Shares of Duolingo, Inc. (DUOL) plummeted 5.35% in pre-market trading on Monday, despite reporting strong fourth-quarter results. The language-learning app maker's stock faced pressure as investors reacted to weaker-than-expected EBITDA guidance for the upcoming quarter.
Duolingo reported impressive Q4 revenues of $209.6 million, marking a 38.8% year-over-year increase and surpassing analysts' expectations by 2.1%. The company also showcased robust user growth, with its user base expanding by 32% year-over-year to reach 116.7 million users. However, the positive revenue and user growth were overshadowed by concerns about future profitability.
The market's negative reaction appears to stem from Duolingo's EBITDA guidance for the next quarter, which fell short of analysts' expectations. This outlook has raised questions about the company's ability to translate its strong top-line growth into improved profitability in the near term. As investors digest this mixed financial picture, Duolingo's stock faces downward pressure in early trading.
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