How Duolingo Makes Money: A Deep Dive Into Its Revenue Model

Subscriptions are the lifeline of Duolingo’s business. 

The numbers show why subscriptions matter: in Q2 2025, subscription revenue surged 46% year-over-year to $210.7 million, accounting for the majority of the $252.3 million total revenue for the quarter—underlining how crucial paid tiers are to Duolingo’s financial foundation. For full-year 2024, Duolingo hit $748 million in revenue, and subscriptions represented approximately 76% of that total stream. 

What drove that growth? One key factor is the rising popularity of Duolingo’s tiered offerings.

While the app is free at entry, more than 6.6 million paid subscribers now fuel predictable, recurring revenue through premium tiers like Super Duolingo, Premium, and Family. Each plan unlocks perks such as offline lessons, progress tracking and advanced analytics, and this makes upgrading too tempting to ignore. 

Their Max plan, with AI-powered tools like video-chat practice, now contributes meaningfully: Max subscribers accounted for 8% of the subscriber base in Q2 2025, up from 5% a few quarters earlier. Meanwhile, average revenue per user (ARPU) rose about 6%, thanks to both currency effects and shifts toward higher-priced plans.

Here’s a breakdown of Duolingo’s subscription model:

Duolingo’s surge was no accident—it came from investing in value that users are willing to pay for. This proves that subscriptions thrive when they’re tied to progress. 

Users pay because they see themselves advancing and apps that can connect pricing to personal achievement will always have an edge.

Even if you’ve never paid for Duolingo, you’ve probably sat through an ad between lessons or watched a short video to earn a perk like ‘free heart’. Those moments aren’t filler. They’re a deliberate revenue stream designed to keep the app free for most learners while still driving income. 

In 2024, as mentioned, Duolingo’s total revenue hit $748M, with subscriptions as the backbone and “Other” revenue (ads + DET + IAP) rising alongside surging DAUs—evidence that ads scale with engagement.

Duolingo’s ad engine leans heavily on native and rewarded formats (e.g., watch an ad, get an in-app benefit), implemented through Google AdMob back in 2015. That shift wasn’t cosmetic because due to that, it lifted ad revenue to ~70%, and later bidding added ~20% more, with CPMs up to 20% higher across formats. This is proof that smart ad tech can increase yield without wrecking UX.

How big are ads in the mix? Duolingo’s CEO has said ads contribute ~6–7% of revenue, with the vast majority from subscriptions—and only a small minority of MAUs pay. In other words, ads help monetize the massive free audience while also nudging some users toward paid tiers.

Scale matters here. By late 2024, Duolingo reported ~103.6M MAUs and 34.1M DAUs, giving advertisers global reach and making rewarded inventory plentiful. This means that if there is more engagement, there will be more impressions. And if there are more impressions, that means more ad dollars. Especially when the formats feel integrated into learning loops rather than bolted on. 

Here’s the real insight: ads are Duolingo’s way of turning “no” into “not yet.” For app builders, the question becomes—how can you design ads that add value instead of irritation?

At AppMakers USA, we help founders build monetization strategies that integrate ads without breaking user trust. From rewarded ad formats to hybrid models, we design revenue engines that keep free users engaged while creating clear pathways to premium upgrades.

Subscriptions may dominate Duolingo’s revenue, but another often-overlooked pillar is the Duolingo English Test (DET). Designed as a faster, cheaper, and more accessible alternative to traditional exams like TOEFL or IELTS, DET has grown into a steady contributor to the company’s bottom line.

The appeal lies in its accessibility. Test-takers can complete the exam from home with just a webcam and internet connection. Priced at $59 in the U.S., with slight regional variations, the DET undercuts competitors on cost and convenience. That model has paid off: as of 2023, more than 4,000 universities and institutions worldwide accept the DET for admissions, including selective schools like Yale and Columbia. Notably, Duolingo English Test scores are valid for up to 2 years, making the certification a lasting and practical investment for test-takers.

The revenue potential is significant. Each test fee adds up quickly, and unlike ads or subscriptions, certification taps into an entirely different customer base—international students and professionals seeking credentials. With English learners making up over 60% of Duolingo’s total user base (Duolingo Investor Report), the funnel is already built into the app. 

The bigger picture is this: Duolingo is monetizing proof of learning. That shift from content to credential unlocks an entirely new market, one that many education-focused apps overlook.

So what’s the takeaway? Think of it like a gym. Subscriptions get you access to the equipment, but certifications are the equivalent of earning a trainer’s license—you’re not just practicing, you’re proving your ability. 

For founders, the question is: what part of your app experience could be formalized into a credential, badge, or proof of progress that people would pay for?

While you’re busy racking up daily streaks and leveling up your Spanish, Duolingo’s behind-the-scenes revenue engine quietly spins through virtual goods and in-app purchases (IAPs). This means that while subscriptions keep the lights on, Duolingo’s IAPS are the quiet moneymakers that add layers of engagement.

