Duolingo, Inc. (DUOL) shares tumbled 11.33% in after-hours trading on Wednesday, as the company's third-quarter revenue forecast fell short of Wall Street expectations, dampening enthusiasm from a strong second-quarter performance.
Duolingo reported Q2 revenue of $298.5 million, beating analysts' estimates of $295.6 million, and adjusted earnings per share of $0.66 versus the $0.60 consensus. Daily active users (DAU) grew 23% year-over-year to 58.7 million, surpassing Visible Alpha estimates. However, the company projected Q3 revenue of approximately $302 million, below the $304 million consensus, and forecast Q3 bookings of $307 million, also missing the $309.5 million estimate.
The cautious guidance signals that Duolingo is prioritizing user growth over near-term monetization, as management noted it is enabling teams to focus on driving DAU rather than immediate revenue conversion. While the company reaffirmed its full-year revenue outlook of $1.21 billion, the softer-than-expected Q3 forecast triggered a sharp sell-off in extended trading.
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