DUOL
Duolingo, Inc.
Technology · Software - Application · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The growth and profitability factors scored very strongly, reflecting a rare combination of 38.7% revenue growth, 367.5% net income growth, and a 39.9% net margin in FY2025 [growth.revenue.yoy, growth.net_income.yoy, profitability.net_margin_pct].
- The momentum factor contributed positively due to consistent quarterly revenue and operating income growth, though net income volatility tempered the score [momentum.revenue_quarterly, momentum.operating_income_quarterly, momentum.net_income_quarterly].
- The financial health factor scored low, and the dividend and theme factors each contributed zero, collectively pulling the composite score down to 51.6/100 despite the strong growth and profitability results [dividend.none, theme.none, financial_health.total_assets].
Why Not Higher
- The dividend factor contributes zero because Duolingo pays no dividend, and the theme factor also contributes zero due to no macro theme assignment, together representing a significant portion of potential score that goes unrealized [dividend.none, theme.none].
- The financial health factor scored poorly, and the large divergence between the 13.1% operating margin and the 39.9% net margin raises questions about the sustainability of reported profitability [financial_health.total_assets, profitability.operating_margin_pct, profitability.net_margin_pct].
Data Confidence
6 / 10
Medium — some data gaps
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $748,024,000 to FY2025's $1,037,589,000, a gain of +38.7%. Net income expanded from FY2024's $88,574,000 to FY2025's $414,065,000, a gain of +367.5%, while diluted EPS rose from FY2024's $1.88 to FY2025's $8.57, a gain of +355.9%.
The model awarded a perfect growth score, reflecting simultaneous top-line acceleration and dramatic bottom-line expansion across all three key growth metrics in the FY2024-to-FY2025 period.
In FY2025, Duolingo posted a net margin of 39.9%, an operating margin of 13.1%, and a return on assets of 20.8%.
The model rewarded the combination of a high net margin and strong asset productivity; the operating margin, while positive, is notably lower than the net margin, which may reflect non-operating income contributions and explains why the score fell slightly short of a perfect 20.
Filing evidence currently available does not support a more specific explanation for this factor.
Revenue has risen steadily across the last four quarters: $252,265,000 in 2025Q2, $271,713,000 in 2025Q3, $282,868,000 in 2025Q4, and $291,967,000 in 2026Q1. Operating income has similarly trended upward from $33,363,000 in 2025Q2 to $44,527,000 in 2026Q1, though net income was volatile, spiking to $292,195,000 in 2025Q3 before returning to the $41,954,000–$43,460,000 range in 2025Q4 and 2026Q1.
The model recognized consistent revenue and operating income growth as positive momentum signals, while the sharp net income spike in 2025Q3 followed by a return to lower levels likely introduced volatility that tempered the overall momentum score.
Duolingo does not currently pay a dividend; this is a genuine characteristic of the company, not a data limitation.
The model assigns a score of zero for this factor because no dividend income is available to investors, which is consistent with a growth-oriented company that retains earnings rather than distributing them.
Duolingo is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment is a neutral classification outcome; it does not reflect negatively on the company's business or prospects, but it does mean the security did not receive any theme-based score contribution under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Duolingo delivered exceptional growth in FY2025, with revenue rising 38.7% to over $1 billion and net income surging 367.5%, producing a diluted EPS of $8.57 [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy]. Profitability metrics are strong, with a net margin of 39.9% and return on assets of 20.8%, though the operating margin of 13.1% is notably lower than the net margin, suggesting meaningful non-operating income contributions [profitability.net_margin_pct, profitability.operating_margin_pct, profitability.roa_pct]. Quarterly momentum is positive on the revenue and operating income fronts, but net income showed a sharp spike in 2025Q3 followed by a return to lower levels, introducing volatility [momentum.revenue_quarterly, momentum.net_income_quarterly, momentum.operating_income_quarterly]. The model rates the stock as High Risk with a composite score of 51.6/100, reflecting meaningful uncertainty despite the strong top-line and bottom-line performance [financial_health.total_assets, dividend.none].
Plain English
Duolingo more than doubled its profits and crossed $1 billion in revenue in its latest fiscal year, but the stock carries a High Risk rating because some parts of its financial picture — like its financial health score and lack of dividends — drag down the overall model score [growth.revenue.yoy, growth.net_income.yoy, dividend.none].
Bull Case vs. Bear Case
Bull Case
- Revenue crossed $1 billion in FY2025, growing 38.7% year-over-year, and quarterly revenue has continued to climb every single quarter through 2026Q1, demonstrating durable top-line momentum [growth.revenue.yoy, momentum.revenue_quarterly].
- Net income expanded by 367.5% in FY2025 and the company posted a 39.9% net margin, reflecting dramatic bottom-line leverage on a growing revenue base [growth.net_income.yoy, profitability.net_margin_pct].
- Return on assets of 20.8% against a total asset base of nearly $2 billion signals that Duolingo is deploying its resources productively [profitability.roa_pct, financial_health.total_assets].
Bear Case
- The operating margin of 13.1% is far below the 39.9% net margin, suggesting that a large portion of reported profitability comes from non-operating sources rather than core business operations, which may not be sustainable [profitability.operating_margin_pct, profitability.net_margin_pct].
- Net income was highly volatile on a quarterly basis, spiking to $292,195,000 in 2025Q3 before falling back to roughly $42–$43 million in subsequent quarters, making earnings quality difficult to assess [momentum.net_income_quarterly].
- Duolingo pays no dividend and is not assigned to any tracked macro theme, meaning investors receive no income return and the stock benefits from no thematic tailwind in the model's framework [dividend.none, theme.none].
What Could Change the Picture
Bullish Triggers
- If the gap between operating margin and net margin narrows — meaning core operating profitability catches up to the headline net margin — that would signal more durable, high-quality earnings growth [profitability.operating_margin_pct, profitability.net_margin_pct].
- Sustained acceleration in quarterly operating income, which has risen from $33,363,000 in 2025Q2 to $44,527,000 in 2026Q1, could indicate that operating leverage is building and the business fundamentals are strengthening [momentum.operating_income_quarterly].
Bearish Triggers
- If quarterly net income remains volatile and fails to converge toward a stable upward trend, it would raise concerns about earnings quality and the reliability of the FY2025 profit surge [momentum.net_income_quarterly, growth.net_income.yoy].
- A slowdown in the consistent quarterly revenue growth trend — which has risen every quarter from 2025Q2 through 2026Q1 — would undermine the momentum thesis that currently supports the stock's score [momentum.revenue_quarterly].
Risk Profile
High RiskThe High Risk rating reflects a low financial health score alongside notable earnings volatility, as net income swung from roughly $44 million in 2025Q2 to $292 million in 2025Q3 and back down to approximately $42–$43 million in subsequent quarters [financial_health.total_assets, momentum.net_income_quarterly]. The wide gap between the operating margin and net margin further suggests that reported profitability may depend on non-operating factors that could be less predictable over time [profitability.operating_margin_pct, profitability.net_margin_pct].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.