Duolingo stock surges 26% after record user growth
- Duolingo shares rose 26% on Wednesday following a strong earnings report.
- The company reported $309 million in revenue, beating consensus estimates.
- Duolingo raised its full-year 2026 revenue forecast to $1.22 billion.
- Analysts from Goldman Sachs and Morgan Stanley raised price targets for the stock.
Duolingo shares surged 26% on Wednesday following the release of the company's third-quarter earnings report. Investors pushed the stock higher on November 4 as they reacted to the financial results. One outlet reported a climb of roughly 30% on the day, which helped the company recover most of its year-to-date losses.
The stock traded more than 11% higher overnight leading into Wednesday, marking its best performance in more than a year.
Daily active users climb 29% to 64.9 million
This growth rate outpaced the 23% increase recorded in the second quarter and the 21% rise in the first quarter.
Revenue rose 14% to $309 million in the third quarter, beating the consensus estimate of $303 million. The company also reported $316 million in bookings for the period.
Company reports $27.2 million in net income
Duolingo reported net income of $27.2 million for the third quarter, resulting in a net profit margin of 8.8%. The company earned $0.54 per share. Operating cash flow increased 6% to $89.4 million. Adjusted EBITDA reached $78.7 million, and free cash flow totaled $75.3 million.
Bookings advanced 12% to $316.1 million during the quarter. Management projects fourth-quarter revenue of $382 million, which exceeds the analyst consensus of $321 million and the most optimistic analyst estimate of $331 million.
The company raised its full-year 2026 revenue forecast to an 18% increase, now expecting $1.2 billion. The firm also expects full-year revenue to reach $1.29 billion, surpassing the $1.22 billion expectation, with adjusted EBITDA between $84 million and $323 million.
Partnerships and management strategy drive growth
Chief Executive Officer Luis von Ahn said the company prioritizes better teaching and user growth, adding that investments in attracting users are paying off. Chief Financial Officer Gilian Munson said year-over-year daily active user growth occurred in eight of the company's ten biggest national markets.
Revenue and user growth were attributed in part to partnerships with games including Eggy Party and Brawl Stars.
Stock price recovers as sentiment turns bullish
Duolingo stock reached $147 on Wednesday, a 15 percent increase from its low during the week of November 4, 2026.
Retail sentiment on Stocktwits moved to extremely bullish from bullish following the earnings release. The company repurchased $6.4 million worth of shares, utilizing a $400 million program announced in February.
Analysts raise price targets following results
Goldman Sachs analyst Eric Sheridan increased his price target for Duolingo from $114 to $135. Morgan Stanley analyst Nathan Feather raised his price target for the company to $140.
Evercore analyst Mark Mahaney maintained an outperform rating on Duolingo shares.
Duolingo maintains strong cash position
The Pittsburgh-based firm, which went public on the NASDAQ under the ticker DUOL on July 28, 2021, has seen its stock decline 27 percent year-to-date.
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