Key points
- What drove AppLovin's 55% revenue growth
- Why AppLovin's Q4 forecast implies slower growth
- AppLovin's stock entered the report down nearly 60%
AppLovin (APP) reported third-quarter revenue of $2.18 billion and earnings of $4.30 a share on November 4, beating Wall Street estimates. The ad technology company also forecast fourth-quarter revenue of about $2.38 billion, well above the $2.25 billion analysts expected.
The shares traded at $333.80 when after-hours trading ended at 8 p.m. ET, up about 23% from the regular-session close of $271.75. AppLovin had already risen 10.7% during the day, ahead of the after-the-close report.
AppLovin topped estimates and its own forecast
| Measure | Result | Analyst estimate |
|---|---|---|
| Q3 revenue | $2.18 billion | $2.07 billion |
| Q3 earnings per share | $4.30 | $4.03 |
| Q3 adjusted EBITDA | $1.84 billion | $1.73 billion |
| Q4 revenue forecast, midpoint | $2.38 billion | $2.25 billion |
Results come from AppLovin's earnings release. Revenue and EBITDA estimates are S&P figures reported by StockStory. The earnings estimate is FactSet's, according to Investor's Business Daily.
Revenue rose 55% from a year earlier and came in about $100 million above the top of AppLovin's August forecast of $2.055 billion to $2.085 billion. Net income rose 72% to $1.44 billion. Adjusted EBITDA, a profit measure that leaves out items such as interest, taxes, and stock pay, rose 59% and equaled 84% of revenue.
Higher revenue per install drove the growth
AppLovin's quarterly report says third-quarter growth came mainly from better performance at AppLovin Ads. Net revenue per installation rose 55%, while the volume of installations rose 2%. Almost all of the growth came from earning more per install rather than from more installs.
The first nine months show the same pattern. Net revenue per installation rose 68%, and the volume of installations fell 7%.
Finance chief Matt Stumpf said on the earnings call that the beat came primarily from the core mobile gaming business, because of model improvements. CEO Adam Foroughi said gaming grew nearly 50%, and that the new models have only partly rolled out. Stumpf said spending by consumer advertisers, the category that includes e-commerce, grew by a double-digit percentage from the prior quarter and by a triple-digit percentage from a year earlier.
AppLovin's quarterly report says the company began adding web-based e-commerce advertisers in 2024, and it warns that broader adoption isn't assured. The report breaks revenue down by geography, not by type of advertiser, so neither the report nor the call shows how much of the growth came from e-commerce.
The Q4 forecast implies slower growth
AppLovin forecast fourth-quarter revenue of $2.365 billion to $2.395 billion and adjusted EBITDA of $1.995 billion to $2.025 billion. The revenue midpoint would be about 44% above the $1.66 billion reported a year earlier, by our arithmetic. That's slower than the third quarter's 55%, but faster than the roughly 36% that the analyst estimate implied.
The forecast also calls for revenue to rise 8% to 10% from the prior quarter. Third-quarter revenue rose 14% from the second quarter. Stumpf said the forecast reflects what the company knows now, including normal seasonality, model updates already in use, and higher data center costs. Foroughi said AppLovin can compound at roughly 30% a year over the long term, and warned that as e-commerce grows, the company should see "bigger Q4s followed by tougher Q1s."
Free cash flow was $1.4 billion in the third quarter. AppLovin spent about the same amount repurchasing and withholding 4.1 million shares, which works out to roughly $340 a share by our arithmetic. Stumpf said AppLovin stepped up the buyback because of a "dislocation in the stock price versus the actual intrinsic value of the company." The board added $3.2 billion to the buyback authorization, bringing the total to $3.6 billion at the end of October.
AppLovin entered the report as the S&P 500's worst stock this year
AppLovin closed 2025 at $673.82. By the November 4 close, the shares were down 59.7% for the year, and 24/7 Wall St. called it the worst performer in the S&P 500. Even at $333.80, the stock would still be down about 50%.
The last earnings report did much of the damage. The shares fell 19.7% on August 6 after second-quarter results, and The Wall Street Journal reported that the company said those results fell short of its standards. Foroughi said on the latest call that competition didn't cause the miss: "it was our own foot fault."
