01—Abstract
Summary
Summary of the 10-Q filed May 7, 2025. Cited figures are marked; the original filing is the authoritative source.
AppLovin Corporation reported a strong first quarter of 2025, with total revenue increasing by 40% year-over-year to $1.48 billiona.
This growth was primarily driven by a significant 71% surge in Advertising Revenue, which now constitutes 78% of total revenue, indicating a successful shift in business focus. The Apps segment, however, experienced a 14% decline in revenue due to decreased In-App Purchase and In-App Advertising revenue. Net income more than doubled to $576.4 millionb, and Adjusted EBITDA also saw substantial growth, reaching $1.0 billion.
The company also demonstrated robust operating cash flow of $831.7 millionc. A notable event during the quarter was a $188.9 million goodwill impairment charge related to the Apps segment, stemming from the pending sale of the mobile gaming business to Tripledot, announced post-quarter end. Despite this, the company's financial performance was exceptionally strong, supported by efficient cost management in sales and marketing, and research and development.
02—Key points
Key Highlights
- Total revenue grew 40% year-over-year to $1.48 billion.
- Advertising Revenue surged 71% to $1.16 billion, driven by AppDiscovery performance.
- Apps Revenue declined 14% to $325 million, impacted by lower in-app purchases and advertising.
- Net income increased significantly to $576.4 million from $236.2 million in the prior year.
- Adjusted EBITDA reached $1.0 billion, up from $548.8 million in Q1 2024.
- Operating cash flow was strong at $831.7 million.
- A goodwill impairment charge of $188.9 million was recorded for the Apps segment due to the pending sale of the mobile gaming business.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, AppLovin Corp kept $0.50.
- Revenue$1.16B100.0%
- Cost of revenue−$151.7M13.1%
- Gross profit$1.01B86.9%
- Operating costs−$167.3M14.4%
- Operating income$840.0M72.5%
- Interest, other & tax−$263.6M22.7%
- Net income$576.4M49.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 7, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.16B$1.06B | +9.5% |
| Cost of Revenue | $151.68M$294.15M | −48.4% |
| Gross Profit | $1.01B$763.97M | +31.9% |
| R&D Expenses | $56.41M$155.32M | −63.7% |
| Operating Expenses | $318.99M$718.56M | −55.6% |
| Operating Income | $839.98M$339.56M | +147.4% |
| Net Income | $576.42M$236.18M | +144.1% |
| EPS (Basic) | $1.70$0.70 | +142.9% |
| EPS (Diluted) | $1.67$0.67 | +149.3% |
| Shares Outstanding (Basic) | 339.84M335.79M | +1.2% |
| Shares Outstanding (Diluted) | 344.88M348.60M | −1.1% |
05—Questions
Frequently Asked Questions
What is the primary driver of AppLovin's revenue growth in Q1 2025?
The primary driver of AppLovin's revenue growth in Q1 2025 was the Advertising segment, which saw a 71% year-over-year increase in revenue, largely due to improved performance in its AppDiscovery platform.
What is the company's strategy regarding its mobile gaming business?
AppLovin announced a definitive agreement to sell its mobile gaming business (Apps segment) post-quarter end. The company is classifying this segment as a discontinued operation starting in Q2 2025, signaling a strategic shift to focus more heavily on its Advertising solutions.
How did the company's profitability change in Q1 2025?
Profitability significantly improved. Net income more than doubled to $576.4 million, and Adjusted EBITDA increased to $1.0 billion, indicating strong operational efficiency and robust performance.
What is the significance of the goodwill impairment charge?
The $188.9 million goodwill impairment charge is a non-cash expense related to the Apps reporting unit. It was recognized due to the pending sale of the mobile gaming business, reflecting a downward revision in the carrying value of that segment's assets.
06—Continue