Duolingo Registered (A) shares surged nearly 24% in pre-market trading to $428.63 following a robust quarterly earnings report that exceeded expectations. The language-learning platform reported bookings 9% above forecasts, with earnings per share reaching $0.91 compared to the anticipated $0.58. Revenue also outperformed, hitting $252.3 million against projections of $240.73 million. Driving this growth was a 36% year-over-year increase in paying subscribers and a 6% rise in average revenue per user. Notably, the company’s new chess feature has already attracted over 1 million daily active users, while its adjusted EBITDA margin stood at a healthy 41%.
Strategic Moves and Mixed Analyst Sentiment
Alongside its earnings triumph, Duolingo announced the acquisition of a London-based music-gaming firm’s team, adding 23 specialists in game design and monetization to bolster its expanding music-learning segment. Despite the bullish momentum, analyst opinions remain divided. One firm maintained a "Market Perform" rating, citing valuation concerns, while another reaffirmed a "Buy" rating with a $460 price target, praising subscriber growth and margin improvements. The stock’s 108% 12-month gain before the earnings release underscores its dominant position in mobile education, supported by a $15.6 billion market cap and 39% revenue growth.
