Duolingo stock is falling off a cliff, continuing a dramatic collapse. You can’t just blame that ‘AI first’ memo

Investors are dumping Duolingo after it released underwhelming guidance for 2026. Shares have seen their value slashed since their high point in May 2025.

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It’s a horrible day for investors in Duolingo. Shares of the language learning app with the green owl mascot are falling off a cliff after the company reported its fourth quarter results.

Yet it’s not the results themselves that are causing investors to dump the stock. Rather, it’s more about forward guidance the company has issued. Here’s what you need to know.

Duolingo’s Q4 by the numbers

Yesterday, after market close, Duolingo (Nasdaq: DUOL) reported its fourth quarter 2025 results. On the surface, many of the company’s most critical metrics saw decent gains for the quarter, including:

Daily Active Users: 52.7 million (up 30% year-over-year)

Paid Subscribers: 12.2 million (up 28% year-over-year)

Revenue: $282.9 million (up 35% year-over-year) 

Total bookings: $336.8 million (up 24% year-over-year) 

Net income: $42 million

The company also reported its full-year 2025 financials, revealing that for the first time in its history, it crossed the $1 billion revenue mark for a fiscal year.

In 2025, Duolingo recorded $1.03 billion in revenue, along with total bookings of $1.15 billion, the latter figure representing 33% year-over-year growth. Net income for the year totaled $414.1 million.

“We closed 2025 with strong momentum,” Duolingo CEO Luis von Ahn said in a statement, “surpassing 50 million daily active users and generating more than $1 billion in bookings for the first time.”

Yet it was von Ahn’s next comments, along with the company’s 2026 guidance, that caused investors to turn negative on the stock.

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