Duolingo Inc shares surged 19% on Friday after the company posted record user growth and rising demand for premium tiers such as Duolingo Max, fueling 38% revenue growth and improved profit margins.
The Pittsburgh-based company reported first-quarter revenue of $230.7 million, up 38% from a year earlier, while net income rose to $35.1 million from $27 million in the prior-year quarter.
Total bookings also grew 38% year-over-year to $271.6 million, fueled by a 44% increase in subscription bookings to $232.2 million.
“Q1 was an outstanding start to the year—we added more Daily Active Users this quarter than any in our history, highlighting the continued strength of our product and brand,” said CEO Luis von Ahn. Daily active users rose 49% to 46.6 million, while monthly active users climbed 33% to 130.2 million. The company also surpassed 10 million paid subscribers during the quarter.
UBS analysts raised their 12-month price target on Duolingo shares to $500 from $400 and reiterated a “Buy” rating, citing stronger-than-expected performance and increasing traction for the company’s premium “Max” subscription tier. Shares were last trading around $475 on Friday afternoon.
“Barring a change in macro, the high-end of Duolingo’s FY25 guidance still strikes us as conservative,” the UBS team wrote. The firm highlighted that Max accounted for 7% of total subscribers exiting the quarter—above the bank’s prior estimate of 5.8%—and now projects it will reach 9.5% by year-end, contributing $125 million to subscription revenue in FY25.
Duolingo also said its investments in generative AI are accelerating content creation and may help lower operational costs. UBS noted that the company has already seen early success in optimizing AI-related expenses, although it remains unclear if some savings tied to the adoption of GPT-4.1 are one-time in nature.
Von Ahn said Duolingo is “just beginning to scratch the surface” of what its AI investments can deliver. The company is also preparing to launch a Chess course in the coming weeks, adding to its growing lineup of non-language offerings alongside Math and Music.