Current Duolingo, Inc. shareholders who have held Duolingo shares since prior to May 2, 2025, are encouraged to contact Grabar Law Office to learn more about the investigation.

Duolingo operates a mobile learning platform that primarily focuses on language learning and utilizes a “freemium” model under which users can access the platform without charge while the Company seeks to convert users to paid subscription offerings.

What is The Investigation About? Grabar Law Office is investigating potential claims on behalf of long-term shareholders of Duolingo, Inc. (NASDAQ: DUOL) concerning whether certain officers and directors of the Company breached fiduciary duties owed to Duolingo and its shareholders in connection with the matters alleged in a recently filed securities class action.

Why? As alleged in a federal securities fraud class action complaint, Duolingo, Inc.’s (NASDAQ: DUOL) growth strategy increasingly emphasized monetization through advertising, subscription-tier upselling and the use of rapidly generated artificial-intelligence content. In this context it is alleged that the company, through certain corporate officers made materially false or misleading statements and/or failed to disclose that: 1) Duolingo was deliberately increasing user “friction” through higher advertising volume and subscription upsells; 2) the Company’s extensive A/B testing allegedly showed that such friction was negatively affecting daily active user, or DAU, growth; 3) rapidly generated AI content was allegedly degrading the quality of Duolingo’s product offerings and user experience; and 4) the Company’s monetization strategy and lower-quality AI-generated content were allegedly undermining the sustainability of Duolingo’s growth and financial performance.

The complaint further alleges that, in April 2025, Duolingo introduced a new feature known as Energy, which replaced its prior Hearts system. According to the complaint, the Energy system was designed in part to create additional friction for free users and encourage them to convert to paid subscriptions, while Duolingo publicly characterized the feature as rewarding and beneficial to user engagement.

The complaint also alleges that Duolingo increasingly relied upon AI-generated content while representing to investors that its use of AI was improving the product and accelerating content creation. According to the complaint, users instead began reporting translation and pronunciation errors, repetitive lessons and other quality concerns associated with certain AI-powered features.

Duolingo Announces Strategy Shift as DAU Growth Decelerates

According to the complaint, on November 5, 2025, Duolingo reported third-quarter results showing that year-over-year DAU growth had slowed to 36%, compared with 49% in the first quarter of 2025 and 40% in the second quarter. The Company also announced that it would place greater emphasis on user growth and improving teaching quality rather than monetization.

Following the announcement, Duolingo’s stock price fell approximately 25%, or $66.28 per share, to close at $193.74 on November 6, 2025.

On January 12, 2026, Duolingo announced that Chief Financial Officer Matthew Skaruppa had resigned and disclosed preliminary fourth-quarter operating metrics showing DAU growth of approximately 30%. Duolingo shares subsequently fell approximately 8.5%.

Then, on February 26, 2026, Duolingo announced its fourth-quarter and full-year 2025 financial results and provided its outlook for 2026. According to the complaint, the Company disclosed that its shift toward user growth and away from monetization would materially affect bookings growth, revenues and profitability, and projected approximately 20% DAU growth for 2026.

Following those disclosures, Duolingo shares fell another 14%, closing at $101 per share on February 27, 2026. Duolingo 10b - 6ac6b94c4a990db5…

What Can Long-Term Duolingo Shareholders Do Now?

If you currently own Duolingo, Inc. (NASDAQ: DUOL) shares and have held those shares since prior to May 2, 2025, you can seek corporate reforms, the return of funds spent defending litigation back to the company, and a court approved incentive award, at no cost to you whatsoever.  If you would like to learn more about this matter, you are encouraged to contact us at jgrabar@grabarlaw.com, or call 267-507-6085.