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Mar 31, 2025
Duolingo Q1 2025 Earnings Report
Duolingo posted strong revenue growth, margin expansion, and record user additions in Q1 2025.
Key Takeaways
Duolingo reported a robust Q1 FY25 with 38% revenue growth year-over-year, driven by strong paid subscriber growth and adoption of premium tiers like Duolingo Max. The company also saw record high user engagement and improved profitability metrics.
Revenue by Segment
Forward Guidance
Duolingo raised its FY 2025 guidance for bookings and Adjusted EBITDA margin, citing strong Q1 performance and early AI cost efficiencies.
Positive Outlook
- Raised FY25 bookings growth guidance to 29%
- Raised FY25 Adjusted EBITDA margin guidance to 28%
- Q2 bookings expected to grow ~29% YoY
- Continued strength in premium plans and Duolingo Max adoption
- AI cost optimizations implemented earlier than expected
Challenges Ahead
- Expected decline in gross margin of 150 basis points YoY for FY25
- Q2 gross margin expected to be ~50bps lower than Q1
- Sequential deceleration in bookings growth forecasted for H2
- Gross margin decline due to higher generative AI costs
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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