Duolingo Q1 EPS Tops, Cuts Guidance to $1.205B as Margins Slip
Duolingo posted Q1 adjusted EPS of $0.89, topping estimates by $0.13, and revenue of $292 million, surpassing forecasts by $3 million. It trimmed full-year revenue guidance to $1.205 billion, projected gross margins falling to 69% and reported 21% growth in daily users.
1. Q1 Financial Results
Duolingo delivered adjusted EPS of $0.89 in Q1, beating the consensus by $0.13 per share, and reported revenue of $292 million, exceeding forecasts by $3 million and representing 27% year-on-year growth.
2. Revenue Guidance
The company lowered its full-year 2026 revenue outlook to $1.205 billion versus $1.21 billion expected, and forecast Q2 revenue of $295.5 million, slightly above the $294.2 million consensus.
3. Margin Outlook
Duolingo anticipates gross margins will narrow to about 69.0% by Q4, down from 73.0% in Q1, driven by expanded use of AI features, and projects a full-year adjusted EBITDA margin of 25.7%.
4. User Growth and Cash Flow
Daily active users rose 21% year-over-year to 56.5 million, paid subscribers increased 21% to 12.5 million, and the company generated $147.8 million in free cash flow, a 50.6% margin.