Duolingo, Inc 10-Q for FY2026 Q1

Duolingo, Inc. (DUOL)

10-Q 2026-05-05 For: 2026-03-31

Added on May 05, 2026

About this 10-Q

Duolingo, Inc filed this 10-Q on May 5, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $291.97M; up 26.5% from $230.74M a year earlier
Net income: $43.46M; up 23.7% from net income of $35.14M a year earlier
Diluted EPS: $0.89; up 23.6% from $0.72 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 per share	DUOL	The Nasdaq Stock Market LLC


Special Note Regarding Forward-Looking Statements			2
Special Note Regarding Key Operating Metrics			4
Part I Financial Information			5
Item 1. Financial Statements (Unaudited)			5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			32
Part II Other Information			34
Item 1. Legal Proceedings			34
Item 1A. Risk Factors			34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3. Defaults Upon Senior Securities			34
Item 4. Mine Safety Disclosures			34
Item 5. Other Information			34
Item 6. Exhibits			36
Signatures			37



	March 31, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	1,138,561	$	1,036,389
Short-term investments	113,049		104,078
Accounts receivable	125,086		162,827
Deferred cost of revenues	104,513		102,663
Income tax receivable	5,092		14,067
Prepaid expenses and other current assets	19,658		16,582
Total current assets	1,505,959		1,436,606
Operating lease right-of-use assets	79,944		80,380
Long-term investments	140,211		135,098
Intangible assets, net	28,327		28,309
Property and equipment, net	36,966		36,297
Goodwill	35,335		35,335
Restricted cash	2,735		2,735
Deferred tax assets, net	217,837		227,339
Other assets	10,680		10,083
Total assets	$	2,057,994	$	1,992,182

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Deferred revenues	$	513,256	$	496,205
Accounts payable	7,486		7,998
Income tax payable	3,814		1,257
Accrued expenses and other current liabilities	49,558		45,688
Total current liabilities	574,114		551,148
Long-term obligation under operating leases	91,873		93,779
Deferred tax liabilities, net	243		249
Other long-term liabilities	—		—
Total liabilities	666,230		645,176
Commitments and contingencies (Note 9)
Stockholders’ equity
Class A common stock, $0.0001 par value; 2,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 40,534 issued and 40,487 outstanding at March 31, 2026 and 40,368 issued and outstanding at December 31, 2025, respectively Class B common stock, $0.0001 par value; 30,000 shares authorized as of March 31, 2026 and December 31, 2025; 6,356 and 6,260 issued and outstanding at March 31, 2026 and December 31, 2025, respectively	5		5
Treasury stock, at cost; 46 and 0 shares as of March 31, 2026 and December 31, 2025, respectively.	(4,499)		—
Additional paid-in capital	1,064,580		1,058,783

Retained earnings	331,678		288,218
Total stockholders’ equity	1,391,764		1,347,006
Total liabilities and stockholders' equity	$	2,057,994	$	1,992,182


	Three Months Ended March 31,
	2026		2025






Revenues	$	291,967	$	230,743






Cost of revenues	78,871		66,647
Gross profit	213,096		164,096
Operating expenses:
Research and development	82,974		70,390
Sales and marketing	39,249		26,662
General and administrative	46,346		43,450

Total operating expenses	168,569		140,502
Income from operations	44,527		23,594


Other (expense) income, net	(786)		1,001
Income before interest income and income taxes	43,741		24,595
Interest income	11,811		10,415
Income before income taxes	55,552		35,010
Provision for (benefit from) income taxes	12,092		(125)
Net income and comprehensive income	$	43,460	$	35,135
Net income per share attributable to Class A and Class B common stockholders, basic	$	0.93	$	0.78
Net income per share attributable to Class A and Class B common stockholders, diluted	$	0.89	$	0.72


	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		(Accumulated Deficit) Retained Earnings		Total








BALANCE—January 1, 2025	44,936	$	4	—	$	—	$	950,393	$	(125,847)	$	824,550
Stock-based compensation expense	—	—		—	—		31,018		—		31,018


