Duolingo (NASDAQ:DUOL) Announces Quarterly Earnings Results

Duolingo (NASDAQ:DUOL) announced its quarterly earnings results on Tuesday. The company reported $0.54 EPS for the quarter, missing the consensus estimate of $0.57 by ($0.03), FiscalAI reports. The company had revenue of $309.01 million during the quarter, compared to analysts’ expectations of $303.20 million. Duolingo had a return on equity of 12.10% and a net margin of 35.88%. The firm’s revenue for the quarter was up 13.7% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $5.95 EPS.

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

• User growth accelerated: Q3 daily active users rose 29% year over year, up from 23% in Q2, with growth accelerating across eight of the company’s ten largest markets. Management expects similar DAU growth in Q4.
• Product improvements remain the primary growth driver, particularly higher retention from Duolingo’s frequent A/B testing. Gaming partnerships with Brawl Stars and Eggy Party added millions of users who have shown strong retention, although management expects such partnerships to remain occasional.
• Duolingo is expanding monetization while preserving the free-user experience. It is moving Video Call from the Max tier to Super as AI costs have fallen from about $0.30 to under $0.01 per call, and it expects to focus more heavily on monetization testing in 2027.
• Q4 profitability is expected to be pressured by higher operating expenses, continued investments, and an additional employee bonus accrual; adjusted EBITDA is forecast to be roughly flat year over year at $84 million. Gross margin is also expected to decline slightly as Video Call rolls out broadly.
• Management highlighted substantial AI-driven efficiency gains, including roughly 90% year-over-year growth in experiments with only 10% headcount growth, while inference costs per DAU are declining. The company also expects improved advertising monetization and continued long-term potential in Chess, Math, and AI-powered tutoring.

Duolingo Trading Up 32.4%

Shares of NASDAQ:DUOL traded up $41.48 during trading hours on Wednesday, hitting $169.47. 3,445,121 shares of the company’s stock traded hands, compared to its average volume of 1,767,886. The firm has a market capitalization of $7.93 billion, a P/E ratio of 20.11, a price-to-earnings-growth ratio of 1.11 and a beta of 1.08. The business has a fifty day moving average price of $144.65 and a 200-day moving average price of $124.10. Duolingo has a 1 year low of $87.89 and a 1 year high of $268.97. The company has a debt-to-equity ratio of 0.06, a current ratio of 2.72 and a quick ratio of 2.72.

Analysts Set New Price Targets

A number of research firms have issued reports on DUOL. Evercore set a $128.00 price objective on Duolingo in a research note on Wednesday. The Goldman Sachs Group set a $128.00 target price on Duolingo in a research report on Wednesday. KeyCorp raised shares of Duolingo from a “hold” rating to an “overweight” rating in a report on Tuesday, August 18th. Scotiabank set a $120.00 price target on shares of Duolingo in a research report on Thursday, August 6th. Finally, Needham & Company LLC upped their price target on shares of Duolingo from $145.00 to $165.00 and gave the company a “buy” rating in a research note on Wednesday. Eight equities research analysts have rated the stock with a Buy rating, fifteen have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and an average target price of $134.44.

Key Duolingo News

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Daily active users grew 29% year over year, with bookings growth accelerating. Duolingo also raised its outlook; its Q4 forecast includes 13% bookings growth and $84 million in adjusted EBITDA. The planned rollout of Video Call to all paid subscribers adds to the product-growth story. Duolingo Q3 results Q4 outlook and Video Call rollout
• Neutral Sentiment: Analyst actions were mixed: Needham raised its price target to $165, while Wells Fargo upgraded DUOL to Equal Weight from Underweight but set a $120 target—well below the current share price. Needham target change Wells Fargo rating change
• Negative Sentiment: Q3 EPS of $0.54 fell short of analysts’ roughly $0.57 estimate, although revenue of $309 million beat expectations of about $303 million. The earnings shortfall is a counterpoint to the upbeat outlook. Q3 earnings details
• Negative Sentiment: Several law firms publicized a pending securities class action covering May 2025–February 2026 investors. The complaint reportedly alleges misleading statements about the Hearts feature and AI-first strategy; the claims remain allegations and could create reputational or legal uncertainty. Class action allegations

Insiders Place Their Bets

In other Duolingo news, Director William B. Gordon sold 10,000 shares of the company’s stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $145.67, for a total value of $1,456,700.00. Following the transaction, the director owned 68,415 shares of the company’s stock, valued at $9,966,013.05. This represents a 12.75% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, General Counsel Stephen C. Chen sold 8,072 shares of the stock in a transaction on Monday, September 14th. The stock was sold at an average price of $149.33, for a total value of $1,205,391.76. Following the completion of the sale, the general counsel owned 43,769 shares in the company, valued at approximately $6,536,024.77. The trade was a 15.57% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders have sold 250,740 shares of company stock valued at $37,685,893. Corporate insiders own 16.62% of the company’s stock.

Duolingo Company Profile

Duolingo, Inc develops technology-based learning products designed to make education accessible and engaging. Its flagship Duolingo mobile and web platform offers gamified courses in languages including Spanish, English, French, German and Japanese, among others. Lessons incorporate interactive exercises, personalized practice and achievement-based features intended to support regular learning.

The company also operates the Duolingo English Test, an online English-proficiency assessment that can be taken remotely and is accepted by educational institutions and other organizations.