Duolingo (DUOL), users up 20%... stock 'plummets' amid slowing growth

▲ Duolingo (DUOL)/AI-generated image

Duolingo (Duolingo, DUOL) stock plunged 12% on disappointing revenue forecasts, falling to around $120.

FX Leaders reported on August 5 (local time) that Duolingo presented a third-quarter revenue forecast of $302 million. This fell short of the market's forecast of $304 million, highlighting concerns about slowing growth rather than robust user increase. The stock fell by up to 12% during trading, and its year-to-date decline expanded to 23%.

Second-quarter earnings exceeded market expectations. Revenue was recorded at $298.5 million, an 18% increase year-over-year. This also surpassed Wall Street's forecast of $295.6 million.

Daily active users increased by 23% year-over-year to 58.7 million. This figure exceeded the market's expectation of 57.4 million. Product improvements, revised marketing strategies, and learning streak recovery events drove the user increase.

CEO Luis von Ahn projected that the daily active user growth rate would exceed 20% for the remainder of the year. Duolingo also maintained its long-term goal of securing 100 million daily active users by 2028.

Duolingo is extending its free trial period to counter AI-based competing services. This strategy aims to increase the conversion rate to its paid service, Super Duolingo, without compromising the user experience for free users.

[Article Summary]

-Duolingo's stock plunged 12% to around $120 as its Q3 revenue forecast fell short of market expectations.

-Q2 revenue increased 18% to $298.5 million, and daily active users grew 23% to 58.7 million.

-Duolingo aims to expand free trials to increase paid subscribers and achieve 100 million users by 2028.

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