Financial Data and Key Metrics Changes - Total revenue increased by 40% year-over-year to $1,500,000,000, while adjusted EBITDA rose by 83% to $1,000,000,000, achieving a 68% adjusted EBITDA margin [18] - Free cash flow reached $826,000,000, up 113% year-over-year, with a quarter-over-quarter growth of 19% [18][19] - The company repurchased 3,400,000 shares for a total cost of $1,200,000,000, reducing total outstanding shares to 338,000,000 [19] Business Line Data and Key Metrics Changes - The advertising business generated $1,160,000,000 in revenue and $943,000,000 in adjusted EBITDA, achieving an 81% margin [19] - Revenue growth was driven by enhancements in AI-driven technology and the full quarter impact of web-based advertising solutions [20] Market Data and Key Metrics Changes - The company reported that over 90% of its advertising revenue comes from mobile games, which are not directly impacted by tariffs [13] - The web advertising segment is still in its early stages, with less than 0.1% market penetration, indicating significant growth potential [12][14] Company Strategy and Development Direction - The company is focusing on three key priorities for 2025: improving machine learning models, advancing e-commerce and web advertising solutions, and enhancing ad testing and automated ad creation [10] - A definitive agreement has been signed to sell the games business, allowing the company to sharpen its focus on advertising [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow despite macroeconomic changes, citing low market penetration and a strong demand for advertising services [14][16] - The management team emphasized the importance of continuous improvement in technology and the potential for significant growth in the web advertising space [39][40] Other Important Information - The company is set to launch a self-service dashboard for select customers, which is expected to unlock a massive opportunity for growth [12] - The adjusted EBITDA per employee in the advertising business has risen to approximately $4,000,000 annually, reflecting operational excellence [16] Q&A Session Summary Question: Guidance for next quarter and potential sequential decline in ads revenue - Management clarified that the current guidance reflects typical seasonality and that past performance is not indicative of future growth trends [29][30] Question: Category exposure and onboarding new advertisers - Management indicated that they are not actively pushing into new categories but are focused on improving self-service tools to onboard existing demand [37][39] Question: Churn among advertisers and spend per advertiser - Management reported a sub 3% churn rate for advertisers spending $250,000 annually, indicating strong retention [50][51] Question: Velocity of new web advertiser additions - Management noted that the pace of new advertiser additions has slowed due to resource constraints but expects to ramp up onboarding with the new self-service dashboard [70] Question: Self-service model expectations - Management anticipates that advertisers will gradually build budgets as they prove the effectiveness of campaigns on the new platform [83][84] Question: Contribution of non-gaming audience to total advertising revenue - Management remains optimistic about the e-commerce business potentially exceeding the previously estimated 10% contribution to total revenue [100]

Applovin (APP) Q1 2025 Earnings Call May 07, 2025 05:00 PM ET Speaker0 Welcome to AppLovin's earnings call for the first quarter ended 03/31/2025. I'm David Shao, head of investor relations. Joining me today to discuss our results are Adam Frueghi, our cofounder, CEO, and chairperson, and Matt Stumpf, our CFO. Please note our SEC filings to date as well as our financial update and press release discussing our first quarter performance are available at investors.app11.com. During today's call, we will be mak ...

