Duolingo Faces Securities Fraud Lawsuit Over Growth and Monetization Claims

Duolingo, Inc., the company behind the popular language learning application, is facing a securities fraud class action lawsuit in the United States. Plaintiffs allege that the company made materially false or misleading statements to investors regarding its business operations, growth strategies, and prospects.

The lawsuit covers the period between May 2, 2025, and February 26, 2026. The core allegations center on claims that Duolingo misrepresented its daily active user (DAU) growth rates. It is alleged that the company deliberately increased user friction, including higher ad volumes and aggressive subscription upsells, to artificially inflate these growth metrics.

According to the complaint, Duolingo's internal A/B testing reportedly showed that these monetization efforts and the rapid generation of low-quality AI content were negatively impacting DAU growth. The suit contends that the company failed to disclose these adverse effects, rendering its public statements about its business operations and future outlook misleading and without a reasonable basis.

The allegations gained traction following Duolingo's financial disclosures. In November 2025, the company reported a slowdown in DAU growth, causing its stock price to fall. Further stock declines occurred in January 2026 after the resignation of its CFO and the release of weak preliminary fourth-quarter metrics. The company's fourth-quarter report in February 2026 confirmed slower DAU growth and reduced profitability.

Investors who purchased Duolingo Class A common stock during the specified class period and suffered losses have until December 7, 2026, to file for lead plaintiff status. The law firm Kessler Topaz Meltzer & Check, LLP is representing investors in this matter.