Stock options exercised	276	—		—	—		3,123		—		3,123
Release of restricted stock units	204	—		—	—		—		—		—
Net income	—	—		—	—		—		35,135		35,135
BALANCE—March 31, 2025	45,416	$	4	—	$	—	$	984,534	$	(90,712)	$	893,826




BALANCE—January 1, 2026	46,628	$	5	—	$	—	$	1,058,783	$	288,218	$	1,347,006
Stock-based compensation expense	—	—		—	—		34,647		—		34,647
Release of performance stock units	180	—		—	—		—		—		—
Taxes paid related to net-share settlement of share-based compensation awards	(84)	—		—	—		(9,441)		—		(9,441)
Stock options exercised	190	—		—	—		1,922		—		1,922
Release of restricted stock units	191	—		—	—		—		—		—

Repurchases of common stock	—	—		(262)	(25,830)		—		—		(25,830)
Retirement of treasury stock	(216)	—		216	21,331		(21,331)		—		—
Net income	—	—		—	—		—		43,460		43,460
BALANCE—March 31, 2026	46,889	$	5	(46)	$	(4,499)	$	1,064,580	$	331,678	$	1,391,764


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


As of March 31, 2026
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments
Cash	$	—	$	—	$	—	$	171,198	$	171,198	$	—	$	—

Level 1
Commercial paper	$	5,618	$	—	$	(12)	$	5,606	$	—	$	5,618	$	—
Money market funds	967,363		—		—		967,363		967,363		—		—
Subtotal	$	972,981	$	—	$	(12)	$	972,969	$	967,363	$	5,618	$	—

Level 2
Asset-backed securities	$	26,400	$	12	$	(18)	$	26,394	$	—	$	—	$	26,401

Corporate debt securities	182,365		47		(396)		182,016		—		97,985		84,380
U.S. Treasury securities	37,477		41		(71)		37,447		—		9,446		28,030
Subtotal	$	246,242	$	100	$	(485)	$	245,857	$	—	$	107,431	$	138,811

Level 3
Investment in SAFE	$	—	$	—	$	—	$	1,400	$	—	$	—	$	1,400
Subtotal	$	—	$	—	$	—	$	1,400	$	—	$	—	$	1,400
Total	$	1,219,223	$	100	$	(497)	$	1,391,424	$	1,138,561	$	113,049	$	140,211


As of December 31, 2025
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments
Cash	$	—	$	—	$	—	$	155,840	$	155,840	$	—	$	—

Level 1
Commercial paper	$	4,318	$	—	$	—	$	4,318	$	1,993	$	2,324	$	—
Money market funds	878,556		—		—		878,556		878,556		—		—
Subtotal	$	882,874	$	—	$	—	$	882,874	$	880,549	$	2,324	$	—

Level 2
Asset-backed securities	$	26,794	$	44	$	—	$	26,838	$	—	$	347	$	26,447

Corporate debt securities	182,417		237		(19)		182,635		—		93,997		88,420
U.S. Treasury securities	26,241		154		—		26,395		—		7,410		18,831
Subtotal	$	235,452	$	435	$	(19)	$	235,868	$	—	$	101,754	$	133,698

Level 3
Investment in SAFE	$	—	$	—	$	—	$	1,400	$	—	$	—	$	1,400
Subtotal	$	—	$	—	$	—	$	1,400	$	—	$	—	$	1,400
Total	$	1,118,326	$	435	$	(19)	$	1,275,982	$	1,036,389	$	104,078	$	135,098



(In thousands)	March 31, 2026		December 31, 2025
Leasehold improvements	$	46,773	$	44,773
Furniture, fixtures and equipment	13,080		13,095
Total property and equipment	59,853		57,868
Less: accumulated depreciation	(22,887)		(21,571)
Total property and equipment, net	$	36,966	$	36,297


	Three Months Ended March 31,
(In thousands, except percentages)	2026			2025
Income before income taxes	$	55,552		$	35,010
Provision for (benefit from) income taxes	12,092			(125)
Effective tax rate	21.8		%	(0.4)		%


