Shares in the language-learning app Duolingo (DUOL) plummeted on Thursday, falling more than 25% as an AI-heavy pitch from the company fell flat with investors and the company lowered its guidance on bookings.
Duolingo, which has leaned into pitching itself as an AI-forward company in recent months, posted third quarter sales of $271.1 million against analyst estimates of $260.3 million. But several negative measures dragged shares downward.
The company lowered its bookings forecast for the fourth quarter to a range of $329.5 million to $335.5 million, below analyst estimates of $343.6 million. Meanwhile, Duolingo also missed on estimates on utilizer growth in the third quarter, ticking up to 50.5 million daily active utilizers against analysts’ estimates of 51.1 million utilizers.
The company noted in a third quarter investor letter that its revenues and daily active utilizers are both up more than 40% since the start of the year.
Shares in Duolingo, which had seen explosive growth through May, are down more than 40% on the year as repeated attempts at an AI pitch have fallen flat with investors.
“We are one of the few companies that has found a way to build profit off of AI. This is actually profitable for us,” CEO Luis von Ahn declared to Reuters.
Von Ahn wrote in the third quarter investor letter that “we’re investing proportionally more in teaching better … becautilize we want to keep growing utilizers for a long time, and becautilize of our increasing conviction that AI can fundamentally alter what’s possible in how we teach.”
The language-learning platform has been on the back foot ever since a ChatGPT-5 presentation by OpenAI displayed the generative AI software building a language-learning tool from scratch in only minutes.
