Duolingo, Inc. (DUOL) Citi's 2026 Global TMT Conference September 9, 2026 10:10 AM EDT
Company Participants
Luis von Ahn Arellano - Co-Founder, Chairman of the Board, President & CEO
Conference Call Participants
Ronald Josey - Citigroup Inc., Research Division
Presentation
Ronald Josey
Citigroup Inc., Research Division
All right. So welcome, everyone. Let's get started. I'm Ron Josey. I lead Internet coverage here at Citi. And I am thrilled, psyched, excited to have with us today, Luis von Ahn, the Co-Founder and CEO of Duolingo. So Luis, thanks for being here.
Luis von Ahn Arellano
Co-Founder, Chairman of the Board, President & CEO
Thank you for having me.
Ronald Josey
Citigroup Inc., Research Division
Duolingo is one of the, in my mind, most recognized consumer learning fun platforms out there. There's a lot going on. And so maybe we'll get started. And first of all, thanks for coming. So excited to see you. Thanks for being here.
Question-and-Answer Session
Ronald Josey
Citigroup Inc., Research Division
I think most people know Duolingo, so we can sort of just jump into it. Maybe I'll start with some icebreakers. Just to tighten the mood, if you will. And the first one to lighten the mood is when I give you this one number or word like what's the first thing that comes to mind, 100 million.
Luis von Ahn Arellano
Co-Founder, Chairman of the Board, President & CEO
That's the number of DAUs we want to get to in 2028.
Ronald Josey
Citigroup Inc., Research Division
Okay. That's the first thing that comes to mind.
Luis von Ahn Arellano
Co-Founder, Chairman of the Board, President & CEO
That's it. That's our goal.
Ronald Josey
Citigroup Inc., Research Division
Chess.
Luis von Ahn Arellano
Co-Founder, Chairman of the Board, President & CEO
When the AI boom took hold, few companies looked more vulnerable than Duolingo Inc. NASDAQ: DUOL. If a chatbot could teach you a language for free, so the thinking went, why bother with a dedicated app at all?
Duolingo Today
$154.46 -4.36 (-2.75%)
As of 09/4/2026 04:00 PM Eastern
$87.89▼
$353.0018.30
$124.38
That fear sent the stock down more than 80% in less than a year, but since bottoming out last April, shares of the language-learning app have been rallying hard. With the stock having gained about 70% through the end of last week, this week’s jump came thanks to a fresh analyst upgrade.
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Evercore’s Mark Mahaney has turned bullish, saying the threat from ChatGPT and its peers has been wildly overstated. Alongside a fresh Outperform rating, he raised his price target to $210, indicating more than 30% upside from current levels.
Maheney also reached for an interesting comparison. He likened Duolingo's setup to that of Netflix Inc. NASDAQ: NFLX in 2022, when the streaming giant's shares fell more than 75% before a wave of product improvements powered a spectacular recovery. As we head into the final few months of 2026, could Duolingo be setting up for a Netflix-style comeback of its own?
Why the AI Fear Was OverdoneThe heart of the bullish case is that the market has fundamentally misjudged the AI threat. Rather than stealing Duolingo's users, tools like ChatGPT appear to coexist with the app, and often the same people use both. The evidence is telling. Evercore's research found that most language learners who use ChatGPT also use Duolingo, and crucially, they use the app just as intensively as Duolingo's most dedicated fans.
Far from cannibalizing the business, the AI-chatbot crowd treats ChatGPT as a casual supplement, reaching for it mostly for light, travel-related dabbling rather than serious study.
Duolingo, Inc. (DUOL) Price Chart for Saturday, September, 5, 2026
Given Duolingo’s stock had more than 80% of its value wiped out on the assumption that this wouldn’t be the case, that distinction matters enormously. It suggests the company’s committed, habit-forming core, the users who log in day after day to keep their streaks alive, remains firmly intact. But with shares still down 70% from last year’s all-time high, it feels like the market still hasn’t quite priced this in yet.
A Business in Good HealthBeyond the AI question, the underlying numbers paint a picture of a company in good health. User growth, for example, has been accelerating rather than fading, with daily active users recently hitting an all-time high. Just as important, those users are sticking around, with retention rates well above 80%. They’re also coming back, with a clever one-off campaign to win back lapsed learners bringing millions flooding back to the app.
That’s not exactly the kind of engagement momentum you’d expect from a product being disrupted by AI. Duolingo is also widening its appeal well beyond languages, pushing into subjects like math, music, and even chess, while using AI to slash the cost of premium features. One of the app's tools saw its cost per use collapse from around 30 cents to less than 1 cent, a neat illustration that, far from being replaced by AI, Duolingo is making it work in its favor.
Where the Bears Still See RiskFor all the renewed enthusiasm, the skeptics have not been entirely silenced, and their concerns deserve a fair hearing. The most pressing is the gap between Duolingo's booming user numbers and the slower pace at which it converts those users into paying subscribers. Strong engagement is one thing; turning it into hard revenue is quite another.
Then there are external risks, from the ever-present threat of new and more capable AI rivals to the regulatory complications of operating in China. This market holds the key to much of Duolingo’s planned growth. In addition, with such a sharp rebound in shares already, investors are right to question whether most of the easy gains have already been made.
Could History Repeat?So, could Duolingo really deliver the next Netflix-style comeback? The parallel is appealing: a beaten-down favorite, written off too soon, staging a comeback on the back of relentless product innovation. If the comparison holds, today's price could look cheap in hindsight, just as Netflix's did after its own 700% recovery.
Yet caution is warranted. Netflix operated at a vastly greater scale, and the monetization questions hanging over Duolingo are real and unresolved. History, as ever, rarely repeats itself so cleanly, and a single upbeat analyst call doesn’t guarantee a repeat performance.
Still, the direction of travel is hard to ignore. Duolingo seems to have answered its biggest existential question, with strong evidence that AI is proving more friend than foe, and its engagement numbers keep climbing. For investors willing to look past the near-term doubts, this recovering favorite may be at the start of a triple-digit rally of its own.
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A month has gone by since the last earnings report for Duolingo, Inc. (DUOL - Free Report) . Shares have added about 29.6% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Duolingo due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Duolingo, Inc. before we dive into how investors and analysts have reacted as of late.
Reported earnings of 66 cents per share beat the Zacks Consensus Estimate of 61 cents by 8.2%. Earnings declined from 91 cents in the year-ago quarter as the company continued investing in product development and user growth.
Revenues increased 18.3% year over year to $298.5 million and topped the consensus estimate of $297.3 million by 0.4%. Daily active users grew 23% to 58.7 million, accelerating from the first quarter, while paid subscribers increased 17% to 12.7 million.
DUOL Gains From Expanding User EngagementMonthly active users rose 10% year over year to 140.6 million. Management attributed the stronger daily active user growth to product improvements, marketing efforts and a one-time Streak Revival campaign conducted in June.
Current User Retention Rate, which measures the proportion of recurring users returning the following day, reached an all-time high of 84%. The metric improved roughly one percentage point from the prior year, reflecting the combined impact of hundreds of product experiments conducted through Duolingo’s Green Machine testing process.
The Streak Revival campaign allowed eligible learners to restore their longest previous streak by completing three lessons. About 15.4 million learners participated, including nearly 8 million who did not have an active streak when the campaign began.
Duolingo’s Subscription Revenues Drive GrowthSubscription revenues increased 22% year over year to $258 million and accounted for the bulk of the company’s top-line expansion. Subscription bookings advanced 10% to $250.3 million.
Total bookings rose 8% to $289.1 million, or 6% on a constant-currency basis. Growth moderated from the first quarter due to a difficult year-ago comparison related to the initial Energy rollout, a price increase and stronger advertising performance.
Advertising revenues grew 2% to $21.1 million, while Duolingo English Test revenues remained nearly flat at $10.1 million. In-app purchase revenues declined 23% to $8 million. Other revenues increased to $1.3 million from $0.5 million.
DUOL Balances Monetization With User GrowthThe company continued testing monetization initiatives designed to avoid adding friction for free users. Longer free trials have increased trial participation and payer conversions while improving the user experience by removing advertisements and Energy restrictions during the trial period.
Duolingo is also testing Super Lite, a lower-priced, advertising-supported subscription tier that provides more Energy than the free product but fewer benefits than Super. The offering remains in an early testing phase and represents only a small portion of subscribers.
Most new Super Duolingo subscribers now have access to Video Call, the company’s AI-powered conversational practice feature. Management plans to extend access to existing Super subscribers later in 2026 after reducing the cost per call to less than 1 cent through greater use of open-source models.
Duolingo’s Costs Rise on Strategic InvestmentsGross profit increased 19% year over year to $216.7 million. Gross margin expanded 20 basis points to 72.6%, exceeding management’s expectation of approximately 71%, supported by AI cost efficiencies and the measured rollout of AI-powered features.
Operating expenses increased to $182.8 million from $149.2 million. Research and development expenses rose to $92.2 million, sales and marketing expenses increased to $40 million, and general and administrative expenses advanced to $50.6 million.
Net income declined 26% to $33.2 million, while net margin contracted to 11.1% from 17.8%. Adjusted EBITDA decreased 2% to $77.3 million, and the corresponding margin narrowed 530 basis points to 25.9% as Duolingo prioritized investments in user acquisition and product improvements.
DUOL Maintains Strong Liquidity and BuybacksNet cash provided by operating activities declined 3% year over year to $88.3 million. Free cash flow decreased 9% to $78.6 million, while free cash flow margin contracted 790 basis points to 26.3%.
Duolingo ended the quarter with approximately $1.3 billion in cash and short-term investments. The company repurchased $44.4 million of shares during the quarter, bringing total repurchases under its $400 million authorization to $71.9 million through Aug. 1, 2026.
Duolingo Raises Profitability OutlookFor the third quarter of 2026, management expects revenues of approximately $302 million, indicating 11.1% year-over-year growth. Bookings are projected at $307 million, while adjusted EBITDA is forecast at $76 million, implying a 25.2% margin.
Duolingo maintained its full-year revenue and bookings targets. Revenues are expected to reach approximately $1.21 billion, up 16.3%. Bookings are projected at $1.29 billion, indicating growth of 10.9%.
The company raised its full-year adjusted EBITDA margin outlook to approximately 26.5% from its earlier expectation of about 25%. Adjusted EBITDA is projected at $320 million, reflecting stronger-than-expected gross margin performance and lower AI costs.
How Have Estimates Been Moving Since Then?It turns out, estimates review have trended downward during the past month.
VGM ScoresAt this time, Duolingo has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Duolingo has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
PITTSBURGH, Sept. 02, 2026 (GLOBE NEWSWIRE) -- Duolingo, Inc. (Nasdaq: DUOL) today announced that Luis von Ahn, Co-Founder and Chief Executive Officer, will participate in a fireside chat at the Citi 2026 Global TMT Conference on September 9, 2026 at 10:10 a.m. ET.
A live audio webcast of the fireside chat will be accessible on the company's Investor Relations website at investors.duolingo.com/events. A replay will be available following the presentation.
About Duolingo
Duolingo is the leading mobile learning platform globally. Its flagship app has organically become the world's most popular way to learn languages and the top-grossing app in the Education category on both Google Play and the Apple App Store. With technology at the core of everything it does, Duolingo has consistently invested to provide learners a fun, engaging, and effective learning experience while remaining committed to its mission to develop the best education in the world and make it universally available.
Duolingo stock DUOL rose more than 5% on Tuesday after Evercore ISI upgraded the language-learning company to Outperform from In Line and raised its price target to $210 from $105.
The new target implies nearly 42% upside from Monday’s close.
The upgrade comes as Duolingo works to expand user engagement and subscriber growth through artificial intelligence-enabled products.
The shares have declined more than 10% this year as the company has struggled to maintain paid subscriber growth and faced concerns about potential disruption from generative AI tools.
However, recent product developments and user activity data have led some analysts to take a more positive view of the stock.
Evercore ISI analyst Mark Mahaney said the firm’s recent survey showed Duolingo has about four times the selection of its closest pure-play competitor. The survey also indicated that user satisfaction and daily usage have increased.
According to the survey, daily usage rose to 65% in 2026 from 61% in 2025. Mahaney attributed the improvement to recent AI-linked product changes.
Evercore has focused on the engagement impact of several AI-enabled products introduced by Duolingo this year.
These include spoken tokens, Flashcards and Speaking Adventures, a free lesson format that allows learners to complete real-world tasks by interacting with Duolingo characters.
