The Green Owl Is Ending Duolingo's Own Cash Cow. Here's Why That's Good News For Users and Investors.

Duolingo (NASDAQ: DUOL) is doing something unexpected. The company appears to be ending its ultra-premium Max tier.

Premium subscriptions are far more lucrative than free user accounts with ad-supported services. The double-priced Max subscription tier has been a core business focus since its introduction in 2023. So why is it going away already?

I'll take a look at that. First, let me explain what's going on.

The Max tier that wasn't there

I have a streak of daily Duolingo lessons going back to June 2016. My kids are less committed, so I decided to let my family plan expire last week. The plan was always to grab a Super subscription just for me instead, but let's take a couple of lessons first to see the difference.

Two ads later, I was signing up for a free trial. And there were some surprises in that process.

I noticed that the top-shelf Max level wasn't an option. Just Super, Super Family, and the newer Super Lite (which is cheaper but keeps some ads). Hmm. Maybe that's just for the free trial week?

But no, it's not that simple. You see, Duolingo's sign-up process said the Super plan would include features I always associated with Max. You know, the AI-based stuff. Video calls with fictional characters in a handful of popular languages, plus the "explain my mistake" function. These things were worth double the price yesterday. Today, they're included in the basic Super subscription.

First, I thought it might be one of many user experience tests, where I'm randomly chosen for a small test sample while most users still get the old sign-up flow. So I tried signing up as a new user instead (with a different email address in an incognito browser window). Same options, same sign-up process, except for filling in the basic info and trying a beginner-level lesson. The plan choices were identical.

Doesn't look like a test case to me.

Image source: Getty Images.

The CEO has been hinting at this since last month

If you've been following the earnings calls, this isn't a total surprise. CEO and co-founder Luis von Ahn has been telegraphing this move for months, just without putting a firm date on it.

In last month's Q2 2026 call, von Ahn laid it out pretty clearly. "My goal in the moment is to make [Video Call] available to all Super subscribers," he said. He also noted the company hadn't figured out Max's future yet. Maybe Super users would get limited access to the ultra-premium features, while Max could bring unlimited use. "Another possibility, truthfully, is that we may actually sunset Max."

At a Citi tech industry conference last week, von Ahn went a step further.

"We're not entirely sure what we're going to do with Max," he said.

It's still there. People are still paying for it, but we're not entirely sure. There are some options.

Doing the subscriber math

My resubscription experience suggests that Max is no longer available to new subscribers, but current users are still paying for it. Stepping them down to the Super tier may happen organically, as each subscription comes up for annual renewal. Luis von Ahn doesn't want to sacrifice revenues in this process, so the broader feature set for Super subscriptions should make up for the lost Max premium.

Max currently accounts for about 10% of the total paid subscriber base, and the paid subscriber count is growing at 17% year over year. So if 10% of subscribers are moving down to the half-cost plan, boosting the paid user growth to 26% would make up for the lost Max revenue.

Why open source changed the equation

And that's not the whole story. There's also a cost-saving component to this shift in the economic balance.

The video calls used to be powered by OpenAI's ChatGPT, costing the company about $0.30 per call. In recent quarters, Duolingo has moved to open-source LLM models, driven by the company's own systems and proprietary language data. The cost per call has dropped to $0.01, according to the Citi presentation. One call a day is now about as expensive as one a month used to be.

"Open source all the way," von Ahn said.

And with these lower back-end expenses, there's less of a need for high-priced subscription plans. It's not all about revenue, as Duolingo focuses on profitable top-line growth.

Image source: The Motley Fool.

Watch for the marketing push

So the rollout of more powerful Super plans and the retirement of Max will be gradual. There's not much marketing behind this shift yet, but that should change. Duolingo's popular social media channels will bring out a new message soon enough -- an affordable Super plan gets you all the fancy Max features nowadays.

And the next earnings call should bring more clarity, if nothing else. That's a must-see event in mid-November.

The cheat code other companies should copy

Duolingo is executing a real-time simplification of its premium offerings, enabled by far lower AI costs. It sounds like a cheat code for companies with AI-budget issues.

If you're a user, you're getting a better deal. If you're a Duolingo shareholder, the company is trying to accelerate its premium subscriber growth while also boosting profit margins.

In the meantime, don't forget your lesson. The green owl is watching. Duo is always watching.

Anders Bylund has positions in Duolingo. The Motley Fool has positions in and recommends Duolingo. The Motley Fool has a disclosure policy.