The analysis reviews Duolingo's second-quarter performance, noting a 42% revenue increase but a 47% rise in the cost of revenues due to investments in Duolingo Max. Earnings per share grew by almost 80%, and operating and net margins expanded. Free cash flow and net income also increased. The company has $1.1 billion in cash and zero debt. Investments in AI for Duolingo Max are front-loaded, impacting gross margins. Operating expenses rose by 33%. The company announced it will become AI-first, leading to non-renewal of contracts. Total monthly active users were at 128 million, a 24% increase year-over-year, while daily active users did not pull back. Paid subscribers reached 11.1 million, up 36%. Subscription bookings are up 45%. Analyst’s 10 year revenue expectations are for it to grow by about 18%. A reverse DCF analysis indicates the company is fairly valued with target price about 370 based on his investment criteria.