AppLovin Corporation (APP) — Company Research

Last Updated: 16 August 2026

AppLovin Corporation is now a pure advertising-software company. It sold its ten mobile-gaming studios to Tripledot Studios on 30 June 2025 and what remains is AXON, a machine-learning engine that decides which advertisement to show which user, and the platform that sells access to it. On the continuing-operations basis, revenue grew 70 per cent in FY2025 to $5,480.7m and adjusted EBITDA margin reached 82 per cent. Twelve months later the story is more complicated: Q2 2026 revenue of $1,923.7m grew 53 per cent but came in narrowly below expectations, and the shares have fallen from an intraday high of $745.61 in December 2025 to a 52-week low of $303.17 in August 2026. On the same day the company also disclosed that the SEC had closed its inquiry with no recommended action. This report sets out the filed numbers. No analyst opinions, no price targets.

1. Company Snapshot

Field	Value
Exchange and ticker	NASDAQ: APP (Class A common stock)
Sector	Technology — digital advertising software and performance marketing
Headquarters	Palo Alto, California, USA
Founded	2012. Listed on NASDAQ in April 2021
CEO / Leadership	Adam Foroughi, Co-founder and Chief Executive Officer. Matt Stumpf is Chief Financial Officer; Giovanni Ge became Chief Technology Officer on 1 July 2026
Employees	Approximately 876 full-time employees. AppLovin runs one of the leanest cost bases in large-cap software
Revenue (FY2025)	$5,480.7m from continuing operations, up 70.0 per cent on the restated FY2024 base
Revenue (TTM to 30 Jun 2026)	$6,829.1m
Operating income (FY2025)	$4,151.9m, a 75.8 per cent operating margin
Net income (FY2025)	$3,333.8m including discontinued operations; $3,433.2m from continuing operations. GAAP diluted EPS $9.75
Market capitalisation	Approximately $105.6bn at the 14 August 2026 close of $315.44
Shares outstanding	335.3m Class A and Class B shares at 30 June 2026 (305.1m Class A, 30.2m Class B)
Dividend	None. AppLovin returns capital through share repurchases
Last reported period	Q2 2026, quarter ended 30 June 2026, released 5 August 2026

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2. Bull Case and Bear Case

Bull Case

• Extraordinary margin structure: FY2025 operating income of $4,151.9m on revenue of $5,480.7m is a 75.8 per cent operating margin, and Q2 2026 adjusted EBITDA margin reached 84 per cent. Very few businesses of this size convert revenue to profit at this rate.
• Growth is still well above 45 per cent: Q2 2026 revenue grew 53 per cent year on year to $1,923.7m and management guided Q3 2026 to $2,055m to $2,085m, implying 46 to 48 per cent growth. Trailing twelve-month revenue of $6,829.1m compares with $4,109m for the equivalent prior period.
• Asset-light cash generation: trailing twelve-month operating cash flow was $4,527.6m against capital expenditure of only a few million dollars, so essentially all operating cash converts to free cash flow. FY2025 free cash flow was $3,952.0m.
• The regulatory cloud lifted: the SEC advised AppLovin on or before 5 August 2026 that it had concluded its inquiry into the company's data-collection practices with no recommended action. That inquiry, opened in October 2025, had been the single largest identifiable overhang.
• Optionality in e-commerce: the self-service AppLovin Ads platform was opened to the public in June 2026 after a referral-only period, giving direct-response advertisers outside mobile gaming access to AXON for the first time. Management sizes this addressable market as several times the core gaming ad business.

Bear Case

• The growth engine showed its first crack: Q2 2026 revenue missed consensus of roughly $1.94bn, and management attributed the shortfall to weaker-than-usual AI model improvement during the quarter. That is an admission that revenue depends on the cadence of internal model upgrades rather than on a durable contracted base.
• Severe multiple compression already under way: the shares fell from an intraday high of $745.61 in December 2025 to $303.17 in August 2026, roughly 59 per cent, with a fall of about 16 to 20 per cent on the Q2 print alone. Enterprise value to trailing EBITDA of roughly 19.6x is far below where the stock traded through 2025.
• Single-product concentration: after the Apps divestiture AppLovin reports one operating segment. There is no second business to cushion a stumble in AXON's performance, and no disclosed breakdown of revenue by advertiser vertical to let outsiders track the e-commerce transition.
• Platform dependency: the business runs on inventory and identifiers governed by Apple's and Google's operating-system and store policies. A change in either company's advertising or privacy rules is outside AppLovin's control and can reset the model's inputs.
• Litigation has not gone away with the SEC inquiry: a securities class action in the Northern District of California covering purchasers between 7 November 2024 and 27 March 2025 remains unresolved, and a Dutch privacy group filed a separate class action in May 2026 alleging unlawful data collection including the data of approximately 1.5 million children.

