Duolingo, Inc. (DUOL) shares tumbled 10.94% in extended trading, erasing gains after the language-learning platform issued a third-quarter revenue forecast that fell short of Wall Street expectations, dampening enthusiasm from an otherwise strong quarterly performance.
The company reported second-quarter revenue of $298.5 million, surpassing analysts' estimates of $295.6 million, while adjusted earnings per share of $0.66 also beat the $0.60 consensus. Daily active users grew 23% year-over-year to 58.7 million, signaling robust engagement. However, Duolingo guided for third-quarter revenue of approximately $302 million, below the $304 million consensus estimate, and forecast bookings of $307 million, missing the $309.5 million projection.
The cautious outlook reflects the company's deliberate strategy to prioritize user growth and daily active user expansion over near-term monetization. Management indicated it is enabling teams to focus on driving DAU toward a long-term target of 100 million, rather than maximizing immediate revenue conversion. While the company reaffirmed its full-year revenue forecast, the softer-than-expected Q3 guidance triggered a sharp sell-off in the post-market session.
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