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The filed complaint alleges that Duolingo, Inc made materially false and/or misleading statements and/or failed to disclose that: (a) DAU growth rates were being leveraged against deliberately added user friction in the form of significant increases in ad volume, subscription tier upsells, and worsened product quality, and defendants understood that any amount of user friction would cause users to leave the app and, ultimately, negatively impact DAU growth rates; (b) the Company’s rigorous A/B testing demonstrated to Defendants that increased friction in the free user experience was having negative impacts on DAU growth rates; (c) the Company’s quickly generated AI content was worsening the quality of Duolingo’s product offerings, negatively impacting the user experience and user trends, and threatening the sustainability of the Company’s financial performance; and (d) far from driving sustained growth and strong user momentum through content and “product improvements” that “get improved retention,” the Company’s constant A/B testing informed the Company that its monetization push and lower-quality, rapidly generated AI content were degrading the Duolingo product experience and the value proposition of its subscription tiers.
Investors who purchased or otherwise acquired Duolingo, Inc. securities within the class period described above and suffered losses may be eligible.
If you suffered a loss in Duolingo, Inc. during the relevant time frame or pursuant to the relevant offering(s), you have until December 7, 2026 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff.
● The Allegation: The complaint alleges that Duolingo and its top executives concealed the negative impacts of an aggressive monetization push, including relentless ads, subscription upsells, and deliberately added user friction, along with increasing reliance on lower-quality, rapidly generated AI content, all while assuring investors the Company was experiencing sustainable growth in critical metrics like daily active users (DAUs) and bookings.
● The Stock Drop: On November 6, 2025, DUOL fell $66.28 per share (25%) to close at $193.74 after the Company reported decelerating DAU growth and announced a pivot away from monetization; on January 12, 2026, DUOL fell $14.92 per share (8.45%) to close at $161.74 after announcing the CFO's resignation and further DAU deceleration; and on February 27, 2026, DUOL fell $16.45 per share (14%) to close at $101 per share after the Company revealed material negative impacts on 2026 bookings, DAU growth, revenue, and profitability.
● Class Period & Defendants: The class period runs from May 2, 2025 through February 26, 2026, inclusive. The named defendants are Duolingo, Inc., Luis von Ahn (co-founder, Chief Executive Officer, and chair of the board), and Matthew Skaruppa (Chief Financial Officer until his resignation effective February 23, 2026).
● Lead Plaintiff Deadline: December 7, 2026. Investors who wish to seek appointment as lead plaintiff must apply by the deadline.
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Duolingo Class Action Summary |
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Company |
Duolingo, Inc. (NASDAQ: DUOL) |
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Lead Plaintiff Deadline |
December 7, 2026 |
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Class Period |
May 2, 2025 – February 26, 2026 |
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Stock Drop |
November 6, 2025 – DUOL fell $66.28 (25%) to $193.74; January 12, 2026 – DUOL fell $14.92 (8.45%) to $161.74; February 27, 2026 – DUOL fell $16.45 (14%) to $101 |
A securities class action has been filed against Duolingo, Inc. (NASDAQ: DUOL). The plaintiff is the City of Dearborn Heights Act 345 Police & Fire Retirement System. The case covers investors who bought Duolingo Class A common stock from May 2, 2025 through February 26, 2026.
The complaint alleges that Duolingo made materially false and misleading statements about its growth. According to the complaint, the Company hid the harm caused by its aggressive push to make money from users. It did this by flooding users with ads, pushing subscription upgrades, and adding friction to the free experience. The lawsuit claims Duolingo also leaned on low-quality, fast-generated AI content that weakened the app. These actions allegedly slowed daily active user growth, even as executives told investors growth was strong and sustainable.
The truth came out over three disclosures, the complaint alleges. As the news reached the market, Duolingo stock fell sharply. The complaint states that investors suffered billions of dollars in losses.
Duolingo, Inc. is a U.S.-based, mobile-first learning platform that primarily focuses on language learning. The Company uses a "freemium" model that offers free access while converting users into paid subscribers through tiers such as Super Duolingo and Duolingo Max, and it also generates revenue through advertising and in-app purchases. Duolingo is headquartered in Pittsburgh, Pennsylvania, and its Class A common stock trades on the Nasdaq under the ticker symbol "DUOL."
May 2, 2025 – February 26, 2026
Investors who purchased Duolingo (DUOL) Class A common stock during the Class Period may be eligible to seek recovery under the federal securities laws.
