Revenue growth slowed from 41.5% in 2025Q2 to 13.7% in 2026Q3 while operating margin compressed from a 15.5% peak in 2026Q1 to 7.8%, suggesting operating expenses are rising faster than gross profit.
Duolingo, Inc. (DUOL) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Sales/Revenue | 1.18B | 1.04B | 748.02M | 531.11M | 369.5M | 250.77M | 161.7M | 70.76M |
| Revenue Growth % | 22.61% | 38.71% | 40.84% | 43.74% | 47.34% | 55.09% | 128.51% | - |
| Cost of Goods Sold | 324.32M | 293.87M | 209.19M | 147.18M | 103.43M | 69.88M | 46.53M | 21.36M |
| COGS % of Revenue | - | 28.32% | 27.97% | 27.71% | 27.99% | 27.87% | 28.78% | 30.18% |
| Gross Profit | 857.97M | 743.72M | 538.84M | 383.93M | 266.06M | 180.89M | 115.16M | 49.4M |
| Gross Margin % | 72.57% | 71.68% | 72.03% | 72.29% | 72.01% | 72.13% | 71.22% | 69.82% |
| Gross Profit Growth % | - | 38.02% | 40.35% | 44.3% | 47.08% | 57.08% | 133.11% | - |
| Operating Expenses | 711.1M | 602.49M | 475.27M | 396.85M | 330.62M | 236.99M | 130.89M | 62.3M |
| OpEx % of Revenue | - | 58.07% | 63.54% | 74.72% | 89.48% | 94.5% | 80.95% | 88.04% |
| Selling, General & Admin | 350.35M | 299.49M | 242.33M | 204.15M | 181.68M | 133.2M | 77.87M | 30.74M |
| SG&A % of Revenue | - | 28.86% | 32.4% | 38.44% | 49.17% | 53.12% | 48.16% | 43.44% |
| Research & Development | 360.75M | 303M | 232.94M | 192.7M | 148.94M | 103.79M | 53.02M | 31.56M |
| R&D % of Revenue | - | 29.2% | 31.14% | 36.28% | 40.31% | 41.39% | 32.79% | 44.6% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 146.87M | 141.24M | 63.57M | -12.92M | -64.56M | -56.1M | -15.73M | -12.9M |
| Operating Margin % | 12.42% | 13.61% | 8.5% | -2.43% | -17.47% | -22.37% | -9.73% | -18.23% |
| Operating Income Growth % | - | 122.18% | 591.98% | 79.99% | -15.08% | -256.65% | -21.96% | - |
| EBITDA | 163.4M | 155.63M | 74.42M | -5.83M | -59.69M | -53.37M | -13.47M | -11.65M |
| EBITDA Margin % | 13.82% | 15% | 9.95% | -1.1% | -16.15% | -21.28% | -8.33% | -16.46% |
| EBITDA Growth % | 30.05% | 109.11% | 1377.43% | 90.24% | -11.84% | -296.14% | -15.69% | - |
| D&A (Non-Cash Add-back) | 16.53M | 14.39M | 10.85M | 7.09M | 4.87M | 2.73M | 2.26M | 1.25M |
| EBIT | 179.97M | 182.41M | 102.31M | 17.78M | -58.64M | -59.96M | -15.73M | -12.9M |
| Net Interest Income | 47.66M | 45.23M | 42.7M | 31.09M | 7.24M | 0 | 0 | 0 |
| Interest Income | 47.66M | 45.23M | 42.7M | 31.09M | 7.24M | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 44.11M | 41.17M | 38.74M | 30.7M | 5.92M | -3.86M | 21K | -657K |
| Pretax Income | 190.99M | 182.41M | 102.31M | 17.78M | -58.64M | -59.96M | -15.71M | -13.55M |
| Pretax Margin % | 16.15% | 17.58% | 13.68% | 3.35% | -15.87% | -23.91% | -9.71% | -19.15% |
| Income Tax | 45.25M | -231.66M | 13.73M | 1.71M | 938K | 177K | 68K | 0 |
| Effective Tax Rate % | 23.69% | -127% | 13.42% | 9.62% | -1.6% | -0.3% | -0.43% | 0% |
| Net Income | 145.74M | 414.06M | 88.57M | 16.07M | -59.57M | -60.13M | -15.78M | -13.55M |
| Net Margin % | 12.33% | 39.91% | 11.84% | 3.03% | -16.12% | -23.98% | -9.76% | -19.15% |
| Net Income Growth % | -62.25% | 367.48% | 451.28% | 126.97% | 0.93% | -281.18% | -16.39% | - |
| Net Income (Continuing) | 145.74M | 414.06M | 88.57M | 16.07M | -59.57M | -60.13M | -15.78M | -13.55M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 2.87 | 8.57 | 1.88 | 0.35 | -1.51 | -1.57 | -0.44 | -0.38 |
| EPS Growth % | -62.72% | 355.85% | 437.14% | 123.18% | 3.82% | -256.82% | -15.79% | - |
| EPS (Basic) | - | 9.05 | 2.04 | 0.35 | -1.51 | -1.57 | -0.44 | -0.38 |
| Diluted Shares Outstanding | 50.8M | 48.31M | 47.1M | 46.52M | 39.47M | 38.27M | 35.89M | 35.89M |
| Basic Shares Outstanding | 46.84M | 45.77M | 43.5M | 46.52M | 39.47M | 38.27M | 35.89M | 35.89M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying DUOL stock.
