Duolingo: Duo is dead, long live Duo!
$DUOL Q1 2025 ER update
This quarter, we launched one of our most successful marketing campaigns ever and spent practically nothing on it: Dead Duo. This social-led narrative—a ‘whodunit’ mystery—generated 1.7 billion organic impressions, and drove a meaningful lift in new and resurrected users as our community rallied around their favorite owl,
Who knew that killing off Duo the Owl could breathe so much life into Duolingo’s numbers? In a marketing stunt that was equal parts unhinged and genius, Duolingo’s “Dead Duo” campaign turned a fake owl funeral into a global sensation, proving once again that this language-learning app knows how to make learning (and marketing) irresistibly fun.
With Q1 2025 results soaring, let’s dive into the numbers and see how Duolingo’s owl-powered superpowers continue to drive exponential growth, as outlined in my original deep dive.
If you haven't read my original deep dive on Duolingo, I recommend doing so before reviewing this update. It's essential reading for a thorough understanding of the company.
Duolingo’s Q1 2025 earnings showcase a company firing on all cylinders. Revenue reached $230.7 million, a 38% year-over-year (YoY) increase, surpassing analyst expectations. Perhaps most impressively, Duolingo’s free cash flow and Free Cash Flow per Share continues its upward trajectory, reinforcing the investment flywheel highlighted in my original analysis.
Duolingo Business Ontology
As usual for my deep dives, to dissect Duolingo’s growth engine, I’ve constructed a Business Ontology that distills its strategy into three core pillars: User Growth (MAU), Engagement (DAU/MAU), and Paid Subscriber Penetration, as shown in the diagram below.
User Growth leverages the freemium model and network effects, with leading indicators like interest over time (Google Trends), the trend of Revenue vs SGA margins, and the launch of new verticals, driving organic acquisition.
Engagement is propelled by social features, gamification, and rigorous A/B testing, with AI adoption enhancing content creation and product innovation to boost DAU/MAU ratios.
Paid Subscriber Penetration capitalizes on increased engagement and time on the platform, improving conversion rates, tracked through indicators like investments in product enhancements.
This ontology reveals how Duolingo’s interconnected flywheel continues to fuel its exponential growth trajectory.
If you’re new to my Business Ontology framework, check out this article for a detailed introduction.
User Growth
Duolingo’s Monthly Active Users (MAUs) soared to 130.2 million in Q1 2025, a 33% year-over-year increase in acceleration from the 32.4% of the previous quarter, driven by its freemium model and powerful network effects, as most of users continue to join organically through word-of-mouth. The “Dead Duo” campaign, generating 1.7 billion organic impressions, significantly boosted MAU growth by attracting new users and re-engaging lapsed ones.
Beyond language learning, the company’s expansion into new verticals—math, music, and the newly launched chess course—is tapping into massive demand, broadening its user base.
CEO Luis von Ahn emphasized the potential of chess, stating,
We think there’s a huge demand for chess. There’s hundreds of millions of people who want to play chess. And the same is true for math and music,
He further highlighted the innovative approach to launching chess:
It really started with a team of 2 people, neither of whom knew how to program… And they basically made prototypes and did the whole curriculum of chess by just using AI,
This aligns with Duolingo’s broader strategy, as von Ahn noted,
The strategy is really to become not just a language learning app, but an app that teaches you subjects that take a long time to learn… that hundreds of millions of people want to learn and that are also good for the world,
While these new subjects are “growing a lot faster than language learning” and already have “millions of daily active users,” von Ahn cautioned that scaling them takes time, as “it took us 10 years to grow language learning to a big scale.” Nonetheless, this multi-vertical approach positions Duolingo to sustain its impressive MAU growth trajectory.
Engagement
Duolingo’s DAU/MAU ratio continues to soar, with Daily Active Users (DAUs) reaching 46.6 million in Q1 2025, up 49% year-over-year—a clear indicator of rising user engagement.
