Duolingo shares jump 26%, daily active users grow 29%

Duolingo (DUOL) said on Nov. 3 that third-quarter revenue rose 14% from a year earlier to $309.0 million, in line with the $309.3 million consensus estimate, while daily active users grew 29%.

Shares rose 25.8% in regular trading as of 3:59 p.m. ET on Nov. 4, from a regular-session close of $128.00.

Bookings rose 12% to $316.1 million, and subscription bookings grew 16%, the company said in a regulatory filing.

Here's how the company did:

• Revenue: $309.0 million vs. $271.7 million a year earlier, in line with $309.3 million expected
• Total bookings: $316.1 million vs. $281.9 million a year earlier
• Diluted EPS: $0.54 vs. $5.95 a year earlier, when a tax benefit lifted results
• Adjusted EBITDA: $78.7 million vs. $80.0 million a year earlier

Revenue has risen in each of the last three quarters, from $271.7 million in the third quarter of 2025 to $298.5 million in the second quarter of 2026, according to its SEC filings.

The company said revenue growth moderated from the second quarter because subscription revenue is recognized over the subscription term, which reflects slower prior-period bookings growth. It expects revenue growth to follow bookings as bookings growth reaccelerates.

Users and product changes

Daily active users rose 29% to 64.9 million from 50.5 million a year earlier. Paid subscribers reached 13.1 million at period end, up 14% from 11.5 million.

Partnerships with the mobile games Brawl Stars and Eggy Party brought the company millions of new and returning users, it said.

CEO Luis von Ahn said the company's strategy is paying off. "We had a great Q3, with DAU growth accelerating to 29% year over year, and all of our key financial metrics coming in ahead of expectations," he said in the release.

The company said it will stop selling new Duolingo Max subscriptions in November and move existing individual subscribers to a Super family plan at the same price. It said the bookings effect should be minimal and is reflected in its fourth-quarter guidance.

Guidance

The company is raising its full-year guidance across all key financial metrics. It expects full-year bookings of $1.30 billion, up 12%, and revenue of $1.22 billion, up 18%.

It expects full-year adjusted EBITDA of $323 million, or a 26.5% margin, which is $3 million above its previous guidance. It expects to finish 2026 at the high end of its 10% to 12% bookings growth target and its 15% to 18% revenue growth target.

For the fourth quarter, the company expects bookings of $382 million, up 13%, and revenue of $322 million, up 14%. It expects adjusted EBITDA of $84 million, or a 26.1% margin, and gross margin of 72.0%.

Costs and capital returns

GAAP operating expenses grew $39.2 million, or 24%, from a year earlier. That figure includes an $11.4 million accrual for a company-wide performance bonus tied to a fourth-quarter DAU growth goal of 25% or greater.

Net income was $27.2 million, an 8.8% margin, down from $292.2 million a year earlier. That year-earlier result included a $222.7 million tax benefit from releasing a tax valuation allowance.

Free cash flow was $75.3 million. Cash and short-term investments reached $1.4 billion at quarter end.

The company repurchased $6.4 million, or 48,419 shares, in the third quarter under a $400 million program announced in February. Through Oct. 30, 2026, it had repurchased 781,439 shares for $82.0 million.