A：Q1 achievements include a 21% year-over-year growth in users, the introduction of spoken tokens for speaking practice, the start of rolling out speaking adventures, the launch of flashcards to build fast recall, improvements in video call for paid subscribers, and reaching a milestone of offering professional proficiency courses across nine languages.

A：New features introduced by Duolingo this quarter include spoken tokens for speaking practice, speaking adventures that put learners in real-world conversational scenarios, and flashcards to help learners recall words by speaking them aloud.

A：In Q1 alone, Duolingo published 20,500 course units, which is more than 10 times the number it was shipping per quarter just two years ago.

A：AI has fundamentally changed what's possible for Duolingo, making the product better than ever and allowing for advancements that the company believes are just the beginning.

A：For Q1, Duolingo achieved solid growth with bookings and revenue, expanded gross margin, and delivered adjusted EBITDA of $83 million. For the full year of 2026, the company is investing deliberately with a focus on revenue growth of about 10.5%, an adjusted margin of about 25%, and is guiding for Q2 bookings growth of about 6% with an expectation for revenue growth of about 17% in Q2.

A：DAU growth is distributed across all regions with Asia being the fastest-growing region. The main drivers of growth remain similar, with word of mouth being the primary driver and some amount of marketing and performance marketing being done. Improvements in retention, making the product stickier, also contribute to the growth, evidenced by an increasing DAU to MAU ratio.

A：The company expects its growth rate to remain around 20% for the rest of the year, with slight ups and downs depending on the comparisons from the previous year.

A：The company has made improvements to the free tier, which they believe will lead to increased word of mouth. They have enhanced the availability of features for free users. Specific changes include the introduction of cool avatar costumes inspired by mobile games and new reward mechanisms displayed as cards, which are intended to feel collectible.

A：The company is satisfied with the new monetization tactics for the free tier, particularly with longer free trials. They have found that extending the free trials to one month benefits both bookings and users, as users appreciate having a longer period to try the service for free.

A：To understand the impact of past initiatives, the company looks at daily active user growth and related metrics. The top of the funnel for new users has been flat, and there's an emphasis on marketing efforts to reach underpenetrated regions. The company is also working on improving the product to enhance user education and word of mouth.

A：The company is focused on keeping the learning process fun and motivating for users, which is a key factor in user retention. They believe that incorporating a voice experience does not detract from fun but can enhance the learning experience. The company plans to continue making the app more fun and visually appealing with beautiful animations and game-like features. They are dedicated to keeping the app enjoyable for users.

A：The key lessons learned in scaling AI for the platform include significant improvements in the user experience, such as more fluid conversations in the video call feature, leading to users saying twice as many words on average as they did a year ago. Also, there has been a massive increase in the scale of content produced, with 20,500 units of content produced in one quarter, which is more than the entire year's production of the previous year.

A：The platform is working on personalizing the AI to pick the most suitable exercise for each user, which is a significant step towards more personalized learning experiences, akin to having a one-on-one human tutor.

A：The adoption of AI is expected to initially increase costs, but as the team optimizes, there are waves of efficiency that lead to lower per unit costs. The company's gross margin guidance reflects this, with an expected 69% in the fourth quarter. Despite higher AI costs, the efficiency gains and reduction in costs per unit are anticipated to improve overall financial performance.

A：The company plans to integrate the video call feature into the medium tier 'super' Duolingo subscription as it believes this feature significantly enhances the learning experience and should lead to better outcomes for users. The video call feature has started being tested for 'super' subscribers and is not yet available to all existing users. The company is experimenting with different pricing models and the availability of certain features, such as video call, for different subscriber tiers, but no concrete changes have been announced for 'max' subscribers at this time.

A：The company is conducting various experiments, including cohort experiments that have shown a 20% gain in growth. New users are currently not seeing the 'max' tier, which is one of these experiments. The company is considering different pricing strategies for 'max' subscribers, which could involve lowering prices or offering limited features compared to the 'is not limited' tiers. However, specific details on these pricing changes are yet to be announced.

