AsianFin -- Duolingo emerged as one of the surprise standouts of the Q2 earnings season, with its stock surging after the language-learning platform reported strong revenue growth and record profitability.

On Wednesday, the company said subscription revenue jumped 46% year-over-year, helping lift total revenue by 41%. Net income hit a record high, and Duolingo raised its full-year outlook, signaling confidence in continued growth.

Shares of DUOL climbed 30% in early Thursday trading, fueled in part by the company’s expanding use of artificial intelligence. Executives said AI tools, including the conversational AI feature in Duolingo Max, have been integrated into more products at a lower cost than expected.

Gross margin rose 130 basis points from Q1 to Q2 to reach 72.4%, aided by lower-than-anticipated AI costs and a strong ads business, CEO Luis von Ahn told shareholders. While margins dipped 100 basis points from a year earlier due to AI-related expenses for Max, the decline was far smaller than the 300 basis points the company had forecast.