Akcie AppLovin za měsíc od poslední výsledkové zprávy klesly asi o 6,6 %. Firma ale pro 3. čtvrtletí čeká tržby až 2,085 miliardy USD a upravenou EBITDA až 1,74 miliardy USD.
A month has gone by since the last earnings report for AppLovin (APP - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is AppLovin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
AppLovin Q2 Earnings Beat EstimatesAppLovin reported adjusted earnings of $3.76 per share, surpassing the Zacks Consensus Estimate of $3.72 by 1.08%. Earnings increased 66.4% from $2.26 per share in the year-ago quarter.
The company has now exceeded consensus EPS estimates in each of the past four quarters. However, the magnitude of the latest beat narrowed from the preceding quarter, when earnings of $3.56 per share topped expectations by 4.71%. On a sequential basis, second-quarter EPS increased 5.6%.
Revenues reached $1.92 billion, up approximately 52.4% from $1.26 billion a year earlier. The top line nevertheless missed the Zacks Consensus Estimate by 0.75%. Revenues increased about 4% sequentially, implying first-quarter revenues of roughly $1.85 billion.
The combination of rapid year-over-year expansion and a sequential slowdown in incremental growth helps explain the mixed interpretation of the quarter. AppLovin continues to expand at an exceptional rate for its scale, but elevated expectations leave relatively little room for execution delays.
EBITDA Growth and Margin Remain Major StrengthsAdjusted EBITDA climbed 58% year over year to $1.61 billion, implying approximately $1.02 billion in the prior-year quarter. EBITDA growth therefore exceeded revenue growth by roughly six percentage points.
More importantly, adjusted EBITDA represented approximately 83.9% of second-quarter revenues. That is an exceptionally high profitability level and demonstrates the operating leverage embedded in AppLovin's technology-driven advertising platform.
The quarter also generated $863 million of free cash flow, equivalent to roughly 44.9% of revenues and about 53.6% of adjusted EBITDA. Cash generation was softer than the company's recent earnings profile might suggest, but the weakness primarily reflected timing rather than a deterioration in underlying economics.
Costs increased sequentially as AppLovin directed additional resources toward computing capacity for existing and new artificial-intelligence models. This is worth watching because model training and inference requirements could create some quarter-to-quarter margin variability even if the investments ultimately support higher revenues.
Balance Sheet Supports Continued Capital ReturnsAppLovin ended the quarter with $3.05 billion in cash and $3.7 billion of total debt. The resulting $650 million gap between debt and cash is modest relative to the company's EBITDA generation, with net leverage standing at approximately 0.1 times trailing adjusted EBITDA.
During the quarter, the company repurchased or withheld approximately 1.14 million shares for $551 million. Repurchase activity moderated compared with the first quarter as management balanced capital returns against temporarily softer free cash flow.
The combination of strong profitability, substantial cash holdings and minimal net leverage gives AppLovin flexibility to fund AI infrastructure, pursue product expansion and continue returning capital without placing meaningful stress on the balance sheet.
Q3 Guidance Points to ReaccelerationThird-quarter guidance provides one of the strongest counterarguments to the post-earnings pessimism.
AppLovin expects revenues between $2.055 billion and $2.085 billion. The $2.07 billion midpoint implies approximately 7.8% sequential growth from the second quarter’s $1.92 billion, representing a meaningful acceleration from the second quarter's roughly 4% sequential increase.
Adjusted EBITDA is projected between $1.71 billion and $1.74 billion. At the $1.725 billion midpoint, EBITDA would increase approximately 7.1% sequentially from $1.61 billion.
The company expects an adjusted EBITDA margin of approximately 83% in the third quarter. That would be modestly below the second quarter's roughly 83.9%, reflecting, in part, higher AI-related infrastructure spending. Still, sustaining a margin above 80% while investing aggressively in model development would underline the strength of APP's operating model.
Importantly, the outlook incorporates model enhancements already deployed and does not depend on additional releases that have yet to reach production. That makes the guidance somewhat more tangible than an outlook dependent on future technological breakthroughs.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates revision.
VGM ScoresAt this time, AppLovin has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, AppLovin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerAppLovin belongs to the Zacks Technology Services industry. Another stock from the same industry, SLB (SLB - Free Report) , has gained 11.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
SLB reported revenues of $8.97 billion in the last reported quarter, representing a year-over-year change of +5%. EPS of $0.55 for the same period compares with $0.74 a year ago.
For the current quarter, SLB is expected to post earnings of $0.62 per share, indicating a change of -10.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SLB. Also, the stock has a VGM Score of C.
AppLovin ve 2. čtvrtletí 2026 zvýšil tržby na 1,92 miliardy USD a marže upravené EBITDA dosáhla 84 %, přesto dva investoři akcii po rozboru odmítli kvůli obavám o udržitelnost algoritmické výhody.
AppLovin prints $1.9 billion quarters and 84% margins, yet two disciplined investors studied the model and walked away. Their reason cuts to the heart of what separates a durable moat from a very good algorithm.
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Shares of AppLovin (NASDAQ:APP | APP Price Prediction) closed at $319.05 on September 2, marking a 52.7% year-to-date decline for a stock that spent late 2025 above $656. On the September 3, 2026, episode of The Investor’s Podcast Network’s We Study Billionaires, hosts Kyle Grieve and Shawn O’Malley devoted a full teardown to the mobile ad platform. Grieve framed the show as “TIP843: AppLovin (APP): The 30-Bagger Down More Than Half.” After walking through the model, both hosts passed.
An Ad Platform Bigger Than Pinterest, Snap, and Reddit Combined The scale is the first thing that lands. Grieve noted that “the advertising spend on AppLovin is more than Pinterest, Snapchat’s and Reddit’s combined revenue.” That comparison puts the AXON 2 engine in context for readers outside ad tech. AppLovin runs a marketplace where mobile game publishers and, increasingly, e-commerce brands bid for user attention through the company’s recommendation algorithm.
Asset-light in this context means the platform monetizes traffic without owning the audience: no content studio, no consumer app, minimal capex. O’Malley pointed to “over 79% over the last 12 months” adjusted EBITDA margins and $7.6 million in revenue per employee as evidence of that model. Q2 2026 revenue reached $1.92 billion, up 52.82% year over year, with an 84% adjusted EBITDA margin, per AppLovin’s Q2 2026 8-K exhibit filed with the SEC.
Founder Who Said No to a Billion Dollars Grieve recounted CEO Adam Foroughi’s 2015 decision to turn down an acquisition offer: “He walked away hoping for a valuation closer to a billion dollars. To give you an idea of how big a mistake that would have been, the company is now valued at a little over a hundred billion dollars today.” AppLovin’s market cap stands near $107.2 billion as of September 3, 2026. The anecdote set up the hosts’ capital-allocation debate.
Where the Two Hosts Diverged on Capital Allocation Grieve graded the buyback program highly. AppLovin repurchased 1.1 million Class A shares for $551.3 million in Q2 2026 and 6.4 million shares for $2.58 billion across full-year 2025. O’Malley took a more skeptical view of overall capital allocation, citing prior M&A history that included studio acquisitions later divested. The company recorded a $188.9 million goodwill impairment and a $99.4 million loss from discontinued operations in FY 2025. Grieve graded buybacks well; O’Malley graded the full record as average. Both positions stayed on the table.
Why Both Investors Passed Grieve’s core concern was the durability of an algorithmic moat: “There’s just something I don’t really like about a business whose core advantage is a really good algorithm, because it feels like another business can just write a better algorithm and then poof, there goes your business model.” He layered on saturation risk, noting roughly 55% of top mobile games are already on Max.
O’Malley framed the same worry through platform economics. With Google and Meta, “it’s sort of transcended just the algorithm” because network effects anchor the business regardless of which quarter’s ranking model wins. AppLovin looks more like a pure technology bet in his framing.
The hosts invoked a circle-of-competence argument, the Warren Buffett idea that investors should only underwrite businesses they can accurately model. Both said ad-tech algorithms sit outside theirs, echoing their earlier caution on Trade Desk (NASDAQ:TTD). Grieve’s base case used a 17% revenue CAGR, 77% EBITDA margins, and a 13x EV/EBITDA multiple to reach a $480 price target implying a 9% CAGR. His verdict: “My thoughts on this business are that it’s a pass. While it certainly offers upside, I just don’t think I could find myself getting comfortable enough with the business to ever have it in the intrinsic value portfolio or my personal account.”
What Investors Should Take From Two Careful Passes Foroughi is running the buyback aggressively, and Q3 2026 guidance calls for revenue of $2.055 billion to $2.085 billion at roughly 83% adjusted EBITDA margin. The CEO’s conviction is expressed in capital returns. Grieve and O’Malley’s restraint is a reminder that two disciplined investors can pass on one of the best businesses either of them has ever modeled without predicting a break. Readers weighing AppLovin after the drawdown should decide whether an algorithm is the kind of moat they are willing to hold through a competitive shock.
Contact [email protected] for any questions or corrections.
Digital Turbine ve fiskálním 1. čtvrtletí 2027 zvýšila tržby platformy App Growth Platform o 55,9 % na 56,6 milionu USD a uzavřela partnerství s Orange pro alternativní distribuci aplikací.
Key Takeaways Digital Turbine is expanding through app growth, international gains, AI and the Orange partnership.AppLovin is boosting ad efficiency with AI while expanding into consumer advertising and new verticals.Digital Turbine shares surged 158.5%, while AppLovin fell 32.9% over the past year. Digital Turbine, Inc. (APPS - Free Report) and AppLovin Corporation (APP - Free Report) are two ad-tech players benefiting from the increasing use of AI to improve mobile advertising, user acquisition and monetization. Digital Turbine is positioning itself as an end-to-end mobile growth platform connecting advertisers, publishers, carriers and device manufacturers, while AppLovin is using its AI-powered advertising technology to improve campaign performance and expand into new advertiser categories. The key question for investors is which company offers the stronger long-term growth opportunity.
The Case for APPSDigital Turbine continues to expand its role in the mobile application ecosystem by serving advertisers, publishers, carriers and device OEMs through its two complementary businesses. Its App Growth Platform enables publishers to monetize users through display, native and video advertising, while allowing advertisers and agencies to participate in programmatic and real-time bidding. In fiscal first-quarter 2027, App Growth Platform revenue rose 55.9% to $56.6 million, with advertising exchange revenues benefiting from the continued onboarding and growth of new publishers and demand partners.
