01—Abstract
Summary
Summary of the 10-K filed March 11, 2022. Cited figures are marked; the original filing is the authoritative source.
AppLovin Corporation's 2021 10-K filing highlights a year of significant growth, with total revenue nearly doubling from $1.45 billion in 2020 to $2.79 billiona in 2021.
This impressive growth was driven by strong performance across both its Software Platform and Apps segments, with Business Revenue increasing by 88% and Consumer Revenue up by 97%. The company's strategic focus on its integrated "flywheel" model, combining core technologies, a software platform, and a portfolio of owned apps, continues to be a key driver of its success. While the company achieved profitability in 2021 with a net income of $35.3 millionb, an improvement from a net loss of $125.9 million in 2020, its sales and marketing expenses, particularly user acquisition costs, also rose significantly, indicating continued investment in growth.
The company also detailed its ongoing strategic acquisition activities, including the acquisition of Adjust, and its plans for further expansion, including into the Connected TV (CTV) market with the pending acquisition of Wurl. Investors should note the company's substantial debt of $3.27 billionc as of December 31, 2021, and its intention to repurchase up to $750.0 million of its Class A common stock.
02—Key points
Key Highlights
- AppLovin reported a substantial increase in total revenue, growing 92% year-over-year to $2.79 billion in 2021, up from $1.45 billion in 2020.
- The Software Platform segment saw impressive growth, with Business Revenue increasing by 225% year-over-year, driven by strong performance in AppDiscovery and the acquisition of Adjust.
- Consumer Revenue also experienced significant growth, increasing by 97% year-over-year, primarily due to a rise in in-app purchase volume.
- The company achieved net income of $35.3 million in 2021, a significant turnaround from a net loss of $125.9 million in 2020.
- Sales and marketing expenses increased by 80% in 2021, largely driven by user acquisition costs, reflecting continued investment in growth.
- AppLovin made significant strategic acquisitions in 2021, including Adjust, and planned further expansion into the Connected TV market with the pending acquisition of Wurl.
- As of December 31, 2021, the company had substantial debt outstanding, totaling $3.27 billion, and announced a $750.0 million share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, AppLovin Corp kept $0.01.
- Revenue$2.79B100.0%
- Cost of revenue−$988.1M35.4%
- Gross profit$1.81B64.6%
- Operating costs−$1.65B59.3%
- Operating income$150.0M5.4%
- Interest, other & tax−$115.0M4.1%
- Net income$35.0M1.3%
Where FY2021 revenue went
$2.79B- Other operating costs: $1.29B, 46% of revenue
- Cost of revenue: $988.1M, 35% of revenue
- R&D: $366.4M, 13% of revenue
- Net income: $35.0M, 1.3% of revenue
- Interest, other & tax: $115.0M, 4.1% of revenue
Kept 1.3% as net incomeNet income $35.0M · 1.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 11, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $2.79B$1.45B | +92.5% |
| Cost of Revenue | $988.10M$555.58M | +77.8% |
| Gross Profit | $1.81B$895.51M | +101.6% |
| R&D Expenses | $366.40M$180.65M | +102.8% |
| Operating Expenses | $2.64B$1.51B | +74.7% |
| Operating Income | $150.02M-$62.04M | +341.8% |
| Net Income | $35.00M-$125.19M | +128.0% |
| EPS (Basic) | $0.10$-0.58 | +117.2% |
| EPS (Diluted) | $0.09$-0.58 | +115.5% |
| Shares Outstanding (Basic) | 324.84M214.94M | +51.1% |
| Shares Outstanding (Diluted) | 342.76M214.94M | +59.5% |
05—Questions
Frequently Asked Questions
What was AppLovin's revenue growth in 2021?
AppLovin experienced substantial revenue growth in 2021, with total revenue increasing by 92% to $2.79 billion, compared to $1.45 billion in 2020. This growth was driven by both its Software Platform and Apps segments.
How is AppLovin's business structured and how does it generate revenue?
AppLovin operates a dual business model, generating revenue from its Software Platform (serving third-party app developers) and its own portfolio of mobile apps. Business Revenue comes from advertisers using its platform and advertising on its apps, while Consumer Revenue is generated from in-app purchases within its own apps. The company emphasizes its "flywheel" model where its core technologies, software platform, and apps mutually reinforce each other for growth.
What is the company's financial performance regarding profitability?
AppLovin returned to profitability in 2021, reporting a net income of $35.3 million, a significant improvement from a net loss of $125.9 million in 2020. Adjusted EBITDA also saw substantial growth, reaching $726.8 million in 2021, up from $345.5 million in 2020.
What are the key risks or challenges mentioned in the filing?
Key risks include intense competition in the mobile app ecosystem, reliance on third-party platforms (like Apple and Google), evolving privacy regulations (such as Apple's IDFA changes), cybersecurity threats, the integration of acquisitions, and the significant amount of debt the company carries ($3.27 billion as of December 31, 2021). The company also noted the concentration of revenue from a few top games.
06—Continue