Duolingo (DUOL) Stock Forecast & Price Target

Duolingo Inc reported a substantial increase in adjusted EBITDA of $80 million, reflecting a $32.5 million year-over-year improvement driven by strong revenue performance that exceeded expectations. The company also saw a rise in paid subscribers to 11.5 million, slightly surpassing consensus estimates and indicating robust conversion from free to paid tiers, supported by seasonal trends and promotional activities. With total revenues growing 41% year-over-year, alongside a notable increase in daily active users, Duolingo demonstrates solid momentum and potential for further subscriber growth, underpinning a positive outlook for the company’s financial trajectory.

Duolingo Inc. has reported a decrease in gross margins from 72.9% to 72.5% year-over-year, indicating potential challenges in subscriber penetration rates among monthly active users (MAUs). The company has provided guidance for 4Q25 that reflects anticipated bookings and adjusted EBITDA below consensus expectations, with bookings projected at $329.5 million to $335.5 million and adjusted EBITDA ranging between $75.4 million and $78.8 million. Additionally, increased costs related to generative AI and hosting, along with dependence on direct-to-consumer revenue, may expose Duolingo to headwinds from discretionary spending constraints.