AppLovin Corporation (NASDAQ:APP) Q2 2024 Earnings Conference Call August 7, 2024 5:00 PM ET Company Participants David Hsiao - Head of IR Adam Foroughi - Chairman, Co-Founder & CEO Matt Stumpf - CFO Conference Call Participants Jason Bazinet - Citi Clark Lampen - BTIG James Heaney - Jefferies Omar Dessouky - BofA Vasily Karasyov - Cannonball Matt Cost - Morgan Stanley Martin Yang - OpCo David Hsiao Welcome to the AppLovin Earnings Call for the Second Quarter Ended June 30, 2024. I'm David Hsiao, Head of In ...

AppLovin (APP) came out with quarterly earnings of $0.89 per share, beating the Zacks Consensus Estimate of $0.77 per share. This compares to earnings of $0.22 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 15.58%. A quarter ago, it was expected that this mobile app technology company would post earnings of $0.57 per share when it actually produced earnings of $0.67, delivering a surprise of 17.54%.Over the last four quarters ...

Revenue and Financial Performance - Revenue increased 44% year-over-year to $1.08 billion for the three months ended June 30, 2024, compared to $750.2 million in the same period in 2023[85] - Net income for the three months ended June 30, 2024, was $310.0 million, up from $80.4 million in the same period in 2023[85] - Adjusted EBITDA for the three months ended June 30, 2024, was $601.2 million, compared to $333.5 million in the same period in 2023[85] - Free Cash Flow for the six months ended June 30, 2024, was $833.1 million, up from $503.7 million in the same period in 2023[85] - Revenue for the six months ended June 30, 2024, was $2.14 billion, compared to $1.47 billion in the same period in 2023[114] - Net income for the six months ended June 30, 2024, was $546.2 million, compared to $75.8 million in the same period in 2023[114] - Total Revenue for Q2 2024 reached $1,080.1 million, a 44% increase compared to Q2 2023, with Apps Revenue growing by $25.0 million (7%)[121] - Net income as a percentage of revenue improved to 29% in Q2 2024, up from 11% in Q2 2023[119] Revenue Breakdown and Composition - Software Platform Revenue represented 66% of total revenue, while Apps Revenue accounted for 34% for the three months ended June 30, 2024[86] - In-app purchase (IAP) revenue represented 68% of total Apps Revenue, while in-app advertising (IAA) revenue accounted for 32% for the three months ended June 30, 2024[89] - 43% of the company's revenue from Software Platform and IAA Revenue clients was generated from outside the United States during the three months ended June 30, 2024[103] - Software Platform Revenue increased by $305.0 million (75%) in Q2 2024 compared to Q2 2023, driven by improved AppDiscovery performance with a 7% increase in net revenue per installation and a 77% increase in installation volume[121] - In-App Advertising Revenue increased by $8.1 million (7%) in Q2 2024, driven by a 56% rise in advertising impressions, partially offset by a 31% decrease in price per impression[121] Expenses and Costs - The company's cost of revenue for the six months ended June 30, 2024, was $576.7 million, compared to $520.5 million in the same period in 2023[114] - The company's research and development expenses for the six months ended June 30, 2024, were $319.2 million, compared to $282.3 million in the same period in 2023[114] - Cost of revenue increased by $24.0 million (9%) in Q2 2024, primarily due to a $35.2 million rise in network infrastructure expenses, partially offset by a $12.1 million decrease in amortization of intangible assets[124] - Sales and marketing expenses rose by $9.7 million (5%) in Q2 2024, driven by a $12.4 million increase in personnel-related expenses, partially offset by a $6.2 million decrease in user acquisition costs[125] - Research and development expenses increased by $26.5 million (19%) in Q2 2024, primarily due to a $20.3 million rise in personnel-related expenses and a $5.4 million increase in professional services costs[126] - General and administrative expenses grew by $10.2 million (33%) in Q2 2024, mainly due to a $10.1 million increase in personnel-related expenses[127] - Total stock-based compensation for Q2 2024 was $98.7 million, up from $81.3 million in Q2 2023[115] - Total amortization expense related to acquired intangibles was $100.5 million in Q2 2024, down from $112.9 million in Q2 2023[116] - Provision for income taxes increased by $30.5 million (183%) in H1 2024 compared to H1 2023, driven by higher pre-tax income and global intangible low-taxed income[131] Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended June 30, 2024, was $847.3 million, compared to $518.5 million in the same period in 2023[85] - Net cash provided by operating activities for the six months ended June 30, 2024, was $847.3 million, compared to $518.5 million in the same period in 2023[98] - Free Cash Flow for the six months ended June 30, 2024, was $833.1 million, compared to $503.7 million in the same period in 2023[98] - Net cash provided by operating activities was $847.3 million in H1 2024, a 63% increase compared to $518.5 million in H1 2023[136] - Net cash used in investing activities was $100.0 million in H1 2024, primarily consisting of $76.3 million in purchases of non-marketable equity securities[138] - Net cash used in financing activities was $785.6 million in H1 2024, primarily consisting of $752.2 million in share repurchases and $677.9 million in debt repayments[139] - The company repurchased 13,466,397 shares of Class A common stock for $752.2 million in H1 2024[141] - The company had $460.4 million in cash and cash equivalents as of June 30, 2024, sufficient to meet anticipated needs for the next 12 months[135] Adjusted EBITDA and Margins - Adjusted EBITDA margin for the three months ended June 30, 2024, was 55.7%, up from 44.5% in the same period in 2023[96] - Software Platform Adjusted EBITDA increased by $247.6 million (91%) in Q2 2024 compared to Q2 2023, driven by a $305.0 million increase in Software Platform revenue[133] - Apps Adjusted EBITDA increased by $20.1 million (33%) in Q2 2024 compared to Q2 2023, driven by a $25.0 million increase in Apps Revenue[133] User Metrics and Engagement - Monthly Active Payers (MAPs) averaged 1.6 million for the three months ended June 30, 2024, with an Average Revenue Per Monthly Active Payer (ARPMAP) of $52[89] Strategic Investments and Acquisitions - The company has invested approximately $4.1 billion in 33 strategic acquisitions and partnerships from the beginning of 2018 through June 30, 2024[104] - The company plans to continue investing in its AI-powered advertising engine AXON, AppDiscovery, Adjust, and MAX to improve effectiveness for advertisers[100][101] - The company expects to enter new verticals outside of gaming, such as eCommerce, CTV, OEM, and carrier-related markets[101] Interest and Other Financial Metrics - Interest expense increased by $23.7 million (46%) in Q2 2024 compared to Q2 2023, driven by a net gain of $21.4 million related to interest rate swaps in the prior year period[128] - Other income, net decreased by $6.5 million (42%) in Q2 2024 compared to Q2 2023, primarily due to a $6.0 million decrease in interest income[129] Market Risk and Portfolio - No material changes in market risk from the information presented in the Annual Report for the year ended December 31, 2023[147] - The company's portfolio of apps consists of over 200 free-to-play mobile games across five genres, run by ten studios[85]

