Duolingo CEO Luis von Ahn Talks Earnings, AI

Summary

Podcast Summary: Bloomberg Talks

Episode: Duolingo CEO Luis von Ahn Talks Earnings, AI
Date: February 27, 2026
Host: Bloomberg (multiple hosts)
Guest: Luis von Ahn, Co-founder, Chairman, President, CEO of Duolingo

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Episode Overview

This episode features an in-depth conversation with Duolingo CEO Luis von Ahn about the company’s latest earnings, its transformative AI strategy, and how Duolingo approaches future growth amid investor concerns. Hosts probe into Duolingo’s shifting short-term financials, long-term aspirations, unique market position, and expanding subject offerings. The tone is candid, data-driven, and focused on clarifying market misunderstandings and the big bets Duolingo is making.

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Key Discussion Points & Insights

1. Current State of Duolingo and Market Sentiment

• Duolingo shares are down 17% on the day, with over 80% loss since May 2025 and 22% of float shorted.
• The market is reacting negatively to Duolingo’s guidance for slower near-term earnings and tighter profit margins, due to increased investment in AI and user growth.

2. Duolingo’s Strategy: AI as an Opportunity, Not a Threat

• Luis von Ahn’s AI Expertise: Recognized as a long-term AI researcher, von Ahn explains the company’s deep-rooted experience leveraging AI in education.
• AI’s Potential: He positions AI as a tool to “teach significantly better” and make the app as effective as a one-on-one tutor and as enjoyable as a game.
  • Quote [01:53]:
    “Our sense is that within the next few years we're going to have an app that teaches as well as a one-on-one tutor, but also is as fun as a mobile game.”
    — Luis von Ahn

3. Duolingo’s Competitive Advantage in the AI Era

• Market Share and Scale: Duolingo claims 85% of daily active users among language learning apps.
• Data Advantage: Billions of exercises daily power unique, proprietary learning models, strengthening Duolingo’s moat.
  • Quote [02:49]:
    “We just have more data into how people learn than anybody else, and we can use that to train our own specific models.”
    — Luis von Ahn

4. The Duolingo Habit Loop and User Motivation

• Habit Formation: Von Ahn emphasizes that Duolingo’s key differentiator is its gamified habit-building, not just educational content.
  • Highlight [03:46]: 15 million users have a streak longer than 365 days.
• Motivation over Memorization: Maintaining motivation and engagement is highlighted as the hardest aspect of independent learning.
  • Quote [03:46]:
    “The hardest thing about learning something by yourself is staying motivated...what we do differently is we motivate people to continue doing it. And that's hard to get right.”
    — Luis von Ahn

5. Growth vs. Profit: Explaining Investor Concerns

• Long-Term Vision: Von Ahn reiterates that Duolingo is playing the long game, willing to trade short-term financials for long-term user base expansion.
  • Quote [04:50]:
    “We're trying to build a company for the very long term...trading off this year's financial metrics for a much larger thing in the long term.”
    — Luis von Ahn
• Doubling Users: The company’s target is doubling DAUs from 50 million to 100 million by 2028.

6. Operational Focus for 2026

• Three Main Priorities [06:14]:
  • Teaching better (via AI and pedagogy)
  • Improving the free tier experience
  • Expanding into new subjects (currently include math, music, and chess)
    • Now, 15% of active users engage with non-language content; chess has seen particular growth.
  • Past Growth: Since IPO in 2021, active users have increased more than fivefold.

7. User Acquisition vs. Monetization

• 2026 Focus: This year’s main priority is to grow the total user base, even at the expense of immediate conversion and monetization.
  • Quote [07:23]:
    “This year, we're mainly concentrating on just growing the pie...there's no other education app that has the scale that we have.”
    — Luis von Ahn

8. Personal Touch and User Streaks

• Hosts and producers share their own Duolingo streaks (from ~355 days to ~770 days), underscoring the platform’s sticky engagement.

