Duolingo is set to report earnings on Monday after market hours, and Duol stock goes into the update with Wall Street expecting another quarter of growth but at a slower pace than a year ago. The language-learning company reported $282.9 million in revenue last quarter, up 35% from a year earlier, while user count rose to 133.1 million.
That prior quarter also carried a catch: Duolingo's full-year revenue guidance and EBITDA guidance both missed analysts' expectations significantly. Still, the company has a history of topping Wall Street's forecasts, and the latest consensus points to revenue growth of 25.1% this quarter, below the 37.7% increase it delivered in the same period last year. Over the past 30 days, most analysts covering the company have reconfirmed their estimates, a sign they are waiting for the numbers rather than rushing to change them.
The setup comes as investors are weighing Duolingo against a choppy consumer subscription group. Shares in that segment were up 11.1% on average over the last month, while Duolingo gained 13.3% in the same period. Roku climbed 6% after its results, helped by 22.4% year-on-year revenue growth that beat estimates by 3.6%, while Coursera fell 11.6% after reporting revenue up 9.1% and matching consensus.
The tension for Duolingo is straightforward: it can keep beating on the top line and still get punished if guidance fails to keep up. With the stock at $112.61 against an average analyst target of $104.97, Monday's report will test whether the market is willing to pay up for growth that is still strong, just not as fast as before.