The complaint alleges that throughout the Class Period, Duolingo and its highest-ranking executives, co-founder and Chief Executive Officer Luis von Ahn and Chief Financial Officer Matthew Skaruppa, made materially false and misleading statements about the Company's growth and the health of its user base. According to the complaint, the Company publicly attributed strong daily active user (DAU) growth and subscriber gains to product improvements and a high-quality learning experience, while concealing a deliberate monetization push that was degrading the product. Duolingo described itself as intensely data-driven, running thousands of A/B tests that, the complaint alleges, gave defendants a detailed understanding of how their changes affected user behavior.
The lawsuit claims that during the Class Period Duolingo bombarded free users with unskippable ads and aggressively upsold both free users and paying Super subscribers toward its highest-priced Max tier. In April 2025, the Company replaced its "Hearts" system with a new feature called "Energy," which the complaint alleges was designed to cap free user engagement and create friction to force users into paid subscriptions. Although Duolingo told investors Energy was "rewarding" and positively impacting DAUs, engagement, and conversion, the complaint alleges it was actually hindering the free user experience and negatively affecting DAU growth rates.
The complaint further alleges that Duolingo's shift to "AI-first" content, announced by von Ahn in an April 28, 2025 internal memo published on LinkedIn, degraded the quality of lessons and premium features. Users reportedly suffered translation errors, pronunciation errors, and repetitive, poorly structured lessons, including within the AI-powered "conversations with Lily" feature in the Max tier. The memo also triggered widespread social media backlash, prompting the Company to wipe content from its TikTok and Instagram accounts on May 17, 2025.
According to the complaint, defendants knew or recklessly disregarded that DAU growth was being leveraged against deliberately added friction, that the Company's rigorous A/B testing demonstrated these negative impacts, and that rapidly generated AI content was worsening the product and threatening the sustainability of Duolingo's financial performance. These facts, the complaint alleges, were concealed from investors while defendants assured the market the Company was on sound footing.
The complaint alleges that Duolingo's true condition was revealed through three partial disclosures. On November 5, 2025, the Company reported third quarter results showing DAU growth had decelerated again to 36%, down from 49% in the first quarter and 40% in the second quarter. Defendants disclosed a reversal of the monetization push, stating the Company would prioritize user growth over monetization and invest more in "teaching better." Even so, the complaint alleges, defendants downplayed the shift as a "relatively small financial impact" and "a change of small proportion," allegedly concealing that Duolingo expected further DAU growth deceleration and material negative impacts on bookings, revenue, and its financial outlook.
Next, on January 12, 2026, Duolingo announced that Chief Financial Officer Matthew Skaruppa had resigned and provided preliminary fourth quarter operating metrics showing DAU growth of only approximately 30%, nearly six additional points of deceleration from the third quarter. The complaint alleges this contradicted the market's expectation, which had been shaped by the Company's decision not to provide DAU guidance in its third quarter announcement.
Finally, after the market closed on February 26, 2026, Duolingo announced fourth quarter and full-year 2025 results and guided to 2026 DAU growth of just 20%, with bookings growth of only 10% to 12%, revenue growth below consensus, and adjusted EBITDA margin well short of expectations. According to the complaint, von Ahn admitted the disclosures would come as a "surprise" to investors and conceded that during the monetization push the Company had deliberately introduced friction it knew would cause users to leave the app and slow DAU growth.
The complaint alleges that each disclosure drove a sharp decline in Duolingo's stock. On November 6, 2025, DUOL fell more than 25%, or $66.28 per share, to close at $193.74, a decline accompanied by a wave of analyst downgrades and price target reductions from firms noting the Company had moved monetization to the "backburner." On January 12, 2026, after the CFO resignation announcement and further DAU deceleration, the stock fell 8.45%, or $14.92 per share, from a prior close of $176.66 to close at $161.74.
Following the February 26, 2026 disclosures, DUOL fell again on February 27, 2026, dropping 14%, or $16.45 per share, from a prior close of $117.45 to close at $101 per share. According to the complaint, these declines removed artificial inflation from the price of Duolingo stock and caused investors to suffer billions of dollars in losses.
● Lead Plaintiff Deadline: December 7, 2026
● After the lead plaintiff deadline, the Court will consider any lead plaintiff motions.
● Defendants may file a motion to dismiss.
