AppLovin (Nasdaq: APP) Live Coverage: Earnings Are Out

2nd qtr. guidance for ads segment. Flat margins with continued top-line growth suggest sustained ad demand and operational efficiency.

• Advertising segment is booming: Now the dominant driver of growth, up 71% YoY and delivering 92% YoY EBITDA growth.

• Apps segment in decline: Revenue from owned apps dropped 14%, consistent with AppLovin’s pivot away from first-party content.

  

• Profitability is surging: Net income more than doubled, showing strong operating leverage and cost control.

• Massive cash generation: $832M in operating cash flow and $826M in free cash flow.

AppLovin has surged into earnings on bullish expectations for its AI-driven ad tech growth and the recent divestiture of its games business. With Street estimates implying a strong acceleration in top-line growth and profitability, investor tolerance for even minor guidance misses may be low. Commentary on advertiser demand trends and Axon’s margin leverage will be key.

AppLovin has aggressively pivoted away from its legacy app portfolio to focus on its AI-powered ad platform, and investors are expecting results. The Street is looking for $1.38B in revenue and $1.44 in GAAP EPS, with management’s guidance indicating they could land at the upper end of both.

Key to this shift is AXON 2.0, AppLovin’s proprietary bidding engine that’s being hailed as a real differentiator in mobile ad tech. Last quarter, software platform revenue surged 88% year-over-year, while AppLovin reported a staggering $867M in EBITDA, demonstrating the scalability of the new model.

The market is also watching how much of this margin expansion is sustainable. With Meta and Alphabet tightening ad stack efficiency, AppLovin has a chance to carve out a larger share of the performance marketing pie—especially as advertisers demand better ROI post-ATT.

A clean beat and confident guide could ignite a further rally in a stock already up triple digits over the past year. But any softness in guidance or usage metrics could test that premium multiple.

Wall Street is looking for another strong quarter from AppLovin, reflecting sustained adoption of its AXON platform and improved advertiser ROI.

• Q1 2025 Revenue Estimate: $1.06 billion

• Q1 2025 Adjusted EBITDA Estimate: $520 million

• Q1 2025 EPS Estimate: $0.70

• Full-Year 2025 Revenue Guide: Street sees up to $4.5 billion, pending guidance update

• Full-Year Adjusted EBITDA Forecast: $2.0–2.1 billion, suggesting 45–48% margin levels

Analysts widely agree that AppLovin is executing on a software-led growth flywheel, with AXON acting as a long-term margin driver. That said, the valuation leaves little room for misses. With shares at $298, the implied 20x forward EBITDA multiple means the Street will demand not just solid execution — but upside to guidance.

1. Hidden Leverage from AI Ads – How Sticky is the Growth?
The software platform has exploded, but the market still discounts APP as adtech. If the call details retention rates, ROAS uplift, or share gains vs. Google Ads, this could re-rate APP as a scaled AI infra play.

2. Gaming Business Sale – What Will They Do With $900M?
Management’s commentary on capital allocation post-sale (buybacks, M&A, R&D) could hint at aggressiveness in expanding their AI moat—or even international CTV pushes.

3. China Exposure – Soft Risk or Strategic Edge?
APP doesn’t disclose much about regional mix, but any reference to Chinese ad volume or regulatory tailwinds/headwinds could add geopolitical flavor—especially in light of recent tech curbs.

AppLovin heads into earnings trading at $298 share, down 2.38% so far on the day.

However the stock is up a staggering +286% over the past year, making it one of the best-performing tech stocks over the past 12 months.

With a market cap of $101.8B and a P/E ratio of 65.8, the company is priced for continued growth — driven largely by the outperformance of its AI-powered AXON advertising engine.

Shares surged in late 2024 as investors embraced AppLovin’s pivot from ad network to high-margin software platform. AXON, the company’s machine learning backbone, continues to attract performance-driven mobile marketers, pushing ad spend through AppLovin’s ecosystem and driving up yields. In Q4, platform revenue surged over 130% YoY, and EBITDA margins hit an exceptional 48%.

Heading into Q1 earnings investors are eager to see whether operating leverage continues to scale. Analysts will watch for signals of sustained AXON demand, margin resilience, and guidance strength. At these levels, the bar is high — but AppLovin’s execution track record has so far kept bulls firmly in control.