Duolingo Earnings Call Highlights AI Focus and User Growth

Duolingo, Inc. Class A ((DUOL)) has held its Q3 earnings call. Read on for the main highlights of the call.

Duolingo’s recent earnings call conveyed a generally positive sentiment, underscoring the company’s robust user growth and strategic emphasis on artificial intelligence (AI) and long-term educational impact. Despite some short-term deceleration in bookings growth due to strategic shifts, the overall outlook remains optimistic.

Strong Daily Active User Growth

Duolingo reported a remarkable 36% year-over-year increase in daily active users (DAUs) for the third quarter of 2025. This growth was primarily driven by strategic partnerships and continuous product improvements, showcasing the company’s ability to attract and retain users effectively.

Significant Increase in Bookings and Adjusted EBITDA Margin

The company provided guidance for nearly $1.2 billion in bookings for the year, reflecting a 33% growth. Additionally, Duolingo reported an adjusted EBITDA margin of 29%, highlighting its strong financial performance and operational efficiency.

Expansion of AI and Product Innovation

Duolingo is heavily investing in AI to enhance the efficacy of its teaching methods. The company’s goal is to develop an app that can teach as effectively as a human tutor, which could potentially increase its user base from 135 million monthly active users to billions.

Chess Course Success

The chess course has emerged as the fastest-growing course on Duolingo, attracting millions of users. Interestingly, its retention rates are slightly higher than those of the language courses, indicating a strong user interest and engagement.

Growth in Asia and China

Asia has been identified as the fastest-growing region for Duolingo, with China being the second-largest country by DAUs. This region accounts for about 5-6% of the company’s business, highlighting significant growth potential.

Deceleration in Bookings Growth

Duolingo anticipates a deceleration in bookings growth for the fourth quarter of 2025, attributed to a strategic shift towards long-term growth and teaching efficacy. This move is expected to strengthen the company’s position in the educational technology sector.

Challenges with Social Media Engagement

A temporary pause in ‘unhinged’ social media posts led to reduced virality and impacted DAU growth. However, recent efforts have shown signs of recovery, indicating the company’s adaptability in managing its social media strategy.

Max Subscriber Bookings Underperformance

Despite a year-over-year doubling of Duolingo Max bookings, the performance fell short of high expectations. This underperformance suggests room for improvement in meeting subscriber expectations.

Forward-Looking Guidance

Duolingo’s forward-looking guidance remains strong, with projections of over 50 million daily active users and nearly $1.2 billion in bookings for the year, representing a 33% growth rate. The company is optimistic about leveraging AI to enhance its educational offerings and is focused on long-term user growth and monetization. Future initiatives, such as enhanced video calls and expanded content, are expected to drive further user engagement and growth.

In summary, Duolingo’s earnings call reflects a positive sentiment with strong user growth and strategic advancements in AI and educational impact. Despite some challenges, the company’s forward-looking guidance and focus on long-term growth present a promising outlook for investors and stakeholders.