What is the Duolingo securities investigation about?

Faruqi & Faruqi, LLP is investigating Duolingo (NASDAQ: DUOL) for potential securities violations after the company revealed slower earnings growth and shrinking profit margins, causing shares to drop ~22% on February 27, 2026.

Why did Duolingo stock drop 22% in February 2026?

Duolingo warned investors of slower bookings growth and lower profitability as it shifts focus toward AI investment and user growth, catching markets off guard and triggering a sharp sell-off on February 27, 2026.

Is Duolingo being sued by investors?

Not yet formally, but law firm Faruqi & Faruqi, LLP is actively investigating potential securities claims on behalf of investors who suffered significant losses in Duolingo stock or options as of February 2026.

What law firm is investigating Duolingo for securities fraud?

Faruqi & Faruqi, LLP, a national securities litigation firm founded in 1995 with offices in New York, Pennsylvania, California, and Georgia, is leading the Duolingo investigation and has recovered hundreds of millions for past clients.

What did Duolingo's CEO say that upset investors?

CEO Luis von Ahn stated in a shareholder letter that 2026 would bring slower bookings growth and lower profitability, as Duolingo prioritizes AI investment and user growth over near-term monetization.

What are Duolingo's user growth goals and why are they controversial?

Duolingo aims to double daily active users to 100 million by 2028, but investors are concerned the strategy sacrifices short-term profits. DAU growth also slowed to 30% — its weakest pace in four years — in the latest quarter.

How did Duolingo's Q1 2026 earnings guidance miss expectations?

Duolingo projected Q1 adjusted EBITDA of $73.6 million, well below analyst estimates of $84 million. The miss, combined with margin warnings, contributed to the stock's sharp decline and triggered the securities investigation.

Can Duolingo investors join the Faruqi & Faruqi securities investigation?

Yes. Investors who suffered significant losses in Duolingo stock or options can contact Faruqi & Faruqi partner Josh Wilson at 877-247-4292 or 212-983-9330 (Ext. 1310) to discuss their legal rights and options.

What securities law violations is Duolingo allegedly being investigated for?

The investigation centers on whether Duolingo misled investors about its financial outlook, specifically regarding profitability, bookings growth, and the impact of its AI investment strategy on near-term earnings.

What is Duolingo's AI investment strategy and how does it affect profits?

Duolingo is increasing AI spending to accelerate user engagement and growth, but this reduces short-term monetization and margins. The company acknowledged 2026 will see slower bookings growth as a direct result of this pivot.

Duolingo, Inc. - Faruqi & Faruqi LLP

Duolingo, Inc.

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If you are a Duolingo investor who suffered a loss and would like to learn more, you can provide your information below

If you suffered significant losses in Duolingo stock or options and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).

Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Duolingo, Inc. (“Duolingo” or the “Company”) (NASDAQ: DUOL).

STOCK DROP: Duolingo Inc. shares tumbled as much as 22% on February 27^th after the company said its drive to gain subscribers would mean slower earnings growth and narrower profit margins in the short term. The language-learning app company said it would step up investment in artificial intelligence and sacrifice some degree of monetization in order to accelerate user growth and engagement, with the goal of doubling the current number of daily active users to 100 million in 2028. “The short-term implication is that this year will see slower bookings growth and lower profitability,” Chief Executive Officer Luis von Ahn said in a letter to shareholders. Daily active users grew the slowest in four years, rising 30% in the quarter from a year ago. The company expects first-quarter adjusted Ebitda of $73.6 million, trailing analyst estimates of $84 million.

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