Duolingo Stock Heads For Worst Day In Months As CEO Flags Slower Growth — Retail Calls Selloff 'Stupid'
Google News: Duolingo · 2026-07-14 · earnings
Duolingo shares fell sharply after the CEO flagged slower growth ahead.
AI applications & software · Industry Index 7 (rank #177) ·
price: as of 2026-10-29 index: as of 2026-10-29 fundamentals: latest filing 2026-08-06 Reports quarterly (10-Q XBRL)
Duolingo operates the world's most popular language-learning app, with premium AI-powered tutoring features in Duolingo Max.
Industry exposure 0.4 (AI features (Duolingo Max, GPT-4 tutoring) drive premium tiers and product strategy but sit atop a consumer subscription core.)
Delayed, end-of-day, aggregate per contract — not a live tape or trade-level flow. Buy/sell side is INFERRED from where each contract's last print sat in the bid/ask spread, not observed order flow. The company-wide side is withheld unless quoted contracts cover at least a quarter of the day's premium, so it can be blank while individual contracts below show a side. Call/put premium is measured across the chain we capture — the 6 nearest expiries within 45 days, not the full option chain — while the table below lists at most 20 flagged contracts, so summing those rows will not reproduce the percentage.
Why flagged:earnings in 6 days
20 small flags (under $100000 premium) — none large enough to highlight.
latest session: 1.0× its 13-day baseline
35% calls / 65% puts (by premium)
Structural carried this call — it supplied almost the entire lean; the other voters nearly net out.
Most voters leaned one way; structural dissented. Directional agreement 0.58.
A clear bearish score; conviction 0.28 reflects how strongly the agents agree. Conviction is confidence, not a probability of the move.
Duolingo's moat is essentially one asset — a consumer brand strong enough that the filing claims people "search for the term 'Duolingo' much more often than 'learn Spanish'" — sitting on real but not defensive scale. It converts into economics through organic acquisition: sales and marketing took 12% of FY2025 revenue while Q4 DAUs grew 30% to 52.7 million and DAU/MAU rose to 39.6% from 34.7%. It is not wide, because the company supplies both disqualifiers itself: "low switching costs" and "Low barriers to entry allow start-up companies with lower costs and less pressure for profitability to compete with us." Width and pricing power diverge: Duolingo will not price against its own free product, grows subscription revenue by adding subscribers ($873.4 million, up 44%), and guides gross margin down to roughly 69% by Q4 FY2026 "as AI feature use expands in our products."
Rating: narrow
Wide is ruled out by the company's own Item 1A, which concedes "low switching costs" and that "Low barriers to entry allow start-up companies with lower costs and less pressure for profitability to compete with us." It sits well above none because Q4 DAUs grew 30% to 52.7M, DAU/MAU rose to 39.6% from 34.7%, and marketing took only 12% of FY2025 revenue, though that ratio was flat versus FY2024 and gross margin fell to 72.2% from 72.8%. It stays narrow rather than eroding because Q1 FY2026 DAUs and paid subscribers each grew 21%.
Type: intangibles ip
The intangible is the consumer brand, not patents: Item 1 says "For many, Duolingo has become synonymous with language learning" and that growth is "organic, primarily driven by word-of-mouth and brand buzz," while the IP section discloses only "two patent applications." Switching costs are ruled out by the filing's own "low switching costs" caption. The data-scale support is the filing's own characterisation, and the brand is admittedly damageable: an April 2025 AI memo "may have contributed to unfavorable publicity, adverse impacts on the Company's brand and social media presence, and a deceleration in user growth."
Leadership: clear leader
Leadership holds within consumer app-based language learning, anchored on one externally checkable claim in Item 1: the app "is also the top-grossing app globally in the Education category on both Google Play and the Apple App Store," with "over 250 total language courses to more than 130 million monthly active users" as of 2025-12-31. The broader "leading market position" claim is the filing's own characterisation, and no third-party share statistic appears anywhere in the 10-K, so a band is recorded and no percentage transcribed. The band does not extend to assessment, literacy, math, music, chess or offline learning, where the filing claims no position.
Pricing power: weak
Every mechanism is cost, mix or volume, never price. FY2025 gross margin fell to 72.2% from 72.8% on "increased AI costs used in features like Video Call" and an advertising mix shift; the Q1 FY2026 gain to 73.0% came from "continued reductions in per-unit AI costs," with margin guided to about 71.0% in Q2 and "approximately 69.0% by Q4." The filing concedes it "may not be able to fully offset such higher costs through price increases." Subscription revenue rose 44% to $873.4 million "primarily due to an increase in the average number of paid subscribers," and the cap is self-imposed: "We intentionally do not put our learning content behind a paywall."
