Duolingo (NASDAQ:DUOL) Posts Quarterly Earnings Results, Beats Estimates By $0.13 EPS

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

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

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 market capitalization of $5.43 billion, a PE ratio of 14.89, a P/E/G ratio of 0.59 and a beta of 0.86. Duolingo has a 52 week low of $104.51 and a 52 week high of $544.93. The business’s 50-day moving average price is $147.49 and its 200 day moving average price is $226.95. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.82 and a quick ratio of 2.82.

Insiders Place Their Bets

In related news, insider Robert Meese sold 1,000 shares of Duolingo stock in a transaction dated Tuesday, February 17th. The stock was sold at an average price of $110.06, for a total value of $110,060.00. Following the completion of the transaction, the insider directly owned 122,636 shares of the company’s stock, valued at $13,497,318.16. The trade was a 0.81% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. Also, General Counsel Stephen C. Chen sold 1,901 shares of the company’s stock in a transaction dated Wednesday, February 18th. The stock was sold at an average price of $113.26, for a total transaction of $215,307.26. Following the transaction, the general counsel owned 30,545 shares in the company, valued at approximately $3,459,526.70. This trade represents a 5.86% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders have sold 14,939 shares of company stock worth $1,676,291. 15.67% of the stock is owned by company insiders.

Hedge Funds Weigh In On Duolingo

Institutional investors have recently modified their holdings of the stock. EFG International AG bought a new stake in shares of Duolingo during the fourth quarter valued at approximately $26,000. AlphaCentric Advisors LLC bought a new position in Duolingo in the 4th quarter worth approximately $33,000. Caitong International Asset Management Co. Ltd acquired a new position in Duolingo during the 4th quarter worth $43,000. Advisors Asset Management Inc. boosted its position in Duolingo by 152.5% in the 4th quarter. Advisors Asset Management Inc. now owns 298 shares of the company’s stock valued at $52,000 after buying an additional 180 shares during the last quarter. Finally, Banque Cantonale Vaudoise bought a new position in Duolingo in the 3rd quarter valued at $70,000. 91.59% of the stock is owned by institutional investors.

Analysts Set New Price Targets

Several equities analysts have commented on the company. DA Davidson cut their price target on Duolingo from $205.00 to $170.00 and set a “neutral” rating for the company in a report on Tuesday, January 27th. Weiss Ratings restated a “hold (c)” rating on shares of Duolingo in a research report on Monday, December 29th. BMO Capital Markets upgraded Duolingo to a “buy” rating in a research note on Monday, January 12th. Jefferies Financial Group raised their target price on Duolingo from $210.00 to $220.00 and gave the stock a “hold” rating in a research report on Thursday, December 11th. Finally, Wells Fargo & Company lowered their price target on shares of Duolingo from $185.00 to $160.00 and set an “underweight” rating on the stock in a report on Thursday, January 8th. Eleven research analysts have rated the stock with a Buy rating, eleven have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, Duolingo has an average rating of “Hold” and a consensus target price of $292.37.

Key Headlines Impacting Duolingo

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

About Duolingo

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.