Duolingo raised its annual revenue forecast after beating second-quarter estimates.

The company reported revenue of US$252.3 million for April-June, topping analyst expectations of US$240.7 million.

It now expects 2025 revenue between US$1.01 billion and US$1.02 billion, higher than previous guidance and above the consensus of US$996.6 million.

Shares rose about 20% in after-hours trading.

The freemium language-learning app saw improved gross margin, supported by lower-than-expected AI costs and better ad revenue.

Premium tiers, Super and Max, include AI-driven features like video-call conversation practice and personalized feedback.

For Q3, Duolingo forecast revenue of US$257 million to US$261 million. It also projected an adjusted core profit of US$288.1 million to US$295.5 million for 2025.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Duolingo’s market dominance showcases concentration in language learning apps

Duolingo’s revenue forecast approaching $1 billion highlights the company’s significant presence in the language learning app market.

The company already accounts for approximately 50% of all language learning app revenues, with the entire sector generating $1.08 billion in 2023 1.

Duolingo’s projected 2025 revenue of $1.01-1.02 billion would nearly match what the entire language learning app industry generated just two years earlier.

This level of market presence in a digital education sector suggests that Duolingo has built competitive advantages through its gamified approach and massive user base of 500 million registered users 2.

2️⃣ AI acceleration reveals the transformative power of automation in content creation

Duolingo’s course development timeline demonstrates how AI can significantly accelerate productivity.

Recent Duolingo developments