Duolingo Crashes Hard: WTF Is Going On? # Duolingo Crashes Hard: WTF Is Going On?!  by Rich Duprey  November 6, 2025  Share it: **Duolingo** ( [DUOL](https://moneymorning.com/stocks/duol/)) shares are tanking hard in premarket trading today, down about 26% to around $190 from yesterday's close of $260 per share. Investors woke up to a bloodbath following the language-learning app's Q3 earnings report released after the bell yesterday. Despite smashing expectations on revenue and earnings, the market is punishing the stock over concerns about future growth slowing down. Duolingo reported revenue of $271.7 million, a whopping 41% jump year-over-year, beating Wall Street's estimate of $260.35 million. Earnings came in at an eye-popping $5.95 per share , far above the consensus of $0.76, though this was boosted by a one-time $222.7 million tax benefit from releasing a valuation allowance on deferred tax assets. User metrics were solid too: daily active users hit 50.5 million, up 36%, monthly actives reached 135.3 million (up 20%), and paid subscribers grew 34% to 11.5 million. Adjusted EBITDA climbed 68% to $80 million, with margins expanding.  ## **Standing On the Brakes** So why the heck is going on? It's all about the forward guidance, which came in softer than hoped. For the fourth quarter, DUOL forecasts bookings of $329.5 million to $335.5 million, implying just 21% to 23% growth – a slowdown from Q3's 33% increase. Revenue guidance of $273 million to $277 million implies 30% to 32% growth, again slower. Duolingo's full-year outlook slightly increased, with revenue expected at $1.028 billion to $1.032 billion. But management highlighted ramping up investments in user growth and teaching improvements, like AI enhancements, over short-term monetization. Higher gen AI and hosting costs also dinged gross margins by 40 basis points. CEO Luis von Ahn emphasized long-term priorities, saying the scale of 50 million DAUs offers a "unique opportunity to deliver impact" through better engagement. However, traders aren't buying it, fearing decelerating momentum amid competition in edtech. Operational tweaks, like toning down "unhinged" social media content, may have slowed user acquisition temporarily. This isn't Duolingo's first rodeo with volatility – the stock is down 47% year-to-date, and that's before today's implosion. While analysts had been bullish pre-earnings, this guidance miss could prompt downgrades. For investors, it's a classic beat-and-lower scenario: a strong past, overshadowed by a cloudy future. This isn't a buy-the-dip moment. Considering the path downward it has been on, stay on the sidelines until the language-learning app proves it can turn itself around. **Beat the market, without relying on brokers or biased institutions.** Email(Required) LinkedIn This field is for validation purposes and should be left unchanged. Subscribe By submitting your email address, you will receive a free subscription to _Money Morning!_ and occasional special offers from us and our affiliates. 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