Duolingo, Inc. (DUOL): A Bull Case Theory

Ricardo Pillai

Tue, May 13, 2025, 7:05 AM 4 min read

We came across a bullish thesis on Duolingo, Inc. (DUOL) on Substack by Lorenzo Bastianelli. In this article, we will summarize the bulls’ thesis on DUOL. Duolingo, Inc. (DUOL)'s share was trading at $503.57 as of May 8^th. DUOL’s trailing and forward P/E were 248.06 and 178.57 respectively according to Yahoo Finance.

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Duolingo's Q1 2025 results are a testament to the company’s ability to leverage its unique brand and marketing strategies, with the “Dead Duo” campaign becoming a viral sensation that significantly boosted its performance. Revenue for the quarter reached $230.7 million, marking a 38% year-over-year increase and exceeding analyst expectations. This surge is reflective of Duolingo’s business model, which continues to benefit from a well-oiled flywheel of user growth, engagement, and paid subscriber conversion.

The company’s Monthly Active Users (MAUs) surged to 130.2 million in Q1 2025, a 33% increase compared to the same period last year. This growth was propelled not only by Duolingo’s freemium model and the network effects of its global reach but also by the marketing success of its “Dead Duo” campaign, which generated 1.7 billion organic impressions. This viral event attracted new users and re-engaged lapsed ones, further fueling Duolingo’s MAU growth. Beyond language learning, Duolingo’s expansion into new verticals, such as math, music, and chess, provides additional growth opportunities and broadens its user base. CEO Luis von Ahn emphasized the potential of these new subjects, noting the massive demand for skills like chess and the platform’s ability to scale content quickly, especially with the help of AI.

Duolingo’s engagement metrics are also impressive, with Daily Active Users (DAUs) reaching 46.6 million, up 49% year-over-year. The DAU/MAU ratio’s surge highlights how users are increasingly engaged, with features like Friend Streaks, streak freezes, and AI-driven enhancements keeping users committed. The “Dead Duo” campaign’s interactive component also played a key role in driving daily participation. The integration of generative AI into content creation has significantly boosted Duolingo’s ability to scale and personalize its offerings. AI has enabled faster and more cost-effective content production, contributing to both user retention and feature innovation. For instance, the new “Video Call with Lily” feature has made practicing conversation with a computer more feasible, and AI has streamlined the development of Duolingo’s chess course.