10-KPeriod: FY2023

AppLovin Corp Annual Report, Year Ended Dec 31, 2023

Filed February 26, 2024For Securities:APP

Summary

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 billion. 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 million, 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 billion, supporting its share repurchase program. AppLovin continues to focus on innovation in its Software Platform and expanding its market reach.

Financial Highlights

55 data points
Beta

Revenue

$1.84B

80.6% Gross Margin

Net Income

$357.00M

19.4% Net Margin

EPS (Diluted)

$0.98

Total Assets

$5.36B

Cash & Equivalents

$502.15M

Free Cash Flow

$1.06B

Financial Statements
Beta
Revenue$1.84B
Cost of Revenue$356.61M
Gross Profit$1.49B
R&D Expenses$333.78M
Operating Expenses$1.07B
Operating Income$772.41M
Interest Expense$281.71M
Net Income$357.00M
EPS (Basic)$1.01
EPS (Diluted)$0.98
Shares Outstanding (Basic)351.95M
Shares Outstanding (Diluted)362.59M

Key Highlights

  • 1Total revenue grew 17% year-over-year to $3.28 billion in 2023.
  • 2Software Platform revenue surged by 76% to $1.84 billion, now representing 56% of total revenue.
  • 3The Apps segment revenue declined by 18% to $1.44 billion.
  • 4Net income turned positive at $356.7 million in 2023, compared to a net loss of $192.9 million in 2022.
  • 5Adjusted EBITDA increased by 41% to $1.5 billion, with a corresponding margin improvement to 45.8%.
  • 6Free Cash Flow was strong at $1.04 billion for the year.
  • 7The company continued its share repurchase program, repurchasing $1.15 billion of Class A common stock during 2023.

Frequently Asked Questions

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.

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%.

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.

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.