Duolingo (NASDAQ:DUOL) Releases Quarterly Earnings Results, Beats Estimates By $0.12 EPS

Duolingo (NASDAQ:DUOL) released its quarterly earnings results on Thursday. The company reported $0.91 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.79 by $0.12, reports. The firm had revenue of $282.87 million for the quarter, compared to the consensus estimate of $275.95 million. Duolingo had a return on equity of 14.02% and a net margin of 40.03%.The firm’s revenue for the quarter was up 35.0% on a year-over-year basis.

Here are the key takeaways from Duolingo’s conference call:

• Milestones: Duolingo closed 2025 with over 50 million daily active users, more than $1 billion in bookings and over $300 million in adjusted EBITDA, highlighting profitability at scale.
• Strategic pivot to user growth: Management is prioritizing DAU expansion (targeting 100 million DAUs by 2028) via AI-driven teaching improvements, a better free experience, and investments in new subjects (math, music, chess) with thousands of A/B tests planned.
• Near-term financial trade-off: The company expects ~20% YoY DAU growth in 2026 but also warns of slower bookings growth and lower profitability this year as it shifts spend toward growth; full-year guidance is bookings +10–12%, revenue +15–18% and adjusted EBITDA margin around 25%.
• Product/monetization moves: Duolingo plans to broaden access to costly AI features (e.g., Video Call) from Max into Super via A/B tests and may meter usage, acknowledging lower gross margins from wider AI rollout while aiming to boost engagement and long-term monetization.
• Capital allocation: The board authorized up to a $400 million share buyback, signaling confidence in the balance sheet and shareholder returns while the company funds its 2026 investments.

Duolingo Price Performance

Duolingo stock traded down $16.45 during mid-day trading on Friday, hitting $101.00. The stock had a trading volume of 20,096,588 shares, compared to its average volume of 2,830,754. The firm has a market capitalization of $4.67 billion, a P/E ratio of 12.80, a P/E/G ratio of 0.63 and a beta of 0.86. The company has a current ratio of 2.82, a quick ratio of 2.82 and a debt-to-equity ratio of 0.07. The firm’s 50 day moving average is $144.48 and its 200 day moving average is $224.53. Duolingo has a one year low of $91.99 and a one year high of $544.93.

Insiders Place Their Bets

In related news, insider Robert Meese sold 1,000 shares of the business’s stock in a transaction that occurred on Tuesday, February 17th. The stock was sold at an average price of $110.06, for a total value of $110,060.00. Following the transaction, the insider directly owned 122,636 shares of the company’s stock, valued at approximately $13,497,318.16. The trade was a 0.81% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, General Counsel Stephen C. Chen sold 1,901 shares of the company’s stock in a transaction that occurred on Wednesday, February 18th. The stock was sold at an average price of $113.26, for a total value of $215,307.26. Following the completion of the transaction, the general counsel owned 30,545 shares of the company’s stock, valued at $3,459,526.70. The trade was a 5.86% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 14,939 shares of company stock worth $1,676,291. Company insiders own 15.67% of the company’s stock.

Institutional Investors Weigh In On Duolingo

A number of hedge funds have recently made changes to their positions in DUOL. EFG International AG purchased a new position in Duolingo during the 4th quarter valued at approximately $26,000. AlphaCentric Advisors LLC purchased a new position in shares of Duolingo in the 4th quarter worth $33,000. Caitong International Asset Management Co. Ltd purchased a new position in shares of Duolingo in the 4th quarter worth $43,000. Advisors Asset Management Inc. increased its stake in Duolingo by 152.5% during the fourth quarter. Advisors Asset Management Inc. now owns 298 shares of the company’s stock worth $52,000 after acquiring an additional 180 shares during the last quarter. Finally, Banque Cantonale Vaudoise purchased a new stake in Duolingo during the third quarter valued at approximately $70,000. 91.59% of the stock is currently owned by hedge funds and other institutional investors.

Trending Headlines about Duolingo

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q4 results beat estimates — revenue and EPS topped expectations and the company reported strong margin metrics. Earnings Report
• Positive Sentiment: User scale: Duolingo closed 2025 with >50M daily active users and topped $1B in bookings — evidence of continued product adoption. Shareholder Letter
• Positive Sentiment: Strong full-year profitability: reports note roughly $400M profit for 2025, underlining unit economics at scale. Profit Article
• Neutral Sentiment: Management is explicitly shifting to prioritize user growth over near-term monetization, saying bookings and revenue growth will slow as they aim for 100M DAUs by 2028. Reuters Strategy Piece
• Neutral Sentiment: Management set explicit DAU growth targets and framed short-term profitability trade-offs as part of a longer-term expansion plan. Seeking Alpha
• Negative Sentiment: Guidance disappointment: FY‑2026 and Q1 2026 revenue/bookings guidance came in below Street expectations, triggering sharp intraday selling. Guidance/Miss Report
• Negative Sentiment: Analyst downgrades and price-target cuts accelerated the sell-off (multiple firms cut targets and/or ratings after the call). Analyst Moves
• Negative Sentiment: Regulatory/litigation risk: investor law firms have launched probes into DUOL, increasing uncertainty and potential legal overhang. Investigation Alert
• Negative Sentiment: High-volume selling and negative press amplified moves — multiple outlets flagged a steep intraday decline and described investor concern over the strategy shift. Barron’s

Wall Street Analyst Weigh In

DUOL has been the subject of several research reports. Citigroup reaffirmed a “neutral” rating and set a $101.00 price target (down from $270.00) on shares of Duolingo in a research report on Friday. Needham & Company LLC cut their target price on shares of Duolingo from $300.00 to $145.00 and set a “buy” rating for the company in a research report on Friday. Evercore reaffirmed a “hold” rating and set a $114.00 target price on shares of Duolingo in a report on Friday. Morgan Stanley reiterated an “equal weight” rating and set a $100.00 price target (down from $245.00) on shares of Duolingo in a research note on Friday. Finally, Scotiabank reissued a “sector perform” rating and set a $100.00 price objective (down from $300.00) on shares of Duolingo in a research report on Friday. Five research analysts have rated the stock with a Buy rating, seventeen have assigned a Hold rating and one has given a Sell rating to the company’s stock. According to data from MarketBeat.com, Duolingo presently has an average rating of “Hold” and an average price target of $220.26.

Duolingo Company Profile

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.