Duolingo Stock Soars on User Growth Surge

Duolingo (DUOL) experienced a significant stock increase, climbing 26% after reporting robust third-quarter user growth and an improved financial forecast. The language learning platform saw its daily active users (DAUs) jump 29% year over year to 64.9 million. Paid subscribers also saw a 14% annual increase, reaching 13.1 million.

Company management indicated a strategic shift towards increased monetization that preserves the quality of the free user experience. This announcement, coupled with Duolingo surpassing analyst expectations for both revenue and earnings per share, contributed to investor optimism.

For the third quarter, revenue reached $309 million, a 12% year-over-year increase, exceeding the $303 million estimate. Earnings per share were reported at $0.58, surpassing the $0.56 estimate. Duolingo is targeting 1 billion users and has increased operating expenses by 24% year over year.

Looking ahead, Duolingo has raised its 2026 revenue projection to $1.22 billion, exceeding the Street's forecast of $1.2 billion. The company anticipates finishing 2026 at the upper end of its 10% to 12% bookings growth and 15% to 18% revenue growth targets. Full-year Adjusted EBITDA is projected at $323 million, indicating a 26.5% margin.