Core Insights - AppLovin has shown strong performance in the mobile app advertising sector, with significant revenue growth and recovery from stock price declines due to short-seller claims [2][3][4] Financial Performance - AppLovin's advertising platform revenue grew by 71% year-over-year in Q1 2025, reaching $1.16 billion [3] - Overall revenue increased nearly 40% year-over-year, with adjusted EBITDA rising close to 83% [3] - The company's revenues rose from $3.6 billion to $5.1 billion over the past 12 months, reflecting a 41.6% increase [6] - Quarterly revenues increased by 40.3% to $1.5 billion compared to $1.1 billion a year prior [6] Profitability Metrics - AppLovin's operating income over the last four quarters was $2.4 billion, resulting in an operating margin of 46.5% [7] - The operating cash flow for the same period was $2.5 billion, indicating an operating cash flow margin of 49.4% [7] - Net income for the last four quarters was $1.9 billion, reflecting a net income margin of 37.4% [7] Valuation Comparisons - AppLovin has a price-to-sales (P/S) ratio of 25.1, significantly higher than the S&P 500's 3.0 [5] - The price-to-free cash flow (P/FCF) ratio stands at 50.8 compared to 20.5 for the S&P 500 [5] - AppLovin's price-to-earnings (P/E) ratio is 67.1, while the S&P 500's is 26.4 [5] Financial Stability - AppLovin reported a debt figure of $3.7 billion against a market capitalization of $124 billion, resulting in a debt-to-equity ratio of 2.9% [8] - Cash and cash equivalents amount to $551 million of the total assets of $5.7 billion, leading to a cash-to-assets ratio of 9.7% [8] Market Performance and Volatility - AppLovin's stock has shown volatility, with a 57% drop from early February 2025 peaks due to short-seller claims, but has since recovered and is up approximately 7% year-to-date in 2025 [2][4] - The stock has underperformed compared to the S&P 500 during recent economic downturns, indicating challenges in downturn resilience [9][11] Overall Assessment - AppLovin exhibits extremely strong growth and profitability, with very strong financial stability, but weak downturn resilience, making it a challenging investment choice [12][11]