Duolingo (NASDAQ:DUOL) Announces Earnings Results

Duolingo (NASDAQ:DUOL) issued its earnings results on Wednesday. The company reported $0.66 EPS for the quarter, topping the consensus estimate of $0.60 by $0.06, FiscalAI reports. Duolingo had a net margin of 38.44% and a return on equity of 14.07%. The company had revenue of $298.45 million for the quarter, compared to analyst estimates of $295.58 million. During the same period in the previous year, the firm earned $0.91 EPS. The business’s revenue was up 18.3% on a year-over-year basis.

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

• Daily active users grew 23% year over year in Q2, accelerating from Q1, while user retention reached an all-time high. Duolingo said growth was broad-based and supported by ongoing product experimentation.
• The company raised its full-year adjusted EBITDA margin outlook to 26.5% and now expects roughly $320 million of adjusted EBITDA, gross margin near 70%, and more than $375 million in free cash flow.
• Duolingo is expanding monetization in ways it believes support user growth, including longer free trials, a lower-priced Super Lite tier, improved advertising, and broader access to Video Call as AI costs decline. AI cost savings are expected to support margins while enabling more features for users.
• Management maintained full-year guidance of approximately 11% bookings growth and 16% revenue growth despite stronger user trends, noting that freemium users take time to monetize and that the company is prioritizing DAU expansion and product quality.
• The future of the higher-priced Max subscription remains uncertain as Video Call is rolled out to Super subscribers; management said Max could be restructured or even sunset, although it intends to avoid a material revenue loss.

Duolingo Price Performance

Duolingo stock traded down $2.43 during mid-day trading on Wednesday, hitting $135.32. 1,834,575 shares of the company were exchanged, compared to its average volume of 1,008,954. Duolingo has a 12-month low of $87.89 and a 12-month high of $468.00. The company has a market capitalization of $6.30 billion, a P/E ratio of 15.57, a PEG ratio of 1.05 and a beta of 0.87. The business’s 50 day simple moving average is $125.09 and its two-hundred day simple moving average is $115.19. The company has a debt-to-equity ratio of 0.07, a current ratio of 2.62 and a quick ratio of 2.62.

Duolingo News Roundup

Here are the key news stories impacting Duolingo this week:

• Positive Sentiment: Second-quarter revenue increased 18.3% year over year to approximately $298.5 million, while gross profit rose 18.7% to $216.7 million. Adjusted earnings of $0.66 per share exceeded the roughly $0.60 consensus estimate, and operating cash flow reached $88.3 million. Duolingo ended the quarter with $1.2 billion in cash and cash equivalents. Duolingo Reports Second Quarter 2026 Results
• Neutral Sentiment: Institutional sentiment was mixed in the latest quarter, with 220 investors increasing positions and 253 reducing them. Large additions from Two Sigma, Federated Hermes and Bank of America contrasted with complete or substantial exits by Capital World Investors, FMR and Dragoneer.
• Negative Sentiment: Third-quarter revenue guidance of $302 million was below the approximately $303.9 million analyst consensus. The outlook overshadowed the quarterly earnings beat because investors are focused on whether user engagement can translate into stronger near-term monetization. Duolingo’s lower-than-expected revenue forecast overshadows quarterly beat
• Negative Sentiment: Profitability weakened year over year: net income declined 26% to $33.2 million and diluted EPS fell from $0.91 to $0.66, while operating profit increased only 1.7%. The company’s third-quarter outlook therefore suggests decelerating growth despite continued expansion. Duolingo Stock Falls on Q2 2026 Earnings
• Negative Sentiment: Bank of America downgraded DUOL to “underperform” and cut its price target to $93 from $103. In addition, insiders recorded 23 sales versus one purchase over the past six months, adding to investor concerns about valuation and near-term expectations. Bank of America downgrade

Analyst Upgrades and Downgrades

A number of equities research analysts have recently issued reports on the stock. UBS Group reiterated a “neutral” rating on shares of Duolingo in a research report on Wednesday, June 17th. Weiss Ratings raised Duolingo from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, June 18th. Morgan Stanley boosted their target price on Duolingo from $95.00 to $125.00 and gave the stock an “equal weight” rating in a research report on Thursday, July 16th. DA Davidson reissued a “neutral” rating and issued a $120.00 target price on shares of Duolingo in a report on Monday, June 29th. Finally, Scotiabank restated a “sector perform” rating and issued a $130.00 price target on shares of Duolingo in a research report on Tuesday, July 28th. Two investment analysts have rated the stock with a Buy rating, nineteen have given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of “Hold” and an average target price of $151.88.

Insider Activity

In other Duolingo news, General Counsel Stephen C. Chen sold 1,977 shares of the company’s stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $113.61, for a total value of $224,606.97. Following the transaction, the general counsel directly owned 52,807 shares in the company, valued at approximately $5,999,403.27. This represents a 3.61% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Natalie Glance sold 3,360 shares of the firm’s stock in a transaction dated Monday, May 18th. The stock was sold at an average price of $113.59, for a total transaction of $381,662.40. Following the sale, the insider directly owned 173,401 shares in the company, valued at $19,696,619.59. This represents a 1.90% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 9,506 shares of company stock worth $1,073,864 over the last three months. 16.62% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Duolingo

Institutional investors and hedge funds have recently modified their holdings of the company. Alpine Woods Capital Investors LLC purchased a new position in shares of Duolingo during the 4th quarter worth $333,000. Vident Advisory LLC increased its stake in Duolingo by 5.8% in the fourth quarter. Vident Advisory LLC now owns 2,647 shares of the company’s stock valued at $465,000 after purchasing an additional 145 shares during the last quarter. Cim LLC lifted its position in Duolingo by 6.0% during the fourth quarter. Cim LLC now owns 4,390 shares of the company’s stock worth $770,000 after buying an additional 248 shares during the period. Empowered Funds LLC purchased a new position in shares of Duolingo during the 4th quarter worth about $331,000. Finally, Wellington Management Group LLP raised its stake in Duolingo by 1.7% during the fourth quarter. Wellington Management Group LLP now owns 25,404 shares of the company’s stock worth $4,458,000 after purchasing an additional 431 shares during the period. Hedge funds and other institutional investors own 91.59% of the company’s stock.

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.