Duolingo Posts Q1 Beat; Faces Softness In Monthly Active User Growth

Shares of Duolingo Inc (NASDAQ:DUOL) tanked in early trading on Tuesday, even after the company reported upbeat first-quarter results. Here are the key analyst insights: DA Davidson analyst Wyatt Swanson maintained a Neutral rating and raised the price target from $85 to $90. Needham analyst Ryan MacDonald reiterated a Buy rating and price target of $145. Check out other analyst stock ratings. DA Davidson: Duolingo reported its quarterly revenues, bookings and EBITDA ahead of consensus estimates, Swanson said in a note. Management raised their 2026 adjusted EBITDA guidance to around 1.6% above the high end of the prior range. Yet, they lowered bookings guidance towards the lower end of the earlier rang. While DAU (daily active users) growth of 21.2% year-on-year came in above the consensus of 20.6%, growth in MAU (monthly active users) decelerated in the quarter to 5.8% year-on-year from the previous quarter's 14.1%, the analyst stated. "Notable to us, the spread between MAUs and DAUs added Q/Q was just ~900K, which suggests that experiments with encouraging retention and higher engagement may be in the early innings of paying off," he further wrote. Although the company did not provide any formal guidance for DAU growth for the second quarter, its 20% DAU growth outlook provided earlier "is still intact" for 2026, Swanson said. Read Also: Microsoft's $627 Billion Order Book Is Bigger Than The Combined Size Of IBM, Salesforce, Dell And Adobe Needham: Duolingo made a "solid start to 2026," MacDonald said. Revenues and adjusted EBITDA of $292 million and $83.5 million came higher than Needham's estimates of $288.5 million and $73.6 million, respectively. The company's revenues grew 26.5% year-on-year, subscriber bookings grew 15.5% to $268.1 million, above the consensus of $258.3 million. While DAU growth exceeded Duolingo's 20% target, MAU growth was slightly softer than expected. Needham came away “encouraged by improvements in DAU/MAU” and “rapid increases in content launches.” MacDonald also noted the doubling of average words spoken per video call. Price Action: Shares of Duolingo had declined by 7.2% to $102 at the time of publication on Tuesday. Image: Shutterstock