May 1 (Reuters) - Language learning app Duolingo ( DUOL )

forecast current-quarter revenue above Wall Street

estimates and lifted its annual sales expectations on Thursday,

as more users pay for subscriptions featuring AI features.

Duolingo ( DUOL ) operates on a "freemium" model, offering a basic

set of features for free to all users, with additional

capabilities available through the Super and AI-powered Max

subscriptions.

Users with the Max tier can practice conversations through

video calls with a chatbot, as well as get access to error

analysis and feedback.

After a phased roll-out, Duolingo's ( DUOL ) AI features have been

available to the vast majority of users, fueling revenue growth.

CFO Matt Skaruppa told Reuters that the first quarter

benefited from strong performance of the Max and family plans, a

social media campaign based on the company's mascot and a New

Year's promotion at the end of December and early this year that

brought in more users.

Duolingo ( DUOL ) expects revenue for the second quarter in the range

of $238.5 million to $241.5 million, well above analysts'

estimate of $233.8 million, according to data compiled by LSEG.

It expects revenue for 2025 between $987 million and $996

million, compared to analysts' estimate of $977.2 million. It

had earlier forecast revenue between $962.5 million and $978.5

million for the year.

Duolingo ( DUOL ) this week announced the launch of 148 new language

courses, significantly expanding access to popular languages

like Japanese and Korean.

It said the company used generative AI to rapidly develop

content, enabling the creation of 148 new courses in under a

year. This compares with 12 years that were required to create

the first 100 courses.

The company is adopting an "AI-first" strategy, replacing

many contract workers with AI to streamline operations.

The firm also forecast adjusted core profit between $271.4

million and $283.9 million for the full year, as it employs

tools to make its AI models more efficient. It had earlier

projected adjusted core earnings of $259.9 million to $274.0

million.

Revenue in the January to March period was $230.7 million,

compared with analysts' estimates of $223 million.