Duolingo beat Q4 earnings but lowered 2026 outlook, causing stock to drop despite buyback and strong user growth.

Duolingo reported strong Q4 2025 earnings with $282.87 million in revenue and $0.91 EPS, beating estimates, driven by 133.1 million monthly active users and rising ARPU. Despite this, the company lowered 2026 guidance, forecasting 10–12% bookings growth and a 25% adjusted EBITDA margin due to increased investment in AI features, user growth, and free-tier improvements. The stock dropped 22.5% after the outlook miss, though a $400 million share buyback was announced. The company ended 2025 with over 50 million daily active users and $1 billion in bookings, signaling long-term potential.