Duolingo's Q4 2025 Earnings Call: Key Insights and Future Directions

Duolingo, the leading language learning platform, recently held its fourth-quarter earnings call for 2025, revealing a blend of strong financial performance and strategic pivots aimed at long-term growth. With the company surpassing 50 million daily active users and generating over $1 billion in bookings, the leadership shared insights into the challenges faced and the ambitious plans moving forward. Below, we delve into the financial performance, strategic initiatives, and future outlook based on the recent call.

Financial Performance

In a year characterized by growth despite challenges, Duolingo reported several key metrics:

Daily Active Users (DAUs): Surpassing 50 million, a significant increase from the pre-IPO user base.
Bookings: Exceeding $1 billion, a milestone that highlights the company's scalability and market demand.
Adjusted EBITDA: Over $300 million, showcasing profitability at scale.

Luis Von Ahn, co-founder and CEO, emphasized that while the growth trajectory in DAUs has decelerated, the company expects a 20% year-over-year growth in DAUs throughout 2026. This deceleration reinforces the need for strategic actions to re-accelerate user growth, which has been identified as a priority for the company.

Strategic Initiatives

Duolingo's leadership outlined a comprehensive plan aimed at enhancing user experience and increasing engagement. Key initiatives include:

Improved Learning Experience: The company is focusing on teaching languages better by implementing thousands of A/B tests throughout 2026.
Expanded Subject Offerings: Plans to enhance user engagement through new subjects, including math, music, and chess. The chess program has already attracted 7 million daily active users, demonstrating strong potential for growth.
Free User Experience: By improving the free user experience, Duolingo aims to reduce friction, which historically has correlated with user growth. The company recognizes that enhancing this experience will be critical to attracting new users.
AI Integration: As advances in AI continue to reshape learning methodologies, Duolingo is leaning heavily into AI to enhance user engagement. The leadership believes that AI will allow for personalized learning experiences akin to having a one-on-one tutor, thus making learning more effective and enjoyable.
Marketing Strategy Adjustments: The company intends to refine its marketing strategy, leveraging social media and virality to attract new users while ensuring that the monetization strategy aligns with user growth objectives.

“We are prioritizing growing the size of the pie. Our medium-term goal is to reach 100 million daily active users in 2028.” — Luis Von Ahn, Co-founder and CEO.

Future Outlook

Looking ahead, Duolingo's management set the following guidance for 2026, which reflects a cautious but optimistic approach:

Bookings Growth: Expected to range from 10% to 12%.
Revenue Growth: Anticipated between 15% and 18%.
Adjusted EBITDA Margin: Projected around 25%.

In the first quarter, the company forecasts 11% bookings growth and 25% revenue growth, indicating a strong start to the year. However, management acknowledges the need to navigate tough comparisons from the previous year and is prudent in its projections. As investments in user experience and AI capabilities grow, Duolingo expects to see returns in user engagement and monetization, though initial results may take time to materialize.

Management Expectations

The leadership is focused on creating a resilient brand with meaningfully higher bookings and profits as the user base expands. The decision to slow down short-term monetization efforts in favor of user growth reflects a long-term vision. Gillian Munson, the newly appointed CFO, emphasized the importance of capital allocation and the company’s robust financial position, which allows for these strategic investments.

Concluding Assessment

In conclusion, Duolingo’s Q4 earnings call highlighted a robust financial performance tempered by strategic adjustments aimed at future growth. With ambitious goals of reaching 100 million daily active users by 2028, the company is preparing to enhance its offerings and user engagement through innovative strategies centered around AI and user experience. While the immediate outlook suggests a period of slower growth, the long-term vision is clear: Duolingo is positioning itself not just as a language learning app, but as a comprehensive educational platform poised to redefine learning globally. Investors should remain optimistic about the company’s direction as it navigates this pivotal phase in its evolution.