Curated moat judgment grounded in the cited source. source: sec.gov
Layer: AI applications & software
A consumer AI application and net buyer of model inference. The filing ties its margin line directly to inference cost, attributing the FY2025 subscription gross-margin decline to "increased AI costs used in features like Video Call" and guiding margin to approximately 69.0% by Q4 FY2026 "as AI feature use expands," while the Q1 FY2026 beat came from "reductions in per-unit AI costs."
Derived from this company's mapped supply-chain edges and its industry layer.
The moat prior voted +0.13 on the long (~6-month) horizon at weight 0.20 — the swarm call there is bearish (score -0.31, conviction 32).
Editorial prior — subjective, not backtested. It is bounded (±0.6), low-confidence, and never votes on short/medium. See exactly how it voted →
Products & services with an editorial market-share band and technical barrier band — qualitative judgments tied to a cited basis, never invented figures.
| Product | Market share | Technical barrier |
|---|---|---|
| Duolingo App · Consumer language learning app (freemium) Flagship free mobile and web app; as of 2025-12-31 offered over 250 total language courses to more than 130 million monthly active users. Math, Music and Chess courses are integrated into the same app. | Leader Anchored on one externally checkable claim in Item 1: the app "is also the top-grossing app globally in the Education category on both Google Play and the Apple App Store," alongside "over 250 total language courses to more than 130 million monthly active users" as of 2025-12-31. No third-party share statistic exists anywhere in the 10-K, and the phrase "the world's most popular way to learn languages" plus the Competition section's "leading market position" claim are the filing's own characterisation. No percentage is recorded because none is sourceable. | Moderate Not deep: the filing concedes "Low barriers to entry allow start-up companies with lower costs and less pressure for profitability to compete with us," estimates "thousands of free mobile applications for language learning," and notes free products are "provided in at least 50 languages by private companies, universities and government agencies." It holds above low because displacement at this scale is hard: 133.1M Q4 MAUs, 52.7M Q4 DAUs (+30% year over year), DAU/MAU of 39.6%, and about 43 million daily active users "with a 7-day streak or longer." |
| Duolingo English Test · High-stakes online English proficiency assessment Online, on-demand, computer-adaptive English proficiency test launched in 2016, used for university admissions, work visas and job applications. | Unknown The filing contains no share statistic for high-stakes English assessment, so no positional band is supportable. What is sourced is acceptance breadth and revenue weight: "As of December 31, 2025, over 6,100 education programs around the world accept the Duolingo English Test results as proof of English proficiency for international student admissions, with over 5,300 of those being higher education programs. These include 24 of the top 25 undergraduate programs in the U.S. ranked by international enrollment, as well as all of the Ivy League, MIT, and Stanford." DET was "approximately 4.0% of our total revenue" for FY2025, and its revenue fell 6% year over year in Q1 FY2026, to $11.317 million from $11.986 million. | Moderate The 6,100-programme acceptance network is a genuine institutional adoption barrier, and the filing frames the incumbent alternative as slower — the most popular English proficiency tests are "still administered in physical testing centers and usually costing hundreds of dollars per test." It stays below deep because acceptance is revocable and has been revoked: "Certain schools, governments, and other institutions have in the past rescinded their acceptance of the Duolingo English Test," and brand damage "could also adversely affect educational institutions' willingness to accept" it. |
| Duolingo Max · Premium AI-powered subscription tier Premium tier launched in 2023, offered to a portion of the user base, adding AI-powered features and exercises (including Video Call) on top of Super Duolingo. | Unknown Max is not mentioned in the Q1 FY2026 shareholder letter and is described only in Item 1 of the 10-K: "Duolingo Max is a premium subscription tier launched in 2023 and offered to a portion of our user base and priced higher than Super Duolingo. It gives learners access to the existing features of Super Duolingo in addition to incremental features and exercises powered by AI technology." No share, subscriber count, revenue or attach rate is broken out, so no band can be assigned. | Low Sold into the same market the filing describes as having "low switching costs," and only "to a portion of our user base." Its differentiator is AI features the filing identifies as a cost problem rather than a barrier: the FY2025 subscription gross-margin decline reflects "increased AI costs used in features like Video Call," with margin guided to approximately 69.0% by Q4 FY2026. The Q1 letter also expands Video Call access down to Super subscribers, narrowing Max's differentiation. |
