3 owns · 2 partial of 5 — a pattern, not a score
AI adoption: deepDuolingo's fiscal 2025 annual report describes machine learning that evaluates every learner's answer to every exercise every day and adaptively builds each lesson, putting AI in the core daily loop for the 133.1 million monthly and 52.7 million daily active users reported for the fourth quarter. Roleplay, Explain My Answer, DuoRadio and Video Call are live generative features, and the company credits AI with generating course content materially faster across 250-plus courses. The cost is visible in the accounts: gross margin fell to 72.2% from 72.8%, attributed partly to increased AI costs in features like Video Call. Duolingo Max, the AI-heavy tier, is still offered to only a portion of the user base, and about 9% of monthly active users were paid subscribers at year-end 2025. source: sec.gov
Duolingo owns the three consumer-side dimensions outright — the learner relationship, the first-party exercise corpus, and the daily learning session all sit inside its own product. It is partial where it depends on outside parties: the frontier generative layer is licensed from OpenAI, and its assessment is scored against the externally owned CEFR and IELTS yardsticks.
| Customer relationship | owns | Duolingo is pure direct-to-consumer: learners come to the brand directly and hold Duolingo accounts. The FY2025 10-K reports 133.1M MAUs (three months ended 2025-12-31 average) and 12.2M paid subscribers at period end, up from 9.5M, and says word-of-mouth growth lets it "focus our capital investments on product innovation and data analytics, rather than relying primarily on brand or performance marketing." Pricing is its own: "We determine the prices at which these subscriptions and features are sold." The app stores are a real dependency — 61.6%, 23.4% and 10.3% of FY2025 revenue processed by Apple, Google and Stripe, a "generally 15-30%" cut, and agreements "terminable... without cause with 30 days prior written notice" — but no partner sits between Duolingo and the learner. source: sec.gov |
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| Proprietary data | owns | The training corpus is first-party learner telemetry generated inside Duolingo's own product by its own consumer users, with no enterprise tenant's data and no licensed-in corpus doing the work. The FY2025 10-K states: "Large data moat. With nearly 2 billion exercises completed every day on our platform, we believe we have built the world's largest collection of language-learning data", and separately that learners create "what we believe to be the world's largest learning dataset"; 52.7M DAUs for Q4 2025 confirm the volume. The filing adds that Duolingo does "not sell personal data to outside parties." One qualifier: its AI risk factors concede it may be "deemed to not have sufficient rights to the data we use to train our AI technologies", so not every training input is unambiguously its own, even though the load-bearing asset is. source: sec.gov |
| Evals | partial | Duolingo owns a real assessment instrument but not the standard it is measured against. The CIOL-validated paper calls CEFR "the leading international standard adopted by governments, educational institutions, and assessment providers" and "the standard that Duolingo uses to reference all of our learning and assessment products, including the Duolingo English Test." Legitimacy is externally conferred: the alignment was "validated externally by ACS Ventures, LLC, an independent psychometric company", and the methodology "was reviewed and validated by the Chartered Institute of Linguists (CIOL)." Scores are anchored to IELTS via "3,586 test takers." The test has its own adaptive scale and "over 6,100 education programs" accept it, but it is small and shrinking: $42,006K of 2025 revenue vs $45,640K in 2024, 4.05% of the $1,037,589K total. source: ciol.org.uk |
| Workflow | owns | The day's work — the learning session — happens entirely inside Duolingo's product, with no external system of record to hand off to. The FY2025 10-K reports roughly 52.7M DAUs for the three months ended 2025-12-31 versus 40.5M, "representing an increase of 30%", a DAU/MAU ratio that "increased to 39.6% from 34.7% a year ago", and "about 43 million daily active users with a 7-day streak or longer, and about 15 million daily active users with a 365-day streak or longer." Adjacent subjects and the assessment run on one stack: "Products across our platform, like our flagship Duolingo App (including our Math, Music, and Chess courses), and the Duolingo English Test, share a singular technology infrastructure." A 39.6% ratio means roughly 60% of monthly learners are not daily, and the learner's ultimate goal is consummated outside the app. source: sec.gov |
| Domain-specific model | partial | Duolingo owns a genuine domain-specific model but rents the frontier generative layer. The FY2025 10-K describes "our machine learning tools that evaluate every learner's answer to every exercise every day and learn to predict the probability that any learner will answer any given exercise correctly" — the model Duolingo publicly calls Birdbrain, used "to figure out which exercises in a particular lesson are going to be the best match for a learner's level of knowledge." The generative features are third-party: "Duolingo Max Uses OpenAI's GPT-4 For New Learning Features", with Video Call and Roleplay "powered by the newest, most powerful generative AI technology." The 10-K warns that if model providers "terminate their relationship with us... our business will be harmed", and gross margin fell to 72.2% from 72.8%. source: blog.duolingo.com |