Duolingo’s Growth and Market Dominance

Duolingo, Inc. has recently been highlighted in a bullish investment thesis on Rijnberk InvestInsights’s Substack. As of October 15, Duolingo's stock was trading at $341.08, with trailing and forward P/E ratios of 128.28 and 69.44, respectively. Duolingo has evolved from a gamified language-learning app into a digital education platform, driving engagement across more than forty languages. The company generates revenue through a freemium model, converting free users into paying subscribers.

Over the past decade, Duolingo has expanded into areas such as literacy, math, chess, and English proficiency testing, creating a scalable multi-disciplinary platform. The founder-led leadership, strong brand equity, and gamified design have driven consistent growth, with revenue increasing at a 40%+ CAGR. Duolingo holds a dominant position in app-based language learning, with a 60% market share, reaching only 5% of the global language-learning population, indicating significant expansion potential.

Recent product launches, including Chess and Math courses, have seen strong adoption, broadening the company's market and deepening user engagement. Q2 2025 results showed 41% YoY revenue growth, 46% subscription growth, record EBITDA of $79 million, and free cash flow of $86 million. Duolingo maintains a strong balance sheet with $1.1 billion in cash and minimal debt.

The primary risk to the investment thesis is AI disruption, particularly real-time translation tools, which could reduce the need for language learning. However, AI also presents opportunities through Duolingo Max and accelerated course creation. Execution is critical to maintaining its competitive edge. At current prices of $326, Duolingo's premium valuation limits upside, but it remains compelling below $260. The company is positioned as a high-quality, high-growth platform for long-term expansion in digital education.