Duolingo’s first quarter results were met positively by the market, reflecting the company’s continued ability to drive user and revenue growth beyond analyst expectations. Management credited broad-based expansion in active users and successful monetization of new features for the outperformance. CEO Luis von Ahn highlighted Duolingo’s unique marketing and product development capabilities, citing the launch of new subjects like chess and the effective use of generative AI to rapidly expand course offerings. The company’s approach to product-led growth and efficient marketing campaigns, including viral social media initiatives, drove engagement and contributed to the quarter’s strong results.

Is now the time to buy DUOL? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Duolingo’s Q1 Earnings Call

• Curtis Nagle (Bank of America) asked about gross margin trends, to which CFO Matt Skaruppa explained that margins should decline slightly in Q2 before improving later in the year as AI-driven efficiencies scale.

• Chris Kuntarich (UBS) inquired about retention and adoption rates for the Max premium tier, with Skaruppa noting that Max now makes up 7% of subscribers and is seeing expected retention, particularly among English learners.

• Bryan Smilek (JPMorgan) questioned the drivers of strong daily active user growth, and CEO Luis von Ahn cited product improvements and viral marketing, emphasizing robust growth even in mature regions.

• Ross Sandler (Barclays) asked about potential impacts from new app store payment rules, and Skaruppa stated that while shifting payments off-platform could improve margins, any changes would be tested due to potential impacts on conversion rates.

• Alex Sklar (Raymond James) explored pricing and feature differentiation across subscription tiers. Von Ahn confirmed ongoing price and packaging experiments but said no major changes had been implemented yet.

Catalysts in Upcoming Quarters

In upcoming quarters, the StockStory team will track (1) the rollout and user adoption of new subjects like chess and their monetization impact, (2) additional AI-driven content and feature launches, and (3) shifts in subscriber mix, especially Max adoption and conversion among English learners. We will also monitor the outcomes of pricing experiments and any changes to app store payment flows, as these could influence both revenue and margin trajectories.

Duolingo currently trades at $477, up from $400 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).

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