The company has also reported a record current user retention rate of 84%, representing an increase of about 1 percentage point from a year earlier, according to Evercore.
Mahaney also argued that generative AI tools are unlikely to significantly undermine Duolingo’s business.
ChatGPT users interested in language learning are largely focused on travel, an area that Duolingo is less focused on because it is more difficult to monetize.
DA Davidson also became more positive on Duolingo, raising its price target to $175 from $160 while maintaining a Buy rating.
Analyst Wyatt Swanson based the updated view on in-house data tracking activity among more than 170,000 existing Duolingo users.
The data showed continued strength in week-over-week daily active user growth, with the final week of August recording another increase.
DA Davidson estimates third-quarter daily active user growth could reach between 25.6% and 27.6% year over year.
August daily active users increased 1.3% month over month, compared with 0.6% in the firm’s previous update.
The week from Aug. 22 to Aug. 29 recorded 1.8% week-over-week growth, the strongest weekly increase since Duolingo’s streak revival event in early June.
Growth came from both older users returning to the platform and new users from more recent cohorts.
Wall Street remains divided on DuolingoDA Davidson’s new $175 price target represents 23.5 times the firm’s 2026 EBITDA estimate and 18.5 times its 2027 estimate.
The firm also noted that its daily active user data has historically underestimated Duolingo’s reported results by 100 to 200 basis points.
Despite the positive calls from Evercore ISI and DA Davidson, broader analyst sentiment remains more cautious.
LSEG data shows that 17 of the 25 analysts covering Duolingo have a Hold rating on the stock.
The contrasting views reflect the debate around Duolingo’s ability to sustain user and paid subscriber growth while navigating the impact of generative AI on language learning.
For now, recent engagement data and the company’s expanding portfolio of AI-enabled products have provided a more positive backdrop for the shares, even as Duolingo remains below its levels at the start of the year.
Duolingo stock has crawled back in the past few months, moving to its highest point since January this year. DUOL soared to $162, up by 77% from its lowest level this year. There is a risk that the stock may be on the verge of a reversal.
Duolingo, the popular online learning platform, is facing some major challenges as its business model is disrupted by artificial intelligence (AI) tools.
As a result, the management has decided to focus on its user growth, with the goal of boosting its active users from 58.7 million today to 100 million in the coming years.
To do that, the company is adding more services like chess and maths, and boosting its marketing spending. These activities have had an impact on its margins, with its net profit margin falling to 11.8% from the previous 17.8%.
The most recent results showed that Duolingo’s paid subscribers rose by 17% YoY to 12.7 million, while its revenue jumped by 18% to $298 million. Its results also showed that its net income falling by 26% to over $33 million.
The management and analysts expect the company’s growth to continue in the coming quarters. For example, analysts expect the upcoming earnings to show that its revenue rose by 11.45% in Q3 to $302 million. For the year, analysts expect the revenue to jump by 16% to $1.22 billion, followed by 13% next year.
These numbers imply that the company is in a transition from growth to value, meaning that its valuation multiples will need to be adjusted. Indeed, the forward price-to-earnings ratio has dropped to 22, much lower than its historical level. This multiple is in line with that of the S&P 500 Index.
Some analysts believe that Duolingo stock has more upside to go. For example, Evercore analysts believe that the shares will jump to $210, up by about 35% from the current level. However, many analysts have a mild outlook for the shares, with JPMorgan’s Bryan Smilek boosting his target from $125 to $135, down from where it is today.
DUOL stock chart | Source: TradingView
The risk, however, is that the DUOL stock is facing some technical risks. One of them is that it is forming a rising broadening wedge pattern, a common bearish reversal sign in technical analysis. This pattern is made up of two ascending and diverging trendlines.
The two lines of the Percentage Price Oscillator (PPO) have jumped in the past few months. Also, the stock remains above the 100-day Exponential Moving Average (EMA).
While these are bullish signs, the rising broadening wedge and the forming abandoned baby candle points to a reversal, potentially to the key support of $134. A move above the upper side of the wedge will point to more gains.
Duolingo Inc (NASDAQ:DUOL) stock is bucking the broad market selloff today, up 6.4% to trade at $156.88, after an upgrade to "outperform" from "in-line.
Duolingo (NASDAQ:DUOL – Get Free Report) and Monex Group (OTCMKTS:MNXBF – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.
Analyst Ratings This is a summary of recent recommendations and price targets for Duolingo and Monex Group, as provided by MarketBeat.com.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Duolingo 1 15 8 1 2.36 Monex Group 0 0 0 0 0.00 Duolingo currently has a consensus price target of $132.65, suggesting a potential downside of 9.75%. Given Duolingo’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Duolingo is more favorable than Monex Group.
Earnings & Valuation This table compares Duolingo and Monex Group”s gross revenue, earnings per share and valuation. Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Duolingo $1.04 billion 6.63 $414.07 million $8.44 17.41 Monex Group N/A N/A N/A $11.59 0.38 Duolingo has higher revenue and earnings than Monex Group. Monex Group is trading at a lower price-to-earnings ratio than Duolingo, indicating that it is currently the more affordable of the two stocks.
Profitability This table compares Duolingo and Monex Group’s net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Duolingo 35.88% 12.10% 8.24% Monex Group N/A N/A N/A Insider & Institutional Ownership 91.6% of Duolingo shares are held by institutional investors. Comparatively, 9.7% of Monex Group shares are held by institutional investors. 16.6% of Duolingo shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary Duolingo beats Monex Group on 11 of the 12 factors compared between the two stocks.
About Duolingo (Get Free Report)
Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally. The company offers courses in 40 different languages, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through its Duolingo app. It also provides a digital English language proficiency assessment exam. Duolingo, Inc. was incorporated in 2011 and is headquartered in Pittsburgh, Pennsylvania.
About Monex Group (Get Free Report)
Monex Group, Inc., an online financial institution, provides retail online brokerage services in Japan, the United States, China, and Australia. It offers international forex, asset management, investor education, M&A advisory, and cryptocurrency exchange services; investment and trading, and investment education services; asset building and management services; custodial trust service; private banking services for high net worth clients; investment advisory services; management and utilization services for genomic, medical, and healthcare data; and education and childcare services. In addition, it involved in development and operation of marketing SaaS ChatBook'; research and design, study, development, and consultation on cryptocurrency; and development of trading technology. The company was formerly known as Monex Beans Holdings, Inc. and changed its name to Monex Group, Inc. in July 2008. Monex Group, Inc. was founded in 1999 and is headquartered in Tokyo, Japan.
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I bought Duolingo (DUOL +2.88%) stock shortly after it fell to its 52-week low of $90.03 in April, which marked a staggering 83% decline from last year's record high of $540.68. It has since recovered to around $146.84 as of the market close on Monday, Aug. 24, and while I am very bullish on its prospects from here, Wall Street isn't convinced.
The 27 analysts covering the stock tracked by The Wall Street Journal have put an average price target of $127.07 on it, which suggests the stock could decline by around 13% over the next 12 months. Duolingo operates the world's largest digital language education platform, and Wall Street is concerned about management's plan to focus on user growth at the expense of monetization over the next couple of years, which could hurt the company's financial performance.
However, if the strategy pays off, Duolingo's business could be in the strongest position in its history sometime around 2028. Here's why I plan to stick around to reap the potential rewards.
Image source: The Motley Fool.
A bigger user base will be a net positive in the long run Duolingo designed a highly interactive mobile app that places fun language lessons at the fingertips of anybody with a smartphone. It had 58.7 million daily active users at the conclusion of the second quarter, a 23% increase from the year-ago period. Surprisingly, the company spends very little money on marketing, but it has an enormous social media following thanks to its quirky content, which generates roughly 1 billion impressions per quarter.
Duolingo monetizes users of its free tier by showing them ads, but most of its revenue comes from the 12.7 million subscribers who pay to unlock additional features so they can accelerate their learning. But management's new strategy is to offer more premium features to free users, which could reduce the incentive for people to pay to subscribe. However, it should also entice more language learners to try out the platform.
While this strategy could slow Duolingo's revenue growth in the near term, management thinks it will help increase the platform's daily active user base to 100 million by 2028. This will make it harder for any new competitors to disrupt Duolingo. Plus, when the company decides to focus on monetization again in the future, it will have far more users to attempt to convert into paying subscribers, which is why I think any potential financial headwinds this strategy will create will be temporary.
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Duolingo is leaning into artificial intelligence Artificial intelligence (AI) has been another concern; some investors feel that chatbots and advanced translation tools could disrupt Duolingo's business. But these new tools don't necessarily educate their users, so they aren't a substitute for Duolingo, which teaches languages from the ground up.
Moreover, Duolingo is now using AI to enhance the learning experience with new features. Video Call, for example, uses a digital avatar to help learners practice their foreign language speaking skills. Previously, Video Call was exclusively available to subscribers of Duolingo Max, the platform's most expensive plan, but the company is now rolling it out to subscribers of the cheaper Super Duolingo tier.
Management has reduced the cost of each call from $0.30 to under $0.01 by using open-source AI models, so it's now more economical for it to offer the service to a wider audience. This is important because speaking exercises can be far more engaging than traditional learning methods, and management says the number of spoken words per user who engages with Video Call continues to soar.
As a result, Duolingo is now also integrating more speaking exercises into its free lessons to help boost engagement.
Duolingo stock is cheap now Duolingo generated $1.14 billion in revenue over the last four quarters, placing its stock at a price-to-sales (P/S) ratio of 6.3. That is significantly below its average P/S ratio of 15.2 since going public in 2021. Even if the stock doubled from here, its P/S ratio would still be well below its average.
DUOL PS Ratio data by YCharts.
Plus, based on Duolingo's trailing 12-month earnings of $8.46 per share and its stock price of $146.84 at the close of trading on Monday, it has a price-to-earnings (P/E) ratio of just 17.3. That is a steep discount to both the S&P 500 (^GSPC -0.25%) and the Nasdaq-100 indexes, which currently have P/E ratios of 26.1 and 34.1, respectively. In other words, Duolingo stock is significantly cheaper than the broader market.
There is one caveat to that analysis. Wall Street's average analyst estimate (provided by Yahoo! Finance) suggests Duolingo's earnings could shrink to $7.68 per share in 2027 -- a temporary consequence of its strategy to focus on user growth instead of monetization. That places its stock at a higher forward P/E ratio of 19.1, but it still looks cheap.
Therefore, although Wall Street's average price target of $127.07 implies 13% downside for Duolingo stock, I certainly won't be selling it while it's trading at a valuation discount to the market. I plan to stick around until at least 2028, because if management's plan pays off, I think the stock will be priced significantly higher by then than it is today.
Finding companies with strong momentum and a clear competitive edge is one of the best ways to identify potential long-term winners. Duolingo (DUOL +2.88%) and Take-Two Interactive (TTWO +1.03%) both fit that profile.
Each company has momentum going in its favor and still has an attractive long-term opportunity. Here's why both look like compelling buy-and-hold investments for the next decade.
Image source: Getty Images.
1. Duolingo Duolingo is a popular language-learning app, with courses also in chess, music, and math, and it recently reached 58 million daily active users. The stock is down about 74% from its prior peak after management shifted its priority from revenue growth to user growth. That resulted in revenue growth slowing from a 39% increase in 2025 to just 18% year over year in the second quarter of 2026.
The stock's sell-off, however, creates an attractive setup for patient investors. The strategic shift is about long-term value creation: retaining more users today can build a much larger business over time.
Management is still targeting 100 million daily active users by 2028, which would set the stage for meaningfully higher revenue and earnings. The company's 11.5% second-quarter operating margin shows a profitable business model built around getting users to sign up for a subscription that unlocks additional features. It just needs more of them.
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Duolingo attracts and keeps users with a simple, gamified interface that makes learning feel like playing a game. It also uses data and feedback from its large user base to continuously refine the product and improve monetization -- an advantage that's easy to miss but hard to replicate.
Artificial intelligence (AI) is another lever. Duolingo is using open-source models to lower costs while expanding features like conversation practice in its language courses. As AI improves, Duolingo is continually adding more value to users while driving down costs. This cycle of lowering costs and reinvesting the savings into better features can be a powerful driver of user growth over time.
Investors should still watch for risks. There is potential for new entrants using AI to increase competition. If daily active user growth begins to slow enough to put the company off track of reaching its user target, that would be a valid reason to reconsider the investment thesis.