| Math, Music and Chess courses · Non-language learning subjects inside the Duolingo App Math, Music and Chess courses integrated into the flagship Duolingo App and sharing its technology infrastructure. | Unknown No share data of any kind exists in either cited document. Item 1 says only "Math, Music, and Chess courses are also integrated into the Duolingo App," and the Competition section lists "math, music, and chess learning products" among the categories Duolingo competes with while claiming no position in them. The Q1 FY2026 letter treats them as prospective: "investing in our next engines of growth, like chess, math, and music." No revenue, user or subscriber figure is broken out. | Low Nascent, and outside the language franchise on which the brand rests — the filing names these as a competitor category and asserts no leadership in them. The one disclosed advantage is operational rather than competitive: "Products across our platform, like our flagship Duolingo App (including our Math, Music, and Chess courses), and the Duolingo English Test, share a singular technology infrastructure, which allows us to leverage operational efficiencies in implementing new features for each." |
| Super Duolingo · Consumer subscription tier Subscription offering giving learners additional features on top of the free app; a family plan covering up to six subscribers launched in 2021. | Unknown The 10-K contains no share, rank, or competitive-position statement for a subscription tier. Only scale is disclosed: 12.2 million paid subscribers at 2025-12-31 (9.5 million a year earlier) and subscription revenue of $873.4 million, up 44%, "primarily due to an increase in the average number of paid subscribers." A subscriber count is not a share statistic, and the filing does not separate Super from Max. | Low The filing's own concessions apply directly — "low switching costs" and "Low barriers to entry" — and Super is sold against the company's free product: "We intentionally do not put our learning content behind a paywall. Anyone can download the Duolingo App, use it for as long as they like, and complete as many of our courses as they choose, all without paying anything." |
3 owns · 2 partial of 5 — a pattern, not a score
Duolingo owns the three consumer-side dimensions outright — the learner relationship, the first-party exercise corpus, and the daily learning session all sit inside its own product. It is partial where it depends on outside parties: the frontier generative layer is licensed from OpenAI, and its assessment is scored against the externally owned CEFR and IELTS yardsticks.
| Customer relationship | owns | Duolingo is pure direct-to-consumer: learners come to the brand directly and hold Duolingo accounts. The FY2025 10-K reports 133.1M MAUs (three months ended 2025-12-31 average) and 12.2M paid subscribers at period end, up from 9.5M, and says word-of-mouth growth lets it "focus our capital investments on product innovation and data analytics, rather than relying primarily on brand or performance marketing." Pricing is its own: "We determine the prices at which these subscriptions and features are sold." The app stores are a real dependency — 61.6%, 23.4% and 10.3% of FY2025 revenue processed by Apple, Google and Stripe, a "generally 15-30%" cut, and agreements "terminable... without cause with 30 days prior written notice" — but no partner sits between Duolingo and the learner. source: sec.gov |
|---|---|---|
| Proprietary data | owns | The training corpus is first-party learner telemetry generated inside Duolingo's own product by its own consumer users, with no enterprise tenant's data and no licensed-in corpus doing the work. The FY2025 10-K states: "Large data moat. With nearly 2 billion exercises completed every day on our platform, we believe we have built the world's largest collection of language-learning data", and separately that learners create "what we believe to be the world's largest learning dataset"; 52.7M DAUs for Q4 2025 confirm the volume. The filing adds that Duolingo does "not sell personal data to outside parties." One qualifier: its AI risk factors concede it may be "deemed to not have sufficient rights to the data we use to train our AI technologies", so not every training input is unambiguously its own, even though the load-bearing asset is. source: sec.gov |
| Evals | partial | Duolingo owns a real assessment instrument but not the standard it is measured against. The CIOL-validated paper calls CEFR "the leading international standard adopted by governments, educational institutions, and assessment providers" and "the standard that Duolingo uses to reference all of our learning and assessment products, including the Duolingo English Test." Legitimacy is externally conferred: the alignment was "validated externally by ACS Ventures, LLC, an independent psychometric company", and the methodology "was reviewed and validated by the Chartered Institute of Linguists (CIOL)." Scores are anchored to IELTS via "3,586 test takers." The test has its own adaptive scale and "over 6,100 education programs" accept it, but it is small and shrinking: $42,006K of 2025 revenue vs $45,640K in 2024, 4.05% of the $1,037,589K total. source: ciol.org.uk |
