Duolingo Shares Swoon Despite Strong Earnings

Something isn’t translating in Duolingo ’s first-quarter earnings report.

Shares of the language learning app provider are down nearly 14% in late trading to $210, after the company issued first-quarter financial results that topped Street estimates. Through Wednesday’s regular session close, the stock was 86% higher for the last 12 months.

For the quarter, Duolingo reported revenue of $167.6 million, up 45% from a year ago, inching past the Street consensus at $165.7 million. Profits were 57 cents a share, well ahead of consensus at 27 cents. Adjusted Ebitda, or earnings before interest, taxes, depreciation, and amortisation, were $44 million, up from $15.1 million a year earlier.

Bookings were $197.5 million, up 41%. Daily active users were 31.4 million, up 54% from a year ago, while monthly active users were 97.6 million, up 35%.

For the June quarter, Duolingo sees revenue of between $175 million and $177.5 million, with adjusted Ebitda ranging from $36.8 million to $39.1 million. Street consensus had called for revenue of $176.9 million, with adjusted Ebitda of $38.6 million.

Duolingo’s forecast for the full year calls for revenue of between $726.5 million and $735.5 million, with adjusted Ebitda ranging from $167.1 million to $176.5 million. Street consensus has been calling for $728.4 million in revenue and adjusted Ebitda of $167.2 million.

Starbucks is making another major leadership change just one week after new CEO Brian Niccol started his job.

Michael Conway, the 58-year-old coffee chain’s head of North America, will be retiring at the end of November, according to a Monday filing with the Securities and Exchange Commission.

The decision came only six months after Conway took on the job. His position won’t be filled. Instead, the company plans to seek candidates for a new role in charge of Starbucks’ global branding.

The chief brand officer role will have responsibilities across product, marketing, digital, customer insights, creative and store concepts.

“Recognizing the unmatched capabilities of the Starbucks team and seeing the energy and enthusiasm for Brian’s early vision, I could not think of a better time to begin my transition towards retirement,” wrote Conway in a statement.

Conway has been at Starbucks for more than a decade, and was promoted to his current job—a newly created role—back in March, as part of the company’s structural leadership change under former CEO Laxman Narasimhan.

The coffee giant has been struggling with weaker sales in recent quarters, as it faces not only macroeconomic headwinds, but also operational, branding, and product development challenges.

Narasimhan was taking many moves to turn around the business, but faced increasing pressure from the board, shareholders, and activist investors.

One month ago, Starbucks ousted Narasimhan and appointed Brian Niccol, the former CEO at Chipotle, as its top executive. The stock has since jumped 20% in a show of faith for Niccol, who started at Starbucks last week.

When he was at Chipotle, Niccol made a few executive hires that were key to the company’s turnaround.