DUOL

DUOL

Duolingo

Recurring SaaS

★ Quality 33/100
Undervalued

Price today

$154.46

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See what it is worth

charlieapp.co

What this business is made of

33qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

The green owl blackmails you with streaks so you come back every day.

Duolingo is a free language-learning app that monetizes two ways: premium subscription (Super/Max) and advertising. It has 50 million daily active users and books $1.04B in revenue, growing 39%. Now it's expanding the same game engine to math, music, and chess.

Its edge is psychological: it turned studying into an addictive habit with streaks, levels, and reminders. The brand and its library of gamified content are hard to copy fast. But it's not a deep moat; nothing stops a rival with better tech from replicating the mechanics.

Revenue history

$0.3B
2021
$0.4B
2022
$0.5B
2023
$0.7B
2024
$1.0B
2025
CAGR 5 años: +43%

From $0.3B to $1.0B in 4 years — nearly 3.3x its size. Selling more and more is the base of everything else.

Where each $100 of sales goes

Revenue $1.0B · FY2025

Cost of sales$288M · 28%
Operations and taxes$335M · 32%
Net profit$414M · 40%

Of every $100 in sales, $60 goes to costs and operations; $40 is left as net profit (40% margin).

Catalysts and risks

Expansion into math, music, and chess widens the market beyond languages.

Converting its 50 million daily users to paid subscription.

Duolingo Max with AI features raises revenue per user.

⚠️

Real-time AI translation (T-Mobile deal, feb-2026) threatens the heart of the business: learning languages.

⚠️

Without a deep moat, AI giants like Google or OpenAI can imitate the mechanics.

⚠️

The stock fell 83% from its peak; brutal volatility for weak stomachs.

Charlie's note

Growing 39% with 72% margins while trading at a single-digit multiple of its free cash flow almost doesn't exist. The discount has a reason: instant AI translation could gut the core product. Small position, don't bet the house.

Analysis · July 2026

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Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.