| Workflow | owns | The day's work — the learning session — happens entirely inside Duolingo's product, with no external system of record to hand off to. The FY2025 10-K reports roughly 52.7M DAUs for the three months ended 2025-12-31 versus 40.5M, "representing an increase of 30%", a DAU/MAU ratio that "increased to 39.6% from 34.7% a year ago", and "about 43 million daily active users with a 7-day streak or longer, and about 15 million daily active users with a 365-day streak or longer." Adjacent subjects and the assessment run on one stack: "Products across our platform, like our flagship Duolingo App (including our Math, Music, and Chess courses), and the Duolingo English Test, share a singular technology infrastructure." A 39.6% ratio means roughly 60% of monthly learners are not daily, and the learner's ultimate goal is consummated outside the app. source: sec.gov |
| Domain-specific model | partial | Duolingo owns a genuine domain-specific model but rents the frontier generative layer. The FY2025 10-K describes "our machine learning tools that evaluate every learner's answer to every exercise every day and learn to predict the probability that any learner will answer any given exercise correctly" — the model Duolingo publicly calls Birdbrain, used "to figure out which exercises in a particular lesson are going to be the best match for a learner's level of knowledge." The generative features are third-party: "Duolingo Max Uses OpenAI's GPT-4 For New Learning Features", with Video Call and Roleplay "powered by the newest, most powerful generative AI technology." The 10-K warns that if model providers "terminate their relationship with us... our business will be harmed", and gross margin fell to 72.2% from 72.8%. source: blog.duolingo.com |
Duolingo's fiscal 2025 annual report describes machine learning that evaluates every learner's answer to every exercise every day and adaptively builds each lesson, putting AI in the core daily loop for the 133.1 million monthly and 52.7 million daily active users reported for the fourth quarter. Roleplay, Explain My Answer, DuoRadio and Video Call are live generative features, and the company credits AI with generating course content materially faster across 250-plus courses. The cost is visible in the accounts: gross margin fell to 72.2% from 72.8%, attributed partly to increased AI costs in features like Video Call. Duolingo Max, the AI-heavy tier, is still offered to only a portion of the user base, and about 9% of monthly active users were paid subscribers at year-end 2025. source: sec.gov
A paired axis, not a sixth band: it is never counted in the pattern above and the two are never averaged into one score.
Scouted against the condition: a company that simultaneously owns the customer relationship, the data, the evals, the workflow, and a domain-specific model. Weightless — this profile never affects a signal, and it is not a forecast of returns.
These charts plot Duolingo's reported income statement, cash flow, and balance sheet from its SEC filings through 2026-08-06. Every figure is as-filed XBRL — none of it is an estimate.
Over the reported window, revenue grew 542% to $1.0B (FY2020→FY2025); net income at $414.1M in FY2025.
Analyst consensus — third-party estimates from Yahoo Finance, as of 2026-10-26. Not SEC filings and not a TradingPilot forecast. source: finance.yahoo.com
| Period | EPS (est.) | Revenue (est.) | YoY |
|---|---|---|---|
| Q/E Sep 2026 | USD 1.58 (USD 1.53–USD 1.63) · 4 | USD 303098450.00 (USD 301953000.00–USD 307168270.00) · 19 | +12% |
| FY 2026 | USD 6.61 (USD 6.44–USD 6.93) · 7 | USD 1.2B (USD 1.2B–USD 1.2B) · 22 | +16% |
Each figure shows the consensus mean, its (low–high) range where available, and · the number of analysts behind that estimate.
Next report ~2026-11-03.
Our model leans Bearish on the stock over the medium horizon — a market-direction call, not an earnings forecast. See the Signal tab.
Some recent figures are from Yahoo Finance where the latest SEC filing hasn’t posted yet — FX-converted to USD and reconciled against SEC-filed periods.
Comparing against peers…
| Institution | Shares | Value | Δ shares QoQ | % of 13F | % shares out |
|---|---|---|---|---|---|
| BlackRock Passive / index | 3,867,080 | $444.8M | -119,386 | 0.0% | — |
| State Street Passive / index | 1,229,391 | $141.4M | 45,747 | 0.0% | — |
| FMR (Fidelity) Passive / index | 1,131,136 | $130.1M | 37,797 | 0.0% | — |
| Renaissance Technologies Guru | 211,526 | $24.3M | -392,280 | 0.0% | — |
TradingPilot-computed columns (% of 13F, % shares out) are derived from as-filed 13F values; only name, shares and value are as-filed.