Still, continuing to grow daily users at high rates could translate into a larger and more valuable business over the next decade. The stock trades at a reasonable forward price-to-earnings (P/E) ratio of 22, setting up the potential for excellent returns.
2. Take-Two Interactive Take-Two's Grand Theft Auto (GTA) V sold 230 million copies since launching in 2013, and the franchise has sold 475 million copies across all versions over the last few decades. With the next installment slated for a November release, the series could continue to drive the company's momentum. The stock has delivered a market-beating 443% cumulative return over the past 10 years, and analysts expect earnings to grow at an annualized rate of 27% in the coming years.
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Take-Two's Rockstar Games, the studio behind GTA, shared an extended look of GTA VI on Netflix on Aug. 27. Landing that kind of showcase highlights the franchise's growing audience.
What makes these games attractive to investors is that they can generate revenue long after the initial purchase. That shows up in Take-Two's recurrent consumer spending, which includes in-game purchases and advertising. In fiscal 2026 (which ended in March), recurrent spending grew 16% year over year to $5.2 billion, making up roughly three-quarters of the business.
Beyond its release slate, management also sees room to expand internationally, where some regions are still underrepresented. Take-Two is aiming to grow its presence in Latin America, the Middle East, and Asia, with a long-term goal of making international revenue the majority of total revenue within 10 years.
Of course, new releases carry risk. Even with what management calls an "exceptional start" to GTA VI pre-orders, launch issues like bugs or glitches can hurt reviews and disrupt early sales momentum. That's simply the nature of making games.
The long-term upside is worth considering a small position ahead of the new GTA release. The stock trades at a forward P/E of 33, which isn't cheap, but that valuation can still deliver market-beating returns over the next decade if Take-Two executes on its pipeline and grows earnings in line with Wall Street's expectations.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of DUOL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Shares of Duolingo (DUOL +7.28%) rose on Tuesday, following bullish analyst commentary.
Image source: Getty Images.
A more favorable risk-to-reward profile DA Davidson analyst Wyatt Swanson upgraded Duolingo's stock from neutral to buy. Swanson also boosted his share price forecast from $130 to $160, indicating potential gains of nearly 15% for investors who buy shares now.
Swanson argues that many of the risks related to Duolingo's monetization challenges are already priced into its stock following its 60% decline over the past year.
Today's Change
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However, he thinks investors are not yet appreciating the language-learning platform's product improvements, fresh marketing campaigns, and new revenue-generation strategies.
Moreover, he believes Duolingo is nearing a turning point after which its bookings growth rate will converge toward its daily active user gains.
Investors love accelerating growth Duolingo's daily active users jumped 23% year over year to 58.7 million in the second quarter. Paid subscriber growth trailed that pace a bit but still rose a solid 17% to 12.7 million. The company's bookings -- the total cash value of customer purchases plus ad revenue -- increased at a more modest 8% to $289 million.
If Duolingo's new user acquisition and monetization initiatives can help to reaccelerate its bookings growth, its share price could easily trend toward Swanson's $160 price target.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.
Duolingo Inc. (NASDAQ:DUOL) shares are trading higher Tuesday after DA Davidson upgraded the stock. Here’s what you need to know.
Duolingo stock is among today’s top performers. Why are DUOL shares rallying? DA Davidson Sees Duolingo Nearing a Turning PointDA Davidson analyst Wyatt Swanson upgraded the stock to Buy from Neutral and raised its price target to $160 from $130, according to Benzinga Pro.
DA Davidson reportedly believes the core monetization engine, alongside Duolingo’s product improvements and marketing shifts, isn’t getting enough credit from investors. He said those efforts position the company for years of sustained growth ahead.
Building on that thesis, Swanson pointed to user engagement as a key growth lever. His model calls for daily active user growth to keep building momentum, with bookings eventually closing the gap to match that trajectory. Swanson also argued that past instances of DAU slowdowns or monetization hiccups have already been reflected in the stock, a track record that supports his read that Duolingo is approaching a turning point rather than facing a fresh source of downside risk.
Duolingo’s Chart Shows a Bounce, Not Yet a ReversalDuolingo has climbed back above its 20-day, 50-day, 100-day and 200-day moving averages, a lineup that usually means buyers are stepping in on dips rather than dumping shares into strength. The 20-day average, at $133.05, sitting above the 50-day average of $128.75 gives the near-term picture a bullish lean, though a death cross from August 2025, when the 50-day average slipped below the 200-day, still lingers in the background as an unresolved question mark over the longer-term trend.
Momentum tells a more skeptical story. The MACD line remains below its signal line with a negative histogram, the kind of reading that says the bounce looks fine for now but still needs confirmation. A stock can pop on short-term positioning for a single session, but keeping that move alive usually takes fresh buyers willing to pay even higher prices the next day, and that hasn’t been confirmed yet.
The levels worth tracking are fairly clear-cut. $144 marks the nearest overhead pivot, a spot where the rally could stall if buyers can’t clear it with real conviction. On the way down, $117 stands out as the last area where demand showed up, and it would become a far more pressing level to watch if today’s strength doesn’t hold.
DUOL Shares Are ClimbingDUOL Price Action: Duolingo shares were up 7.74% at $140.23 at the time of publication on Tuesday, according to Benzinga Pro.
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drew an upgrade to Buy from Neutral at DA Davidson, which set a $160 price target. Duolingo shares were up 4.49% premarket.
The argument is that investors are undervaluing product work, marketing changes and continued refinement of the monetization engine. DA Davidson expects daily active user growth to keep accelerating and bookings to converge with it. It also concedes the market has priced the risks around user deceleration and monetization effectively until now, but says Duolingo is nearing a turning point. The stock has fallen 65% over the past year.
The upgrade follows second-quarter results that beat on both lines, with adjusted earnings of $0.66 per share on revenue of $298.45 million against estimates of $0.58 and $295.44 million. Daily active users rose 23%, faster than the prior quarter, and Duolingo lifted its full-year adjusted EBITDA margin outlook to 26.5% from 25%.
UBS raised its price target to $150 after the print, while Scotiabank cut to $120 on a soft third-quarter revenue forecast.
Key Takeaways Duolingo's Q2 daily active users rose 23% to 58.7 million, while paid subscribers climbed 17%.DUOL's Q2 bookings rose 8% as R&D increased 25%, sales and marketing 35%, and net income fell 26%.Duolingo ended Q2 with $1.3 billion in cash and investments and generated $78.6 million of free cash flow. Duolingo, Inc. (DUOL - Free Report) offers investors a growing, highly engaged audience and expanding product reach. Yet bookings growth is slowing, operating spending is rising faster than revenues and the shares still command a premium valuation.
The investment case depends on whether user growth and platform expansion can translate into stronger monetization quickly enough to justify that premium.
Duolingo User Growth Strengthens the Long-Term CaseSecond-quarter daily active users increased 23% year over year to 58.7 million. Monthly active users rose 10% to 140.6 million and paid subscribers climbed 17% to 12.7 million. Current User Retention Rate also reached a record 84%, giving Duolingo a larger and stickier base for future monetization.
Duolingo is extending that distribution advantage beyond language learning. Chess had roughly 7 million daily active users by early 2026, while Math and Music each had single-digit millions of daily active users in the second quarter. Those products remain small relative to the core platform but can broaden engagement over time.
Coursera, Inc. (COUR - Free Report) is another large online learning platform and recently combined with Udemy, expanding its skills-development offering. Nerdy Inc. (NRDY - Free Report) , led by Varsity Tutors, operates a live online learning platform that uses artificial intelligence to personalize instruction.
DUOL Monetization Is Not Keeping Pace With UsageSecond-quarter revenues increased 18.3% year over year to $298.5 million, but total bookings rose only 8% to $289.1 million after increasing 14% in the first quarter. Management has said that new users do not monetize immediately, so stronger engagement may take time to show up fully in revenues.
Research and development expense rose 25% in the quarter and sales and marketing expense increased 35%, both faster than revenues. Net income fell 26%, while adjusted EBITDA declined 2%, showing the near-term cost of prioritizing user growth and product investment.
Duolingo's Premium Valuation Demands ExecutionDUOL trades at 44.4X forward 12-month earnings, compared with 22.2X for its Zacks sub-industry. That roughly twofold premium leaves less room for disappointment if bookings remain soft or the payoff from current investments takes longer than expected.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for current fiscal-year earnings has declined 5% over the past four weeks. A premium multiple alongside weaker estimate revisions raises the importance of meeting growth and margin targets.
DUOL Cash Flow and Buybacks Add Financial SupportDuolingo ended the second quarter with about $1.3 billion in cash and short-term investments and generated $78.6 million of free cash flow. Management expects more than $375 million of free cash flow for 2026, providing flexibility to keep investing through the current growth transition.
The company repurchased $44.4 million of stock during the quarter. Total repurchases reached $71.9 million through Aug. 1 under its $400 million authorization, offsetting nearly all dilution from 2024 and 2025. That supports per-share value even as operating investment remains elevated.
Duolingo Signals Support a Patient StanceDuolingo still has an attractive long-term platform story, but the near-term setup is less clear. User engagement is improving and cash generation remains healthy, while bookings growth, spending and valuation create a higher execution bar.
The stock carries a Zacks Rank #3 (Hold), which supports a patient near-term stance rather than a strong buy signal. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DUOL’s Momentum Score of B is the strongest of its style measures, while the Value Score of C is middling. The Growth Score of D and VGM Score of D are less favorable, leaving the overall style profile mixed.
Key Takeaways Duolingo shares gained 22.1% in three months as daily active users rose 23% to 58.7 million.DUOL cut Video Call costs from about 30 cents to under 1 cent, expanding access for Super subscribers.Duolingo's Q2 bookings rose 8% as R&D climbed 25%, sales and marketing 35%, and net income fell 26%. Duolingo, Inc. (DUOL - Free Report) shares have gained 22.1% in the past three months, drawing attention to whether operating progress can support more upside. The rally has coincided with improving engagement and sharply lower costs for a key artificial intelligence feature.
The main question is whether those gains can outweigh slower bookings growth, heavier investment and a valuation premium that already discounts substantial execution.
Duolingo Engagement Gives the Rally SupportSecond-quarter daily active users rose 23% year over year to 58.7 million, while paid subscribers increased 17% to 12.7 million. Monthly active users also advanced 10% to 140.6 million, giving Duolingo a larger base from which to convert engagement into future revenues.
Current User Retention Rate reached a record 84%, roughly one percentage point above the prior year. Management expects daily active user growth to remain above 20% through the rest of 2026, suggesting that the engagement gains are not being treated as a one-quarter event.
DUOL's Lower AI Costs Expand Product AccessThe cost of Duolingo's Video Call feature has fallen from about 30 cents to less than 1 cent per call, mainly through greater use of open-source models. Most new Super subscribers now receive Video Call, compared with its earlier placement behind the more expensive Max tier.
Management plans to extend the feature to existing Super subscribers later in 2026. Lower unit costs give Duolingo more room to broaden conversational practice while limiting the cost burden that previously constrained access.
Duolingo's Slower Bookings Test the MomentumTotal bookings increased 8% in the second quarter to $289.1 million after growing 14% in the first quarter. Management expects third-quarter revenues of about $302 million, implying 11.1% growth, while bookings are projected to rise 8.9%.
Investment is rising faster than the top line. Second-quarter research and development expense increased 25%, while sales and marketing expense rose 35%. Net income fell 26% and adjusted EBITDA declined 2%, showing that stronger user growth may take time to translate into greater operating leverage.
DUOL Valuation Raises the Bar for More UpsideDUOL trades at 44.4X forward 12-month earnings, compared with 22.2X for its Zacks sub-industry and 20.6X for the S&P 500. That premium leaves less room for execution setbacks if bookings growth remains subdued or monetization takes longer to catch up with engagement.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Coursera, Inc. (COUR - Free Report) is another public online-learning platform and completed its combination with Udemy in May 2026, broadening its skills-learning offering. Nerdy Inc. (NRDY - Free Report) operates a live online tutoring and learning platform that uses artificial intelligence to personalize instruction. Both provide useful digital-education reference points, though their business models differ from Duolingo's freemium mobile platform.
Duolingo Signals Suggest a More Balanced SetupThe rally has support from user growth, record retention and lower artificial intelligence costs, but slower bookings and a premium valuation make the setup more balanced. Duolingo still needs engagement gains to convert into durable monetization without giving back too much margin.
