Speaker 1: All right, we want to switch gears here and talk
Speaker 1: about Dual Lingo. AI innovations powering Dual Lingo to all
Speaker 1: time highs. The company revealing this week two new AI
Speaker 1: powered innovations to the platform, which of course teaches over
Speaker 1: forty languages as well as math and music. Now, since
Speaker 1: the announcement, the Saka Sine price target hikes from both
Speaker 1: evercore and need them and for more. I am thrilled
Speaker 1: to say we are joined now by Luis van On.
Speaker 1: He is the co founder, CEO and chairman of Dual Lingo.
Speaker 1: So of those two innovations, let's start with video call
Speaker 1: with Lily. My understanding is basically it's a video call
Speaker 1: and I will be speaking with one of your characters.
Speaker 1: She has purple hair, her name is Lily, and the
Speaker 1: goal really is conversation. And with that in mind, are
Speaker 1: you trying to target more advanced language learners who maybe
Speaker 1: already have a handle on conjugations and how to ask
Speaker 1: for the check.
Speaker 2: Yeah, we're trying to target everybody.
Speaker 3: The idea is, historically we haven't been able to get
Speaker 3: people to practice conversation very well with couters, but now
Speaker 3: with AI, you actually can have a conversation with a
Speaker 3: fully automated character, and the character adjusts to your level. Now,
Speaker 3: what we're really excited about is that it turns out
Speaker 3: most people, actually, when they're just language beginners or intermediate,
Speaker 3: they don't want to have a conversation with another human because.
Speaker 2: They're too shy about it.
Speaker 3: But having a conversation with an animated character actually allows
Speaker 3: them to practice their conversation. So we're hoping this will
Speaker 3: really bring to a lingo to the next level in
Speaker 3: terms of teaching languages.
Speaker 1: It's fascinating, of course, the human psychology element and the
Speaker 1: decision to keep an animated character there as the voice
Speaker 1: and face of Lily. So my understanding is that Video
Speaker 1: Call with Lily basically it falls under your due Lingo
Speaker 1: Max subscription thirty dollars a month. You just started rolling
Speaker 1: that out in April on With this in mind and
Speaker 1: with the launch of Video Call with Lily, should we
Speaker 1: be expecting any upgrades to your forecasts here?
Speaker 3: Well, I'm not really going to talk about forecasts or anything,
Speaker 3: but we're really excited about, you know, about the uptake.
Speaker 2: I think people are really loving being able to.
Speaker 3: Practice their conversation, and this is particularly true of English learners.
Speaker 3: So people who are learning English, they really care a
Speaker 3: lot about conversation.
Speaker 2: So we're excited about that.
Speaker 1: And I mean to the point on English when we
Speaker 1: spoke a couple months ago, I believe less than fifty
Speaker 1: percent of your daily actor users we're English learners. I
Speaker 1: know that is a big initiative for you. So with
Speaker 1: that in mind, where are you when it comes to
Speaker 1: reaching that fifty percent threshold.
Speaker 3: Yeah, Actually, the threshold we want to reach is about
Speaker 3: eighty percent. It turns out that the number of people
Speaker 3: in the world, the fraction of people in the world
Speaker 3: that are learning a language, that are learning English is
Speaker 3: about eighty percent, whereas of our daily active users this
Speaker 3: is under fifty percent. So we're hoping that, you know,
Speaker 3: it'll get to eighty percent. This will take us a while,
Speaker 3: but you know, we're doing everything we can. And one
Speaker 3: of the important things is are these AI innovations that
Speaker 3: allow us to practice more natural conversation.
Speaker 4: I think what's interesting also about this AI revolution, and
Speaker 4: as it pertains to language and companies that work on
Speaker 4: language like you do, is what it takes to get
Speaker 4: there and advance and grow. What's fascinating about dual LINGO
Speaker 4: to me is that you guys have a nearly thirteen
Speaker 4: billion dollar company that at the end of the last
Speaker 4: year only had about or less than rather eight hundred
Speaker 4: people working at it. What does it mean for the
Speaker 4: workforce for you to be expanding this way in AI?
Speaker 2: Yeah, we're quite lean.
Speaker 3: We still have about it's a little over eight hundred
Speaker 3: people that we have working on due LINGO, and most
Speaker 3: of them are working on the actual product, so mostly
Speaker 3: are their engineers. It just turns out that, you know,
Speaker 3: engineers are quite scalable, and it's getting even better with
Speaker 3: a lot of THEAI improvements because a lot of the
Speaker 3: coding that used to be done entirely manually now can
Speaker 3: be done in part with the help of a computer.
Speaker 3: So we're going to continue growing the number of employees,
Speaker 3: but I don't think you should expect us to quadruple
Speaker 3: the employees anytime soon or anything like that. Is going
Speaker 3: to slowly engine because we get a lot of efficiencies
Speaker 3: with AI.
Speaker 1: Well, continuing along these lines, it's interesting. Late last year,
Speaker 1: of course, you just decided not to renew the contracts
Speaker 1: about ten percent of your contracted workforce, opting instead to
Speaker 1: use AI in some cases and with that in mind,
Speaker 1: of course, AI not just enhancing the product that you offer,
Speaker 1: but maybe enhancing the productivity of your workforce you expect
Speaker 1: to grow the workforce. Where are you hiring right now?
