Duolingo (NASDAQ:DUOL) used its fourth quarter 2025 earnings call to outline a strategic pivot toward re-accelerating daily active user (DAU) growth, even as management guided to slower bookings growth and lower profitability in 2026. Co-founder and CEO Luis von Ahn said the company believes accelerating advances in AI are creating “a unique time in history” for learning products, and that Duolingo intends to lead what he described as a fundamental shift in how people learn.
The call also marked a leadership transition in finance. Von Ahn thanked outgoing CFO Matt Skaruppa and introduced Gillian Munson, a longtime board member and audit committee chair, as the company’s new CFO.
2025 milestones and a renewed focus on user growth
However, management emphasized that DAU growth decelerated throughout 2025 and continued to slow into the start of 2026. Duolingo now expects DAU growth to be about 20% year-over-year throughout 2026. Von Ahn framed long-term value as being driven by two factors: the size of the active learner base (“the size of the pie”) and monetization (“the piece of the pie”). For 2026, he said, Duolingo is prioritizing expanding the user base.
As a medium-term target, management reiterated a goal of reaching 100 million DAUs in 2028. Von Ahn said the short-term implication of the 2026 plan is “slower bookings growth and lower profitability,” which the company incorporated into its guidance.
2026 guidance: slower bookings growth, investment-driven margin changes
Munson provided detailed guidance and modeling context. For full-year 2026, Duolingo guided to:
- Bookings growth: 10% to 12%
- Revenue growth: 15% to 18%
- Adjusted EBITDA margin: around 25%
For the first quarter, management guided to 11% bookings growth, 25% revenue growth, and a 25.5% adjusted EBITDA margin. Munson said Q1 bookings growth was tracking above guidance as of the prior Friday, but she cautioned the company is heading into “a particularly tough compare” in the first half, citing factors including Dead Duo, a price increase, strong advertising bookings, and the rollout of Energy.
On the revenue trajectory, Munson said year-over-year revenue growth should adjust downward over the course of the year in line with bookings, with stabilization in the second half. She added that based on the Q1 revenue growth outlook, “the math implies” Q3 and Q4 revenue growth will be below the low end of the full-year range.
Munson also said Duolingo plans to share AI features with a much larger portion of its user base, which the company expects to pressure gross margins. She said R&D and sales and marketing spending growth will outpace revenue growth in 2026 as the company invests.
Adjusted EBITDA margins are expected to follow a different seasonal pattern than prior years: 25.5% in Q1, declining roughly three points sequentially in Q2, then improving through the back half of the year, with Q4 projected to be the highest-margin quarter in 2026.
Product priorities: better language learning, a smoother free tier, and new subjects
Von Ahn said Duolingo’s 2026 plan centers on “teaching better and user growth,” supported by thousands of A/B tests and larger initiatives in three areas:
- Teaching languages better
- Improving the free user experience by reducing friction
- Feeding new growth engines including math, music, and chess
On AI, von Ahn argued that improvements in inference and product design are moving learning experiences toward “quality… as good as a one-on-one tutor” while remaining as engaging as a mobile game. He pointed to Duolingo’s “Video Call with Lily” as an example of improved conversational practice and said it has been getting better over time.
He also said Duolingo expects to release “Speaking Adventures” more broadly, describing it as a game-like feature that requires learners to speak at points during an adventure. He said the feature is already being tested and is expected to scale “sometime mid-year” for all users, free and paid.
Von Ahn added that within “a month or two,” Duolingo will roll out significantly more advanced content for courses teaching its top nine languages—covering more than 90% of DAUs—up to a Duolingo Score of 129, which he described as an important level for obtaining a knowledge job in that language. He said the rollout is “just the beginning,” with ongoing improvements expected over the rest of the year.
Monetization changes and tier experimentation with Video Call
Management repeatedly emphasized that, for 2026, user growth takes priority over near-term monetization. Von Ahn said Duolingo is “under-monetized and over-monetized at the same time,” noting that only about 10% of monthly active users pay. He said the company previously found the “quickest way” to increase monetization was adding friction, but he believes that approach began to conflict with DAU growth. He said Duolingo will explore monetization methods that don’t rely on increased friction, including adding features and potential in-app purchases such as avatar customizations.
On subscription tiers, von Ahn said Duolingo originally placed certain AI features behind the higher-priced Duolingo Max tier when AI inference costs were higher. As costs have come down, he said the company plans to test putting some form of Video Call into the Super tier. He said Duolingo will A/B test the impact on revenue, retention, and Max bookings, and may meter usage (for example, limiting Video Calls per day in Super versus unlimited in Max) depending on the results. Von Ahn said the decision is “offensive,” not driven by weakness in Max retention, which he said is “quite good.”
Munson said the company’s guidance is designed to give Duolingo room to run experiments and “do the right thing for our customers.” She later added that, relative to Duolingo’s historical pattern, the company hopes to narrow the gap between guidance and results in 2026.
Other disclosures: chess traction, ads strategy, and a $400 million buyback
Von Ahn said Duolingo’s chess offering reached about 7 million DAUs in under a year. He noted that most chess users are existing Duolingo users who now use both languages and chess, though he said chess is increasingly attracting its own user base over time.
On advertising, von Ahn said the company is unlikely to increase ad load—currently an ad at the end of a lesson—because it would increase friction. Instead, he said Duolingo is focusing on improving ad quality and economics through direct deals, which he said can both improve the user experience and increase revenue per ad. He also said the company is experimenting with showing ads in the language a user is learning, though he noted it remains a work in progress.
Munson also highlighted a new capital return program: Duolingo’s board authorized a share repurchase program of up to $400 million, which she said the company expects to execute over the coming year.
About Duolingo (NASDAQ:DUOL)
Duolingo, Inc (NASDAQ:DUOL) is a technology-driven education company that operates a widely used language-learning platform. Founded in 2011 by Luis von Ahn and Severin Hacker, Duolingo offers a freemium service featuring bite-sized lessons, gamified exercises and adaptive learning algorithms. The company’s core product is its mobile and web application, which supports instruction in more than 40 languages, ranging from widely spoken tongues such as English and Spanish to lesser-taught options including Irish and Swahili.
In addition to its flagship language courses, Duolingo has expanded its product suite to include the Duolingo English Test, an on-demand, computer-based English proficiency exam designed for academic and professional admissions.
