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Investing.com -- Shares of Duolingo Inc (NASDAQ:DUOL) soared 22.8% in after-hours trading Wednesday after the language-learning app reported first quarter earnings that surpassed analyst expectations and delivered upbeat full-year guidance. Strong user growth, enhanced monetization of its premium offerings, and early gains in AI-driven efficiencies fueled investor optimism.
The company posted Q1 earnings per share of $0.91, well ahead of consensus estimates of $0.58, while revenue climbed 38% year over year to $252.3 million, topping the $240.7 million forecast by Wall Street. Net income rose to $35.1 million from $27.0 million a year earlier, as the company sustained profitability while expanding aggressively.
Duolingo added a record number of Daily Active Users, reaching 46.6 million in the quarter, up 49% from the prior year. Paid subscribers also surged 40% to 10.3 million, boosting subscription bookings by 44% to $232.2 million, driven in part by increasing uptake of high-value plans such as Duolingo Max and the family plan.
“We’re executing well on the three core priorities we laid out for the year… driving subscription bookings through user growth and conversion gains, using AI to enhance Video Call and scale content, and growing profitably with operational discipline,” the company said in its shareholder letter. AI-powered features such as Role Play and Video Call with in-app character Lily have also seen cost reduction and usage growth, supporting gross margin expansion.
Beyond language learning, Duolingo has continued to broaden its curriculum with the addition of music, math, and now chess. CEO Luis von Ahn described the Chess course as promoting strategic skills in a gamified format, part of Duolingo’s intent to grow beyond its core market with high long-term value products.
The company underscored its commitment to entertainment-grade learning by acquiring London-based startup NextBeat, a music-based gaming team. “The NextBeat team brings deep mobile gaming and music industry expertise, which will make our Music course and the entire Duolingo platform more delightful, immersive, and effective,” said Bob Meese, Chief Business Officer at Duolingo.
Looking ahead, the company guided Q3 revenue to a range of $257–261 million, topping consensus estimates of $253.3 million. It also raised full-year guidance, projecting FY2025 revenue between $1.011 billion and $1.019 billion, well above the $996.5 million anticipated by analysts.
Investors appeared encouraged by Duolingo’s ability to blend rapid user growth with disciplined profitability and expanding product breadth. With efficiency gains from AI deployment and strategic talent acquisition bolstering its competitive edge, sentiment around the stock may remain elevated as the edtech firm enters new verticals.