The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Duolingo’s Momentum Score of B is supportive after the recent advance, while the Value Score of C, Growth Score of D and VGM Score of D are less favorable. Together, those signals argue for measured expectations rather than assuming the three-month rally will continue at the same pace.
Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades, downgrades and initiations, please see our analyst ratings page.
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Duolingo DUOL stock climbed 6.6% on Tuesday despite a broader market decline, after DA Davidson upgraded the language-learning company's shares to Buy and raised its price target. The move comes as investors weigh concerns about slowing user growth and monetization against continued improvements in the company's core product and recent strategic developments.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Award-winning London studio expands Duolingo's creative capabilities to build even more engaging learning experiences Award-winning London studio expands Duolingo's creative capabilities to build even more engaging learning experiences
Decelerating growth, deteriorating profit margins, and ongoing shareholder dilution underscore Duolingo's mixed investment thesis. Intensified investments in marketing, AI, and new subscription tiers may eventually boost engagement/subscription conversion, albeit pressuring near-term margins. Despite strong FCF and robust balance sheet, the EV/Sales of 4.06x is still expensive versus peers, worsened by the uncertain growth acceleration prospects.
Duolingo is downgraded to "Neutral" as monetization lags strong user growth, raising concerns about near-term catalysts. DAUs grew 23% y/y to 58.7 million, but bookings growth slowed to 8% y/y, highlighting a disconnect between engagement and revenue. FY26 guidance was only modestly raised, with bookings expected at $1.285 billion (+10.9%) and adjusted EBITDA at $320 million (26.5% margin).
Bank of America Corp DE lifted its position in Duolingo, Inc. (NASDAQ:DUOL – Free Report) by 511.2% during the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund owned 1,332,301 shares of the company’s stock after acquiring an additional 1,114,315 shares during the period. Bank of America Corp DE owned 2.86% of Duolingo worth $131,325,000 as of its most recent filing with the Securities and Exchange Commission (SEC).
Several other hedge funds have also recently added to or reduced their stakes in the company. Root Financial Partners LLC increased its stake in shares of Duolingo by 194.1% in the 1st quarter. Root Financial Partners LLC now owns 250 shares of the company’s stock worth $25,000 after acquiring an additional 165 shares during the last quarter. EFG International AG acquired a new position in shares of Duolingo during the 4th quarter valued at about $26,000. AlphaCentric Advisors LLC acquired a new position in shares of Duolingo during the 4th quarter valued at about $33,000. Banque Cantonale Vaudoise grew its holdings in shares of Duolingo by 51.1% in the first quarter. Banque Cantonale Vaudoise now owns 340 shares of the company’s stock valued at $34,000 after purchasing an additional 115 shares during the period. Finally, Caitong International Asset Management Co. Ltd purchased a new stake in shares of Duolingo in the fourth quarter valued at about $43,000. 91.59% of the stock is owned by institutional investors and hedge funds.
Wall Street Analyst Weigh In A number of brokerages have commented on DUOL. Morgan Stanley lifted their target price on shares of Duolingo from $95.00 to $125.00 and gave the stock an “equal weight” rating in a research note on Thursday, July 16th. UBS Group increased their price target on shares of Duolingo from $125.00 to $150.00 and gave the company a “buy” rating in a research note on Thursday. Jefferies Financial Group raised their price target on shares of Duolingo from $95.00 to $125.00 and gave the stock a “hold” rating in a report on Tuesday, July 14th. Wedbush began coverage on shares of Duolingo in a research report on Thursday, July 16th. They set a “neutral” rating and a $139.00 price target on the stock. Finally, Needham & Company LLC reiterated a “buy” rating and issued a $145.00 price objective on shares of Duolingo in a research report on Thursday. Three analysts have rated the stock with a Buy rating, eighteen have issued a Hold rating and two have assigned a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and an average target price of $148.24.
Read Our Latest Report on Duolingo
Insider Buying and Selling In other Duolingo news, insider Natalie Glance sold 3,360 shares of the business’s stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $113.59, for a total transaction of $381,662.40. Following the sale, the insider directly owned 173,401 shares in the company, valued at $19,696,619.59. This represents a 1.90% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Meese sold 1,420 shares of the stock in a transaction dated Friday, May 15th. The stock was sold at an average price of $112.16, for a total transaction of $159,267.20. Following the sale, the insider directly owned 170,745 shares in the company, valued at $19,150,759.20. This represents a 0.82% decrease in their position. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders have sold 9,506 shares of company stock valued at $1,073,864. Corporate insiders own 16.62% of the company’s stock.
Duolingo Stock Down 9.4% Shares of NASDAQ DUOL opened at $122.58 on Friday. The company has a quick ratio of 2.62, a current ratio of 2.62 and a debt-to-equity ratio of 0.07. The business’s 50 day moving average is $125.37 and its two-hundred day moving average is $114.99. Duolingo, Inc. has a 52-week low of $87.89 and a 52-week high of $468.00. The firm has a market cap of $5.71 billion, a price-to-earnings ratio of 14.52, a PEG ratio of 1.04 and a beta of 0.87.
Duolingo (NASDAQ:DUOL – Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The company reported $0.66 EPS for the quarter, topping the consensus estimate of $0.60 by $0.06. Duolingo had a return on equity of 12.23% and a net margin of 35.88%.The business had revenue of $298.45 million during the quarter, compared to analyst estimates of $295.58 million. During the same period last year, the business posted $0.91 earnings per share. The company’s quarterly revenue was up 18.3% on a year-over-year basis. Research analysts predict that Duolingo, Inc. will post 2.8 EPS for the current year.
More Duolingo News Here are the key news stories impacting Duolingo this week:
Positive Sentiment: Duolingo reported second-quarter revenue of approximately $298.5 million, up 18.3% year over year and ahead of analysts’ expectations. Adjusted earnings of $0.66 per share also exceeded consensus estimates of roughly $0.60-$0.61. DUOL Q2 Earnings Beat Estimates on Strong User Growth Positive Sentiment: User momentum remained strong, with daily active users increasing 23% year over year and paid subscribers also growing. Management said lower artificial-intelligence costs should support its profitability outlook, while it continues targeting 100 million daily active users by 2028. Positive Sentiment: Needham reaffirmed its “buy” rating and $145 price target, implying meaningful upside from the current trading level. Needham Reaffirms Duolingo Buy Rating Neutral Sentiment: Truist raised its price target from $100 to $120 but maintained a “hold” rating, signaling limited near-term upside in its view. Neutral Sentiment: Duolingo may discontinue its Max subscription tier as it prioritizes broader user growth. The change could simplify the product lineup but may affect monetization and average revenue per user. Negative Sentiment: Third-quarter revenue guidance of $302 million-$302 million came in below Wall Street’s approximately $303.9 million expectation. The forecast revived concerns that Duolingo’s growth engine is slowing, overshadowing the quarterly beat. Duolingo’s lower-than-expected revenue forecast overshadows quarterly beat Negative Sentiment: Although revenue rose, quarterly EPS fell from $0.91 to $0.66 year over year, while net income declined 26%, adding to pressure on the stock. Negative Sentiment: Bank of America downgraded Duolingo to “underperform,” reinforcing concerns about valuation and decelerating growth. Duolingo Company Profile (Free Report)
Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.
In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.
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Key Takeaways Duolingo's Q2 revenues rose 18.3% to $298.5 million as daily active users increased 23%.Subscription revenues climbed 22% to $258 million, driving most of Duolingo's top-line growth.Duolingo raised its 2026 adjusted EBITDA margin outlook to 26.5% as AI costs declined. Duolingo, Inc. (DUOL - Free Report) reported better-than-expected second-quarter 2026 results.
Reported earnings of 66 cents per share beat the Zacks Consensus Estimate of 61 cents by 8.2%. Earnings declined from 91 cents in the year-ago quarter as the company continued investing in product development and user growth.
Revenues increased 18.3% year over year to $298.5 million and topped the consensus estimate of $297.3 million by 0.4%. Daily active users grew 23% to 58.7 million, accelerating from the first quarter, while paid subscribers increased 17% to 12.7 million.
DUOL Gains From Expanding User EngagementMonthly active users rose 10% year over year to 140.6 million. Management attributed the stronger daily active user growth to product improvements, marketing efforts and a one-time Streak Revival campaign conducted in June.
Current User Retention Rate, which measures the proportion of recurring users returning the following day, reached an all-time high of 84%. The metric improved roughly one percentage point from the prior year, reflecting the combined impact of hundreds of product experiments conducted through Duolingo’s Green Machine testing process.
The Streak Revival campaign allowed eligible learners to restore their longest previous streak by completing three lessons. About 15.4 million learners participated, including nearly 8 million who did not have an active streak when the campaign began.
Duolingo’s Subscription Revenues Drive GrowthSubscription revenues increased 22% year over year to $258 million and accounted for the bulk of the company’s top-line expansion. Subscription bookings advanced 10% to $250.3 million.
Total bookings rose 8% to $289.1 million, or 6% on a constant-currency basis. Growth moderated from the first quarter due to a difficult year-ago comparison related to the initial Energy rollout, a price increase and stronger advertising performance.
Advertising revenues grew 2% to $21.1 million, while Duolingo English Test revenues remained nearly flat at $10.1 million. In-app purchase revenues declined 23% to $8 million. Other revenues increased to $1.3 million from $0.5 million.
DUOL Balances Monetization With User GrowthThe company continued testing monetization initiatives designed to avoid adding friction for free users. Longer free trials have increased trial participation and payer conversions while improving the user experience by removing advertisements and Energy restrictions during the trial period.
Duolingo is also testing Super Lite, a lower-priced, advertising-supported subscription tier that provides more Energy than the free product but fewer benefits than Super. The offering remains in an early testing phase and represents only a small portion of subscribers.
Most new Super Duolingo subscribers now have access to Video Call, the company’s AI-powered conversational practice feature. Management plans to extend access to existing Super subscribers later in 2026 after reducing the cost per call to less than 1 cent through greater use of open-source models.
Duolingo’s Costs Rise on Strategic InvestmentsGross profit increased 19% year over year to $216.7 million. Gross margin expanded 20 basis points to 72.6%, exceeding management’s expectation of approximately 71%, supported by AI cost efficiencies and the measured rollout of AI-powered features.
Operating expenses increased to $182.8 million from $149.2 million. Research and development expenses rose to $92.2 million, sales and marketing expenses increased to $40 million, and general and administrative expenses advanced to $50.6 million.
Net income declined 26% to $33.2 million, while net margin contracted to 11.1% from 17.8%. Adjusted EBITDA decreased 2% to $77.3 million, and the corresponding margin narrowed 530 basis points to 25.9% as Duolingo prioritized investments in user acquisition and product improvements.
DUOL Maintains Strong Liquidity and BuybacksNet cash provided by operating activities declined 3% year over year to $88.3 million. Free cash flow decreased 9% to $78.6 million, while free cash flow margin contracted 790 basis points to 26.3%.
Duolingo ended the quarter with approximately $1.3 billion in cash and short-term investments. The company repurchased $44.4 million of shares during the quarter, bringing total repurchases under its $400 million authorization to $71.9 million through Aug. 1, 2026.
Duolingo Raises Profitability OutlookFor the third quarter of 2026, management expects revenues of approximately $302 million, indicating 11.1% year-over-year growth. The projection is below the Zacks Consensus Estimate of $305.9 million. Bookings are projected at $307 million, while adjusted EBITDA is forecast at $76 million, implying a 25.2% margin.
Duolingo maintained its full-year revenue and bookings targets. Revenues are expected to reach approximately $1.21 billion, up 16.3%, broadly in line with the Zacks Consensus Estimate of $1.21 billion. Bookings are projected at $1.29 billion, indicating growth of 10.9%.
The company raised its full-year adjusted EBITDA margin outlook to approximately 26.5% from its earlier expectation of about 25%. Adjusted EBITDA is projected at $320 million, reflecting stronger-than-expected gross margin performance and lower AI costs.
DUOL currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Earnings SnapshotsTrane Technologies (TT - Free Report) reported impressive second-quarter 2026 results. TT’s adjusted earnings of $4.31 per share outpaced the consensus mark by 0.9% and rose 11.1% from the year-ago quarter’s actual. TT’s total revenues of $6.35 billion surpassed the consensus mark by 2.9% and increased 6.4% year over year.