For fiscal year 2025, Duolingo, Inc. (DUOL) reported total revenue of $1.04B. This represents a 1366.3% increase compared to $70.8M in 2019.
Duolingo, Inc. (DUOL) is profitable, generating $414.1M in net income for the fiscal year ending 2025 with a net profit margin of 39.9%.
Duolingo, Inc. (DUOL) reported an operating income of $141.2M, resulting in an operating profit margin of 13.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Duolingo, Inc. (DUOL) generated $743.7M in gross profit for the year, representing a gross profit margin of 71.7%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin compression from AI competition
Metrics are mathematically derived from official filings.
Revenue Growth Decelerating From Peak Pace
Based on reported figures, Duolingo's quarterly revenue growth slowed from roughly 41% in 2025Q2 to 13.7% in 2026Q3, indicating that the rapid expansion phase is maturing and that future top-line gains may depend more on monetization than on user acquisition.
The deceleration spans roughly five quarters and appears structural rather than seasonal, since growth fell steadily even as absolute revenue rose from $252.3M to $309.0M. This pattern suggests the free-user base is growing more slowly or that conversion gains are harder to sustain at scale. Investors should monitor whether raised guidance can hold growth in the mid-teens without relying on one-time tailwinds.
Gross Margin Stable Near Platform-Fee Ceiling
Duolingo's gross margin has held in a narrow 70.5% to 72.9% band across the last ten quarters, which suggests a stable cost structure, though app-store fees appear to cap the upside and leave the margin exposed to any change in distribution economics.
The consistency of gross margin implies that subscription mix and platform fees have been relatively steady, and the margin has not expanded meaningfully despite scale. Because the largest variable cost is the 15-30% app-store take rate, the margin is structurally limited and may be vulnerable to regulatory or policy shifts. Migration to direct web payments would be a key lever to monitor.
Operating Margin Expansion Now Reversing
Operating margin rose from 6.7% in 2024Q4 to a peak of 15.5% in 2026Q1 before falling to 7.8% in 2026Q3, indicating that operating leverage has reversed as operating expenses grew faster than gross profit in recent quarters.
R&D rose from $82.1M in 2026Q1 to $107.7M in 2026Q3 while gross profit grew more modestly, suggesting reinvestment into product and AI capabilities has outpaced revenue. This may reflect deliberate investment or a loss of cost discipline, and the data alone does not confirm which. Sustained margin recovery would require R&D growth to moderate relative to revenue.
Net Income Diverges Sharply From Operating Profit
Reported net margin in several quarters, including an 107.5% figure in 2025Q3 and 14.9% in 2026Q1, diverges sharply from operating margin, which suggests non-operating or tax items materially affect reported earnings and warrant further investigation.
The gap between operating income and net income in certain periods appears too large to be explained by core operations, pointing toward tax benefits or valuation allowance adjustments. The EPS figure for 2025Q3 also appears anomalous relative to adjacent quarters, which may indicate a data or reporting irregularity. Analysts should anchor on operating income and free cash flow rather than headline net income.
Growth Deceleration Challenges Expansion Thesis
Based on reported figures, the slide in quarterly revenue growth from 41% to 13.7% and the fall in operating margin from 15.5% to 7.8% together suggest the bull case may be leaning on monetization gains that have not yet materialized in the income statement.
If the mid-teens growth rate proves to be a floor rather than a stabilization point, the premium multiple implied by an engagement-engine thesis may compress. The rise in R&D and SBC alongside slowing top-line growth raises the possibility that AI-driven product spend is not yet translating into pricing power, and competition from freely available conversational AI could further pressure conversion. Investors should treat the reported profitability as potentially overstated by tax effects until operating cash flow confirms it.