Duolingo Q1 bookings miss as AI push weighs on profit

Duolingo forecast bookings for Q1 and 2026 below expectations, citing a strategic shift toward faster user growth that it said will weigh on profitability this year.

The company plans to expand access to its AI-powered “Video Call with Lily” by adding it to its Super Duolingo subscription, rather than limiting it to the premium Max tier.

The company said AI-based video call costs have fallen more than tenfold, enabling plans to expand AI tools to all users.

Despite efforts to improve monetization through ads and subscription prompts, Duolingo said daily active user growth is expected to slow to roughly half the pace of prior years.

It projects 2026 bookings to grow about 11%, below roughly 20% growth it said it could have delivered under its previous approach.

Adjusted core profit margin is forecast to decline to about 25% as the company invests in AI features and marketing.

For Q1, Duolingo forecast bookings of about US$301.5 million, below estimates of US$329.7 million, according to Visible Alpha.

Full-year bookings are expected between US$1.27 billion and US$1.30 billion, below estimates of US$1.39 billion.

Revenue is forecast between US$1.20 billion and US$1.22 billion, lagging estimates of US$1.26 billion, per LSEG.

The board authorized a share buyback of up to US$400 million.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Duolingo is betting on a bigger future, not just fixing a slowdown

Management wants faster user growth, with a public target of 100 million daily active users by 2028 1.
Leaders say the app is “under-monetized,” since only about 10% of monthly active users pay, while also “over-monetized” because higher ad load and tougher subscription prompts added friction that slowed user growth 1.
The push goes beyond language lessons. A stronger free tier is meant to pull more people into newer products like math and chess, with chess already at around 7 million daily active users 1.