Duolingo Inc (NASDAQ:DUOL) shares reported better-than-expected quarterly earnings, but its shares fell nearly 15% as it issued guidance that fell short of Wall Street estimates.
For the fourth quarter of 2025, Duolingo reported revenue of $282.9 million, a 35% increase year-over-year and slightly above the $275.9 million analysts had anticipated.
Earnings per share of $0.91, topping estimates of $0.78.
Adjusted EBITDA came in at $84.35 million, exceeding estimates of $78.24 million, while the company posted an operating margin of 15.4%, up from 6.6% in the same period last year.
The company reported 133.1 million monthly active users, up 16.4 million from a year earlier, with daily active users rising 30% to 52.7 million and paid subscribers reaching 12.2 million, a 28% increase year-over-year.
Free cash flow margin improved to 33.1% from 28.5% in the prior quarter, and net income for Q4 was $42 million.
“We closed 2025 with strong momentum, surpassing 50 million daily active users and generating more than $1 billion in bookings for the first time,” Duolingo CEO Luis von Ahn said in a statement.
Despite the strong Q4 results, Duolingo’s guidance weighed on investor sentiment. Revenue guidance for the first quarter of 2026 was set at $288.5 million at the midpoint, below the $291.2 million expected by analysts.
For the full year, the company forecast adjusted EBITDA of $302 million, significantly under the $385 million anticipated.