Duolingo Inc shares closed nearly 14% higher on Thursday, adding just over $2 billion to its market capitalisation after a turbulent trading session.
The language learning platform’s stock initially surged a third in value at one point on strong quarterly results.
However, it pared back gains as OpenAI revealed a new version of its language model capable of creating a French-teaching web app in minutes, mirroring Duolingo’s core service.
For the second quarter, Duolingo reported daily active users up 40% to 47.7 million and monthly active users up 24% to 128.3 million, with paying subscribers growing 37%.
Revenue rose 41% to $252.3 million, and earnings per share climbed to $0.91. The company also raised its annual revenue guidance above analyst expectations.
Chief executive Luis von Ahn highlighted stronger-than-expected advertising revenue and lower artificial intelligence costs.