Duolingo Inc. (DUOL) concluded Friday's trading session with its share price at $112.57, marking a slight increase of 0.46%. The stock experienced intraday movement on the Nasdaq, trading between $110.19 and $115.99 before settling. In after-hours activity, shares edged higher to $112.89. Despite this minor uptick, the language-learning platform's stock remains under significant pressure, trading approximately 74% below its valuation from one year ago.
The broader U.S. equity markets will be closed on Monday in observance of Presidents Day, halting trading activity until Tuesday. This pause provides a brief interlude for Duolingo investors ahead of a consequential series of corporate developments scheduled for the latter part of February. A central debate among market participants continues to revolve around the company's strategic focus: whether prioritizing robust user growth or emphasizing immediate cash flow generation holds greater long-term value.
In a significant leadership transition announced in January, Chief Financial Officer Matt Skaruppa is set to depart from his role on February 23, transitioning into an advisory capacity. He will be succeeded by current board member Gillian Munson. The same corporate update provided preliminary fourth-quarter guidance, projecting bookings in the range of $329.5 million to $335.5 million. The company also anticipates daily active user growth of roughly 30% year-over-year for the period.
Friday's trading saw Duolingo shares attract buying interest, aligning with a broader market trend where traders showed appetite for smaller-capitalization, higher-beta stocks. This sentiment was reflected in the performance of key indices and peers; the iShares Russell 2000 ETF (IWM) gained 1.3%, while the ARK Innovation ETF (ARKK) jumped 2.7%. The Invesco QQQ Trust (QQQ), tracking the Nasdaq-100, posted a more modest 0.2% advance. Within the education technology sector, peers like Coursera (COUR) and Udemy (UDMY) each advanced approximately 2%, with Chegg (CHGG) also ticking higher.
In official statements, Duolingo co-founder and CEO Luis von Ahn expressed appreciation for Skaruppa's contributions and highlighted Munson's "deep understanding of Duolingo" as an asset for the financial leadership transition. Munson characterized her decision to accept the CFO role as "an easy yes." Von Ahn reiterated the company's commitment to continued investment in growth and product development, acknowledging that this strategy may involve "near-term tradeoffs" in financial metrics.
The upcoming earnings report follows a challenging previous quarter. In November, Duolingo's decision to emphasize bookings—a forward-looking metric indicating contracted revenue—over immediate profit metrics resulted in a fourth-quarter bookings forecast that fell short of Wall Street expectations. Management attributed this to strategic investments aimed at expanding its user base and enhancing educational efficacy. The announcement triggered a sharp negative reaction, with shares plummeting nearly 20% in after-hours trading following the disclosure.
For subscription-based business models like Duolingo's, bookings typically precede recognized revenue under accounting rules, as customers often pay upfront for services delivered over time. This makes bookings a critical indicator for investors, offering a timelier glimpse into customer demand and renewal momentum than quarterly revenue figures, which are recognized ratably. However, the signal can be complex; should the forthcoming results disappoint or if management commentary points to rising operational costs, scrutiny over Duolingo's ability to convert user engagement into sustainable profitability is likely to intensify rapidly.
Duolingo is scheduled to release its fourth-quarter and full-year 2025 financial results after the U.S. market closes on Wednesday, February 26. The company will host a corresponding webcast for investors and analysts beginning at 5:30 p.m. Eastern Time. This event is poised to provide crucial insights into the company's operational performance, the success of its growth initiatives, and the financial trajectory under its new CFO.