Duolingo Faces Class Action Over Alleged Misleading Growth Metrics

The complaint, filed in the U.S. District Court for the Western District of Pennsylvania, alleges that Duolingo misled shareholders between May 2, 2025, and February 26, 2026. While leadership publicly attributed stable daily active user (DAU) metrics to product improvements, the litigation claims that internal A/B testing revealed a different reality. Plaintiffs argue that features such as the Energy system, unskippable ads, and mass-produced AI content were actively depressing growth rates—a trend management reportedly dismissed as immaterial.

The discrepancy surfaced when the company’s February 2026 guidance projected 20% growth, a significant drop from the 30% reported earlier in the year. The lawsuit contends that generic risk disclosures provided to investors failed to account for the specific, known operational challenges caused by these monetization efforts. Joseph E. Levi, Esq., representing the plaintiffs, stated that shareholders were entitled to transparency regarding internal data that contradicted public assurances of stability. Duolingo shares experienced substantial volatility during the disclosure period, leading to claims of billions of dollars in investor losses.