The “Dead Duo” campaign galvanized the community to collectively earn 50 billion XP to “resurrect” Duo, driving a surge in daily participation, while features like Friend Streaks and streak freezes ensured users remained committed to their learning habits.
The real game-changer in sustaining this engagement for the foreseeable future, however, is the integration of generative AI, which has transformed content creation and feature development. CEO Luis von Ahn highlighted its impact, stating,
Gen AI is allowing us… to make the content for all of our subjects mostly, close to 100%, automatically. So that allows us to just have a lot more content that is made a lot faster and much cheaper,
He also pointed to new features like “Video Call with Lily,” noting, “That was just impossible to practice conversation with a computer 2 years ago.” Additionally, AI has enabled rapid prototyping, as seen with chess:
The fact that 2 people who were not engineers really were able to get pretty far in chess… is showing what the future is going to look like,
By leveraging AI to create content, introduce innovative features, and improve efficiencies, Duolingo ensures users stay engaged, returning daily to learn across its expanding range of subjects.
Paid Subscriber Penetration
Duolingo’s paid subscriber penetration continues to improve, with 10.3 million users opting for premium subscriptions in Q1 2025, a 40% year-over-year increase, signaling the company’s success in converting more free users into paying customers and driving subscription revenue to $191.0 million, up 45% YoY.
This growth is closely tied to product improvements that enhance user value, particularly through Duolingo Max and expanded course offerings.
CFO Matthew Skaruppa noted,
On the Max retention rates, we feel good about how Max is progressing. It’s about 7% of subscribers at quarter end, which is an impressive set of growth, and it helped to deliver a really strong Q1 for us,
Features like Video Call with Lily and AI-driven personalization have made Max a compelling upgrade, boosting retention and conversion rates.
Additionally, the rapid expansion of content—such as 148 new language courses added in just a year—has filled critical gaps, with CEO Luis von Ahn explaining,
We added 148 new language courses… for example, if you were a Portuguese speaker, you couldn’t learn Korean. But now you can,
He added,
All of this content was done with AI, and it really took us about a year to add these 148 language courses… the previous 100-ish courses took us about 12 years to make,
This speedup ensures broader accessibility, catering to diverse learners globally. Von Ahn also highlighted the overlap across subjects, stating,
Quite a few users are learning multiple of our subjects, including multiple of our languages,
which encourages users to spend more time on the platform, further driving conversions as they seek an ad-free, premium experience to support their self-improvement goals.
Conclusion
Duolingo’s Q1 2025 performance reinforces the core thesis from my original deep dive: a powerful flywheel of user growth, engagement, and monetization, fueled by AI innovation and a uniquely engaging brand, drives sustained outperformance.
The “Dead Duo” campaign’s viral success, skyrocketing DAU/MAU ratios, and accelerating paid subscriber growth—bolstered by product enhancements like Duolingo Max and 148 new AI-generated language courses—demonstrate how each pillar of the Business Ontology is firing on all cylinders.
As Duolingo expands into new verticals like chess, math, and music, it’s not just a language app anymore; it’s a platform for lifelong learning, capturing users who want to improve themselves in a fun, accessible way. With a clear strategy to leverage AI for content creation and feature development, Duolingo is well-positioned to maintain its growth trajectory, though execution in scaling these new subjects will be key to unlocking its full potential. The owl’s wings are spread wider than ever, and it’s soaring to new heights.
As always, here is the “Deep Dive To Date” (DDTD), that is how the DUOL 0.00%↑ stock is performing since my initial deep dive on the January 11th 2025, when the price was $318.15.
+52.8% DDTDSee you in the next update!
Check all the Ontologies I have built: ODD 0.00%↑ , RKLB 0.00%↑ , HIMS 0.00%↑ , LMND 0.00%↑ , CRWD 0.00%↑.
The content of this analysis is for entertainment and informational purposes only and should not be considered financial or investment advice. Please conduct your own thorough research and due diligence before making any investment decisions and consult with a professional if needed.