3. Business Segments

Following the disposal of the Apps business on 30 June 2025, AppLovin states in its FY2025 annual report that it operates as a single operating and reportable segment. The table below sets out the continuing business and the divested one so the change of basis is visible.

Segment / category	% of revenue	What it is
Advertising (sole reportable segment)	100 per cent of FY2025 continuing-operations revenue of $5,480.7m	The AXON machine-learning engine plus the platform that sells access to it: user acquisition, monetisation and measurement for app developers and, increasingly, direct-response e-commerce advertisers. AppLovin does not publish a further breakdown of this revenue by advertiser vertical or geography.
Apps and mobile gaming (divested 30 June 2025)	Nil from 1 July 2025; presented as discontinued operations in FY2024 and FY2025	Ten owned mobile-gaming studios including Machine Zone, Belka Games, PeopleFun and Lion Studios, sold to Tripledot Studios for $400.0m in cash plus equity representing approximately 20 per cent of Tripledot's fully diluted share capital.

4. Business Model and Moat

How it makes money. AppLovin sells advertising placements on behalf of advertisers and takes a share of the spend it directs. Advertisers set a return-on-ad-spend target, AXON decides which impressions to buy and at what price to hit it, and AppLovin earns on the volume that flows through. Because the marginal cost of serving one more advertiser is close to zero, incremental revenue drops to profit at an unusually high rate. That is why FY2025 revenue of $5,480.7m produced $4,151.9m of operating income while total costs and expenses were only $1,328.8m.

What protects it. The moat is a data flywheel rather than a contract. AXON improves as it observes more auctions and more downstream conversion outcomes, and the better it performs the more budget advertisers route through it, which generates more observations. Competitors cannot buy this dataset; they have to accumulate it. AppLovin's long history as a mobile-gaming publisher gave it a privileged view of in-app behaviour that seeded the model.

Why the divestiture mattered. Owning studios put AppLovin in competition with its own advertising customers and tied up capital in hit-driven content. Selling them in June 2025 removed the conflict, removed roughly $1.4bn of low-margin revenue, and lifted the reported operating margin from 19.7 per cent in FY2024 on a total-company basis to the mid-seventies on a continuing-operations basis.

Capital allocation. There is no dividend. AppLovin repurchased 6.4m shares for approximately $2.58bn during FY2025 and a further 1.1m shares for approximately $551.3m in Q2 2026, and share count has fallen from 340.0m at the end of FY2024 to 335.3m at 30 June 2026 despite continued equity compensation. Long-term debt has been held broadly flat at approximately $3.5bn.

5. Financial Health

All figures below come from AppLovin's annual reports on Form 10-K and its quarterly earnings releases. Dollar amounts are in millions unless stated.

Fiscal Year	Revenue ($m)	YoY %	GAAP EPS	Adjusted EPS	Dividend/share	Long-term debt (YE)
FY2021§	2,793.1	—	$0.09	$0.09†	Nil	$3,201.8m
FY2022§	2,817.1	+0.9%	$(0.52)	$(0.52)†	Nil	$3,178.4m
FY2023§	3,283.1	+16.5%	$0.98	$0.98†	Nil	$2,905.9m
FY2024‡	3,224.1	+75.1%‡	$4.53	$4.53†	Nil	$3,509.0m
FY2025‡	5,480.7	+70.0%	$9.75	$9.75†	Nil	$3,513.0m

§ Revenue for FY2021, FY2022 and FY2023 is total-company revenue as originally filed, including the Apps business.
‡ Revenue for FY2024 and FY2025 is continuing operations only, the Apps business having been sold on 30 June 2025 and reclassified to discontinued operations. On the same restated basis FY2023 continuing-operations revenue was $1,841.8m, which is the base used for the FY2024 growth rate of 75.1 per cent shown above. The apparent decline from FY2023 to FY2024 in the revenue column is a change of accounting presentation, not a fall in the advertising business.
† AppLovin does not report an adjusted earnings per share measure; its headline non-GAAP metric is adjusted EBITDA. GAAP diluted EPS is repeated in the Adjusted EPS column so the table remains comparable. FY2024 and FY2025 continuing-operations diluted EPS were $4.56 and $10.04 respectively.

