Duolingo(US:DUOL) Xin Lang Cai Jing·2025-11-06 12:43Core Viewpoint - Duolingo's stock price dropped over 21% due to lower-than-expected fourth-quarter booking guidance and a slowdown in daily active user growth, despite strong third-quarter earnings performance [1][2]. Financial Performance - Duolingo reported third-quarter revenue of $271.7 million, a 41% year-over-year increase, exceeding analyst expectations of $260.3 million [1][2]. - The company achieved an adjusted EBITDA of $80 million with a margin of 29.5%, up from 24.7% year-over-year [2]. - Net income for the third quarter was $23.4 million, showing significant growth compared to the previous year [2]. User Metrics - Monthly active users (MAUs) reached 135.3 million, a 20% increase year-over-year, while daily active users (DAUs) grew to 50.5 million, a 36% increase [2]. - Paid subscribers increased to 11.5 million, reflecting a 34% growth [2]. Strategic Adjustments - The company is shifting focus towards long-term plans, emphasizing teaching capability improvements over short-term monetization, which has impacted fourth-quarter booking expectations [4]. - Duolingo has resumed posting humorous content on social media to boost user engagement, which had previously been reduced [3]. Business Model - Duolingo operates on a "free + ads + premium" business model, relying on user growth and increased conversion rates to sustain revenue [5].