Duolingo and Consumer Subscription Businesses

In my opinion, a few key things are driving their incredible scale:

-Duolingo English Test (9%)

-Subscriptions (73% of total revenue)

Duolingo made $162M in 2020, growing 129% y/y, and made its revenue from three sources:

Meanwhile, Duolingo has ~70% gross margins, with app store fees being the main cost. Note that while content isn’t included in gross margins, it is likely <10% of revenue based on the employee mix Duolingo has highlighted.

-The content is accessible for free

-Great use of data and gamification to keep people engaged

It supports over 40 languages and has 40M users. For context, there are more people in the United States learning languages on Duolingo than there are foreign language learners in all US high schools combined.

-Advertising and in-app purchases (18%)