Duolingo, Inc.
Communication Services · Interactive Media & Services
8B+ daily lessons) compounds into the deepest language-learning dataset, which fine-tunes content generation at near-zero marginal cost. AI flips the cost curve: a single GPT-4-authored course replaces a year of human curriculum design, and Max tier ($30/mo) doubles ARPU vs Super while OpenAI inference is the only meaningful COGS line.
(1) DAU/MAU at multi-year highs, paid penetration still under 10% - long runway. (2) Max tier conversion from Super is the highest-margin upsell in the stack; AI features are the moat. (3) English Test is a $1B+ TAM at near-100% gross margin, growing 40%+ YoY.
(4) Math + Music apps reuse the same retention engine - optionality not in numbers. (5) Operating leverage: rev growing 40%+ with headcount near-flat post-2024.
(1) ChatGPT + $GOOGL Gemini are credible substitutes for casual learners - the moat is habit, not knowledge. (2) GPT-4 inference is a variable cost that scales with Max engagement; margin sensitivity to $OPENAI pricing is real. (3) Stock trades at premium SaaS multiples on consumer-app fundamentals - valuation rerate risk if MAU growth slows.
(4) Founder-led concentration; Luis von Ahn supervoting. (5) China + India monetization remains structurally weak.
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