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Duolingo (DUOL) is under heavy pressure today after reporting its Q3 results last night, trading to a new 52-week low. The company reported EPS of $5.95 compared to $0.49 in the prior year period, though that increase was largely due to a one-time tax benefit. Revenue was above estimates, increasing 41% yr/yr to $271.7 mln. The company also guided FY25 revenue to $1.026-1.032 bln, slightly above expectations.

• Daily active users reached 50.5 mln, up 36% yr/yr, but growth slowed from +49% in Q1 and +40% in Q2. Management said DAUs in September and October were trending around +30% yr/yr.
• Bookings rose 33% yr/yr to $281.9 mln, supported by a 34% increase in paid subscribers to 11.5 mln. Premium tiers like Family and Super drove mid-single-digit ARPU gains, while Max (9% of subs) remains slightly below expectations.
• Chess was a bright spot, becoming the fastest-growing subject with higher retention than language learning, while Asia remained the top growth region, driven by the Luckin Coffee partnership and strong engagement.
• CEO Luis von Ahn said Duolingo is prioritizing teaching quality and user growth over near-term monetization, consistent with its "long view" strategy. Q4 bookings guidance of $329-336 mln (+21-24%) reflects that shift and marks a slowdown from recent quarters.

Briefing.com Analyst Insight

DUOL delivered another strong quarter, with solid engagement, healthy subscriber growth, and new subjects like Chess, Math, and Music continuing to gain traction. The disappointment comes from management's renewed focus on the "long view," prioritizing teaching quality and user growth over near-term monetization. Bookings, which captures all revenue streams, shows a clear slowdown from prior quarters, reflecting that shift, and that move is testing investor patience. Its CEO said the company ultimately aims to build an app capable of teaching "billions of users," highlighting its long-term opportunity. That said, Duolingo now becomes more of a "show-me" story, as investors wait to see if its product-led approach can drive even greater engagement and scale over time.