DUOLDuolingo, Inc.
Is the business good?
The checks split: earnings fully cash-backed (3.5×) and margins widening, but 3 of 9 health tests passed.
Weak, deteriorating fundamentals. Nine pass/fail tests of year-over-year health from the filings.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
High-quality, exceptional returns on the assets themselves, not leverage. ROE 30% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is DUOL?
Duolingo, Inc. earns 54% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 45 points above what the capital costs: growth creates value
- Operating margin
- 14%
Operating margin · Software - Application median 6.4% · 12 months to Q2 2026
- Cash conversion
- 3.47×
Cash conversion · 4.39× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +2.1%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | −9.9% |
| FY2021 | −24% |
| FY2022 | −18% |
| FY2023 | −2.5% |
| FY2024 | 8.4% |
| FY2025 | 13% |
Details›
- Gross margin12 months to Q2 2026
- 73%
- Operating margin12 months to Q2 2026
- 14%
- Net margin12 months to Q2 2026
- 36%
- Free cash flow margin
- 36%
- R&D as % of revenue
- 29%
- Revenue, trailing twelve months
- $1.15B
- Free cash flow, trailing twelve months
- $408M
- Net income, trailing twelve months
- $411M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 54%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Software, Application
Ranks #29 of 96 by RyuScore