Financial Performance - For the three months ended March 31, 2025, revenue increased 40% year-over-year to $1.5 billion, up from $1.1 billion in the same period of 2024[105] - Net income for the same period was $576.4 million, compared to $236.2 million in the prior year[105] - Adjusted EBITDA reached $1.0 billion, an increase from $548.8 million year-over-year[105] - Revenue for the three months ended March 31, 2025, was $1,484,021, a 40.2% increase from $1,058,115 in 2024[128] - Net income for the same period was $576,419, representing a net margin of 38.8%, up from 22.3% in 2024[128] - Adjusted EBITDA for Q1 2025 was $1,005,027, with an Adjusted EBITDA margin of 67.7%, compared to $548,771 and 51.9% in Q1 2024[128] - Free Cash Flow for the three months ended March 31, 2025, was $825,731, an increase from $387,593 in 2024[130] - Advertising Revenue increased by $480.6 million, or 71%, primarily due to improved AppDiscovery performance, with net revenue per installation up 49% and installations up 22%[157] Revenue Breakdown - Advertising Revenue accounted for 78% of total revenue, while Apps Revenue represented 22%[106] - The average Monthly Active Payers (MAPs) across the Apps portfolio was 1.5 million, with an Average Revenue Per Monthly Active Payer (ARPMAP) of $52[115] - In-app purchases (IAP) generated 70% of total Apps Revenue, while advertising inventory purchases (IAA) contributed 30%[114][116] - 45% of revenue in Q1 2025 was generated from outside the United States, indicating significant global market opportunities[135] Cash Flow and Investments - The company generated net cash provided by operating activities of $831.7 million, compared to $392.8 million in the same period of 2024[105] - Free Cash Flow for the three months ended March 31, 2025, was $825.7 million, up from $387.6 million in the prior year[105] - Cash and cash equivalents as of March 31, 2025, were $551.0 million, with $793.7 million of remaining availability under the 2024 Credit Agreement[172] - Net cash provided by operating activities for Q1 2025 was $831.7 million, up from $392.8 million in Q1 2024, representing an increase of 111%[174][175] - Net cash used in investing activities decreased to $22.7 million in Q1 2025 from $31.6 million in Q1 2024, a reduction of 28.8%[176] - Net cash used in financing activities increased significantly to $1,002.2 million in Q1 2025 from $424.6 million in Q1 2024, an increase of 135%[177][178] - Stock repurchases in Q1 2025 totaled $1.0 billion, with 2,931,609 shares repurchased, leaving $1.3 billion available for future repurchases[180] Expenses and Charges - Total costs and expenses for Q1 2025 were $820,550,000, representing 55% of revenue, down from 68% in Q1 2024[155] - Goodwill impairment charge of $188.9 million was recorded in Q1 2025, accounting for 13% of revenue, with no impairment in the prior year[164] - Research and development expenses decreased by $32.4 million, or 21%, to $122,918,000, primarily due to a reduction in stock-based compensation[162] - General and administrative expenses increased by $12.1 million, or 29%, to $54,501,000, driven by higher professional services costs[163] - Interest expense decreased by $21.3 million, or 29%, to $52,888,000, due to lower interest rates on debt[165] Strategic Initiatives - The company has invested approximately $4.1 billion in 33 strategic acquisitions and partnerships since 2018 to enhance its Advertising solutions[136] - The company plans to continue investing in AI-powered advertising technologies, including the AXON recommendation engine, to improve effectiveness for advertisers[132] - The company aims to retain and grow existing clients, as growth from existing clients has been a primary driver of revenue[134] - The company is exploring strategic partnerships and acquisitions, including a preliminary indication of interest to purchase TikTok in markets outside of China[137] Market Challenges - The company expects to continue facing challenges from changes in third-party platform policies that could impact advertising effectiveness and revenue generation[138] Accounting and Risk - There were no material changes to critical accounting estimates during the three months ended March 31, 2025[184] - The company reported no material changes in market risk from the previous year[188] - There were no other material changes to contractual obligations since December 31, 2024[181]

Applovin shares soared as high as 15% in extended trading after the company reported earnings and revenue that beat expectations and announced the sale of its mobile gaming business.Here's how the company did compared to LSEG consensus estimates:Earnings: $1.67 per share vs $1.45 per share expectedRevenue: $1.48 billion vs $1.38 billion expectedApplovin also agreed on Wednesday to sell its mobile gaming business to Tripledot Studios in a deal worth $400 million in cash considerations. The advertising tech c ...

Exhibit 2.1 CONFIDENTIAL Execution Copy PURCHASE AGREEMENT TRIPLEDOT, TRIPLEDOT GROUP HOLDINGS LIMITED, ETON GAMES, INC., APPLOVIN CORPORATION by and among MOROCCO, INC. and APPLOVIN GMBH MADE AND ENTERED INTO AS OF MAY 7, 2025 TABLE OF CONTENTS | | | Page | | --- | --- | --- | | Article I THE PURCHASE | | 2 | | 1.1 | Purchase and Sale | 2 | | 1.2 | Closing & Closing Deliveries | 3 | | 1.3 | Equitable Adjustments | 6 | | 1.4 | Preparation and Delivery of Pre-Closing Statement | 6 | | 1.5 | Purchase Price Al ...

Group 1: AppLovin - AppLovin has an implied upside of 115%, with a target price of $650 per share from Wedbush [8] - The company reported a 44% increase in revenue to $1.4 billion and a 253% rise in GAAP earnings to $0.49 per diluted share for the fourth quarter [5] - AppLovin's e-commerce advertising product is expected to account for about 10% of revenue in 2025, having reached a billion-dollar run rate in just a few months [5][6] - Wall Street anticipates a 45% growth in AppLovin's earnings by 2025, making its current valuation of 67 times earnings appear reasonable [7] - The company is expanding its advertising platform beyond video games into other direct-to-consumer categories [3][4] Group 2: MongoDB - MongoDB has an implied upside of 105%, with a target price of $350 per share from Loop Capital [8] - The company reported a 20% increase in revenue to $548 million for the fourth quarter of fiscal 2025, with a 14% rise in customer count to 54,500 [11] - MongoDB's CEO believes that artificial intelligence represents a significant industry shift, and the company is investing heavily to capitalize on this opportunity [12] - The current trading valuation of MongoDB at 6.5 times sales is a discount compared to its three-year average of 14 times sales [13] - MongoDB anticipates its slowest revenue growth as a public company in fiscal 2026, suggesting a cautious approach for investors [13]

