Duolingo forecast first-quarter and full-year bookings below analyst estimates as it shifts strategy toward faster user growth, a move it said will weigh on bookings growth and profitability this year. The company’s shares dropped more than 23% in after-hours trading following the outlook.
The strategy pivot prioritizes expanding the user base over maximizing immediate monetization. Duolingo expects bookings growth to slow to about 11% in 2026, down from roughly 20% under its previous approach, while adjusted core profit margins are forecast to decline to approximately 25% this year.
Duolingo plans to expand access to its AI-powered “Video Call with Lily” feature by adding it to the Super Duolingo subscription. The company previously limited the feature to the premium Max tier. CEO Luis von Ahn stated the company will roll out more AI-driven speaking tools to free users, reducing friction that previously nudged learners toward paid plans.
“If we’re seeing faster user growth than we’re expecting, and what we are expecting is about 20%, then that means the strategy is working,” von Ahn told Reuters. He noted that the AI-based video call is now more than ten times cheaper to run than at launch, allowing for broader access.
Duolingo said daily active user growth decelerated through 2025 and is expected to fall to roughly half the pace of prior years. The company forecast first-quarter bookings of about $301.5 million, below Visible Alpha estimates of $329.7 million.
For the full year, Duolingo expects bookings between $1.27 billion and $1.30 billion, below LSEG estimates of $1.39 billion. The company expects revenue between $1.20 billion and $1.22 billion, lagging expectations of $1.26 billion.
The company’s board authorized a share buyback of up to $400 million. Duolingo is headquartered in Pittsburgh, Pennsylvania.
