The company's quarterly earnings report released on Wednesday showed that despite widespread criticism for choosing to embrace generative AI over human employees, the company's revenue exceeded expectations. This news drove Duolingo's stock to surge nearly 30%.

In April this year, CEO Luis von Ahn revealed that Duolingo would transition to a "AI-first" company, gradually phasing out contract workers. He also advised teams not to hire more employees unless they could not further automate their workflows. With the help of generative AI technology, Duolingo added 148 new language courses, doubling the total number of courses compared to before.

Von Ahn said at the time: "Without AI, it would have taken us decades to scale our content to more learners. It is our responsibility to provide this content to learners as soon as possible."

Although some Duolingo users believe that AI features have worsened the app experience, the company's financial data tells a completely different story. Duolingo expects its revenue to break through the $1 billion mark this year, with daily active users increasing by 40% year-over-year. Although this growth is significant, it is at the lower end of the company's previous estimated growth range of 40%-45%, and some investors mentioned this during the quarterly earnings call on Wednesday.

Von Ahn explained: "The reason our growth rate is at the lower end is because I talked about AI-related content but did not provide sufficient background information. As a result, we faced some criticism on social media. Most importantly, we want to make the sentiment on social media more positive. We stopped posting sharp posts and started posting content that can make people feel more positive, and this strategy worked."

On TikTok, popular comments under Duolingo videos are still mostly critical of the company's AI strategy. Critical commenters ask if videos with multiple people were made using AI, and Duolingo usually replies: "No, these are made by our excellent team!"

Even though public opinion toward Duolingo has shifted, the company's financial performance has not been affected. From the company's perspective, this is what matters most.