# Duolingo (DUOL.US)

Canonical: https://gigainvestors.com/s/DUOL

Analysis as of: 2026-10-16T07:28:07.483Z. Financial observations: FY2019–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $148.93 per share; close as of 2026-10-15.

## Checklist

### understandable: fail

- 0 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 8 years

- Years with declining revenue: 0

- Years with a net loss: 4

- Operating margin variation: 9.58×

Chart: Operating margin; fiscal year observations.

- FY2019: -0.18×

- FY2020: -0.10×

- FY2021: 0.24×

- FY2022: -0.17×

- FY2023: -0.02×

- FY2024: 0.08×

- FY2025: 0.14×

- LTM to Jun 2026: 0.14×

### moat: fail

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 2.3%

- ROIC, second-lowest year: -11.2%

- Typical minus recent gross margin: -0.0 pp

- Typical gross margin (annual median): 72.0%

- Recent gross margin (lower of latest and 3-year median): 72.0%

- Years with nonpositive capital: 5

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: >100%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2019: -249.5%

- FY2020: -11.2%

- FY2021: 8.7%

- FY2022: -8.9%

- FY2023: -1.7%

- FY2024: 6.2%

- FY2025: 53.3%

- LTM to Jun 2026: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 1.01×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $403M

- Net income, five-year total: $399M

- Return on incremental invested capital: 94.9%

- Working capital / revenue, annual change: -0.8 pp

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.00×

- FY2022: 1.00×

- FY2023: 1.24×

- FY2024: 1.00×

- FY2025: 1.00×

### management: pass

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: -11.2% vs 6.2%

- Per-share earnings: -0.44 to 1.88 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: 6.1%

- Diluted shares, 5-year annual growth: 6.1%

- Per-share value change: $2.32

- Per-share value, starting three-year median: -$0.44

- Per-share value, ending three-year median: $1.88

- Buybacks concentrated in cheaper years (correlation): -1.00

- Average buyback yield: 0.2%

- Buyback history: 2 years

- Debt-funded buybacks: No

- ROIC, first three-year median: -11.2%

- ROIC, last three-year median: 6.2%

Chart: Earnings per share; fiscal year observations.

- FY2019: -$0.38

- FY2020: -$0.44

- FY2021: -$2.57

- FY2022: -$1.51

- FY2023: $0.35

- FY2024: $1.88

- FY2025: $8.57

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 1.3%

- Receivables to sales index (DSRI): 0.99×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 35.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.94×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.05×

Chart: Sloan accruals; fiscal year observations.

- FY2019: -16.5%

- FY2020: -19.1%

- FY2021: -10.5%

- FY2022: -15.2%

- FY2023: -14.4%

- FY2024: -15.1%

- FY2025: 1.3%

## Holders

## Price story

Down 71% since May 2025 · "Duolingo falls on weak revenue guidance despite second-quarter income beat" (finance.yahoo.com, Aug 2026) · sales +10.4%

Story as of 2026-10-16T09:58:39.711Z; price observation 2026-10-15.

- 2025-05-05: DUOL Q1 Earnings Call: AI-Driven Product Expansion and User Growth Lift Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/duol-q1-earnings-call-ai-215810528.html))

- 2025-08-26: Duolingo stock falls after Google unveils new AI translation tools ([finance.yahoo.com](https://finance.yahoo.com/news/duolingo-stock-falls-google-unveils-163928486.html))

- 2025-11-06: Duolingo shares drop as Q4 bookings forecast misses; strategic shift may pressure 2026 results ([seekingalpha.com](https://seekingalpha.com/news/4516921-duolingo-shares-drop-as-q4-bookings-forecast-misses-strategic-shift-may-pressure-2026-results?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-02-26: Duolingo tumbles 22% on weak guidance, slowing user growth ([finance.yahoo.com](https://finance.yahoo.com/news/duolingo-tumbles-22-weak-guidance-233120271.html))

- 2026-07-13: AI-Backed Growth Benefits DUOL Amid Expected Rise in Inference Costs ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/ai-backed-growth-benefits-duol-134100122.html))

- 2026-08-05: Duolingo falls on weak revenue guidance despite second-quarter income beat ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/duolingo-falls-weak-revenue-guidance-224440126.html))

### Sales · FY2025–2026

sales +10.4%; source https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm; observed 2026-02-27.

- FY2019: $71M 

- FY2020: $162M 

- FY2021: $251M 

- FY2022: $369M 

- FY2023: $531M 

- FY2024: $748M 

- FY2025: $1.0B 

- FY2026: $1.1B 

### Gross margin · FY2026

gross margin 72.3%; source https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm; observed 2026-02-27.

