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Duolingo Inc (NASDAQ:DUOL) reported fourth-quarter results that exceeded analyst expectations but issued disappointing guidance for 2026, sending shares down 22.9% in after-hours trading Thursday as the company shifts strategy to prioritize user growth over near-term profitability.
The language-learning platform reported adjusted earnings per share of $0.84 for the fourth quarter, beating the analyst estimate of $0.83. Revenue rose 35% YoY to $282.9 million, surpassing the consensus estimate of $275.74 million. However, the company's outlook for 2026 fell significantly short of Wall Street expectations, with first-quarter revenue guidance of $288.5 million below the $291.8 million consensus and full-year revenue guidance of $1.20-$1.22 billion trailing the $1.26 billion estimate. The midpoint of $1.21 billion represents approximately 17% growth, well below analyst expectations.
Daily active users grew 30% YoY to 52.7 million in the fourth quarter, while paid subscribers increased 28% to 12.2 million. However, CEO Luis von Ahn acknowledged that DAU growth decelerated throughout 2025 and expects approximately 20% DAU growth in 2026, down from growth rates exceeding 40% in prior periods.
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