AppLovin Corporation (NASDAQ:APP) Q3 2023 Results Conference Call November 8, 2023 5:00 PM ET Company Participants David Hsiao - Head, IR Adam Foroughi - Co-Founder, CEO and Chairperson Herald Chen - President and CFO Conference Call Participants Ralph Schackart - William Blair Clark Lampen - BTIG Franco Granda - D.A. Davidson Martin Yang - OpCo Matt Cost - Morgan Stanley Omar Dessouky - BofA David Hsiao Welcome, everyone, to the AppLovin Earnings Call for the Third Quarter ended September 30, 2023. I’m Dav ...

Revenue Performance - Revenue for the three months ended September 30, 2023 increased by 21% to $864.3 million compared to $713.1 million in the same period in 2022[133] - Revenue for the nine months ended September 30, 2023 increased by 10% to $2.33 billion compared to $2.11 billion in the same period in 2022[133] Software Platform Revenue - Software Platform Revenue for the three months ended September 30, 2023 increased by 65% to $504.5 million compared to $306.6 million in the same period in 2022[141] - Software Platform Revenue for the nine months ended September 30, 2023 increased by 70% to $1.27 billion compared to $743.0 million in the same period in 2022[141] Apps Revenue - Apps Revenue for the three months ended September 30, 2023 decreased by 11% to $359.8 million compared to $406.5 million in the same period in 2022[141] - Apps Revenue for the nine months ended September 30, 2023 decreased by 22% to $1.06 billion compared to $1.37 billion in the same period in 2022[141] Cost of Revenue - Cost of revenue for the three months ended September 30, 2023 decreased by 12% to $265.0 million compared to $301.0 million in the same period in 2022[143] - Cost of revenue for the nine months ended September 30, 2023 decreased by 11% to $785.6 million compared to $886.7 million in the same period in 2022[143] Net Income - Net income for the three months ended September 30, 2023 was $108.6 million compared to $23.7 million in the same period in 2022[133] - Net income for the nine months ended September 30, 2023 was $184.5 million compared to a net loss of $113.4 million in the same period in 2022[133] Operating Expenses - Sales and marketing expenses increased by $15.6 million (8%) in Q3 2023 compared to Q3 2022, primarily due to a $17.1 million increase in personnel-related expenses[144] - Research and development expenses increased by $37.2 million (31%) in Q3 2023 compared to Q3 2022, driven by a $48.9 million increase in stock-based compensation[145] - General and administrative expenses decreased by $2.8 million (6%) in Q3 2023 compared to Q3 2022, primarily due to a $5.0 million decrease in acquisition-related expenses[146] Interest and Debt - Interest expense and loss on settlement of debt increased by $30.0 million (62%) in Q3 2023 compared to Q3 2022, due to higher interest rates on outstanding debt[147] - Interest income and other, net increased by $0.5 million (54%) in Q3 2023 compared to Q3 2022, driven by a $5.0 million increase in interest income on cash and cash equivalents[148] - The company refinanced $1.7 billion in term loans in August 2023, with a new maturity date of August 16, 2030 and an interest rate floor of 50 basis points for Term SOFR Loans[159] - As of September 30, 2023, $418.7 million was available to be drawn from the revolving credit facility[159] - The company's interest rate risk management strategy includes pay-fixed receive-variable interest rate swap agreements, with a hypothetical 100 basis point change in interest rates not having a material impact on cash interest expense[164] Taxes - Provision for income taxes increased by $22.6 million (103%) in Q3 2023 compared to Q3 2022, primarily due to higher pre-tax book income[149] Adjusted EBITDA - Software Platform Adjusted EBITDA increased by $173.9 million (91%) in Q3 2023 compared to Q3 2022, driven by a $197.9 million increase in Software Platform revenue[151] - Apps Adjusted EBITDA decreased by $12.2 million (18%) in Q3 2023 compared to Q3 2022, primarily due to a $46.7 million decrease in Apps Revenue[151] - Software Platform Adjusted EBITDA increased by $233.1 million (37%) in the nine months ended September 30, 2023, driven by a $522.3 million increase in Software Platform revenue[152] Cash Flow and Liquidity - Cash and cash equivalents stood at $332.5 million as of September 30, 2023, sufficient to cover anticipated needs for the next 12 months[153] - Net cash provided by operating activities for the nine months ended September 30, 2023 was $717.5 million, compared to $249.6 million in the same period in 2022[155] - Net cash used in investing activities for the nine months ended September 30, 2023 was $71.0 million, primarily due to $51.8 million in earn-out payments and $16.9 million in purchases of non-marketable equity securities[156] - Net cash used in financing activities for the nine months ended September 30, 2023 was $1,392.3 million, primarily due to $1,153.6 million in stock repurchases and $490.5 million in debt repayments[157] - The company repurchased 46,665,285 shares of Class A common stock for $1,153.6 million during the nine months ended September 30, 2023[158]

AppLovin Corporation (NASDAQ:APP) Q2 2023 Earnings Conference Call August 9, 2023 5:00 PM ET Company Participants David Hsiao - Head, Investor Relations Adam Foroughi - Founder, CEO and Chairperson Herald Chen - President and CFO Conference Call Participants Ralph Schackart - William Blair Franco Granda - D.A. Davidson Martin Yang - OpCo Bernie McTernan - Needham David Karnovsky - JPMorgan Luke Mott - Wolfe Research Operator Please standby, we are about to begin. David Hsiao Welcome everyone to the AppLovin ...