| --- | --- | |-------|-------| | | | | | | To Our AppLovin Shareholders: 3Q24 Total Revenue $1,115 to $1,135 million Adjusted EBITDA $630 to $650 million Adjusted EBITDA Margin 57% In the second quarter of 2024, we celebrated the first anniversary of our enhanced AXON technology. Reflecting on the past year, we're thrilled by the significant growth AXON drove for our advertising partners. AXON enhancements through ongoing self-learning and our dedicated development efforts have fueled robust business perfo ...

Growth stocks may not be the first thing on your mind right now, and I get it. Most growth plays are tied to tech or software, sectors that have faced immense pressure amid recession fears and a brutal tech selloff sparked by Big Tech’s disappointing results. To make matters worse, the Federal Reserve has held off on interest rate cuts far longer than anticipated. The market expects a cut in September, and I believe that’s when the Fed will finally budge. But if they move too slowly, more pain could be in s ...

Milan Markovic/E+ via Getty Images Investment Thesis AppLovin Corporation (NASDAQ:APP) will report its Q2 2024 results next Wednesday, after hours. And I believe we'll see $110 per share in the not-too-distant future. Here, I discuss both the bullish and bearish aspects. I lay out all the negative aspects facing the business, so you can make up your mind, whether this makes as much sense to you as it does to me. In short, this is my contention, paying 13x next year's free cash flow for AppLovin is a ste ...

In its upcoming report, AppLovin (APP) is predicted by Wall Street analysts to post quarterly earnings of $0.74 per share, reflecting an increase of 236.4% compared to the same period last year. Revenues are forecasted to be $1.08 billion, representing a year-over-year increase of 43.8%.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Before a company anno ...

AppLovin (APP) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on August 7, 2024, might help the stock move higher if these key numbers are better than expecta ...

AppLovin (APP) closed the most recent trading day at $76.85, moving -0.88% from the previous trading session. The stock fell short of the S&P 500, which registered a gain of 0.08% for the day. Elsewhere, the Dow saw a downswing of 0.12%, while the tech-heavy Nasdaq appreciated by 0.07%.Shares of the mobile app technology company witnessed a loss of 6.84% over the previous month, trailing the performance of the Business Services sector with its loss of 0.96% and the S&P 500's loss of 0.21%.Analysts and inves ...

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