Duolingo Drops Premium Tier After AI Feature Costs Plunge
Nov 05, 2026The company is giving more subscribers access to its AI-powered Video Call feature after sharply reducing what it costs to run.
Duolingo has found a way to make one of its most advanced AI features dramatically cheaper to deliver. Now it's retiring its highest-priced subscription tier and bringing that feature to more paying customers.
The language-learning company is moving Video Call, previously reserved for Max subscribers, into Super, its less expensive paid plan. Customers will get more from their existing subscription without paying extra for the feature.
The decision follows a sharp reduction in AI processing costs and comes as Duolingo reports stronger subscription bookings growth.
From 30 Cents to Less Than a Penny
When Duolingo introduced Max, its advanced AI features were expensive to operate. CEO Luis von Ahn told analysts during the company's November 3 earnings call that Video Call initially cost approximately 30 cents per call in AI processing expenses.
That cost has fallen to well under one cent, largely because Duolingo switched to open-source or open-weight AI models. The figure covers AI processing rather than the full cost of providing Video Call, but the reduction is large enough to change how Duolingo can offer the feature.
Super subscribers began receiving unlimited Video Call access during the third quarter. The company expects to make it available to all Super subscribers by the end of 2026, reaching roughly ten times as many users as it could through Max alone.
What Happens to Max Subscribers?
Duolingo is ending new sales of Max during November. Existing Max Individual subscribers will move to Super Family at the same price. They'll keep their features and gain the ability to share the subscription with family or friends.
The company hasn't decided how to handle existing Max Family subscriptions. Those customers will remain on their current plans for now, with Duolingo expecting to address their treatment in 2027.
Max was already a relatively small part of the business, representing a single-digit percentage of both paid subscribers and subscription bookings. Management said early tests of retiring the tier showed a slightly positive effect on revenue, but it expects little immediate change in bookings.
Subscription Growth Picks Up
Duolingo reported $278.4 million in third-quarter subscription bookings, up 16% from a year earlier. That's an improvement from 10% growth in Q2, when paid-subscriber growth was running further ahead of bookings growth.
The company ended September with 13.1 million paid subscribers, up 14% year over year. Daily active users also grew 29% to 64.9 million. Management attributed much of the bookings improvement to stronger user growth, rather than the separate decision to retire Max.
The financial trade-off is beginning to appear in the company's outlook. Third-quarter gross margin improved to 72.9%, helped by lower AI processing costs and favorable hosting expenses. But Duolingo expects that margin to slip to approximately 72% in Q4 as more subscribers gain access to Video Call and begin using it.
The company is also spending to support growth. Adjusted EBITDA was $78.7 million, down 2% from a year earlier, while adjusted EBITDA margin fell four percentage points to 25.5%.
Insider Take
When the cost of delivering a subscription feature falls, a company has a choice. It can keep more of the savings or use some of them to give customers more value.
Duolingo is putting more value into Super, betting that broader access to Video Call will make its core paid offering more attractive. Max was already a small part of its business, however, and the longer-term results remain unknown.
Customers are gaining access to a feature that previously required a more expensive subscription. Duolingo, meanwhile, hopes that a stronger offering will bring in more paying subscribers and encourage them to stay. The question is whether those benefits will outweigh the additional costs as more people use Video Call.
Related Member Resources
Duolingo's decision raises two questions for subscription operators: When should a feature become part of a lower-priced plan, and will giving subscribers more value encourage them to stay? These resources help examine both decisions.
- How Subscription Pricing Works: A Beginner’s Guide (Includes Worksheet)
Explains the factors behind subscription prices and packages, with a worksheet to assess what customers receive at different price points. Useful when deciding whether a feature still belongs in a premium tier or would add more value to a broader offering.
- Why Subscribers Stay: How Retention Drivers Differ From Acquisition Drivers
A decision guide for comparing what convinces customers to subscribe with what keeps them paying. It helps operators assess whether improving an existing plan gives customers more reasons to renew.
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