Duolingo shares surge over 30% on strong AI-driven user growth and upgraded guidance

Duolingo shares surged over 30% following the company’s strong financial results and upgraded full-year guidance, driven by robust user growth powered by artificial intelligence. The language learning platform raised its revenue forecast for the year to a range of $1.01 billion to $1.02 billion, up from its previous outlook of $987 million to $996 million. It also increased its bookings guidance to between $1.15 billion and $1.16 billion. “We exceeded our own high expectations for bookings and revenue this quarter, and did it while expanding profitability,” said co-founder and CEO Luis von Ahn in a statement. The company reported a 40% year-over-year increase in daily active users, reaching nearly 48 million—up from about 34 million in the same period last year. Duolingo has increasingly integrated AI into its platform to enhance user engagement and learning outcomes. Key innovations include an AI-powered video-call conversation practice feature for premium subscribers, allowing learners to practice speaking with simulated partners. The company has also diversified beyond language learning, launching new courses in areas such as chess and music. In a move to further expand its product offerings, Duolingo announced the acquisition of NextBeat, a London-based music gaming startup, though the financial terms were not disclosed. The acquisition aligns with the company’s strategy to build a broader educational entertainment ecosystem within its app. Revenue for the quarter climbed 41% year over year to $252 million, surpassing Wall Street’s forecast of $241 million. Net income rose 84% to approximately $45 million, or $0.91 per share. For the third quarter, Duolingo expects revenue between $257 million and $261 million, exceeding analysts’ consensus estimate of $253 million. CEO Luis von Ahn emphasized that the company is still in the early stages of its growth journey, with significant potential for expansion through AI-driven personalization, new content, and global reach.