Core Viewpoint - AppLovin Corporation is expected to report strong year-over-year revenue growth in its first-quarter 2025 results, primarily driven by the expansion of its Software Platform segment [1] Revenue Estimates - The consensus estimate for Software Platform revenues is $1.05 billion, reflecting a significant 54.3% increase compared to the prior-year quarter, driven by the AXON 2.0 technology [2] - Total revenues for AppLovin are projected to reach $1.38 billion, indicating a robust 30.2% increase from the year-ago quarter, highlighting the effectiveness of strategic expansion efforts [3] Profitability Expectations - The consensus estimate for Software Platform's adjusted EBITDA is $829.4 million, implying a 68.6% year-over-year growth, while the overall adjusted EBITDA for AppLovin is expected to decrease by 16.8% year over year [4] Earnings Per Share - Earnings per share are anticipated to show a substantial 116.4% increase, with the Zacks Consensus Estimate at $1.45, underscoring AppLovin's ability to leverage its technology-driven business model [5]

Core Viewpoint - AppLovin Corporation is facing a class action securities lawsuit due to alleged securities fraud that affected investors between May 10, 2023, and March 26, 2025 [1] Group 1: Lawsuit Details - The lawsuit claims that AppLovin's defendants misled investors regarding the company's financial growth and stability, particularly highlighting the launch of the AXON 2.0 digital ad platform and the use of advanced AI technologies [2] - Allegations include that AppLovin engaged in dishonest advertising practices, such as reverse engineering advertising data from Meta Platforms and manipulating ad metrics to inflate performance figures [2] - Following the revelation of these practices on February 26, 2025, AppLovin's stock price dropped from $377.06 to $331.00 per share, indicating a significant loss for investors [2] Group 2: Next Steps for Investors - Investors who suffered losses during the specified timeframe have until May 5, 2025, to request to be appointed as lead plaintiff in the lawsuit [3] - Participation in the lawsuit does not require any out-of-pocket costs or fees for class members [3] Group 3: Firm Background - Levi & Korsinsky, LLP has a strong track record in securities litigation, having secured hundreds of millions of dollars for shareholders over the past 20 years [4] - The firm is recognized as one of the top securities litigation firms in the United States, ranking in ISS Securities Class Action Services' Top 50 Report for seven consecutive years [4]

Core Viewpoint - AppLovin Corp. is experiencing a significant shift in investor sentiment following a 700% stock surge, with major investment banks downgrading their price targets due to critical reports from short-selling firms [1][2]. Group 1: Stock Performance and Analyst Revisions - AppLovin's stock price target was reduced by Goldman Sachs from $500.00 to $335.00, and UBS Group lowered its target from $630.00 to $450.00 [2]. - The downward revisions in stock expectations are attributed to multiple critical reports from short sellers [3]. Group 2: Legal Challenges - AppLovin is facing a securities class action lawsuit alleging misleading statements regarding its AXON 2.0 digital ad platform and AI technologies [4]. - The lawsuit claims that AppLovin misrepresented its technology's capabilities and engaged in manipulative practices, including exploiting advertising data from Meta Platforms [4][5]. Group 3: Short Seller Allegations - Muddy Waters Research accused AppLovin of violating app store rules by extracting proprietary IDs without user consent and claimed a high churn rate among e-commerce advertisers [3]. - Other firms, such as Fuzzy Panda Research and Culper Research, have also criticized AppLovin's practices, suggesting data theft and revenue fraud [4]. Group 4: Impact of Reports on Stock Price - Following the release of critical reports on February 26, 2025, AppLovin's share price reportedly fell by more than 12% [5].

Core Viewpoint - AppLovin Corporation (APP) is expected to report strong year-over-year growth in earnings and revenues for Q1 2025, with earnings estimated at $1.45, reflecting a 116.4% increase, and revenues projected at $1.38 billion, indicating a 30.2% growth from the previous year [1][12]. Financial Performance - The consensus estimate for Software Platform revenues is $1.05 billion, suggesting a 54.3% year-over-year growth, while Apps revenues are expected to decline by 12.7% to $331.7 million [8]. - Adjusted EBITDA for the Software Platform is estimated at $829.4 million, indicating a 68.6% year-over-year growth, whereas APP's overall adjusted EBITDA is expected to decrease by 16.8% [9]. - In the fourth quarter of 2024, APP reported a 44% year-over-year revenue increase and a 78% year-over-year rise in adjusted EBITDA, showcasing strong operational efficiency [11]. Market Position and Growth - APP's stock has increased by 300% over the past year, significantly outperforming the broader industry, which gained 27% [10]. - The company has a strong earnings surprise history, having surpassed the Zacks Consensus Estimate in all trailing four quarters with an average surprise of 23.5% [3][4]. Strategic Focus - AppLovin continues to leverage its AXON 2.0 technology and expand within the gaming and in-app advertising sectors, positioning itself for sustained growth [11][13]. - Management has guided for $1.4 billion in sales for Q1 2025, slightly above the Zacks Consensus Estimate of $1.37 billion, indicating confidence in continued performance [12]. Investment Outlook - Despite the strong growth trajectory, the absence of a positive Earnings ESP and potential volatility in App revenues suggest a cautious approach for investors [16]. - The company’s consistent earnings beats and leadership in mobile advertising make it an attractive long-term investment option [15][16].