Quarter / Half	Revenue ($m)	Adjusted EPS	GAAP EPS
Q2 2026 (to 30 Jun 2026)	1,923.7	$3.76†	$3.76
Q1 2026	1,842.4	$3.56†	$3.56
Q4 2025	1,657.9	$3.24†	$3.24
Q3 2025	1,405.0	$2.45†	$2.45
Q2 2025	1,258.8	$2.39†	$2.39
FY2025 total	5,480.7	$9.75†	$9.75

Adjusted EBITDA, the measure management guides on, was $1,613.8m in Q2 2026 against $1,018.3m a year earlier, an increase of 58 per cent, with margin rising from 81 to 84 per cent. Q2 2026 free cash flow was $863.3m and net income $1,266.5m.

Cash flow and balance sheet, twelve months to 30 June 2026: operating cash flow $4,527.6m, capital expenditure negligible at a few million dollars, depreciation and amortisation $134.1m. At 30 June 2026 the balance sheet carried $3,515.1m of long-term debt with no current portion, $3,053.3m of cash and cash equivalents and no material marketable securities, total assets of $8,269.1m and stockholders' equity of $3,163.0m. Net debt was therefore approximately $462m, roughly a tenth of one year's EBITDA.

6. Valuation Metrics

Raw metrics, August 2026. Not opinions on whether the stock is cheap or expensive.

Metric	Value
Market cap	Approximately $105.6bn (334.7m Class A and Class B shares at the 14 August 2026 close of $315.44). Note that quoted market caps from earlier in August, in the $131bn to $140bn range, predate the post-results fall.
Trailing P/E (GAAP)	Approximately 24.3x ($315.44 divided by trailing twelve-month diluted EPS of $13.01). On continuing operations the trailing EPS is the same $13.01, so no adjusted-earnings variant is materially different.
P/E (forward)	Approximately 15.0x on consensus forward earnings per share of about $21.00
P/S (TTM)	15.5x (market cap $105.6bn divided by trailing twelve-month revenue of $6,829.1m)
Enterprise value	Approximately $106.0bn (market cap $105.6bn plus long-term debt $3,515.1m, there being no current portion, less cash and cash equivalents of $3,053.3m, per the 30 June 2026 balance sheet). AppLovin holds no material marketable securities.
EV/EBITDA (TTM)	Approximately 19.6x (enterprise value $106.0bn divided by trailing twelve-month EBITDA of $5,422.5m; EBITDA is trailing operating income of $5,288.5m plus depreciation and amortisation of $134.1m from the cash flow statement). Note this is GAAP EBITDA and runs about 17 per cent below the company's own adjusted EBITDA, which adds back share-based compensation.
P/FCF	Approximately 23.3x (market cap $105.6bn divided by trailing twelve-month free cash flow of approximately $4,522m; free cash flow is operating cash flow of $4,527.6m less capital expenditure of roughly $6m, AppLovin being almost entirely asset-light)
52-week high	$745.61 intraday in December 2025 (highest closing price $733.60 on 22 December 2025)
52-week low	$303.17 intraday in August 2026 (lowest closing price $303.76 on 12 August 2026)
Short interest (% of float)	Approximately 4.1 per cent — 11.9m shares short against a free float of about 254.3m shares, settlement date 31 July 2026, down slightly from 12.1m shares the prior month
Days to cover	Approximately 1.9 days on average daily volume, same settlement date

7. What Are They Building

Self-service at scale. AppLovin Ads was opened to the general public in June 2026, removing the referral gating that had limited access through the first half of the year. The intent is to let e-commerce and direct-to-consumer advertisers onboard themselves rather than through a managed-service relationship, which is the only way the advertiser count can grow faster than headcount.

Creative automation. The stated bottleneck in the self-service funnel is producing enough advertising creative, with roughly 57 per cent of self-service leads converting to live campaigns as at mid-2026. An AI interactive landing-page generator has shipped, and a generative video-advertisement tool was in final testing during 2026.

AXON model cadence. Management's explanation for the Q2 2026 revenue shortfall was that model improvements landed more slowly than usual during the quarter, with a stronger upgrade deployed immediately after quarter-end. Q3 2026 guidance explicitly builds in higher AI training and inference compute cost, which is the clearest signal yet that AppLovin intends to spend more on model capability rather than harvest margin.