The app’s virtual currency, Lingots (or Gems on mobile), unlocks perks like streak freezes, extra hearts, custom outfits for Duo the owl, and bonus lesson packs. These are motivators. By keeping the core learning experience free, Duolingo turns purchases into optional upgrades that feel like rewards rather than barriers.

The numbers are modest compared to subscriptions, but meaningful in scale: less than 5% of users convert to IAPs, yet Duolingo’s massive base of 100M+ monthly actives ensures steady incremental revenue. The design plays a big role here. Through A/B testing, Duolingo fine-tunes prices, surfaces seasonal bundles, and introduces “near-miss” nudges (like offering a streak freeze right after you almost lose a 100-day streak). These moments transform frustration into monetization without eroding trust.

It’s also a retention tool. By letting users protect streaks or personalize avatars, IAPs add emotional investment to the learning journey. And that loyalty compounds because people are more likely to stay engaged when they’ve spent even a small amount.

For app founders, the takeaway comes from understanding that IAPs aren’t about squeezing dollars out of users—they’re about designing micro-rewards that deepen engagement. A $2 streak freeze might not sound like much, but at scale, it builds both revenue and retention. Apps that can tie small purchases to emotional milestones can create powerful flywheels of growth.

AppMakers USA helps startups craft IAP systems that balance fun with fairness. From gamified reward loops to retention-driven prompts, we design in-app economies that grow revenue while keeping users hooked for the right reasons.

Duolingo’s revenue success only makes sense when you look at its staggering scale. By 2024, the app had reached 103.6 million monthly active users (MAUs) and 34.1 million daily active users (DAUs)—a massive leap from 68.6M MAUs and 21.4M DAUs the year before. With nearly 950 million total downloads worldwide, Duolingo has become one of the most widely adopted learning apps on the planet.

Here’s a snapshot of how Duolingo’s user ecosystem has grown year-over-year:

This user base is clearly habit-driven. Duolingo’s gamification strategy is finely tuned: daily streaks, leaderboards, XP points, and “Hearts” create a cycle of positive reinforcement. Add in new subject areas like math and music, plus partnerships with over 4,000 schools, and you get a platform that doesn’t just acquire users—it retains them at scale.

Interestingly, fewer than 3% of users ever subscribe. But that’s the brilliance of Duolingo’s model: even a sliver of conversion on a massive base produces millions of paying subscribers, while ads and in-app purchases monetize the rest.

Think of Duolingo’s user base like a vast city. Only a few residents live in the premium high-rises, but the bustling streets—full of engaged free users—are what make the whole city thrive. For founders, the message is clear: scale your community first, then build multiple ways to capture value from it.

That said, we help founders design user engagement systems that drive daily habits. From gamified mechanics to community features, AppMakers USA ensures your app builds not just a user base but a loyal ecosystem you can monetize in many ways.

Look at Duolingo’s financials over the past few years, and you’ll spot one thing right away—exceptional momentum. Their financial performance underscores how its monetization strategies translate into real business results. 

Annual revenue for the twelve months ending March 2025 soared past $800 million, with growth rates consistently topping 35% year-over-year since 2021. In Q2 2025 alone, the company generated $252.3 million, beating market expectations and marking a 16% jump from the previous year.

What’s more telling is the profitability shift. Net income nearly doubled year-over-year, while operating income surged 45% to $210.7 million. Margins expanded even as Duolingo continued investing in new features, AI-powered learning tools, and subject expansions like music and math. 

Performance metrics show the compounding power of Duolingo’s layered monetization model:

This financial momentum illustrates that Duolingo is becoming more efficient while scaling. The lesson here is straightforward. When you diversify revenue streams, growth doesn’t just show up at the top line; it strengthens profitability, investor confidence, and the long-term sustainability of your business.

Duolingo’s rise from a free language app to a billion-dollar business highlights several lessons for founders building digital products today.

• Multiple revenue streams reduce risk. Subscriptions may be the foundation, but ads, in-app purchases, and certification fees provide balance when one channel slows.
• Engagement comes before monetization. With fewer than 3 percent of users paying, Duolingo proves that a massive, loyal community can still power sustainable revenue.
• Value, not paywalls, drives upgrades. Users upgrade when features feel like natural progress—offline lessons, streak protection, or AI-powered practice—not when content is locked away.
• Design matters as much as strategy. From rewarded ads to gamified nudges, Duolingo makes monetization feel like part of the learning journey instead of a distraction.
• Proof creates new markets. By selling certifications, Duolingo turned learning outcomes into career opportunities—something many founders overlook in their own industries.

The lesson here isn’t to copy Duolingo feature for feature, but to see how each revenue stream aligns with user behavior. When monetization flows naturally from engagement, growth becomes more than just numbers, it becomes durable.

AppMakers USA partners with founders to identify the right mix of monetization models for their apps, whether that means building a subscription system, designing fair in-app purchases, or creating entirely new revenue streams that fit your audience.