10-QPeriod: Q2 FY2022

AppLovin Corp Quarterly Report for Q2 Ended Jun 30, 2022

Filed August 12, 2022For Securities:APP

Summary

AppLovin Corporation (APP) reported its Q2 2022 results, showcasing robust growth in its Software Platform segment, which more than doubled its revenue year-over-year. This performance was driven by strong contributions from AppDiscovery, Adjust, and Wurl. However, the Apps segment experienced a revenue decline, primarily due to lower consumer revenue, despite a slight increase in business revenue. Despite the revenue growth in the Software Platform, the company reported a net loss for the quarter, a significant shift from the net income in the prior year's comparable period. This loss was influenced by increased investments in research and development and higher interest expenses. The company's Adjusted EBITDA, a non-GAAP measure, saw substantial growth, indicating underlying operational improvements. Management remains focused on continued innovation and strategic acquisitions to drive future growth.

Financial Highlights

53 data points
Beta

Revenue

$776.23M

60.8% Gross Margin

Net Income

-$21.75M

-2.8% Net Margin

EPS (Diluted)

$-0.06

Total Assets

$5.93B

Cash & Equivalents

$951.56M

Free Cash Flow

$106.70M

Financial Statements
Beta
Revenue$776.23M
Cost of Revenue$303.93M
Gross Profit$472.30M
R&D Expenses$141.11M
Operating Expenses$722.88M
Operating Income$53.35M
Net Income-$21.75M
EPS (Basic)$-0.06
EPS (Diluted)$-0.06
Shares Outstanding (Basic)373.91M
Shares Outstanding (Diluted)373.91M

Key Highlights

  • 1Software Platform revenue surged by 118% year-over-year, reaching $317.5 million for the quarter, driven by strong performance in AppDiscovery and contributions from recent acquisitions like Adjust and Wurl.
  • 2Total revenue increased by 16% year-over-year to $776.2 million, primarily fueled by the Software Platform segment.
  • 3The Apps segment experienced a revenue decline of 12% year-over-year, totaling $458.7 million, with Consumer Revenue down 16% due to lower in-app purchase volumes.
  • 4AppLovin reported a net loss of $21.8 million for the quarter, a reversal from a net income of $14.4 million in the same period last year.
  • 5Adjusted EBITDA showed significant growth, increasing by 47% year-over-year to $269.7 million, with an improved Adjusted EBITDA margin of 34.8%.
  • 6The company repurchased approximately $254.5 million of its Class A common stock during the first six months of the year under its previously announced repurchase program.
  • 7Significant investments in Research and Development (R&D) were made, with expenses nearly doubling year-over-year, reflecting a commitment to innovation and future growth.

Frequently Asked Questions

The Software Platform revenue more than doubled, driven primarily by the AppDiscovery product, which saw a 47% increase in installations and a 58% increase in price per installation year-over-year. Acquisitions such as Adjust and Wurl also contributed to this substantial growth.

The company reported a net loss of $21.8 million compared to a net income in the prior year primarily due to increased investments. Specifically, Research and Development expenses nearly doubled year-over-year, and interest expenses also significantly increased, impacting the bottom line.

The Apps segment saw a 12% decrease in revenue year-over-year, totaling $458.7 million. This decline was mainly attributed to a 16% drop in Consumer Revenue, stemming from a 19% decrease in the volume of in-app purchases, although the price per in-app purchase saw a slight increase.

AppLovin maintains a strong cash position with $951.6 million in cash and cash equivalents as of June 30, 2022. While the company reported a net loss for the quarter, the significant increase in Adjusted EBITDA indicates strong operational performance. The company continues to invest heavily in R&D and has a robust share repurchase program, signaling confidence in future growth prospects, particularly within the Software Platform segment.