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Jun 30, 2025
Duolingo Q2 2025 Earnings Report
Duolingo delivered record net income and strong revenue growth.
Key Takeaways
Duolingo saw revenue rise 41% to $252.3 M and net income more than doubled to $44.8 M, driven by 40% DAU growth and robust subscription bookings.
Revenue grew 41% year-over-year to $252.3 M.
Record net income of $44.8 M, up 84% YoY.
Daily active users increased 40% YoY to 47.7 M.
Subscription bookings rose 45% to $227.3 M.
Revenue by Segment
Forward Guidance
Duolingo provided guidance for Q3 2025 bookings of $268.5–$272.5 M, revenue of $257–$261 M, and Adjusted EBITDA margin of 27–28%, and for FY 2025 bookings of $1,149–$1,157 M, revenue of $1,011–$1,019 M, and Adjusted EBITDA margin of 28.5–29%.
Positive Outlook
- We expect Q3 revenue to grow 34% YoY, or 35% constant currency, at midpoint.
- Our guidance assumes exchange rates as of July 31, 2025, with each 1% dollar move impacting bookings by ~$3 M.
- We now expect FY 2025 gross margin to decline ~100 bps YoY, an improvement from prior guidance.
- We raised full-year Adjusted EBITDA margin guidance to 28.75% midpoint, up ~310 bps YoY and ~80 bps above prior guidance.
- For Q3, we are guiding to an Adjusted EBITDA margin of 27.5% at midpoint.
Challenges Ahead
- FY 2025 gross margin is still expected to decline, indicating higher AI costs relative to last year.
- Profitability is expected to step down slightly in H2 as some outperformance is reinvested.
- Fully diluted share count is projected to increase by about 1% in 2025.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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