Duolingo (NASDAQ:DUOL) Issues Quarterly Earnings Results

Duolingo (NASDAQ:DUOL) issued its earnings results on Thursday. The company reported $0.91 EPS for the quarter, topping the consensus estimate of $0.78 by $0.13, FiscalAI reports. The business had revenue of $282.87 million during the quarter, compared to analysts’ expectations of $275.95 million. Duolingo had a return on equity of 14.02% and a net margin of 40.03%.

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 Stock Performance

Shares of NASDAQ:DUOL traded up $5.80 during trading on Thursday, reaching $117.45. The stock had a trading volume of 7,535,503 shares, compared to its average volume of 2,515,526. The stock has a fifty day simple moving average of $147.49 and a two-hundred day simple moving average of $226.95. The company has a quick ratio of 2.82, a current ratio of 2.82 and a debt-to-equity ratio of 0.07. Duolingo has a 52 week low of $104.51 and a 52 week high of $544.93. The firm has a market capitalization of $5.43 billion, a price-to-earnings ratio of 14.89, a P/E/G ratio of 0.59 and a beta of 0.86.

Analysts Set New Price Targets

DUOL has been the topic of a number of research analyst reports. Morgan Stanley lowered their price objective on shares of Duolingo from $275.00 to $245.00 and set an “overweight” rating on the stock in a research report on Tuesday, February 3rd. Citizens Jmp lowered shares of Duolingo from a “market outperform” rating to a “hold” rating in a research note on Thursday, November 6th. Scotiabank lowered their price target on shares of Duolingo from $600.00 to $300.00 and set a “sector outperform” rating on the stock in a report on Thursday, November 6th. Barclays dropped their price target on shares of Duolingo from $390.00 to $230.00 and set an “equal weight” rating on the stock in a research note on Thursday, November 6th. Finally, The Goldman Sachs Group reduced their price objective on Duolingo from $425.00 to $250.00 and set a “neutral” rating for the company in a research report on Friday, November 7th. Eleven analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $292.37.

Duolingo News Roundup

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Q4 results beat consensus — Duolingo reported $0.91 EPS vs. $0.78 expected and revenue of $282.9M vs. ~$276M consensus; strong margins and ROE underline profitability. Q4 Press Release
• Positive Sentiment: Operational milestones — company said it finished 2025 with 50M+ daily active users and topped $1B in bookings for the first time, supporting the long-term growth thesis. GlobeNewswire
• Positive Sentiment: Ongoing market interest and bullish analyst coverage — a material portion of analysts remain constructive with mid-range price targets well above current levels, keeping upside narratives alive. InsiderMonkey
• Neutral Sentiment: UK universities using Duolingo for English testing — a distribution/brand positive but not an immediate revenue driver. FT: Universities Use Duolingo
• Neutral Sentiment: Pre-earnings coverage and comparisons (AAII/Investing) framed DUOL as a growth-at-a-reasonable-price story — provides context but limited immediate impact. AAII Comparison
• Negative Sentiment: Guidance trimmed / shift to user-growth priority — Duolingo lowered FY2026 revenue guidance to ~$1.2B (vs. ~1.3B consensus) and flagged slower bookings as it focuses on reaching 100M DAUs by 2028, which implies near-term revenue headwinds. WSJ: Slower Revenue Growth Ahead
• Negative Sentiment: Reuters reporting echoed softer bookings and prioritization of growth over monetization, reinforcing concerns about near-term top-line momentum. Reuters: Softer Bookings
• Negative Sentiment: Rising short interest and recent insider selling — short interest climbed ~26% in February and there were reports of insider sales and a new 52-week low earlier this week, increasing downside pressure and volatility. American Banking News: Insider Selling

Insider Activity

In related news, CFO Matthew Skaruppa sold 3,986 shares of Duolingo stock in a transaction on Wednesday, February 18th. The shares were sold at an average price of $113.52, for a total value of $452,490.72. Following the transaction, the chief financial officer owned 31,631 shares in the company, valued at $3,590,751.12. This trade represents a 11.19% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. Also, insider Robert Meese sold 1,000 shares of the business’s stock in a transaction on Tuesday, February 17th. The stock was sold at an average price of $110.06, for a total transaction 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. This represents a 0.81% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 14,939 shares of company stock valued at $1,676,291. 15.67% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Duolingo

Several large investors have recently made changes to their positions in the business. Alpine Woods Capital Investors LLC acquired a new stake in Duolingo in the 4th quarter valued at approximately $333,000. Vident Advisory LLC lifted its holdings in shares of Duolingo by 5.8% during the fourth quarter. Vident Advisory LLC now owns 2,647 shares of the company’s stock worth $465,000 after buying an additional 145 shares during the last quarter. Cim LLC boosted its position in shares of Duolingo by 6.0% in the fourth quarter. Cim LLC now owns 4,390 shares of the company’s stock valued at $770,000 after acquiring an additional 248 shares during the period. Empowered Funds LLC acquired a new stake in shares of Duolingo in the fourth quarter worth $331,000. Finally, Wellington Management Group LLP grew its stake in shares of Duolingo by 1.7% in the fourth quarter. Wellington Management Group LLP now owns 25,404 shares of the company’s stock worth $4,458,000 after acquiring an additional 431 shares during the last quarter. Institutional investors and hedge funds own 91.59% of the company’s stock.

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.