Duolingo’s stock price plunged nearly 30% after the Pittsburgh-based language learning app said Wednesday it’s prioritizing getting users in the door over making them paying customers.

Shares of Duolingo on the Nasdaq stock exchange tumbled to $183 Thursday from $260 a day earlier. By market close Friday, the price made up some ground to end at $201.

The strategic shift comes as the company sees weaker-than-expected user growth driven in part by online backlash over its “AI-first” pivot in April, when co-founder and CEO Luis von Ahn announced plans to phase out human contractors.

Daily active users hit 50.5 million last quarter, 700,000 users short of analyst projections, even as the number of paid subscribers slightly edged forecasts at 11.5 million.

Net income reached $292 million, up from $23 million from the same quarter last year, but $223 million of the increase came from a one-time tax benefit.

Von Ahn told investors on a call Wednesday the company is emphasizing the development of teaching tools ”as good as a human tutor” in hopes of reaching billions of users.

It’s a bet that could take some time to pay off, he acknowledged.

“Whenever you improve your courses, users do grow, but it takes a while for that to happen,” von Ahn said. “And then user growth, there’s a lag to get monetization, because people take some time to subscribe.”

Duolingo has also returned to what von Ahn called “unhinged posting” on social media after laying low in the aftermath of the AI backlash (investors were fond of the AI plan, driving Duolingo’s stock to an all-time high in the following weeks).

The irreverent posts, often inserting Duolingo’s owl mascot into viral trends, were apparently a key pillar in attracting users.

In an attention-grabbing stunt, Duolingo announced its mascot was dead in February only for the owl — or someone dressed in a green owl costume, rather — to rise from the dead later that month behind the company’s East Liberty headquarters.

The resurrection video earned nearly 29 million views on TikTok and 1.9 million on X.

“When we don’t post unhinged things, basically our posts were much less likely to go viral, and because of that, that did have an impact on (daily active user) growth,” von Ahn said.

Social media impressions have started to tick back up, he added.

Duolingo is also looking to pare back paywalls for consumers on its free plan, both in terms of how much they can use the app and the features available to them.

For example, von Ahn said a feature where users can have AI-powered video calls with a chatbot to practice a foreign language may be moved from the $30-per-month “Max” plan to a lower tier.

Though best known for being a low-barrier way to learn a new language, Duolingo has broadened its offerings in recent years.

In 2023, the company added math and music courses to its flagship app, eliminating the short-lived Duolingo Math app, and just a few months ago started teaching chess.

Chess is the fastest-growing course in Duolingo has ever made, according to von Ahn, already surpassing the number of math and music users.

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