Duolingo sees a significant bounce in its stock price following the revision of its annual revenue forecasts. This is attributed to the growth strategy based on artificial intelligence.
Raising Annual Forecast
Duolingo now anticipates full-year revenue between $1.01 billion and $1.02 billion, up from a previous projection of $987 million to $996 million. The bookings forecast was also lifted to $1.15 billion to $1.16 billion, indicating strong momentum in the company’s efforts to leverage AI for enhanced user experiences.
Increase in Premium Subscription Revenue
Average revenue per user (ARPU) climbed 6% year-on-year in the second quarter as more users migrated to the higher-priced, enriched 'Max' tier. The uptake of the $12.99 Super plan also rose, reflecting Duolingo’s targeted experimentation with subscription offers.
Growing User Engagement
Daily active users jumped 40% year-on-year to nearly 48 million. This increase reflects broader adoption of AI-based practice tools and engagement boosts from in-app social features. Co-founder and CEO Luis von Ahn noted that the second quarter performance was beyond expectations.
Duolingo continues to expand vigorously amid high user engagement and the integration of new artificial intelligence technologies. The company's outlook remains optimistic, suggesting further growth and success.
