Duolingo's Shares Reach a Peak Following Impressive Q1 Performance
Duolingo, the language learning platform, saw its shares hit an all-time high on Friday following a stellar first-quarter performance. The company outperformed expectations across the board - revenue, profit, and user numbers all topped predictions, leading Duolingo to raise its full-year revenue projection.
Duolingo reported earnings per share of $0.72 on revenue that climbed an impressive 38% year-over-year to $230.7 million, both surpassing estimates. The company experienced a 40% increase in paid subscribers to 10.3 million and a near 50% annual jump in daily active users (DAUs) to 46.6 million, surpassing projections yet again.
With Confidence in Future Growth, Duolingo boosted its full-year revenue forecast to a range of $987 million to $996 million, up from the previous range of $962.5 million to $978.5 million. Shares of Duolingo were up 19% to over $477 in recent trading and hit an intraday record of $480 earlier in the session.
Duolingo's DAUs Primed for Continued Growth, According to JPMorgan
Following Duolingo's earnings report, JPMorgan analysts reiterated their "overweight" rating and bumped their price target from $360 to $500, above the Visible Alpha consensus of about $446. Analysts believe that Duolingo's DAUs can continue growing due to the increasing adoption of English lessons and the introduction of non-language-focused content like a forthcoming chess course.
The analysts also pointed out that Duolingo's AI-powered efforts, including the addition of 148 new language courses and an increasing amount of educational content created by AI, will support user and paid subscriber growth.
Boosting User Engagement with AI
- Innovative AI-driven language courses: 148 new AI-enhanced language courses rolled out in Q1 2025, targeting non-English speakers and institutional partners.
- Accelerated content creation: AI tools facilitate rapid course development, allowing Duolingo to double its offerings for underrepresented languages and niche markets.
- Duolingo Max: The premium tier incorporates AI for advanced features like personalized feedback and conversational practice, leading to a surge in paid subscriptions.
User Growth Metrics
- DAUs and MAUs: DAUs reached 46.6 million, while monthly active users (MAUs) hit 130.2 million in Q1 2025, showcasing robust engagement.
- Monetization: Revenue grew 38% YoY to $230.7 million, fueled by subscription tiers and ad-supported free users converting to paid plans.
Expanding the Market
- Global Reach: Targeting non-English speakers (such as Spanish and Hindi speakers) with localized content addresses a potential 1 billion+ user base.
- Institutional Partnerships: Collaborations with schools and enterprises aim to integrate Duolingo into formal education and corporate training programs.
Looking Ahead
- Financial Guidance: Q2 2025 revenue forecast at $238.5–241.5 million (above consensus), with full-year estimates at $987–996 million.
- Analyst Optimism: Morgan Stanley and Scotiabank foresee 20%+ growth potential, emphasizing AI's role in content scalability and user retention.
- Product Roadmap: Plans to expand features for advanced learners, including industry-specific vocabulary and certification-aligned courses.
Duolingo's multi-faceted strategy places the company in a strong position to sustain DAU growth through technological innovation and market diversification.
- JPMorgan analysts expressed optimism about Duolingo's daily active users (DAUs) continuing to grow due to the increasing adoption of English lessons and the introduction of non-language-focused content.
- Duolingo's shares hit an all-time high following a stellar first-quarter performance, with revenue, profit, and user numbers all topping predictions.
- The company's AI-powered efforts, including the addition of 148 new language courses and accelerated content creation with AI tools, will support user and paid subscriber growth.
- Duolingo reported impressive earnings per share of $0.72 on revenue that climbed 38% year-over-year to $230.7 million, leading to a boost in the full-year revenue forecast to a range of $987 million to $996 million.
- The analytical firm Morgan Stanley and Scotiabank foresee 20%+ growth potential for Duolingo, emphasizing AI's role in content scalability and user retention.
- Duolingo intends to expand its products for advanced learners, featuring industry-specific vocabulary and certification-aligned courses in its product roadmap.
