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1. Company Snapshot

1.a. Company Description

AppLovin Corporation engages in building a software-based platform for mobile app developers to enhance the marketing and monetization of their apps in the United States and internationally.The company's software solutions include AppDiscovery, a marketing software solution, which matches advertiser demand with publisher supply through auctions; Adjust, an analytics platform that helps marketers grow their mobile apps with solutions for measuring, optimizing campaigns, and protecting user data; and MAX, an in-app bidding software that optimizes the value of an app's advertising inventory by running a real-time competitive auction.Its business clients include various advertisers, publishers, internet platforms, and others.


The company was incorporated in 2011 and is headquartered in Palo Alto, California.

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1.b. Last Insights on APP

Breaking News: AppLovin Corporation recently reported strong Q3 results, with 68% YoY revenue growth and 92% FCF growth. The company's Ads Manager platform and onboarding of e-commerce advertisers are expected to drive sustained growth. Analysts have upgraded shares to a Buy rating, citing the recent share decline as a compelling opportunity. BLI Banque de Luxembourg Investments acquired a new stake in AppLovin, while CTO Vasily Shikin sold 7,385 shares. The company will participate in the UBS Global Technology and AI Conference. Analysts recommend buying the dip, with one analyst upgrading to Buy.

1.c. Company Highlights

2. AppLovin's Q3 2025 Earnings: Strong Performance and Growth

AppLovin reported revenue of $1.405 billion, up 68% year-over-year, and adjusted EBITDA of $1.158 billion, up 79% at an 82% margin. The company's earnings per share (EPS) came in at $2.45, beating estimates of $2.38. Free cash flow was $1.049 billion, up 92% year-over-year. The strong financial performance was driven by the company's continued growth in gaming advertising and the MAX supply-side platform.

Publication Date: Nov -06

📋 Highlights
  • Revenue Growth:: Q3 2025 revenue reached $1.405 billion, a 68% year-over-year increase, driven by strong gaming advertising and MAX platform expansion.
  • Profitability:: Adjusted EBITDA hit $1.158 billion (82% margin), up 79% YoY, with free cash flow of $1.049 billion (92% YoY growth).
  • Self-Service Growth:: Self-service advertiser spend surged 50% week-over-week post-platform launch, indicating strong adoption.
  • AI Integration:: Plans to scale AI agents, test generative AI ad creatives, and enhance onboarding workflows to boost efficiency and demand density.
  • Share Repurchases:: $571 million spent to repurchase/restrict 1.3 million shares, reflecting confidence in long-term value.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by the strong performance of its gaming advertising business, with the MAX supply-side platform growing at healthy rates. The adjusted EBITDA margin expanded to 82%, driven by the company's focus on improving models for all advertisers and tuning onboarding flows. As Matt Stumpf, CFO, noted, "the guidance for Q4 reflects a combination of different factors, including optimism around the e-commerce referral program, continued model enhancements, and normal holiday seasonality."

Guidance and Outlook

AppLovin guided to revenue between $1.570 billion and $1.6 billion for Q4 2025, reflecting 12% to 14% sequential growth. The company also expects adjusted EBITDA between $1.290 billion and $1.320 billion, targeting an adjusted EBITDA margin of 82% to 83%. Analysts estimate next year's revenue growth at 35.9%, which is slightly aggressive considering the company's current growth rate.

Valuation Metrics

AppLovin's current valuation metrics are as follows: P/E Ratio: 86.0, P/B Ratio: 179.02, P/S Ratio: 39.28, EV/EBITDA: 67.78. These metrics suggest that the company's stock is trading at a premium, with a high P/E ratio indicating that investors are pricing in high growth expectations. The EV/EBITDA ratio is also high, indicating that the company's enterprise value is significantly higher than its EBITDA.

Growth Prospects

The company's growth prospects are driven by its expanding presence in e-commerce and its focus on improving its AI capabilities. AppLovin is well-positioned to benefit from the growing demand for mobile advertising, and its strong financial performance is expected to continue. However, investors should be cautious about the company's high valuation multiples and the potential risks associated with its growth prospects.

3. NewsRoom

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Could This Be the Most Overlooked Way to Profit From the AI Boom?

Dec -04

Source: fool.com

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APP Stock Delivers Better Value Than Shopify In 2025

Dec -03

Source: forbes.com

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AppLovin's Merchant Boom Hints At Q4 Upside, Analyst Says

Dec -03

Source: benzinga.com

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How AppLovin is Evolving Into a Multi-Channel Advertising Leader

Dec -03

Source: zacks.com

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AppLovin Stock Rides Swarm Of Setups Beyond Just Mining, Medical Names

Dec -03

Source: investors.com

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AppLovin Corporation (APP) Presents at UBS Global Technology and AI Conference 2025 Transcript

Dec -02

Source: seekingalpha.com

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Voya MidCap Opportunities Strategy Q3 2025 Portfolio Review

Dec -01

Source: seekingalpha.com

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Why Applovin Stock Might Drop Soon?

Dec -01

Source: forbes.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (20.50%)

6. Segments

Advertising

Expected Growth: 20.5%

The mobile ad market is expected to grow rapidly, driven by increasing mobile app usage and demand for effective monetization strategies. AppLovin's diversified ad formats and data-driven approach will likely drive growth, with a forecast CAGR of 20.5% through 2025, fueled by rising adoption of mobile advertising and expanding customer base.

Apps

Expected Growth: 20.5%

The mobile gaming market is expected to grow rapidly, driven by increasing smartphone adoption and demand for in-app entertainment. AppLovin's diversified portfolio of games and monetization solutions positions it for strong growth, with a forecast CAGR of 20.5% through 2025, driven by its MAX advertising platform and expanding developer partnerships.

7. Detailed Products

AppDiscovery

A mobile app discovery platform that helps developers reach their target audience and increase app visibility.

MAX

A mobile app monetization platform that helps developers maximize their ad revenue through in-app advertising.

Lion Studios

A mobile game development studio that creates engaging and interactive mobile games.

AppLovin Exchange

A mobile in-app bidding exchange that connects buyers and sellers in a transparent and efficient marketplace.

8. AppLovin Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

AppLovin Corporation operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand recognition and high-quality products help to mitigate the threat of substitutes.

Bargaining Power Of Customers

AppLovin Corporation's customers have limited bargaining power due to the company's strong market position and the lack of alternative suppliers. This gives the company an upper hand in negotiations.

Bargaining Power Of Suppliers

AppLovin Corporation relies on a few key suppliers for its operations, which gives them some bargaining power. However, the company's strong relationships with its suppliers and its ability to negotiate favorable terms help to mitigate this threat.

Threat Of New Entrants

The mobile app industry is highly competitive, and new entrants can easily enter the market. AppLovin Corporation needs to continuously innovate and improve its products to stay ahead of the competition.

Intensity Of Rivalry

The mobile app industry is highly competitive, and AppLovin Corporation faces intense rivalry from established players and new entrants. The company needs to focus on differentiating its products and services to gain a competitive advantage.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 71.52%
Debt Cost 8.66%
Equity Weight 28.48%
Equity Cost 13.21%
WACC 9.96%
Leverage 251.06%

11. Quality Control: AppLovin Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 4.9/10

Value: 0.0

Growth: 9.7

Quality: 8.0

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

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A-Score: 4.3/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

691.94$

Current Price

691.94$

Potential

-0.00%

Expected Cash-Flows