A Business at a Glance
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Duolingo, Inc.
DUOL
$5.9B
Mkt Cap
$122.24
+1.30%
Duolingo, Inc. (DUOL) has a current P/E ratio of 14.3, compared to its historical median P/E of 21.2. The stock is currently considered Cheap based on its historical valuation range.
Duolingo, Inc. (DUOL) has a 5-year average return on invested capital (ROIC) of 11.6%. This indicates solid capital allocation.
Duolingo, Inc. (DUOL) has a market capitalization of $6.0B. It is classified as a mid-cap stock.
Duolingo, Inc. (DUOL) does not currently pay a regular dividend.
Based on historical P/E analysis, Duolingo, Inc. (DUOL) appears cheap. The current P/E of 14.3 is 33% below its historical median of 21.2. The estimated fair value CAGR (P/E method) is 82.8%.
Duolingo, Inc. (DUOL) operates in the Services-Prepackaged Software industry, within the Technology sector.
Duolingo, Inc. (DUOL) reported annual revenue of $1.0 billion in its most recent fiscal year, based on SEC EDGAR filings.
Duolingo is a technology company that develops mobile-first language learning products powered by sophisticated AI and data analytics, serving over 130 million monthly active users across more than 250 language courses as of December 31, 2025. The company's flagship app has become the world's most popular language learning platform and the top-grossing Education app in app stores, with learners completing nearly 2 billion exercises daily, creating what the company believes to be the world's largest learning dataset. Duolingo's business model is built on gamification and engagement optimization through thousands of A/B tests, enabling organic growth primarily driven by word-of-mouth and brand advocacy, supplemented by selective paid user acquisition. Beyond languages, the company has expanded into Math, Music, and Chess to align with its mission to develop the best education in the world and make it universally available. The platform operates on a freemium subscription model with multiple tiers (including Super and Max), generating revenue from both subscription fees and advertising, while maintaining a mission-driven approach to serve learners across the entire socioeconomic spectrum from developing countries to wealthy markets. The company's competitive moat is built on its massive proprietary learning dataset, sophisticated AI systems, world-class design and animation, and strong brand recognition that has become synonymous with language learning globally.
【Strategic AI investment year】 Management is prioritizing user growth acceleration and product innovation in 2026 as a key strategic investment year, with a medium-term goal to reach 100 million daily active users by 2028 through three major initiatives: teaching languages better, improving the free user experience, and scaling new subjects like math, music, and chess. The company expects to maintain approximately 20% year-over-year DAU growth throughout 2026 while expanding AI-powered features across the platform, which will pressure gross margins as AI content becomes more prevalent in the product. Management is experimenting with pricing and monetization strategies designed to minimize friction while driving subscriber growth, with confidence that financial strength allows room to invest in long-term value creation rather than short-term bookings optimization. The company is managing operating expenses to accommodate increased AI infrastructure costs while maintaining disciplined capital allocation through share buybacks and generating over $350 million in free cash flow in 2026.
No forward guidance provided.
