I wouldn’t normally care about a Duolingo earnings call. However, tomorrow’s quarterly call has my interest.

Three months ago Duolingo’s CEO Luis Von Ahn fast followed Tobi at Spotify, declaring that Duolingo would be “AI-first.” Beyond the headline the actual announcement reads as milquetoast. But, communication is perception.

The youth that Duolingo cultivated as a consumer base saw the headline and were pissed.

So what did they perceive?

Zoom out for a minute to some macro stuff.

The non-ticker tape economy has seen its margins eroded in what Andrew Milgram calls a hollowing out of the middle.

Everyone is seeing their individual spending power erode, and you don’t have to look far to see people struggling.

However, generative AI is booming, putting an otherwise stagnant economy on its back. Yet the rhetoric from the people heading the labs who are making the AI is to expect a white collar bloodbath. Not exactly inspiring for anyone outside of the capital class.

So if you’re a consumer, maybe you’ve been laid off recently and your favorite language learning app says it’s going to be “AI-first.” You are hearing that the white collar bloodbath has arrived and you, as a Duolingo user, are supporting it.

There’s even an entire language evolving around slurs for AI, robots, and people who outsource their thinking to AI.

This is the perception that Luis Von Ahn was unaware of or unconcerned with when he made his announcement.

The question is, does it matter?

Refining that question, does it matter to Duolingo’s fundamentals? Its stock price the past year has been a roller coaster riding to heights of $545/share at an eye-watering 224x P/E ratio and back down to $257/share and a 106x P/E ratio. Record earnings coupled with phenomenal growth drove Duo to the heights while narrative shakiness around Duolingo in a generative AI world dragged it back down.

So I’m not curious about Mr. Market’s opinion on Duolingo in the short-term. What I want to tune in to find out on this earnings call is whether the customer backlash around von Ahn’s “AI-first” announcement will impact Duolingo’s fundamentals.

Financials don’t lie. Tune in on August 6th at 5:30 ET, and we get to find out.



Update Edit (8-24-2025): No material impact to financials. Everything is still up and to the right.

Very limited impact to daily active user (DAU) growth. Year-over-year DAU growth was projected between 40-45%. Duolingo landed on 40% growth with von Ahn attributing them being on the lower end to the social media backlash.