Key Notes
- AppLovin’s Q3 revenue rose 55% to $2.185 billion, while net income grew 72% and diluted EPS reached $4.30.
- Management forecasts Q4 revenue of $2.365 billion to $2.395 billion, with an adjusted EBITDA margin of 84% to 85%.
- APP shares closed 31% higher on November 5, and the board expanded the remaining buyback authorization to $3.6 billion.
AppLovin (Nasdaq: APP) reported a 55% jump in third-quarter revenue and forecast sales approaching $2.4 billion in the final three months of 2026, sending its shares sharply higher even as the wider technology market sold off.
The advertising platform reported record quarterly revenue of $2.185 billion and net income of $1.439 billion, up 72% from a year earlier. Diluted earnings reached $4.30 a share, compared with $2.45 in the same quarter of 2025.
AppLovin released the results after the market closed on November 4. Its shares finished November 5 at $356.10, up 31.0% from the previous close, according to historical prices. That rally stood out on a day when investors were dumping many of the companies supplying the AI infrastructure boom.
APP Stock Rallies Against the Tech Selloff
The S&P 500 lost 4.36% on Thursday, while the Nasdaq Composite fell 5.52% and the Philadelphia Semiconductor Index plunged about 12.2%. The market retreat reflected concerns about data-center spending, financing and the prospect of tighter oversight after the U.S. midterm elections.
AppLovin’s advance showed that investors were still willing to reward growth in parts of the technology industry. Its business centers on helping advertisers acquire customers and app developers earn revenue, giving shareholders a different set of operating measures to assess from those of chipmakers and data-center operators.
The company’s quarterly revenue was about 13.6% higher than the $1.924 billion it generated in the preceding three months.
Revenue and Profit Reach New Highs
The main third-quarter figures were:
- Revenue: $2.185 billion, up 55% year over year.
- Net income: $1.439 billion, up 72%.
- Diluted EPS: $4.30, compared with $2.45 a year earlier.
- Adjusted EBITDA: $1.842 billion, up 59%.
- Net income margin: approximately 66%.
- Adjusted EBITDA margin: approximately 84%.
Profit rose faster than revenue as the company converted a larger share of sales into earnings. The net margin increased from roughly 59% a year earlier, according to AppLovin’s financial update, while the adjusted EBITDA margin rose from about 82%.
The two margins measure different things. Adjusted EBITDA excludes expenses including stock-based compensation, interest, taxes and depreciation; it is not the company’s GAAP operating or net profit. The filed accounts show GAAP operating income of $1.709 billion, equivalent to an operating margin of about 78%.
Total costs increased about 46% to $475.8 million, below the pace of revenue growth, even as research and development spending more than doubled to $101.8 million. The gap helped lift the GAAP operating margin from about 77% a year earlier.
Q4 Guidance Signals Another Step Up
AppLovin expects fourth-quarter revenue of $2.365 billion to $2.395 billion and adjusted EBITDA of $1.995 billion to $2.025 billion. The forecast implies an adjusted EBITDA margin of 84% to 85%.
At the revenue midpoint of $2.38 billion, sales would increase about 9% from the third quarter. Against the $1.658 billion recorded in the final quarter of 2025, the range represents growth of roughly 43% to 44%. That remains substantial, while pointing to a slower annual growth rate than the 55% just reported.
AppLovin did not provide a forward-looking GAAP reconciliation for the adjusted EBITDA forecast, citing uncertainty over items such as stock-based compensation.
Self-Service Advertising Opens a Wider Market
The quarter followed AppLovin’s June 22 decision to open its platform to all advertisers. Previously, businesses needed either a direct relationship with the company or a referral code to use its self-service offering.
Chief Executive Adam Foroughi said the broader launch removed those requirements. The platform, now called AppLovin Ads, uses the Axon AI recommendation system to connect advertisers with potential customers across mobile-game inventory.
Advertisers can buy against revenue-return targets, a target cost per purchaser or a value assigned to a sales lead. The range extends the company’s addressable customer base beyond gaming into online shops, subscriptions and services such as insurance.
That expansion provides context for the growth figures, though the earnings release does not isolate how much third-quarter revenue came from advertisers joining after the June launch.
Cash Flow Supports a Larger Buyback Program
AppLovin generated about $1.4 billion in operating cash flow and free cash flow during the third quarter. The quarter’s approximately $1.4 billion spent on repurchasing and withholding 4.1 million shares includes both market repurchases and tax-related withholding on vested equity awards, rather than open-market buybacks alone.
The company ended September with approximately 331 million shares outstanding, down from 335 million at the end of June. Its balance sheet held $3.174 billion in cash and equivalents against $3.516 billion of long-term debt.
The board approved a further $3.2 billion for share repurchases, bringing the remaining authorization to $3.6 billion as of the end of October. Future purchases can be made in the open market or through private transactions, subject to market conditions and the company’s other capital needs.
