Duolingo, Inc. NASDAQ: DUOL

A securities fraud class action lawsuit has been filed against Duolingo, Inc. (“Duolingo” or the “Company”) (NASDAQ: DUOL) on behalf of shareholders who purchased or otherwise acquired the Company's Class A common stock between May 2, 2025 and February 26, 2026, inclusive (the “Class Period”). Duolingo is a language-learning platform that relies on advertising, subscription upsells, and AI-generated lessons to drive and monetize user engagement.

The complaint alleges that, throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose that Duolingo's 2025 "Energy" feature, which replaced the app's "Hearts" system, was designed to introduce friction that pushed free users toward paid subscriptions; that internal testing had shown this friction was slowing daily-active-user ("DAU") growth even as the Company described the feature to investors as beneficial; that an April 2025 internal memo from co-founder and CEO Luis von Ahn directing an "AI-first" strategy had prompted public backlash and a decline in lesson quality as AI-generated content expanded; and that, as a result, defendants' statements characterizing Duolingo's user growth as healthy and durable lacked a reasonable basis.

The alleged truth emerged through three disclosures. On November 5, 2025, Duolingo reported third-quarter results showing DAU growth decelerating to 36% (from 49% in Q1 2025 and 40% in Q2 2025) and said it would prioritize user growth over monetization going forward; shares fell $66.28 per share, or 25%, to close at $193.74 on November 6, 2025. On January 12, 2026, Duolingo announced the resignation of Chief Financial Officer Matthew Skaruppa and disclosed preliminary fourth-quarter metrics showing DAU growth of only 30%; shares fell 8.5%, or $14.92 per share, to close at $161.74. On February 26, 2026, Duolingo reported full fourth-quarter results confirming the DAU slowdown and issued 2026 guidance of just 20% DAU growth alongside lower bookings and profitability; shares fell $16.45 per share, or 14%, to close at $101.00 on February 27, 2026.