Duolingo, Inc.

What they do

Duolingo offers over 250 total language courses to more than 130 million monthly active users as of December 31, 2025, with over 58 million daily active users in the June 2026 quarter. Products are smartphone-native and monetized primarily through subscriptions, supported by advertising and in-app purchases. The company was founded by Luis von Ahn and Severin Hacker and had more than 900 employees, including over 430 engineers, as of December 31, 2025.

Revenue drivers

• Subscriptions — Paid subscribers reached 12.7 million at June 30, 2026, up 17% year over year; subscription bookings were $250.3 million in Q2 2026 and $518.4 million for the first half of 2026.
• Total bookings — Total bookings were $289.1 million in Q2 2026 (+8% YoY) and $597.5 million for the six months ended June 30, 2026, versus $539.7 million a year earlier.
• Language learning core — Duolingo cites HolonIQ's January 2024 estimate that consumer spend on online and offline language learning is expected to reach about $123 billion by 2027, and says it is the most popular consumer language-learning app.
• New subjects and AI features — Math, Music and Chess courses extend the platform beyond languages; most new Super Duolingo subscribers now have access to the AI-based Video Call conversational practice feature.

Recent performance

Q2 2026 revenue was $298.5 million, up 18% from $252.3 million in Q2 2025, and DAUs grew 23% to 58.7 million. Net income fell to $33.2 million (11.1% margin) from $44.8 million (17.8% margin), and Adjusted EBITDA was $77.3 million versus $78.7 million. Total bookings grew 8% to $289.1 million, slower than revenue. Net cash provided by operating activities was $88.3 million and free cash flow $78.6 million. Full-year 2025 revenue was $1.04 billion with net income of $414.1 million and operating cash flow of $387.8 million.

Strategy

Management's stated 2026 strategy is to prioritize user growth and teaching better, while finding monetization approaches that do not add friction to free users. The company runs a testing process called The Green Machine, applies it to retention, learning outcomes and monetization, and reports Current User Retention Rate at an all-time high of 84%. Marketing has expanded beyond its own social accounts—surpassing one billion organic impressions per quarter—to hundreds of creators, and performance marketing has tripled its channel count and creative output. Longer free trials are cited as an early monetization test, and Video Call access is being rolled out to existing Super subscribers later in 2026.

Risks

• User growth and engagement dependence — The 10-K states that financial performance depends on adding, keeping and engaging users and converting them into paying subscribers who remain subscribers, and warns the user base could fluctuate or decline in one or more markets.
• Booking growth decelerating versus revenue — Q2 2026 total bookings grew 8% year over year against 18% revenue growth, leaving a gap that could pressure future reported revenue.
• Profitability and tax-rate sensitivity — The 10-K lists the impact on income from the release of valuation allowances on deferred tax assets and expected fluctuations in the effective tax rate among the risks to maintaining profitability.
• Platform and AI/cloud dependence — The 10-K cites reliance on third-party platforms to store and distribute products and collect revenue, reliance on third-party hosting and cloud computing providers, and the success of AI and machine learning development.

Outlook

Management reaffirmed topline guidance and raised its Adjusted EBITDA outlook for the year, citing stronger-than-expected profitability. It expects DAU year-over-year growth to remain above the previously guided 20% for the rest of the year, attributing acceleration to product changes, marketing impact, and a one-time event to revive lost streaks, two of which it calls permanent. Video Call access is expected to extend to existing Super subscribers later in 2026.