expectations of $329.7 million, with full-year bookings expected between $1.27 billion and $1.30 billion, below the $1.39 billion analyst estimate.
- Profitability Decline: Due to increased investments in AI features and marketing, Duolingo's adjusted core profit margin is projected to decline to about 25%, indicating a potential sacrifice of short-term profitability in pursuit of user growth.
- User Growth Slowdown: While CEO Luis von Ahn states that user growth is around 20%, daily active user growth is expected to decelerate to roughly half the pace by 2025, reflecting challenges the company faces after rapid expansion.
See More
Stock Market Movers: Nvidia, Sandisk, Salesforce, C3.ai, IonQ, Nutanix, and Others
- Stock Market Trends: Stock futures were declining on Thursday, indicating a downturn in the market.
- Nvidia's Earnings Impact: Nvidia's strong fourth-quarter earnings report was not enough to maintain the recent rebound in the tech sector.
See More
Duolingo Stock Declines Amid Investor Concerns Over Earnings and AI Competition
- Stock Price Decline: Duolingo's stock has dropped approximately 24% in January and an additional 18% in February, resulting in a year-to-date decline of 38%, indicating investor concerns about the company's future performance.
- Disappointing Earnings Guidance: The company forecasts fourth-quarter bookings between $329.5 million and $335.5 million, significantly below the analyst consensus of $344.1 million, reflecting a pessimistic market sentiment regarding its growth outlook.
- Slowing User Growth: Management noted a deceleration in daily active user (DAU) growth in Q4, prompting a strategic shift to expand its user base while ramping up investments to drive long-term growth.
- AI Competition Pressure: With increasing market concerns over AI technologies, Duolingo faces competitive pressures from alternative services like chatbots, leading to valuation pressures and a weaker outlook for future earnings growth.
See More
