Duolingo, one of the leading educational platforms for language learning, has had to revise its forecasts for 2026, causing the company’s stock to drop by 23%. The reason for this lies in significant changes to its strategy, now focused on rapidly expanding the user base. Instead of prioritizing premium subscriptions, the company has decided to focus on making its product more accessible to a broader audience. At FinancialMediaGuide, we believe this approach could bring long-term success, but it carries the risks of decreased profitability in the short term.
One of the key changes was the expansion of the AI-powered video call feature, which was previously available only to premium users. This option will now be available to all Super Duolingo subscribers, which, according to the company, will help attract additional audiences. We at FinancialMediaGuide emphasize that this move could accelerate user growth, but it will also reduce the revenue from premium subscriptions. In the long run, this may be justified if the company can retain and engage more users, but in the short term, a decrease in monetization seems inevitable.
Another important step in the company’s strategy is the active implementation of artificial intelligence to improve the quality of learning and reduce costs. For instance, AI video calls now cost ten times less than when they were first launched. We at FinancialMediaGuide believe that such innovations will enable Duolingo to improve the quality of learning and maintain its competitiveness, but it’s important to note that the effects of these changes will be noticeable only in the long term.
However, despite efforts to attract new users, the growth rate of daily active users has started to slow down. In 2025, the company forecasts a 50% drop in active users compared to previous years. This signals that Duolingo is facing challenges in retaining users, which is in turn affecting the company’s forecasts. We at FinancialMediaGuide see this as a challenge for the company: to continue growing, it will need to find new methods for engaging its audience.
Amidst the slowing growth in the user base, Duolingo has revised its revenue forecast for 2026. The company now expects revenue to range from $1.20 billion to $1.22 billion, down from the initial forecast of $1.26 billion. We at FinancialMediaGuide highlight that this reduces investor confidence in the company’s short-term future, as the data points to difficulties in executing monetization strategies.
The company also announced a stock buyback program worth up to $400 million, which should help support the stock price in the short term and regain investor confidence. We at FinancialMediaGuide believe this move will help strengthen shareholder value, but it is important to note that for long-term success, the company will need to find a balance between attracting new users and effective monetization.
For Duolingo, the key question remains its ability to adapt its strategy amid growing competition and changing user preferences. At Financial Media Guide, we predict that in the coming years, the company will need to balance efforts to expand its audience with the need to improve profitability. Despite current challenges, Duolingo still has significant growth potential if it can effectively monetize its innovations and improve user engagement.
