Duolingo Prioritizes Quality Teaching over Monetization, Stock Dips 31% 

Yesterday, on November 6, Duolingo’s stock dipped more than 30%. That’s $4 billion.

This is after their 2025 Q3 earnings call, in which CEO Luis von Ahn mentioned a strategy pivot. Instead of monetization, the company would be improving the quality of teaching and prioritizing long-term user growth.

Ahn also said that they’re expecting a deceleration in Q4 2025, and it could also be the most variable quarter. While they’re investing more in quality teaching to increase daily active users (DAUs) long-term, both Ahn and CFO Matt Scarupa didn’t specify how long that would take.

If we teach better, that helps user growth. Whenever you improve your courses, users grow, but it takes a while for that to happen. There’s a lag to get to monetization because people take some time to subscribe. So this is kind of a long term thing.

Scarupa added that the change is of small proportion, and it would help users get more lessons, learn better, spend more time on the app, and, in general, be more engaged Duolingo users.

Duolingo has consistently beaten revenue forecasts

The company crossed 50 million in DAUs, and 135 million monthly active users (MAUs), and the revenue is higher ($271 million) than their forecast of $260 million. Duolingo clearly outperformed this quarter, but there were some setbacks in Q3, along with future risks in Q4.

The company had invested heavily in AI to add premium features to Max, which has the same features as Super, with more AI add-ons such as video calls. Still, Max users were just 9% of subscribers. In Q1, 2025, the number was 7% and in Q2, 8%. Scarupa mentioned that Max is growing slower than they expected — something the company said during the last earnings call as well.

Still, Ahn is focused on investing more in improving features such as video calls and making them more beginner-friendly (for example, making them bilingual). This means more investments into AI and into a feature that isn’t living up to the company’s growth expectations.

Ahn also spoke about pricing experimentation, such as lowering prices or introducing packages. Add to this the uncertainty and lack of a timeline for the growth, and it was enough to shake the investors and the market.

It looks like Duolingo wants to get on its users’ good side. The platform has been receiving backlash for its new Energy Mode (which Ahn stated performed well despite the criticism) and its persistent ads. Both were perceived as aggressive monetization moves that frustrated users.

The company also paused its unhinged marketing to listen to customers and build “brand love”. But they’ve restarted those unhinged posts after DAUs lowered.

Maybe Duolingo hasn’t taken its eyes off revenue after all.

The post Duolingo Prioritizes Quality Teaching over Monetization, Stock Dips 31%  appeared first on The Report by Class Central.

​