Duolingo, Inc. (DUOL) experienced a sharp post-market decline of 21.89% following the release of its fourth-quarter and full-year 2025 results and a significant update to its corporate strategy.

The language-learning app announced it is deliberately shifting its strategic focus from maximizing monetization to prioritizing user growth and improving the free learner experience. This strategic pivot is expected to weigh on near-term financial performance. The company forecast first-quarter 2026 bookings of approximately $301.5 million and full-year bookings between $1.27 billion and $1.30 billion, both notably below analyst estimates. Revenue guidance for the year also lagged expectations.

As part of this push for engagement, Duolingo plans to expand access to premium AI features like "Video Call with Lily" to its Super Duolingo subscription tier and eventually to all users. While aimed at driving word-of-mouth growth and feeding new user growth engines, the company acknowledged this will result in slower bookings growth—projected at about 11% for 2026 compared to a potential 20% under the previous approach—and a decline in adjusted core profit margin due to increased investment in AI and marketing.