Prior to the IPO, the Company granted options to purchase shares of the Company’s common stock and restricted stock units (“RSU”) in respect of shares of the Company’s common stock to employees, directors and consultants under the Company’s 2011 Equity Incentive Plan. In July 2021, Duolingo adopted the 2021 Incentive Award Plan (“2021 Plan”) and the 2021 Employee Stock Purchase Plan (“ESPP”), each of which became effective on July 26, 2021 in connection with the IPO. An aggregate of 7,946 shares and 1,119 shares of Class A common stock were made available for future issuance under the 2021 Plan and ESPP, respectively. Pursuant to the terms of the 2021 Plan, on each January 1 through January 1, 2031, the number of shares of the Company’s Class A common stock available for issuance under the 2021 Plan automatically increases by the lesser of (i) 5% of the shares outstanding on the preceding December 31 (calculated on an as-converted basis) and (ii) such smaller number of shares of common stock as determined by the Board or the Committee (as defined in the 2021 Plan). Pursuant to the terms of the ESPP, on each January 1 through January 1, 2031, the number of shares of the Company’s Class A common stock available for issuance automatically increases by the lesser of (i) 1% of the shares outstanding on the preceding December 31 and (ii) such smaller number of shares of common stock as determined by the Board or the Committee (as defined in the ESPP). On January 1, 2025, the number of Class A shares available under the 2021 Plan was increased by 2,247 shares of common stock. The Board waived the 2025 automatic annual increase of shares available for future issuance under the ESPP, and the Company intends to waive such automatic annual increase for all applicable future periods.

The Company’s stock options vest based on terms in the stock option agreements, which generally provide for vesting over four years based on continued service to the Company and its subsidiaries. Each option has a term of ten years. Stock options granted under the 2021 Plan must generally have an exercise price of not less than the estimated fair market value of the underlying Class A common stock at the date of the grant. No options have been granted under the 2021 Plan.

A summary of stock option activity under the Plans was as follows:


(In thousands, except prices and years)	Number of options	Weighted- average exercise price		Weighted- average remaining contractual life (years)	Aggregate intrinsic value





Options outstanding at January 1, 2024	2,985	$	16.04	5.60	$	629,865
Granted (1)	—
Exercised	(1,462)	13.24

Forfeited and expired (2)	—	20.75
Options outstanding at December 31, 2024	1,523	$	18.73	4.67	$	465,985
Options exercisable at December 31, 2024	1,523	$	18.65	4.67	$	465,654

As of December 31, 2024, there was approximately $23 of unrecognized stock-based compensation expense related to stock options granted under the plans with a weighted-average period of approximately 2 months. The amount of unrecognized stock-based compensation expense for RSUs as of December 31, 2024 was $239,138 with a weighted-average period of approximately three years. Total unrecognized compensation expense as of December 31, 2024 was $239,161.

In June 2021, the Company granted an aggregate of 1,800 performance-based RSUs (the “Founder Awards”) to the Company’s founders. The Founder Awards vest upon the satisfaction of both a service-based condition and a performance-based condition and generally are settled one year after vesting. The service-based condition is satisfied as to 25% of the Founder Awards on each anniversary of the IPO on July 27, 2021, subject to the continuous service of the founders through the applicable date. The performance-based condition will be satisfied with respect to each of 10 equal tranches only if the trailing 60-calendar day volume-weighted-average closing trading price of the Company’s Class A common stock reaches certain stock-price hurdles for each such tranche, as set forth below, over a period of 10 years from the date of grant.

Any RSUs associated with stock-price hurdles not achieved by the tenth anniversary of the date of grant will terminate and be canceled for no additional consideration to the founders. The stock-price hurdles and number of RSUs eligible to vest will be adjusted to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications, or similar events under the 2021 Plan. The Founder Awards will be settled in shares of the Company’s Class B common stock.


Tranche	Company Stock Price Hurdle		Number of RSUs Eligible to Vest
1 (1)	$	127.50	90
2 (1)	$	153.00	90
3 (2)	$	178.50	90
4 (3)	$	204.00	180
5 (4)	$	255.00	180
6 (5)	$	306.00	180
7	$	357.00	180
8	$	408.00	180
9	$	612.00	270
10	$	816.00	360

(1) Stock price hurdle for the tranche was achieved in 2021, the service condition satisfied in 2022, and shares were released to CEO and CTO on August 14, 2023. Of the 180 shares underlying RSUs released, an aggregate of 96 shares were disbursed to the founders in a net-share settlement, and 84 shares were withheld by the Company to cover the founders’ tax withholding obligations.

(2) Stock price hurdle and the service condition for the tranche was achieved as of November 22, 2023; the shares were released after the one-year holding requirement was satisfied on November 22, 2024. Of the 90 shares underlying RSUs released, an aggregate of 42 shares were disbursed to the founders in a net-share settlement, and 48 shares were withheld by the Company to cover the founders’ tax withholding obligations.

(3) Stock price hurdle and the service condition for the tranche was achieved as of December 26, 2023; the shares were released after the one-year holding requirement was satisfied on December 26, 2024. Of the 180 shares underlying RSUs released, an aggregate of 85 shares were disbursed to the founders in a net-share settlement, and 95 shares were withheld by the Company to cover the founders’ tax withholding obligations.

The Company estimated the grant date fair value of the Founder Awards using a model based on multiple stock-price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the stock-price hurdles may not be satisfied. The weighted-average grant date fair value of the Founder Awards was estimated to be $61.56 per share using the below inputs.

The Company estimates that it will recognize total stock-based compensation expense of approximately $110,817 over the derived service period of each of the ten separate tranches which is between 3.58 – 5.92 years. If the stock-price hurdles are met sooner than the requisite service period, the stock-based compensation expense will be adjusted to prospectively recognize the remaining expense over the remaining derived service period. Provided that the founders continue to provide services to the Company, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock-price hurdles are achieved.

The Company recognized $19,799, $26,622 and $30,997 of stock-based compensation expense related to the Founders Awards for the years ended December 31, 2024, 2023 and 2022, respectively, which is included within General and administrative in the Consolidated Statements of Operations and Comprehensive Income (Loss). As of December 31, 2024, there is $16,936 of unrecognized stock-based compensation expense related to these awards.