DEF: Duolingo Reports Strong 2025 Financials, Sets 2026 Annual Meeting

Duolingo, Inc. announces its 2026 Annual Meeting of Stockholders to address director elections, auditor ratification, and executive compensation, following a year of record bookings and revenue in 2025.

Summary

• The 2026 Annual Meeting of Stockholders will be held virtually on Wednesday, June 3, 2026, at 11:00 a.m., Eastern Time.
• Stockholders will vote on the election of three Class II directors (Amy Bohutinsky, Bonnie Ross, and Jim Shelton), the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for fiscal year 2026, and an advisory (non-binding) vote on named executive officer compensation.
• Duolingo reported strong financial performance for 2025, with total revenues of $1,037.6 million (up 39% from prior year), total bookings of $1,158.4 million (up 33%), and subscription bookings of $996.3 million (up 36%).
• Net income for 2025 totaled $414.1 million, a significant increase from $88.6 million in the prior year, and Adjusted EBITDA was $305.9 million, up from $191.9 million.
• Matthew Skaruppa resigned as Chief Financial Officer, and Gillian Munson was appointed as the new CFO, effective February 23, 2026.
• The executive compensation program for 2025 consisted of base salary and equity, with the vast majority (81% on average for NEOs excluding the CEO) of total direct compensation awarded as equity in the form of Restricted Stock Units (RSUs).
• The CEO's salary remained flat at $750,000 in 2025, consistent with prior years since 2021.
• Special Multi-Year Performance-Based Founder Awards (PSUs) for the CEO and CTO, which vest upon achieving specified stock price hurdles, saw several tranches satisfied in 2024 and 2025, indicating sustained stock price appreciation.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing as highly positive due to Duolingo's exceptional financial performance in 2025, including record revenues and bookings, and a significant increase in net income. The strategic focus on user growth, AI integration, and new subjects, coupled with a compensation structure aligned with long-term stockholder interests, indicates strong operational health and future potential.

Positives

• Total revenues increased by a robust 39% to $1,037.6 million for the fiscal year ended December 31, 2025.
• Total bookings surpassed $1 billion for the first time, reaching $1,158.4 million, representing a 33% increase from the prior year.
• Subscription bookings showed strong growth, increasing by 36% to $996.3 million.
• Net income saw a substantial improvement, totaling $414.1 million in 2025 compared to $88.6 million in the prior year.
• Adjusted EBITDA grew significantly to $305.9 million from $191.9 million in the prior year.
• The executive compensation program is designed to align pay with performance, with a large portion of executive compensation tied to equity, encouraging long-term value creation.
• The CEO's base salary has remained flat since 2021, emphasizing equity-based incentives for long-term alignment.
• Multiple stock price hurdles for the Special Multi-Year Performance-Based Founder Awards were achieved in 2024 and 2025, reflecting strong stock performance and value creation for shareholders.

Risks

• Forward-looking statements involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, or achievements to differ materially, as detailed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
• Disclosures related to environmental, social, and governance (ESG) matters are informed by evolving standards and frameworks, and the information may not be considered material under federal securities laws for SEC reporting purposes.
• The Audit Committee oversees risks and exposures associated with financial matters, legal and regulatory compliance, information technology, cybersecurity, data privacy, and sustainability-related risks, including climate-related financial risks.
• Management conducts risk assessments of compensation plans and practices to ensure they do not encourage unnecessary risk-taking that could materially adversely affect the Company.

Future Outlook

Duolingo is prioritizing user growth and improving teaching quality in 2026, including reducing friction in the free experience and investing in word-of-mouth marketing. The company plans to expand learning through AI-driven features and new subjects like Chess, Math, and Music, while developing monetization approaches aligned with long-term growth. The free product and freemium model remain central to its strategy for organic growth and subscriber conversion.

Management Comments

• "On behalf of the Board of Directors, I cordially invite you to attend the 2026 annual meeting of stockholders (the Annual Meeting) of Duolingo, Inc., which will be held on Wednesday, June 3, 2026, beginning at 11:00 a.m., Eastern Time." Luis von Ahn, Co-Founder, Chief Executive Officer and Chairman of the Board.
• "On behalf of the Board of Directors and management, it is my pleasure to express our appreciation for your continued support." Luis von Ahn, Co-Founder, Chief Executive Officer and Chairman of the Board.
• "We had another strong year in 2025, including surpassing $1 billion in bookings in for the full year for the first time."
• "We are excited about our trajectory and continue to advance the five core elements of our strategy: grow users, teach better, grow subscribers, become the proficiency standard, and expand beyond language learning."
• "I plan to dedicate my life to building a future in which, through technology, every person on this planet has access to the best quality of education. And not only that, but a future in which people want to spend their time learning." Luis von Ahn (reiterated from 2021 IPO letter).

