Duolingo, Inc. (DUOL) shares plummeted 19.24% in after-hours trading on Wednesday, following the release of the company's third-quarter financial results. Despite reporting better-than-expected Q3 numbers and raising its full-year guidance, investors were spooked by a softer-than-anticipated fourth-quarter bookings forecast and signs of slowing user growth.

The language-learning app provider reported Q3 revenue of $271.7 million, surpassing analyst estimates of $260.3 million. The company also raised its full-year 2025 revenue guidance to a range of $1.028 billion to $1.032 billion, up from the previous range of $1.011 billion to $1.019 billion. However, Duolingo's Q4 bookings forecast of $329.5 million to $335.5 million fell short of Wall Street expectations of $343.6 million.

CEO Luis von Ahn indicated a shift in the company's focus, stating, "We will focus on monetization, but the balance is shifting a little bit. On a relative basis, we're going to work more on teaching quality than we have in the recent past." This strategic pivot, combined with slower sequential user growth and concerns about future profitability, appears to have overshadowed the positive Q3 results. The sharp stock decline suggests that market expectations may have been even higher than the reported results, despite Duolingo's consistent track record of topping revenue estimates since going public in 2021.