What Happened?

Shares of language-learning app Duolingo (NASDAQ:DUOL) jumped 18.6% in the afternoon session after the company reported strong first-quarter 2025 results, which significantly beat analysts' sales, earnings, and EBITDA expectations. Revenue rose 38% from the same period last year, led by a 45% increase in subscription revenue as more learners opted into premium plans like Duolingo Max. The real story was the record surge in user engagement, with daily active users jumping 49% and paid subscribers rising 40% year-over-year, showing that Duolingo continued to expand its footprint while keeping users coming back. Zooming out, we think this was a solid print.

The shares closed the day at $486.52, up 21.6% from previous close.

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What The Market Is Telling Us

Duolingo’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. But moves this big are rare even for Duolingo and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 9 days ago when the stock gained 10.4% on the news that Morgan Stanley initiated coverage of the stock with a Buy rating, calling the company a "best-in-class consumer internet asset." The firm also assigned a price target of $435, implying a potential 30% upside.

Duolingo is up 49.4% since the beginning of the year, and at $487 per share, has set a new 52-week high. Investors who bought $1,000 worth of Duolingo’s shares at the IPO in July 2021 would now be looking at an investment worth $3,503.

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