$DUOL · Duolingo, Inc.
Duolingo filed its Q3 FY2026 10-Q. Revenue grew 14% YoY to $309.0M (nine-month revenue +19% to $899.4M). Gross margin was 72.9% and operating margin 7.8%. Net income of $27.2M (diluted EPS $0.54) compares against $292.2M a year earlier, which included a $245.7M income-tax benefit from releasing deferred-tax valuation allowances. Operating income fell 31% YoY to $24.2M as R&D expense jumped 30% to $107.7M.
- Revenue rose 14% YoY to $309.0M in Q3 FY2026.
- Net income fell 91% YoY to $27.2M; prior-year included a $245.7M tax benefit.
- Operating income declined 31% YoY to $24.2M.
- R&D expense grew 30% YoY to $107.7M, driven partly by stock-based compensation.
- Cash and equivalents stood at $1.24B as of September 30, 2026.
Extended-hours last trade of $145.62 is +13.77% vs the $128.00 regular close, suggesting investors read the results favorably despite the headline net-income drop.
The 91% net-income drop is a tax-comparison artifact, while underlying revenue growth and margin resilience drove a strong after-hours rally.
Duolingo's 14% revenue growth and 72.9% gross margin remain strong for consumer edtech, though rising R&D spend reflects heavier AI investment across the sector.
The filing flags reliance on AI/machine-learning technologies and third-party AI vendors, plus inherent challenges in measuring user metrics that could affect reported DAU and subscriber figures.