Duolingo shares drop sharply on guidance miss

Proactive

Fri, February 27, 2026 astatine 10:09 AM CST 1 min read

Duolingo Inc (NASDAQ:DUOL) shares reported better-than-expected quarterly earnings, but its shares fell astir 15% arsenic it issued guidance that fell abbreviated of Wall Street estimates.

For the 4th fourth of 2025, Duolingo reported gross of $282.9 million, a 35% summation year-over-year and somewhat supra the $275.9 cardinal analysts had anticipated.

Earnings per stock of $0.91, topping estimates of $0.78.

Adjusted EBITDA came successful astatine $84.35 million, exceeding estimates of $78.24 million, portion the institution posted an operating borderline of 15.4%, up from 6.6% successful the aforesaid play past year.

The institution reported 133.1 cardinal monthly progressive users, up 16.4 cardinal from a twelvemonth earlier, with regular progressive users rising 30% to 52.7 cardinal and paid subscribers reaching 12.2 million, a 28% summation year-over-year.

Free currency travel borderline improved to 33.1% from 28.5% successful the anterior quarter, and nett income for Q4 was $42 million.

“We closed 2025 with beardown momentum, surpassing 50 cardinal regular progressive users and generating much than $1 cardinal successful bookings for the archetypal time,” Duolingo CEO Luis von Ahn said successful a statement.

Despite the beardown Q4 results, Duolingo’s guidance weighed connected capitalist sentiment. Revenue guidance for the archetypal 4th of 2026 was acceptable astatine $288.5 cardinal astatine the midpoint, beneath the $291.2 cardinal expected by analysts.

For the afloat year, the institution forecast adjusted EBITDA of $302 million, importantly nether the $385 cardinal anticipated.