Generated solely from the company's own reports listed below — not from third-party data. Hallucination risk is low. · Sources: 10-K, Q4 FY2025 Earnings Call, Q3 FY2025 Earnings Call, Q2 FY2025 Earnings Call, Q1 FY2025 Earnings Call
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 1.1B | 1.0B | 748M | 531M | 369M | 251M |
| Net Income | 422M | 414M | 89M | 16M | -60M | -60M |
| EPS | $8.67 | $8.57 | $1.88 | $0.35 | $-1.51 | $-2.57 |
| Free Cash Flow | 416M | 370M | 273M | 150M | 48M | 5.6M |
| ROIC | 128.6% | 38.1% | 56.5% | 2.7% | -11.3% | -27.8% |
| Gross Margin | 72.7% | 72.2% | 72.8% | 73.2% | 73.1% | 72.4% |
| Debt/Equity | 0.00 | 0.07 | 0.07 | 0.04 | 0.05 | 0.06 |
| Dividends/Share | $0.00 | - | - | - | - | - |
| Operating Income | 157M | 136M | 63M | -13M | -65M | -60M |
| Operating Margin | 14.2% | 13.1% | 8.4% | -2.5% | -17.6% | -23.9% |
| ROE | 30.3% | 38.1% | 12.0% | 2.7% | -11.3% | -27.8% |
| Shares Outstanding | 49M | 48M | 47M | 46M | 39M | 23M |
| Metric | |||||||
|---|---|---|---|---|---|---|---|
| Income Statement | |||||||
| Revenue | 162M | 251M | 369M | 531M | 748M | 1.0B | 1.1B |
| Gross Margin | 71.6% | 72.4% | 73.1% | 73.2% | 72.8% | 72.2% | 72.7% |
| R&D | 53M | 104M | 150M | 194M | 235M | 306M | 319M |
| SG&A | 44M | 79M | 118M | 132M | 156M | 182M | 185M |
| EBIT | -16M | -60M | -65M | -13M | 63M | 136M | 157M |
| Op. Margin | -9.9% | -23.9% | -17.6% | -2.5% | 8.4% | 13.1% | 14.2% |
| Net Income | -16M | -60M | -60M | 16M | 89M | 414M | 422M |
| Net Margin | -9.8% | -24.0% | -16.1% | 3.0% | 11.8% | 39.9% | 38.4% |
| Non-Recurring | 0 | 0 | 0 | -433K | 0 | 0 | 0 |
| Returns on Capital | |||||||
| ROIC | -9.1% | -27.8% | -11.3% | 2.7% | 56.5% | 38.1% | 128.6% |
| ROE | 19.2% | -27.8% | -11.3% | 2.7% | 12.0% | 38.1% | 30.3% |
| ROA | -9.0% | -14.4% | -8.5% | 1.9% | 7.9% | 25.1% | 20.5% |
| Cash Flow | |||||||
| Op. Cash Flow | 18M | 9.2M | 54M | 154M | 286M | 388M | 433M |
| Free Cash Flow | 14M | 5.6M | 48M | 150M | 273M | 370M | 416M |
| Owner Earnings | -1.6M | -34M | -25M | 51M | 164M | 236M | 277M |
| CapEx | 3.4M | 3.6M | 5.6M | 3.2M | 12M | 18M | 17M |
| Maint. CapEx | 2.3M | 2.7M | 4.9M | 7.1M | 11M | 14M | 15M |
| Growth CapEx | 1.1M | 860K | 692K | 0 | 1.3M | 3.7M | 1.9M |
| D&A | 2.3M | 2.7M | 4.9M | 7.1M | 11M | 14M | 15M |
| CapEx/OCF | N/A | 39.1% | 10.4% | 2.1% | 4.2% | 4.7% | 3.9% |
| Capital Allocation | |||||||
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividend Yield | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Share Buybacks | 0 | 868K | 0 | 0 | 0 | 0 | 0 |
| Buyback Yield | N/A | 0.0% | N/A | N/A | N/A | N/A | 0.0% |
| Stock-Based Comp | 17M | 41M | 74M | 95M | 110M | 137M | 141M |
| Debt Repayment | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Balance Sheet | |||||||
| Net Debt | -111M | -521M | -580M | -723M | -729M | -935M | -1.1B |
| Cash & Equiv. | 120M | 554M | 608M | 748M | 786M | 1.0B | 1.1B |
| Long-Term Debt | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Debt/Equity | -0.11 | 0.06 | 0.05 | 0.04 | 0.07 | 0.07 | 0.00 |
| Interest Coverage | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Equity | -81M | 513M | 542M | 656M | 825M | 1.3B | 1.4B |
| Total Assets | 176M | 661M | 747M | 954M | 1.3B | 2.0B | 2.1B |
| Total Liabilities | 74M | 148M | 205M | 298M | 477M | 645M | 666M |
| Intangibles | N/A | 4.6M | 8.5M | 16M | 20M | 28M | 28M |
| Retained Earnings | -111M | -171M | -230M | -214M | -126M | 288M | 332M |
| Working Capital | 93M | 500M | 515M | 620M | 679M | 885M | 932M |
| Current Assets | 158M | 619M | 697M | 898M | 1.1B | 1.4B | 1.5B |
