Cash conversion remains highly efficient, with an OCF/NI ratio of 3.47 in 2026Q1 and free cash flow margins reaching a peak of 51.6% due to upfront subscription payments.
| Cash from Operations | 432.96M | 387.82M | 285.51M | 153.61M | 53.66M | 9.17M | 17.71M | 2.15M |
| Operating CF Margin % | - | 37.38% | 38.17% | 28.92% | 14.52% | 3.66% | 10.95% | 3.04% |
| Operating CF Growth % | 166.5% | 35.83% | 85.86% | 186.29% | 485.13% | -48.22% | 722.86% | - |
| Net Income | 422.39M | 414.06M | 88.57M | 16.07M | -59.57M | -60.13M | -15.78M | -13.55M |
| Depreciation & Amortization | 14.99M | 14.39M | 10.85M | 7.09M | 4.87M | 2.73M | 2.26M | 1.25M |
| Stock-Based Compensation | 141.07M | 137.44M | 110.48M | 95.22M | 73.82M | 40.8M | 17.03M | 3.73M |
| Deferred Taxes | -215.69M | -225.19M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -12.18M | -1.85M | -313K | 333K | 0 | 0 | 0 | 1.23M |
| Working Capital Changes | 82.39M | 48.97M | 75.92M | 34.9M | 34.54M | 25.77M | 14.2M | 9.5M |
| Change in Receivables | 36.59M | 89.42M | -39.92M | 49.4M | -13.56M | -12.71M | -10.45M | -5.3M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | -2.22M | 1.62M | 3.93M | 1.26M | -6.66M | 5.62M | -1.61M | 2.43M |
| Cash from Investing | -113.88M | -107.68M | -217.33M | -13.58M | -14.17M | -6.21M | -4.01M | 2.43M |
| Capital Expenditures | -9.88M | 0 | -12.12M | -3.19M | -5.56M | -3.59M | -3.38M | -3.77M |
| CapEx % of Revenue | 0.9% | 1.74% | 1.62% | 0.6% | 1.51% | 1.43% | 2.09% | 5.33% |
| Acquisitions | -33.1M | 0 | -6.59M | 0 | -4.05M | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | -48.01M | -107.68M | -9.02M | -10.39M | -4.56M | -2.62M | -638K | -1.48M |
| Cash from Financing | -64.52M | -29.55M | -30M | 2.13M | 14.78M | 430.47M | 46.95M | 30.97M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | 9.45M | 12.57M | 19.36M | 0 | 0 | 425.32M | 44.92M | 29.68M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | -868K | 0 | -168K |
| Other Financing | -73.97M | -42.12M | -49.36M | 2.13M | 14.78M | 5.14M | 2.03M | 1.29M |
| Net Change in Cash | 254.56M | 250.6M | 38.18M | 142.16M | 54.26M | 433.43M | 60.65M | 35.55M |
| Free Cash Flow | 423.09M | 369.73M | 273.4M | 139.93M | 43.53M | 2.96M | 13.69M | -3.09M |
| FCF Margin % | 38.5% | 35.63% | 36.55% | 26.35% | 11.78% | 1.18% | 8.47% | -4.37% |
| FCF Growth % | 45.79% | 35.23% | 95.38% | 221.44% | 1368.69% | -78.36% | 542.6% | - |
| FCF per Share | 9.07 | 7.65 | 5.80 | 3.01 | 1.10 | 0.08 | 0.38 | -0.09 |
| FCF Conversion (FCF/Net Income) | 1.00x | 0.94x | 3.22x | 9.56x | -0.90x | -0.15x | -1.12x | -0.16x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 11.63M | 0 | 7.62M | 2.32M | 615K | 132K | 0 | 0 |
Platform fee dependency
As reported in financial statements, Duolingo consistently generates operating cash flow significantly higher than net income, with the OCF/NI ratio reaching 3.47 in 2026Q1, suggesting that the company's accounting earnings are heavily influenced by non-cash items and deferred revenue recognition patterns that mask underlying cash generation.
The persistent gap between net income and operating cash flow indicates that the company's reported profitability is conservative relative to its actual cash-generating capacity. Investors should monitor this divergence, as it suggests that the business model benefits from significant upfront cash collections that are only recognized as revenue over the duration of subscription terms.
Based on recent quarterly filings, Duolingo has maintained a robust free cash flow trajectory, with margins peaking at 51.6% in 2026Q1, which highlights the company's ability to convert its subscription-based revenue into liquid capital while keeping capital expenditures at a negligible fraction of total revenue.
The upward trend in free cash flow margins suggests that the company is successfully scaling its platform without requiring proportional increases in infrastructure investment. This efficiency appears to be a direct result of the software-centric nature of the business, which avoids the heavy capital intensity typically associated with traditional education providers.
According to historical cash flow data, Duolingo frequently records positive working capital changes, such as the $81.2M inflow observed in 2025Q4, which reflects the company's structural advantage in collecting annual subscription payments upfront before the associated service is fully delivered to the end user.
This working capital dynamic acts as a self-funding mechanism for the company's growth initiatives, effectively providing interest-free financing from its customer base. Analysts should interpret these fluctuations as a leading indicator of future revenue recognition rather than purely operational efficiency, as they are inherently tied to the timing of subscription renewals.
Data from recent SEC filings reveals that Duolingo consistently issues stock-based compensation, with quarterly expenses averaging approximately $30M, which serves to dilute existing shareholders and obscures the true economic cost of the engineering talent required to maintain the company's competitive moat in a highly technical market.
While these non-cash expenses improve reported cash flow metrics, they represent a real economic cost that should be factored into any valuation model. Investors should be cautious of the impact this persistent dilution may have on long-term earnings per share growth, especially if the company does not implement offsetting share repurchase programs.
Quick answers to the most common questions about buying DUOL stock.
Duolingo, Inc. (DUOL) generated $387.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Duolingo, Inc. (DUOL) generated $369.7M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Duolingo, Inc. (DUOL) spent $0.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.