Applovin(US:APP)2024-11-06 22:05Revenue Growth - Revenue increased 39% year-over-year to $1.20 billion for the three months ended September 30, 2024, compared to $864.3 million in the same period in 2023[68] - Total Revenue for Q3 2024 was $1.198 billion, a 39% increase compared to Q3 2023, with Software Platform Revenue contributing $835.2 million, up 66% year-over-year[101] - Revenue for the nine months ended September 30, 2024, was $3,336,469 thousand, compared to $2,329,826 thousand in the same period in 2023[96] - Total Revenue for the nine months ended September 30, 2024, was $3.336 billion, a 43% increase compared to the same period in 2023[101] Net Income and Profitability - Net income for the three months ended September 30, 2024, was $434.4 million, up from $108.6 million in the same period in 2023[68] - Net income for the nine months ended September 30, 2024, was $980,572 thousand, compared to $184,478 thousand in the same period in 2023[96] - Adjusted EBITDA for the three months ended September 30, 2024, was $721.6 million, compared to $419.3 million in the same period in 2023[68] - Adjusted EBITDA margin was 60.2% for the three months ended September 30, 2024, compared to 48.5% in the same period in 2023[79] - Software Platform Adjusted EBITDA increased by $289.3 million (79%) in the three months ended September 30, 2024, and $810.2 million (95%) in the nine months ended September 30, 2024, compared to the same periods in 2023, driven by higher revenue[114] - Apps Adjusted EBITDA increased by $13.0 million (24%) in the three months ended September 30, 2024, and $34.9 million (20%) in the nine months ended September 30, 2024, compared to the same periods in 2023, driven by higher revenue and lower user acquisition costs[114] Revenue Composition - Software Platform Revenue represented 70% of total revenue, while Apps Revenue accounted for 30% for the three months ended September 30, 2024[69] - 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 September 30, 2024[72] - 47% of revenue from Software Platform and IAA Revenue clients was generated from outside the United States during the three months ended September 30, 2024[86] - Software Platform Revenue increased by $330.7 million, or 66%, in Q3 2024 compared to Q3 2023, driven by improved AppDiscovery performance with a 22% increase in net revenue per installation and a 39% increase in installation volume[101] - Apps Revenue for Q3 2024 increased by $3.2 million compared to Q3 2023, with In-App Advertising Revenue up $4.2 million (4%) due to an 8% increase in advertising impressions[101] - Software Platform Revenue for the nine months ended September 30, 2024, increased by $959.3 million (76%) compared to the same period in 2023, driven by a 64% increase in installation volume and an 11% increase in net revenue per installation[101] - Apps Revenue for the nine months ended September 30, 2024, increased by $47.3 million (4%) compared to the same period in 2023, with In-App Advertising Revenue up $23.5 million (7%) due to a 53% increase in advertising impressions[102] User Metrics - The company had 1.6 million Monthly Active Payers (MAPs) with an Average Revenue Per Monthly Active Payer (ARPMAP) of $52 for the three months ended September 30, 2024[72] - The company's Software Platform provides access to over 1.4 billion daily active users[71] - The Software Platform provides advertisers with access to over 1.4 billion daily active users[85] Expenses and Costs - Cost of Revenue for Q3 2024 increased by $4.6 million (2%) compared to Q3 2023, primarily due to a $27.9 million increase in network infrastructure expenses, offset by a $23.4 million decrease in amortization of intangible assets[103] - Sales and Marketing expenses for Q3 2024 decreased by $6.6 million (3%) compared to Q3 2023, primarily due to a $9.7 million reduction in user acquisition costs[104] - Research and Development expenses for Q3 2024 decreased by $9.3 million (6%) compared to Q3 2023, driven by reduced stock-based compensation related to PSUs[105] - General and Administrative expenses for Q3 2024 decreased by $3.4 million (8%) compared to Q3 2023, primarily due to a $5.9 million reduction in bad debt expense[108] - Research and development expenses for the nine months ended September 30, 2024, were $469,209 thousand, compared to $441,563 thousand in the same period in 2023[96] - Sales and marketing expenses for the nine months ended September 30, 2024, were $634,547 thousand, compared to $607,755 thousand in the same period in 2023[96] - General and administrative expenses for the nine months ended September 30, 2024, were $120,880 thousand, compared to $116,231 thousand in the same period in 2023[96] Cash Flow and Financial Position - Free Cash Flow for the nine months ended September 30, 2024, was $1.38 billion, up from $697.3 million in the same period in 2023[80] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $1,398,008 thousand, compared to $717,522 thousand in the same period in 2023[81] - Free Cash Flow for the nine months ended September 30, 2024, was $1,378,198 thousand, compared to $697,329 thousand in the same period in 2023[81] - Net cash provided by operating activities was $1,398.0 million for the nine months ended September 30, 2024, compared to $717.5 million in the same period in 2023, driven by higher net income and non-cash adjustments[118] Investments and Acquisitions - The company has invested approximately $4.1 billion in 33 strategic acquisitions and partnerships from the beginning of 2018 through September 30, 2024[87] - The company committed to spend a minimum of $1.26 billion over three years under an amended agreement with a cloud services provider as of September 30, 2024[124] Share Repurchases - The company repurchased 16,081,408 shares of Class A common stock for $981.3 million during the nine months ended September 30, 2024, and authorized an additional $2.0 billion share repurchase program in October 2024[122] Interest and Other Income - Interest expense decreased by $3.4 million (4%) in the three months ended September 30, 2024, compared to the same period in 2023, primarily due to a $4.3 million loss on debt settlement in the prior year[109] - Interest expense increased by $20.0 million (10%) in the nine months ended September 30, 2024, compared to the same period in 2023, driven by a $15.8 million net gain from interest rate swaps in the prior year and increased debt outstanding[109] - Other income, net increased by $6.5 million in the three months ended September 30, 2024, compared to the same period in 2023, primarily due to third-party costs related to term loan refinancing in the prior year[110][111] - Other income, net decreased by $7.6 million (28%) in the nine months ended September 30, 2024, compared to the same period in 2023, driven by lower interest income due to reduced interest rates and cash balances[111] Taxes - Provision for income taxes increased by $32.7 million in the three months ended September 30, 2024, and $63.1 million (367%) in the nine months ended September 30, 2024, compared to the same periods in 2023, driven by higher pre-tax income and global intangible low-taxed income[113] Accounting and Financial Reporting - No material changes to critical accounting policies and estimates during the nine months ended September 30, 2024[125] - Financial statements prepared in accordance with GAAP, requiring estimates and assumptions affecting reported amounts[125] - Estimates based on historical experience and reasonable factors, evaluated on an ongoing basis[125] - No material changes in market risk from the information presented in the Annual Report for the year ended December 31, 2023[128] Apps Portfolio - The portfolio of Apps consists of over 200 free-to-play mobile games across five genres, run by ten studios[68]