Filing Flows › Duolingo (DUOL) › Takeover & LBO
Is Duolingo (DUOL) a takeover target?
A leveraged buyout at today's price plus 30% ($194.90 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%. Historically 3.0% of companies with its figures were bought within a year (0.59× the average).
The buyout, step by step
| Entry | Amount | How |
|---|---|---|
| Offer price a share | $194.90 | today's $149.92 plus 30% |
| × shares | 49.9 million | |
| = Equity value | $9.7B | |
| + Debt refinanced | $0 | |
| − Cash | $1.2B | |
| = Enterprise value | $8.6B | 52.8× EBITDA of $162M |
| Fees | $171M | 2% of the price |
| New debt | $891M | 5.5× EBITDA at 7.65% a year; the limit that binds: 5.5× EBITDA |
| Buyer's own money | $7.8B | 90% of the cost |
5 years under the buyer
| Year | Revenue | EBITDA | Interest | Free cash flow | Debt left |
|---|---|---|---|---|---|
| Year 1 | $1.3B | $175M | $68.1M | $62.1M | $828M |
| Year 2 | $1.4B | $187M | $63.4M | $76.0M | $752M |
| Year 3 | $1.4B | $197M | $57.6M | $90.0M | $663M |
| Year 4 | $1.5B | $205M | $50.7M | $104M | $559M |
| Year 5 | $1.5B | $211M | $42.7M | $117M | $442M |
The exit and the buyer's return
| Exit | Amount | |
|---|---|---|
| Exit multiple | 38.9× EBITDA | today's trading multiple, before any premium |
| Enterprise value at exit | $8.2B | |
| − Debt left | $442M | |
| = Buyer's equity | $7.8B | |
| Money multiple | 1.00× | on $7.8B put in |
| Buyer's yearly return (IRR) | −0.1% |
Price against return
What the buyer makes at other premiums over today's $149.92.
| Premium | Price a share | Buyer's IRR |
|---|---|---|
| 10% | $164.91 | 4.3% |
| 20% | $179.90 | 2.0% |
| 30% | $194.90 | −0.1% |
| 40% | $209.89 | −1.9% |
| 50% | $224.88 | −3.6% |
The figures used
| Figure | Amount | |
|---|---|---|
| Revenue, last 12 months | $1.2B | |
| EBITDA, last 12 months | $162M | 13.7% of revenue |
| Depreciation and amortization | $15.8M | |
| Capital spending | $22.6M | |
| Debt | $0 | |
| Cash | $1.2B | |
| Share price | $149.92 | on Oct 9, 2026 |
Fixed rules, the same as the interactive view's starting point: the shares are bought at today's price plus 30%, the company's debt is refinanced and fees take 2%. New debt is the least of 5.5× EBITDA, 65% of the price and the amount whose interest EBITDA covers 2 times, at 7.65% a year (SOFR 3.89% plus the high-yield B spread 3.26% plus 0.5%, rates of Oct 15, 2026). Revenue grows 8.0% in the first year — the company's own rate, held between −3% and +8% — fading to 3% by year 5; the EBITDA margin, depreciation and capital spending stay at today's share of revenue; working capital takes 10% of each year's added revenue; tax is 12% of profit after interest. Every dollar of free cash flow repays debt. After 5 years the buyer sells at today's multiple of EBITDA.
What a takeover could cost
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Duolingo would cost about $194.90 a share, $9.7B for all its shares.
| Premium | % | Price a share | All shares |
|---|---|---|---|
| Low end (a quarter of deals paid less) | 12% | $167.91 | $8.4B |
| Median | 30% | $194.90 | $9.7B |
| High end (a quarter paid more) | 31% | $196.40 | $9.8B |
The odds, from history
Historically 3.0% of companies with its figures were bought within a year (0.59× the average). Its figures put it in decile 2 of 10 (10 = the most likely to be bought). The odds come from a model of every merger proxy, tender-offer response and going-private statement filed on EDGAR since 2011, set against each company's size, margins, debt, cash flow and growth the year before.
Duolingo's latest quarter
Duolingo, Q3 2026: revenue $309M (+14% year over year), operating margin 7.8%, net earnings $27.2M, operating cash flow $89.4M. The chart follows the revenue to costs, profit and cash.
Questions
Is Duolingo being acquired?
No headline, 8-K or 13D about a sale is on file in the last year.
Could private equity buy Duolingo?
A leveraged buyout at today's price plus 30% ($194.90 a share) would return a loss of about 0% a year to a private-equity buyer over 5 years; no price, however low, gets a buyer to 20%.
What would a takeover of Duolingo cost?
Takeovers in its sector paid a median premium of 30% over the share price before the deal (the middle half 12% to 31%), according to the 14 merger proxies and tender-offer responses on EDGAR that state a premium. At the median, Duolingo would cost about $194.90 a share, $9.7B for all its shares.
Updated Nov 8, 2026. Read automatically from SEC filings and public data; errors are possible. Not investment advice.