Google News: Duolingo · 2026-07-14 · earnings
Duolingo shares fell sharply after the CEO flagged slower growth ahead.
2026-10-29 PR Newswire Tech · Duolingo, Inc. Sued for Securities Law Violations - Contact the DJS Law Group to Discuss Your Rights - DUOL
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2026-10-29 PR Newswire Aerospace/Defense · INVESTOR NOTICE: RGRD Law Files Class Action Lawsuit Against Duolingo, Inc. and Announces Opportunity for Investors with Substantial Losses to Lead Class Action Lawsuit - DUOL
2026-10-27 PR Newswire Tech · Duolingo, Inc. Investors: December 7, 2026, Deadline in Securities Fraud Class Action Lawsuit - Kessler Topaz Meltzer & Check, LLP
2026-10-27 Yahoo Finance: DUOL · Duolingo, Inc. (DUOL) Expected to Beat Earnings Estimates: Should You Buy?
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2026-10-26 Yahoo Finance: DUOL · Duolingo, Inc. (DUOL) Stock Dips While Market Gains: Key Facts
2026-10-24 PR Newswire Tech · Duolingo, Inc. Notice of December 7, 2026 Application Deadline for Class Action Lawsuit - Contact Lewis Kahn, Esq. at Kahn Swick & Foti, LLC, Before Application Deadline
2026-10-23 Yahoo Finance: DUOL · Here is What to Know Beyond Why Duolingo, Inc. (DUOL) is a Trending Stock
2026-10-21 PR Newswire Tech · Duolingo, Inc. Class Action Lawsuit Seeks Recovery for Investors; December 7, 2026 Deadline- Contact Kessler Topaz Meltzer & Check, LLP
2026-10-21 Yahoo Finance: DUOL · Duolingo's Expanding Marketing Reach Fuels Long-Term Growth Prospects
2026-10-20 Yahoo Finance: DUOL · Duolingo, Inc. (DUOL) Stock Sinks As Market Gains: What You Should Know
2026-10-20 PR Newswire Tech · What's Next for Duolingo, Inc. Shareholders After 25.49% Stock Drop? Glancy Prongay Wolke & Rotter LLP Explains Securities Fraud Class Action Lead Plaintiff Deadline
2026-10-17 PR Newswire Tech · Duolingo Shareholder Alert: ClaimsFiler Reminds Investors With Losses In Excess Of $100,000 Of Lead Plaintiff Deadline In Class Action Lawsuit Against Duolingo, Inc. - DUOL
2026-10-16 PR Newswire Tech · Duolingo, Inc. Class Action Lawsuit: Investors Face December 7, 2026, Deadline
2026-10-15 PR Newswire Financial Services · INVESTOR ALERT: Pomerantz Law Firm Reminds Investors with Losses on their Investment in Duolingo, Inc. of Class Action Lawsuit and Upcoming Deadlines - DUOL
2026-10-15 PR Newswire Tech · DUOL Investors Have Opportunity to Lead Duolingo, Inc. Securities Fraud Lawsuit
2026-10-13 PR Newswire Tech · DUOL INVESTOR DEADLINE: Robbins Geller Rudman & Dowd LLP Files Class Action Lawsuit Against Duolingo, Inc. and Announces Opportunity for Investors with Substantial Losses to Lead Class Action Lawsuit
2026-10-12 PR Newswire Financial Services · Bronstein, Gewirtz & Grossman LLC Urges Duolingo, Inc. Investors to Act: Class Action Filed Alleging Investor Harm
2026-10-11 PR Newswire Tech · Duolingo, Inc. Class Action Lawsuit Seeks Recovery for Investors; December 7, 2026, Deadline
Impact = company-prominence tier (High/Medium auto-assigned by graph centrality/size; Low only on curated minor events), not a magnitude forecast.
| Date | Type | Event | Impact |
|---|---|---|---|
| 2026-11-05 | earnings | Duolingo earnings (estimated) — Date not yet announced — estimated from EDGAR filing cadence (last periodic filing + 91/365 days); confirm via IR. estimated | Medium |
| Date | Event | Impact | Outcome |
|---|---|---|---|
| 2026-08-05 | Duolingo earnings confirmed | Medium | EPS miss · -9.4% |
| 2026-05-04 | Duolingo earnings confirmed | Medium | EPS miss · +1.0% |