Duolingo (DUOL) Q3 2025 earnings summary

Executive summary

• Achieved strong Q3 performance with 36% year-over-year DAU growth, reaching 50.5 million DAUs and 135.3 million MAUs, and a 34% increase in paid subscribers to 11.5 million.

• Revenue grew 41% year-over-year to $271.7 million for Q3 2025, with net income of $292.2 million, including a one-time $222.7 million income tax benefit.

• Guiding to nearly $1.2 billion in bookings for the year, representing 33% growth and an adjusted EBITDA margin of 29%.

• Strategic shift to prioritize long-term user growth and teaching efficacy, leveraging AI to enhance product quality and engagement.

• Paid subscriber growth and robust user engagement are driving strong financial results.

Financial highlights

• Q3 2025 revenue: $271.7 million (up 41% year-over-year); nine months ended September 30, 2025: $754.7 million (up 40%).

• Bookings expected to reach nearly $1.2 billion for the year, up 33% year-over-year.

• Adjusted EBITDA margin for Q3 2025: 29.5%.

• Gross margin for Q3 2025: 72.5%, slightly down due to higher AI and hosting costs.

• ARPU increased mid-single digits each quarter, driven more by Max than price changes.

Outlook and guidance

• Management expects continued growth in MAUs, DAUs, and paid subscribers, supported by ongoing product innovation and marketing.

• Expecting some deceleration in DAU growth in Q4, with September and October at around 30% year-over-year growth.

• Not providing specific Q4 DAU guidance but confident in stabilization and long-term growth trajectory.

• Sufficient liquidity and cash flow to support operations and capital expenditures for at least the next 12 months.

• Investments in product and teaching efficacy expected to drive long-term user and bookings growth, with a modest near-term impact on financials.