Rollins (ROL - Free Report) posted unimpressive second-quarter 2026 results. ROL’s adjusted earnings of 32 cents per share missed the Zacks Consensus Estimate by 5.9% but rose 6.7% year over year. Total revenues of $1.08 billion fell short of the consensus estimate by 1.7% but increased 7.9% from the year-ago quarter.
Verisk (VRSK - Free Report) reported second-quarter 2026 diluted adjusted earnings of $1.98 per share, beating the Zacks Consensus Estimate of $1.94 by 2.1%. The figure increased 5.3% from the year-ago quarter. Revenues of $806.3 million topped the consensus mark of $802.4 million by 0.5% and rose 4.3% year over year.
Duolingo DUOL shares fell about 15% on Thursday after the language-learning platform issued a third-quarter revenue forecast that fell short of Wall Street expectations, overshadowing better-than-expected second-quarter results and stronger user growth.
The company reported second-quarter revenue of $298.5 million, an 18% increase from a year earlier and above analysts' expectations of $295.6 million, according to LSEG data.
Adjusted core profit also exceeded estimates.
However, investors focused on Duolingo's guidance for third-quarter revenue of about $302 million, below analysts' expectations of roughly $304 million.
The company maintained its full-year revenue forecast despite the softer quarterly outlook.
Daily active users (DAUs), a key measure of engagement, rose 23% year over year to 58.7 million during the second quarter, ahead of Visible Alpha estimates, although paid subscriber growth came in slightly below consensus.
Management said the company continues to prioritize expanding its user base over maximizing near-term revenue from subscriptions.
Chief Executive Officer Luis von Ahn said Duolingo now expects daily active user growth to remain above 20% for the rest of the year, supported by product improvements, stronger user retention and marketing initiatives.
Chief Financial Officer Gillian Munson said the company is allowing teams to focus more heavily on growing engagement rather than immediate monetization, believing that strategy will help Duolingo reach its long-term goal of 100 million daily active users.
The company also credited broader deployment of AI-powered features, including Video Call, along with more disciplined marketing efforts, for boosting engagement during the quarter.
Management noted that a one-time "Streak Revival" campaign helped bring millions of inactive users back to the platform.
However, executives said future growth is expected to come primarily from improvements in retention and learning outcomes rather than temporary promotional campaigns.
Lower artificial intelligence costs also contributed to stronger profitability during the quarter.
Munson said Duolingo has increasingly adopted open-source AI models for features that do not require its most advanced systems, helping reduce operating costs and improve gross margins.
The company raised its adjusted EBITDA outlook for the full year to 26.5%, up from the 25% target announced earlier this year.
It also increased its gross margin forecast, with Munson stating, "For gross margin, we now expect to end the year closer to 70% as compared to the 69% we initially expected."
Full-year guidance remains unchangedDespite the softer third-quarter revenue outlook, Duolingo reaffirmed its annual financial guidance.
Munson said the company continues to expect bookings growth of about 11% and revenue growth of roughly 16% for the full year.
For the third quarter, the company expects bookings of approximately $307 million alongside revenue of about $302 million.
Management also disclosed that employees could receive a cash bonus if fourth-quarter daily active user growth reaches at least 25%.
According to BarCharts data, Duolingo currently holds a consensus Hold rating from analysts, including two Buy ratings, 18 Hold ratings and two Sell ratings.
Thursday's decline erased part of the stock's recent gains as investors weighed the company's long-term user growth strategy against expectations for near-term revenue expansion.
Vzdělávací platforma a aplikace Duolingo zveřejnila výsledky za druhý kvartál roku 2026. Výnosy i zisk na akcii překonaly odhady analytiků a růst denně aktivních uživatelů zrychlil, investory ovšem zklamal opatrný výhled výnosů a objemu objednávek (bookings) na třetí kvartál.
Výsledky společnosti Duolingo (DUOL) za 2Q 2026 2Q 2026 Konsensus 2Q 2026 2Q 2025 Výnosy (mil. USD) 298,5 295,6 252,3 Čistý zisk (mil. USD) 33,2 -- 44,8 Zisk na akcii (EPS, USD/akcie) 0,66 0,62 0,91 Výsledky za 2Q 2026 Výnosy vzrostly meziročně o 18 % (o 17 % v konstantních měnách) na 298,5 mil. USD.
Výnosy z předplatného meziročně vzrostly o 22 % na 258 mil. USD. Reklamní výnosy zaznamenaly růst o 2 % na 21,1 mil. USD. Výnosy z Duolingo English Test zůstaly meziročně beze změny na 10,1 mil. USD a výnosy z nákupů v aplikaci klesly o 23 % na 8,0 mil. USD.
Celkový objem objednávek (bookings) vzrostl meziročně o 8 % na 289,1 mil. USD. Objem objednávek z předplatného zaznamenal růst o 10 % na 250,3 mil. USD
Hrubá marže zaznamenala meziroční růst o 0,2 p. b. na 72,6 %. Trh odhadoval 71 %.
Očištěný zisk EBITDA se meziročně snížil o 2 % na 77,3 mil. USD. Trh projektoval 71,4 mil. USD. Očištěná marže EBITDA klesla o 5,3 p. b. na 25,9 %.
Počet měsíčně aktivních uživatelů (MAU) vzrostl o 9,6 % na 140,6 mil., čímž překonal očekávání trhu ve výši 138,05 mil. Denně aktivní uživatelé (DAU) stoupli o 23 % na 58,7 mil. a překonali odhad 57,36 mil.
Zrychlení růstu uživatelů Duolingo přičítá třem faktorům: produktovým změnám, marketingu a jednorázové červnové akci Streak Revival, která umožnila uživatelům obnovit jejich nejdelší dosaženou sérii po splnění tří lekcí. Sérii si obnovilo 15,4 mil. uživatelů, z toho téměř 8 mil. těch, kteří na začátku akce žádnou aktivní sérii neměli. Protože dva ze tří zmíněných faktorů jsou trvalé, očekává management po zbytek roku meziroční růst DAU nad původně cílovanými 20 %. Společnost dříve uvedla, že ve střednědobém horizontu cílí na 100 mil. denně aktivních uživatelů v roce 2028.
Počet placených předplatných meziročně vzrostl o 17 % na 12,7 mil. při odhadech Wall Street ve výši 12,79 mil.
Volný hotovostní tok (FCF) zaznamenal meziroční pokles o 9 % na 78,6 mil. USD.
Výhled Duolingo ve 3Q 2026 očekává:
Objem objednávek ve výši 307 mil. USD, což indikuje 8,9% meziroční růst. Projekce byly na úrovni 308,6 mil. USD. Výnosy ve výši 302 mil. USD, což reprezentuje meziroční růst o 11,1 %. Trh odhadoval 303,8 mil. USD. Očištěný zisk EBITDA ve výši 76 mil. USD s očištěnou EBITDA marží 25,2 %. Konsensus činil 73,2 mil. USD. V celém roce poté společnost projektuje:
Objem objednávek ve výši 1,285 mld. USD, což indikuje 10,9% meziroční růst. Projekce byly na úrovni 1,28 mld. USD. Dříve Duolingo odhadovalo 1,280 mld. USD. Výnosy ve výši 1,207 mld. USD, což reprezentuje meziroční růst o 16,3 %. Trh odhadoval 1,21 mld. USD. Dříve Duolingo očekávalo 1,205 mld. USD. Očištěný zisk EBITDA ve výši 320 mil. USD s očištěnou EBITDA marží 26,5 %. Konsensus činil 311,6 mil. USD. Dříve společnost projektovala 310 mil. USD s očištěnou EBITDA marží 25,7 %. Dopis akcionářům „2Q byl silný kvartál. Pokračovali jsme v realizaci naší strategie pro rok 2026, která klade důraz na růst počtu uživatelů a zlepšování kvality výuky. Objem objednávek i ziskovost zůstaly na zdravé úrovni a byly v souladu s naším plánem. Počet denně aktivních uživatelů (DAU) meziročně vzrostl o 23 %, což představuje zrychlení oproti 1Q a zároveň překonání našich očekávání. Náš finanční plán pro letošní rok zůstává na správné cestě. Potvrzujeme celoroční výhled výnosů a zároveň zvyšujeme výhled očištěného zisku EBITDA, což odráží vyšší než očekávanou ziskovost,“ uvedl generální ředitel Luis von Ahn v dopise akcionářům.
Pohled analytiků Analytik Ronald Josey z Citi uvedl, že výhled objednávek (bookings) pro 3Q byl slabší, než se očekávalo, protože Duolingo investuje do nových produktů a služeb v rámci svých hlavních jazykových kurzů, přidává větší hodnotu do bezplatné verze a rozvíjí nové služby.
Analytik Nat Schindler ze Scotiabank se domnívá, že pokles akcií je pravděpodobně způsoben mírně zklamávajícím výhledem výnosů na 3Q poté, co se investoři stále více zaměřovali na zrychlující se trend růstu zapojení uživatelů. Po výsledcích za 2Q26 se podle něj debata posouvá od otázky, zda Duolingo dokáže znovu nastartovat růst uživatelů, k tomu, zda silnější zapojení uživatelů povede k významnému zrychlení růstu objednávek. Dodává, že výsledky za kvartál příliš nevyřešily hlavní debatu ohledně monetizace. Investoři stále potřebují důkazy, že vyšší zapojení uživatelů se nakonec promítne do rychlejšího růstu objednávek.
Analytik Arvind Ramnani z Truist Securities uvedl, že Duolingo vykázalo silné výsledky za 2Q26 a zvýšilo výhled růstu uživatelů. Nicméně investoři pravděpodobně očekávají více důkazů, protože jednorázová akce Streak Revival znovu aktivovala přibližně 8 milionů uživatelů a časový horizont návratu k vyšší monetizaci zůstává nejistý. Analytik zůstává stranou, dokud nezíská lepší přehled o udržitelném růstu uživatelů a návratu k monetizaci.
Analytik Justin Patterson z KeyBanc Capital Markets uvedl, že výsledky Duolinga za 2Q překonaly očekávání a počet denně aktivních uživatelů (DAU) během čtvrtletí dále zrychloval. Není však podle něj jasné, zda jsou produktová vylepšení dostatečná k tomu, aby si firma uživatele dlouhodobě udržela a dokázala je převést na platící zákazníky. Analytik také zpochybňuje, zda se reklama může stát významným zdrojem monetizace, aniž by negativně ovlivnila zapojení uživatelů.
Vývoj akcie Akcie Duolingo (DUOL) v předburzovní fázi obchodování odepisují 4,82 % na 128,8 USD.
Akcie Duolingo (DUOL) před výsledky na 135,32 USD Ukazatel Ukazatel Kapitalizace (mld. USD) 6,3 P/E 16,0 Vývoj za letošní rok (%) -22,9 Očekávané P/E 47,5 52týdenní minimum (USD) 87,9 Prům. cílová cena (USD) 119,9 52týdenní maximum (USD) 468,0 Dividendový výnos (%) -- Zdroj: Duolingo, Bloomberg
For the quarter ended June 2026, Duolingo, Inc. (DUOL - Free Report) reported revenue of $298.45 million, up 18.3% over the same period last year. EPS came in at $0.66, compared to $0.91 in the year-ago quarter.
The reported revenue represents a surprise of +0.37% over the Zacks Consensus Estimate of $297.35 million. With the consensus EPS estimate being $0.61, the EPS surprise was +8.2%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Duolingo performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Total bookings: $289.1 million versus $286.09 million estimated by four analysts on average.Subscription bookings: $250.3 million versus $243.43 million estimated by three analysts on average.Daily active users (DAUs): 58.7 million versus 58.03 million estimated by three analysts on average.Monthly active users (MAUs): 140.6 million versus the three-analyst average estimate of 139.37 million.Paid subscribers (at period end): 12.7 million versus the three-analyst average estimate of 12.59 million.Revenues- Subscription: $258.04 million versus $254.89 million estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +22.5% change.Revenues- Advertising: $21.05 million versus the four-analyst average estimate of $22.83 million. The reported number represents a year-over-year change of +2.2%.Revenues- Duolingo English Test: $10.11 million versus $9.71 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +0.2% change.Revenues- In-App Purchases: $8 million versus $10.75 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -23% change.Revenues- Other: $1.26 million versus the two-analyst average estimate of $0.79 million. The reported number represents a year-over-year change of -96%.View all Key Company Metrics for Duolingo here>>>
Shares of Duolingo have returned +4.4% over the past month versus the Zacks S&P 500 composite's +3.5% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.