Digital Turbine is also benefiting from improving international traction. On Device Solutions revenues increased 15.2% to $110 million, primarily reflecting improved international performance, including higher new-device volumes and revenue per device in international markets. The company uses its relationships with mobile carriers and OEMs to connect consumers with applications and content directly on their devices, giving it an opportunity to participate in the app economy beyond traditional advertising channels.
AI is becoming an important part of Digital Turbine's platform evolution. The company is integrating AI into its core intelligence systems to improve targeting, recommendations and real-time optimization across apps, devices and on-device surfaces. Its collaborations with Google Cloud and Databricks are designed to accelerate the data and AI strategy, while management said these tools are helping the company optimize its data to drive better results for platform partners and advertisers and attract new partners seeking improved yields and returns on advertising spend.
The company's alternative app distribution strategy provides another avenue for expansion. Digital Turbine entered into a strategic partnership with Orange, which serves 340 million customers across 26 countries in EMEA. Through the agreement, Digital Turbine plans to bring its alternative app distribution platform and SingleTap technology to Orange subscribers during the latter half of fiscal 2027. This gives the company an opportunity to expand its distribution capabilities through a major telecom network and strengthen its presence across international markets.
Management's confidence is reflected in its fiscal 2027 outlook, which calls for $650-$670 million in revenues and $145-$155 million in adjusted EBITDA. With the App Growth Platform scaling, international On Device Solutions gaining traction, AI capabilities advancing and alternative distribution expanding through the Orange partnership, Digital Turbine has several distinct levers to support its longer-term growth.
The Case for APPAppLovin continues to strengthen its position in digital advertising through its integrated platform spanning AppLovin Ads, MAX, Adjust and Wurl. The company is benefiting from improving advertising efficiency, with net revenue per installation increasing 58% in the second quarter of 2026 despite a 2% decline in installation volume. This reflects improving monetization efficiency as AppLovin generates more revenue from each installation.
AppLovin's AI-powered advertising technology remains central to its growth strategy. The company continues to enhance its Axon AI recommendation system, with investments in architecture that allow more complex models to benefit from additional training compute. Management is also improving creative tools and ad formats to help advertisers optimize campaigns and achieve better outcomes. Continued model improvements are expected to support advertising performance and encourage greater spending on the platform.
The company's consumer advertising business provides another avenue for expansion beyond gaming. Advertiser spending in the consumer vertical reached a record level in the second quarter, finishing 28% above fourth-quarter 2025 levels despite the seasonal slowdown. Management believes that adding more advertiser categories to its auction can substantially expand the opportunity ahead, with gaming improvements and consumer expansion supporting its view that the business can potentially compound at roughly 30% annually over the longer term.
AppLovin is also broadening its advertiser base through the public launch of AppLovin Ads Manager. The company is initially targeting mid-market advertisers, where its platform currently performs best, while planning to expand toward the long tail as its data and technology compound. At the same time, AppLovin is pursuing opportunities in new verticals such as e-commerce and connected TV, which could expand its addressable market beyond mobile gaming.
Management's confidence is reflected in its third-quarter 2026 outlook, which calls for $2.06-$2.09 billion in revenues and $1.71-$1.74 billion in adjusted EBITDA, implying an adjusted EBITDA margin of approximately 83%. The guidance incorporates continued model improvements, expansion of the consumer business and seasonal strength. With AI capabilities advancing, advertiser categories expanding and new opportunities emerging across e-commerce and connected TV, AppLovin has several distinct levers to support its longer-term growth.
How Does the Zacks Consensus Estimate Compare for APPS & APP?The Zacks Consensus Estimate for Digital Turbine’s current fiscal-year sales and EPS implies growth of 16.8% and 53.6%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates a 9.5% rise in sales and 33.7% growth in earnings. The consensus estimates for EPS for the current and next fiscal year have increased 2 cents and 9 cents over the past 30 days to 86 cents and $1.15, respectively.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for AppLovin's current financial-year sales and EPS implies growth of 40% and 54.7%, respectively, from the year-ago period’s actuals. For the next financial year, the consensus estimate indicates 27.5% growth in sales and 28.5% growth in earnings. The consensus estimate for EPS for the current and next fiscal year has decreased 50 cents and $1.45 over the past 30 days to $15.53 and $19.95, respectively.
Image Source: Zacks Investment Research
Stock Performance of Digital Turbine & AppLovinShares of Digital Turbine have skyrocketed 158.5% in the past year, whereas AppLovin has declined 32.9%.
Image Source: Zacks Investment Research
Stock Valuations of APPS & APPDigital Turbine is trading at a forward price-to-sales (P/S) multiple of 1.91, above its median of 0.79 in the past three years. AppLovin’s forward 12-month P/S multiple sits at 10.81, below its median of 15.98 in the past three years.
Image Source: Zacks Investment Research
Digital Turbine or AppLovin: Which is the Better Bet Now?While AppLovin remains an attractive ad-tech player with strong AI capabilities, expanding consumer advertising operations and a broadening addressable market, Digital Turbine currently appears to hold the edge for investors. The company’s rapidly growing App Growth Platform, improving international On Device Solutions business, AI-driven optimization initiatives and alternative app distribution strategy provide multiple avenues for growth. In addition, Digital Turbine’s significantly lower valuation and stronger recent stock performance offer greater upside potential, while its improving execution and fiscal 2027 outlook support the growth story. With accelerating platform momentum, new distribution opportunities and a more favorable valuation, Digital Turbine offers a more compelling opportunity.
Digital Turbine currently carries a Zacks Rank #2 (Buy), whereas AppLovin currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
UBS drží pro AppLovin doporučení Buy a cílovou cenu 790 USD, což znamená asi 158% potenciál růstu oproti současným 305,77 USD. Akcie jsou letos dole o 54,62 % po zklamání z tržeb za 2. čtvrtletí.
AppLovin (NASDAQ:APP | APP Price Prediction) trades at $305.77, while the average Wall Street analyst target sits at $526.39. That gap implies roughly 72% of upside if the Street is right, and one bank thinks the disconnect is far wider.
AppLovin runs an AI-powered mobile advertising platform built around its AXON recommendation engine, which places ads inside mobile games and increasingly in e-commerce and consumer apps. Wall Street focuses on two factors: extraordinary margins (an 84% adjusted EBITDA margin in the latest quarter) and management’s belief the auction technology can compound revenue at roughly 30% annually long term.
APP is one of few large-cap ad-tech names where growth, cash generation, and buybacks accelerate even as the share price collapsed.
A 54% YTD Drop Despite Another Earnings Beat APP has fallen 54.62% year to date and sits roughly 59% below its 52-week high of $745.61. The stock is also down 25.87% over the past month alone.
The catalyst was Q2 2026 earnings on August 5, 2026. AppLovin delivered EPS of $3.76 versus a $3.7549 consensus, but revenue of $1.92 billion missed the $1.94 billion consensus by 0.94%. That was the first revenue miss after three consecutive beats. Management blamed timing, saying the “pace of meaningful model improvement was lighter than normal during the quarter” and the next AXON upgrade landed just after quarter-end.
Revenue still grew 52.82% year over year, adjusted EBITDA margin expanded to 84%, and free cash flow hit $863.32 million. Investors punished the miss because APP is a story stock where model cadence drives sentiment.
UBS Sees a Path to $790 and 158% Upside One analyst doubled down. UBS analyst Stephen Ju maintains a Buy rating with a $790 price target, trimmed only slightly from $798 after Q2. Against the current $305.77 price, that implies roughly 158% of upside, well above consensus.
UBS’s thesis rests on three pillars: continued monetization gains from AXON 2.0, which lifts return on ad spend for developers; expansion beyond mobile gaming into e-commerce and consumer ads, where consumer advertiser spend finished 28% above Q4 2025 levels in a seasonally slow quarter; and operating leverage, where roughly 88% gross margins mean revenue growth flows through to cash at rates few software peers match.
Of 32 analysts tracked, 7 rate APP Strong Buy, 22 Buy, and 3 Hold, with zero Sell or Strong Sell ratings. Post-earnings updates were mostly reiterations with modest target trims. The bull-case timeline hinges on Q3, where management guided revenue to $2.055 billion to $2.085 billion and said the business is “off to a strong start” after the post-quarter model release.
APP Fell Alone While Ad-Tech Peers Diverged The ad-tech group diverged sharply. Two peers rallied while APP and one other collapsed, sharpening the case that APP trades on company-specific stress.
Trade Desk (NASDAQ:TTD) has cratered CITE_25 after its own Q2 miss. At CITE_26 against a CITE_27, implied upside is roughly CITE_28. Consensus splits CITE_29, and revisions have leaned bearish.
Unity Software (NYSE:U) has moved the other way, up CITE_30. At CITE_31 versus a CITE_32, upside is around CITE_33. Ratings run CITE_34, with recent revisions turning upward after a Q2 EPS beat.
Magnite (NASDAQ:MGNI) trades at CITE_35 against a CITE_36, roughly CITE_37 of implied upside. It has rallied CITE_38 on CTV strength, and the analyst mix is CITE_39. Targets have drifted higher.
The largest analyst-implied upside sits on APP. Targets are not guarantees, but AppLovin is the clear outlier on both punishment and projected recovery.
What the Numbers Say AppLovin trades at $305.77 with a consensus 12-month target of $526.39 from 32 analysts, implying roughly 72% upside. UBS’s $790 Street-high target pushes that to about 158%.
APP is down 54.62% year to date and 26.98% over the past year. The S&P 500 is up 12.29% year to date and 20.48% over the past year. The stock trades at a forward P/E of 20, unusual for a company growing revenue in the 50s%.
Bull and Bear Cases for AppLovin From Here AppLovin looks compelling if Q3 confirms model reacceleration and consumer ads keep compounding. The path back toward analyst targets requires exactly what management guided: 46% to 48% year-over-year revenue growth, a stable 83% adjusted EBITDA margin, and evidence that AppLovin Ads Manager converts mid-market advertisers into recurring spend. Hit those, and the multiple compression reverses quickly on a business still buying back stock aggressively.
