Duolingo Price Drops Over Future Growth Concerns

Q1 results for the language learning company saw revenue climb by 44.9% on a year-by-year basis to over $167m. This is roughly in line with its growth rate for the last three years, which has averaged 45.7%. Its net earnings per share was reported at $0.57, marking a significant increase from last year’s $0.06 loss. DUOL executives were positive about the results and stated:

We’re excited about our near-term opportunities, which remain consistent: user growth, optimized subscription conversion and tiers, and family plan.

This optimism is based on the number of daily users growing by 54% year over year, though it was lower this time around than the last quarter’s 65%.

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However, the share price still fell in the aftermath of the results being announced, partly due to some profit-taking and partly due to worries that the period of rapid growth is over. In the 52 previous weeks, the DUOL price had risen 86%, so it’s no surprise that some investors choose this moment to cash out and look for something else to put their money into if they feel that things are starting to slow down.

The DUOL guidance for Q2 revenue is now sitting at $176.3m, which is in line with what analysts expect the company to achieve. Full-year revenue guidance has been increased by 1% though, rising from $723.5m to $731m.