2 Falling Knives That Might Be Worth CatchingDuolingo NASDAQ: DUOL reported accelerating user growth in the second quarter, with daily active users rising 23% year over year, as the language-learning company continued to prioritize product improvements, retention and long-term audience expansion.
Co-founder and CEO Luis von Ahn said the company’s daily active user, or DAU, growth accelerated from the first quarter and came in slightly above expectations. He said the company was encouraged by early trends in the third quarter and remains focused on reaching 100 million DAUs by 2028.
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Duolingo: This Beaten-Down Growth Stock May Bounce Back“The vast majority” of growth came from Duolingo’s ongoing product experimentation process, which von Ahn called the “Green Machine.” The company tests hundreds of product changes, measures their performance and expands the initiatives that work, he said. Duolingo releases a new app version weekly, with roughly 350 changes per version, according to von Ahn.
Retention and streak campaign support engagement Von Ahn said user retention metrics reached all-time highs during the quarter. In particular, the company’s current user retention rate, or CURR, increased by about one percentage point over the past year. He said the improvement was broad-based across regions and user types, reflecting a “stickier” product rather than a single feature or change.
Duolingo Stock: EdTech Growth Meets Subscription StrengthDuolingo also ran a one-time Streak Revival campaign in June, allowing learners who had lost their longest streak to restore it by completing three lessons. More than 15 million learners revived their streaks, von Ahn said, adding that these users have demonstrated stronger retention than a typical re-engaged user cohort.
The company is also working to improve its top-of-funnel user acquisition. Von Ahn said Duolingo’s own social media accounts generated more than 1 billion impressions per quarter. It has also expanded its work with content creators, particularly in China, Indonesia and India, where influencers account for roughly two-thirds of the company’s total social media impressions.
While most growth remains organic, Duolingo has become more active in performance marketing. Von Ahn said the company is seeing traction from both creator partnerships and performance marketing, while CFO Gillian Munson said top-of-funnel growth improved in almost every region during the quarter. The U.S. also posted faster growth, although Asia remained the company’s fastest-growing region.
Guidance maintained as company invests for growth Munson said second-quarter top-line results were in line with expectations and profitability was modestly ahead of plan. The company maintained its full-year outlook for bookings growth of 10% to 12% and revenue growth of 15% to 18%.
For modeling purposes, Duolingo expects approximately 11% bookings growth and roughly 16% revenue growth for the full year. At constant foreign exchange rates from the prior earnings call, bookings growth would be about half a percentage point higher, Munson said.
For the third quarter, the company forecast:
Bookings of approximately $307 million, up 9% year over year. Revenue of approximately $302 million, up 11% year over year. Gross margin of 71%. Adjusted EBITDA of roughly $76 million, representing a 25.2% margin. Duolingo now expects to finish the year with gross margin closer to 70%, compared with an earlier expectation of 69%, citing increased AI content in its products and AI-related cost savings. Munson said the company increased its adjusted EBITDA outlook to 26.5% from 25% at the start of the year, while also providing a point estimate of approximately $320 million in adjusted EBITDA and a roughly 25.5% margin. It expects to generate more than $375 million in free cash flow for 2026.
The company ended the quarter with $1.3 billion in cash and investments and generated $79 million in free cash flow. It repurchased about $44 million of stock during the quarter, bringing cumulative repurchases under its authorization to $72 million, or about 700,000 shares.
Monetization tests include longer trials, lower-priced plan Von Ahn said stronger user growth will ultimately support revenue, but noted that users in Duolingo’s freemium model do not necessarily monetize immediately. The company is maintaining its planned bookings-growth range while prioritizing DAU expansion and improvements in teaching.
Among the company’s monetization experiments, Duolingo has been shifting many free trials from seven days to one month. Von Ahn said longer trials have increased the number of users willing to begin a trial and, as a result, increased conversions to paying subscribers. Trial users also receive an improved experience with ads and the energy system turned off, which he said supports daily active user growth.
Duolingo is also testing “Super Lite,” an ad-supported subscription offering priced at approximately half the cost of Super Duolingo, depending on geography. The plan provides more energy than the free tier but does not offer unlimited energy. Von Ahn emphasized that the offering remains in early testing and represents only a small share of subscribers.
The company is pursuing ad revenue more actively as well. While von Ahn said subscriptions will remain Duolingo’s larger business for the foreseeable future, he sees a substantial advertising opportunity given the company’s active user base. Duolingo has expanded from minimal ad-revenue resources several years ago to a more developed team focused on improving ad quality and monetization.
Video Call expansion and lower AI costs Duolingo is broadening access to its AI-powered Video Call feature, which is designed to help users practice conversation. The feature initially cost about $0.30 per call to provide and was placed behind the company’s premium Duolingo Max plan. Von Ahn said the cost has since fallen below $0.01 per call, largely through the use of open-source models.
Most new Super Duolingo subscribers now receive Video Call, and the company expects to extend it to existing Super subscribers over the coming months. Von Ahn said Duolingo is still determining the future of the Max tier, including whether Max could offer unlimited Video Calls while Super subscribers receive limited access, or whether the company could eventually sunset Max.
“Our intent is that we give it to as many users as possible,” von Ahn said, while noting the company is trying to avoid a loss of revenue as it broadens access.
Munson said AI expenses within cost of goods sold are in the tens of millions of dollars, while internal AI-related spending is closer to $10 million. Von Ahn said Duolingo expects its mix of AI models to shift increasingly toward open-weight models where quality is sufficient, though it will continue using proprietary frontier models for some applications.
In China, now Duolingo’s second-largest market by DAUs, the company uses local AI models because U.S. models cannot be used there under local law. Von Ahn said China monetizes at roughly the same level as France and could become Duolingo’s largest market by DAUs within one or two years.
About Duolingo (NASDAQ:DUOL)Duolingo, Inc NASDAQ: DUOL is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company's core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.
In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.
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Duolingo, Inc. (DUOL - Free Report) came out with quarterly earnings of $0.66 per share, beating the Zacks Consensus Estimate of $0.61 per share. This compares to earnings of $0.91 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +8.20%. A quarter ago, it was expected that this company would post earnings of $0.79 per share when it actually produced earnings of $0.89, delivering a surprise of +12.66%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Duolingo, which belongs to the Zacks Technology Services industry, posted revenues of $298.45 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.37%. This compares to year-ago revenues of $252.26 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Duolingo shares have lost about 21.5% since the beginning of the year versus the S&P 500's gain of 13%.
What's Next for Duolingo?While Duolingo has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Duolingo was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.58 on $305.89 million in revenues for the coming quarter and $2.81 on $1.21 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Technology Services is currently in the bottom 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, NextNav Inc. (NN - Free Report) , has yet to report results for the quarter ended June 2026. The results are expected to be released on August 11.
This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of +46.7%. The consensus EPS estimate for the quarter has been revised 12% higher over the last 30 days to the current level.
NextNav Inc.'s revenues are expected to be $0.9 million, down 25% from the year-ago quarter.
• Duolingo stock is taking a hit today. See analyst ratings here.
Here are the key highlights.
Duolingo Q2 EarningsDuolingo reported second-quarter revenue of $298.45 million, up 18% year-over-year. The revenue total beat a Street consensus estimate of $295.62 million, according to data from Benzinga Pro.
The company reported quarterly earnings of 66 cents per share, beating a Street estimate of 61 cents per share.
Duolingo reported 58.7 million daily active users in the quarter, up 23% year-over-year. Paying subscribers rose 17% year-over-year in the quarter, hitting 12.7 million in the quarter.
"We believe our user growth acceleration is due to three factors: product changes, marketing impact, and a one-time event to revive lost streaks. Since two of these are permanent, we expect DAU year-over-year growth throughout the rest of the year to remain above the 20% we had previously guided to," Duolingo CEO Luis von Ahn said.
What’s Next for DuolingoDuolingo is guiding for third-quarter revenue of $302 million, up 11.1% year-over-year. The Street expects revenue of $304.1 million.
The company raised its full-year revenue guidance from $1.205 billion to $1.207 billion, expecting year-over-year growth of 16.3%. The Street expects full-year revenue of $1.2088 billion.
The stock is trading lower based on the updated guidance figures.
“Our ambition is to teach a billion people, and every step we take toward a better product brings us closer to that goal," von Ahn said.
Duolingo Stock Price ActionDuolingo stock is down 11.54% to $119.70 in after-hours trading Wednesday versus a 52-week trading range of $87.89 to $468.
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Duolingo (DUOL -1.76%) enters its second-quarter earnings report, to be released on Aug. 5, with something to prove. The business itself remains strong. In the first quarter, revenue jumped 27% year over year to $292 million, paid subscribers grew 21% to 12.5 million, and adjusted EBITDA increased 33% to $83.4 million.
But those numbers don't tell the whole story. Duolingo made a major strategic shift as it entered 2026. Instead of maximizing near-term monetization, management is investing more aggressively in the free experience, AI-powered learning, and other initiatives designed to drive long-term user growth.
Q2 should give investors an early indication of whether that strategy is working. Here are three things worth watching.
Image source: Getty Images.
Is user growth holding up? This is arguably the most important number in Duolingo's upcoming report. Daily active users (DAUs) increased 21% in Q1 to 57 million, a deceleration from 49% growth a year earlier. Some deceleration was inevitable as Duolingo grew and management's earlier focus on improving monetization shifted.
Still, management pivoted by the end of 2025, making user growth its priority in the near future. The company wants to reach 100 million DAUs by 2028, nearly double Q1's level. Getting there requires Duolingo to sustain strong growth even as its existing user base becomes much larger.
That's why investors shouldn't simply ask whether DAUs increased. They should ask whether Duolingo remains on a credible path toward 100 million. If DAU growth remains at or above 20%, the strategy appears on track. A meaningful slowdown, however, would make that 2028 target harder to reach.
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What is Duolingo sacrificing for that growth? There's no free lunch. Duolingo is deliberately making parts of its product more generous to improve the free learner experience. It's also expanding AI-powered features, which can improve learning but entail additional computing costs.
Management already warned investors about the trade-off. While Q1 gross margin actually improved 190 basis points to 73%, management expects adjusted EBITDA margins for 2026 to come under pressure, down from 30% to below 26%. At the same time, bookings are expected to grow at just 11% in 2026.
That makes Q2 a useful test of Duolingo's balancing act. Investors shouldn't panic if margins or bookings growth soften. That's partly the plan. What matters is whether Duolingo is getting enough additional engagement and user growth in return. Sacrificing some profitability for faster growth can create enormous long-term value. Sacrificing profitability without accelerating growth cannot.
What does management say about the rest of 2026? Finally, don't stop at the quarterly numbers. Listen to what management has to say for the rest of the year. Duolingo said after Q1 that it was still early in executing its 2026 strategy and that results were tracking largely as expected. That makes any change in tone during Q2 particularly important.
Does management remain confident in its 100 million DAU target? Is investment in the free experience producing the desired results? Are AI costs developing as expected? And does the company maintain or change its financial outlook?
Those answers could matter more than whether Duolingo beats Wall Street's quarterly revenue estimate by a few million dollars, since they will indicate whether the company's efforts are bearing fruit.
What does it mean for investors? Duolingo's Q2 earnings aren't simply another report card. They're an early test of one of the biggest strategic decisions the company has made since going public. Management is effectively asking investors to accept slower near-term monetization in exchange for a larger user base and potentially greater long-term earnings power. That's a reasonable trade-off, but only if it works.
So when Duolingo reports Q2, forget about whether earnings beat expectations by a penny. Watch the users. Watch the cost of acquiring that growth. And, above all, listen to what management says about what comes next. Those three things will tell investors far more about where Duolingo is heading than a single quarter's headline numbers ever could.
PITTSBURGH, Aug. 05, 2026 (GLOBE NEWSWIRE) -- Duolingo, Inc. (NASDAQ: DUOL) announced results for the second quarter ended June 30, 2026 in a shareholder letter that is posted on its Investor Relations website at investors.duolingo.com.
"Q2 was a strong quarter, with DAU growth of 23% compared to the prior year, an acceleration from Q1," said Luis von Ahn, Co-Founder and CEO of Duolingo. "The results reinforce our strategy to improve the product and prioritize user growth."
"Our ambition is to teach a billion people, and every step we take toward a better product brings us closer to that goal."
