Duolingo forecasts its 2025 annual revenue to be between US$962.5 million and US$978.5 million, slightly above analysts’ estimates of US$965.9 million.

Following the announcement, shares rose about 4% in after-hours trading.

For Q1 2025, the company expects revenue between US$220.5 million and US$223.5 million, aligning closely with projections of US$221.1 million.

The company operates under a freemium model, with premium tiers Super and Max. The Max plan includes a generative AI feature for video call conversations.

Expanding AI-driven features has attracted more subscribers but increased costs, impacting gross margins by about 100 basis points.

Duolingo expects costs to decline over time as it focuses on innovation and engagement.

For 2025, adjusted core profit is forecasted between US$259.9 million and US$274 million, slightly below analysts’ expectations of US$272.1 million due to AI-related expenses.

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