Duolingo's Earnings Highwire Acts Collapse as Volume Plummets to 87th Market Rank Amid Paywall Backlash and Founder Exit

On August 11, 2025, Duolingo (NASDAQ:DUOL) closed with an 8.03% decline, trading at $340.49 per share, as volume dropped 34.73% to $0.95 billion, ranking 87th in market activity. The selloff followed a mix of positive earnings surprises and lingering concerns over user retention and premium paywalls.

Earlier in the week, the company reported Q2 results exceeding revenue and earnings forecasts, with 41% year-over-year growth and an upward revision of full-year guidance. Analysts from Morgan Stanley and JPMorgan raised price targets to $500 and $515, respectively, citing strong user engagement and diversified content expansion, including a new music-learning initiative. These upgrades initially boosted investor sentiment, but momentum waned amid mixed user feedback on aggressive paywall strategies and insider selling by co-founder Severin Hacker, who offloaded 99% of his stake.

Despite positive earnings revisions from William Blair and Seaport Research, neutral ratings from Seeking Alpha highlighted risks tied to rising AI costs and retention challenges. Meanwhile, user backlash over the “AI-first” pivot remained muted in terms of growth impact, as the platform continued to attract new subscribers. However, the stock’s post-earnings surge failed to sustain, with trading volume declining sharply, suggesting short-term profit-taking or caution among investors.

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