10-QPeriod: Q1 FY2021

AppLovin Corp Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 14, 2021For Securities:APP

Summary

AppLovin Corporation's (APP) Q1 2021 report shows robust top-line growth, with total revenue increasing by 132% year-over-year to $603.9 million. This surge was primarily driven by a substantial 215% increase in Consumer Revenue, alongside a strong 68% rise in Business Revenue. Despite this impressive revenue expansion, the company reported a net loss of $10.6 million for the quarter, a shift from the net income of $4.7 million in the prior year period. This was influenced by a significant increase in Cost of Revenue (up 192%), Sales and Marketing (up 106%), Research and Development (up 219%), and General and Administrative expenses (up 297%). The company successfully raised $1.75 billion in net proceeds from its Initial Public Offering (IPO) on April 19, 2021, post-quarter end. A portion of these proceeds was used to repay its revolving credit facility. The report also highlights significant debt financing activity in the quarter, including an increase in senior secured term loans and draws on the revolving credit facility. AppLovin's cash position strengthened considerably, ending the quarter with $761.1 million in cash and cash equivalents, up from $317.2 million at the end of the previous quarter.

Financial Highlights

52 data points
Beta

Revenue

$603.88M

63.1% Gross Margin

Net Income

-$10.52M

-1.7% Net Margin

EPS (Diluted)

$-0.05

Total Assets

$2.62B

Cash & Equivalents

$761.08M

Free Cash Flow

$61.70M

Financial Statements
Beta
Revenue$603.88M
Cost of Revenue$223.06M
Gross Profit$380.82M
R&D Expenses$60.88M
Operating Expenses$592.41M
Operating Income$11.46M
Net Income-$10.52M
EPS (Basic)$-0.05
EPS (Diluted)$-0.05
Shares Outstanding (Basic)222.41M
Shares Outstanding (Diluted)222.41M

Key Highlights

  • 1Total revenue grew 132% year-over-year to $603.9 million.
  • 2Consumer Revenue saw a significant increase of 215% to $358.5 million.
  • 3Business Revenue increased by 68% to $245.4 million.
  • 4The company reported a net loss of $10.6 million, compared to a net income of $4.7 million in the prior year.
  • 5Operating expenses, particularly Cost of Revenue, Sales & Marketing, R&D, and G&A, increased significantly year-over-year, contributing to the net loss.
  • 6Cash and cash equivalents increased substantially to $761.1 million from $317.2 million at the end of the previous quarter.
  • 7AppLovin completed its IPO in April 2021, raising $1.75 billion in net proceeds.

Frequently Asked Questions

The primary driver for AppLovin's 132% year-over-year revenue growth in Q1 2021 was the substantial increase in Consumer Revenue, which grew by 215%. This segment includes in-app purchases made by users within AppLovin's portfolio of apps. Business Revenue also showed strong growth (68%), contributing to the overall top-line expansion.

While revenue surged, AppLovin experienced a significant increase in its operating expenses across several key areas: Cost of Revenue increased by 192%, Sales and Marketing by 106%, Research and Development by 219%, and General and Administrative expenses by 297%. These increased costs, along with a substantial increase in interest expense and loss on settlement of debt ($35.0 million compared to $18.6 million), led to a net loss of $10.6 million for the quarter, despite the revenue growth.

AppLovin's financial position strengthened considerably. Cash and cash equivalents more than doubled, reaching $761.1 million by the end of Q1 2021, up from $317.2 million at the end of Q4 2020. This increase was bolstered by net proceeds of $1.75 billion from its IPO, which occurred shortly after the quarter ended. The company also utilized IPO proceeds to repay its revolving credit facility.

In Q1 2021, AppLovin amended its credit agreement to increase its senior secured term loan facility and revolving credit facility. It also drew down $250 million from its revolving credit facility. A significant portion of the IPO proceeds were used to repay the $400 million outstanding under the revolving credit facility shortly after the quarter ended. The company also incurred a $16.9 million loss on the extinguishment of certain term loans during the quarter.