Duolingo Surges 30% on Robust User Growth and Monetization

As of August 7th, 2025, Duolingo, the popular language learning platform, has seen its shares surge nearly 30% in pre-market trading. This surge in stock price comes on the heels of the company's impressive performance in the second quarter of the year, which has bolstered investor confidence in Duolingo's ability to drive user growth and enhance its monetization strategies.

According to the report, Duolingo has been actively experimenting with new app features and social engagement strategies to maintain and grow its user base. The company has also been optimizing its subscription offerings, with a focus on maximizing long-term platform value rather than pushing any single plan. This approach has paid off, as the company saw a 6% increase in average revenue per user during the second quarter, largely driven by users migrating to Duolingo's higher-priced Max tier, which offers features such as AI-powered video calls for practicing conversational skills.

Additionally, Duolingo's gross margin declined less than expected during the quarter, due to lower-than-anticipated AI costs and stronger performance in its advertising business. This, combined with the company's surpassing of analysts' earnings estimates, has prompted them to boost their earnings expectations for Duolingo.

Despite the impressive performance, Duolingo's shares are still trading at a relatively high valuation compared to other internet services companies. However, the company's focus on innovation, user engagement, and monetization strategies appears to be paying off, positioning it for continued growth and success in the language learning market.