NASDAQ: DUOL
Key Data Points
Duolingo went public in July 2021 on the Nasdaq Stock Exchange with a very successful debut that saw shares close up 36% and valued the company at nearly $5 billion. In the years since Duolingo’s initial public offering (IPO), the company has continued to expand its revenue streams, expand into other subjects like math and music, grow its user base, and boost its profitability. Here’s what investors ought to know about what Duolingo does, how it makes money, and more.
What does Duolingo do?
Duolingo is a multisubject educational platform that uses games and artificial intelligence (AI) to teach various skills. Its primary function remains language education, but the platform has expanded significantly into other academic and professional areas. Duolingo currently offers more than 280 courses across 40+ languages.
Its math courses teach foundational skills like arithmetic, fractions, and geometry for primarily elementary and middle school learners. Music courses include music theory, rhythm, and pitch using a virtual keyboard, and the platform even offers a dedicated music instruments tab to allow practice with real pianos.
Duolingo incorporates several game-like elements designed to motivate users and build consistent learning habits. These features include:
- Streaks: A visual counter for consecutive days of practice that encourages daily engagement.
- Leaderboards: Weekly competitions against other users.
- Experience Points (XP): Points awarded for completing lessons and activities, which determine your rank on the leaderboards.
- Gems: You can earn gems by completing lessons, hitting XP goals, finishing daily/friends quests, maintaining streaks, and topping league leaderboards, which are then spent in the Duolingo Shop.
Lessons are bite-sized across all subjects. The language lessons focus on building vocabulary, grammar, and pronunciation through interactive exercises like translation and matching. The Duolingo English Test (DET) is a widely accepted, AI-proctored English proficiency exam for international students and professionals. As of 2025, it was accepted by more than 6,000 institutions worldwide.
How does Duolingo make money?
Duolingo has three main tiers: Free, Super Duolingo, and Duolingo Max. Max adds certain AI features, and both Super and Max are available as individual or family plans (up to 6 accounts). The core of Duolingo's revenue comes from its premium tiers, Super Duolingo and Duolingo Max. These subscriptions offer an ad-free experience, offline access, and other learning tools.
For the large majority of users who use the app for free, ads are displayed between lessons. This revenue stream effectively monetizes the massive non-paying user base.
The company’s online English proficiency test, which provides a more affordable and convenient alternative to traditional tests, also generates a steady income stream from test fees. Users can make small, one-time purchases of virtual goods, and that accounts for a modest portion of Duolingo’s overall revenue.
Revenue
Duolingo’s financials
Duolingo stock had a strong financial year in 2024, reporting total revenue of $748 million, a 41% increase from 2023. The company achieved net income of $88.6 million in the 12-month period, more than five times its earnings from the previous year. Bookings totaled $870.6 million (up 40% year over year), and paid subscribers soared by 43% in 2024.
The launch of AI features like conversation practice in Duolingo Max notably boosted engagement and subscriptions. Subscriptions generated about 81% of Duolingo’s total revenue in 2024, advertising about 7%, the Duolingo English Test approximately 6%, and in-app purchases approximately 5%.
Duolingo has delivered strong top-line momentum in 2025, too, with total revenue through the third quarter of 2025 up over 40% compared to the first nine months of 2024. The company expanded its profitability throughout the period, with record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $80 million in Q3 2025 alone. Net income in Q3 was significantly boosted by a one-time income-tax benefit related to deferred tax assets and totaled $292.2 million.
Total bookings also saw strong growth, with Q3 bookings increasing 33% year over year to $281.9 million. The company noted a mix shift towards higher-priced tiers, such as Max and the family plan, which helped drive subscription revenue growth. Duolingo surpassed a major milestone in Q3 2025, reaching more than 50 million daily active users (DAUs), a 36% year-over-year spike.
Monthly active users (MAUs) grew 20% year-over-year to 135.3 million. The number of paid subscribers grew substantially, too, reaching 11.5 million by the end of Q3 2025, an increase of around 34% from the prior year.
Recent developments
In 2025, Duolingo officially transitioned to an AI-first business model, a strategic pivot the company likened to its 2012 mobile-first bet. This shift is focused on utilizing generative AI to automate Duolingo's content creation and operational workflows. The AI-first directive has introduced several changes to the company's internal operations as well. For example, Duolingo began phasing out contractors for tasks AI can handle, such as basic translation and content generation.
The shift has significantly accelerated Duolingo's ability to produce content and generate revenue. Case in point: Using generative AI, Duolingo launched 148 new courses in a single year -- more than it produced in the previous 12 years combined. The Duolingo English Test added new interactive speaking and listening sections powered by AI in July 2025.
The premium Duolingo Max tier uses generative AI to provide features that simulate a human tutor. New interactive features in courses allow subscribers to engage in spontaneous, real-time video conversations with an AI character named "Lily" to practice speaking skills in a low-pressure environment.
The Explain My Answer feature provides learners with personalized, chat-based explanations for why a particular answer was correct or incorrect. Driven by the AI-powered Duolingo Max subscription tier, the company forecasts revenue will reach $1 billion in 2025, a 51% year-over-year increase.
Related investing topics
Duolingo continues to use its proprietary AI system, "Birdbrain," to analyze every user's progress. It predicts which exercises will provide the optimal challenge to maximize retention and prevent boredom. Duolingo has expanded its platform beyond languages, math, and music to include a free, gamified chess course designed for absolute beginners.
Launched in April 2025, the chess course aims to make the game accessible and fun through bite-sized, interactive lessons and puzzles. The course is hosted by an in-app character, "Oscar," who acts as a personal coach, guiding users through the fundamentals and providing feedback.
Lessons start with basic concepts, like how each piece moves, and gradually advance to more complex strategies and tactics, with the goal of helping users reach an intermediate (around 1500 Elo) skill level. A feature allowing users to play against other real learners was added in late 2025.
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