What To Expect From Duolingo’s (DUOL) Q4 Earnings

Jabin Bastian /
2024/02/27 2:03 am EST

Language-learning app Duolingo (NASDAQ:DUOL) will be announcing earnings results tomorrow afternoon. Here's what to look for.

Last quarter Duolingo reported revenues of $137.6 million, up 43.3% year on year, beating analyst revenue expectations by 4.2%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates.Is Duolingo buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Duolingo's revenue to grow 42.9% year on year to $148.4 million, in line with the 42.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.65 per share.

Duolingo Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 3.5%.

Looking at Duolingo's peers in the education services segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Lincoln Educational delivered top-line growth of 11.7% year on year, beating analyst estimates by 6.6% and Perdoceo Education reported revenue decline of 16% year on year, exceeding estimates by 1.2%. Lincoln Educational traded up 2.7% on the results, and Perdoceo Education was down 1.4%.

Read our full analysis of Lincoln Educational's results here and Perdoceo Education's results here.

Stocks have been under pressure as inflation (despite slowing) makes their long-dated profits less valuable, and while some of the education services stocks have fared somewhat better, they have not been spared, with share price declining 4.7% over the last month. Duolingo is down 4.6% during the same time, and is heading into the earnings with analyst price target of $213.6, compared to share price of $183.82.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.