Duolingo (DUOL -1.62%) is the world’s largest digital language learning platform. It follows a mobile-first approach and provides playful and interactive lessons to millions of users worldwide.

The company operates on a freemium business model: anyone can access the basic tools for free, but those who want to accelerate their learning process can take out a monthly subscription and unlock additional features.

At the end of the second quarter, Duolingo had a record 103.6 million monthly active users, up 40% year-over-year, and the number of paying monthly subscriptions increased 52% to an all-time high of 8.0 million.

This means that 8.6% of monthly active users are now paying for subscriptions, and since the paying user base has always grown faster than the total user base, this percentage is gradually increasing.

The company earns its free users by selling advertising, but that only makes up a small portion of its overall revenue. Subscriptions bring in most of the money, so the rapid increase in paid usage is providing the company with significant financial growth.

In the second quarter, Duolingo’s revenue increased 41% to $178.3 million, beating management’s previous forecast. As a result, the company raised its full-year revenue guidance to $731.3 million to $738.3 million, up from previous guidance of $726.5 million to $735.5 million.

But it could get even better. Last year, Duolingo launched its Max subscription, which introduced two new artificial intelligence (AI)-powered features. Explain My Answer provides users with personalized feedback based on their mistakes in each lesson, and Roleplay is a chatbot-style assistant that helps users practice their conversation skills in the foreign language of their choice.

Duolingo Max was only available to 15% of the platform’s users in 27 countries in the second quarter, but is gradually being rolled out more widely. Since it’s more expensive than Duolingo’s other subscriptions, it could be a significant revenue driver in the future.

AI will help Duolingo achieve its goal of providing a learning experience that rivals the guidance of a human tutor, and Max is an important first step that could increase the company’s paid penetration even further in the coming quarters.