Duolingo Lawsuit: Investigations, Earnings Drop, and Disclosures

The Duolingo lawsuit activity currently underway is not a filed class action but a cluster of securities fraud investigations by shareholder law firms. At least four firms — Pomerantz LLP, Levi & Korsinsky, Faruqi & Faruqi, and Bronstein, Gewirtz & Grossman — are examining whether Duolingo, Inc. (NASDAQ: DUOL) and its officers misled investors about slowing user growth and the financial cost of a strategic pivot toward artificial intelligence before two catastrophic stock declines in November 2025 and February 2026.¹²

As of mid-2026, none of these investigations has publicly progressed to a filed complaint with a defined class period or a lead plaintiff deadline. They remain in the pre-suit phase, in which firms solicit affected shareholders and evaluate whether the evidence supports a formal case.

What the Investigations Are Looking At

The common thread across the four investigations is whether Duolingo’s leadership knew user engagement was decelerating, and knew a growth-over-profit pivot was coming, before either was disclosed to the market. If shareholders bought stock at prices inflated by incomplete disclosures and then lost money when the truth emerged, that is the classic fact pattern for a federal securities fraud claim under Section 10(b) of the Securities Exchange Act.

Two disclosure events are doing most of the work in these investigations, and both produced dramatic stock reactions.

The November 6, 2025 Earnings Drop

On November 6, 2025, Duolingo reported third-quarter earnings that beat revenue and profitability estimates but paired that beat with weak fourth-quarter guidance. The company forecast Q4 bookings of $329.5 million to $335.5 million, below the $344.3 million consensus, and adjusted EBITDA of $75.4 million to $78.8 million, below the expected $80.5 million.³

CEO Luis von Ahn told investors the company was “investing a lot more in long-term things.”³ By that point, daily active user growth had slipped to 36% year-over-year, down from roughly 51% in Q1 2025.⁴

The February 26, 2026 Pivot Announcement

The second drop was larger. On February 26, 2026, Duolingo reported full-year 2025 results and told investors that 2026 would be a year of “deliberately prioritizing user growth and teaching better,” with a goal of 100 million daily active users by 2028.⁵ To hit that number, the company said it would extend premium AI features, including its “Video Call with Lily” tool, to cheaper tiers and to free users.⁶

Guidance came in well below consensus. Full-year 2026 bookings were projected at $1.27 billion to $1.30 billion against $1.39 billion expected. Revenue guidance of $1.20 billion to $1.22 billion trailed the $1.26 billion consensus. Bookings growth would slow to roughly 11%, about half the previously anticipated pace, and adjusted margins would compress to around 25%.⁶

The stock fell more than 23% the next day, closing at $101.00.²

Which Firms Are Investigating

Four plaintiff-side firms have announced investigations tied to these events.

Pomerantz LLP opened its investigation in August 2025, after early signs of decelerating user growth, and said it was examining whether Duolingo and certain officers or directors engaged in securities fraud.¹
Levi & Korsinsky opened a parallel investigation citing the same Q1-to-Q2 2025 deceleration in daily active user growth.⁷
Faruqi & Faruqi, LLP announced its investigation after the February 27, 2026 sell-off, focused on the monetization-for-growth trade the company disclosed that week.⁸
Bronstein, Gewirtz & Grossman, LLC announced its investigation on March 15, 2026, tied to the same February guidance.²

What “Investigation” Means If You Held DUOL

An investigation is not a lawsuit. It is a firm publicly announcing that it is gathering information and looking for shareholders who lost money to serve as potential lead plaintiffs. No court has been asked to certify a class. No class period has been defined. No deadline to move for lead plaintiff status has been set, because that clock only starts once a complaint is actually filed and notice is published.

If you bought Duolingo stock and sold at a loss, or held through either drop, contacting one of the investigating firms places you on their list for updates if a case is filed. It does not obligate you to anything and does not by itself preserve any legal right, because there is no active proceeding yet.

The Disclosure Question at the Center

Any complaint that eventually gets filed will run into Duolingo’s own risk disclosures. In both its 2024 annual report and its Q1 2025 quarterly filing, Duolingo stated that its daily active user counts, monthly active user counts, and subscriber figures come from an internal analytics platform that “ha[s] not been validated by an independent third party.”⁹¹⁰ The company also warned that it updates its measurement methodologies “from time-to-time,” so its metrics “may not be comparable to those in prior periods.”

Whether those disclosures were enough, or whether executives had specific, undisclosed knowledge about engagement trends and the planned AI pivot, is the question that would decide a case. Until a complaint is filed, that question stays in the investigation stage.

1
PR Newswire. Investor Alert: Pomerantz Law Firm Investigates Claims on Behalf of Investors of Duolingo
2
Access Newswire. Duolingo Inc. (DUOL) Investigation: Bronstein, Gewirtz and Grossman
3
CNBC. Duolingo Stock Q3 Earnings 2025
4
Benzinga. Duolingo Posts Q3 Beat but Monetization Moved to the Backburner: Analysts
5
Duolingo Investor Relations. Duolingo Reports Fourth Quarter and Full Year 2025 Results
6
Reuters. Duolingo Prioritizes User Growth Over Monetization, Forecasts Softer Bookings
7
Levi & Korsinsky. Duolingo Inc. Class Action Lawsuit
8
PR Newswire. DUOL Investigation Alert: Faruqi and Faruqi LLP Investigates Claims on Behalf of Investors of Duolingo
9
SEC. Duolingo 2024 Form 10-K
10
Duolingo Investor Relations. Duolingo Q1 2025 Form 10-Q