The bear case strengthens if the Q2 shortfall is the front edge of a broader pattern. Model improvements are hypothesis-driven, and management admitted results swing quarter to quarter. If AXON cadence stays lumpy, if consumer creative bottlenecks slow the non-gaming rollout, or if competitors close the ROAS gap on Android, a beta of 2.53 means the drawdown can extend further. A name that swings this hard belongs in the speculative sleeve of a portfolio, sized with the kind of rules we spelled out in a free guide to speculating with 5% of your capital.
The setup looks cautiously constructive. Fundamentals still support the bull case, buybacks provide a floor, and even the consensus gap offers a real margin of safety for investors willing to sit through volatility.
Contact [email protected] for any questions or corrections.
Jefferies uvedla, že nálada investorů vůči AppLovin je před druhou polovinou roku převážně negativní a býčí případ je čím dál těžší najít. Největší obavy míří na zpomalující mobilní hry a tlak na take-rate.
AppLovin Corp (NASDAQ:APP) faces a mostly negative investor mood heading into the back half of the year, with few able to make a clear bullish case, according to a new Jefferies note summarizing recent investor conversations and a debate the firm hosted on the stock.
Jefferies said questions about whether AppLovin could follow a trajectory similar to The Trade Desk's downturn represent the most negative line of questioning the firm has received in its years covering the company.
Jefferies believe the two businesses don't overlap much. The Trade Desk relies more on large agencies and Fortune 100 advertisers moving budgets to rivals like Amazon DSP and Google DV360, while AppLovin is built around performance marketing tied to measurable results rather than fixed brand spending.
On the bull side, investors point to AppLovin's potential to grow its e-commerce business by expanding its sales team and building out agency partnerships, which could bring more large, sophisticated direct-to-consumer brands onto the platform. Bulls also argue that continued growth in in-app advertising works in AppLovin's favor even if the broader mobile gaming market slows, so long as the company keeps improving its ad targeting.
Bears counter that a slowing mobile games market limits how much upside is left. Third-party data pointing to declining install volumes and rising cost-per-install figures suggests some game studios are pulling back spending, they argue, which would put more weight on take-rate expansion and e-commerce growth to sustain results. Both of those areas have seen expectations soften over the past quarter.
Bears also flagged take-rate compression in the second quarter, tied to double-digit percentage growth in publisher revenue disclosures from AppLovin's MAX ad exchange. Rising competition from Unity, Meta and Liftoff is pressuring AppLovin's 35-40% take rate. Jefferies can't say how much stems from competition versus stalled improvement in AppLovin's AXON ad model.
Jefferies estimates the addressable market for mobile games, excluding China, at about $105 billion for 2026 across in-app purchases, direct-to-consumer spending and in-app advertising, up in the mid-single digits year over year.
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Palantir Technologies (PLTR -2.78%) CEO Alex Karp is fond of highlighting the company's Rule of 40 score. The Rule of 40 states that a healthy software company's year-over-year revenue growth percentage plus its operating margin must exceed 40. Palantir blew that benchmark away last quarter, producing a Rule of 40 score of 155.
Another software company is quietly producing a triple-digit Rule of 40 score as well. But while the market is rewarding Palantir with earnings and sales multiples far in excess of those of practically any other company of its size, the valuation for this other fast-growing software stock is much more tame. In fact, its forward price-to-earnings (P/E) sits below 19, less than the overall S&P 500's.
Here's why AppLovin (APP +0.89%) deserves a closer look.
Image source: Getty Images.
Can this software stock keep its triple-digit Rule of 40 score? AppLovin is an adtech company that sets itself apart by charging advertisers only when ads convert. The catch is, advertisers have to turn over practically everything about ad placement and pricing to AppLovin's black box model. The company's Axon 2 models have driven a sharp acceleration in revenue over the last few years, as it has also expanded AppLovin's market beyond its original gaming niche.
Management has seen excellent progress in non-gaming revenue growth, and it launched a self-service platform in June, which should help accelerate onboarding and total revenue growth. Total non-gaming-related revenue in the second quarter exceeded the seasonally strong fourth quarter by 28%. However, weakness in gaming advertising, which still accounts for the vast majority of its revenue, led to a disappointing overall result -- total revenue grew 53% year over year last quarter, down from the 59% growth it posted in the first quarter.
The weakness stems from the timing of the latest upgrade in the Axon 2 models. At the same time, the company spent more on compute to train its models and on research and development to improve them further. Management says the model update is now live, the third quarter is off to a strong start, and the business is back on the trajectory it expects. With its strength in gaming and the expansive market beyond gaming, management sees the potential for long-term compound annual revenue growth of 30%.
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What's more, the business's margin profile is incredible. Despite increased spending to improve the Axon 2 models, the company posted an operating margin of 78% last quarter. That makes its Rule of 40 score 131 for the quarter. Over the long run, sales and marketing may come down as a percentage of revenue due to the growing self-service platform and the scale of operations. However, management is likely to funnel more money into research and development to ensure Axon 2 maintains its advantage over the competition.
CFO Matt Stumpf noted that the company doesn't manage for margin, but focuses on EBITDA and free cash flow growth. If it can invest a dollar in improving its artificial intelligence models and get more than a dollar back in cash returns, it'll do it. That said, Stumpf expects the EBITDA margin to remain in the low-80% range over the long term. So, combined with 30% long-term revenue growth, AppLovin should maintain a triple-digit Rule of 40 score for the foreseeable future.
Why is the market paying so much more for Palantir stock? Palantir shares trade for more than 100 times estimated earnings over the next year and more than 50 times estimated sales. That's an exceptional premium, suggesting the company's growth runway is massive.
In comparison, AppLovin's earnings and sales multiples of 19 and 13, respectively, suggest investors don't expect earnings growth to remain elevated over the long run.
To be sure, Palantir has a tremendous opportunity. Its total addressable market could expand from $335 billion this year to $1.4 trillion by 2033, according to select analyst estimates. Palantir could merely maintain its market penetration rate and grow revenue at a compound rate of 23%. Doubling its market penetration, well within reason, would double that average growth rate.
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174.04
That said, the digital advertising market is expected to grow relatively quickly as well. Global spending could reach $662 billion this year and $1.7 trillion by 2033, according to Grand View Research. That's a compound annual growth rate of 14.3%, which supports AppLovin's estimate of 30% long-term growth as it takes share of the large non-gaming ad market.
But while Palantir faces few limitations to its growth, AppLovin's black-box ad platform will struggle to deliver exceptional results for advertisers if it saturates the market. More advertisers using the same algorithm makes it less effective. That sets an upper limit on AppLovin's market penetration.
Still, at just 19 times forward earnings, the stock looks underpriced relative to its potential, even with that limitation. The company should be able to deliver strong revenue growth at very high margins for years to come, and the market is heavily discounting that right now.
JPMorgan upozornil, že investoři zpochybňují udržitelnost rychlého růstu herního byznysu AppLovin, protože výnosy za 2. čtvrtletí i výhled na 3. čtvrtletí zaostaly za očekáváním.
The firm established a December 2027 price forecast of $400, based on about 18 times its 2028 GAAP earnings estimate of $22.42 per share. AppLovin closed Thursday at $312.67, implying about 28% upside from that level.
AppLovin Gaming Growth Faces Durability QuestionsJPMorgan called AppLovin a leading advertising technology platform for mobile gaming marketers. The company is targeting roughly 30% annual revenue growth over the longer term and adjusted EBITDA margins in the low-80% range.
However, the firm said investors are increasingly questioning how long AppLovin can sustain its rapid gaming growth. The company’s second-quarter revenue fell below the midpoint of its guidance.
Its third-quarter revenue outlook of $2.055 billion to $2.085 billion, representing 46% to 48% year-over-year growth, also fell short of investor expectations, according to JPMorgan’s conversations.
JPMorgan estimates AppLovin’s MAX mediation platform holds more than 70% of the mobile gaming mediation market. Its AppLovin Ads demand-side platform has more than 40% share.
Consumer Advertising Could Drive Next Growth PhaseAppLovin’s expansion beyond gaming could become an important growth engine. The company opened its advertising platform to all advertisers in June.
JPMorgan estimates the consumer business accounted for about 9% of second-quarter gross spend. Consumer spending increased 28% from fourth-quarter 2025 levels.
The firm forecasts consumer net revenue of $777 million in 2026, up 63% year over year, before climbing 75% to $1.4 billion in 2027. Consumer advertising would account for about 14% of total net revenue by 2027 under those estimates.
The opportunity is sizable. JPMorgan estimates the U.S. online advertising market exceeds $335 billion, with retail and consumer packaged goods representing about $140 billion, or 42%, of spending.
Still, JPMorgan said AppLovin must prove it can scale advertiser density, improve its models and demonstrate returns for consumer advertisers in a highly competitive market.
Margins Remain A StandoutDespite those execution risks, JPMorgan remains positive on AppLovin’s market position, reach across more than 1 billion daily active users and ability to improve advertiser returns.
The firm forecasts net advertising revenue of $8.1 billion in 2026, up 48% year over year, with an adjusted EBITDA margin of 84%.
JPMorgan also projects $5.2 billion in 2026 free cash flow, representing about 76% conversion from adjusted EBITDA. AppLovin has about $1.8 billion authorized for share repurchases.
For now, JPMorgan said it wants to see more consistent returns from AppLovin’s gaming model improvements and further evidence that the consumer advertising business can scale meaningfully.
AppLovin Price ActionAPP Price Action: AppLovin shares were up 2.30% at $319.84 at the time of publication on Friday, according to Benzinga Pro data.
Photo via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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AppLovin v roce 2025 zvýšil tržby o 70 % na 5,481 miliardy USD a ve 2. čtvrtletí 2026 tržby stouply o 52,4 % na 1,92 miliardy USD. Firma ale čelí rizikům v e-commerce a slabší viditelnosti diverzifikace.
Key Takeaways AppLovin's 2025 revenues surged 70%, while second-quarter 2026 revenues rose 52.4% to $1.92 billion.AppLovin trades at 17.2X forward earnings, below its sub-industry, sector and S&P 500 benchmarks.AppLovin's e-commerce expansion faces onboarding hurdles, while limited disclosure clouds diversification. AppLovin Corporation (APP - Free Report) is pairing rapid earnings expansion with unusually high profitability, but the investment case is not one-sided. The stock’s growth profile remains powerful while diversification, disclosure and execution risks leave less room for disappointment.