| Current Liabilities | 66M | 119M | 182M | 277M | 422M | 551M | 574M |
| Per Share Data | |||||||
| EPS | -1.24 | -2.57 | -1.51 | 0.35 | 1.88 | 8.57 | 8.67 |
| Owner EPS | -0.12 | -1.47 | -0.63 | 1.12 | 3.48 | 4.88 | 5.65 |
| Book Value | -6.34 | 21.93 | 13.74 | 14.28 | 17.50 | 27.88 | 28.41 |
| Cash Flow/Share | 1.39 | 0.39 | 1.36 | 3.35 | 6.06 | 8.03 | 8.93 |
| Dividends/Share | N/A | N/A | N/A | N/A | N/A | N/A | 0.00 |
| Shares Out. | 12.7M | 23.4M | 39.5M | 45.9M | 47.1M | 48.3M | 49.0M |
| Valuation | |||||||
| P/E Ratio | N/A | N/A | N/A | 666.0 | 177.3 | 21.2 | 14.1 |
| P/FCF | N/A | 453.0 | 53.6 | 71.1 | 57.4 | 23.7 | 14.4 |
| EV/EBIT | N/A | N/A | N/A | N/A | N/A | N/A | 31.0 |
| Price/Book | N/A | 4.9 | 4.8 | 16.3 | 19.0 | 6.5 | 4.3 |
| Price/Sales | N/A | 13.5 | 9.5 | 12.6 | 14.7 | 15.8 | 5.4 |
| FCF Yield | N/A | 0.2% | 1.9% | 1.4% | 1.7% | 4.2% | 6.9% |
| Market Cap | N/A | 2.5B | 2.6B | 10.7B | 15.7B | 8.8B | 6.0B |
| Avg. Price | N/A | 144.60 | 88.97 | 145.83 | 232.66 | 338.66 | 122.24 |
| Year-End Price | N/A | 108.11 | 65.38 | 233.09 | 333.34 | 181.66 | 122.24 |
Duolingo, Inc. passes 5 of 9 quality checks, suggesting mixed fundamentals.
Duolingo, Inc. trades at 14.3x trailing earnings, compared to its 15-year median P/E of 21.2x, suggesting it is currently Cheap relative to its historical range. On a free-cash-flow basis, the stock trades at 13.4x vs a median of 55.5x. The company's 5-year average ROIC is 11.6% with a gross margin of 72.8%. At current prices, the estimated annualized return to fair value is +92.2%.
Duolingo, Inc. (DUOL) has a net profit margin of 39.9%. This is a strong margin indicating high profitability.
Duolingo, Inc. (DUOL) generated $370 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
Duolingo, Inc. (DUOL) has a debt-to-equity ratio of 0.07. This indicates a conservatively financed balance sheet.
Duolingo, Inc. (DUOL) reported earnings per share (EPS) of $8.57 in its most recent fiscal year.
Duolingo, Inc. (DUOL) has a return on equity (ROE) of 38.1%. This indicates the company generates strong returns for shareholders.
Duolingo, Inc. (DUOL) has a 5-year average gross margin of 72.8%. This high margin suggests strong pricing power and a potential competitive moat.
The Ledger Terminal provides 6 years of financial data for Duolingo, Inc. (DUOL), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
Duolingo, Inc. (DUOL) has a book value per share of $27.88, based on its most recent annual SEC filing.
Based on recent SEC filings and earnings disclosures, Management is prioritizing user growth acceleration and product innovation in 2026 as a key strategic investment year, with a medium-term goal to reach 100 million daily active users by 2028 through three major initiatives: teaching languages better, improving the free user experience, and scaling new subjects like math, music, and chess. The company expects to maintain approximately 20% year-over-year DAU growth throughout 2026 while expanding AI-powered features across the platform, which will pressure gross margins as AI content becomes more prevalent in the product. Management is experimenting with pricing and monetization strategies designed to minimize friction while driving subscriber growth, with confidence that financial strength allows room to invest in long-term value creation rather than short-term bookings optimization. The company is managing operating expenses to accommodate increased AI infrastructure costs while maintaining disciplined capital allocation through share buybacks and generating over $350 million in free cash flow in 2026.