Financial Performance - Revenue for the three months ended June 30, 2023, declined 3% year-over-year to $750.2 million, down from $776.2 million in the same period of 2022[94] - Net income for the three months ended June 30, 2023, was $80.4 million, compared to a net loss of $21.8 million in the same period of 2022[94] - Adjusted EBITDA for the three months ended June 30, 2023, was $333.5 million, an increase from $269.7 million in the same period of 2022, resulting in an Adjusted EBITDA margin of 44.5%[106] - Total revenue for the three months ended June 30, 2023, was $750.165 million, a decrease of 3% compared to $776.231 million in the same period of 2022[133] - Software Platform Revenue increased by $88.5 million, or 28%, for the three months ended June 30, 2023, primarily due to a 38% increase in net revenue per installation[134] - In-App Purchases Revenue decreased by $69.6 million, or 23%, for the three months ended June 30, 2023, driven by a 17% decrease in the volume of in-app purchases[134] - Total costs and expenses for the three months ended June 30, 2023, were $618.837 million, down from $722.876 million in the same period of 2022[126] - The effective tax rate for the three months ended June 30, 2023, was 16.1%, compared to 226.5% in the same period of 2022[131] Cash Flow and Investments - Free Cash Flow for the six months ended June 30, 2023, was $503.7 million, significantly up from $62.4 million in the same period of 2022[94] - Net cash provided by operating activities for the six months ended June 30, 2023, was $518,456 thousand, compared to $75,092 thousand for the same period in 2022, indicating a significant increase[108] - Net cash used in investing activities was $(55.2) million for the six months ended June 30, 2023, significantly lower than $(1,351.7) million for the same period in 2022[152] - The company repurchased 30,880,452 shares of Class A common stock for an aggregate amount of $579.8 million during the six months ended June 30, 2023[154] - The company has $3.2 billion of outstanding indebtedness, with interest rate swap agreements fixing borrowing rates on a notional amount of $1.8 billion[160] User Engagement and Market Focus - Monthly Active Payers (MAPs) averaged 1.7 million for the three months ended June 30, 2023, down from 2.3 million in the same period of 2022[102] - Average Revenue Per Monthly Active Payer (ARPMAP) increased to $46 for the three months ended June 30, 2023, compared to $43 in the same period of 2022[102] - In Q2 2023, 42% of revenue from Software Platform and IAA Revenue clients was generated from outside the United States, highlighting the company's global market focus[113] - The company continues to focus on acquiring new clients globally, with significant opportunities outside of mobile gaming as its Core Technologies are relevant to the broader mobile app ecosystem[113] Strategic Initiatives - The company plans to continue expanding its portfolio of apps and enhancing user engagement to drive future revenue growth[94] - The company rolled out its latest AI-based advertising engine, AXON 2.0, in Q2 2023, which improved AppDiscovery performance and returns for advertisers[111] - The company plans to continue investing in research and development to enhance its Core Technologies and Software Platform, expecting R&D expenses to increase in absolute dollars over the long term[122] - The company has performed a strategic review of its Apps portfolio, resulting in divestitures and a focus on optimizing cost structures, which has improved Apps Adjusted EBITDA margin[114] Economic and Regulatory Environment - Current economic conditions, including inflation and rising interest rates, have led to cautious spending from clients, impacting the mobile gaming and app market[118] - The company anticipates that changes in third-party platform policies, such as those from Apple and Google, could adversely affect its business and results of operations[117] Expenses and Cost Management - Sales and marketing expenses decreased by $39.7 million, or 17%, in Q2 2023 compared to Q2 2022, primarily due to a $38.7 million reduction in user acquisition costs[138] - Research and development expenses for the three months ended June 30, 2023, were $137.424 million, slightly up from $141.108 million in the same period of 2022[126] - General and administrative expenses decreased by $15.3 million, or 34%, in Q2 2023 compared to Q2 2022, primarily due to a $13.7 million reduction in personnel-related expenses[141] - Interest expense increased by $14.5 million, or 40%, in Q2 2023 compared to Q2 2022, primarily due to higher interest rates on outstanding debt[142] - Interest income and other, net increased by $14.9 million in Q2 2023 compared to Q2 2022, driven by a $10.4 million increase in interest income from cash and cash equivalents[143] - Provision for income taxes decreased by $23.7 million, or 61%, in Q2 2023 compared to Q2 2022, primarily due to lower non-deductible stock-based compensation expenses[144]

AppLovin Corporation (NASDAQ:APP) Q1 2023 Earnings Conference Call May 10, 2023 5:00 PM ET Company Participants David Hsiao - Head of IR Adam Foroughi - CEO & Co-Founder Herald Chen - President & CFO Conference Call Participants Martin Yang - Oppenheimer Ralph Schackart - William Blair David Pang - Stifel Franco Granda - D.A. Davidson David Hsiao Welcome, everyone, to the AppLovin earnings call for the first quarter ended March 31, 2023. I'm David Hsiao, Head of Investor Relations. Joining me today to discu ...

