Core Viewpoint - The United States Securities and Exchange Commission (SEC) is investigating AppLovin over allegations of violating service agreements with platform partners to enhance targeted advertising practices [1][5]. Group 1: SEC Investigation Details - The SEC's investigation is being conducted by enforcement officials focused on cyber and emerging technologies [2]. - The investigation was prompted by a whistleblower complaint and multiple short-seller reports alleging AppLovin's misuse of proprietary identifiers from other platforms [5]. - The SEC has not yet accused AppLovin or its officials of any wrongdoing, and the extent of the investigation remains unclear [5]. Group 2: AppLovin's Response - AppLovin has declined to comment on the investigation, stating that it typically does not discuss potential regulatory matters [3]. - The company has engaged Alex Spiro, a prominent litigator, to conduct an independent review of recent short report activities and investigate the origins of these reports [4]. - AppLovin's CEO previously described short reports as "littered with inaccuracies" and denied the creation of unauthorized device fingerprints [3][4]. Group 3: Company Background and Market Position - AppLovin assists mobile app developers in user acquisition and advertising sales, with a market valuation exceeding $226 billion as of 2025 [5]. - The company was added to the S&P 500 Index in September 2025, indicating significant growth and market presence [5]. - Allegations against AppLovin include unauthorized tracking of users across different platforms, which is prohibited by Apple's App Store and was restricted by Google until a recent policy change [5].

ToplineAppLovin shares tumbled as the Securities and Exchange Commission launched a probe into alleged data-collection violations tied to targeted ads, according to Bloomberg, erasing about $8.65 billion in wealth held by the company’s top executives and key early investors.CHONGQING, CHINA - MAY 04: In this photo illustration, the logo of AppLovin Corporation is displayed on a smartphone screen, with a stock market chart in the background suggesting recent trading activity, on May 04, 2025. AppLovin is a U ...

Economic Impact of Government Shutdown - Each week of a government shutdown shaves off approximately 025 percentage points from the annualized GDP growth rate during that quarter [4] - A three-week shutdown, the longest seen, could potentially be absorbed within the fourth quarter, resulting in a negligible overall impact [5][6] - A prolonged shutdown could lead to a 1 percentage point reduction in fourth-quarter GDP growth [4] Labor Market Data and Analysis - A government shutdown would suspend data releases from the US Bureau of Labor Statistics (BLS) and cease active data collection [1] - The absence of federal data increases the importance of alternative datasets like ADP data for labor market insights [2] - The Department of Labor could reduce its workforce from approximately 13000 to 3000 employees during a shutdown, with only one employee remaining at the Bureau of Labor Statistics [10] - Data collection during the reference week (containing the 12th of the month) could be significantly impacted, potentially leading to choppy labor surveys and data revisions [11][13] - Mass firings could increase the unemployment rate up to 45% [11] Federal Reserve Policy Implications - A government shutdown could hinder the Federal Reserve's ability to make informed decisions due to the lack of official statistics [7] - The Fed relies on data like the core PCE measure and the unemployment rate for communication and policy decisions, which would be unavailable during a shutdown [8]

BLS Chief's Firing & Institutional Integrity - The market is largely ignoring a red flag in Friday's jobs report, which is problematic because the decision undermines institutional integrity [1][2] - Firing the BLS chief is interpreted as a signal of dissatisfaction with released data, raising concerns about political influence on data collection [4][5] - The BLS faces challenges in data collection, including declining response rates and insufficient incorporation of high-frequency data [3][4] Data Revisions & Economic Insights - Significant downward revisions in job creation data, reaching levels not seen in four years based on three-month moving averages, suggest potential economic problems [2][10] - Bottom-up data from individual retailers can provide valuable insights at turning points, signaling economic weakness before top-down data reflects it [8][9] - Macro data is finally catching up with microdata, leading to changes in expectations regarding the Federal Reserve's actions [11] Federal Reserve & Political Influence - Concerns exist about the increasing and deepening political attacks on the Federal Reserve, potentially impacting its financial integrity [14][15] - Preserving institutional integrity is crucial, differentiating the US from other countries [13]

Core Problem & Solution - AI model commoditization and decreasing compute costs highlight data as the primary bottleneck [1] - The company addresses the data bottleneck by coordinating data collection, labeling, and curation using crypto incentives [4] - Crypto and blockchain technology facilitate the placement of data and IP on an immutable ledger, enabling tracking, attribution, and licensing via smart contracts [7] Competitive Advantage & Market Opportunity - Meta Scale AI's partial acquisition created a vacuum in the AI data space, presenting an opportunity for competitors [6] - The company's decentralized approach allows collaboration with any IP, offering flexibility [15] - The company has already secured contracts, indicating market demand [13] Data Acquisition & Application - The company uses crypto incentives to coordinate data collection on a global scale, compensating contributors with stablecoins or other crypto tokens [6] - The collected data, including egocentric video footage from diverse settings, is crucial for training AI models, such as humanoid robots [9] - Contributors set licensing usage terms on the blockchain, ensuring IP safety [12] Business Model & Demand - The company acts as an agent to secure contracts, connecting data providers with AI model developers [13] - Many organizations are willing to work with the company, some dropping contracts from Scale AI [14][15]