Advertiser mix shift. The strategic objective is to move revenue mix away from mobile gaming, where AppLovin already has high share, toward general e-commerce, where it has very little. AppLovin does not disclose the split, so progress has to be inferred from total revenue growth and management commentary rather than measured directly.

8. Competitive Landscape

AppLovin competes with independent demand-side platforms for direct-response budget and, indirectly, with the walled gardens that absorb most of the world's performance advertising. Market capitalisations are as at the 14 August 2026 close.

Peer	Market cap (August 2026)	Key 2025 metric
The Trade Desk (NASDAQ: TTD)	Approximately $6.6bn	The largest independent demand-side platform, trading on 2.2x trailing revenue after a fall of roughly three-quarters over twelve months from a 52-week high of $56.39. Short interest stood at approximately 20.7 per cent of float at the 31 July 2026 settlement date, the highest in this peer group.
Unity Software (NYSE: U)	Approximately $20.4bn	Trailing twelve-month revenue of approximately $2.03bn with a trailing loss of $1.36 per share; trailing EBITDA of approximately $146m. Unity's Grow advertising unit is AppLovin's most direct competitor for mobile-game user acquisition budget.
Meta Platforms (NASDAQ: META)	Approximately $1,503bn	Q2 2026 advertising revenue of $59.36bn, up 27 per cent year on year. Operating margin compressed to 31 per cent from 43 per cent on a $2.40bn youth-litigation charge and $1.18bn of severance. Guided 2026 capital expenditure of $125bn to $145bn.
Alphabet (NASDAQ: GOOGL)	Approximately $4,230bn	Q2 2026 group revenue of $119.80bn, up 24.2 per cent year on year, with Search up 17 per cent and YouTube advertising up 13 per cent. Google's app-install and performance-max products compete for the same advertiser budgets AppLovin targets.

The structural context matters. Independent forecasts published in 2026 have Meta overtaking Google in global digital advertising revenue for the first time, at roughly $243.5bn against $239.5bn. Both walled gardens are an order of magnitude larger than AppLovin and both are expanding automated, model-driven buying of exactly the kind AXON provides. AppLovin's counter-argument is inventory: it reaches in-app placements the walled gardens do not own.

9. Insider Activity

Adam Foroughi co-founded AppLovin in 2012 and remains Chief Executive Officer. He is also the dominant insider seller, disposing of shares through 2026 while retaining a stake of roughly 4.6m shares across direct holdings and family trusts. AppLovin's dual-class structure means Class B shares carry super-voting rights, so control is not materially diluted by Class A sales. The disposals below were made at prices between roughly $454 and $499, well above the $315.44 close on 14 August 2026.

Name	Date	Type	Shares	Price	Value	Plan Type
Adam Foroughi (Co-founder and CEO)	12 Jun 2026	Sale of Class A	22,544	Weighted average approximately $490 to $499	Approximately $11.16m	Not stated in filing summary
Adam Foroughi (Co-founder and CEO)	10 Jun 2026	Sale of Class A	29,457	Weighted average approximately $496	Approximately $14.61m	Not stated in filing summary
Adam Foroughi (Co-founder and CEO)	12 Mar 2026	Sale of Class A	40,704	Weighted average approximately $453.80 to $468.33	Approximately $18.7m	Not stated in filing summary

Post-transaction, Foroughi's reported direct holding was approximately 2,349,628 Class A shares, with a further 780,519 and 1,530,519 shares held through The WHK Trust and The OD Trust respectively, for which beneficial ownership is disclaimed. Additional Form 4 filings were made by other AppLovin insiders during 2026 but the filing summaries did not identify the individuals or amounts; readers wanting the complete record should consult SEC EDGAR for CIK 0001751008. No open-market purchases by insiders were identified in 2026.

