Duolingo Raises Full-Year Outlook as Shares Gain After Hours

what happened

According to Dow Jones Newswires, Duolingo shares climbed 11% to $142 in after-hours trading on Tuesday, though the stock was still down 27% for the year through the close. The company now expects full-year revenue of $1.22 billion, up from its earlier $1.21 billion, and bookings of $1.3 billion, up from $1.29 billion.

Third-quarter revenue rose 14% to $309 million, beating the $303.2 million analysts had forecast. Daily active users grew 29% to 64.9 million, above the 62.4 million estimate, while paid subscribers reached 13.1 million, slightly below the expected 13.2 million. Profit, however, fell to $27.2 million from $292.2 million a year earlier.

Chief Executive Luis von Ahn said: "At the beginning of the year, we laid out a plan to prioritize teaching better and user growth, knowing it would take time to see results. We're now seeing the user acceleration we hoped for."

why it matters

The market focus is on the signal that user growth is accelerating, not only on revenue. Duolingo expects daily active user growth this quarter to be similar to the third quarter, and its fourth-quarter sales outlook of $322 million is above the $314.7 million analysts projected. Investors will watch whether this shifts sentiment after the stock's decline earlier this year.

market impact

Duolingo shares: higher guidance and stronger user growth support the stock

• ▲Duolingo shares pressure up — raised full-year outlook and accelerating user growth

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