Speaker 3: I mean the main places we're hiring are highly skilled engineers,
Speaker 3: product managers, and designers. I mean, the way we see
Speaker 3: it is, you know, there's some road work that can
Speaker 3: be entirely substituted by AI, But for the majority of
Speaker 3: our employees or the types of works we do, what's
Speaker 3: going to happen is we're just going to be able
Speaker 3: to see each one of them get more efficient. So
Speaker 3: we're not going to be doing anything like layoffs or anything.
Speaker 3: We're just going to get a lot more efficiency because
Speaker 3: what happens is somebody who used to be an animator
Speaker 3: now can still be an animator.
Speaker 2: They will be working on.
Speaker 3: Kind of the more conceptual stuff as opposed to having
Speaker 3: to spend a lot of time on you know, tiny
Speaker 3: little movements of the characters, which now can be done
Speaker 3: mostly by AI.
Speaker 4: I'd love to go back to Katie's point a little
Speaker 4: bit as well about kind of the higher price tiers
Speaker 4: that you're offering people. What do you find people coming
Speaker 4: to do a lingo for I'm a user myself. I
Speaker 4: want to learn Spanish. I use it every so often.
Speaker 4: I'm not using it in my job every day. Do
Speaker 4: you find people learning at these higher price tiers to
Speaker 4: get different jobs across the world? And are is that
Speaker 4: a rationale for why people are willing to pay for it?
Speaker 4: Will employers pay for it?
Speaker 2: Yeah?
Speaker 3: So there's there's many reasons for learning a language. The
Speaker 3: two big ones that we have among our users, and
Speaker 3: they're about half half. One half is hobby. These are
Speaker 3: people who don't actually need to learn a language, but
Speaker 3: they just think to themselves, well, uh, you know, I
Speaker 3: used to, I don't know, play a lot of candy
Speaker 3: crush or do a lot of Instagram, and now I'm
Speaker 3: using Duolingo and at least I'm learning.
Speaker 2: In some Spanish. That's one group.
Speaker 3: And then the other big group are people who are
Speaker 3: doing this to actually learn a language and doing so
Speaker 3: for either school or work. And usually those are people
Speaker 3: who are learning English. And so those are the two
Speaker 3: big buckets. It's easy to see that the people who
Speaker 3: are learning English are willing to pay because they really,
Speaker 3: you know, they actually want to get a result. But
Speaker 3: it turns out that the people who are hobbyists are
Speaker 3: also interested in paying, because, as with all hobbies, you
Speaker 3: usually get started with something you know, you get started small,
Speaker 3: but as you get more and more into it, you
Speaker 3: want to have more features and then you end up paying.
Speaker 3: So we're seeing appetite to pay in both big groups.
Speaker 1: I'm glad you brought up candy Crush. I'm not much
Speaker 1: of a candy Crush player. I really like two dots,
Speaker 1: but that's a different conversation. But as part of of
Speaker 1: course the innovations that we're announced this week, we mentioned
Speaker 1: video Call with Lily. There's also Adventures, which are a
Speaker 1: mini game Louis. So it's interesting that you're also trying
Speaker 1: to tap into that gaming mindset. Maybe people on the
Speaker 1: subway just want to have some fun here.
Speaker 3: Yes, it's always been gamified, and I think that's one
Speaker 3: of the big reasons why we've grown so much. It's
Speaker 3: because it turns out that learning a language and do
Speaker 3: ling is easy and fun. But we're really leaning into it,
Speaker 3: and it turns out there is one aspect of learning
Speaker 3: a language, which is these situational things where you're you know,
Speaker 3: you may have to buy a croissant, or you know,
Speaker 3: whatever it is get yourself out of trouble, that you
Speaker 3: can really turn into a little bit of an adventure game.
Speaker 3: So some of the lessons are now going to be
Speaker 3: as opposed to just having to do certain you know,
Speaker 3: translations or listening to things, You're going to be put
Speaker 3: into a full screen where you're in a situation where
Speaker 3: you may have to buy something or you know, clean
Speaker 3: up something, or ask for directions or something, and you know,
Speaker 3: it's a whole game that you can that you can fail,
Speaker 3: and it's pretty fun.
Speaker 2: And we don't have.
Speaker 1: Much time left, but I do want to talk a
Speaker 1: little bit about the stock movement. Of course, do a
Speaker 1: lingo shares hitting an all time high this week, up
Speaker 1: mightily for the year. You take a look at what
Speaker 1: that means for market cap. Ashanal I mentioned you're close
Speaker 1: to thirteen billion dollars in market cap right now. You
Speaker 1: were under seven billion a year ago. I know that
Speaker 1: you have plans to hire more, but is there any
Speaker 1: potential M and A in your future?
Speaker 3: I mean, look, we're always considering, you know, how to
Speaker 3: expand to different things, as you mentioned, we are you know,
Speaker 3: we historically have mainly taught languages. We of late now,
Speaker 3: also teach math and music. We're always seeing what other
Speaker 3: subjects we can teach, and there may be some M
Speaker 3: and A opportunities there. However, you know, there's there's nothing
Speaker 3: very specific that we're looking at. I mean generally, we're
Speaker 3: just doing our thing and you know, getting better at
Speaker 3: our main market, which is teaching languages.
Speaker 1: All right, Louis, that's a good place to leave it.
Speaker 1: Really appreciate your time today. That, of course is Louis
Speaker 1: von On. He is the CEO of Doueling Go