● If the case proceeds, the Court may later consider class certification.
Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. Prior results do not guarantee similar outcomes.
The Duolingo securities class action lawsuit alleges that Duolingo, Inc. (NASDAQ: DUOL) and two of its executives made materially false and misleading statements between May 2, 2025 and February 26, 2026. According to the complaint, the Company concealed the negative impacts of an aggressive monetization push, including relentless ads, subscription upsells, and deliberately added user friction, along with its growing reliance on lower-quality, rapidly generated AI content. The complaint alleges these actions slowed daily active user growth even as executives assured investors Duolingo was experiencing sustainable growth in key metrics like DAUs and bookings.
The complaint names Duolingo, Inc. as a defendant, along with two individual defendants. Luis von Ahn is the Company's co-founder, Chief Executive Officer, and chair of the board of directors, and has served since founding the Company in 2011. Matthew Skaruppa served as Chief Financial Officer for nearly six years. He tendered his resignation on January 8, 2026, effective February 23, 2026. According to the complaint, both executives signed Duolingo's SEC filings and certified the accuracy of its periodic reports under the Sarbanes-Oxley Act during the Class Period, and spoke on behalf of the Company on earnings calls.
The class period runs from May 2, 2025 through February 26, 2026, inclusive. The complaint alleges the period began following Duolingo's May 1, 2025 after-market-close announcement of its first quarter 2025 results and the filing of its first quarter shareholder letter and Form 10-Q. Investors who purchased Duolingo (DUOL) Class A common stock during this period during this period may be eligible to seek recovery under the federal securities laws. The complaint alleges that defendants' statements throughout this period artificially inflated the price of Duolingo stock.
According to the complaint, investors were not told that Duolingo's reported daily active user growth was being leveraged against deliberately added friction, including sharp increases in ad volume, subscription upsells, and a new "Energy" feature that capped free user engagement. The complaint alleges the Company's extensive A/B testing demonstrated that this friction negatively affected DAU growth. It further alleges that Duolingo's rapidly generated AI content was of worse quality than historical offerings, degrading the user experience and threatening the sustainability of the Company's financial performance.
The complaint alleges the truth emerged through three partial disclosures, each followed by a sharp stock decline. On November 6, 2025, DUOL fell 25%, or $66.28 per share, to close at $193.74. On January 12, 2026, the stock fell 8.45%, or $14.92 per share, to close at $161.74 after the CFO resignation and further DAU deceleration. On February 27, 2026, DUOL fell 14%, or $16.45 per share, to close at $101 per share after the Company disclosed material negative impacts on its 2026 outlook. The complaint alleges investors suffered billions of dollars in losses.
The lead plaintiff deadline is December 7, 2026.
A lead plaintiff is an investor appointed by the Court to represent the interests of the class in a securities class action. Under the Private Securities Litigation Reform Act of 1995, the Court typically selects the investor with the largest financial interest who is otherwise adequate and typical of the class. In the Duolingo case, the named plaintiff is the City of Dearborn Heights Act 345 Police & Fire Retirement System. Investors who wish to seek appointment as lead plaintiff must apply by the deadline. Serving as lead plaintiff is not required to remain a member of the class.
The Duolingo securities class action was filed in the United States District Court for the Western District of Pennsylvania. According to the complaint, venue is proper in that district because Duolingo is headquartered there, at 5900 Penn Avenue, Pittsburgh, Pennsylvania, and certain of the conduct alleged occurred there. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 against the defendants.
The complaint alleges Duolingo (NASDAQ: DUOL) concealed the harm from its aggressive monetization push and reliance on lower-quality AI content, which slowed daily active user growth, while executives assured investors of sustainable growth between May 2, 2025 and February 26, 2026.
The defendants are Duolingo, Inc., co-founder and Chief Executive Officer Luis von Ahn, and Chief Financial Officer Matthew Skaruppa, who resigned effective February 23, 2026.
The class period runs from May 2, 2025 through February 26, 2026, inclusive. Investors who purchased Duolingo (DUOL) Class A common stock during this period may be eligible to seek recovery.
DUOL fell $66.28 (25%) to $193.74 on November 6, 2025; $14.92 (8.45%) to $161.74 on January 12, 2026; and $16.45 (14%) to $101 on February 27, 2026.
The lead plaintiff deadline is December 7, 2026.
Deadline
Dec 7, 2026