Duolingo: Owner-Operated, Fast-Growing Gamified Learning Leader

Switzerland-based investor Jens Kruse presented his investment thesis on Duolingo (Nasdaq: DUOL) at Wide-Moat Investing Summit 2025.

Thesis summary:

Duolingo is an innovative, mission-driven educational technology company that has transformed language learning through its engaging, gamified app. With the ambitious goal of providing the best education universally accessible, Duolingo has become the most downloaded educational app worldwide, boasting approximately 130 million monthly active users and 10 million subscribers as of early 2025. Co-founded by Luis von Ahn, renowned for inventing Captcha and ReCaptcha, Duolingo leverages its significant user base and high brand recognition to maintain robust growth and competitive positioning.

Financially, Duolingo has shown remarkable growth momentum, with revenues projected to reach approximately \$975 million in 2025, reflecting an annual growth rate of about 31%. The company’s scalable freemium model, with subscriptions driving approximately 76% of revenues, underpins this strong revenue expansion. Duolingo’s high gross margins, consistently around 75%, illustrate its profitability potential, which is complemented by improving operating leverage as it advances toward a long-term EBITDA margin target of 35%.

The company’s growth potential extends well beyond language learning. Plans to expand into broader educational segments, including music, mathematics, computer science, and financial literacy, suggest significant untapped opportunities to monetize its massive and growing user base. This strategic product diversification, along with Duolingo’s robust engagement metrics—28% daily active users as a percentage of monthly users—positions the company strongly to achieve sustained long-term growth.

Despite its strengths, Duolingo faces challenges such as intense competition, potential slowing subscriber growth, regulatory risks around internet usage, and significant investments in AI that could temporarily weigh on profitability. Nonetheless, the company’s visionary leadership, powerful brand, scalable platform, and broad market potential justify its compelling long-term investment thesis, with considerable upside potential suggested by recent valuations targeting significantly higher than the stock’s recently traded range.

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About the instructor:

Jens Kruse is Chief Representative based in Zurich, Switzerland. In addition to build relationships for Jifu Investments he is responsible to manage an inhouse global equity portfolio. Prior to joining Jifu Investment Group, he was the Director and Country Head Switzerland within Franklin Templeton for over 10 years. In that capacity, he oversaw the increase of Swiss client assets from USD 4B to 24B at the peak, joining the top ten Swiss investment managers. His team conducted sophisticated, technology driven campaigns, covering all sales channels, including pension funds, private banks, insurance companies, family offices and independent asset managers. Jens was instrumental in executing state-of-the-art sales processes with the team in a pilot project, subsequently followed by all international offices. Jens has 30 years of investment experience, selling financial products to European institutional investors. He lived and worked in the UK, Italy, France, Germany and Switzerland and acquired the local languages. He holds a master’s in political sciences with a focus on macroeconomics from the University of Berne, Switzerland.

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