By Akash Sriram<\/p>\n
(Reuters) -Duolingo Inc beat Wall Street estimates for third-quarter revenue and raised its annual revenue forecast on Wednesday, as \u200bthe language-learning app attracted more paying subscribers for its AI-powered tier.<\/p>\n
Shares of \u200cthe Pittsburgh-based company rose 7% in trading after the bell.<\/p>\n
The company operates on a “freemium” model \u200cand has sought to convert free users to paid subscriptions, such as “Super Duolingo” for an ad-free experience, and “Duolingo Max,” which incorporates generative AI features.<\/p>\n
“We are one of the few companies that has found a way to make profit off \u2060of AI. This is actually \u200cprofitable for us,” CEO Luis von Ahn told Reuters.<\/p>\n
While the AI additions resulted in a lower profit margin in the third quarter of \u200d72.5%, it was still higher than estimates of 71.4%, according to data compiled by LSEG.<\/p>\n
A growing user base continued to drive conversions from free users to paid subscribers. Paid \u200busers jumped 34% to 11.5 million in the third quarter.<\/p>\n
Growth was bolstered by \u200coutsized performance in China. A partnership with Luckin Coffee in July helped boost visibility in the region.<\/p>\n
“That activation was a home run. We did not have to pay any money for it. Twenty-six thousand Luckin stores sold more than 10 million Duolingo-branded drinks, which directly led to user growth \u2014 mostly in China,” von \u2060Ahn said.<\/p>\n
The company has historically relied on its viral \u200bmarketing campaigns and strong social media presence to acquire users \u200bat a low cost, a strategy that has helped it gain a dominant position in the mobile learning market.<\/p>\n
In the third quarter, revenue of \u200d$271.7 million beat \u2060estimates of $260.3 million. Duolingo has topped revenue estimates every quarter since the company went public in 2021.<\/p>\n
The company raised its annual revenue forecast to between $1.\u2060028 billion and $1.032 billion, from $1.01 billion to $1.02 billion. Analysts on average \u200cwere expecting $1.02 billion, according to LSEG data.<\/p>\n
(Reporting by Akash \u200cSriram in Bengaluru; Editing by Sriraj Kalluvila)<\/p>\n","protected":false},"excerpt":{"rendered":"By Akash Sriram (Reuters) -Duolingo Inc beat Wall Street estimates for third-quarter revenue and raised its annual revenue…\n","protected":false},"author":2,"featured_media":123841,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,73374,218,219,21322,61,60,73375,80,68442],"class_list":{"0":"post-123840","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-annual-revenue","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-duolingo","13":"tag-ie","14":"tag-ireland","15":"tag-luis-von-ahn","16":"tag-technology","17":"tag-wall-street-estimates"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/123840","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=123840"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/123840\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/123841"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=123840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=123840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=123840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}