By Akash Sriram<\/p>\n
(Reuters) -Language-learning app Duolingo raised its annual revenue forecast and beat second-quarter revenue estimates on Wednesday, anticipating broader adoption of its AI-enhanced subscription tier among its global user base.<\/p>\n
The company’s shares rose about 20% in trading after the bell.<\/p>\n
Duolingo operates on a freemium model, offering basic language-learning features for free while providing premium capabilities through monthly or annual paid subscriptions.<\/p>\n
The company now expects revenue for 2025 to be in the range of $1.01 billion to $1.02 billion, compared to analysts’ estimates of $996.6 million. It had earlier projected revenue between $987 million and $996 million for the year.<\/p>\n
Revenue in the April-June period was $252.3 million, compared with analysts’ estimates of $240.7 million.<\/p>\n
Duolingo’s two subscription tiers \u2014 Super, designed for frequent learners, and Max, tailored for advanced users \u2014 include AI-driven features such as video-call conversation practice with chatbots, personalized error analysis and enhanced feedback tools.<\/p>\n
Since launching an AI-powered video-call tool for Android in January, Duolingo has expanded the feature to additional languages, aiming to boost subscription growth by enabling users to practice natural conversations across a broader linguistic range.<\/p>\n
Duolingo’s gross margin benefited this quarter from lower-than-expected AI costs, as the decline in margin from expanding Max and AI features was much smaller than the company had originally expected.<\/p>\n
“The cost of calling AI tools has come down a lot. Ads also did better; ads are not a big part of our business, but it turned out that it helped margin a little bit as well,” CFO Matt Skaruppa told Reuters.<\/p>\n
Duolingo leverages generative AI to create and personalize bite-sized lessons across more than 100 language courses.<\/p>\n
In April, CEO Luis von Ahn said that after taking 12 years to develop the first 100 courses, the company’s AI tools helped it introduce 148 new courses in roughly one year.<\/p>\n
Duolingo expects revenue for the third quarter to be in the range of $257 million to $261 million, compared to analysts’ estimates of $253 million, according to data compiled by LSEG.<\/p>\n
The firm also forecast an adjusted core profit of $288.1 million to $295.5 million for 2025.<\/p>\n
(Reporting by Akash Sriram in Bengaluru; Editing by Mohammed Safi Shamsi)<\/p>\n","protected":false},"excerpt":{"rendered":"By Akash Sriram (Reuters) -Language-learning app Duolingo raised its annual revenue forecast and beat second-quarter revenue estimates on…\n","protected":false},"author":2,"featured_media":63514,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,47066,181,507,47065,47064,74],"class_list":{"0":"post-63513","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-revenue-estimates","14":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/63513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=63513"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/63513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/63514"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=63513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=63513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=63513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}