Form 4: Duolingo CTO Severin Hacker Converts, Gifts Shares

Duolingo Co-Founder and CTO Severin Hacker reported the conversion of Class B shares to Class A and subsequent gifting of Class A shares.

Summary

• Severin Hacker, Duolingo's Co-Founder and Chief Technology Officer, converted 10,000 shares of Class B Common Stock into 10,000 shares of Class A Common Stock on August 20, 2025.
• Concurrently, Hacker gifted 10,000 shares of Class A Common Stock on August 20, 2025.
• Both the conversion and gifting transactions were executed at a price of $0 per share, indicating non-sale transactions.
• All shares involved in these transactions were held indirectly through the SBH Trust dated March 10, 2020, for which Hacker serves as Trustee.
• Following these reported transactions, Hacker indirectly holds 2,886,917 shares of Class B Common Stock and directly holds 72 shares of Class A Common Stock.

Sentiment

Score: 5

Explanation: The filing reports a routine insider transaction (conversion and gift of shares) which is neutral for the company's operational performance or financial health. It does not convey positive or negative sentiment regarding the company's prospects.

Positives

• The filing demonstrates transparency in insider equity movements, which is beneficial for market integrity.
• The conversion of Class B shares to Class A shares, while small in this instance, contributes to the eventual simplification of the company's capital structure.

Negatives

• The gifting of 10,000 Class A shares represents a disposition of equity by a key insider, which reduces their indirect beneficial ownership, though it is a non-cash transaction.

Risks

• The filing notes that Class B Common Stock automatically converts into Class A Common Stock under certain conditions, including specific transfers, when Class B shares represent less than 5% of total common stock outstanding, or upon the death of the Reporting Person. This highlights the dual-class share structure and its eventual sunset provisions.

Future Outlook

The filing does not contain any forward-looking statements or guidance regarding the company's future performance or strategic direction.

Industry Context

This Form 4 filing details a routine insider transaction, specifically a conversion and gift of shares, which is a common occurrence for executives across all industries for personal financial planning or estate management. It does not provide specific insights into broader industry trends for language learning or technology.

Corporate Governance

Related Party Transactions

• The shares involved in the transactions were held indirectly by the SBH Trust dated March 10, 2020, where Severin Hacker serves as Trustee. Transactions involving a trust controlled by an insider are considered related party dealings.

Stakeholder Impact

• Shareholders: The conversion of Class B to Class A shares, while not changing the total number of shares outstanding, contributes to the eventual simplification of the company's capital structure. The gifting of shares by a co-founder is a routine personal financial management event and does not typically impact the company's operational performance or strategic direction.
• Employees, Customers, Suppliers, Creditors: No direct impact on these stakeholders is indicated by this insider transaction.

Next Steps

• Severin Hacker, as an insider, will continue to be subject to Section 16 reporting requirements for any future changes in beneficial ownership of Duolingo securities.

Key Dates

Recommendation

This Form 4 filing details a routine insider transaction involving the conversion of Class B shares to Class A and subsequent gifting of Class A shares by a co-founder. Such transactions are typically for estate planning or personal financial management and do not reflect on the company's operational performance or future prospects. Therefore, the filing itself does not provide a basis for changing an investment thesis, warranting a 'hold' recommendation.

Keywords

Duolingo, DUOL, Severin Hacker, Form 4, Insider Transaction, Stock Conversion, Share Gift, Beneficial Ownership, Class A Common Stock, Class B Common Stock