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Notable Quotes & Moments (with Timestamps)

• [01:53] Luis von Ahn:
  “Our sense is that within the next few years we're going to have an app that teaches as well as a one-on-one tutor, but also is as fun as a mobile game.”
• [02:49] Luis von Ahn:
  “We just have more data into how people learn than anybody else, and we can use that to train our own specific models.”
• [03:46] Luis von Ahn:
  “The hardest thing about learning something by yourself is staying motivated...what we do differently is we motivate people to continue doing it. And that's hard to get right.”
• [04:50] Luis von Ahn:
  “We're trying to build a company for the very long term...trading off this year's financial metrics for a much larger thing in the long term.”
• [07:23] Luis von Ahn:
  “This year, we're mainly concentrating on just growing the pie...there's no other education app that has the scale that we have.”

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Important Segments & Timestamps

• AI's Role for Duolingo and the Education Sector: [01:05] – [03:46]
• Competitive Advantage & Data: [02:49] – [03:46]
• Investor Concerns and Growth Strategy: [04:37] – [06:14]
• Subjects Beyond Language Learning: [06:14] – [07:07]
• Free Tier and Monetization Focus: [07:07] – [08:25]
• Hosts’ User Streaks & Wrap-up: [08:34] – [08:40]

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Takeaways

• Duolingo is pushing aggressively into AI, not as a defensive strategy but as a way to reimagine digital teaching at scale.
• The company’s durable advantage stems from user engagement habits, data, and scale—elements that generic language models cannot easily replicate.
• Short-term financial sacrifices are deliberate to enable massive user base expansion and category growth (math, music, chess).
• The biggest challenge and core differentiator is turning learning into a daily, engaging habit.
• Despite market skepticism, Duolingo is betting that a stickier, broader, and better AI-enabled educational experience will secure both future growth and a defensible market position.

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For listeners and investors:
This episode clarifies that Duolingo’s current financial softness is calculated and intentional, driven by a commitment to deep product and AI investment—and the goal to become the world’s definitive digital learning platform, not just a language app.

Transcript

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[Bloomberg Host]

Bloomberg Audio Studios Podcasts Radio news Shares of Duolingo are tanking today. The stock in fact right now down about 17%. It did, though, hit its lowest intraday since February of 2023, now down more than 80% since May of 2025. And about 22% of the float is short. So there's some real negative sentiment on the name shares sliding after the company said its drive to gain subscrib mean slower earnings growth and narrower profit margins in the short term. Tim, you keep reminding us that there's a lot going on at the company. Some transformations here.

[Bloomberg Host 2]

Yeah, the company said it would step up investment in AI and sacrifice some degree of monetization in order to accelerate user growth and engagement. The goal? Double the current number of daily active users to 100 million in 2028. Great to be talking again with a member of the Duolingo C suite. Back with us, Luis Von Ahn, co founder, chairman, president and CEO of Duolingo. He joins us from New York. Luis, always good to see you. We're going to talk about the quarter and the outlook in a minute, but I want to start big picture with AI because I mean, you've been thinking and researching AI for decades at this point. You're a recipient of a MacArthur Genius foundation grant back in the year 2006 for working on AI. This is nothing new to you what's happening right now. But answer the question for investors, is AI a threat to your business?

[Luis Von Ahn]

Well, first of all, thank you for having me. I think that we're in a unique point in time where because of AI, we're going to be able to teach significantly better. And Duolingo is by a wide margin the largest app in education in the world. I think because of that we're going to be able to really take advantage of this AI boon to be able to teach significantly better. And our sense is that within the next few years we're going to have an app that teaches us well as a one on one tutor, but also is as fun as a mobile game. And if we're really able to do that. I think there's just so much more that we can capture. So that's what, that's what we're doing. We're really shooting for that.

[Bloomberg Host]

So jumping on the AI bandwagon, I mean, I guess what, I guess what investors want to know is what is Duolingo's advantage over potential new AI learning apps?

[Luis Von Ahn]

Well, you know, at the moment, we're not, we're not particularly concerned with competition in terms of, you know, other, other education apps. We have, for example, for language learning, we have about 85% of the market share of all daily active users of people who are learning a language. So we have huge scale. And what differentiates us is that because of that scale, we just have more data into how people learn than anybody else, and we can use that to train our own specific models. So we just have the advantage of scale, of being able to literally billions of exercises every day by people who are learning different things.

[Bloomberg Host]

But as you know, this is going and this is moving pretty quickly. The AI impact, it seems. And to be fair, you are right. Like, we'll see many say this is, you know, we're kind of early in on this process and the impact. But what does Duolingo offer that can't easily be replicated by a large language model? And how do you kind of view that competitive landscape evolving?