For investors deciding whether to hold, add or wait, the key issue is whether operating momentum can keep pace with expectations already embedded in the business and valuation.
AppLovin’s Growth Case Remains PowerfulAppLovin generated $5.481 billion of revenues in 2025, up 70% year over year, driven by Axon Ads Manager. The Zacks Consensus Estimate calls for 2026 revenues of $8.145 billion and earnings of $15.57 per share, pointing to continued expansion at scale.
The second quarter of 2026 reinforced the operating case. Revenues rose 52.4% year over year to $1.92 billion, while adjusted EBITDA reached $1.61 billion, or roughly 83.9% of revenues. The Trade Desk, Inc. (TTD - Free Report) also operates a technology platform for buyers of advertising, giving investors another reference point for the economics and execution demands of scaled digital advertising.
APP’s Valuation Looks Discounted on Forward EarningsAPP trades at 17.2X forward 12-month earnings, below the 21.6X multiple for its Zacks sub-industry, 18.0X for the Zacks sector and 20.8X for the S&P 500. That relative discount provides some support after the stock’s 18.4% decline over the past six months.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
The valuation picture is less straightforward on other measures. APP carries a price-to-sales ratio of 15.68 and a price-to-book ratio of 33.85. Investors are therefore paying a lower forward earnings multiple than the cited benchmarks while still assigning substantial value to the company’s revenue base and equity.
AppLovin’s E-Commerce Opportunity Carries Execution RiskSelf-service e-commerce could broaden AppLovin’s advertiser base beyond gaming, but the rollout is still developing. Roughly 57% of qualified leads currently go live, while management is working to close creative gaps that limit onboarding.
Generative creative tools remain in testing, including an interactive page generator being piloted with more than 100 customers. Unity Software Inc. (U - Free Report) , which provides a platform to create and grow games and interactive experiences, is relevant to the broader gaming-linked monetization landscape in which AppLovin built much of its advertising reach.
APP’s Visibility Gaps Keep the Bull Case in CheckAppLovin does not provide a revenue split by vertical, making it difficult to quantify the contribution from e-commerce and other newer categories. That disclosure gap matters because diversification is a central part of the longer-term growth argument.
Management also has not provided formal 2026 or multi-year financial guidance. Third-quarter guidance calls for revenues of $2.055 billion to $2.085 billion and an adjusted EBITDA margin of about 83%, but the absence of a full-year framework keeps investors dependent on quarterly execution.
AppLovin’s Ratings Point to a Balanced SetupThe investment case remains balanced. AppLovin has the growth, margins and cash generation to support continued expansion, but execution in e-commerce and limited mix visibility argue against treating the growth trajectory as fully de-risked.
APP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AppLovin’s Growth Score of A and VGM Score of B reflect favorable growth and combined style characteristics, while its Value Score of C is more neutral and its Momentum Score of D is weaker. The mix is consistent with a hold-and-monitor posture rather than a clear signal to add before diversification and execution become easier to assess.
AppLovin čeká ve 3. čtvrtletí tržby ve výši 2,055–2,085 mld. USD, což naznačuje zrychlení sekvenčního růstu na 7,8 % zhruba ze 4 % ve 2. čtvrtletí. Adjusted EBITDA má zůstat kolem 83% marže.
Key Takeaways AppLovin's Q3 revenue midpoint of $2.07B implies 7.8% sequential growth, up from roughly 4% in Q2.AppLovin expects Q3 adjusted EBITDA of $1.71B-$1.74B, with its margin holding near 83%.AppLovin's outlook uses AI model enhancements already deployed while computing investments continue. AppLovin Corporation (APP - Free Report) paired a modest second-quarter revenue miss with third-quarter guidance that points to faster sequential expansion. Revenues still increased sharply year over year, but the sequential pace slowed from the first quarter.
The next test is whether that guidance translates into renewed momentum while AppLovin continues spending on computing capacity for existing and new artificial-intelligence models. The outlook suggests growth can accelerate without a major reset in profitability.
APP’s Q3 Revenue Guide Implies ReaccelerationAppLovin expects third-quarter revenues of $2.055 billion to $2.085 billion. The $2.07 billion midpoint implies about 7.8% sequential growth from second-quarter revenues of $1.92 billion, a clear step up from the roughly 4% sequential increase recorded in the second quarter.
That matters after second-quarter revenues rose 52.8% year over year but missed the Zacks Consensus Estimate by 0.75%. The Trade Desk, Inc. (TTD - Free Report) , which operates a self-service advertising platform for buyers, offers a useful industry reference as investors assess whether AI-driven advertising platforms can sustain growth while improving campaign decisioning.
AppLovin Expects EBITDA to Keep PaceAdjusted EBITDA is projected between $1.71 billion and $1.74 billion for the third quarter. At the $1.725 billion midpoint, adjusted EBITDA would rise about 7.1% sequentially from $1.61 billion in the second quarter.
That pace would keep profitability broadly aligned with the expected revenue acceleration. AppLovin’s second-quarter adjusted EBITDA increased 58% year over year, faster than revenue growth, underscoring the operating leverage already present in the model.
APP’s Margin Outlook Absorbs Higher AI SpendingManagement expects an adjusted EBITDA margin of about 83% in the third quarter, compared with approximately 83.9% in the second quarter. The projected decline is modest given the company’s continued investment in computing capacity for current and new AI models.
Research and development expenses reached $99.9 million in the second quarter, up from $44 million a year earlier. Unity Software Inc. (U - Free Report) , which also operates advertising technology tied to gaming and broader digital channels, provides another relevant comparison as advertising platforms invest in data, automation and campaign performance tools.
AppLovin’s Guidance Uses Models Already in ProductionThe third-quarter outlook incorporates model enhancements that have already been deployed. It does not depend on additional releases that have yet to reach production, which gives investors a more concrete basis for evaluating the projected acceleration.
That distinction reduces the degree to which the quarter depends on untested product launches. Execution still matters, but the revenue and EBITDA targets are tied to technology already operating in AppLovin’s marketplace rather than future model breakthroughs.
APP’s Growth Score Supports the Guidance StoryThe guidance sets up a straightforward operating test. Faster sequential revenue and adjusted EBITDA growth, combined with an expected margin near 83%, would show that AppLovin can absorb heavier AI investment while maintaining substantial profitability.
APP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AppLovin has a Growth Score of A, VGM Score of B, Value Score of C and Momentum Score of D. The Growth Score supports the company’s favorable growth characteristics, while the weaker Momentum Score suggests less supportive near-term price trends.
The Zacks Rank #3 indicates a more neutral short-term earnings-estimate backdrop. Taken together, the ratings leave third-quarter execution as an important proof point rather than a settled conclusion about the stock’s near-term direction.
AppLovin klesl o 5 % poté, co Bank of America snížila doporučení na Neutral kvůli nejistotě kolem udržení dlouhodobého 30% růstu tržeb. Banka také snížila cílovou cenu na 400 USD z 430 USD.
AppLovin Corp (NASDAQ:APP) shares fell 5% to $321 after Bank of America downgraded the stock to Neutral, citing greater uncertainty around the company’s ability to sustain its long-term 30% revenue growth trajectory.
Bank of America said AppLovin’s second quarter results raised questions about a previously assumed source of baseline sequential growth. The firm said engineer-directed improvements to the company’s gaming models appeared to be the primary driver of quarterly growth, while it was less clear whether the 3% to 5% sequential growth from self-learning remained applicable.
The firm said the future trajectory of self-learning was not explicitly addressed in AppLovin’s recent earnings report or third-quarter guidance. Given what it estimates is AppLovin’s roughly two-times market share relative to its next-largest competitor, Bank of America said 3% sequential growth from self-learning alone may no longer apply over the long term.
Bank of America also said AppLovin’s next wave of innovation requires more evidence before it can support the company’s 30% long-term annual revenue growth target. Management has outlined plans to train larger and more complex recommender system models, which it believes could generate larger gains over time by benefiting from scaling effects similar to those seen in large language models.
While Bank of America described AppLovin as a technology leader that has out-innovated Google and Meta in the in-app bidding market, it said there was not yet enough evidence to assess the magnitude or durability of potential gains from the larger recommender models.
As a result, Bank of America lowered its 2027 revenue growth forecast to 23% from 31% and reduced its 2027 EBITDA estimate to $8.3 billion from $9 billion.
The firm also lowered its third quarter model to the midpoint of AppLovin’s guidance range from the high end and reduced its 2027 Consumer revenue forecast to $2 billion from $2.3 billion.
Bank of America lowered its price objective to $400 from $430, based on a 16-times multiple of estimated 2027 EBITDA. It kept the valuation multiple unchanged, saying it expects limited downside to its estimates and does not anticipate AppLovin losing significant market share.
The firm said the debate around AppLovin is increasingly likely to center on the company’s maturity. Without another innovation cycle, Bank of America said AppLovin could increasingly be viewed as a mature adtech platform, with its valuation moving closer to that of established, scaled online advertising companies.
AppLovin ve 2. čtvrtletí zvýšil tržby o 53 % na 1,92 miliardy USD, ale mírně zaostal za odhady a akcie po zveřejnění výsledků prudce klesly. Zisk na akcii i EBITDA ale překonaly očekávání.
Investors weren't loving AppLovin's (APP +3.32%) Q2 results, and a difficult year for the stock just got worse. The stock crashed last week after it missed revenue expectations, and its shares have been cut in half this year, as of this writing.
Let's dig into the adtech company's results and prospects to see if this dip is a good buying opportunity.
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Strong growth but missed expectations Since the launch of its artificial intelligence (AI) adtech platform, Axon 2.0, in 2023, AppLovin has seen tremendous growth. While its Q2 results came up short of analyst expectations, its growth was still strong. The company's revenue climbed 53% to $1.92 billion, which was just shy of the $1.94 billion analyst consensus.
Image source: The Motley Fool.
The company said the miss was due to its model not improving at its typical pace, and that the next big boost in model performance did not occur until after the quarter ended. Axon 2.0 helps gaming-industry advertisers attract more customers, and as its AI model improves and advertisers see better returns on their spending, ad spending on its platform tends to increase. It said it saw no signs of increased competition or weakening demand and that growth is already reaccelerating.
