Duolingo Inc. is bullish that the continued use of in-house tools powered by artificial intelligence as well as those from its partners will play a formidable role in the company's user growth strategy in the months and years to come, a figure that has seen sustained rapid growth year-over-year.
During the East Liberty-based company's Q1 earnings call, Duolingo (NASDAQ: DUOL) CEO and Co-Founder Luis von Ahn said the language learning platform makers are already using AI to create educational content at a faster and cheaper pace than before. That's saving time across the company's roughly 600-person workforce and it's leading to a better product for its users, von Ahn said.
"I'm personally extremely excited about AI," von Ahn, who previously taught computer science as a professor at Carnegie Mellon University, said on the call. "Since we launched Duolingo, the goal has always been to make something that can teach you as well as a one-on-one human tutor, but without the one-on-one human tutor because one-on-one human tutors are expensive and not very scalable. So that's been the goal. And we've been using AI from the beginning to be able to do that."
Previously, von Ahn said Duolingo used these tools to offer its users the best lesson at the right time along their individually tailored and nonlinear language learning path. Over 20 million daily users were active on Duolingo's language learning platform during its most recent fiscal quarter, up 62% year-over-year. The company also reported that 4.8 million people are paying for its premium, subscription-based offering, up 63% from the 2.9 million who did the same year-over-year.
Von Ahn said that using more advanced AI tools is important to help sustain that growth, which he said the company recognizes won't be possible forever. During its last fiscal quarter, Duolingo announced a partnership with OpenAI Inc. to deploy AI tools on the platform that could be directly used and seen by its learners via interactive incorrect answer explanations and a role-playing feature that can mimic those that a human tutor might offer. It's part of a new Duolingo Max subscription offering that's been rolling out slowly to users in the U.S. over the past few months that is powered by OpenAI's GPT-4 platform, which came out in March.
"And ever since [these AI features] came out, ever since we got early access to it, we started developing features for it. And what's amazing about it is it's like having a really good writer on staff. It allows us to just have a really good language that can come pretty quickly," von Ahn said. "So in our case, we just think there's a massive opportunity to make our apps teach better, be more engaging, which is really important, and also to have lower costs."
Duolingo posted over $115 million in revenue during its Q1, up 42% from the $82 million it had year-over-year. It had a $2.6 million net loss for the quarter, an improvement from the $12.2 million net loss seen during the same time period a year ago.
