DUOL Stock Plummets Overnight Even As CEO Bets Big On AI Ambitions

• Duolingo’s daily active users climbed 21% year-on-year in Q1. 
• The company reported stronger margins, with gross margin improving by 190 basis points to 73%.
• CFO Gillian Munson said Duolingo is investing in 2026 for long-term growth, targeting 10-12% bookings growth.

Duolingo (DUOL) stock plummeted nearly 14% overnight, late Monday, even as the language-learning platform’s executives highlighted the transformative role of artificial intelligence and outlined financial expectations during the company’s first-quarter earnings call.

The company reported fiscal first-quarter (Q1) revenue of $292 million, a 27% year-on-year increase, and earnings per share of $0.89. Both metrics surpassed the analyst’s consensus estimates of $288.98 million and $0.76, respectively, according to Fsical AI data. 

CEO Says AI Drives DUOL’s Product Evolution

During the earnings call, CEO Luis von Ahn described artificial intelligence as a game-changer for the business, noting that its full potential has yet to be realized.

“AI has fundamentally changed what's possible for us, and I believe we're just scratching the surface. The product is better than it has ever been, and I couldn't be more excited about what's ahead. And with that, I'll turn it over to Gillian.”

-Luis von Ahn, Co-Founder and CEO, Duolingo

He said daily users rose 21% from last year, matching expectations as the company shifts focus to better teaching and stronger user engagement.

DUOL’s Solid Financial Performance In Q1

Paid subscriptions also grew 21% year over year to 12.5 million by the end of Q1. Total bookings reached $308.5 million, up 14% from a year earlier.

The company reported stronger margins, with gross margin improving by 190 basis points to 73%. Duolingo ended the quarter with approximately $1.1 billion in cash and equivalents, maintaining a debt-free position. 

CFO Gillian Munson said Duolingo is focusing on long-term growth by investing in 2026. The company expects bookings to rise by 10% to 12%, revenue to grow by 15% to 18%, and the EBITDA margin to be about 25%. 

The company anticipates a slower increase in bookings in the second quarter due to tough comparisons with last year, when pricing changes and strong advertising results boosted performance. However, growth is expected to pick up in the latter half of the year.

DUOL Retail Traders View 

On Stocktwits, retail sentiment around the stock shifted to ‘extremely bullish’ from ‘bullish’ territory the previous day. Message volume jumped 4,114% over a 24-hour period. 

A Stocktwits user remarked, “That overnight drop is brutal… something clearly spooked the market.”

Another user said, “picked up 2500 share starter here at $96,” and added that they would buy more if the stock drops further. 

DUOL stock has declined by over 37% year-on-year. 

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