Duolingo Cuts 2026 Revenue Forecast, Launches $400M Buyback After DAU Surge
Duolingo’s Q4 sales rose 35% to $282.9 million, daily active users climbed 30% to 52.7 million and 2025 bookings topped $1 billion. Management cut 2026 revenue guidance to $1.197–$1.221 billion, announced a $400 million share buyback and prioritized free-learner enhancements, triggering price-target cuts to $100.
1. Q4 Financial Results
Duolingo reported Q4 revenue of $282.9 million, up 35% year-over-year, with total bookings of $336.8 million (up 24%) and 2025 bookings exceeding $1 billion. Daily active users grew 30% to 52.7 million, paid subscribers rose 28% to 12.2 million, and adjusted EBITDA margin expanded nearly five points to 29.8%.
2. Guidance and Analyst Reactions
For fiscal 2026, Duolingo expects revenue of $1.197–$1.221 billion versus a $1.264 billion consensus and Q1 sales of $288.5 million versus $290.5 million consensus, with adjusted EBITDA guidance below estimates. Morgan Stanley cut its rating to Equal Weight and set a $100 target, while Evercore ISI downgraded to In-Line with a $114 target.
3. Strategy Shift and User Growth
Management is prioritizing enhancements to the free-learner experience in languages, chess, math and music to drive word-of-mouth growth, accepting moderated near-term monetization. Leadership projects this approach will support a medium-term goal of 100 million daily active users and build a more durable long-term business.
4. $400M Share Repurchase Program
The board authorized a $400 million share buyback to return capital and offset dilution while maintaining flexibility for strategic investments, as shares trade near their 52-week low.