Industry Context

StockSavvy.ai notes that Duolingo's continued focus on user growth, teaching efficacy, and expansion into new subjects like Chess, Math, and Music, leveraging AI, positions it strongly within the evolving edtech landscape. The emphasis on a freemium model and organic growth aligns with successful strategies seen in consumer-facing technology companies, particularly those aiming for broad market penetration before monetization. The strong financial performance in 2025, including surpassing $1 billion in bookings, indicates robust execution in a competitive global education technology market.

Comparison to Industry Standards

• The company's executive compensation peer group for 2025 includes consumer and subscription-model software companies such as Affirm Holdings, Inc., Bumble, Inc., Pinterest, Inc., Reddit, Inc., Roblox Corporation, Rubrik, Inc., Tripadvisor, Inc., and Yelp, Inc., indicating a focus on comparable business models and market profiles.
• Duolingo's 2025 financial performance, including 39% revenue growth, 33% total bookings growth, and a significant increase in net income, demonstrates strong results that would likely compare favorably to many peers in the software and services industry, especially given the scale of surpassing $1 billion in bookings for the first time.
• The CEO pay ratio of 2.6 to 1 for fiscal year 2025 is provided, which can be benchmarked against other publicly traded technology companies, though the filing cautions against direct comparisons due to varying methodologies.

Management Changes

Corporate Governance

Related Party Transactions

• The Board has adopted a written policy requiring the Audit Committee to approve or ratify related person transactions exceeding $120,000.
• Indemnification agreements have been entered into with each current director and executive officer.

Stakeholder Impact

• Shareholders benefit from strong financial performance in 2025, including record revenues, bookings, and net income, and a compensation structure designed to align executive interests with long-term shareholder value.
• Learners benefit from the company's mission to provide free, high-quality education globally, accessible Duolingo English Tests with fee waivers, and a commitment to product quality and data privacy.
• Employees ('Duos') are supported by a mission-driven work environment, career development, robust performance reviews, anti-discrimination training, competitive compensation, and 401(k) matching contributions.
• Local communities, particularly in Pittsburgh, benefit from the 'Early Learners First' initiative, which pledges $1 million annually to improve early childhood education and care.
• Global communities benefit from partnerships with NGOs like UNHCR and the International Rescue Committee, supporting students and refugee families.
• The environment benefits from sustainability initiatives such as recycling, composting, LEED-certified office spaces, and efforts to reduce waste and assess the GHG emissions footprint.

Next Steps

• Stockholders are invited to attend and vote at the virtual 2026 Annual Meeting on June 3, 2026, on proposals including director elections, auditor ratification, and executive compensation.
• The company will announce preliminary voting results at the Annual Meeting and report final results in a Current Report on Form 8-K.
• Duolingo plans to continue advancing its five core strategic elements: grow users, teach better, grow subscribers, become the proficiency standard, and expand beyond language learning.
• In 2026, the company will prioritize user growth and teaching better, including reducing friction in the free experience and investing in word-of-mouth marketing.
• Expansion of learning through AI-driven features and new subjects such as Chess, Math, and Music is planned.
• The management working group will report to the board throughout 2026 on progress regarding corporate responsibility and impact initiatives.
• The company is assessing how to address its greenhouse gas (GHG) emissions footprint as accounting standards evolve.

Key Dates

Recommendation

The filing presents a company with strong financial performance in 2025 and a clear strategic direction for 2026, including expansion into new learning areas and continued focus on its freemium model. Corporate governance appears robust, and executive compensation is designed to align with long-term shareholder value. However, as a routine proxy statement, it primarily reiterates previously disclosed financial results and outlines standard annual meeting proposals. While the company's trajectory is positive, there is no new information that would warrant an immediate 'buy' or 'sell' action based solely on this filing. A 'hold' recommendation reflects the solid operational and financial standing without new catalysts for significant short-term price movement.

Keywords

Duolingo, SEC Filing, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Financial Performance, Revenue Growth, Bookings, Net Income, Adjusted EBITDA, Director Election, Auditor Ratification, Stockholder Vote, EdTech, Language Learning, DUOL