Duolingo stock soars over 30% on strong user growth, monetization plans

Duolingo (DUOL) stock rocketed 31% higher after the company reported a surge in daily active users and raised its financial guidance.

In the third quarter, Duolingo reported that its daily active users (DAUs) rose 29% year over year to 64.9 million. Paid subscribers for the language learning platform grew 14% annually to 13.1 million.

Investors also cheered management’s note that the company will be “gradually leaning more into monetization in ways that preserve the quality of our free experience.”

For Q3, Duolingo also beat Wall Street estimates on the top and bottom lines. Revenue came in at $309 million, up 12% year over year, versus analyst estimates of $303 million, according to S&P Global Market Intelligence. Earnings per share of $0.58 also surpassed estimates of $0.56.

The company is eyeing even stronger user growth as it aims for 1 billion users. Duolingo said its operating expenses increased 24% year over year. Those expenses included $11.4 million that the company set aside for a company-wide performance bonus for employees if it achieves DAU growth of 25% or greater in Q4.

Duolingo raised its outlook across the board. For 2026, revenue is expected at $1.22 billion, ahead of the Street’s forecast of $1.2 billion.

“We expect to finish 2026 at the high end of both the 10% to 12% bookings growth and 15% to 18% revenue growth targets we set at the start of the year,” the company stated. “We expect full-year Adjusted EBITDA of $323 million, or a 26.5% margin, up $3 million from our previous guidance, and $21 million above the midpoint of our original 2026 guidance provided in February.”

The quarter and market reaction on Wednesday went a long way toward patching up what’s been a rough year for the stock. Year to date, Duolingo stock remains down 2%, versus a 12% gain for the S&P 500 (^GSPC).

“In our view, the quarter begins to address the primary investor concern following second-quarter results: whether accelerating engagement can translate into stronger monetization,” William Blair analysts led by Ralph Schackart wrote in a note. “DAU growth accelerated for a second consecutive quarter, subscription bookings reaccelerated meaningfully, and management expects paid-subscriber growth to bottom in a couple of quarters as the stronger bookings trajectory flows through revenue.”