Table of contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, par value $0.00003 per share APP The Nasdaq Stock Market LLC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the tra ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-40325 AppLovin Corporation (Exact name of registrant as specified in its charter) Delaware 45-3264542 (State or other jurisdiction of inc ...

Financial Data and Key Metrics - Q4 revenue and EBITDA came in at the high end of guidance, with Software Platform revenue growing 24% YoY [12] - Full-year 2022 revenue was $2.8 billion, with over $1 billion in EBITDA, representing a 38% margin [12] - Q1 2023 guidance indicates flat revenue and EBITDA compared to Q4 2022 [12] - Free cash flow in Q4 was $132 million, with total cash exceeding $1 billion [15] - Revenue per install for ALX and AppDiscovery increased 46% YoY, while the number of installs grew 24% [14] Business Line Performance - Software Platform grew 24% YoY in Q4, driven by AppDiscovery and ALX [12] - The company has optimized its apps portfolio, reducing underperforming assets and focusing on 11 remaining studios [10] - A $128 million net loss charge was taken for divestitures and closures, including $100 million in Q4 [11] Market Performance - The Connected TV (CTV) space is identified as a significant growth opportunity, with the company extending its marketing solutions to CTV devices [7] - The company is investing in innovative products to help carriers and OEMs monetize their users, as the mobile market becomes saturated [8] Strategic Direction and Industry Competition - The company is focused on long-term growth, with key initiatives including the development of AXON 2, leveraging advancements in AI technologies [7] - The CTV market is seen as a faster-growing category than the current mobile advertising market, with potential for significant expansion [7] - The company is simplifying its KPIs, removing metrics like SPEC and TSTV, and focusing on revenue per install and install numbers [13] Management Commentary on Operating Environment and Future Outlook - Management emphasized the importance of relevant advertising in funding free digital content, despite economic slowdowns and privacy challenges [6] - The company remains optimistic about the future, with a strong team and culture, and a focus on long-term growth [5] - The rollout of AXON 2 is expected to have a significant impact on the business, improving efficiency and benefiting advertisers [26] Other Important Information - The company has over $1 billion in cash and is focused on free cash flow, with $260 million in EBITDA and $132 million in free cash flow in Q4 [15] - Share buybacks in 2022 totaled $340 million, but no shares were repurchased in Q4 as the company assessed its capital allocation policy [16] Q&A Session Summary Question: How is the company addressing the Connected TV market? [18] - The company is leveraging its performance marketing expertise to bring full-stack advertising solutions to CTV, combining its DSP and SSP capabilities [19][20][23] Question: What is the expected impact of AXON 2? [25] - AXON 2 is expected to improve efficiency and scale for advertisers, with a gradual rollout expected in 2023 [26] Question: How is the company managing its apps portfolio? [31] - The company has optimized its portfolio, focusing on 11 studios with growth potential, and expects margins to stabilize in the mid-teens [34][36] Question: What is the competitive landscape in the advertising market? [38] - The company remains a leader in mobile marketing, with competition driving improvements in algorithms and targeting, which could benefit the entire category [40][41] Question: How does the company view the DOJ lawsuit against Google? [43] - The company has a strong partnership with Google and does not expect any negative impact from the lawsuit [44] Question: What is the outlook for in-app purchase behavior and advertising? [49] - The company believes that improvements in marketing technologies and targeting will drive growth in in-app purchases, with stability already evident in the market [50][51] Question: How is the company expanding beyond mobile gaming? [59] - The company is exploring opportunities in CTV and other verticals, leveraging its data engine and marketing platform [62][63] Question: What is the impact of hyper-casual game publishers reducing ad spend? [66] - The company has a diverse advertiser base and does not expect significant impact from any single category, with stable performance in Q4 and Q1 guidance [68] Question: How is the new game release environment changing? [74] - The bar for new game releases has increased, with developers focusing on more innovative concepts and hybrid monetization models [75][77] Question: What is the trend in Software Platform client revenue? [80] - The company has seen steady growth in Software Platform clients, with net dollar retention exceeding 160%, and is simplifying its reporting metrics to better reflect business performance [85]

AppLovin Corporation (NASDAQ:APP) Q3 2022 Earnings Conference Call November 9, 2022 5:00 PM ET Company Participants Ryan Gee - Head of Investor Relations and Strategic Finance Adam Foroughi - Chief Executive Officer and Co-Founder Herald Chen - President and Chief Financial Officer Conference Call Participants Tim Nollen - Macquarie Youssef Squali - Truist Securities Eric Sheridan - Goldman Sachs Clark Lampen - BTIG Matthew Cost - Morgan Stanley Stephen Ju - Credit Suisse Omar Dessouky - Bank of America Fra ...