[Luis Von Ahn]

Yeah, I mean, there's a number of things. I mean, for one with Duolingo, what we do is we try to build a habit of learning. For example, 15 million of our daily active users have a streak of longer than 365 days, meaning they have been using Duolingo for a year or longer and haven't missed a day. So we're really trying to build a habit for that. And this is why Duolingo is part game, part education. And that's, you know, I think that's just the right thing. It just turns out the hardest thing about learning something by yourself is staying motivated. That actually the content to learn has been there for a long time. So, for example, it's, you know, you've been able to learn a language by just reading a book for hundreds of years. That has been there. It's just what we do differently is we motivate people to continue doing it. And that's hard to get right.

[Bloomberg Host 2]

So what are, what are investors not getting right in your view, Carol? Carol mentioned some of the stock moves and now, you know, down at a point that you haven't seen since February of 2023. What are investors missing here?

[Luis Von Ahn]

I think it's a matter of timing. You know, on our end, we are trying to build a company for the very long term. We're trying to do something that, you know, for example, in our, in our shareholder letter we said that we are, we're shooting to have a double the daily active users that we have now. I mean, at the moment we have a little north of 50 million daily active users worldwide. We're trying to have more than 100 million, but we're saying that that's going to take some time. And so we're concentrated in the long term. And what we're doing is we're trading off this year's financial metrics for a much larger thing in the long term.

[Bloomberg Host 2]

Yeah, go ahead.

[Bloomberg Host]

Well, I get that right. Companies have to invest in order to provide growth going forward. And I think it's fair to say that we understand why investors, I mean, they're not loving your forecast for first quarter adjusted ebitda. That's missing the mark from what the street was expecting. 2026 revenue. Also that forecast missing same story for 2026 adjusted EBITDA overall. So you talk about building this to double your daily active users to 100 million. How much will, how long will that build actually take and what kind of visibility do you have on that to kind of maybe reassure investors that this isn't something that takes longer while the AI world continues to challenge established players?

[Luis Von Ahn]

Yeah, I mean, the way we're seeing it is we're going to spend this year really working on three things, really teaching better, improving the free user experience and also expanding to other subjects. I mean, by now we already teach math, music and chess. And you know, we've been growing quite a bit. About 15% of our active users are learning things that are, you know, other than languages. Our chess course has grown quite significantly. So these are the three things that we're working on and we're going to be working on that for the rest of the year. And we're, we're expecting that towards the end of the year we're going to see some improvements in our, in our year over year growth rate. We're still growing. I mean, we've had five years of really phenomenal growth. We IPO'd in 2021 and since then we've more than five x' ed our active users. So, you know, we expect that we'll continue growing pretty, pretty strong.

[Bloomberg Host 2]

Luis, is the idea in making cheap changes to the free tier, is it to get more people who don't use duolingo now to use the free tier or is it to get those free, free tier users to upgrade to a paid tier?

[Luis Von Ahn]

Historically, what we have done is we have tried to, you know, the way, the way we generate value on Duolingo is there's two parts to it. One is how many active users we have. That's kind of like the size of the pie that has grown quite significantly. And then there is how many of these people are paying us because we have this freemium model that's like the fraction of the pie that our payers historically we have worked on. Both we have worked on growing the pie and also growing the fraction of the pie that is paying, which is why our bookings have grown really significantly over the last five years. This year, we're mainly concentrating on just growing the pie. That is the number of people that are actively using Duolingo because it is our belief that because of the moment that we're in, we really want to have as many people as possible actually learning something meaningful. And Duolingo, once we're able to do that, I mean, one of the main advantages that we have certainly against new entrants is scale. There's no other education app that has the scale that we have.

[Bloomberg Host]

Well, great to always get a check on what you guys are up to and really appreciate it. Love to hear more too, as we go out throughout the year, how things are going.

[Bloomberg Host 2]

I'm at 355, I think my Duolingo, I'm almost at a year, I think.

[Bloomberg Host]

I think Sebastian actually said he's on his streak is about 770. That's one of our producers. Hey, Louise, thank you so much. Luis Von On Co Founder Chairman President CEO of Duolingo when we come back, check on trading and stocks on the move. This is Bloomberg Businessweek daily.

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