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Duolingo Eyes $735M Revenue, Hits 31M Users Amid Growth

Duolingo raises revenue forecast to up to $735.5M as daily users surpass 31M, credits AI enhancements and social media.

By Bill Bullington

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5/8, 16:26 EDT
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Key Takeaway

  • Duolingo raises its full-year revenue forecast to $726.5M-$735.5M, beating previous estimates with a Q1 earnings beat driven by 31M daily users.
  • Launch of Duolingo Max and strategic adjustments to subscription tiers underscore innovation and growth strategy.
  • Despite potential TikTok bans, social media remains a significant growth driver, with plans to expand English content further.

Raised Guidance and Earnings Beat

Duolingo Inc., the Pittsburgh-based education software company, has updated its full-year revenue forecast to $726.5 million to $735.5 million, surpassing its previous maximum estimate of $729.5 million and analysts' expectations of $728 million. This adjustment follows a first-quarter performance where Duolingo reported earnings of 57 cents per share on sales of $168 million, exceeding the average analyst prediction of 28 cents on $166 million. The company attributes this success to its growing user base, which now exceeds 31 million active users daily, more than doubling its count from 18 months prior.

Strategic Product Enhancements

The company's CEO, Luis von Ahn, expressed enthusiasm for the broader rollout of Duolingo Max, a higher-priced subscription tier featuring generative artificial intelligence (AI) capabilities. This new tier has been made available to up to 10% of its active users, though it is not yet accessible on Android devices. Duolingo's CFO, Matthew Skaruppa, highlighted ongoing adjustments to subscription tiers throughout the year as part of their strategy. Additionally, efforts to enhance the family plan offering have contributed to the company's confidence in raising its full-year guidance.

Social Media Influence and Content Expansion

Duolingo's user growth has been significantly influenced by its popularity on social media platforms, including TikTok, which is currently facing potential bans in the U.S. Despite this, CFO Skaruppa noted that TikTok's importance to Duolingo's growth has diminished compared to two years ago, with over half of the company's social media impressions now originating from outside the U.S. Furthermore, the company plans to expand its English content to attract more learners, signaling a strategic focus on broadening its educational offerings.

Management Quotes

  • Luis von Ahn, CEO of Duolingo:

    "We’re excited about the broader rollout of Duolingo Max, our higher-priced subscription tier, and the strides we’re making to improve our family plan, giving us the confidence to raise our full year guidance."

  • Matthew Skaruppa, CFO of Duolingo:

    "Max is not currently available on Android and the company plans to continue adjusting subscription tiers throughout the year." "TikTok was an important part of its recent rise but is no longer as important as it was two years ago. More than half of the company’s social media impressions come from outside of the US."