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Duolingo (DUOL) Q2 Earnings Report Preview: What To Look For


Max Juang /
2024/08/06 3:00 am EDT

Language-learning app Duolingo (NASDAQ:DUOL) will be reporting results tomorrow after the bell. Here's what you need to know.

Duolingo beat analysts' revenue expectations by 1.1% last quarter, reporting revenues of $167.6 million, up 44.9% year on year. It was a mixed quarter for the company, with impressive growth in its users but a miss of analysts' user estimates. It reported 97.6 million users, up 34.4% year on year.

Is Duolingo a buy or sell going into earnings? Read our full analysis here, it's free.

This quarter, analysts are expecting Duolingo's revenue to grow 39.7% year on year to $177.1 million, slowing from the 43.5% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.85 per share.

Duolingo Total Revenue

The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Duolingo has a history of exceeding Wall Street's expectations, beating revenue estimates every single time over the past two years by 2.5% on average.

Looking at Duolingo's peers in the consumer subscription segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Roku delivered year-on-year revenue growth of 14.3%, beating analysts' expectations by 3.2%, and Coursera reported revenues up 10.8%, topping estimates by 3.5%. Roku traded down 3.9% following the results while Coursera was up 45.1%.

Read our full analysis of Roku's results here and Coursera's results here.

Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts thanks to mixed inflation data, and while some of the consumer subscription stocks have fared somewhat better, they have not been spared, with share prices down 6.6% on average over the last month. Duolingo is down 18.2% during the same time and is heading into earnings with an average analyst price target of $250.5 (compared to the current share price of $161).

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