Duolingo, Inc. — research brief

# Duolingo, Inc. — research brief

**Slug:** duolingo  
**Date:** 2026-10-03  
**Industry:** EdTech / Consumer Learning  
**Accent:** `#58CC02`  
**Ticker:** NASDAQ: DUOL

## Label key
- **FACT** — Duolingo IR shareholder letter / earnings materials, Form 10-K, official product / help / blog
- **SECONDARY** — reputable press summarizing company materials
- **INFERENCE** — teaching connection (labeled; not a cited metric)

## Primary sources (FACT)
1. Q4 / FY 2025 shareholder letter (SEC HTML): https://www.sec.gov/Archives/edgar/data/1562088/000162828026012246/q4fy25duolingo12-31x25shar.htm
2. Q4 / FY 2025 earnings press release: https://investors.duolingo.com/news-releases/news-release-details/duolingo-reports-fourth-quarter-and-full-year-2025-results
3. Form 10-K FY 2025 (SEC EDGAR): https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm
4. Investor relations hub: https://investors.duolingo.com/
5. Duolingo Max help: https://www.duolingo.com/help/what-is-duolingo-max
6. Official blog — Duolingo Max / Video Call: https://blog.duolingo.com/duolingo-max/ · https://blog.duolingo.com/video-call/
7. Product / consumer: https://www.duolingo.com/

## Key figures used on canvas
| Metric | Value | Label | Source |
|---|---|---|---|
| FY 2025 revenue | $1,037.6M (+39% Y/Y) | FACT | Shareholder letter |
| Q4 2025 revenue | $282.9M (+35% Y/Y) | FACT | Shareholder letter |
| FY 2025 total bookings | $1,158.4M (+33% Y/Y) | FACT | Shareholder letter |
| FY 2025 subscription bookings | $996.3M (+36% Y/Y) | FACT | Shareholder letter |
| Q4 2025 MAUs | 133.1M (+14% Y/Y) | FACT | Shareholder letter |
| Q4 2025 DAUs | 52.7M (+30% Y/Y) | FACT | Shareholder letter |
| Paid subscribers (YE’25 / period end) | 12.2M (+28% Y/Y) | FACT | Shareholder letter |
| Paid penetration of MAUs | ~9% at YE’25 | FACT | Form 10-K |
| Subscription revenue FY’25 | $873.4M | FACT | Form 10-K note |
| Advertising revenue FY’25 | $79.7M | FACT | Form 10-K note |
| Duolingo English Test FY’25 | $42.0M | FACT | Form 10-K note |
| In-app purchases FY’25 | $40.5M | FACT | Form 10-K note |
| Other (misc) FY’25 | $1.9M | FACT | Form 10-K note |
| “Other” revenue total FY’25 | $164.1M (ads + DET + IAPs + misc) | FACT | Form 10-K |
| Gross profit / margin FY’25 | $749.5M / 72.2% | FACT | Shareholder letter |
| Adj. EBITDA FY’25 | $305.9M (29.5% margin) | FACT | Shareholder letter |
| Free cash flow FY’25 | $360.4M (34.7% margin) | FACT | Shareholder letter |
| Operating cash flow FY’25 | $387.8M | FACT | Shareholder letter |
| GAAP net income FY’25 | $414.1M (includes $256.7M one-time tax benefit from valuation-allowance release) | FACT | Shareholder letter |
| Cost of revenues FY’25 | $288.1M | FACT | Shareholder letter / statements |
| R&D FY’25 | $306.3M | FACT | Statements |
| Sales & marketing FY’25 | $125.7M | FACT | Statements |
| G&A FY’25 | $181.9M | FACT | Statements |
| Cash & cash equivalents YE’25 | $1.04B | FACT | Shareholder letter |
| Short-term investments YE’25 | $104.1M | FACT | Balance sheet |
| Employees YE’25 | >900 (incl. >430 engineers) | FACT | Form 10-K |
| Courses / MAUs (product) | >250 language courses; >130M MAUs | FACT | Form 10-K |
| US vs Rest of World revenue | US $392.2M (38%); RoW $645.4M (62%) | FACT | Form 10-K |
| Payment processors share of revenue | Apple 61.6%; Google 23.4%; Stripe 10.3% | FACT | Form 10-K |
| Chess subject DAUs | >7M DAUs in <1 year (CEO letter) | FACT | Shareholder letter |
| Share repurchase authorization | Up to $400M (announced with Q4’25 results) | FACT | Earnings PR / letter |

## Model read (teaching arc)
**Gamified freemium (free lessons + ads + streaks/Energy) → Super Duolingo (ad-free / unlimited practice) → Duolingo Max (GPT-powered Roleplay + Video Call with Lily) → ads + DET + IAPs as secondary streams; Duolingo for Schools / ABC as adjacent classroom & literacy tools.**

Duolingo is a **consumer freemium education platform**: course content is intentionally not paywalled (FACT 10-K). Free learners see ads and hit energy/heart limits; paid subscribers (~9% of MAUs) buy Super or Max for an ad-free, higher-intensity experience. Subscriptions dominate revenue ($873M of $1.04B). Advertising, the Duolingo English Test, and gem/IAP packs fill the rest. Engagement loops (streaks, leagues, notifications, owl brand) and organic word-of-mouth are the primary growth engine; paid UA supplements. In early 2026 the company is shifting strategy toward user growth and expanding Video Call access into Super (FACT shareholder letter) — teaching point: AI features move down the ladder to re-accelerate DAUs.

## Product ladder (features — FACT)
| Tier | What learners get | Source |
|---|---|---|
| Free | Full course content; ads after lessons; energy/heart limits | 10-K |
| Super Duolingo | Ad-free; unlimited energy/hearts; Practice Hub / personalized review; Family plan up to 6 (2021) | 10-K + blog |
| Duolingo Max | Everything in Super + AI Roleplay + Video Call with Lily (+ Explain My Answer historically) | Blog / Max help / 10-K |
| Duolingo English Test | Paid high-stakes English proficiency exam (proctored, adaptive) | 10-K |
| Duolingo for Schools | Free web tool for teachers to use Duolingo in classrooms | 10-K |
| Duolingo ABC | Early literacy app for young children | 10-K |
| Math / Music / Chess | Non-language subjects inside the app; Chess >7M DAUs | 10-K + shareholder letter |

**List prices** for Super / Max vary by country, platform (App Store / Play / web), and promotion. Do **not** invent a single global ARR ARPU or fixed USD sticker as FACT. Feature ladder + disclosed revenue mix are the teaching anchors.

## Do not invent
- Exact % of paid subscribers on Super vs Max (not separately disclosed)
- Exact US Super/Max list price as a single FACT (regional / A/B / platform)
- Enterprise / B2B SaaS ARR for schools (Duolingo for Schools is a classroom tool; not disclosed as a material paid enterprise line)
- Exact AI inference cost per Video Call (press SECONDARY only)
- Exact MAU→paid conversion funnel rates beyond the ~9% paid-of-MAU FACT
- Valuation / market-cap snapshots as operating metrics