Joseph Carlson After Hours on $DUOL (Nov 4, 2026)

We also have Dualingo which reported its earnings yesterday. I'll be going over that. But the stock is up a staggering 35% on the day. Dualingo is having a massive recovery.

Now, one company that reported earnings just yesterday and is now currently up 32% is Dualingo. Dualingo is a smaller position in my portfolio. It only makes up around uh 2.7%.

So, this isn't some gargantuan bet that my portfolio lives or dies by, but it was a stock that I was excited about. Dualingo, I believe, has a lot of potential. Now, after today, the stock is only down $5,600 on a $41,000 position, down about 15%.

Duelingo is going through an incredible recovery from its lows. If we look at the price chart here, Dolingo fell from $180 all the way down to $90 per share. It started to recover rapidly.

It went up to $150, then it traded back down. And with today's trade, it's back up to around 170, working its way back almost flat year to date. Right now, it's currently down 3.6% on the year.

Gaining 32% is a big day on a stock, but we have to put this in context. Dualingo is not a typical stock. It's a company that has a small market cap. It's only $8 billion. With a lot of companies we're dealing with, the Mastercards and Amazons and Google's, those have trillion dollar market caps.

So, it's more difficult and it requires more money to move those market caps than it does a company like Duolingo. Duelingo with only an $8 billion market cap, well, things can change quickly.

If the company starts doing well, the market cap could double. It's a company where things can improve rapidly. If the company does poorly and sentiment goes south, the market cap can quickly be chopped in half.

That's what we saw over the past year. So, this is a situation of a highly volatile company. And if you've been following Duolingo or invested in this company, you'll see the trade up and down every single day is around 5%.

But today is a massive increase in share price and it shows how quickly the narrative and things can change. So Dolingo stock is up big today and the company's doing well. It's actually performing well fundamentally speaking.

Intrinsically the company's doing really quite well. That is the reason that investors are having such a strong positive reaction on the day. For example, the daily active users went from 50.5 million to 64.9 million year-over-year, a 29% increase.

So, it gained 29% daily active users year-over-year. In the last quarter alone, the user growth accelerated. It went from the previous quarter being 58.7 million daily active users now to 64.9 daily active users.

So, Dualingo added on 6 million daily active users in the past 3 months alone, incrementally on top of their already large daily active user user base. And what this tells you is a couple things.

One of them is that it's still growing. Dualingo is still growing and the rate of growth has increased in terms of the people using the platform. It also tells you that the people that were talking about how AI is disrupting Dualingo, how it will never be able to compete, they said that people are just going to go to ChatgBT or Muse or Anthropic.

And look, I can spin up a language app. I can vibe code it. Look, I typed build a Dualingo uh clone in in Anthropic. That's just the same, right? Wrong. It's not the same. And that's the reason that people aren't using your vibecoded language learning app. and instead they're using Dualingo.

You see, the issue with these thoughts are they're just not practical. Nobody really wants to start a massive language learning app with thousands of lessons, tens of thousands of lessons in structured format.

Nobody wants to create ladders and ranking systems and streaks. Nobody really wants to go through the effort of making so it has retention where it has characters, characters that you get to know over time and you can talk with.

Nobody wants to perfect all the small things that make Duolingo work as well as it works. Without all those little edge cases, all that fine-tuning, it's not enough to compete with this company.

The people that have talked about how AI will easily replace this have just been wrong. And they're wrong again in the numbers. AI has enhanced Duolingo's ability to create course structure rapidly.

Their user growth has sped up both on a daily active user basis and a monthly active user basis. Now, there's many people that enjoyed Duolingo going down. Frankly, they liked seeing me fail.

They There's some people that get joy out of that. I know it's not everybody. Some people like seeing other people succeed. There's some people that like seeing other people fail.

Makes them feel better about themselves. If Joseph fails at something, then at least uh you know, at least you can feel better that you didn't fail in that way. There's some people that find joy in watching other people fail, watching other people lose money because it makes them feel better about themselves.

And that was apparent with Duolingo. This is a stock more than any that people enjoyed watching me fail with. They they enjoyed watching it go down. Many people danced on the grave of Duolingo with a lot of glee.

So, it's a hard thing for some people to see this stock going back up. It's almost like it's frustrating for them. They're looking at it and they're going, "No, that's supposed to be a failed investment.

That one was supposed to do poorly and it's not. Dualingo is doing well." Even looking at the business, the other metrics are doing well. paid subscribers grew by 14% up to 13.1 million.

It actually accelerated this quarter. So, not only are they growing in their monthly users, but they're also converting those monthly users to daily active users. You can see that conversion going on here.

This is the percentage of their daily active users that make up monthly active users and it's growing over time. Then the daily active users like the product enough that many of them upgrade to a paid subscription to get rid of the ads and have additional additional features.

That's where you get the paid subscriptions growing by 14%. This is a solid conversion cycle. Dualingo has a free product. It gets a lot of people in the door. Many of them use the product at least once a month.

Then they start to use it every single day as they get the streak and they start enjoying it more. And then if they use it for long enough, a lot of them will just pay for a year in advance.

That's where you see the paid subscribers and the bookings growing. Both of these came in above estimates. The financial metrics of Dualingo look very solid. The user growth and engagement look very solid and the product improvements are also great.

Dualingo is getting better. If you haven't used it in the past year or so, try it out again. It is dramatically better. For example, Dualingo used to have two paid tiers. They had super, which was the upgrade, and then they have the Max, which is the upgrade above Super.

Max was kind of expensive, and it had features like the video call feature. You could have unlimited video calls. They're sunsetting the max tier. They're just getting rid of it and they're putting unlimited video calls in super, making it more accessible, more broad, bringing more value to their biggest tier.

This may affect bookings in the short term, but this makes the product much better and gives a lot of people a bigger reason to upgrade. The video calling is exceptionally good.

You can practice learning languages much better in an interactive video call than you can just filling out a sentence. So, this is a major product improvement. the company's product is actually getting better.

And while that's going on, we have Dualingo with an exceptional balance sheet. The stock continues to gain cash every single quarter. In the meantime, they can just make money with interest now that interest rates are higher.

But this puts them in a very flexible position to do acquisitions or buybacks if they need. This is over 10% of their market cap in cash. So overall, I like what I see with Duelingo.

I see great progress. I think the company intrinsically is worth more. And of course, I love seeing stocks like this, ones that have epic falls in stock price. They go down dramatically.

Everybody counts them as dead. Many people pointing to them as the the worst examples in the market, the worst stock picks ever, and they all of a sudden have these big resurgences as the numbers actually show that they're doing quite well.

I've been through this before many times. I'm sure it will happen in the future. This is just another example.