What Does Duolingo, Inc.'s 25.49% Stock Drop Mean for Investors? The Law Offices of Howard G. Smith Outlines Securities Fraud Class Action Lead Plaintiff Deadline

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Oct 19, 2026, 22:49 ET

Suit alleges Duolingo, Inc. failed to disclose key facts to investors from May 2, 2025 through February 26, 2026; lead plaintiff deadline is December 7, 2026

BENSALEM TOWNSHIP, Pa., Oct. 19, 2026 /PRNewswire/ -- The Law Offices of Howard G. Smith today reported that a securities class action lawsuit is pending against Duolingo, Inc. ("Duolingo" or the "Company") (NASDAQ: DUOL) on behalf of investors who acquired its securities from May 2, 2025 through February 26, 2026. The Duolingo, Inc. case, City of Dearborn Heights Act 345 Police & Fire Retirement System v. Duolingo, Inc. et al., was filed on October 7, 2026 in the U.S. District Court Western District of Pennsylvania (Pittsburgh) (Case No. 2:26-cv-02197).

Investors with losses on Duolingo, Inc. securities can contact the Law Offices of Howard G. Smith about the Duolingo, Inc. lawsuit before the December 7, 2026 lead plaintiff deadline.

Key deadlines and dates for Duolingo, Inc. investors

Lead plaintiff deadline: December 7, 2026
Class period: May 2, 2025 through February 26, 2026
Complaint filed: October 7, 2026

What happened?

On November 5, 2025, Duolingo, Inc. announced its financial results for the third quarter of 2025. It disclosed that growth in daily active users had slowed for yet another consecutive quarter, falling to 36% from 40% in the second quarter of 2025 and 49% in the first quarter of 2025. The Company also disclosed that it was retreating from its push to increase monetization. It stated that it would now place user growth ahead of monetization and that it needed to invest more heavily in "teaching better across all our subjects."

On this news, Duolingo, Inc. stock fell $66.28 or 25.49%, to close at $193.74 on November 6, 2025, thereby injuring investors.

Then, on January 12, 2026, Duolingo, Inc. disclosed the resignation of its Chief Financial Officer, Matthew Skaruppa. In the same announcement, the Company released limited preliminary operating metrics for the fourth quarter of 2025, which showed growth in daily active users of only 30%. This was a further slowdown of six percentage points from the third quarter of 2025.

On this news, the price of Duolingo, Inc. stock fell $14.92 or 8.45%, to close at $161.74 on January 12, 2026, thereby further injuring investors.

Finally, on February 26, 2026, Duolingo, Inc. released its financial results for the fourth quarter of 2025. The results confirmed the slowdown in daily active user growth and showed that the financial effects of the Company's change in strategy would not be "small" or "little." Instead, they would materially harm its 2026 bookings, daily active user growth rates, revenue, and adjusted EBITDA.

On this news, the price of Duolingo, Inc. stock fell $16.45 or 14.01%, to close at $101 on February 27, 2026, thereby further injuring investors.

What is the Duolingo, Inc. lawsuit about?

The Duolingo, Inc. securities lawsuit alleges that, between May 2, 2025 and February 26, 2026, defendants made materially false and/or misleading statements and failed to disclose material adverse facts about Duolingo, Inc.'s business, operations, and prospects. Specifically, the complaint alleges defendants failed to disclose that: (1) Daily Active User ("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; (2) Duolingo's rigorous A/B testing demonstrated to defendants that increased friction in the free user experience was having negative impacts on DAU growth rates; (3) Duolingo'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 Duolingo's financial performance; (4) far from driving sustained growth and strong user momentum through content and "product improvements" that "get improved retention," Duolingo's constant A/B testing informed Duolingo 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; and (5) as a result, defendants' positive statements about Duolingo, Inc.'s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

"The lawsuit against Duolingo, Inc. alleges that, among other things, the Company failed to tell investors that Daily Active User ("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. Duolingo, Inc. investors who bought during the class period may be able to pursue their losses, and the December 7, 2026 deadline is where that process begins," said Howard G. Smith of The Law Offices of Howard G. Smith.

Next steps for Duolingo, Inc. investors

Duolingo, Inc. investors who suffered losses may contact The Law Offices of Howard G. Smith to learn about pursuing their claims.

Lead plaintiff motions in the Duolingo, Inc. class action are due to the Court by December 7, 2026. For more information, visit the firm's website, email [email protected], or call (215) 638-4847.

If you purchased Duolingo, Inc. securities during the class period, you may retain counsel of your choice, or you may take no action and remain an absent class member. No class has been certified in the Duolingo, Inc. case so far.

Common questions from Duolingo, Inc. investors

Who is eligible? Investors who acquired Duolingo, Inc. securities from May 2, 2025 through February 26, 2026 and suffered losses may qualify for the class in the Duolingo, Inc. shareholder lawsuit.

What is the deadline? Lead plaintiff motions in the Duolingo, Inc. case are due by December 7, 2026.

Can I recover without being lead plaintiff? Yes, Duolingo, Inc. investors may take no action and remain absent class members.

Does it cost anything? The Law Offices of Howard G. Smith works on contingency, so investors pay no attorneys' fees unless there is a recovery, and any fees require court approval.

About The Law Offices of Howard G. Smith

The Law Offices of Howard G. Smith has helped injured investors recover their money for more than 15 years. The firm prosecutes securities fraud, takeover, and derivative litigation against public companies and their officers, directors, and advisors in federal and state courts nationwide, and has helped clients recover hundreds of millions of dollars in losses. Clients speak directly with a lawyer, who will promptly answer any question.

Prior results do not guarantee a similar outcome.

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Howard G. Smith

The Law Offices of Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Email: [email protected]

Telephone: (215) 638-4847

www.howardsmithlaw.com

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SOURCE Law Offices of Howard G. Smith