Video Webcast
Duolingo will host a live video webcast to discuss its quarterly results today, August 5, 2026 at 5:00 p.m. ET. Luis von Ahn and Gillian Munson, our Chief Financial Officer, will answer questions from sell side analysts. This webcast and related materials will be publicly available and can be accessed at investors.duolingo.com. A replay will be available on the Investor Relations section of our website two hours following completion of the webcast.
About Duolingo
Duolingo is the leading mobile learning platform globally. Its flagship app has organically become the world's most popular way to learn languages and the top-grossing app in the Education category on both Google Play and the Apple App Store. With technology at the core of everything it does, Duolingo has consistently invested to provide learners a fun, engaging, and effective learning experience while remaining committed to its mission to develop the best education in the world and make it universally available.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this press release, including without limitation, statements regarding our business model and strategy and the expected benefits therefrom are forward-looking statements. Without limiting the generality of the foregoing, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal,” “objective,” “seeks,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are neither promises nor guarantees, but involve a number of known and unknown risks, uncertainties and assumptions that may cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to: our ability to retain and grow our users and sustain their engagement with our products; competition in the online language learning industry; our limited operating history; our ability to maintain or increase profitability; our ability to manage our growth and operate at such scale; the success of our investments; our reliance on third-party platforms to store and distribute our products and collect revenue; our reliance on third-party hosting, cloud computing providers and Artificial Intelligence (“AI”) vendors; our ability to compete for advertisements; acceptance by educational organizations of technology-based education; our ability to access, protect, collect, use, and otherwise process Personal Data about our users and payers, and to comply with applicable data privacy laws; our ability to successfully develop, implement and use artificial intelligence and machine learning technologies; our ability adequately obtain, protect and maintain our intellectual property rights; and the other important factors more fully detailed under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as any such factors may be updated from time to time in our other filings with the Securities and Exchange Commission (“SEC”), accessible on the SEC’s website at www.sec.gov and the Investor Relations section of the Company’s website at investors.duolingo.com. All forward-looking statements speak only as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, unless required by applicable law, we disclaim any obligation to do so, even if subsequent events cause our views to change.
Duolingo forecast third-quarter revenue below Wall Street expectations on Wednesday, tempering optimism from its robust second quarter as the language-learning company bets stronger user engagement will fuel long-term growth.
Wall Street analysts forecast that Duolingo, Inc. (DUOL - Free Report) will report quarterly earnings of $0.61 per share in its upcoming release, pointing to a year-over-year decline of 33%. It is anticipated that revenues will amount to $297.35 million, exhibiting an increase of 17.9% compared to the year-ago quarter.
The current level reflects an upward revision of 3.7% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period.
Prior to a company's earnings release, it is of utmost importance to factor in any revisions made to the earnings projections. These revisions serve as a critical gauge for predicting potential investor behaviors with respect to the stock. Empirical studies consistently reveal a strong link between trends in earnings estimate revisions and the short-term price performance of a stock.
While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight.
With that in mind, let's delve into the average projections of some Duolingo metrics that are commonly tracked and projected by analysts on Wall Street.
According to the collective judgment of analysts, 'Revenues- Subscription' should come in at $254.89 million. The estimate suggests a change of +21% year over year.
Analysts' assessment points toward 'Revenues- Advertising' reaching $22.83 million. The estimate points to a change of +10.8% from the year-ago quarter.
The consensus among analysts is that 'Revenues- Duolingo English Test' will reach $9.71 million. The estimate indicates a change of -3.8% from the prior-year quarter.
The consensus estimate for 'Revenues- Other' stands at $0.79 million. The estimate suggests a change of -97.5% year over year.
Analysts predict that the 'Revenues- In-App Purchases' will reach $10.75 million. The estimate suggests a change of +3.5% year over year.
Analysts expect 'Total bookings' to come in at $286.09 million. Compared to the current estimate, the company reported $268.00 million in the same quarter of the previous year.
The collective assessment of analysts points to an estimated 'Subscription bookings' of $243.43 million. The estimate compares to the year-ago value of $227.30 million.
Based on the collective assessment of analysts, 'Daily active users (DAUs)' should arrive at 58.03 million. Compared to the current estimate, the company reported 47.70 million in the same quarter of the previous year.
The combined assessment of analysts suggests that 'Monthly active users (MAUs)' will likely reach 139.37 million. Compared to the present estimate, the company reported 128.30 million in the same quarter last year.
Analysts forecast 'Paid subscribers (at period end)' to reach 12.59 million. Compared to the present estimate, the company reported 10.90 million in the same quarter last year.
View all Key Company Metrics for Duolingo here>>>
Over the past month, Duolingo shares have recorded returns of +6.2% versus the Zacks S&P 500 composite's -0.5% change. Based on its Zacks Rank #2 (Buy), DUOL will likely outperform the overall market in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Duolingo, Inc. (DUOL - Free Report) closed at $133.60 in the latest trading session, marking a -4.69% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 1.66%. Meanwhile, the Dow experienced a rise of 1.19%, and the technology-dominated Nasdaq saw an increase of 2.78%.
Coming into today, shares of the company had gained 15.64% in the past month. In that same time, the Business Services sector gained 2.72%, while the S&P 500 lost 1.49%.
The investment community will be paying close attention to the earnings performance of Duolingo, Inc. in its upcoming release. The company is slated to reveal its earnings on August 5, 2026. It is anticipated that the company will report an EPS of $0.61, marking a 32.97% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $297.35 million, showing a 17.87% escalation compared to the year-ago quarter.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.81 per share and a revenue of $1.21 billion, representing changes of -67.21% and +16.6%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Duolingo, Inc. These revisions help to show the ever-changing nature of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 1.65% upward. Duolingo, Inc. is currently a Zacks Rank #2 (Buy).
In terms of valuation, Duolingo, Inc. is currently trading at a Forward P/E ratio of 49.93. This represents a premium compared to its industry average Forward P/E of 16.25.
We can also see that DUOL currently has a PEG ratio of 1.07. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Technology Services stocks are, on average, holding a PEG ratio of 1.28 based on yesterday's closing prices.
The Technology Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 152, finds itself in the bottom 39% echelons of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Reflecting on second-quarter 2026, the U.S. services sector furthered its expansion. Per a report published in June by the Institute for Supply Management, the Services PMI checked in at 54%, closing the aforesaid quarter powering forward with its 24th consecutive month in expansion territory.
According to the latest data from the Bureau of Economic Analysis, real GDP moved up at an annual rate of 1.5% during the April-June period of 2026. This growth is achieved amidst inflationary pressure induced by the Persian Gulf conflict, precarious trade policy and high fiscal debt, driven by sustained budget deficits.
The services sector’s steady performance underlines the adaptability of the U.S. economy, facilitated by sustained consumer demand. Service industries, including transportation and warehousing, finance and insurance, retail trade, accommodation and food services, rental and leasing and health care and social assistance, showed resilience and sound activity by the end of the quarter. However, multiple industries showed weakness, including educational services, public administration, management of companies and support services, and agriculture, forestry, fishing and hunting.
Overall, the mixed momentum demonstrates the U.S. services sector continuing to anchor economic growth, with underlying disparities between industries highlighting the economy’s persistent transition toward a more balanced and sustainable expansion.
Some service providers are set to report their earnings results over the next few weeks. We have picked four stocks, Duolingo (DUOL - Free Report) , Dave (DAVE - Free Report) , Thomson Reuters (TRI - Free Report) and Coherent Corp. (COHR - Free Report) , which are well-positioned to beat earnings estimates this time around.
Stocks Poised to Beat This SeasonWith the existence of several players in the sector, finding the right business services stocks that have the potential to beat on earnings can be daunting. Our proprietary methodology, however, makes it fairly simple.
You could narrow down the list of choices by looking at stocks that have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP is our proprietary methodology for determining stocks that have the best chances to surprise with their next earnings announcement. It is the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with this combination, the chance of an earnings surprise is as high as 70%.
Here are our picks.
Other Stocks to ConsiderHere are a few stocks from the broader Business Services sector, which, according to our model, also have the right combination of elements to beat on earnings this season.
Duolingo: It has an Earnings ESP of +9.02% and a Zacks Rank of 2. The company is scheduled to declare second-quarter 2026 results on Aug. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $297.4 billion, suggesting a 17.9% jump from the year-ago quarter’s actual. For earnings, the consensus mark is set at 61 cents per share, a 33% plunge from the year-ago quarter’s actual. DUOL beat the consensus estimate in the trailing four quarters, with an average surprise of 32.3%.
Thomson Reuters: The Zacks Consensus Estimate for second-quarter 2026 revenues is pinned at $1.9 billion, marking 7.3% growth from the year-ago quarter’s actual. For earnings, the consensus mark is at 96 cents per share, indicating 9.1% growth from the year-ago quarter’s reported number. TRI surpassed the consensus estimate in the trailing four quarters, with an average beat of 3.1%.
It has an Earnings ESP of +2.53% and a Zacks Rank of 2 at present. TRI is scheduled to declare results on Aug. 5.
Dave: The company currently has an Earnings ESP of +1.42% and a Zacks Rank of 2. Dave is scheduled to declare second-quarter 2026 results on Aug. 5.
The Zacks Consensus Estimate for DAVE’s revenues is kept at $169.8 million, suggesting 28.9% year-over-year growth. The consensus estimate for earnings is pegged at $3.69 per share, implying a year-over-year increase of 17.5%. Dave beat the consensus estimate in the trailing four quarters, delivering an average earnings surprise of 45.8%.
Coherent: The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is set at $2 billion, suggesting a 30.3% jump from the year-ago quarter’s actual. For earnings, the consensus mark is pegged at $1.62 per share, implying a 62% surge from the year-ago quarter’s reported number. COHR surpassed the consensus estimate in the trailing four quarters, with an average beat of 6.2%.
It has an Earnings ESP of +2.65% and a Zacks Rank of 2 at present. COHR is scheduled to declare results on Aug. 12.
Duolingo, Inc. (DUOL - Free Report) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.
The earnings report, which is expected to be released on August 5, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of -33%.
Revenues are expected to be $297.35 million, up 17.9% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 3.72% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for Duolingo?For Duolingo, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +9.02%.
On the other hand, the stock currently carries a Zacks Rank of #2.
So, this combination indicates that Duolingo will most likely beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that Duolingo would post earnings of $0.79 per share when it actually produced earnings of $0.89, delivering a surprise of +12.66%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Duolingo appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
From a technical perspective, Duolingo, Inc. (DUOL - Free Report) is looking like an interesting pick, as it just reached a key level of support. DUOL recently overtook the 20-day moving average, and this suggests a short-term bullish trend.
The 20-day simple moving average is a well-liked trading tool because it provides a look back at a stock's price over a 20-day period. Additionally, short-term traders find this SMA very beneficial, as it smooths out short-term price trends and shows more trend reversal signals than longer-term moving averages.
The 20-day moving average can show signals that are similar to other SMAs as well. If a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
Over the past four weeks, DUOL has gained 14.5%. The company is currently ranked a Zacks Rank #2 (Buy), another strong indication the stock could move even higher.
The bullish case solidifies once investors consider DUOL's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 1 higher, while the consensus estimate has increased too.
Investors should think about putting DUOL on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
Duolingo stock price has slumped this year as concerns about disruption by artificial intelligence tools and as investors watch its turnaround strategy. DUOL was trading at $132 after falling by 25% this year and 64% in the last 12 months. It has slumped by 75% from its all-time high, with its market capitalization falling from $24.12 billion to the current $6.2 billion.
Duolingo stock price has pulled back sharply in the past few months as investors predict that its business will slow in the future. That’s because analysts believe that its business is vulnerable to AI disruption.
The company has taken measures to grow its business in the long term. In a statement, the management maintained that it would reduce its focus on revenue growth. Instead, it will focus on user growth in the long term.
The company also announced plans to expand in adjacent areas like chess, math, and music. It is also expanding its video call service to more users and reducing subscription friction.
The most recent earnings reports showed that its business continued growing in the first quarter. Its daily active users jumped by 21% to 56.5 million. Paid subscribers grew by the same percentage to 12.5 million. Its goal is to get to 100 million users by 2028.
The data also revealed that Duolingo’s revenue jumped by 27% to $292 million, which is impressive for a company whose business is being highly disrupted.
Duolingo has continued to be profitable, with the net income rising to $43 million from the previous $35.1 million.
