Duolingo has revised its sales and profit forecasts upwards, attributing the boost to the increasing popularity of its AI-enhanced subscription tiers. The language learning platform's 'freemium' model offers basic features for free, while 'Super' and AI-powered 'Max' subscriptions unlock additional capabilities. Max tier subscribers gain access to features like video call conversations with chatbots and detailed error analysis. The company has embraced an 'AI-first' strategy, using generative AI to accelerate content creation, launching 148 new language courses in under a year, a feat that previously took 12 years for the first 100 courses. Duolingo is also replacing many contract workers with AI to streamline operations.
The company now projects adjusted core profit between $271.4 million and $283.9 million for the year, up from earlier estimates of $259.9 million to $274.0 million. First-quarter revenue reached $230.7 million, exceeding analysts' expectations of $223 million. Duolingo Max includes all the benefits of Super Duolingo, along with three AI-powered features: Explain My Answer, Roleplay and Video Call with Lily. These features are powered by OpenAI's GPT-4. Duolingo Max is currently available on the iOS and Android version of the Duolingo app.