Duolingo

AI usage in the engineering and product organization is increasing A/B test velocity and engineer productivity.

Introduced spoken tokens, speaking adventures, and flashcards to enhance language learning practice.

Management acknowledged margin pressure due to increasing internal AI costs and the expansion of AI-powered features, with gross margin expected to trend down to 69% by year-end.

“we have started to see some pretty big increases in AI costs internally”— Gilian Munson

Duolingo published 20,500 course units in Q1, more than tenfold the historical rate two years ago, enabled by AI acceleration.

Management acknowledges that gross margins are guided lower due to the expansion of AI features to a broader user base.

Duolingo is testing AI-driven ad delivery where ads are presented in the target language being learned.

Management notes that AI inference costs for video call features have decreased significantly, enabling the expansion of these features to lower-priced subscription tiers.

CEO Luis von Ahn Arellano emphasizes the transformative potential of AI in education, aiming to provide teaching quality equivalent to a one-on-one tutor.

“I'm more convinced than ever that the accelerating advances in AI will fundamentally change the way people learn.”— Luis von Ahn Arellano

Duolingo plans to expand AI-driven features, including video call capabilities, from the Max tier to the Super Duolingo tier, pending A/B test results.

Duolingo plans to expand its math course content to cover all core K-12 curriculum in the coming months.

Duolingo announced the upcoming launch of 'guided video calls,' a bilingual AI-powered feature designed to assist beginner users.

CEO Luis von Ahn expressed a lack of concern regarding competitive risks from generative AI tools, citing Duolingo's engagement and curriculum depth.

“we're not particularly worried about”— Luis von Ahn

Duolingo Max subscribers accounted for 9% of total subscribers in Q3 2025, with bookings for the tier doubling year-over-year.

Management reported that AI-related inference costs have declined naturally without specific optimization efforts.

“AI-related costs have declined 'just without us doing anything'”— Luis von Ahn

Duolingo is actively testing Duolingo Max in the Chinese market, pending regulatory approvals.

CEO Luis von Ahn articulated the company's long-term vision for AI-driven education, stating that AI will fundamentally transform the sector.

“We believe AI will fundamentally transform education, and we have line of sight to building a product that teaches better than ever before.”— Luis von Ahn

Management disclosed that they are fine-tuning their own models to improve engagement in the Max Video Call feature.

Duolingo is optimizing the Max Video Call feature using a new metric: average number of words spoken per Max subscriber.

Management confirmed that the trend of lowering AI unit costs (API/token expenses) is expected to continue.

“We've got a lot of data now from the first two quarters of the year that says that the trend we expected to see, which was lowering of those unit costs, coming down, that trend is likely to stay intact”— Matt Skaruppa

Management acknowledged regulatory delays in launching Duolingo Max in China due to requirements for local LLM approval.

Duolingo is enhancing the Max 'Video Call' feature with bilingual conversation support and improved engagement (backgrounds) to address beginner user difficulty.

Gross margin outperformed expectations due to lower AI-related costs, specifically reduced API call and token expenses.