 |
|
|
|||||
Shares in language learning platform Duolingo, Inc. (Nasdaq: DUOL) are plummeting this morning. As of this writing, the stock is down a staggering 25% in premarket trading. That cliff edge comes after the company reported strong Q3 numbers yesterday. So whats the reason for todays fall? Heres what you need to know. Duolingo reports a strong Q3 2025 By nearly every metric, Duolingo had a strong third quarter, which ended on September 30, 2025. Here are the key metrics the company reported for its Q3: Daily Active Users: 50.5 million (up 36% year over year) Monthly Active Users: 135.3 million (up 20% YOY) Paid Subscribers: 11.5 million (up 34% YOY) Revenue: $271.7 million (up 41% YOY) Adjusted earnings per share (EPS): $5.95 Total Bookings: $281.9 million (up 33% YOY) As you can see, Duolingos results are nothing to sneeze at. There are plenty of companies today that would love to report 36% daily active user growth or an increase in revenue of 41%. Yet still, DUOL stock is in free fall this morning. The reason for this is one of the key metrics that Duolingo reports: total bookings. Duolingos total bookings forecast disappoints The Duolingo metric that investors pay heavy attention to is what the company calls total bookings. Total bookings is the catch-all term that Duolingo uses to encapsulate all of its revenue streams. It includes not just current revenues, but future revenues that the company has commitments for. This mainly includes subscription revenue. A customer may sign up for an annual subscription, but may only be billed for it in increments, which means Duolingo doesnt have that revenue in its bank account yet, but it’s coming in the future. We believe bookings provide an indication of trends in our operating results, including cash flows, that are not necessarily reflected in our revenues because we recognize subscription revenues ratably over the lifetime of a subscription, the majority of which are twelve months in duration, the company notes in its Q3 shareholder letter. Total bookings include subscription bookings, income from advertising networks for advertisements served to our users, purchases of the Duolingo English Test, and in-app purchases of virtual goods, the company says. Because of the importance of the total bookings metric, investors like to hear Duolingo forecast acceptable total bookings growth quarter after quarter. And for the past five quarters, the total bookings growth has ranged between 33% (in Q3 2025) and 42% (in Q4 2024). But for Q4 2025, which ends on December 31, Duolingo says it expects total bookings growth to be only 21.3% to 23.5% (about $329.5 million to $335.5 million). That is well below what Wall Street had expected, as Reuters reports. So what is the reason for the slowdown in total bookings? In Duolingos Q3 shareholder letter, CEO Luis von Ahn said the company was pivoting to improve the platforms teaching quality and grow its user base. This will come at an expense to monetization, which will affect that all-important total bookings metric. In particular, were investing proportionally more in teaching better, and were prioritizing user growth over monetization in the A/B tests that get launched, von Ahn said, adding, Were doing this now because we want to keep growing users for a long time, and because of our increasing conviction that AI can fundamentally change whats possible in how we teach.” This decision reflects one of Duolingos operating principles, which the company calls take the long view. It believes that by improving the quality of its product and acquiring more users, those moves will help bring in the things investors care most about: increased revenue from increased total bookings. Duolingo’s 2025 stock slide Whether or not Duolingos long view pays off remains to be seen. But the companys 25% premarket price drop this morning shows investors arent too happy with what’s been happening. This morning’s price drop compounds an already bad year for Duolingo as far as its share price is concerned. As of yesterdays close, before today’s 25% plummet, DUOL shares were already trading down nearly 20% for the year. The companys share price started at around $325 before rising to an all-time high of over $544 in May. But since then, shares have fallen steadily, particularly after the company faced a brand crisis after announcing an AI-first strategy that shifted the content creation from humans to artificial intelligence. As of the time of this writing in premarket trading, DUOL shares are currently trading below $200 apiecea price not seen since August 2024.
