Duolingo Shares Swoon Despite Strong Earnings

Something isn’t translating in Duolingo ’s first-quarter earnings report.

Shares of the language learning app provider are down nearly 14% in late trading to $210, after the company issued first-quarter financial results that topped Street estimates. Through Wednesday’s regular session close, the stock was 86% higher for the last 12 months.

For the quarter, Duolingo reported revenue of $167.6 million, up 45% from a year ago, inching past the Street consensus at $165.7 million. Profits were 57 cents a share, well ahead of consensus at 27 cents. Adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortization, were $44 million, up from $15.1 million a year earlier.

Bookings were $197.5 million, up 41%. Daily active users were 31.4 million, up 54% from a year ago, while monthly active users were 97.6 million, up 35%.

For the June quarter, Duolingo sees revenue of between $175 million and $177.5 million, with adjusted Ebitda ranging from $36.8 million to $39.1 million. Street consensus had called for revenue of $176.9 million, with adjusted Ebitda of $38.6 million.

Duolingo’s forecast for the full year calls for revenue of between $726.5 million and $735.5 million, with adjusted Ebitda ranging from $167.1 million to $176.5 million. Street consensus has been calling for $728.4 million in revenue and adjusted Ebitda of $167.2 million.

U.K.-listed Intermediate Capital Group plans to sell one of Singapore’s largest independent tertiary education institutions, which could be valued at as much as 700 million Singapore dollars, equivalent to US$526 million, people familiar with the situation said.

The alternative asset management company, which acquired PSB Academy in 2018, is working with corporate advisory firm Rippledot Capital Advisers to explore options, the people said.

ICG and Rippledot declined to comment.

The U.K.-based company, which has $107.0 billion in assets under management as of the end of 2024, acquired PSB Academy from Baring Private Equity Asia for an undisclosed price.

Set up in 1964, PSB Academy currently hosts over 20,000 students each year and offers certification, diploma and degree courses. It has operations across Asia, including Indonesia, China and Sri Lanka.

The Asian education sector has become increasingly attractive to private-equity firms and strategic investors due to rapid urbanization and a fast-growing middle class that can now afford higher education for their children.

In 2021, private-equity firm KKR invested in EQuest Education Group, Vietnam’s largest private education institution. A year before, China Maple Leaf Educational Systems paid S$730.0 million to buy Canadian International School in Singapore.