Data Collection and Usage - Social media platforms collect extensive user data, including location, browsing history, contacts, and even health and fitness information [5][6] - Platforms like Facebook can infer sensitive information such as physical address, political and religious beliefs, and sexual orientation [7][8] - Companies are collecting data not just for targeted advertising but to control user behavior and decision-making [27] - Criminals exploit readily available personal data to manipulate individuals, emphasizing that users are targeted, not their devices [23] Security Vulnerabilities and Exploits - Applications with SMS access can be exploited to read and send OTPs, leading to financial losses [12][15] - Criminals are hacking individuals to reach their devices [23] - Even seemingly harmless actions, like a child installing an app for gaming currency, can have severe consequences [22] - User activities across devices linked to the same Gmail account can be tracked and exploited [18] Digital Footprint and Privacy - Individuals leave a unique digital fingerprint based on their internet usage patterns [24] - Google tracks user locations and activities precisely over many years, creating a detailed timeline [10][11] - This data can be used as court-admissible evidence [11] Recommendations - Users should be aware of the permissions granted to applications on their phones [13] - Users can check their Google activity to see what data is being tracked [17] - The industry should recognize that users are products of the data they consume, influencing their thoughts and aspirations [2]

Data Privacy Concerns - The internet's capacity to copy, spread, and retain information without consent poses risks to personal data [16] - Online data never expires, fades, or forgets, potentially resurfacing years later [12] - Social media algorithms can reinforce existing beliefs, potentially distorting perceptions of truth and increasing safety risks [13] Risks to Children - Children are increasingly vulnerable online due to greater access and potential exposure to inappropriate content and targeted manipulation [7][8] - Even child-friendly games can contain inappropriate ads, highlighting the need for ad-free versions and parental awareness [6] - Children may be targeted with personalized ads based on observed behavior, leading to fear and discomfort [5] Personal Security Recommendations - Individuals should be mindful of the information they share online, as even seemingly harmless posts can reveal sensitive details [9][11] - Disabling unnecessary permissions on devices and using two-factor authentication can enhance online security [15] - Open communication with children about their online experiences is crucial for fostering trust and addressing potential issues [15]

Financial Data and Key Metrics Changes - Annual revenue reached a record high of $31.8 million, a 20% increase from 2023, with 97% attributed to data collection [9][22] - Adjusted EBITDA for 2024 was a record $9.4 million, up from $5.2 million in 2023 [9][27] - Non-IFRS gross margin for the full year 2024 grew to 77% from 74.3% in 2023 [23] - IFRS net profit for 2024 increased to $5.8 million from a net loss of $5.6 million in 2023 [26] Business Line Data and Key Metrics Changes - Data collection revenue for Q4 2024 was $7.2 million, a 6.8% increase from Q4 2023 [22] - Data collection revenue for the full year 2024 reached $30.9 million, up 45.2% from $21.3 million in 2023 [22] Market Data and Key Metrics Changes - The data collection segment accounted for 97% of total revenues in both quarterly and annual metrics, up from 80% in 2023 [22] - The company experienced volatility in demand due to competition between AI platforms and traditional websites [12][39] Company Strategy and Development Direction - The company has fully executed its strategic vision to focus solely on data collection, phasing out other activities [8] - Investments were made to expand the IP network and enhance infrastructure to support massive data traffic [14] - The company aims to be a data enabler for AI-driven companies, positioning itself for long-term growth [17][33] Management's Comments on Operating Environment and Future Outlook - Management highlighted a "once in a generation inflection point" due to the AI revolution reshaping the data landscape [14] - The company is navigating a period of adjustment as the industry evolves, with short-term revenue growth expected to be lower [30] - Management emphasized the importance of patience and a long-term approach to capitalize on future opportunities [18] Other Important Information - The company recorded financial income of $300,000 for the full year 2024, compared to a financial expense of $300,000 in 2023 [25] - Shareholders' equity doubled to a record of $26.4 million from $13.2 million on December 31, 2023 [28] Q&A Session Summary Question: Can you describe the period of adjustment as the industry evolves? - Management noted that large companies are approaching them for cooperation, indicating a shift in strategy due to competition between AI platforms and websites [38][39] Question: Is the decline in net retention rate related to customer usage? - Management confirmed that the decline in net retention rate is indeed related to customer usage fluctuations as they reevaluate their strategies [45][46] Question: How has the engagement with a Fortune 200 company evolved? - The company reported increased usage from the Fortune 200 customer, with an annual run rate exceeding $500,000 [48] Question: What is the opportunity with large customers in the future? - Management sees significant potential for both regular and strategic customers, especially those aiming to become major players in AI [51][52] Question: What are the plans for new product launches versus M&A? - The company is focusing on internal development for new products but remains open to acquisitions if unique opportunities arise [57][60]