Category:
E-Commerce
European shares opened lower on Thursday after a broad advance in Asia spurred by a rebound on Wall Street.Upbeat economic updates and a steady flow of quarterly reports from U.S. companies have helped counter worries over surging share prices for Big Tech companies.But that optimism failed to carry over from Asia to Europe.Germany’s DAX lost 0.2% to 24,003.24, while the CAC 40 in Paris declined 0.5% to 8,033.11. Britain’s FTSE 100 slipped 0.2% to 9,761.18.The future for the S&P 500 was virtually unchanged while that for the Dow Jones Industrial Average lost 0.1%.In Asia, shares bounced back from a retreat the day before.Tokyo’s Nikkei 225 jumped 1.3% to 50,883.68.Shares in Nissan Motor Co. fell 1.7% after the company said it was selling its headquarters building in Yokohama to raise cash.After trading closed, Nissan reported a 221.9 billion yen ($1.4 billion) loss for April-September and said its revenue dropped 7% from a year earlier.In South Korea, the Kospi advanced 0.6% to 4,026.45. Taiwan’s Taiex was up 0.7%.Hong Kong’s Hang Seng jumped 2.1% to 26,485.90, while the Shanghai Composite index climbed 0.1% to 4,007.76.However, shares in autonomous driving companies Pony.ai and WeRide fell in their debut on the Hong Kong stock exchange.Pony.ai lost 9.3%, while WeRide’s shares fell 10%.Shares in Cathay Pacific Airways gained 4% after it announced that Qatar Airways was selling its 9.57% stake in the Hong Kong-based carrier in a buyback worth $896 million. The deal is subject to shareholder approval.On Wednesday, U.S. stocks gained ground with broad gains, reversing the prior day’s dip. Much of the market’s push and pull came from the technology sector, where several companies with huge values have an outsized influence over the market.Google’s parent, Alphabet, jumped 2.4%, Broadcom rose 2%, and Facebook parent Meta Platforms rose 1.4%. They helped lead the way higher for the broader market. Their gains also helped counter losses from a few technology behemoths, including Nvidia and Microsoft.Overall The S&P 500 rose 0.4% and the Dow industrials picked up 0.5% to 47,311. The Nasdaq composite added 0.6%.Company earnings and forecasts were once again a big focus for Wall Street, with results coming from a broad spectrum of industries.The latest round of earnings offers Wall Street a source of information on consumers, businesses and the economy that is otherwise lacking amid the government shutdown. Important monthly updates on inflation and employment have ceased, leaving investors, economists and the Federal Reserve without a fuller picture of the economy.There are still several informative private economic updates that Wall Street can review.A monthly report from ADP showed that private payrolls rose more than expected in October. The report offers a partial glimpse into the job market, which has been generally weakening and raising broader concerns about economic growth.A weaker job market remains a big concern for the Fed. The central bank cut its benchmark rate for the second time this year at its most recent meeting, in part to help bolster the economy amid a weakening job market. Lower interest rates can make a wide range of loans and credit less expensive, potentially promoting economic growth. But, lower rates can also add fuel to inflation, which could stunt economic growth.In other dealings early Thursday, U.S. benchmark crude gained 26 cents to $59.86 per barrel. Brent crude, the international standard, advanced 25 cents to $63.77 per barrel.The U.S. dollar fell to 153.85 Japanese yen from 154.11 yen. The euro rose to $1.1510 from $1.1494. Elaine Kurtenbach, AP Business Writer
Category:
E-Commerce
Until recently, some of the fastest-growing places in the U.S. were also among the most exposed to climate risk. But that’s starting to changemore Americans are now moving out of the areas that are most likely to flood. In the Miami area, where nearly a third of homes face flood risk, nearly 70,000 more people moved away than moved in last year, according to a new report from Redfin. In Houston, the domestic outflow was more than 30,000 people; in Brooklyn, where around a quarter of homes face flood risk, around 28,000 more people left than moved in. In Floridas Pinellas County, where many homes were hit hard by Hurricane Helene, around 4,000 more people left for other parts of the state or country. Florida has been a migration destination, but this year the Florida housing market changed a lot, says Daryl Fairweather, chief economist at Redfin. Weve seen a downward trend in home values there, so we wanted to explore what is going on. The team looked at the highest-risk counties for flooding, where the biggest percentages of homes face flood risk, using climate risk scores from First Street, and then compared those to the lowest-risk counties. High-risk counties were losing more people, and low-risk counties were gaining them. (The caveat: because of international immigration, places like Houston and Miami didn’t see net population loss last yearRedfin’s data focuses only on domestic moves.) Climate risk obviously isn’t the only reason that people move. Cost is another major factor, as the price of housing has gone up in places like Miami. But in a Redfin survey, “concern for natural disasters or climate risks in my previous area” was the most common reason cited by Florida residents for a move. In some cases, people who moved may have lost their homes in a disaster. Others may be struggling with the rising cost of insurance premiums. In some cases, people aren’t moving that far; people leaving Pinellas County often moved to non-flood zones in nearby Pasco County. But some people who left flood-prone areas may be “boomerang” movers who arrived in the pandemic and now are going back to other states where they lived before. “One of the reasons that we hear from our agents that people are leaving these places that during the pandemic, people moved to migration destinations like Houston or Miami, got there, and realized that they are really hot,” Fairweather says. “And then it’s not as affordable so they thought.” It’s not clear if the trend will stickHouston had an outflow of people moving after Hurricane Harvey, but then gained more residents during the pandemic, and now that’s reversing again. But people are increasingly becoming aware of climate risk. “As there have been more high-profile storms happening, flooding is something that’s more on the minds of home buyers,” says Fairweather. “It’s just an added cost when it comes to affordability.”
Category:
E-Commerce
All news |
||||||||||||||||||
|
||||||||||||||||||