Admittedly, I don't get this company and I don't think it's a long term hold.
It's supposed to be a learning company, and the mission is to "develop the best education in the world and make it universally available" except they don't optimize for "best education", they optimize for DAU.
Earlier in the year management pivoted to delay monetization to continually grow the DAU funnel, and move certain features from upper tier subscription (MAX) to lower (SUPER) and freemium, making the app "less annoying" for free users.
Management is effectively sacrificing over $50 million in foregone near-term bookings to keep users engaged. As a result, their 2026 guidance shows Adjusted EBITDA margins compressing down to approximately 25%, down from 29.5% they achieved in 2025.
There is high insider ownership though, and one of the founders is CEO (the second recently stepped down from CTO position although he's still active in the company).
The ROIC is high, although I imagine it'll show compression soon enough. I am not sure they have a moat. I think it's probably overvalued though.
Any bulls here that are buying? Tell me what you think of the company.
Also full write up here going deeper --> [https://thepursuitofcompounding.substack.com/p/the-two-front-war-decoding-duolingo](https://thepursuitofcompounding.substack.com/p/the-two-front-war-decoding-duolingo)