AppLovin believes its gaming ad business can compound at 30% annually over the long term. As such, it is investing in computing power and architectural changes that will help it build more complex models.
While revenue came up just short of expectations, adjusted EPS came in slightly above expectations. Earnings per share (EPS) from continuing operations climbed 57% from $2.39 a year ago to $3.76, beating the consensus by $0.01. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, jumped 58% year over year to $1.6 billion.
The company also continues to boost its gross margin while keeping its costs in check. In Q2, its gross margin improved to 88.3% from 87.7% a year ago, while it lowered its general and administrative expenses by 27%.
AppLovin also continues to produce a boatload of cash. In the quarter, it generated free cash flow of $863.3 million and $2.15 billion for the first half of the year. It ended the year with $500 million in net debt, down from $1 billion at the start of the year. The company also repurchased 1.1 million shares in the quarter, worth $551.32 million.
Looking ahead, AppLovin projected Q3 revenue between $2.055 billion and $2.085 billion, representing growth of 46% to 48%. The $2.07 billion midpoint, though, was slightly below the $2.08 billion consensus. It guided for adjusted EBITDA to be between $1.71 billion and $1.74 billion.
Is the stock a buy on the dip? AppLovin hasn't yet seen a big boost from opening its platform to smaller advertisers or expanding beyond the gaming industry. However, these newer opportunities still have potential.
For example, the consumer vertical saw a 28% increase in ad spend compared to Q4 2025 levels (which should be seasonally stronger given the holiday season), indicating progress. It is also pursuing third-party partnerships to attract more high-quality advertisers while looking to develop new creative tools and ad formats, which is the biggest hurdle it faces in moving non-gaming advertisers to its platform.
Despite the slight Q2 misstep, AppLovin's core gaming ad business remains strong. The company has been running a very lean operation, but it looks like it is willing to start spending some of its profits to drive higher growth. It has started to invest more in research and development and compute power but will only continue to do so if it translates into a material revenue lift.
Following the sell-off, the stock, which had gotten pricey, now once again looks cheap, trading at a forward price-to-earnings (P/E) ratio of below 16 times 2027 analyst estimates. Given its growth and opportunities, the stock looks like a buy for more aggressive investors.
Magnite vyskočila o 18 % po lepších výsledcích za 2. čtvrtletí a zvýšení celoročního výhledu. AppLovin naopak spadla o 20 % po smíšených výsledcích a Trade Desk klesla o 6 % v návaznosti.
Ad-tech stocks are moving in opposite directions midday Thursday as traders sort earnings winners from disappointments. Magnite (NASDAQ:MGNI) shares are surging 18% to $24.33 after a beat-and-raise second-quarter report. Meanwhile, AppLovin (NASDAQ:APP | APP Price Prediction) stock is crashing 20% to $335.84 on a mixed print that fell short of lofty expectations. For context, the Invesco QQQ Trust (NASDAQ:QQQ) (which tracks the NASDAQ 100 index) is down 0.46%.
The Trade Desk (NASDAQ:TTD) shares are sliding 6% to $17.77 despite no fresh company-specific news, caught in a sympathy move alongside AppLovin. The split captures how quickly the market is discriminating within ad-tech, rewarding connected TV (CTV) leverage and punishing any hint of mobile ad-model deceleration.
Magnite Soars on CTV Momentum and Raised Guidance Magnite reported Q2 2026 adjusted EPS of $0.26, topping the $0.15 consensus and rising from $0.20 a year earlier. Revenue of $189.6 million came in above expectations and above the $162 million posted a year ago.
Magnite’s management raised the company’s full-year guidance, citing accelerating CTV growth, market-share gains, improving profitability, and new agentic AI capabilities as a growth frontier. CEO Michael G. Barrett struck a confident tone, telling investors “we are uniquely positioned between supply and demand, and with our agentic offerings we believe we will benefit from serving as vital infrastructure for the future of digital advertising.”
Sell-side analysts moved quickly. BTIG raised its Magnite stock price target to $27 from $20 with a Buy rating, while Susquehanna lifted its target to $30 from $22 at Positive. MGNI stock entered today up 27% year to date, and today’s rally extends that lead over the rest of the group.
AppLovin Crashes as Guidance Misses the Midpoint AppLovin posted Q2 2026 revenue of $1,924 million, up 53% year over year (YoY), with net income of $1,267 million and adjusted EBITDA of $1,614 million. Diluted EPS was $3.76, and free cash flow reached $863.3 million.
The issue was the mix. AppLovin slightly missed the midpoint of its revenue and EBITDA guidance for the first time since its IPO, tied to temporary gaming ad-model timing challenges. Furthermore, AppLovin’s Q3 guidance of $2.055 billion to $2.085 billion in revenue with an 83% adjusted EBITDA margin implied a slight step-down from the 84% reached this quarter.
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Analysts responded with a cascade of target cuts. Piper Sandler downgraded AppLovin stock to Neutral with a $385 target from $665, citing “more questions than answers” on the company’s ability to keep beating. Wells Fargo moved to Equal Weight at $357 from $575, seeing mobile-game share plateauing.
The bulls trimmed but didn’t fold. Bank of America’s Omar Dessouky cut his APP stock price target to $430 from $705 while keeping a Buy, Goldman Sachs went to $465 from $585 at Neutral, BTIG trimmed to $574 from $640 as a Top Pick, and UBS analyst Stephen Ju edged down to $790 from $798. Retail on r/wallstreetbets is leaning the other way, with one widely-read post asserting, “I think the selloff is overdone.”
Trade Desk Sinks in Sympathy With No Fresh Catalyst Trade Desk shares are dropping 6% without any company-specific news today. The move reads as a sentiment spillover from AppLovin’s crash and broader concerns about mobile ad-tech pricing power.
Trade Desk stock has been one of 2026’s worst ad-tech performers, down 50% year to date entering Thursday. Prediction market positioning is cautious too, with Polymarket traders currently pricing a 43% probability that Trade Desk beats its next quarterly earnings print.
What to Watch Traders can watch for whether Magnite stock holds its double-digit gain through Thursday afternoon and whether tomorrow morning brings additional analyst commentary on AppLovin. The next anticipated Trade Desk catalyst is its own Q2 report, with the Street modeling roughly $751.5 million in revenue.
The takeaway from Thursday’s tape is that CTV-levered names delivering clean beats are getting paid, while any hint of decelerating growth in mobile advertising is being penalized aggressively. Position sizing should reflect that dispersion, and cautious exposure to the winners may prove more durable than bottom-fishing the drawdowns.
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AppLovin ve 2. čtvrtletí zvýšil tržby na 1,92 miliardy USD a upravenou EBITDA na 1,61 miliardy USD, obojí ale pod vlastním odhadem kvůli slabšímu tempu vylepšování reklamních modelů. Firma čeká ve 3. čtvrtletí tržby 2,055 až 2,085 miliardy USD.
3 Stocks That Prove the AI Trade Isn't Over, It MovedAppLovin NASDAQ: APP reported second-quarter revenue of $1.92 billion, up 53% from a year earlier and 4% sequentially, while adjusted EBITDA rose 58% year-over-year to $1.61 billion. The company said both figures came in below its own guidance expectations, attributing the shortfall primarily to a lighter-than-normal pace of advertising-model improvements during the quarter.
Co-founder and CEO Adam Foroughi said the company’s gaming business, which remains the majority of revenue, depends heavily on the performance of its models. Improved models enable advertisers to profitably increase spending while meeting return-on-ad-spend targets, he said. During the second quarter, however, the company did not receive the level of model uplift it had experienced in prior periods.
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Why AppLovin’s CEO Is Selling While Quantum Insiders Are Buying“This quarter came down to timing,” Foroughi said. “Our pace of meaningful model improvement was lighter than normal during the quarter, and the next step up in model performance landed just after quarter end.”
Third-Quarter Outlook Reflects New Model Release Management said the next model improvement is now live, has contributed to a strong start to the third quarter, and is reflected in the company’s outlook. AppLovin expects third-quarter revenue of $2.055 billion to $2.085 billion, representing year-over-year growth of 46% to 48% and sequential growth of 7% to 8%.
Time to Sell? 3 Winners With Fading Technical MomentumThe company forecast adjusted EBITDA of $1.71 billion to $1.74 billion for the third quarter, implying year-over-year growth of 48% to 50% and an adjusted EBITDA margin of about 83%. The outlook includes higher training and compute costs associated with the model improvements already deployed, but does not assume further model releases that have not yet gone live.
Foroughi said there was no indication during the quarter of weaker advertiser demand or a change in the competitive environment. He noted that MAX publisher earnings grew by double digits sequentially and that AppLovin’s share of publisher waterfalls remained consistent.
Chief Financial Officer Matt Stumpf said higher compute spending was the main driver of sequential cost increases. He said AppLovin manages its business toward EBITDA dollars and free cash flow rather than a fixed margin percentage, and will continue to spend on compute when it can generate incremental revenue.
Stumpf said the company expects to remain in the low-80% adjusted EBITDA margin range over the longer term, though margins could fluctuate in the near term as AppLovin invests in model development and infrastructure.
Consumer Advertising Spend Reaches New Record AppLovin also highlighted continued expansion in its consumer advertising vertical. Foroughi said advertiser spending in the category set another record and finished 28% above fourth-quarter 2025 levels, despite the second quarter being seasonally slower for e-commerce advertisers than the fourth quarter.
The company said consumer advertising is still not large enough to fully offset variability in the gaming business, but management expects its growing contribution to become increasingly meaningful over time. Foroughi said the company believes its combination of continued gaming-model improvements and consumer expansion could support roughly 30% annual compounding over the longer term.
AppLovin opened its platform to the public during the quarter under the AppLovin Ads Manager name. Management said the launch was progressing as expected but was not intended to transform the business immediately. The company is initially targeting mid-market advertisers, rather than the largest brands or smaller long-tail businesses.
Foroughi said mid-market advertisers are more likely to have the budgets and willingness to absorb the learning costs associated with a newer advertising platform. He said the company expects its addressable base to broaden as it brings more advertisers onto the platform, collects more transaction data and further improves its models.
