What Should Duolingo, Inc. Investors Know After 25.49% Stock Drop? The Law Offices of Frank R. Cruz Outlines Securities Fraud Class Action Lead Plaintiff Deadline

Lawsuit alleges Duolingo, Inc. made misleading statements to investors from May 2, 2025 to February 26, 2026; lead plaintiff motions are due December 7, 2026

LOS ANGELES, Oct. 22, 2026 /PRNewswire/ -- The Law Offices of Frank R. Cruz today announced a class action lawsuit against Duolingo, Inc. ("Duolingo" or the "Company") (NASDAQ: DUOL) on behalf of investors who acquired the Company's securities from May 2, 2025 to February 26, 2026. Filed on October 7, 2026, the case is City of Dearborn Heights Act 345 Police & Fire Retirement System v. Duolingo, Inc. et al., U.S. District Court Western District of Pennsylvania (Pittsburgh), Case No. 2:26-cv-02197.

If you lost money on Duolingo, Inc. securities, submit your Duolingo, Inc. loss information by December 7, 2026 to learn about participating in the lawsuit.

Duolingo, Inc. class action timeline

• Class period begins: May 2, 2025
• Class period ends: February 26, 2026
• Complaint filed: October 7, 2026
• Lead plaintiff motion deadline: December 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.

"According to the complaint filed against Duolingo, Inc., the Company, among other things, did not disclose 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. The December 7, 2026 deadline is a key date for Duolingo, Inc. investors who want a voice in how this case moves forward," said Frank R. Cruz of The Law Offices of Frank R. Cruz.

What should Duolingo, Inc. investors do now?

The Law Offices of Frank R. Cruz can help Duolingo, Inc. investors evaluate potential claims to recover their losses.

Investors who want to serve as lead plaintiff in the Duolingo, Inc. class action must file a motion with the Court by December 7, 2026. For more information, visit the Duolingo, Inc. case page, email [email protected], or call 310-914-5007.

If you inquire by email, please include your mailing address, telephone number, and number of shares purchased.

Investors may retain counsel of their choice. Duolingo, Inc. investors who bought during the class period may also take no action and remain absent class members. No class has been certified yet in the Duolingo, Inc. case.

Questions and answers about the Duolingo, Inc. lawsuit

Who is eligible? Investors who bought Duolingo, Inc. securities between May 2, 2025 and February 26, 2026 and lost money may be class members, and may seek lead plaintiff appointment by December 7, 2026.

What does a lead plaintiff do? The lead plaintiff is appointed by the court to represent all class members and direct the Duolingo, Inc. class action.

Must I be lead plaintiff to share in a recovery? No, Duolingo, Inc. investors can take no action and remain absent class members.

How are attorneys' fees handled? The Law Offices of Frank R. Cruz 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 Frank R. Cruz

The Law Offices of Frank R. Cruz investigates and prosecutes securities fraud and corporate malfeasance class actions. With nearly 20 years of litigation experience, the firm focuses on complex securities class actions and gives each client personal, one-on-one attention throughout the legal process.

Prior results do not guarantee a similar outcome.

Related links

• Duolingo, Inc. case page, The Law Offices of Frank R. Cruz
• Complaint: City of Dearborn Heights Act 345 Police & Fire Retirement System v. Duolingo, Inc. et al., U.S. District Court Western District of Pennsylvania (Pittsburgh)
• Duolingo, Inc. SEC filings index, EDGAR
• The Law Offices of Frank R. Cruz

Follow The Law Offices of Frank R. Cruz for updates on Twitter: twitter.com/FRC_LAW

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

SOURCE The Law Offices of Frank R. Cruz, Los Angeles