DU

Duolingo Inc. Class A Common Stock Earnings Recaps

DUOL Information Technology 3 recaps
Next earnings: November 4, 2026 (estimated) · full calendar
Q2 2026 Aug 7, 2026

Shares fell 11% as investors were disappointed by cautious full-year bookings guidance and modest margin improvement despite accelerating user growth. Market reaction reflects skepticism that rising DAUs will translate into near-term revenue gains given ongoing experimentation and gradual monetization.

Key takeaways
  • Daily Active Users (DAUs) grew 23% year-over-year in Q2, accelerating from Q1, driven by product experimentation and user retention initiatives like the Streak Revival campaign.
  • Full-year bookings growth guidance was maintained at approximately 11%, despite current user momentum, signaling a deliberate restraint on near-term revenue expectations.
  • Gross margin outlook was marginally raised to ~70% for 2026, up from 69%, primarily due to AI-driven cost savings and content improvements.
  • Adjusted EBITDA margin guidance increased to around 25.5-26.5%, reflecting disciplined expense management despite investments.
  • Free cash flow remains robust, with $79 million generated in Q2 and $1.3 billion cash on hand; $44 million of stock buybacks executed during the quarter.
Full recap
Q1 2026 May 5, 2026

Duolingo’s shares dropped 6.5% after earnings as investors reacted negatively to the company’s cautious Q2 bookings guidance and margin pressure from increased AI-driven investments, signaling concerns over near-term growth deceleration and margin compression.

Key takeaways
  • Q1 revenue and bookings grew double digits, with adjusted EBITDA margin expanding to 29%, above the year target.
  • Daily active users (DAUs) grew 21% YoY, consistent with guidance, led by strong retention improvements and accelerated growth in Asia.
  • Q2 bookings growth guidance of approximately 6% reflects a tough comp and a significant slowdown from Q1, driving negative sentiment.
  • Gross margin expected to decline from 71% in Q2 to about 69% by year-end due to rising AI feature costs.
  • Adjusted EBITDA margin expected to dip slightly to 24% in Q2 before rebounding toward year-end, reflecting deliberate strategic investments.
Full recap
Q3 2025 Nov 6, 2025

Duolingo reported robust third-quarter results with 36% year-over-year growth in Daily Active Users (DAUs) and a guiding forecast of nearly $1.2 billion in bookings for the year, reflecting both significant user engagement and expanding profitability.

Key takeaways
  • Over 50 million daily users, driving a 33% growth in total bookings year-over-year.
  • Adjusted EBITDA margin improved to 29%, indicating enhanced operational efficiency.
  • Strategic investments in AI-driven educational tools expected to transform user engagement and learning effectiveness.
  • Anticipated moderate deceleration in DAU growth for Q4, yet optimistic about stabilization around 30% year-over-year.
  • Upcoming enhancements to the app include enriched content and interactive features to foster long-term user retention and growth.
Full recap

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