01—Abstract
Summary
Summary of the 8-K filed February 11, 2026. Cited figures are marked; the original filing is the authoritative source.
AppLovin reported a strong fourth quarter and full year 2025.
Q4 revenue rose 66% year over year to $1.66 billiona, and full-year revenue rose 70% to $5.48 billion. Q4 net income grew 84% to $1.10 billion, and full-year net income grew 111% to $3.33 billion. Adjusted EBITDA reached $1.40 billion in Q4 (84% margin, up from 77%) and $4.51 billion for the year (82% margin, up from 75%).
Net cash from operations was $3.97 billionb for 2025, and free cash flow was $3.95 billion, nearly doubling from $2.07 billion in 2024. The filing also shows significant portfolio and balance sheet changes. The company completed a divestiture, reporting a $106 million gain on divestiture (net of transaction costs) against a $99 million loss from discontinued operations, and it recorded a $189 million goodwill impairment and a $50 million investment impairment.
It now holds $288 millionc in equity method investments. Cash and equivalents increased to $2.49 billion from $697 million, while long-term debt was essentially unchanged at $3.51 billion. Management returned substantial capital in 2025, repurchasing and withholding shares for about $2.58 billion, and shares outstanding declined to 338 million.
For the first quarter of 2026, management guided to revenue of $1.745 to $1.775 billiond and Adjusted EBITDA of $1.465 to $1.495 billion, implying an 84% margin at both ends of the range. The guidance suggests continued sequential growth and margin stability. Investors should weigh these strong results against the impairments, the reliance on non-GAAP metrics, and the company's continued dependence on digital advertising dynamics.
02—Key points
Key Highlights
- Q4 2025 revenue of $1.66B grew 66% YoY; full-year revenue of $5.48B grew 70%.
- Full-year 2025 net income of $3.33B (up 111%); Q4 net income of $1.10B (up 84%). Continuing operations net income was $3.43B for the year.
- Adjusted EBITDA margin expanded to 84% in Q4 and 82% for the full year, versus 77% and 75% in the prior-year periods.
- Free cash flow of $3.95B for 2025 (up ~91% from $2.07B), supported by $3.97B in operating cash flow.
- Q1 2026 guidance calls for revenue of $1.745–1.775B and Adjusted EBITDA of $1.465–1.495B, both at an 84% margin.
- Capital returns of about $2.58B in 2025 (repurchases and tax withholdings) reduced shares outstanding to 338M, while cash rose to $2.49B.
- Portfolio changes include a $106M divestiture gain, a $189M goodwill impairment, a $50M investment impairment, and $288M in new equity method investments.
03—Questions
Frequently Asked Questions
How did AppLovin's profitability change in 2025?
Full-year net income rose 111% to $3.33B, and continuing operations net income rose 116% to $3.43B. Income from operations was $4.15B, versus $1.91B in 2024. Diluted EPS was $9.75 for the full year and $3.24 for Q4. Results benefited from strong revenue growth and lower operating expenses as a share of revenue, though the period also included impairments and divestiture-related items.
Is the company generating enough cash to fund its operations and shareholder returns?
Yes. Operating cash flow of $3.97B and free cash flow of $3.95B in 2025 covered $2.19B in share repurchases and $392M in tax withholdings on net share settlement, and still increased cash by about $1.79B to $2.49B. Long-term debt was roughly flat at $3.51B, and principal repayments were only $200M, so leverage fell relative to earnings.
What are the main non-recurring or quality-of-earnings concerns in the filing?
The filing shows a $189M goodwill impairment, a $50M impairment of investments, and a $99M loss from discontinued operations, partly offset by a $106M gain on divestiture. The company also reports Adjusted EBITDA, a non-GAAP measure that excludes stock-based compensation ($208M in 2025, down from $357M) and other items. Investors should review the GAAP results alongside these adjustments.
What does the Q1 2026 guidance imply for near-term growth?
Guidance midpoints of $1.76B revenue and $1.48B Adjusted EBITDA are close to Q4 2025 levels, which suggests the company expects sustained high sequential revenue and profitability rather than an acceleration. The filing does not provide year-over-year comparisons for Q1 2026. The company also declined to provide GAAP reconciliations for its forward-looking Adjusted EBITDA guidance, citing variability in items such as stock-based compensation.
04—Continue