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2h ago

Duolingo Stock Plunges on Soft Q4 Bookings Outlook Despite Q3 Beat and Raised Forecast

The sell-off reflects softer Q4 bookings guidance tied to a pivot toward teaching quality over near-term monetization.

Woman with her smartphone poses in front of displayed Duolingo logo in this illustration taken, June 29, 2021. REUTERS/Dado Ruvic/Illustration
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Overview

  • Duolingo guided Q4 total bookings to $329.5–$335.5 million, below the roughly $344 million analyst consensus, and projected EBITDA of $75.4–$78.8 million versus $80.5 million expected.
  • Shares fell as much as 27% in after-hours and morning trading following the outlook.
  • Management said it is prioritizing teaching quality and user growth over near-term monetization, and noted some impact could extend into 2026.
  • Q3 results topped estimates, with revenue of $271.7 million (up 41% year over year), total bookings of about $281.9 million (up 33%), and paid subscribers up 34% to 11.5 million.
  • The company lifted its 2025 revenue forecast to $1.028–$1.032 billion, and said AI-powered features are profitable even as they reduced gross margin to 72.5%, which beat estimates.