Duolingo Raises Full-Year Outlook After Second DAU Speed-Up

The Tip Desk · November 10, 2026 · 4 min read

Daily active users rose 29% year over year in the third quarter, and the company lifted 2026 Adjusted EBITDA guidance to $323 million.

Duolingo, Inc. (DUOL), the mobile learning platform, said daily active users accelerated for a second consecutive quarter to 29% year-over-year growth in the three months ended September 30, 2026, up from 23% in the second quarter, and raised full-year 2026 guidance across key financial metrics.

Daily active users averaged 64.9 million, versus 50.5 million a year earlier. Monthly active users were 153.1 million. Paid subscribers stood at 13.1 million at period end. Co-founder and Chief Executive Officer Luis von Ahn said the company had laid out a plan at the start of the year to prioritize teaching better and user growth and was now seeing the acceleration it had hoped for.

Bookings growth also picked up. Total bookings rose 12% year over year on both a reported and constant-currency basis to $316.1 million, accelerating four percentage points sequentially. Subscription bookings increased 16% to $278.4 million, up six percentage points from the second quarter, which the company attributed in large part to strength in user growth.

Revenue grew 14% on both a reported and constant-currency basis to $309.0 million. The company said revenue growth moderated from the second quarter because subscription revenue is recognized ratably over the subscription term and therefore reflects slower prior-period bookings growth. It said that as bookings growth reaccelerates, it expects revenue growth to follow. Gross margin was 72.9%, which the company said was above its expectations, primarily due to lower feature-based AI costs and favorable hosting cost trends.

GAAP operating expenses grew $39.2 million, or 24%, over the prior year and included an $11.4 million accrual for a company-wide performance bonus tied to achieving a fourth-quarter DAU growth goal of 25% or greater. That bonus had previously been excluded from the outlook. Net income was $27.2 million, an 8.8% margin, down from $292.2 million a year earlier, when the company recognized a $222.7 million tax benefit from releasing a valuation allowance on deferred tax assets. Adjusted EBITDA was $78.7 million, a 25.5% margin. Free cash flow was $75.3 million. Cash and short-term investments were $1.4 billion at quarter end.

The company said it ran hundreds of experiments on notifications and streaks and partnered with the mobile games Brawl Stars and Eggy Party, which it said brought millions of new and returning users. It said the share of exercises learners can answer by speaking has doubled since the start of the year and that it is on track to make unlimited Video Call available to all Super subscribers by year-end.

Duolingo decided to sunset Duolingo Max, its highest subscription tier. It said it will stop selling new Max subscriptions this month and move existing Max individual subscribers to a Super family plan at the same price, with a minimal bookings effect reflected in fourth-quarter guidance. Options for legacy Max family-plan subscribers remain under consideration for 2027.

The company raised full-year 2026 guidance. It expects to finish at the high end of the 10% to 12% bookings-growth and 15% to 18% revenue-growth ranges it set at the start of the year. Full-year Adjusted EBITDA is expected at $323 million, or a 26.5% margin, up $3 million from previous guidance and $21 million above the midpoint of original February 2026 guidance.

For the fourth quarter, Duolingo expects bookings of $382 million, up 13% over the prior year, and revenue of $322 million, up 14%. It said fourth-quarter bookings would be slightly ahead of the guidance implied by its previous full-year outlook. Fourth-quarter Adjusted EBITDA is expected at $84 million, or a 26.1% margin. Gross margin is expected at 72.0%, down 90 basis points sequentially, as the company expands the rollout of AI-based features. The fourth-quarter outlook includes an additional accrual for the remainder of the DAU performance bonus and a timing shift of certain expenses from the third quarter.

Von Ahn said the company expects year-over-year DAU growth in the fourth quarter to be similar to the third quarter.