AppLovin is using partnerships with third-party analytics providers to target prospective mid-market advertisers. Management said consumer advertisers currently tend to be fewer in number but larger in spending, rather than a broad base of small advertisers. The company identified creative production as a key hurdle for smaller advertisers, particularly the need for 30- to 60-second video advertisements paired with interactive end cards. Foroughi said AppLovin can already generate interactive end cards with relatively high efficiency, but is still working to reliably produce high-quality long-form video creative automatically. Resolving that issue, or offering alternative ad templates that do not require video, could make campaign creation easier for smaller advertisers, he said.
Cash Flow, Debt and Buybacks Free cash flow totaled $863 million in the second quarter. Stumpf said cash conversion was below the company’s typical level because of the timing of international cash-tax and interest payments, rather than a change in the company’s earnings power. AppLovin expects free-cash-flow conversion to improve in the third quarter and to normalize to roughly 75% of adjusted EBITDA for the full year.
The company ended the quarter with $3.05 billion in cash and $3.7 billion in total debt, for net leverage of approximately 0.1 times trailing 12-month adjusted EBITDA. Stumpf said this was well within the roughly one-times leverage level AppLovin expects to maintain over the long term.
During the quarter, AppLovin repurchased and withheld approximately 1.14 million shares for $551 million. It ended the period with 335 million shares outstanding and about $1.8 billion remaining under its repurchase authorization. Stumpf said the reduced pace of buybacks from the roughly $1 billion deployed in the first quarter reflected lower second-quarter free cash flow and did not signal a change in the company’s view of share repurchases.
Stumpf also said the Securities and Exchange Commission had concluded a previously reported voluntary inquiry with no recommended action. The company had not considered the request material, he said.
Looking ahead, management said its immediate priorities include improving core models, advancing architecture that can benefit more from scaled compute, enhancing creative tools and ad formats, and adding higher-quality advertisers through partnerships.
About AppLovin (NASDAQ:APP)AppLovin Corporation is a Palo Alto–based mobile technology company that provides software and services to help app developers grow and monetize their businesses. The company operates a data-driven advertising and marketing platform that connects app publishers and advertisers, delivering tools for user acquisition, monetization, analytics and creative optimization. AppLovin's technology is integrated into a broad set of mobile applications through software development kits (SDKs) and ad products designed to maximize revenue and engagement for developers.
Key components of AppLovin's offering include an ad mediation and exchange platform that enables publishers to manage and monetize inventory across multiple demand sources, and a user-acquisition platform that helps advertisers target and scale campaigns.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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David Hsiao - Head of Investor Relations
Adam Foroughi - Co-Founder, CEO & Director
Matt Stumpf - Chief Financial Officer
Conference Call Participants
Jason Bazinet - Citigroup Inc., Research Division
James Heaney - Jefferies LLC, Research Division
Stephen Ju - UBS Investment Bank, Research Division
Ralph Schackart - William Blair & Company L.L.C., Research Division
Omar Dessouky - BofA Securities, Research Division
Robert Sanderson - Loop Capital Markets LLC, Research Division
Alec Brondolo - Wells Fargo Securities, LLC, Research Division
Robert Coolbrith - Evercore ISI Institutional Equities, Research Division
James Callahan - Piper Sandler & Co., Research Division
Matthew Swanson - RBC Capital Markets, Research Division
William Lampen - BTIG, LLC, Research Division
Aaron Lee - Macquarie Research
Martin Yang - Oppenheimer & Co. Inc., Research Division
Vasily Karasyov - Cannonball Research, LLC
Timothy Nollen - SSR LLC
Presentation
David Hsiao
Head of Investor Relations
Welcome to AppLovin's earnings call for the second quarter ended June 30, 2026. I'm David Hsiao, Head of Investor Relations. Joining me today to discuss our results are Adam Foroughi, our Co-Founder and CEO; and Matt Stumpf, our CFO. Please note our SEC filings to date, as well as our financial update and press release discussing our second quarter performance, are available at investor.applovin.com.
During today's call, we will be making forward-looking statements, including, but not limited to, the future development and reach of our platform, our expected growth opportunities, the expected future financial performance of the company and other future events. These statements are based on our current assumptions and beliefs, and we assume no obligation to update them except as required by law. Our actual results may differ materially from the results predicted. We encourage you to review the risk factors in our most recently filed Form 10-Q for the fiscal quarter ended March 31, 2026. Additional information may also be found in our quarterly
AppLovin ve 2. čtvrtletí vykázal tržby 1,924 miliardy USD, což bylo pod odhady, i když zisk na akcii 3,76 USD je překonal. Akcie v prodlouženém obchodování klesly o 19,34 %.
AppLovin stock is trending. Where is APP stock headed? AppLovin Q2 Earnings HighlightsAppLovin reported second-quarter revenue of $1.924 billion, missing analyst estimates of $1.935 billion, according to Benzinga Pro. The advertising technology company reported earnings of $3.76 per share for the quarter, beating estimates of $3.67 per share.
Total revenue was up 53% on a year-over-year basis. Cash flow from operations totaled $869 million and free cash flow came in at $863.3 million in the quarter.
AppLovin repurchased $551.3 million of its common stock during the quarter and ended the period with approximately $3.05 billion in cash and cash equivalents.
AppLovin expects third-quarter revenue to be in the range of $2.055 billion to $2.085 billion, versus estimates of $2.068 billion. The company anticipates third-quarter adjusted EBITDA of $1.71 billion to $1.74 billion.
AppLovin management will discuss the quarter on an earnings call scheduled for 5 p.m. ET.
APP Shares Fall After The CloseAPP Price Action: Applovin shares were down 19.34% in after-hours, trading at $337.02 at the time of publication on Wednesday, according to Benzinga Pro.
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AppLovin stock is showing downward pressure. What’s ahead for APP stock? AppLovin Steps Into Q2 Earnings After a Standout First QuarterAnalysts are looking for earnings of $3.75 per share on revenue of $1.94 billion when results land after the bell, a bar that would represent a substantial leap from the $2.39 per share and $1.26 billion the company delivered in the comparable period a year ago.
The company’s own second-quarter guidance of $1.92 billion to $1.95 billion in revenue and $1.62 billion to $1.65 billion in adjusted EBITDA places the consensus estimate comfortably within the range management said it expected to achieve, reducing the likelihood of a guidance-driven miss.
The prior quarter laid a strong foundation for those expectations. Revenue of $1.84 billion outpaced the $1.77 billion estimate while earnings of $3.56 per share topped the $3.38 consensus, with the top line expanding 59% from the same period a year earlier. Both cash flow from operations and free cash flow landed at $1.30 billion for the period, a figure that speaks to the company’s capacity to translate revenue into cash efficiently.
APP’s Bounce Attempt Is Fighting The Trend, Not The HeadlinesWith markets open, the setup looks technical rather than headline‑driven. APP is trying to stabilize after its July swing low even though Communication Services is the weakest group today. That kind of divergence can be an early sign of accumulation, but it can also be a simple reflex rally, especially with the broader trend still leaning bearish.
The stock is 13.4% below its 50‑day SMA and 18.6% below its 200‑day SMA, and the March death cross remains an overhead structure that often turns rebounds into selling opportunities. Momentum is muted. RSI at 45.22 is neutral, which fits a market still searching for sustained upside pressure after the July low.
Near‑term signals are tighter. APP is sitting about 1.6% below its 20‑day SMA, which makes the next few sessions important for determining whether this is a base or just a pause before another leg lower. A move back above the 50‑day area would be the first meaningful step toward repairing the intermediate trend. Until that happens, rebounds can stay choppy and fade quickly.
Key resistance: $492.00 — This is the nearby ceiling where recent rebounds have stalled. Key support: $418.50 — This is the floor buyers have defended during the current consolidation. APP Shares Are Edging LowerAPP Price Action: Applovin shares were down 0.10% at $419.29 at the time of publication on Wednesday, according to Benzinga Pro.
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Key Takeaways AppLovin will report Q2 2026 results on Aug 5, with EPS expected to jump 64.6% and revenues up 54%.APP beat the earnings estimates in all four of the past four quarters, averaging an 8.4% surprise.AppLovin faces high valuation and a 41% year-to-date stock drop, despite strong ad tech momentum. AppLovin Corporation (APP - Free Report) will report its second-quarter 2026 results on Aug. 6, after the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $3.72, indicating 64.6% growth from the year-ago reported quarter. The consensus estimate for revenues stands at $1.94 billion, implying 54% year-over-year growth. There have been no changes or revisions to analyst estimates lately.
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The company has a strong history of earnings surprises. Earnings surpassed the Zacks Consensus Estimate in all four trailing quarters, with an average earnings surprise of 8.4%.
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Q2 Earnings Beat Not Likely for APPOur proven model doesn’t conclusively predict an earnings beat for APP this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APP has an Earnings ESP of 0.00% and a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
APP’s Price Dynamics and ValuationThe stock has plunged 41% year to date, compared with the broader industry's 10% decline, but the sell-off has not made valuations compelling.
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Even after the correction, ARM continues to trade at a forward 12-month price-to-earnings multiple of 21X, above the industry average of 20.79X. It trades at a forward 12-month price-to-sales multiple of 13.82X, way above the industry average of 2.8X, suggesting the stock remains far from inexpensive.
Investment ConsiderationsAppLovin’s growth story remains firmly intact, with demand for its AI-powered advertising and app monetization platform continuing to accelerate. Sustained expansion reflects increasing adoption of AppLovin’s AI-enhanced advertising solutions, particularly improvements driven by its Axon platform. The company has also broadened its reach beyond its traditional gaming customer base into larger e-commerce and digital advertising markets, creating new opportunities for long-term expansion.
Although rapid revenue growth continues to attract investor attention, AppLovin’s profitability may represent its greatest long-term strength. The company is increasingly generating revenues from higher-margin software offerings, allowing a much larger percentage of incremental sales to flow directly to the bottom line. This favorable business mix, combined with disciplined cost management, has significantly improved operating efficiency over the past several quarters.
Despite these positives, the early-stage nature of its e-commerce initiatives and elevated valuation contribute to a balanced investment case. With the company carrying a Zacks Rank #3 (Hold), a cautious stance appears appropriate as investors weigh the company’s structural strengths against near-term uncertainties. Existing shareholders may benefit from staying invested to capture long-term upside, while new investors could consider waiting for greater clarity or more attractive entry points.
