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Duolingo's AI Chatbot Lily Debuts as User Base Soars 54% to 37.2 Million

Duolingo’s AI Chatbot Lily Debuts as User Base Soars 54% to 37.2 Million

Duolingo Introduces AI Chatbot Lily in Earnings Call, Reports Mixed Results

In an unexpected twist to its latest earnings call, language learning app Duolingo introduced an AI chatbot named Lily to deliver the opening remarks, typically handled by CEO Luis von Ahn. The purple-haired virtual character, described as having the tone of a bored, sarcastic teenager, provided a concise summary of the company’s quarterly performance.

Lily’s appearance, lasting less than two minutes, highlighted key metrics including a 54% increase in daily active users to 37.2 million. The chatbot attributed this growth to successful social media marketing efforts and investments in generative AI. Lily also mentioned the new Duolingo Max feature, which allows learners to video call and interact with the AI character.

Despite the innovative presentation, Duolingo reported mixed financial results. While the company surpassed revenue expectations with $192.6 million, a 40% year-on-year improvement, it fell short of Wall Street’s predictions for paid subscribers. This shortfall led to a nearly 5% decline in after-hours trading.

Duolingo’s focus on AI integration extends beyond the earnings call. The company is leveraging OpenAI’s GPT-4 for interactive lessons and has recently reduced its contractor workforce by 10% as AI begins to create lessons. CEO Luis von Ahn humorously suggested that Lily might eventually take on more of his responsibilities.

Analysts, including Piper Sandler’s Arvind Ramnani, responded positively to Lily’s appearance, with some describing it as one of the most enjoyable earnings calls in recent quarters. The introduction of Lily aligns with Duolingo’s strategy to humanize its brand and appeal to its largely Gen Z user base.

Duolingo has maintained a strong market position despite the challenges in paid subscriber growth. The company’s stock has risen over 40% year-to-date, with six consecutive profitable quarters. Duolingo also increased its full-year 2024 revenue guidance to as much as $744 million.

As AI continues to play a significant role in earnings discussions across the tech industry, Duolingo’s innovative approach to its earnings call reflects the growing influence of artificial intelligence in both product development and corporate communications.

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