New York, Feb 27, 2026, 05:04 EST — Premarket
- Duolingo dropped roughly 24% before the bell as its 2026 bookings forecast landed below what analysts were looking for. Public
- The language-learning company is putting user growth ahead of immediate monetization, warning this change will likely pressure both bookings growth and profits this year. Reuters
- Duolingo approved a $400 million buyback plan for its shares. Reuters
Duolingo shares tumbled roughly 24% ahead of Friday’s open, deepening the steep after-hours slide. The language-learning app projected 2026 bookings under Wall Street targets as it shifts focus to quicker user growth. Public
The selloff stands out: Duolingo’s long been seen as a growth play, consistently squeezing more revenue from each learner. Now, though, the company’s warning investors to brace for the reverse—higher costs, and a pullback in monetization “nudges”—as it works to spark daily user growth again.
That throws more focus on bookings—a figure capturing money from subscriptions and other transactions before it lands as recognized revenue. If bookings growth starts to lose steam, it’s often an early sign that demand or pricing muscle is slipping, regardless of whether revenue numbers look stable for now.
Duolingo told shareholders in a letter filed with the U.S. SEC that fourth-quarter revenue climbed 35% to $282.9 million, with total bookings up 24% to $336.8 million. Daily active users hit 52.7 million, a jump of 30%. Looking to 2026, the company expects bookings between $1.274 billion and $1.298 billion, with revenue forecast in the range of $1.197 billion to $1.221 billion. It’s aiming for an adjusted EBITDA margin near 25%. SEC
The company said it’s expanding access to its AI features, shifting its “Video Call with Lily” into the Super Duolingo tier and rolling out more AI-powered speaking tools for free users. Reuters
Management cast the move as a swap—easing barriers that nudged users into paid plans, willing to live with a slower pace in bookings growth, while betting on a faster pickup in engagement and word-of-mouth. SEC
Bulls got a shot in the arm from Duolingo’s buyback authorization, but that wasn’t where traders zeroed in—they were watching the company’s shift toward growth and margin improvement. Management has full discretion on timing, with repurchases permitted either in the open market or through private deals, and there’s no set end date on the plan. SEC
The disruption comes as consumer education apps and online learning platforms find themselves squeezed by generative AI tools—these can now deliver basic tutoring or translation for little cost. Companies are scrambling to stand out on user experience and brand loyalty, rather than relying solely on content.
There’s a real risk here: if Duolingo’s user growth stalls, the company might not see quick returns. Daily active users need to pick up again, or Duolingo could wind up facing heavier marketing and AI expenses, weaker monetization, and less flexibility to protect its margins.
Investors are eyeing whether the company’s growing lineup of AI tools can actually hold the line on costs as it ramps up. There’s also the question of whether a lighter touch on ads and subscriptions puts a bigger dent in conversion than the company is banking on.
The immediate focus shifts to how the market responds once trading kicks off at 9:30 a.m. ET. Investors may keep volatility elevated as they recalculate, factoring in the revised outlook for slower 2026 bookings growth.
Once the market opens, focus shifts to fresh data coming in from the March quarter, which wrapped up March 31. Investors are watching for signs on daily active users, paid subscriber numbers, and any signs that bookings are steadying under the new model. SEC
