Popular language-learning app Duolingo is facing a class-action lawsuit accusing its executives of keeping investors in the dark about monetization and AI efforts that drove away customers.
Investors who acquired Duolingo shares between May 2, 2025, and Feb. 26, 2026, are eligible to file as claimants in the securities fraud lawsuit, which was filed earlier this month by Levi & Korsinsky, LLP, in US District Court for the Western District of Pennsylvania.
The suit alleges Duolingo executives relentlessly advertised paid subscription tiers to users on the free version of the app and implemented low-quality AI features that they knew would frustrate customers, even as they told investors they were prioritizing user growth.
“With increasing frequency, the Company forced free users to watch unskippable ads after each lesson, plus additional monetization for [paid tiers] Super and Max, creating scenarios where free users were spending as much or more time on watching ads than lessons,” the suit said.
“The Company’s ad push was so aggressive that it saw users snap years-long participation streaks just to avoid being bombarded with the Company’s aggressive ad campaigns and monetization push.”
The lawsuit also alleged that unbeknownst to investors, in another effort to boost monetization, Duolingo rolled out a new feature called Energy to replace its old Hearts system.
With the old Hearts system, free users lost one heart for every wrong answer, and when their hearts ran out on a given day, they had to wait for them to replenish before completing a new lesson. It allowed customers to use Duolingo — known for its green owl mascot — for extended periods of time without paying.
The Energy system, however, causes users to lose energy with every correct and incorrect answer – meaning even if they complete a flawless lesson, they are still using energy. Some energy can be replenished by watching even more ads, but for full energy, customers need to wait until the next day or sign up for a premium tier.
“The Company’s real, undisclosed goal was to create friction for free users to try and force them into becoming paid subscribers,” the lawsuit said.
Meanwhile, executives were telling investors that they were doing everything they could to avoid frustrations and prioritize Daily Active User growth rates, or DAU, the suit claimed.
In an interview just ahead of the class period, Duolingo CEO Luis von Ahn said the company’s primary focus is to boost user engagement, and that if users encounter “things that are frustrating, [that] frustration makes [users] leave,” according to the lawsuit.
He said Duolingo would “actually just smooth” out any sources of frustration, because executives understood “the tiniest frustration” would force users to leave and Duolingo “just can’t lose those users.”
Von Ahn added that DAU growth is “probably the most important metric in the company” and one that executives would be “looking at … a lot.”
He also assured investors that Duolingo was using AI features to improve user quality and lessons rather than focusing on cost-optimization.
The lawsuit, however, accused the company of pushing out “low-quality AI content” that irritated users.
Duolingo was founded in 2011 at Carnegie Mellon University in Pittsburgh, Penn., by von Ahn, then a professor in the computer science department, and a grad student of his.
It uses games and characters to teach users over 40 languages and a few other subjects, including math and chess.
The basic version of the app is free for all users. It also offers paid subscription tiers with perks. Exact prices vary by country.
Super Duolingo costs about $12.99 a month or $84 at an annual discount, and offers users no ads and unlimited energy.
Duolingo Max – the most premium tier – costs about $30 a month or $168 at an annual discount. It has all the benefits of Super Duolingo, along with access to AI tools that allow customers to role play conversations on video chats with Duolingo’s AI bot, Lily.
The lawsuit alleged that free “Duolingo users were inundated with ads at levels not seen before, and even paying Super subscribers were aggressively upsold and pushed to sign up for Max through consistent advertising and promotion, despite already paying to not see ads.”
Despite executives assuring investors that they were prioritizing user growth, Duolingo reported DAU growth of just 36% in November 2025 – a drop from previous quarters, the lawsuit said. The news sent the stock price down 25%.
This January, Duolingo announced its chief financial officer, Matthew Skaruppa, had resigned and also revealed preliminary DAU growth of 30%, sending the stock down another 8.5%.
In February, disclosing its fourth-quarter 2025 results, Duolingo confirmed its DAU growth rate was slowing and forecast that its strategy shift would continue to hurt user growth, revenue and earnings throughout 2026. The stock price fell another 14%.
So far this year, Duolingo is down more than 20%. The stock was last trading at roughly $138.60 a share.
Duolingo did not immediately respond to The Post’s request for comment.