AppLovin Q4 Earnings Call Highlights

Core Viewpoint - AppLovin's management emphasizes that competition and AI advancements will not diminish the value of its platform, but rather enhance content supply and discovery, leading to increased opportunities for the company [1][3]. Financial Performance - AppLovin reported Q4 revenue of $1.66 billion, a 66% year-over-year increase, with adjusted EBITDA of $1.4 billion, reflecting an 84% margin [6][7]. - Full-year revenue reached $5.48 billion, up 70% year-over-year, with adjusted EBITDA of $4.51 billion, an 87% increase [8]. - Free cash flow for Q4 was $1.31 billion, up 88% year-over-year, and for the full year, it totaled $3.95 billion, a 91% increase [8]. E-commerce Initiative - AppLovin is expanding its e-commerce push with a self-service platform currently in a referral-only phase, targeting general availability in H1 2026 [4][11]. - The e-commerce business has shown significant growth, with some customers experiencing a "sizable uplift" in spending as models improve [11][13]. Competitive Landscape - Management asserts that higher bid density in the MAX auction can expand the overall advertising market, benefiting publishers and supporting ecosystem growth [2][5]. - AppLovin's MAX auction is viewed as a foundational component of the mobile gaming ecosystem, with the company not fearing competition from larger players like Google LevelPlay [2][5][18]. Capital Returns - The company has been actively repurchasing shares, buying back approximately 800,000 shares for $482 million in Q4 and 6.4 million shares for $2.58 billion over the full year [9]. - The share repurchase program is funded entirely by free cash flow, with about $3.28 billion remaining under its authorization [9]. Future Outlook - AppLovin plans to focus on model improvement, expanding advertiser diversity, and a controlled ramp of self-service and marketing initiatives, particularly leveraging AI-driven creative generation [19].