10. Key Risks

• Model-dependent revenue: management attributed the Q2 2026 revenue shortfall directly to slower-than-usual AXON model improvement during the quarter. Revenue is therefore a function of research productivity on a quarterly cadence, which is inherently difficult to forecast and impossible for outsiders to verify in advance.
• Single-segment concentration: after the Apps divestiture there is one reportable segment and no published breakdown by advertiser vertical, geography or customer. A stumble in the advertising platform has nothing to offset it and limited disclosure through which to diagnose it.
• Platform and privacy policy dependency: the business relies on advertising identifiers and in-app inventory governed by Apple's and Google's operating-system rules. Prior industry-wide changes such as App Tracking Transparency reset the economics of mobile advertising once already, and AppLovin has no control over the next such change.
• Unresolved securities litigation: the class action in the Northern District of California covering purchases between 7 November 2024 and 27 March 2025 alleges inflated revenue disclosures and remains undecided, with the motion to dismiss fully briefed. An adverse ruling would extend disclosure and cost exposure even though the SEC closed its own inquiry without action.
• European privacy exposure: a Dutch advocacy group filed a class action in May 2026 alleging unlawful collection and trading of personal data, including that of approximately 1.5 million children. EU data-protection claims carry both financial and operational remedies.
• Execution risk on the e-commerce pivot: the growth narrative depends on advertisers outside mobile gaming adopting AXON at scale, but the self-service funnel converted only about 57 per cent of leads to live campaigns as at mid-2026 and creative production remains the stated bottleneck.
• Valuation volatility: the shares fell roughly 16 to 20 per cent on a revenue miss of roughly $16m against consensus, and are down approximately 59 per cent from the December 2025 intraday high. A business valued on growth durability re-rates violently on small deviations.
• Key-person concentration: Adam Foroughi is co-founder, Chief Executive and the architect of the AXON strategy, and holds super-voting Class B stock. Succession is not addressed in public disclosure.

11. Recent Developments

• 27 Jan 2026 — AppLovin demands a retraction from short-seller CapitalWatch. The company publicly described the report as conspiratorial. It followed short reports from Fuzzy Panda and Culper Research in February 2025 and Muddy Waters in March 2025.
• 11 Feb 2026 — FY2025 results published. Continuing-operations revenue of $5,480.7m, up 70 per cent, operating income $4,151.9m, adjusted EBITDA $4,512.5m at an 82 per cent margin, and net income of $3,333.8m.
• 20 Feb 2026 — SEC confirms its inquiry into AppLovin is active and ongoing. The inquiry, opened in October 2025, followed a sealed whistleblower complaint and examined data-collection practices alleged to breach platform-partner agreements.
• 12 Mar 2026 — CEO Adam Foroughi sells 40,704 Class A shares. Executed at a weighted average of approximately $453.80 to $468.33 per share.
• 13 May 2026 — Q1 2026 results published. Revenue of $1,842.4m and GAAP diluted EPS of $3.56, reported while the SEC inquiry was still open.
• 29 May 2026 — Dutch privacy class action filed. A Netherlands advocacy group alleged unlawful tracking and data trading, including data on approximately 1.5 million children.
• 30 Jun 2026 — AppLovin Ads self-service platform opened to the public. Referral gating removed, giving e-commerce and other non-gaming advertisers direct access to AXON.
• 01 Jul 2026 — Giovanni Ge appointed Chief Technology Officer.
• 01 Aug 2026 — Victoria Valenzuela, Chief Administrative and Legal Officer, retires.
• 05 Aug 2026 — Q2 2026 results and SEC clearance. Revenue of $1,923.7m, up 53 per cent but below consensus of roughly $1.94bn; adjusted EBITDA $1,613.8m at an 84 per cent margin; GAAP diluted EPS $3.76. On the same call the Chief Financial Officer disclosed that the SEC had concluded its inquiry with no recommended action. The shares fell approximately 16 to 20 per cent.
• 12 Aug 2026 — Shares set a 52-week low. The stock touched $303.17 intraday and closed at $303.76, roughly 59 per cent below the December 2025 intraday high of $745.61.

12. Key Dates to Watch

• 11 Nov 2026 — Q3 2026 results, after market close. Guidance is revenue of $2,055m to $2,085m, implying 46 to 48 per cent year-on-year growth, and adjusted EBITDA of $1,710m to $1,740m at roughly an 83 per cent margin.
• Expected Feb 2027 — Q4 and FY2026 results, the first full year on a clean continuing-operations basis with no Apps comparative distortion, plus initial FY2027 guidance.
• Expected May 2027 — Q1 2027 results, the first quarter that will show a full year of the publicly available self-service platform in the comparative base.
• TBD — ruling on the motion to dismiss in the Northern District of California securities class action, fully briefed since late 2025.
• TBD — first procedural hearing in the Dutch privacy class action filed in May 2026.
• TBC — further share repurchase authorisations. The board increased the programme by $3.2bn in October 2025 and roughly $1.8bn of authorisation was reported as remaining after the Q2 2026 buyback.

Quarterly reporting dates are confirmed by AppLovin roughly four weeks in advance on its investor relations site. Track the release calendar alongside the macro schedule on the ChartsView Economic Calendar, and discuss the numbers with other members in the ChartsView Forum.

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