How AppLovin Compares With Key U.S. PeersThe Trade Desk (TTD - Free Report) operates a leading demand-side platform built around programmatic advertising and data-driven targeting. While the company benefits from strong relationships with premium brands and advertisers, its margin profile tends to be more sensitive to fluctuations in advertising spending. In many ways, The Trade Desk focuses on scale and reach, while AppLovin concentrates more heavily on performance and efficiency.
Unity Software (U - Free Report) also participates in the advertising ecosystem through its real-time 3D platform and monetization tools for developers. However, Unity’s advertising business remains closely tied to the developer community and has been more volatile. Unlike AppLovin, Unity is still working to balance growth with consistent profitability, which makes AppLovin’s margin stability a notable differentiator among these peers.
Akcie AppLovin uzavřely se ztrátou 3,78 % na 412,48 USD, což bylo horší než denní pokles indexu S&P 500 o 0,14 %. Za poslední měsíc akcie odepsaly 8,21 %.
AppLovin (APP - Free Report) ended the recent trading session at $412.48, demonstrating a -3.78% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.14%. Meanwhile, the Dow experienced a drop of 0.01%, and the technology-dominated Nasdaq saw a decrease of 0.57%.
Shares of the mobile app technology company witnessed a loss of 8.21% over the previous month, trailing the performance of the Business Services sector with its gain of 4.1%, and the S&P 500's gain of 0.25%.
Market participants will be closely following the financial results of AppLovin in its upcoming release. The company plans to announce its earnings on August 5, 2026. The company is expected to report EPS of $3.72, up 64.6% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $1.94 billion, indicating a 53.99% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $15.93 per share and a revenue of $8.24 billion, indicating changes of +58.67% and +41.98%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for AppLovin. These revisions typically reflect the latest short-term business trends, which can change frequently. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.28% decrease. Right now, AppLovin possesses a Zacks Rank of #3 (Hold).
Looking at its valuation, AppLovin is holding a Forward P/E ratio of 26.92. Its industry sports an average Forward P/E of 16.41, so one might conclude that AppLovin is trading at a premium comparatively.
One should further note that APP currently holds a PEG ratio of 0.7. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services industry had an average PEG ratio of 1.44 as trading concluded yesterday.
The Technology Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 98, placing it within the top 40% of over 250 industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
Akcie AppLovin v první polovině roku klesly o 24 % kvůli obavám z AI, útoku short-sellera a konkurenci v reklamě. Přesto ve čtvrtletí tržby vzrostly o 66 % na 1,66 miliardy USD a EPS se téměř zdvojnásobil na 3,24 USD.
AppLovin (APP +1.01%) has been one of the biggest winners on the stock market since 2022 as the company has gone from a mobile-game maker to an adtech powerhouse after leveraging the ad tools it built inside its games.
Its ad business has been so successful that it sold off its mobile games business last year and is now a pure-play adtech company. However, the AI boom has brought a mixed bag for the company, and it's been pressured by the broader worries about disruption in the software sector. AI is a key component of Axon, its AI-powered advertising engine, but investors also seem to believe its competitive advantage is more vulnerable as AI tools become more widely embraced.
As a result, the stock slipped 24% through the first half of the year, according to data from S&P Global Market Intelligence. As you can see from the chart below, the stock pulled back in the first two months of the year, and then mostly traded sideways.
APP data by YCharts
What's happening with AppLovin A number of factors weighed on the stock to start the year. It faced a short-seller attack from CapitalWatch, which alleged that the company was avoiding typical anti-money-laundering controls and being financially unscrupulous in other ways. The company pushed back on the claims, calling them "false, misleading, and nonsensical." It's also faced similar short reports in the past, though none of the allegations have stuck.
Additionally, mobile game-related stocks initially fell after Google announced Project Genie, a new platform for AI game creation, which potentially threatens the app-based game ecosystem, which includes AppLovin, as much of its business comes from ads that run on mobile games.
AppLovin then plunged in February after it reported fourth-quarter earnings, even though it beat estimates. Revenue jumped 66% to $1.66 billion, and earnings per share nearly doubled to $3.24.
Nonetheless, the results were not enough to push the stock higher, especially due to signs that Meta Platforms was planning on competing for untracked ad traffic on Apple's iOS that it had historically ignored.
AppLovin redeemed itself in the first-quarter report in May as the stock moved up 6% after another round of strong results and rapid growth.
Image source: Getty Images.
What's next for AppLovin Despite fears about disruption from AI, Meta, or other weaknesses, AppLovin has continued to deliver impressive results. It generates blockbuster profit margins, a sign of competitive advantage, and it has begun repurchasing stock, showing management confidence in future growth.
If AppLovin maintains its current momentum, the stock will eventually bounce back.
AppLovin už není herní studio: prodala celé mobilní herní portfolio a zůstává jí hlavně reklamní platforma Axon. V posledním čtvrtletí tržby vzrostly o 59 % na 1,84 miliardy USD a provozní marže dosáhla 78 %.
AppLovin (NASDAQ:APP | APP Price Prediction) is now a pure-play, AI-driven advertising platform generating profitability metrics that stand alongside the biggest names in software, even as the market still categorizes it as a “mobile gaming roll-up.”
A Literal Business Pivot AppLovin sold its entire Apps and mobile-gaming portfolio to Tripledot Studios, closing the deal on June 30, 2025, for roughly $400 million in cash plus an approximately 20% equity stake. The games business is gone from the operating results. What remains is the Axon advertising engine and a balance sheet that looks nothing like a hit-driven app studio.
The Margins Tell the Real Story In the most recently reported quarter, revenue reached $1.84 billion, up 59% year over year, with operating income of $1.44 billion and an operating margin of 78%. GAAP net margin came in at 65%, and adjusted EBITDA margin hit 85%. These are Big Tech-caliber margins.
CFO Matt Stumpf framed it plainly: “Margins expanded approximately 400 basis points from the same period last year. Quarter-over-quarter flow-through to adjusted EBITDA was 86%, again, reflecting the operating leverage of our model.”
Operating Leverage from the AI Engine Full-year 2025 revenue landed at $5.48 billion (+16.4% year on year) with net income of $3.33 billion (+111% year on year). In Q2 2025, R&D fell 56% year on year and S&M fell 30%, even as revenue grew 77%. Four consecutive quarterly beats have followed. CEO Adam Foroughi noted: “We continue to grow this business very quickly despite the numbers getting much bigger, and we are doing it while margins keep expanding.”
A Capital-Light Cash Machine Q1 free cash flow of $1.29 billion was generated on just $413,000 in capital expenditures. The company returned $1.0 billion via buybacks (2.2 million shares) in the quarter alone, with roughly $2.3 billion remaining under authorization.
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Investors curious about the broader shift in AI-adjacent software winners can see our related research at 7 Stocks Powering the AI Boom (That Aren’t Chipmakers).
The Risks of a Premium Platform Shares trade at a trailing P/E of 38 and a beta of 2.48. The stock is down 33.4% year to date to $448.98, against a 52-week range of $343.00 to $745.61. FY2025 also included a $188.9 million goodwill impairment tied to the pivot. Analyst consensus target is $654.60.
Retail is catching on. A February 2026 Reddit thread titled “$APP Has Gone from Overvalued to Now Cheap?” drove sustained bullish sentiment. The category-leader thesis remains intact; the stock simply needs the market to update its label.
This article is for informational purposes only and does not constitute investment advice.
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AppLovin získává větší podíl z e-commerce reklamních rozpočtů; podle průzkumu Jefferies vzrostl její podíl na rozpočtech inzerentů o 169 bazických bodů na 11,1 %. Zůstává mezi třemi největšími reklamními sítěmi podle podílu i ROAS.
AppLovin Corp (NASDAQ:APP) is gaining share of e-commerce advertising budgets as brands increase spending on the platform, according to a Jefferies survey of advertisers using the company’s advertising technology in the second quarter of 2026.
Jefferies surveyed 30 e-commerce and web advertisers using AppLovin in 2Q26 and found that AppLovin’s share of advertiser budgets increased by 169 basis points compared with the fourth quarter of 2025, reaching 11.1% of spend in 2026.
The firm noted that AppLovin maintained its position among the top three advertising networks by both budget share and return on ad spend (ROAS), ranking just ahead of TikTok.
The survey found that TikTok also gained share during the period, while Meta and Google accounted for most of the budget share losses. Jefferies wrote that the shift was primarily driven by advertisers diversifying incremental ad spend toward platforms including AppLovin and TikTok rather than reducing spending on Meta and Google.
The survey captured a greater proportion of advertisers that had joined AppLovin in the fourth quarter of 2025, with those advertisers representing 23% of respondents compared with 7% in Jefferies’ previous survey. The firm noted that these newer advertisers have continued to scale spending throughout 2026.
Jefferies also highlighted improving feedback on AppLovin’s generative artificial intelligence tools. Half of surveyed advertisers had tested AI-generated end cards, half had tested AI-generated video, and one-third had tested full campaign setup using generative AI features.
The firm wrote that feedback on AI-generated video was particularly positive, with six advertisers reporting ROAS improvements. Advertisers cited the ease of use and ability to test multiple videos as benefits. Jefferies noted that prior feedback on AppLovin’s AI video product had been more muted, making the latest results an incremental positive.
Feedback on AI-generated end cards was mixed, with advertisers describing the tool as intuitive and easy to use, though only four respondents reported performance improvements. For full campaign setup, advertisers focused more on improved speed and campaign launch efficiency rather than direct performance gains, according to Jefferies.
Advertisers surveyed also raised their expectations for direct-to-consumer ad spending growth in 2026. Respondents now expect total DTC ad spend to increase 15% year-over-year, up from an 8% growth expectation in Jefferies’ first-quarter survey. The group reported 12% spending growth in the second quarter and expects a similar pace in the third quarter.
AppLovin’s prospecting and discovery campaigns also showed improvement in the survey. Jefferies found that 73% of respondents reported an increase in new customer revenue from prospecting campaigns, up from 60% in the prior survey, while the percentage seeing a significant increase rose to 30% from 13%. For discovery campaigns, 60% of advertisers reported increased benefits, compared with 50% previously.
