Duolingo's (NASDAQ:DUOL) Q4 CY2025 Sales Top Estimates But Stock Drops 22.5%

Language-learning app Duolingo (NASDAQ:DUOL) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 35% year on year to $282.9 million. On the other hand, next quarter’s revenue guidance of $288.5 million was less impressive, coming in 0.9% below analysts’ estimates.

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Company Overview

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Duolingo grew its sales at an incredible 41.1% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Duolingo reported wonderful year-on-year revenue growth of 35%, and its $282.9 million of revenue exceeded Wall Street’s estimates by 2.5%. Company management is currently guiding for a 25% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 21.4% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and implies the market sees success for its products and services.

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Monthly Active Users

User Growth

As a subscription-based app, Duolingo generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.

Over the last two years, Duolingo’s monthly active users, a key performance metric for the company, increased by 677% annually to 133.1 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

In Q4, Duolingo added 16.4 million monthly active users, leading to 14.1% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.

Revenue Per User

Average revenue per user (ARPU) is a critical metric to track because it measures how much the average user spends. ARPU is also a key indicator of how valuable its users are (and can be over time).

Duolingo’s ARPU fell over the last two years, averaging 26.8% annual declines. This isn’t great, but the increase in monthly active users is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Duolingo tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether users can continue growing at the current pace.

This quarter, Duolingo’s ARPU clocked in at $2.13. It grew by 18.4% year on year, faster than its monthly active users.

Key Takeaways from Duolingo’s Q4 Results

We were impressed by how significantly Duolingo blew past analysts’ EBITDA expectations this quarter. We were also glad it expanded its number of users. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 22.5% to $91.61 immediately after reporting.

Duolingo’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).