In a significant achievement, Duolingo (DUOL) surpassed 50 million daily active users (DAUs) for the first time in 2025, while generating over $1 billion in bookings. This growth is attributed to the company's focus on integrating artificial intelligence (AI) into its offerings, particularly through products like Duolingo Max, which enhances language learning experiences.
Notably, Duolingo's gross margin improved by 90 basis points year-over-year in the fourth quarter of 2025, reflecting a strategic shift towards higher-tier subscriptions. The company successfully launched 148 new courses within the year, leveraging its extensive educational dataset to enhance personalization across various subjects, including math and music.
Looking ahead, CEO Luis von Ahn Arellano has set a goal for a 20% increase in DAUs for 2026, aiming for 100 million DAUs by 2028. However, revenue growth is projected to slow to 10% to 12% in 2026, down from a remarkable 39% in 2025. Additionally, adjusted EBITDA is expected to decrease from 29.5% to 25%.
Despite challenges reflected in a 65.7% drop in stock value over the past year, Duolingo's management has launched a $400 million share buyback program, demonstrating confidence in the company’s long-term potential amidst evolving market conditions.