A：The company has been working for years to ensure all top 9 languages have comprehensive content up to Duolingo score 129. They are now in a better position to improve the quality of this content based on user performance. With a rapid increase in content generation capabilities, the company is starting to see opportunities to test new content for different engagement metrics and potentially expand into additional subjects beyond language learning.

A：The type of content taught has an interesting impact on retention, particularly new user retention. The specific content like greetings or just the words for mom and dad can influence retention, and the team is conducting experiments to determine the best approach.

A：AI is helping the company to add new subjects faster, such as chess, which was added in about 9 months. However, generating content with diagrams and user interaction for subjects like math is still challenging, and not yet trivial, despite AI making it easier compared to before.

A：The company is excited about the math course because it has nearly complete content for students between grades 2 and 12, and it can explain things when students get things wrong, which is a valuable feature for learning.

A：The company returned some level of cash to shareholders through buybacks and has a budget of $400 million for additional buybacks. The focus is on operating the business and investing in it as well. They consider buying back stock a great way to offset dilution and believe they can balance buybacks with their free cash flow generation.

A：The company is focusing on performance marketing for English learners in underpenetrated markets like Asia, where profitable performance marketing can be done. With the announcement of advanced content availability, the company is investing more in performance marketing, which has historically been under-invested in. They are building infrastructure for better user attribution and are excited about the results.

A：The company is running tests to determine the right price for Super Duolingo with video call. Although the full results are not yet available, they have learned that people are willing to pay more for this feature. The exact amount users are willing to pay additional for the feature will be revealed in a future quarter or two.

A：The company is operating within a set of ranges of financials for the business to allow themselves to conduct certain types of testing and check different things without any big surprises.

A：The company is paradoxically undermonetized and overmonetized at the same time. 1% of monthly users is much lower than the comparison with other similar models, while at the same time, there is friction in the free user experience which impacts DAU growth.

A：The company is working on finding ways to monetize without adding friction to the free user experience, such as experimenting with longer trials, and is considering a three-month trial.

A：Gross margins are expected to phase down to the high 60s in the fourth quarter. The expected trajectory is for margins to hold at those levels or possibly recover higher or lower, influenced by factors like the introduction of more expensive features which are optimized over time.

A：The company's philosophy of conducting many tests concurrently is contributing to an increase in engineered productivity and is expected to influence long-term headcount needs positively. The increase in the number of AB tests being run is believed to be due to AI usage in engineering and product organizations, indicating an upward trend in productivity that could affect future headcount requirements.

A：DAUs are growing in the United States, but the growth rate is low. The company hopes that by improving the product and increasing marketing investment, particularly in the U.S., it will result in higher year-over-year growth in DAUs and, consequently, bookings.

A：The company is managing content quality by evaluating it with AI and human assessments, and by testing it with small groups of users. If the content is deemed high quality, it is shown to a larger audience. The company is also conducting spot checks and ratings of content quality to ensure an increase in quality over time.

A：The main bottleneck for performance advertising is building the necessary infrastructure and improving the quality of the free tier to convert users into subscribers. Geographical issues and the nature of performance marketing in different regions also pose challenges. To address this, the company is making investments in marketing, including performance marketing, with a multi-tiered approach.

A：Brand partnership success in China stems from strong brand recognition and the willingness of large brands like McDonald's to partner with Duolingo. Cultural openness to partnerships in China compared to Western brands plays a role. The company is leveraging this learnings, especially in Asia, due to the large appetite for English learning in China.

A：The quarterly progression of bookings is showing a typical pattern of seasonality with an adjustment in Q1 and Q2 to the new monetization balance. Q3 and Q4 usually exhibit growth patterns similar to previous years. The company is focusing on operating around 20% DAU growth by 2026 while growing the business. Visibility on the inflection point of booking growth is tied to these trends and the company's long-term outlook.