(In thousands, except prices and years)	Number of options	Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value
Options outstanding at January 1, 2026	859	$	18.38	3.77	$	135,938
Granted (1)	—	—
Exercised	(190)	10.10

Forfeited and expired (2)	—	—
Options outstanding at March 31, 2026	669	$	20.71	3.88	$	52,549
Options exercisable at March 31, 2026	669	$	20.71	3.88	$	52,549


(In thousands, except prices)	Restricted stock units	Weighted- average grant date fair value per share
Outstanding at January 1, 2026	1,406	$	242.94
Granted	332	107.16
Released	(191)	178.29
Forfeited	(61)	246.66
Outstanding at March 31, 2026	1,486	$	220.81


	Three Months Ended March 31,
(In thousands, except per share data)	2026		2025
Numerator:
Net income attributable to Class A and Class B common stockholders	$	43,460	$	35,135


Denominator:
Weighted-average shares in computing net income per share attributable to Class A and Class B common stockholders, basic	46,793		45,148
Effect of dilutive securities
Founder awards where performance has been met	180		540
Dilutive effect of stock options outstanding (1)	528		1,165
RSUs outstanding	1,486		1,644
Denominator for dilutive net income per common share - weighted-average shares	48,987		48,497
Basic income per common share	$	0.93	$	0.78
Diluted income per common share	$	0.89	$	0.72


	Three Months Ended March 31,
(In millions)	2026	2025
Operating Metrics
Daily active users (DAUs) (1)	56.5	46.6
Paid subscribers (at period end)	12.5	10.3


	Three Months Ended March 31,
(In thousands)	2026		2025
Subscription	$	250,908	$	190,987
Advertising	20,614		17,882
Duolingo English Test	11,317		11,986
In-App Purchases	8,446		9,442
Other	682		446
Total revenues	$	291,967	$	230,743


	Three Months Ended March 31,
(In thousands)	2026		2025
Beginning balance—January 1	$	496,205	$	372,884
Amount from beginning balance recognized into revenue	(204,169)		(150,183)
Deferral of revenue	285,742		252,013
Amount recognized from current period deferrals	(64,522)		(59,691)
Ending balance—March 31	$	513,256	$	415,023


	Three Months Ended March 31,
(In thousands)	2026		2025
Operating Metrics
Subscription bookings	$	268,065	$	232,184
Total bookings	$	308,484	$	271,648

Non-GAAP Financial Measures
Net income (GAAP)	$	43,460	$	35,135
Adjusted EBITDA	$	83,432	$	62,804
Net cash provided by operating activities (GAAP)	$	150,771	$	105,631
Free cash flow	$	147,786	$	103,012


	Three Months Ended March 31,
(in thousands)	2026		2025		% Change	Constant Currency Change %
Revenue
Subscription	$	250,908	$	190,987	31%	27%
Total revenues	$	291,967	$	230,743	27%	22%
Bookings
Subscription	$	268,065	$	232,184	15%	11%
Total Bookings	$	308,484	$	271,648	14%	9%



	Total Number of Shares Purchased (1)	Average Price Paid Per Share (2)		Total Number of Shares Purchased as Part of the Share Repurchase Program (1)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plan (1)
					(In thousands)
January 1 - 31, 2026	—	$	—		$	—
February 1 - 28, 2026	—	$	—		$	400,000
March 1 - 31, 2026	262,324	$	98.45	262,324	$	374,170
	262,324			262,324


1.			I have reviewed this Quarterly Report on Form 10-Q of Duolingo, Inc.;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			(a)			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			(b)			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			(c)			Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			(d)			Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


			(a)			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


			(b)			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date: May 4, 2026	By:	/s/ Luis von Ahn
		Luis von Ahn
		President and Chief Executive Officer (Principal Executive Officer)


Date: May 4, 2026	By:	/s/ Gillian Munson
		Gillian Munson
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)


			1.			The Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934; and


			2.			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.