10-QPeriod: Q3 FY2023

AppLovin Corp Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 8, 2023For Securities:APP

Summary

AppLovin Corporation (APP) reported a strong third quarter for 2023, demonstrating significant year-over-year growth in revenue and profitability. The company's Software Platform segment was a key driver of this performance, with revenue increasing by 65% due to improved AppDiscovery performance. Despite a decline in revenue from the Apps segment, driven by strategic optimization efforts and reduced user acquisition spend, overall profitability saw substantial improvement. Adjusted EBITDA increased by 63% year-over-year, indicating effective cost management and operational efficiency. The company also highlighted robust free cash flow generation, underscoring its financial strength and ability to reinvest in growth initiatives and return capital to shareholders.

Financial Highlights

53 data points
Beta

Revenue

$864.26M

69.3% Gross Margin

Net Income

$108.64M

12.6% Net Margin

EPS (Diluted)

$0.30

Total Assets

$5.01B

Cash & Equivalents

$332.49M

Free Cash Flow

$198.88M

Financial Statements
Beta
Revenue$864.26M
Cost of Revenue$265.05M
Gross Profit$599.21M
R&D Expenses$159.29M
Operating Expenses$677.94M
Operating Income$186.32M
Net Income$108.64M
EPS (Basic)$0.32
EPS (Diluted)$0.30
Shares Outstanding (Basic)341.44M
Shares Outstanding (Diluted)356.91M

Key Highlights

  • 1Total revenue for the three months ended September 30, 2023, increased by 21% year-over-year to $864.3 million.
  • 2Software Platform Revenue saw a substantial increase of 65% year-over-year, reaching $504.5 million, driven by improved AppDiscovery performance.
  • 3Net income for the third quarter of 2023 was $108.6 million, a significant increase from $23.7 million in the prior year period.
  • 4Adjusted EBITDA grew by 63% year-over-year to $419.3 million, with an Adjusted EBITDA margin of 48.5%.
  • 5The company repurchased approximately $1.15 billion of its Class A common stock during the nine months ended September 30, 2023, demonstrating a commitment to returning capital to shareholders.
  • 6Free Cash Flow for the nine months ended September 30, 2023, was $697.3 million, a significant increase from $230.9 million in the prior year period.
  • 7The Apps segment experienced an 11% decrease in revenue year-over-year, primarily due to strategic portfolio optimization and reduced user acquisition spend.

Frequently Asked Questions

AppLovin reported a strong third quarter for 2023 with a 21% year-over-year increase in total revenue to $864.3 million. The company also saw a significant jump in net income to $108.6 million and a 63% increase in Adjusted EBITDA to $419.3 million, indicating robust operational performance and profitability.

The Software Platform segment experienced a significant 65% year-over-year revenue increase to $504.5 million. This growth was primarily attributed to improved performance in AppDiscovery, with a 40% increase in net revenue per installation and a 29% increase in the volume of installations.

The Apps segment revenue decreased by 11% year-over-year to $359.8 million. This decline was a result of strategic optimization efforts within the Apps portfolio, including reduced user acquisition spend, and the sale of certain assets. While this impacted revenue, it contributed to improved Apps Adjusted EBITDA margins.

AppLovin ended the quarter with $332.5 million in cash and cash equivalents. The company generated strong free cash flow of $697.3 million for the nine months ended September 30, 2023. They also actively repurchased approximately $1.15 billion of their Class A common stock during the same period, demonstrating a strong focus on capital management and returning value to shareholders.