Duolingo, Inc. (DUOL)

Price$155.25Cached quoteAs of 2026-09-04 16:23 UTC

AI: Fair-priced

Price checkThe shares look fairly priced because strong cash generation offsets slowing growth and heavy share-based pay.

At the observed quote, Duolingo is valued at roughly five times expected 2026 revenue and about eighteen times recent free cash flow, meaning cash left after running and investing in the business. That is reasonable for a profitable company still growing quickly, but not obviously cheap. Reported 2025 earnings make the shares appear cheaper, yet those earnings included an unusually large tax-related benefit. After treating stock-based employee pay as a real ownership cost, the effective cash valuation rises toward the high-twenties multiple range.

Big pictureDuolingo has moved from losses to durable cash profits while revenue growth is cooling.

Revenue rose from $162 million in 2020 to $1.04 billion in 2025, about 45% annualized growth, while operating income improved from a $16 million loss to a $136 million profit. In 2025, operating cash flow reached $388 million and capital spending was only $18 million. The first half of 2026 produced about $232 million of free cash flow. However, second-quarter revenue grew about 18% from a year earlier, slower than the first quarter, so continued premium growth cannot be assumed.

Business strengthA debt-light balance sheet and recurring subscriptions give Duolingo unusually strong downside protection.

At June 2026, Duolingo held about $1.18 billion of cash against $664 million of total liabilities, with no debt reported in the supplied history. Current assets were $1.57 billion versus $578 million of current liabilities, providing substantial financial flexibility. Gross profit was about 73% of second-quarter revenue. Capital allocation is less impressive for outside owners: first-half buybacks totaled about $70 million, while stock-based compensation was about $73 million, meaning much of the repurchase spending effectively offset employee-share dilution rather than shrinking ownership materially.

What could change the storyFaster paid-user growth could justify more upside, while weaker bookings would expose the valuation.

The bull case requires Duolingo to sustain roughly 20% or better revenue growth, expand cash profitability, and let stock-based compensation grow more slowly than the business. Under the company outlook reviewed during research, 2026 revenue was around $1.21 billion with approximately $320 million of adjusted operating profit before interest, taxes, depreciation and similar items. The bear case is continued growth deceleration toward the mid-teens while employee-share costs remain near their recent share of revenue. At roughly five times expected revenue, several more years of profitable growth are already assumed.

AI: News

Second-quarter growth slowedRevenue kept rising, but slower growth made future expectations more important than the latest profit improvement.

In its second-quarter 2026 reporting, Duolingo posted $298.5 million of revenue, about 18% above the prior year, $33.9 million of operating income and roughly $81 million of free cash flow. First-quarter revenue had grown about 27%, making the slowdown notable. Because the valuation still assumes substantial future expansion, changes in the growth rate can move investor estimates significantly. Any stock move around the report should be viewed as an association with the news, not proof that earnings alone caused it.

Preliminary user data surfacedA surprise user-data update shifted attention toward engagement trends before the next scheduled earnings report.

In mid-August 2026, preliminary Duolingo user information appeared outside the normal quarterly reporting cycle and drew investor attention to near-term engagement trends. Daily user activity matters because stronger engagement can support paid subscriptions and future bookings. The update was especially important after second-quarter revenue growth had moderated to about 18%. Contemporary coverage associated the disclosure with substantial share-price volatility, although timing alone cannot establish that this single development caused the entire market move.

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Revenue

2020

2021

2022

2023

2024

2025

Net income

2020

2021

2022

2023

2024

2025

Free cash flow

2020

2021

2022

2023

2024

2025

Total cash / debt

CashTotal debt

2020

2021

2022

2023

2024

2025

Financial statements

	2025	2024	2023	2022	2021	2020
Revenue	$1.04B	$748.0M	$531.1M	$369.5M	$250.8M	$161.7M
Gross profit	$749.5M	$544.4M	$389.0M	$270.1M	$181.6M	$115.7M
Gross margin	72.23%	72.78%	73.24%	73.09%	72.41%	71.56%
Research & development	$306.3M	$235.3M	$194.4M	$150.4M	$103.8M	$53.0M
Operating expenses	$613.9M	$481.8M	$402.3M	$335.3M	$241.6M	$131.7M
Operating income	$135.6M	$62.6M	−$13.3M	−$65.2M	−$60.0M	−$16.0M
Operating margin	13.07%	8.37%	−2.50%	−17.64%	−23.93%	−9.90%
EBITDA	$150.0M	$73.4M	−$6.2M	−$60.3M	−$57.3M	−$13.8M
EBITDA margin	14.45%	9.82%	−1.16%	−16.33%	−22.84%	−8.51%
Net income	$414.1M	$88.6M	$16.1M	−$59.6M	−$60.1M	−$15.8M
Net profit margin	39.91%	11.84%	3.03%	−16.12%	−23.98%	−9.76%
Basic EPSper basic share	$9.05	$2.04	$0.39	-$1.51	-$2.57	-$1.24
Diluted EPSper diluted share	$8.57	$1.88	$0.35	-$1.51	-$2.57	-$1.24

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

11.96%of listed shares

BAILLIE GIFFORD & CO4.82M shares · Jun 30, 2026

View holders

Top 20 reported holders of DUOL
Holder	% owned
BAILLIE GIFFORD & CO	11.96%4.82M shares
BlackRock, Inc.	9.59%3.87M shares
AQR CAPITAL MANAGEMENT LLC	5.78%2.33M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.33%1.75M shares
TWO SIGMA INVESTMENTS, LP	4.04%1.63M shares
FIL Ltd	3.98%1.6M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	3.98%1.6M shares
FEDERATED HERMES, INC.	3.40%1.37M shares
STATE OF MICHIGAN RETIREMENT SYSTEM	3.24%1.31M shares
STATE STREET CORP	3.05%1.23M shares
BANK OF AMERICA CORP /DE/	2.95%1.19M shares
FMR LLC	2.81%1.13M shares
UBS Group AG	2.54%1.03M shares
GEODE CAPITAL MANAGEMENT, LLC	1.91%769.07K shares
GOLDMAN SACHS GROUP INC	1.55%624.53K shares
Quinn Opportunity Partners LLC	1.38%555.66K shares
MORGAN STANLEY	1.26%506.17K shares
GILDER GAGNON HOWE & CO LLC	1.25%502.34K shares
Whale Rock Capital Management LLC	1.17%471.76K shares
Amundi	1.17%471.29K shares

Percentages use 40.33M shares of this listed class outstanding on Jun 30, 2026.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys1$498.8K disclosed value

Sells (SEC code S)676$349.58M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 18, 2026Form 4 · 10b5-1	Chen Stephen C.General Counsel	SellClass A Common Stock	700	$114.22	$80.0K	52.8K
May 18, 2026Form 4 · 10b5-1	Chen Stephen C.General Counsel	SellClass A Common Stock	1.3K	$113.27	$144.6K	53.5K
May 18, 2026Form 4 · 10b5-1	Glance NatalieChief Engineering Officer	SellClass A Common Stock	1.3K	$114.19	$148.4K	173.4K
May 18, 2026Form 4 · 10b5-1	Glance NatalieChief Engineering Officer	SellClass A Common Stock	2.1K	$113.21	$233.2K	174.7K
May 15, 2026Form 4 · 10b5-1	Chen Stephen C.General Counsel	SellClass A Common Stock	820	$112.16	$92.0K	54.8K