TLDR
- AppLovin beat Q2 earnings expectations with $2.39 per share vs $1.98 estimate, up 20.4%
- Q2 revenue of $1.26 billion missed Wall Street estimates of $1.27 billion by 1.2%
- Adjusted EBITDA reached $1.02 billion, up 99% year-over-year from Q2 2024
- Q3 guidance exceeded expectations with revenue guided to $1.33 billion vs $1.31 billion estimate
- Stock fell 6.9% in after-hours trading despite beating earnings and raising guidance
AppLovin stock declined in after-hours trading Wednesday despite beating Q2 2025 earnings expectations. The mobile advertising platform reported earnings per share of $2.39, crushing Wall Street estimates of $1.98 by 20.4%.
However, AppLovin revenue disappointed investors with Q2 results coming in below expectations. The company posted $1.26 billion in revenue, missing the consensus estimate of $1.27 billion by 1.2%.
AppLovin stock fell as much as 6.9% in extended trading following the earnings announcement. The mixed quarterly results highlighted strong profitability growth alongside revenue growth concerns.
AppLovin, $APP, Q2-25. Results:
📊 EPS: $2.39 🟢
💰 Revenue: $1.26B 🔴
📈 Net Income: $820M
🔎 Completed the $400M sale of its Apps business to Tripledot Studios, boosting profitability. pic.twitter.com/4tprzglAT2— EarningsTime (@Earnings_Time) August 6, 2025
The company’s mobile advertising business showed impressive year-over-year performance metrics. AppLovin advertising revenue jumped 77% compared to the same quarter in 2024, demonstrating strong demand for mobile app marketing solutions.
AppLovin sold its mobile apps division during Q2 2025 to focus entirely on advertising technology. This strategic pivot appears successful based on the advertising segment’s revenue performance and growth trajectory.
AppLovin adjusted EBITDA reached $1.02 billion, representing massive 99% year-over-year growth. The EBITDA performance exceeded Wall Street projections, showcasing the company’s ability to generate profits from revenue growth.
AppLovin free cash flow came in at $768 million for the second quarter. This figure was lower than some investor expectations and may explain reduced share buyback activity during the period.
The company completed $341 million in share buybacks during Q2 2025. This represented a decrease from the $1.2 billion in repurchases completed during the first quarter of 2025.
AppLovin diluted share count continued declining, falling 0.8% from the first quarter. The ongoing share reduction demonstrates management’s commitment to returning capital to AppLovin shareholders.
AppLovin Q3 2025 Guidance Exceeds Wall Street Estimates
AppLovin Q3 2025 revenue guidance exceeded analyst expectations across key financial metrics. The company guided third-quarter revenue to $1.33 billion at the midpoint, above Wall Street estimates of $1.31 billion.
AppLovin EBITDA guidance for Q3 2025 also topped projections at $1.08 billion midpoint. This guidance surpassed the analyst consensus estimate of $1.06 billion for the third quarter.
AppLovin CEO Adam Foroughi expressed confidence in the gaming-focused business strategy during the earnings call. He believes the company can sustain 20-30% annual revenue growth from core gaming customers alone.
The AppLovin platform serves mobile app developers, particularly gaming studios worldwide. The company operates a two-sided marketplace connecting app developers with advertising opportunities and monetization solutions.
Gaming companies remain AppLovin’s primary customer base, but non-gaming app revenue growth is accelerating. This customer diversification could provide additional revenue streams beyond traditional mobile gaming advertising.
AppLovin operating margin improved dramatically to 76.1% in Q2 2025, up from 36.2% year-over-year. This margin expansion demonstrates the scalability of the company’s advertising platform technology.
AppLovin Expansion Beyond Mobile Gaming Advertising
AppLovin is expanding into connected TV advertising through its Wurl platform acquisition. While still representing a small portion of total revenue, Wurl targets the growing streaming video advertising market.
The Wurl connected TV platform operates as a separate brand from the main AppLovin business. This strategy allows the company to enter new advertising verticals while maintaining its core mobile focus.
Foroughi highlighted the expansion opportunity during the AppLovin earnings call. He questioned the potential when the company’s successful mobile advertising model serves small businesses globally across industries.
AppLovin free cash flow margin strengthened to 61% in Q2 2025, improving from 56% in Q1. The company continues generating substantial cash flow despite investments in new product development and market expansion.
Wall Street analysts maintain average Overweight ratings on AppLovin stock with price targets averaging $485. The consensus suggests potential upside from current trading levels based on the company’s growth prospects.
AppLovin customer acquisition cost payback period remains efficient at 3.9 months for Q2 2025. This quick recovery timeline indicates strong product differentiation and competitive advantages in mobile advertising technology.
The company’s mobile advertising platform continues gaining market share in the competitive digital advertising landscape. AppLovin technology helps gaming companies and app developers optimize user acquisition and monetization strategies effectively.
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