Language-learning app Duolingo (NASDAQ:DUOL) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 35% year on year to $282.9 million. On the other hand, next quarter’s revenue guidance of $288.5 million was less impressive, coming in 0.9% below analysts’ estimates.

Is now the time to buy Duolingo? Find out in our full research report.

Revenue: $282.9 million vs analyst estimates of $275.9 million (35% year-on-year growth, 2.5% beat)

Adjusted EBITDA: $84.35 million vs analyst estimates of $78.24 million (29.8% margin, 7.8% beat)

Revenue Guidance for Q1 CY2026 is $288.5 million at the midpoint, below analyst estimates of $291.2 million

EBITDA guidance for the upcoming financial year 2026 is $302 million at the midpoint, below analyst estimates of $385 million

Operating Margin: 15.4%, up from 6.6% in the same quarter last year

Free Cash Flow Margin: 33.1%, up from 28.5% in the previous quarter

Monthly Active Users: 133.1 million, up 16.4 million year on year

Market Capitalization: $5.16 billion

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Duolingo grew its sales at an incredible 41.1% compounded annual growth rate. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Duolingo reported wonderful year-on-year revenue growth of 35%, and its $282.9 million of revenue exceeded Wall Street’s estimates by 2.5%. Company management is currently guiding for a 25% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 21.4% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and implies the market sees success for its products and services.

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As a subscription-based app, Duolingo generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.

Over the last two years, Duolingo’s monthly active users, a key performance metric for the company, increased by 677% annually to 133.1 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

In Q4, Duolingo added 16.4 million monthly active users, leading to 14.1% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.

Average revenue per user (ARPU) is a critical metric to track because it measures how much the average user spends. ARPU is also a key indicator of how valuable its users are (and can be over time).

Duolingo’s ARPU fell over the last two years, averaging 26.8% annual declines. This isn’t great, but the increase in monthly active users is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Duolingo tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether users can continue growing at the current pace.

This quarter, Duolingo’s ARPU clocked in at $2.13. It grew by 18.4% year on year, faster than its monthly active users.

We were impressed by how significantly Duolingo blew past analysts’ EBITDA expectations this quarter. We were also glad it expanded its number of users. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 22.5% to $91.61 immediately after reporting.

Duolingo didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.