Duolingo Inc. Shares Drop After Low Third-Quarter Revenue Forecast

Duolingo Inc. saw its shares drop more than 10% in extended trading after reporting second-quarter results on August 5, 2026. Although the company surpassed analyst expectations with $298.5 million in revenue, an 18% increase, its outlook for the third quarter dampened investor sentiment. The company forecasted revenue of approximately $302 million, falling short of the $304 million estimate predicted by Wall Street.

Despite the revenue dip, the company reported a 23% rise in daily active users, which reached 58.7 million. Chief Executive Officer Luis von Ahn projected that daily active user growth will remain above 20% for the rest of the year. This growth is supported by a strategic shift to prioritize user engagement over immediate monetization.

Chief Financial Officer Gillian Munson stated that the company is focusing on reaching a goal of 100 million daily active users. Additionally, Duolingo Inc. noted that its gross margins have improved through the implementation of open-source AI models to reduce operational costs.