Language-learning platform Duolingo has raised its revenue forecast for 2025, following stronger-than-expected second-quarter results and growing user interest in its AI-powered subscription features. The announcement led to a 20 percent rise in the company’s shares in after-hours trading.
Duolingo operates on a freemium model, where users can access basic features for free, with additional advanced tools available through paid subscriptions. The company now expects to generate between $1.01 billion and $1.02 billion in revenue for 2025. This is a notable increase from its previous guidance of $987 million to $996 million, and it also surpasses analysts’ projections of $996.6 million.
For the April to June quarter, Duolingo reported revenue of $252.3 million, ahead of the estimated $240.7 million. This performance reflects higher engagement with its AI-powered tools and increased interest in its premium subscription tiers.
Duolingo offers two main subscription plans. The Super plan is designed for frequent learners, while the Max plan targets advanced users and includes AI-enhanced features. These include video-call conversation practice with chatbots, detailed error analysis and improved personalised feedback.
Since January, the company has rolled out its AI-powered video-call tool on Android, gradually expanding it to more languages. The goal is to help users practise natural conversations and drive more sign-ups to the Max tier.
The company’s gross margin also improved during the quarter, supported by lower-than-expected AI costs. According to Chief Financial Officer Matt Skaruppa, “The cost of calling AI tools has come down a lot. Ads also did better; ads are not a big part of our business, but it turned out that it helped margin a little bit as well.”
Duolingo uses generative AI to create and personalise its lessons across over 100 language courses. In April, CEO Luis von Ahn highlighted how AI had significantly accelerated course development. While it took 12 years to build the first 100 courses, AI tools helped the company launch 148 new courses in just one year.
Looking ahead, Duolingo expects third-quarter revenue to be between $257 million and $261 million, ahead of the estimated $253 million. For the full year of 2025, it has projected an adjusted core profit of between $288.1 million and $295.5 million.
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