Duolingo, Inc. (DUOL) Business Profile

What it does

Duolingo is an education technology company whose main product is a learning app. Its core subject is language learning, but the app also offers math, music and chess courses. Lessons are designed for smartphones, with short exercises, points and streaks that encourage learners to return. Users can also access the learning product through a web browser.

Anyone can complete the app’s courses without paying. Learners who want additional features can buy a subscription. Duolingo uses data from exercises and tests of product changes to adapt lessons and develop features. Its AI systems help adjust exercise difficulty, generate course content and support features such as Video Call.

The company also offers the Duolingo English Test, an online English-proficiency assessment used for purposes including university admissions. Test takers need a computer with a webcam, a smartphone and an internet connection. The test adapts its difficulty to the person taking it and can be completed in less than an hour. Duolingo for Schools helps teachers use the platform in classrooms, while Duolingo ABC teaches early literacy skills to young children.

Luis von Ahn, who founded the company with Severin Hacker, is chief executive officer.

How it makes money

Duolingo uses a freemium model: its courses are free, while subscriptions add features and remove advertisements. Super Duolingo offers additional learning features, including a family plan. Duolingo Max is a higher-priced tier that adds AI-powered features and exercises to those in Super. Subscriptions recur, and the company recognizes subscription revenue over the life of the subscription.

Free learners see advertisements, and Duolingo earns money from display and video ads delivered through advertising networks. It also sells one-time in-app benefits, such as Streak Freezes and Timer Boosts. The separate Duolingo English Test generates revenue through a one-time fee paid by each test taker. Acceptance of the test by university programs is a driver of that business.

Duolingo said it was testing Superlight, an ad-supported subscription priced below Super, depending on geography. The company was also shifting most free trials to a longer period and considering whether to discontinue Max. Duolingo said subscriptions were much larger than advertising and expected that to continue for a while, although it saw an opportunity to increase advertising revenue.

Subscription bookings and total bookings increased in the latest reported year. Bookings include amounts received for subscriptions, advertising, tests and in-app purchases; they are not the same as revenue recognized during the period.

Customers and how it sells

Duolingo serves individual learners who use its courses for free or pay for additional features. Its products also reach teachers using Duolingo for Schools, young children using Duolingo ABC, and people taking the English Test for purposes such as admissions, work visas and job applications. Education programs around the world accept the test for international student admissions.

The app and learning website serve monthly active users, some of whom pay for subscriptions. Users can access the app through mobile app stores or learn through a desktop browser.

In FY2025, Apple represented 61.6% of revenue, Google 23.4%, and Stripe 10.3%. Duolingo’s learning app and English Test are available worldwide, and it has subscribers outside the United States. The company uses local marketing and localized social media campaigns in markets where awareness is lower. Duolingo said creator marketing was working particularly well in China, Indonesia and India.

Suppliers and costs

Duolingo’s products share a technology infrastructure, and its costs include product development, computing, marketing and the people who build and support its services. AI features require computing infrastructure and related spending. The company also uses advertising networks to sell advertising inventory and relies on payment-processing platforms for cash received from customers.

Duolingo uses external AI models as well as open-source models. It said it continued to use models from OpenAI and Anthropic internally and would choose between paid and open-source models depending on whether the latter could deliver comparable quality. The company also said the cost of a video call had fallen, mainly because of a move toward open-source models.

Duolingo supplements word-of-mouth growth with paid acquisition and local marketing. Its future capital requirements depend in part on research and development, marketing investment and subscription growth and renewals.

Competitive position

Duolingo competes for learners’ time, attention and spending against other online and app-based language-learning services and offline forms of language learning. It also competes with language-assessment providers, literacy platforms, and math, music and chess learning products. No competing company is named in the available evidence.

Its courses are free to access, and the company uses short lessons, streaks and other game-like features to encourage engagement. Learners also share the product by word of mouth. Duolingo uses exercise data to personalize lessons and runs tests of product changes to improve engagement and teaching.

Our reading: Free access and word of mouth are meaningful competitive advantages because they help Duolingo reach learners without requiring each one to pay or relying entirely on paid acquisition. Our reading: Its exercise data and testing process are another meaningful advantage because a large learner base supplies information the company can use to refine lessons and features. Our reading: These advantages depend on continued engagement and product improvement; learners can choose other online or offline options.

For its English Test, acceptance by education programs is relevant to demand. Duolingo says it develops the test as an online alternative to assessments administered in physical testing centers.

Growth opportunities

Duolingo’s growth strategy includes attracting and retaining learners, converting some free users to subscriptions, and improving paid features. It also seeks to reengage former users. The company says product improvements and marketing contributed to growth in monthly active users, while subscription product initiatives helped attract and retain paying subscribers.

Monthly active users and paid subscribers increased in the latest reported year. Subscription bookings also increased, driven by growth in both first-time and renewal subscriptions.

Beyond languages, Duolingo offers math, music and chess within the same app. It believes additional subjects can expand its addressable market using its existing technology, product development and data capabilities. The company said math and music each had daily active users but were much smaller than chess.

Geographic expansion is another avenue: Duolingo uses local marketing managers, social media, app-store optimization and paid advertising to build awareness. It also sees an opportunity to grow advertising revenue from its free users. The company expects higher daily active users to lead to higher revenue over time, while noting that free users can take time to monetize.

Structural risks

• Duolingo’s revenue and results may be harmed if it cannot retain users, add new ones, maintain engagement or convert free learners into paying users. Subscribers may also decide not to renew or become less willing to pay.
• Learners can spend their time with competing products. Changes to features, content or advertising could diminish the experience, and new products may not be well received or successfully monetized.
• Outages, failures of third-party systems, security breaches and other technical problems could prevent reliable delivery. Users may also have difficulty installing, updating or accessing products because of actions by Duolingo or third parties.
• Privacy, data protection, children’s online privacy, subscription and consumer-protection laws apply across Duolingo’s markets. Requirements are evolving and can be interpreted or enforced in ways that harm the business.
• International operations expose Duolingo to local legal, tax, language and cultural differences, as well as the cost of adapting its platform. The company has also identified regulatory risk in China.
• Quarterly results can fluctuate with user growth and engagement, marketing and development spending, exchange rates, economic conditions and the timing or success of product introductions.

Bottom line

Our reading

Our reading: Duolingo is a freemium education business built around a large learner community, with subscriptions supported by advertising, in-app purchases and test fees. Its data and product-testing process can reinforce the learning app, but that depends on keeping users engaged and converting some to paid plans. Its exposure includes reliance on major distribution and payment channels, changing privacy rules and the cost of developing AI features.