Duolingo, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against Duolingo, Inc. (DUOL).

If you purchased or held Duolingo securities and suffered losses, you may be eligible to join this securities investigation and seek compensation.

About Duolingo

Duolingo, Inc. is a technology company best known for its language-learning platform, which offers courses in dozens of languages to millions of users worldwide. The company has become a major player in the edtech sector, with a focus on leveraging artificial intelligence to enhance user engagement and learning outcomes.

Duolingo’s business model relies heavily on user growth, daily engagement, and paid subscriptions. The company has consistently highlighted its strong product and brand, as well as new features such as AI-powered subscriptions and expanded course offerings, to drive revenue and attract new users.

Concerns Under Investigation

Lawyers are investigating whether Duolingo may have made misleading statements or omitted critical information regarding its user engagement and business performance during the period from May 1, 2025 to July 25, 2025. One area of focus is whether the company’s public statements accurately reflected the true state of daily active user (DAU) growth and engagement.

On May 1, 2025, Duolingo’s CEO Luis von Ahn described the first quarter as an “outstanding start,” emphasizing “record” DAU additions and the “continued strength of our product and brand” that drove 38% revenue growth. The company highlighted strong user momentum, new AI features, and “more Daily Active Users this quarter than any in our history”. However, these statements may have omitted key information about a slowdown in the rate of new user engagement.

The Q1 2025 shareholder letter and earnings call further reinforced the narrative of “sustained user growth and engagement,” driven by campaigns such as “Dead Duo.” CEO von Ahn stated that “things are going great,” while CFO Matt Skarupa provided guidance for higher Q2 revenue above Wall Street estimates. Legal professionals may review whether shareholders were informed about the actual deceleration in DAU growth, as neither management commentary nor SEC filings seemed to have disclosed any slowdown at that time.

The investigation could focus on whether Duolingo’s upbeat guidance and public statements misled investors by omitting the fact that user growth had already begun to slow. Third-party data cited by analysts later revealed that Q2 DAU growth was only about 40% (47.7 million DAUs), noticeably below the 49% achieved in Q1. This key metric was apparently not included in any public statements during the proposed class period, which could be considered a material omission.

On July 28, 2025, Duolingo’s stock price dropped approximately 6.48% (about $23.60 per share, closing near $340.49) on high trading volume. This sharp decline erased around $1–$1.2 billion in market value and was attributed to an analyst report from Citizens JMP, which cited concerns about slowing DAU growth based on third-party data. Lawyers may investigate whether this price decline was a direct result of the market learning the truth about Duolingo’s engagement trends.

Your Rights and Next Steps

If you purchased or held Duolingo securities and experienced financial losses between May 1, 2025 and July 25, 2025, you may have important legal rights. This is an active investigation, not a filed lawsuit, but it could lead to a securities class action if evidence supports potential claims.

Lawyers are ready to help investors understand their options. Investors may be eligible to participate in any future class action that could arise from this investigation. By joining, investors may have the opportunity to recover losses related to the alleged misstatements or omissions.

It is important to act promptly, as securities investigations are time-sensitive and certain legal deadlines may apply. Investors can work with legal professionals to document their transactions and preserve their rights.

You May Be Entitled to Compensation

Investors who purchased Duolingo securities and suffered losses during the relevant period may be eligible to join this investigation and seek compensation. Securities investigations can move quickly, and waiting may affect your ability to recover losses.

To learn more or to participate, complete the form below to join the investigation.