01—Abstract
Summary
Summary of the 10-K filed February 26, 2024. Cited figures are marked; the original filing is the authoritative source.
AppLovin Corporation (APP) reported strong financial performance for the fiscal year ended December 31, 2023.
Total revenue increased by 17% year-over-year, reaching $3.28 billiona. This growth was primarily driven by a substantial 76% increase in Software Platform revenue, which now represents 56% of total revenue. This segment's success was fueled by strong performance in AppDiscovery and MAX solutions, demonstrating the effectiveness of their AI-powered advertising engine, AXON.
Conversely, the Apps segment experienced an 18% decline in revenue, largely due to a decrease in In-App Purchases (IAP) revenue, particularly from flagship games like Project Makeover and Matchington Mansion. Despite the decline in Apps revenue, the company achieved significant profitability, reporting a net income of $356.7 millionb, a substantial improvement from the net loss of $192.9 million in the prior year. Adjusted EBITDA also saw robust growth, increasing by 41% to $1.5 billion.
The company also generated strong free cash flow of $1.04 billionc, supporting its share repurchase program. AppLovin continues to focus on innovation in its Software Platform and expanding its market reach.
02—Key points
Key Highlights
- Total revenue grew 17% year-over-year to $3.28 billion in 2023.
- Software Platform revenue surged by 76% to $1.84 billion, now representing 56% of total revenue.
- The Apps segment revenue declined by 18% to $1.44 billion.
- Net income turned positive at $356.7 million in 2023, compared to a net loss of $192.9 million in 2022.
- Adjusted EBITDA increased by 41% to $1.5 billion, with a corresponding margin improvement to 45.8%.
- Free Cash Flow was strong at $1.04 billion for the year.
- The company continued its share repurchase program, repurchasing $1.15 billion of Class A common stock during 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, AppLovin Corp kept $0.19.
- Revenue$1.84B100.0%
- Cost of revenue−$356.6M19.4%
- Gross profit$1.49B80.6%
- Operating costs−$712.7M38.7%
- Operating income$772.4M41.9%
- Interest, other & tax−$415.4M22.6%
- Net income$357.0M19.4%
Where FY2023 revenue went
$1.84B- Interest, other & tax: $415.4M, 23% of revenue
- Other operating costs: $379.0M, 21% of revenue
- Net income: $357.0M, 19% of revenue
- Cost of revenue: $356.6M, 19% of revenue
- R&D: $333.8M, 18% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 26, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $1.84B$2.82B | −34.6% |
| Cost of Revenue | $356.61M$1.26B | −71.6% |
| Gross Profit | $1.49B$1.56B | −4.9% |
| R&D Expenses | $333.78M$507.61M | −34.2% |
| Operating Expenses | $1.07B$2.86B | −62.7% |
| Operating Income | $772.41M-$47.79M | +1716.2% |
| Interest Expense | $281.71M$172.18M | +63.6% |
| Net Income | $357.00M-$193.00M | +285.0% |
| EPS (Basic) | $1.01$-0.52 | +294.2% |
| EPS (Diluted) | $0.98$-0.52 | +288.5% |
| Shares Outstanding (Basic) | 351.95M371.57M | −5.3% |
| Shares Outstanding (Diluted) | 362.59M371.57M | −2.4% |
05—Questions
Frequently Asked Questions
What was AppLovin's revenue performance in 2023?
AppLovin reported a 17% year-over-year increase in total revenue for 2023, reaching $3.28 billion. The Software Platform segment was the primary driver of this growth, with revenue increasing by 76% to $1.84 billion, while the Apps segment experienced an 18% decrease in revenue to $1.44 billion.
How did AppLovin's profitability change in 2023?
AppLovin significantly improved its profitability in 2023, reporting a net income of $356.7 million, a substantial turnaround from a net loss of $192.9 million in 2022. Adjusted EBITDA also grew strongly, up 41% to $1.5 billion, with an improved margin of 45.8%.
What are the key growth drivers for AppLovin?
The primary growth driver for AppLovin is its Software Platform, powered by its AI engine AXON, which includes solutions like AppDiscovery and MAX. The company is investing in innovation within this platform and expanding its market reach. While the Apps segment faced challenges, the company is focused on optimizing its portfolio and leveraging its Software Platform to drive future growth.
What is AppLovin's current financial health and cash generation?
AppLovin demonstrated strong financial health in 2023, generating $1.04 billion in Free Cash Flow. The company also maintained a healthy cash and cash equivalents balance of $502.2 million as of December 31, 2023. Furthermore, the company continued its share repurchase program, returning significant capital to shareholders.
06—Continue