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Custom AI agentsWe build and run an agent for one jobSoftware FactoryCustom software built with AI agentsPricingAboutBlogDuolingo grew daily users 23% a year to 58.7 million, yet its stock fell from $540.68 to $90.03. The AI-first memo got the blame online; Duolingo's own letters tell a different story. Here is the timeline and the lesson for small businesses.
Duolingo's stock fell while its users grew because investors price future growth, not current size, and Duolingo's growth was slowing. Daily users still grew 23% a year in Q2 2026, but that was down from more than 40% a year from 2022 to mid-2025. In February 2026 Duolingo said 2026 user growth would be about 20% and that bookings growth and profit would be lower. The stock fell from a $540.68 close on May 14, 2025 to $90.03 on April 10, 2026, a drop of about 83%. The "AI-first" memo got the blame online, but Duolingo's own letter points to its monetization push.
Video: “Duolingo's Users Grew 23%. Its Stock Fell 80%.” by Dooza on YouTube (@thedooza), published November 4, 2026. Sources below. Watch on YouTube.
Yes, both are true, depending on the dates you pick. Here are the figures from Duolingo's shareholder letters and the daily price history.
| Metric | Then | Now | Source |
|---|---|---|---|
| Daily active users, Q2 | 47.7M (Q2 2025) | 58.7M (Q2 2026), +23% | Q2 2026 letter |
| Daily active users, Q3 | 50.5M (Q3 2025) | 64.9M (Q3 2026), +29% | Q3 2026 letter |
| Paid subscribers, Q3 | 11.5M | 13.1M, +14% | Q3 2026 letter |
| Total bookings, Q3 | $281.9M | $316.1M, +12% | Q3 2026 letter |
| Adjusted EBITDA margin, Q3 | 29.5% | 25.5% | Q3 2026 letter |
| Stock, closing price | $540.68 (May 14, 2025 peak) | $90.03 (Apr 10, 2026 low); $157.02 (Nov 5, 2026) | DUOL price history |
The video says "about 80%". Based on intraday prices (about $545 high, about $88 low) or closing prices, the real fall was a bit more than 80%. Users grew, but the rate of growth fell. Bookings and profit margins grew more slowly than users.
| Date | What happened | Source |
|---|---|---|
| Late April 2025 | CEO Luis von Ahn emails staff that Duolingo will be "AI-first" | TechCrunch |
| Apr 30, 2025 | Duolingo launches 148 new courses created with generative AI | TechCrunch |
| May 14, 2025 | Stock closes at its all-time high of $540.68 | Price history |
| Aug 2025 | Von Ahn: "This was on me. I did not give enough context" | Fortune |
| Feb 26, 2026 | Q4 2025 letter: user growth slowed; Duolingo will "prioritize user growth over monetization" | Q4 2025 letter |
| Apr 10, 2026 | Stock closes at its low of $90.03 | Price history |
| Aug 2026 | Q2 2026: daily users grow 23% to 58.7 million | Q2 2026 letter |
| Nov 3, 2026 | Q3 2026: daily users grow 29% to 64.9 million | Q3 2026 letter |
Von Ahn wrote that Duolingo would "gradually stop using contractors to do work that AI can handle" and that "headcount will only be given if a team cannot automate more of their work," as TechCrunch reported. Two days later Duolingo launched 148 AI-built courses. He said, "Developing our first 100 courses took about 12 years, and now, in about a year, we're able to create and launch nearly 150 new courses."
Users were angry. TechCrunch reported that some deleted the app and urged others to do the same. Later, von Ahn told the New York Times, "This was on me. I did not give enough context," and "We've never laid off any full-time employees. We don't plan to," according to Fortune.
The stock didn't fall right after the memo. It hit its all-time high about two weeks later. No source we found proves the memo caused the later fall. Duolingo's letters don't blame it, so we don't either.
Its own monetization push. In its Q4 2025 shareholder letter, Duolingo wrote: "from Q2 2022 to Q2 2025, we did not have a single quarter with year-over-year DAU growth below 40%". It added that growth "decelerated throughout 2025, and we expect 2026 DAU growth to be about 20%."
"Some of this deceleration is natural as we scale; and some of it, we believe, is a function of our increased focus on monetization in recent years."
The letter says Duolingo has "decided to prioritize user growth over monetization", and that "this year will see slower bookings growth and lower profitability." That is what investors priced in. A company growing 40%+ a year was now planning on about 20%, and on lower margins.
The user plan is working so far. In Q3 2026, daily user growth "accelerated for a second quarter in a row to 29% year-over-year growth, up from 23% in Q2," per the Q3 2026 letter.
This is our takeaway, not a sourced fact.
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User growth slowed. Daily active users grew more than 40% a year from Q2 2022 to Q2 2025. In February 2026 Duolingo said 2026 growth would be about 20%, with slower bookings growth and lower profitability. The stock fell from a $540.68 close on May 14, 2025 to $90.03 on April 10, 2026.
Yes. Daily active users grew from 47.7 million in Q2 2025 to 58.7 million in Q2 2026, up 23%. In Q3 2026 they grew 29% to 64.9 million.
No source proves it did. The memo went out in late April 2025, and the stock hit its all-time high on May 14, 2025. Duolingo's own letter blames slowing user growth, partly from its focus on monetization.
The memo said Duolingo would gradually stop using contractors for work AI can handle. CEO Luis von Ahn later said, 'We've never laid off any full-time employees. We don't plan to.'
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