Language-learning app Duolingo (NASDAQ:DUOL) announced better-than-expected revenue in Q1 CY2025, with sales up 37.7% year on year to $230.7 million. Guidance for next quarter’s revenue was optimistic at $240 million at the midpoint, 2.6% above analysts’ estimates. Its GAAP profit of $0.72 per share was 39.3% above analysts’ consensus estimates.

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Duolingo (DUOL) Q1 CY2025 Highlights:

Company Overview

Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.

Sales Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Duolingo’s sales grew at an incredible 43.1% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis.

This quarter, Duolingo reported wonderful year-on-year revenue growth of 37.7%, and its $230.7 million of revenue exceeded Wall Street’s estimates by 3.4%. Company management is currently guiding for a 34.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 27.6% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is commendable and suggests the market is baking in success for its products and services.

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Monthly Active Users

User Growth

As a subscription-based app, Duolingo generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.

Over the last two years, Duolingo’s monthly active users, a key performance metric for the company, increased by 39.8% annually to 130.2 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction.

In Q1, Duolingo added 32.6 million monthly active users, leading to 33.4% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.

Revenue Per User

Average revenue per user (ARPU) is a critical metric to track because it measures how much the average user spends. ARPU is also a key indicator of how valuable its users are (and can be over time).

Duolingo’s ARPU growth has been subpar over the last two years, averaging 1.6%. This isn’t great, but the increase in monthly active users is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Duolingo tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether users can continue growing at the current pace.

This quarter, Duolingo’s ARPU clocked in at $1.77. It grew by 3.2% year on year, slower than its user growth.

Key Takeaways from Duolingo’s Q1 Results

We were impressed by how significantly Duolingo blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 11.6% to $446.40 immediately following the results.

Sure, Duolingo had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free .