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PITTSBURGH - Duolingo, Inc. (NASDAQ:DUOL), the education technology company with impressive gross margins of 72% and strong revenue growth of 39% according to InvestingPro data, announced Wednesday it has acquired the team behind NextBeat, a London-based music gaming startup, to strengthen its music education offerings.
The acquisition brings 23 specialists in game design, user retention, monetization, sound design, and music licensing to Duolingo. This move establishes the company’s first official presence in the United Kingdom, building on the company’s solid financial foundation with more cash than debt on its balance sheet.
"Learning should be just as engaging as playing a great game, whether you’re practicing a new language or playing a favorite song," said Bob Meese, Chief Business Officer at Duolingo.
NextBeat is known for mobile rhythm games Beatstar and Country Star, which reportedly reached over 100 million downloads and generated nearly $200 million in revenue. The team was founded by Simon Hade, Olly Barnes, and Joe Adams.
"From day one, it was clear that Duolingo and NextBeat share the same values: putting learners first, obsessing over great design, and never taking ourselves too seriously," said Hade, CEO of NextBeat.
Duolingo launched its Music course in beta earlier this year, which the company reports has already attracted millions of users. The company indicated that the NextBeat team’s expertise will be applied primarily to enhancing this music education offering.
The financial terms of the acquisition were not disclosed in the company’s press release statement.
Duolingo describes itself as the leading mobile learning platform globally with its flagship app for language learning ranking as the top-grossing app in the Education category on both Google Play and the Apple App Store. The company’s market position is reflected in its $15.6 billion market capitalization, though InvestingPro analysis suggests the stock is currently trading above its Fair Value. InvestingPro subscribers have access to 15+ additional key insights about Duolingo’s financial health and growth prospects.
In other recent news, several analysts have adjusted their price targets for Duolingo Inc. ahead of its upcoming second-quarter earnings report. Evercore ISI raised its price target to $540 from $480, citing favorable market trends from recent surveys. Conversely, JPMorgan reduced its target to $500 from $580 due to concerns about user growth and subscription bookings. Similarly, DA Davidson also lowered its target to $500, maintaining a Buy rating while analyzing user growth trends. UBS reiterated its Buy rating with a $500 target, expressing caution but maintaining growth estimates for the fiscal year 2025. Citizens JMP adjusted its target to $450, pointing to a temporary slowdown in user engagement during the second quarter. These developments reflect varying analyst perspectives on Duolingo’s performance and potential.
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