Jefferies’ survey cohort represented more than $1.2 billion in direct-to-consumer advertising spend and at least $7.1 billion in gross merchandise value, based on the firm’s estimates.
Shares of AppLovin traded hands at $514 on Friday, down almost 24% so far this year.
AppLovin v 1. čtvrtletí 2026 vykázal rekordní tržby ve výši 1,84 miliardy USD, což je meziročně o 59 % více. Akcie přesto od začátku roku klesly zhruba o 19 %.
Key Takeaways APP delivered record Q1 2026 revenues of $1.84 billion, up 59% year over year.AppLovin posted an 85% adjusted EBITDA margin and a 65% net margin in its latest quarter.APP trades at premium valuation multiples, supporting a hold stance despite strong fundamentals. Despite delivering strong operational performance, AppLovin (APP - Free Report) has seen its stock decline roughly 19% year to date. The weakness reflects shifting market sentiment toward high-growth technology stocks rather than any visible deterioration in the company’s fundamentals. While investors have grown cautious about valuation and broader macroeconomic uncertainty, AppLovin continues to execute at a remarkably high level.
Image Source: Zacks Investment Research
The company remains one of the fastest-growing names in digital advertising, supported by artificial intelligence-driven ad optimization, expanding monetization capabilities and improving profitability. As the stock trades well below its recent highs, investors may need to determine whether the recent correction reflects a fundamental concern or simply a disconnect between price action and business performance.
AI-Powered Advertising Continues to Drive APP’s Revenue GrowthAppLovin’s growth story remains firmly intact, with demand for its AI-powered advertising and app monetization platform continuing to accelerate.
Quarterly revenues climbed steadily from $406 million in the second quarter of 2023 to nearly $1 billion by the fourth quarter of 2024. The momentum strengthened further throughout 2025, with quarterly revenues consistently exceeding $1 billion while maintaining sequential growth.
The company carried that momentum into the first quarter of 2026, reporting record quarterly revenues of $1.84 billion, representing an impressive 59% year-over-year increase.
This sustained expansion reflects increasing adoption of AppLovin’s AI-enhanced advertising solutions, particularly improvements driven by its Axon platform. The company has also broadened its reach beyond its traditional gaming customer base into larger e-commerce and digital advertising markets, creating new opportunities for long-term expansion.
As advertisers increasingly rely on AI-powered targeting, campaign optimization and monetization tools to improve returns on advertising spend, AppLovin continues to strengthen its position within one of the fastest-growing segments of the digital advertising industry.
Margin Expansion Is Becoming APP’s StrengthAlthough rapid revenue growth continues to attract investor attention, AppLovin’s profitability may represent its greatest long-term strength.
The company is increasingly generating revenue from higher-margin software offerings, allowing a much larger percentage of incremental sales to flow directly to the bottom line. This favorable business mix, combined with disciplined cost management, has significantly improved operating efficiency over the past several quarters.
During its latest reported quarter, AppLovin delivered an adjusted EBITDA margin of 85%, expanding 100 basis points from the prior-year period. Net margin improved even more dramatically, rising 1,500 basis points to 65%.
These figures demonstrate that AppLovin is not merely growing rapidly; it is scaling efficiently. Many technology companies can deliver strong top-line expansion, but far fewer can convert that growth into substantial profitability.
The company’s operating leverage suggests its business model becomes increasingly profitable as revenues continue to expand, reinforcing the quality and durability of its earnings profile.
Analyst Projections Signal Fundamental StrengthAnalyst expectations reflect continued optimism. The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $3.72 per share, indicating a 65% increase from the year-ago period. Revenue for the same quarter is expected to reach $1.94 billion, indicating 54% year-over-year growth. Looking further ahead, full-year 2026 earnings are projected to increase 59%, with 2027 earnings expected to rise an additional 32%. Revenues are also expected to increase 42% in 2026 and 29.5% in 2027. These projections underscore confidence in the company’s monetization engine and its ability to deliver strong earnings amid digital ad market expansion.
APP Valuation Appears ElevatedAPP currently trades at a forward P/E multiple of 29.29, noticeably above the industry average of 22.11.
Image Source: Zacks Investment Research
Its forward price-to-sales ratio of 19.21 also stands far above the industry benchmark of 2.89, indicating that investor expectations for future growth remain extremely aggressive.
Image Source: Zacks Investment Research
When stocks trade at premium valuation levels, even modest growth slowdowns or softer guidance can lead to significant multiple compression. Consequently, APP shares could remain vulnerable if market sentiment shifts or expectations are revised lower.
Comparing APP With Major U.S. Advertising Technology RivalsThe Trade Desk (TTD - Free Report) operates a demand-side advertising platform centered around programmatic advertising and advanced audience targeting capabilities. Although The Trade Desk benefits from strong exposure to premium advertising brands, its profitability profile tends to be more cyclical and sensitive to broader advertising spending trends compared with AppLovin. While TTD prioritizes scale and reach, AppLovin remains more focused on performance optimization and monetization efficiency.
Unity Software (U - Free Report) also maintains exposure to digital advertising through its real-time 3D platform and monetization offerings. However, Unity Software’s advertising operations remain closely connected to developer ecosystems and have historically demonstrated greater volatility. Unlike AppLovin, Unity Software continues to balance profitability objectives alongside growth expansion, making AppLovin’s consistent margin profile a notable competitive advantage among peers.
Hold Rating Appears AppropriateAppLovin continues to execute exceptionally well, supported by robust demand for its AI-powered advertising platform, expanding profitability, and favorable long-term growth prospects. The company has consistently demonstrated its ability to scale efficiently while strengthening its competitive position across the digital advertising ecosystem. However, much of this optimism appears reflected in the stock's premium valuation, leaving limited room for disappointment if growth moderates or market sentiment weakens. Although the long-term outlook remains compelling, the current risk-reward profile suggests investors should adopt a wait-and-watch approach. APP appears appropriately rated as a Hold while investors monitor future execution and valuation trends.
APP carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
AppLovin klesl o 4,09 % na 445,93 USD, tedy výrazně více než širší trh. Před zveřejněním výsledků trh čeká zisk 3,7 USD na akcii a tržby 1,94 miliardy USD.
AppLovin (APP - Free Report) ended the recent trading session at $445.93, demonstrating a -4.09% change from the preceding day's closing price. This move lagged the S&P 500's daily loss of 0.01%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq lost 0.46%.
Heading into today, shares of the mobile app technology company had lost 18.12% over the past month, lagging the Business Services sector's loss of 1.21% and the S&P 500's loss of 1.4%.
The upcoming earnings release of AppLovin will be of great interest to investors. On that day, AppLovin is projected to report earnings of $3.7 per share, which would represent year-over-year growth of 63.72%. Alongside, our most recent consensus estimate is anticipating revenue of $1.94 billion, indicating a 54.14% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $15.86 per share and a revenue of $8.26 billion, demonstrating changes of +57.97% and +42.34%, respectively, from the preceding year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for AppLovin. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. AppLovin presently features a Zacks Rank of #3 (Hold).
In terms of valuation, AppLovin is currently trading at a Forward P/E ratio of 29.32. This signifies a premium in comparison to the average Forward P/E of 15.61 for its industry.
We can additionally observe that APP currently boasts a PEG ratio of 0.76. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As of the close of trade yesterday, the Technology Services industry held an average PEG ratio of 1.4.
The Technology Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 162, this industry ranks in the bottom 34% of all industries, numbering over 250.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Key Takeaways AppLovin has reported 85% adjusted EBITDA margin and 65% net margin.APP is shifting revenues toward higher-margin software while maintaining disciplined cost control.APP stock falls 31% year to date, while its margin stability stands out versus peers. The key story surrounding AppLovin Corporation (APP - Free Report) today is not just growth; it is the company’s exceptional margin strength. While AppLovin continues to expand its presence in the advertising ecosystem through performance-based tools and AI-driven optimization, its real competitive advantage lies in its operating efficiency.
A growing share of revenues is coming from higher-margin software offerings, which are increasingly driving profitability. Combined with disciplined cost management, this shift has significantly boosted bottom-line performance. As a result, a larger portion of incremental revenue now flows directly to profit, reinforcing the durability and quality of AppLovin’s business model. In the latest reported quarter, the company delivered an adjusted EBITDA margin of 85%, expanding 100 basis points from the prior year. Net margin also improved 1500 basis points to 65%, reflecting the strength of its operating structure.
This strong financial profile gives AppLovin the flexibility to continue investing in areas that support long-term growth, including AI innovation, platform improvements and balance-sheet optimization. That resilience is particularly valuable in the ad-tech sector, where market sentiment can change quickly, and short-term volatility sometimes overshadows underlying fundamentals.
The recent pullback in the stock appears to be driven more by market sentiment than by any structural weakness in the business. When a platform demonstrates scalable margins, steady demand, and disciplined capital allocation, temporary valuation resets can sometimes create attractive entry opportunities. If AppLovin can sustain its margin durability, the investment conversation may increasingly shift away from cyclical advertising trends and toward the company’s structural profitability advantage.
How AppLovin Stacks Up Against Key U.S. Peers
The Trade Desk (TTD - Free Report) operates a leading demand-side platform built around programmatic advertising and data-driven targeting. While the company benefits from strong relationships with premium brands and advertisers, its margin profile tends to be more sensitive to fluctuations in advertising spending. In many ways, The Trade Desk focuses on scale and reach, while AppLovin concentrates more heavily on performance and efficiency.
Unity Software (U - Free Report) also participates in the advertising ecosystem through its real-time 3D platform and monetization tools for developers. However, Unity’s advertising business remains closely tied to the developer community and has been more volatile. Unlike AppLovin, Unity is still working to balance growth with consistent profitability, which makes AppLovin’s margin stability a notable differentiator among these peers.Top of Form
APP’s Price Performance, Valuation and Estimates
The stock has declined 31% year to date compared with the industry’s 5% fall.
Image Source: Zacks Investment Research
From a valuation standpoint, APP trades at a forward price-to-earnings ratio of 25.36, which is above the industry average of 21.03. It carries a Value Score of C.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for APP’s 2026 earnings has remained unchanged over the past 30 days.
APP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
