Duolingo Crash Below $120 On Weak Sales Outlook

Quick overview

Duolingo shares plunged  12% on Wednesday after a soft third-quarter revenue forecast ($302M vs. $304M expected) overshadowed strong user engagement.

Despite the weak outlook, Q2 revenue beat estimates at $298.5M (up 18% year-over-year), and Daily Active Users (DAUs) surged 23% to 58.7M—beating projections thanks to product updates, marketing tweaks, and a streak-revival promotion.

CEO Luis von Ahn raised the rest-of-year DAU growth forecast above 20%, maintaining the company’s long-term goal of reaching 100M DAUs by 2028. To counter AI-driven competition without frustrating free users, Duolingo is testing longer free trials to boost “Super Duolingo” paid subscriptions. Before the report, the stock was already down 23% for the year.

 Duolingo stock dropped up to 12% Wednesday due to a conservative Q3 revenue forecast ($302M vs. $304M expected), adding to a 23% year-to-date decline. Revenue rose 18% year-over-year to $298.5M, outperforming Wall Street expectations ($295.6M).

Strong User Engagement: DAUs grew 23% to 58.7M (exceeding the 57.4M estimate), driven by product improvements and a popular streak-restoration feature. Growth Strategy & Outlook: CEO Luis von Ahn expects DAU growth to stay above 20% for the rest of the year, targeting 100M DAUs by 2028.

Monetization vs. AI Competition: To stave off AI rivals, Duolingo is expanding free trials to convert unpaid users into “Super Duolingo” subscribers without disrupting the user experience.

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks the financial markets with over 20 years of working experience in investment trading