Duolingo Faces Class Action Lawsuit Over Alleged Growth Misrepresentations

The legal action, filed by Levi & Korsinsky, LLP, covers investors who purchased shares between May 2, 2025, and February 26, 2026. Plaintiffs contend that while management touted 49% user growth as evidence of sustainable scaling, internal A/B testing data suggested that aggressive monetization tactics and lower-quality AI-generated lessons were actively stifling engagement. By February 2026, the company’s outlook for daily active user growth had plummeted to 20%.

This discrepancy allegedly left shareholders vulnerable as the stock price tumbled from a high of $260.02 in November 2025 to $101.00 by late February 2026. The complaint argues that executives were aware of the friction caused by their monetization strategy but failed to disclose the material risks to investors until the growth deceleration became impossible to ignore. Investors seeking to participate in the recovery effort must act before the December deadline to establish their standing in the case, which is currently pending in the United States District Court for the Western District of Pennsylvania.