Stock Prospects for Duolingo in the Future
Duolingo, the popular language learning platform, has announced its plans to diversify its educational offerings, moving beyond language learning and into subjects like chess and music. This expansion is expected to drive growth and increase user engagement, with projections of revenues surpassing $1 billion by 2025.
In Q2 2025, Duolingo reported revenues of $252.3 million, representing a 42% year-over-year growth. The company's daily active users also increased to 47.7 million, a growth of 40%. These impressive figures are a testament to Duolingo's continued success in the language learning market.
The company's net income for Q2 2025 was $88.6 million, up over 450% compared to the previous year. Duolingo's free cash flow now exceeds $270 million, and its EBITDA margins are improving. The company's AI-enhanced subscription tier, Duolingo Max, has demonstrated higher conversion and retention rates than its Super tier.
Duolingo's growth trajectory is driven by AI, global reach, and an expanding subject range. The company has released over 140 new courses in a year due to the implementation of generative AI. This technology is expected to play a significant role in the company's new ventures, such as the recently introduced chess course.
The chess course is projected to generate bookings of $60-$150 million by 2026. While exact revenue projections for non-language subjects are not publicly detailed, the overall strategy indicates that Duolingo views these new avenues as major growth drivers alongside its core language offerings.
Duolingo's goal is to become a comprehensive learning platform. The company is focusing on upgrading language proficiency levels and enhancing AI tools to personalize learning experiences. These improvements, combined with the addition of chess and potentially other subjects, support substantial revenue growth in the near term.
Despite the elevated valuation, with a forward P/E around 103x and a price-to-sales ratio near 18x, Duolingo's performance metrics demonstrate reduced volatility. The High Quality (HQ) Portfolio, a comprehensive risk assessment framework utilised by Trefis, has consistently outperformed the S&P 500 over the past four years. The HQ Portfolio delivers higher returns with reduced volatility.
In conclusion, Duolingo's strategic expansion into new subjects like chess, coupled with AI-driven features, is expected to contribute to increasing revenues beyond $1 billion by 2025. The company's positive outlook extends into 2026, with continued growth and innovation.
[1] Duolingo Q2 2025 Earnings Report [2] Duolingo's 2025-2026 Revenue Forecast [3] Duolingo's Product Roadmap for 2025-2026 [4] Duolingo's AI-Enhanced Learning Strategy for 2025-2026
- As Duolingo ventures into non-language subjects like chess, they are set to leverage artificial-intelligence technology, a significant factor in the success of their AI-enhanced subscription tier Duolingo Max.
- With the expansion into new subjects and the continuous advancement of AI tools, Duolingo aims to boost their finance, particularly revenue, surpassing $1 billion by 2025, as suggested in their 2025-2026 revenue forecast.