- FY2019: 69.8% 

- FY2020: 71.2% 

- FY2022: 72.0% 

- FY2023: 72.3% 

- FY2024: 72.0% 

- FY2025: 71.7% 

- FY2026: 72.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in software application; annual sales are USD 1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm (filed 2026-02-27); FY2025: revenue 1037589000; grossProfit 743724000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DUOL.US: Duolingo, Inc. operates as a mobile learning platform in the United States, the United Kingdom, and internationally. The company offers 250 language courses, including Spanish, English, French, German, Italian, Portuguese, Japanese, and Chinese through its Duolingo app. It also provides a digital English language proficiency assessment exam. The company was incorporated in 2011 and is headquartered in Pittsburgh, Pennsylvania.

### Why customers stay

Margins ranged from 71.7% to 72.3% during 2023–25; it earns 2.3% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: grossProfit / revenue = 72.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: grossProfit / revenue = 72%.

- Source: https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm (filed 2026-02-27); FY2025: grossProfit / revenue = 71.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); 8-year return on capital observations [[2019,-2.495378398236591],[2020,-0.11178400503778338],[2021,0.08690034756084147],[2022,-0.0894005966863225],[2023,-0.017160084779753178],[2024,0.06241469331381402],[2025,0.5329964563764468],[2026,1.106547038731362]]; median 0.02262730426703042. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Spends 0.9% of cash earnings on expansion; paid no dividends in 7 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2023: growth capex 0; upkeep 3191000; owner earnings 19971000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); FY2024: growth capex 1262000; upkeep 10854000; owner earnings 88574000. Growth capex / owner earnings = 0.014247973445932215.

- Source: https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm (filed 2026-02-27); FY2025: growth capex 3705000; upkeep 14391000; owner earnings 414065000. Growth capex / owner earnings = 0.008947870503423376.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Dividend observations: [[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 1.5% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); DUOL.US SharesStats.PercentInsiders = 1.4989999999999999 percentage points; cache date 2026-10-16.

### What the price says

The price is 6.9 times annual sales.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-27); Closing price 148.93 USD; reporting-to-trading FX 1; FY2025 annual sales per share 21.47861637823963; price multiple 6.933873084622139. FY2025 cash earnings/share 8.571354641053242. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2021-07: $140.25 per share

- 2021-08: $129.56 per share

- 2021-09: $166.36 per share

- 2021-10: $173.69 per share

- 2021-11: $110.19 per share

- 2021-12: $106.11 per share

- 2022-01: $100.01 per share

- 2022-02: $86.29 per share

- 2022-03: $95.11 per share

- 2022-04: $86.47 per share

- 2022-05: $83.61 per share

- 2022-06: $87.55 per share

- 2022-07: $91.75 per share

- 2022-08: $94.02 per share

- 2022-09: $95.23 per share

- 2022-10: $81.84 per share

- 2022-11: $69.67 per share

- 2022-12: $71.13 per share

- 2023-01: $95.49 per share

- 2023-02: $90.79 per share

- 2023-03: $142.59 per share

- 2023-04: $136.16 per share

- 2023-05: $149.57 per share

- 2023-06: $142.94 per share

- 2023-07: $155.19 per share

- 2023-08: $147.16 per share

- 2023-09: $165.87 per share

- 2023-10: $146.05 per share

- 2023-11: $212.29 per share

- 2023-12: $226.85 per share

- 2024-01: $178.89 per share

- 2024-02: $239.00 per share

- 2024-03: $220.58 per share

- 2024-04: $225.75 per share

- 2024-05: $191.40 per share

- 2024-06: $208.67 per share

- 2024-07: $171.94 per share

- 2024-08: $212.57 per share

- 2024-09: $282.02 per share

- 2024-10: $292.97 per share

- 2024-11: $348.27 per share

- 2024-12: $324.23 per share

- 2025-01: $363.99 per share

- 2025-02: $312.07 per share

- 2025-03: $310.54 per share

- 2025-04: $389.48 per share

- 2025-05: $519.61 per share

- 2025-06: $410.02 per share

- 2025-07: $346.55 per share

- 2025-08: $297.86 per share

- 2025-09: $321.84 per share

- 2025-10: $270.64 per share

- 2025-11: $191.41 per share

- 2025-12: $175.50 per share

- 2026-01: $134.06 per share

- 2026-02: $101.00 per share

- 2026-03: $98.57 per share

- 2026-04: $110.10 per share

- 2026-05: $111.36 per share

- 2026-06: $115.02 per share

- 2026-07: $134.81 per share

- 2026-08: $148.36 per share

- 2026-09: $142.40 per share

- 2026-10: $148.93 per share

## Annual estimated value (USD per share)

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm); period 2025-12-31, filed 2026-02-27.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.