01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
AppLovin Corporation (APP) reported robust financial performance for the quarter ended March 31, 2026.
Revenue surged by 59% year-over-year to $1.84 billiona, driven by strong growth in its Axon Ads Manager solution, which saw a 93% increase in net revenue per installation. Net income more than doubled to $1.21 billion, resulting in diluted earnings per share of $3.56. The company maintained strong profitability with a net income margin of 65.4% and a substantial Adjusted EBITDA margin of 84.5%.
Significant free cash flow generation of $1.29 billionb highlights operational efficiency. AppLovin also continued its aggressive capital return program, repurchasing $1 billion of its Class A common stock during the quarter, underscoring its commitment to shareholder value. The company ended the quarter with a strong cash position of $2.76 billion, providing ample liquidity for future operations and investments.
Operationally, AppLovin's strategic focus on its advertising business appears to be paying off, as evidenced by the significant revenue and profit growth. The divestiture of its non-core Apps Business in the prior year has allowed for a clearer focus on its core advertising solutions.
While the company faces ongoing risks related to platform changes, competition, and regulatory environments, the current financial results demonstrate resilience and strong execution. Investors should note the substantial share repurchase activity and the company's continued investment in innovation, particularly in AI, as key drivers for future growth.
02—Key points
Key Highlights
- Revenue increased significantly by 59% year-over-year to $1.84 billion.
- Net income more than doubled to $1.21 billion, with diluted EPS of $3.56.
- Axon Ads Manager showed substantial growth with a 93% increase in net revenue per installation.
- Adjusted EBITDA margin remained exceptionally strong at 84.5%.
- Free cash flow generation was robust at $1.29 billion.
- The company repurchased $1 billion of Class A common stock during the quarter, indicating a strong commitment to returning capital to shareholders.
- Ending cash and cash equivalents stood at $2.76 billion, providing a healthy liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, AppLovin Corp kept $0.65.
- Revenue$1.84B100.0%
- Cost of revenue−$203.6M11.1%
- Gross profit$1.64B88.9%
- Operating costs−$198.9M10.8%
- Operating income$1.44B78.2%
- Interest, other & tax−$234.3M12.7%
- Net income$1.21B65.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 6, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.84B$1.16B | +59.0% |
| Cost of Revenue | $203.63M$151.68M | +34.3% |
| Gross Profit | $1.64B$1.01B | +62.7% |
| R&D Expenses | $94.10M$56.41M | +66.8% |
| Operating Expenses | $402.52M$318.99M | +26.2% |
| Operating Income | $1.44B$839.98M | +71.4% |
| Net Income | $1.21B$576.42M | +109.2% |
| EPS (Basic) | $3.57$1.70 | +110.0% |
| EPS (Diluted) | $3.56$1.67 | +113.2% |
| Shares Outstanding (Basic) | 337.40M339.84M | −0.7% |
| Shares Outstanding (Diluted) | 338.73M344.88M | −1.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of AppLovin's revenue growth in the first quarter of 2026?
The primary driver of AppLovin's revenue growth was the strong performance of its Axon Ads Manager solution, which saw a significant 59% increase in overall revenue and a 93% increase in net revenue per installation. This highlights the effectiveness of their AI-powered advertising solutions.
How did AppLovin's profitability change year-over-year?
AppLovin's profitability significantly improved. Net income more than doubled to $1.21 billion from $576.4 million in the prior year's comparable quarter. The net income margin expanded from 50% to 65.4%, and the Adjusted EBITDA margin remained robust at 84.5%.
What is the company's approach to capital allocation and shareholder returns?
AppLovin demonstrated a strong commitment to returning capital to shareholders through its significant share repurchase program. During the quarter ended March 31, 2026, the company repurchased $1 billion of its Class A common stock. This, combined with a healthy cash balance and strong free cash flow generation, indicates a focus on shareholder value.
What are the key risks or challenges AppLovin faces?
AppLovin faces ongoing risks related to changes in third-party platform policies (like those from Apple and Google), intense competition in the advertising ecosystem, evolving regulatory landscapes concerning data privacy and AI, and the potential for cyberattacks. Additionally, the company is subject to macroeconomic conditions and geopolitical factors that could impact advertiser spending.
06—Continue