10-QPeriod: Q3 FY2024

AppLovin Corp Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 6, 2024For Securities:APP

Summary

AppLovin Corporation (APP) demonstrated robust financial performance in the third quarter of 2024, with significant year-over-year growth in revenue and profitability. Total revenue reached $1.20 billion, a 39% increase driven primarily by a strong performance in the Software Platform segment, which grew 66% year-over-year. The Apps segment also saw modest growth, contributing to the overall positive trend. Net income surged to $434.4 million, a substantial improvement from $108.6 million in the prior year's quarter, reflecting improved operational efficiencies and strong revenue growth. The company's operational efficiency is highlighted by a substantial increase in Adjusted EBITDA to $721.6 million, up from $419.3 million in Q3 2023, with an improved Adjusted EBITDA margin of 60.2%. This strong profitability has allowed AppLovin to continue investing in innovation and return capital to shareholders, evidenced by substantial share repurchases. The balance sheet remains solid, with a healthy cash position, though long-term debt has increased. The company's strategic focus on its Software Platform, particularly its AI-powered solutions, appears to be driving significant value for investors.

Financial Highlights

49 data points
Beta

Revenue

$835.19M

85.5% Gross Margin

Net Income

$434.42M

52.0% Net Margin

EPS (Diluted)

$1.25

Total Assets

$5.44B

Cash & Equivalents

$567.60M

Free Cash Flow

$550.70M

Financial Statements
Beta
Revenue$835.19M
Cost of Revenue$120.92M
Gross Profit$714.27M
R&D Expenses$80.78M
Operating Expenses$300.89M
Operating Income$534.30M
Net Income$434.42M
EPS (Basic)$1.29
EPS (Diluted)$1.25
Shares Outstanding (Basic)336.93M
Shares Outstanding (Diluted)348.23M

Key Highlights

  • 1Total revenue for the third quarter of 2024 increased by 39% year-over-year to $1.20 billion.
  • 2Software Platform revenue saw a significant 66% year-over-year increase to $835.2 million, driven by AppDiscovery performance.
  • 3Net income grew substantially to $434.4 million, a significant increase from $108.6 million in the prior year quarter.
  • 4Adjusted EBITDA reached $721.6 million, up 72% year-over-year, with an improved Adjusted EBITDA margin of 60.2%.
  • 5The company repurchased approximately $981.3 million of Class A common stock in the first nine months of 2024.
  • 6Cash and cash equivalents stood at $567.6 million as of September 30, 2024.
  • 7Despite growth, long-term debt increased to $3.47 billion from $2.91 billion at the end of 2023.

Frequently Asked Questions

The primary driver of AppLovin's revenue growth in Q3 2024 was the Software Platform segment, which experienced a 66% year-over-year increase in revenue. This growth was largely attributed to improved performance in AppDiscovery, with increases in both net revenue per installation and the volume of installations.

AppLovin's profitability has significantly improved. Net income increased from $108.6 million in Q3 2023 to $434.4 million in Q3 2024. Adjusted EBITDA also saw a substantial increase of 72% year-over-year, reaching $721.6 million, with the Adjusted EBITDA margin expanding to 60.2% from 48.5% in the prior year.

As of September 30, 2024, AppLovin had $567.6 million in cash and cash equivalents. However, its long-term debt increased to $3.47 billion from $2.91 billion at the end of 2023. The company generated strong operating cash flow, providing liquidity.

AppLovin actively returned capital to shareholders through share repurchases. In the first nine months of 2024, the company repurchased approximately $981.3 million of its Class A common stock. The board also authorized an increase to the share repurchase program, demonstrating confidence in the company's financial health.