Duolingo Boosts Revenue Forecast as AI Subscription Tier Delivers Profit

Duolingo Boosts Revenue Forecast as AI Subscription Tier Delivers Profit
London, 5 November 2025
Duolingo [DUOL −0.77%], the world’s leading language-learning application, reported third-quarter revenue of 271.7 million USD, exceeding Wall Street expectations by 4.3 percent.
Headquartered in Pittsburgh, the app uses gamified lessons to teach over 40 languages and has become a global household name in education technology.
The company raised its full-year revenue forecast to between 1.028 and 1.032 billion USD, up from its previous range of 1.005 to 1.015 billion USD.
📈 AI-Driven Subscriptions Fuel Growth
Paid subscriptions rose 34 percent year-on-year to 11.5 million users, driven largely by Duolingo Max, an AI-powered premium tier.
This upgraded plan integrates conversational AI technology to provide personalised learning, instant feedback and contextual explanations.
CEO Luis von Ahn stated that the feature “has actually become profitable,” making Duolingo one of the few companies to successfully monetise AI functionality at scale.
This milestone highlights a broader shift in the education technology sector, where AI is moving from engagement to direct revenue generation.
🌏 Global Expansion and China Collaboration
Monthly active users climbed to 135.3 million, an increase of 22.2 million from a year earlier.
Growth in China stood out, supported by a creative partnership with Luckin Coffee, one of the country’s largest coffee chains.
As part of the campaign, Luckin distributed over 10 million Duolingo-branded drinks across 26,000 stores, allowing customers to scan QR codes on their cups to unlock free Duolingo lessons and in-app rewards.
The collaboration positioned Duolingo not only as a digital learning platform but also as a lifestyle brand connecting online learning with everyday experiences in the Chinese market.
💰 Margins and Market Reaction
Gross margin reached 72.5 percent, topping analyst expectations of 71.4 percent.
However, shares initially dropped 19 percent in after-hours trading due to investor caution over next-quarter EBITDA guidance, before rebounding to close 7 percent higher.
Analysts attributed the rebound to Duolingo’s strong fundamentals and clear path to AI profitability, a rare outcome in today’s competitive generative AI landscape.
🧩 FLASHOP Editorial Perspective
Duolingo’s success illustrates a crucial lesson in the AI economy:
“Value comes not from using AI, but from integrating it into a product that people are willing to pay for.”
While many companies still treat AI as a marketing tool, Duolingo has shown how to convert it into a self-sustaining subscription engine — combining user experience, localisation, and gamified engagement into a profitable loop.