Shares of online language-learning platform Duolingo plunged 7.3% in trading on Jan. 12, to their lowest level since August 2024, after the company announced an important personnel change. Chief financial officer Matt Scaruppa, who has been on the job for about six years, is leaving.
He is one of the key executives who played a significant role in taking Duolingo public in 2021, Reuters writes . The company under him demonstrated steady revenue growth and improved profitability, transforming the high level of user engagement into paid subscriptions, as well as actively increasing the use of artificial intelligence for personalization and attracting new customers, the agency reports.
Scaruppa's resignation will take place on Feb. 23, and he will be succeeded by Jillian Munson, who has been on Duolingo's board since 2019 and previously held senior finance positions at Vimeo and other tech companies.
What's going on with the company
Shares of Duolingo after the announcement fell the most sharply since Nov. 6, CNBCcalculated . At that time, they lost 25% in one session due to a weak fourth-quarter earnings forecast: the company warned that it was shifting its focus from rapid monetization to improving the quality of learning and sustained audience growth, and this should be reflected in its performance. On Jan. 12, Duolingo announced that its daily active users grew by about 30% during the quarter, according to preliminary data. That was broadly in line with market expectations, Reuters noted. Bookings were between $329.5 million and $335.5 million, with a consensus forecast of $334.2 million. The company will release its fourth-quarter report on Feb. 26.
What analysts advise
Over the past three months, Duolingo's capitalization has almost halved. However, Wall Street continues to look at the prospects of the online application with optimism: 15 analysts out of 26 advise the company's shares to buy, MarketWatch shows . One recommends selling the stock. The rest are neutral. The average target price is $264, suggesting a potential upside of 50% from the closing level on Jan. 9.
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