Duolingo Shares Jump 34% After Strong Third-Quarter Results
Duolingo reported a 29% increase in daily active users and raised its full-year bookings outlook to $1.3 billion, driving a 34% share price increase.
Duolingo saw its share price rise approximately 34% in early trading on November 4, 2026, following the release of strong third-quarter financial results. The company reported revenue of $309 million, a 14% year-over-year increase, and daily active users grew 29% to 64.9 million. This growth marks the second consecutive quarter of acceleration for the platform, which is currently expanding into math and chess to become a general learning hub.
Subscription bookings rose 16% to $278.4 million, prompting management to raise the full-year bookings outlook to approximately $1.3 billion. However, GAAP operating income fell to $24.2 million from $35.2 million. This decline resulted from a 24% increase in operating expenses, driven by higher research spending and a companywide bonus tied to fourth-quarter user growth targets. Earnings per share of $0.54 slightly missed the $0.57 forecast.
Analysts highlighted the company's use of artificial intelligence to drive efficiency. Duolingo reported that experiment volume rose approximately 90% year-over-year while headcount grew only 10%, allowing product managers to ship A/B tests without engineers. Management expects 2027 experiment volume to be multiples of 2026 levels. In response to the results, Evercore ISI raised its price target to $210 and Goldman Sachs increased its target to $140. The company also repurchased $82 million of stock through October 30 as part of a $400 million program.