Wall Street analysts predict that its growth will continue, although the deceleration will accelerate. The average estimate among analysts is that the upcoming results will show that revenue comes in at $295 million, up by 17% from the same period last year.
For the year, analysts estimate that its revenue will jump by 16% to $1.21 billion. This will mark a deceleration after it expanded by nearly 40% last year. This slowdown will then continue, falling to 13% YoY next year.
Most notably, analysts expect that its earnings per share will drop drastically this year, moving from $11.77 last year to $6.69.
Analysts are largely bullish about the Duolingo stock. For example, JPMorgan’s Bryan Smilek hiked his target from $94 to $125. Morgan Stanley and Jefferies have the same target of $125, while Wedbush expects it to hike to $139. The average estimate among analysts is $150.
Duolingo stock chart | Source: TradingView
The daily chart shows that the DUOL stock has bounced back gradually in the past few months. It has jumped from the year-to-date low of $89.7 in April to the current $132.
The stock has formed an ascending channel and is slowly approaching the upper side. However, the stock remains below the 100-day moving average.
Most importantly, the Relative Strength Index (RSI) has formed a descending channel, a sign that it has formed a bearish divergence. Similarly, the Percentage Price Oscillator (PPO) has continued falling.
The stock has also formed a bearish flag pattern. Therefore, there is a risk that it will resume the downward trend, potentially after releasing its financial results next week.
California Public Employees Retirement System cut its position in Duolingo, Inc. (NASDAQ:DUOL – Free Report) by 8.4% in the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 45,796 shares of the company’s stock after selling 4,208 shares during the quarter. California Public Employees Retirement System owned about 0.10% of Duolingo worth $4,514,000 at the end of the most recent reporting period.
A number of other institutional investors and hedge funds have also recently added to or reduced their stakes in DUOL. Baillie Gifford & Co. lifted its holdings in shares of Duolingo by 71.9% during the fourth quarter. Baillie Gifford & Co. now owns 4,861,445 shares of the company’s stock worth $853,184,000 after buying an additional 2,033,611 shares in the last quarter. State of Michigan Retirement System grew its stake in shares of Duolingo by 112.9% in the first quarter. State of Michigan Retirement System now owns 1,193,307 shares of the company’s stock valued at $117,624,000 after acquiring an additional 632,807 shares in the last quarter. FIL Ltd increased its position in Duolingo by 1,715,575.9% during the fourth quarter. FIL Ltd now owns 497,546 shares of the company’s stock worth $87,319,000 after acquiring an additional 497,517 shares during the period. Norges Bank bought a new position in Duolingo during the fourth quarter worth about $86,159,000. Finally, Balyasny Asset Management L.P. raised its stake in Duolingo by 22,970.4% in the 3rd quarter. Balyasny Asset Management L.P. now owns 415,268 shares of the company’s stock worth $133,650,000 after purchasing an additional 413,468 shares in the last quarter. 91.59% of the stock is owned by institutional investors and hedge funds.
Duolingo Stock Performance Shares of Duolingo stock opened at $122.24 on Monday. The company has a market capitalization of $5.70 billion, a price-to-earnings ratio of 14.07, a PEG ratio of 0.93 and a beta of 0.88. The company has a quick ratio of 2.62, a current ratio of 2.62 and a debt-to-equity ratio of 0.07. Duolingo, Inc. has a 12-month low of $87.89 and a 12-month high of $468.00. The firm’s 50-day moving average price is $120.62 and its two-hundred day moving average price is $116.97.
Duolingo (NASDAQ:DUOL – Get Free Report) last released its earnings results on Monday, May 4th. The company reported $0.89 EPS for the quarter, beating the consensus estimate of $0.79 by $0.10. The firm had revenue of $291.97 million for the quarter, compared to analyst estimates of $288.60 million. Duolingo had a net margin of 38.44% and a return on equity of 14.07%. The business’s quarterly revenue was up 26.5% compared to the same quarter last year. During the same period last year, the firm earned $0.72 EPS. On average, analysts forecast that Duolingo, Inc. will post 2.81 earnings per share for the current fiscal year.
Insider Buying and Selling In related news, insider Natalie Glance sold 3,360 shares of Duolingo stock in a transaction that occurred on Monday, May 18th. The shares were sold at an average price of $113.59, for a total value of $381,662.40. Following the transaction, the insider directly owned 173,401 shares of the company’s stock, valued at $19,696,619.59. This trade represents a 1.90% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Robert Meese sold 1,420 shares of Duolingo stock in a transaction that occurred on Friday, May 15th. The shares were sold at an average price of $112.16, for a total transaction of $159,267.20. Following the completion of the transaction, the insider directly owned 170,745 shares in the company, valued at $19,150,759.20. This trade represents a 0.82% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last 90 days, insiders have sold 9,506 shares of company stock worth $1,073,864. Corporate insiders own 16.62% of the company’s stock.
Wall Street Analyst Weigh In A number of research analysts have issued reports on the stock. Jefferies Financial Group increased their target price on shares of Duolingo from $95.00 to $125.00 and gave the stock a “hold” rating in a research report on Tuesday, July 14th. Weiss Ratings upgraded shares of Duolingo from a “sell (d+)” rating to a “hold (c-)” rating in a research report on Thursday, June 18th. JPMorgan Chase & Co. boosted their price target on Duolingo from $94.00 to $125.00 and gave the company a “neutral” rating in a research note on Friday, July 17th. Wedbush began coverage on Duolingo in a research report on Thursday, July 16th. They set a “neutral” rating and a $139.00 price target on the stock. Finally, Needham & Company LLC restated a “buy” rating and set a $145.00 price objective on shares of Duolingo in a research note on Tuesday, May 5th. Two analysts have rated the stock with a Buy rating, twenty have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat.com, Duolingo currently has an average rating of “Hold” and an average target price of $167.17.
View Our Latest Analysis on Duolingo
About Duolingo (Free Report)
Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.
In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.
Further Reading Five stocks we like better than Duolingo RTX and Lockheed Earnings: Can Strong Guidance Reset the Defense Trade? These 4 Earnings Reports Expose the Market’s Growing Economic Divide Broadcom May Be the Biggest Winner From Alphabet’s Earnings Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit Want to see what other hedge funds are holding DUOL? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Duolingo, Inc. (NASDAQ:DUOL – Free Report).
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Shares of the language learning company Duolingo (DUOL +1.92%) fell by 9.8% this week, according to data provided by S&P Global Market Intelligence, as investors grow increasingly concerned about AI disruption.
Duolingo will report its second-quarter 2026 results early next month, and shareholders could be paring back their holdings now, in anticipation of a rough quarter.
Image source: The Motley Fool.
AI has Duolingo investors worried Duolingo's share price has nosedived over the past year, falling 66% as investors have become increasingly concerned that AI will disrupt Duolingo's business model.
Shareholders may have reacted this week to news that a yet-to-be-released OpenAI ChatGPT model went rogue and hacked a website. OpenAI was testing the model for its cybersecurity capabilities, and it broke free of its contained sandbox environment in search of the test answers.
Duolingo isn't a cybersecurity company, but its shareholders are already concerned that AI companies could disrupt the company's language learning and education app. A highly capable ChatGPT doesn't instill confidence that Duolingo can fend off AI competition.
Today's Change
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Shareholders may be bracing for Duolingo's quarterly results Duolingo is investing more in AI features to stay relevant, but it's coming at a cost. Management said gross margins will fall to 69% by the end of this year as AI-driven costs rise.
Duolingo has set a goal of 100 million daily active users in 2028 and is willing to sacrifice some higher margins to get there.
Investors will find out more about how well the company is achieving its goals when Duolingo reports its second-quarter results on Aug. 5. Still, it's clear from the share price declines this week that Duolingo has a lot to prove before regaining investor confidence.
Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.
In the latest trading session, Duolingo, Inc. (DUOL - Free Report) closed at $124.71, marking a -6.86% move from the previous day. This change lagged the S&P 500's daily gain of 0.89%. Meanwhile, the Dow gained 0.74%, and the Nasdaq, a tech-heavy index, added 1.29%.
Shares of the company witnessed a gain of 5.22% over the previous month, beating the performance of the Business Services sector with its gain of 4.27%, and the S&P 500's loss of 0.63%.
Market participants will be closely following the financial results of Duolingo, Inc. in its upcoming release. The company plans to announce its earnings on August 5, 2026. The company is expected to report EPS of $0.61, down 32.97% from the prior-year quarter. Alongside, our most recent consensus estimate is anticipating revenue of $297.2 million, indicating a 17.81% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $2.81 per share and revenue of $1.2 billion, which would represent changes of -67.21% and +16.1%, respectively, from the prior year.
Any recent changes to analyst estimates for Duolingo, Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.65% higher. Right now, Duolingo, Inc. possesses a Zacks Rank of #2 (Buy).
Investors should also note Duolingo, Inc.'s current valuation metrics, including its Forward P/E ratio of 47.7. For comparison, its industry has an average Forward P/E of 16.53, which means Duolingo, Inc. is trading at a premium to the group.
We can also see that DUOL currently has a PEG ratio of 1.02. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Technology Services was holding an average PEG ratio of 1.44 at yesterday's closing price.
The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 99, putting it in the top 41% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Investors looking for stocks in the Technology Services sector might want to consider either Duolingo, Inc. (DUOL - Free Report) or Amplitude, Inc. (AMPL - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Duolingo, Inc. has a Zacks Rank of #2 (Buy), while Amplitude, Inc. has a Zacks Rank of #3 (Hold). This means that DUOL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
DUOL currently has a forward P/E ratio of 47.70, while AMPL has a forward P/E of 208.51. We also note that DUOL has a PEG ratio of 1.02. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AMPL currently has a PEG ratio of 5.02.
Another notable valuation metric for DUOL is its P/B ratio of 4.51. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AMPL has a P/B of 4.69.
These metrics, and several others, help DUOL earn a Value grade of B, while AMPL has been given a Value grade of D.
DUOL has seen stronger estimate revision activity and sports more attractive valuation metrics than AMPL, so it seems like value investors will conclude that DUOL is the superior option right now.
Duolingo, Inc. (DUOL - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this company have returned +5.2% over the past month versus the Zacks S&P 500 composite's -0.6% change. The Zacks Technology Services industry, to which Duolingo belongs, has lost 6.8% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Duolingo is expected to post earnings of $0.61 per share for the current quarter, representing a year-over-year change of -33%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.7%.
For the current fiscal year, the consensus earnings estimate of $2.81 points to a change of -67.2% from the prior year. Over the last 30 days, this estimate has changed +1.7%.
For the next fiscal year, the consensus earnings estimate of $3.18 indicates a change of +13.2% from what Duolingo is expected to report a year ago. Over the past month, the estimate has changed +3.2%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #2 (Buy) for Duolingo.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Duolingo, the consensus sales estimate for the current quarter of $297.2 million indicates a year-over-year change of +17.8%. For the current and next fiscal years, $1.2 billion and $1.36 billion estimates indicate +16.1% and +12.6% changes, respectively.
Last Reported Results and Surprise HistoryDuolingo reported revenues of $291.97 million in the last reported quarter, representing a year-over-year change of +26.5%. EPS of $0.89 for the same period compares with $0.72 a year ago.
Compared to the Zacks Consensus Estimate of $288.54 million, the reported revenues represent a surprise of +1.19%. The EPS surprise was +12.66%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Duolingo is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Duolingo. However, its Zacks Rank #2 does suggest that it may outperform the broader market in the near term.
Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Duolingo, Inc. (DUOL - Free Report) , which belongs to the Zacks Technology Services industry, could be a great candidate to consider.
This company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of 15.82%.
For the most recent quarter, Duolingo was expected to post earnings of $0.79 per share, but it reported $0.89 per share instead, representing a surprise of 12.66%. For the previous quarter, the consensus estimate was $0.79 per share, while it actually produced $0.94 per share, a surprise of 18.99%.
Price and EPS Surprise
Thanks in part to this history, there has been a favorable change in earnings estimates for Duolingo lately. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the stock is positive, which is a great indicator of an earnings beat, particularly when combined with its solid Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Duolingo has an Earnings ESP of +9.55% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential. When you combine this positive Earnings ESP with the stock's Zacks Rank #3 (Hold), it shows that another beat is possibly around the corner. The company's next earnings report is expected to be released on August 5, 2026.
Investors should note, however, that a negative Earnings ESP reading is not indicative of an earnings miss, but a negative value does reduce the predictive power of this metric.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
