Duolingo, Inc.

Duolingo, Inc. (Nasdaq: DUOL) runs a mobile learning app with a free version and paid subscriptions. Subscriptions supply most revenue. Advertising, the Duolingo English Test and in-app purchases provide additional income.

Users and subscriptions

Daily active users averaged 64.9 million during Q3 2026, versus 50.5 million a year earlier. Year-over-year growth accelerated to 29% from 23% in Q2. Monthly active users averaged 153.1 million, up 13%.

Paying subscriber accounts were 13.1 million at September 30, up from 11.5 million a year earlier. The count excludes free trials and nonpaying members of family plans.

In November 2026, Duolingo announced it would stop selling new Max subscriptions that month. Existing individual Max subscribers will move to a Super family plan at the same price. Plans for legacy Max family subscribers remain under consideration for 2027.

Unlimited Video Call, its automated conversation-practice feature, is being extended to all Super subscribers by year-end. Access for new Super subscribers had already started before this announcement. Management expects minimal bookings impact from retiring new Max sales, included in its Q4 forecast.

Third-quarter results

Three months ended September 30. USD millions, except diluted earnings per share. Bookings count purchases; subscription revenue is recognized over the subscription term.

The prior-year net income included a $222.7 million tax benefit from releasing a valuation allowance. Adjusted EBITDA removes interest income, taxes, depreciation, amortization, equity compensation including related employer taxes, acquisition transaction and earn-out costs, and capitalized-software impairment. Its margin fell to 25.5% from 29.5%.

Operating expenses rose to $200.9 million from $161.8 million. Q3 included an $11.4 million accrual for a company-wide bonus tied to Q4 daily-user growth of at least 25%.

Results against earlier expectations

August's Q3 forecasts were $307 million in bookings, $302 million in revenue and $76 million in adjusted EBITDA. Actual results exceeded all three.

The annual forecast now calls for $1.296 billion in bookings, $1.221 billion in revenue and $323 million in adjusted EBITDA. The respective August forecasts were $1.285 billion, $1.207 billion and $320 million.

Q4 forecasts are $382 million in bookings, $322 million in revenue and $84 million in adjusted EBITDA. Gross margin is expected at 72%, lower than Q3 as conversation features reach more subscribers. Duolingo expects Q4 daily-user growth similar to Q3.

Cash and capital allocation

At September 30, cash and cash equivalents were $1.240 billion and short-term investments were $134.3 million. These figures exclude long-term investments and restricted cash.

Q3 free cash flow subtracts $3.1 million of software and intangible-asset spending and $11 million of equipment purchases from $89.4 million of operating cash. Nine-month operating cash flow was $328.5 million, versus $280.5 million a year earlier.

Duolingo repurchased $6.4 million of shares during Q3. Cumulative purchases under its February program reached $82 million through October 30. These repurchases sit alongside continuing share-based compensation and equity grants.

What the next results can show

The next comparison is whether the expansion of Super and faster daily-user growth support Q4's $382 million bookings target, while gross margin and spending absorb wider feature access and the performance bonus.