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what it is
Duolingo teaches 40+ languages and sells premium subscriptions plus a language test.
how it gets paid
Last year Duolingo made $1.0B in revenue. Super Duolingo subscriptions was the main engine at $0.66B, or 66% of sales.
why it's growing
Revenue grew 38.7% last year. Revenue grew 178% vs. prior year, but EPS came in at $0.99 versus $4.42 expected.
what just happened
Duolingo missed EPS by 77.6% even as revenue hit $755M.
At a glance
B+ balance sheet — decent shape, but not bulletproof
15.0x trailing p/e — the market's not buying it — or you found a deal
62.5% return on capital — a money-printing machine
xvary composite: 34/100 — weak
$22.00 fy2028 eps est
What they do
Duolingo teaches 40+ languages and sells premium subscriptions plus a language test.
More than 50 million people use it every day. Free lessons pull you in, and the paid upgrade sits one tap away. Freemium means free first, paid upgrade later, so habits turn into subscriptions.
How they make money
$1.0B
annual revenue · their business grew +38.7% last year
Super Duolingo subscriptions
$0.66B
Duolingo English Test
$0.16B
Advertising
$0.10B
Other premium and family plans
$0.08B
The products that matter
premium language subscription
duolingo super
$850M · 85% of segment revenue shown
this is the business that matters most. $850M of revenue growing 45% vs. prior year is why the market still gives duolingo credit for compounding, even after the stock broke.
core driver
free-user monetization
advertising
$100M · 10% of segment revenue shown
ads turn the free tier into more than a marketing cost. $100M is still small next to subscriptions, but it proves free users are not dead weight while you wait for conversion.
funnel support
english-language certification
duolingo english test
$50M · +30% growth
at $50M, this is still the side business. but 30% growth means it matters as a second act if university adoption keeps expanding.
optional upside
Key numbers
$1.0B
annual revenue
That is the size of the business today. It is up 38.7% vs. prior year, which is a big number for a company this small.
72.0%
gross margin
Duolingo keeps 72 cents of each sales dollar before operating costs. That leaves room to spend without breaking the model.
13.1%
operating margin
After operating costs, Duolingo keeps 13.1 cents of each dollar. That is real profit, not user-count theater.
62.5%
return on capital
Return on capital means profit from the money tied up in the business. At 62.5%, that money is working hard.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- net profit margin 51.0% — keeps 51 cents of every dollar in revenue
- return on equity 62% — $0.62 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for DUOL right now.
source: institutional data · return history unavailable
What just happened
missed estimates
Duolingo missed EPS by 77.6% even as revenue hit $755M.
Revenue grew 178% vs. prior year, but EPS came in at $0.99 versus $4.42 expected. That gap says the market wanted perfection and got a miss instead.
$755M
revenue
$0.99
eps
72.0%
gross margin
the number that mattered
The 77.6% EPS miss mattered most because it reset expectations faster than the 178% revenue jump could impress people.
-
duolingo, inc. has reported impressive top-line results.
-
revenues have risen, thanks to a 36% surge in daus (daily active users).
-
more than 50 million people now use duolingo's products every day.
-
the business is seeing significant growth in asia, especially in china.
-
china has become the company's second-largest country in terms of daus, behind only the u.s.this growth in users in asia may be attributable to duolingo's partnership with luckin coffee, a coffee chain based in china. recently, over 26,000 participating luckin stores sold more than 10 million duolingo-branded drinks in two weeks. also, duolingo's chess course is the fastest-growing subject, surpassing math and music, with millions of new users.
source: company earnings report, 2026
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What could go wrong
the #1 risk is premium conversion fatigue inside the free-to-paid funnel.
med
free users stop converting at the old pace
monthly active users grew 54% from a year ago. paid subscribers grew 35%. that gap is the whole debate. if free growth stays hot while paid growth keeps trailing by that much, subscription revenue stops looking automatic.
subscriptions are $850M of the $1.0B revenue shown on this page. if that engine slows, the rest of the business is too small to hide it.
med
the english test stays promising, not material
the duolingo english test grew 30%, but it is still only $50M. that makes it useful as upside, not as a rescue plan if the core subscription story cools.
at 5% of the segment revenue shown here, this business helps the narrative more than the near-term model.
med
the stock keeps trading on expectations, not the quarter
price stability is 5 / 100 and the shares dropped 22% after a beat because guidance disappointed. that is what high-expectation stocks do when the story bends.
if you own it, you are not just underwriting the business. you are underwriting how much optimism the market assigns to that business next.
303 institutional sellers versus 301 buyers last quarter is not a mass exit, but it does tell you the big money is no longer giving DUOL the benefit of the doubt.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
paid subscriber growth versus user growth
54% MAU growth against 35% paid sub growth is the key gap. if that spread narrows, the core thesis gets healthier fast.
calendar
next earnings guide
the last quarter beat and still failed the vibe check. your next read is not just the numbers. it is whether management restores confidence in the pace from here.
risk
subscription concentration
$850M of the $1.0B segment revenue shown here comes from subscriptions. that concentration is great when conversion works and painful when it slows.
trend
english test scale-up
30% growth is strong. at $50M, it still needs several more turns of growth before it matters to the valuation in a serious way.
Analyst rankings
short-term outlook
bottom 5%
momentum score 5 — the lowest rating. in human-speak, analysts think this has been one of the market's weaker setups near term.
risk profile
below average
stability score 4 means bigger swings than most stocks. if you own it, you need a stomach for tape-driven moves.
chart momentum
below average
technical score 4 says the chart has not repaired itself yet. the business and the stock are telling two different stories.
source: institutional data
Institutional activity
301 buyers vs. 303 sellers in 3q2025. total institutional holdings: 39.2M shares.
source: institutional data
Price targets
3-5 year target range
$123
$316
$180
current price
$220
target midpoint · +22% from current · 3-5yr high: $270 (+50% · 11% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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