AppLovin (APP)
Market Price (4/2/2026): $387.0 | Market Cap: $130.9 BilSector: Information Technology | Industry: Application Software
AppLovin (APP)
Market Price (4/2/2026): $387.0Market Cap: $130.9 BilSector: Information TechnologyIndustry: Application Software
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 61% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 72% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 68%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 68%, CFO LTM is 4.0 Bil, FCF LTM is 4.0 Bil Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -52% Megatrend and thematic driversMegatrends include Digital Advertising, Social Media & Creator Economy, and Digital Content & Streaming. Themes include Ad-Tech Platforms, Show more. | Expensive valuation multiplesP/SPrice/Sales ratio is 23x Short seller reportMuddy Waters Research report on 3/27/2025. Key risksAPP key risks include [1] ongoing government investigations (SEC, Show more. |
| Strong revenue growthRev Chg LTMRevenue Change % Last Twelve Months (LTM) is 61% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 72% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 68%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 68%, CFO LTM is 4.0 Bil, FCF LTM is 4.0 Bil |
| Valuation becoming less expensiveP/S 6M Chg %Price/Sales change over 6 months. Declining P/S indicates valuation has become less expensive. is -52% |
| Megatrend and thematic driversMegatrends include Digital Advertising, Social Media & Creator Economy, and Digital Content & Streaming. Themes include Ad-Tech Platforms, Show more. |
| Expensive valuation multiplesP/SPrice/Sales ratio is 23x |
| Short seller reportMuddy Waters Research report on 3/27/2025. |
| Key risksAPP key risks include [1] ongoing government investigations (SEC, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Investor concerns over growth deceleration and valuation led to significant profit-taking. AppLovin's stock peaked at $733.60 in December 2025, but subsequently declined by approximately 40.98% to $432.98 by March 2026, despite reporting strong Q4 2025 revenue growth of 66% year-over-year. The market appeared to be pricing in a future growth peak, and investor sentiment was highly sensitive to the company's valuation, indicating a shift from a willingness to pay peak multiples. Furthermore, industry checks for Q1 2026 in the e-commerce advertising sector suggested subdued momentum, with advertisers facing "scale walls" where efficiency diminished at higher spending volumes.
2. Increased competition and skepticism regarding AppLovin's AI technology contributed to the decline. Analysts cited growing competition from major players such as Meta, Google, and CloudX. Although AppLovin's management attributed its strong Q4 2025 results to advancements in its AI platform, AXON 2.0, the market exhibited skepticism about the long-term competitive moat of this technology. Short-seller allegations also highlighted competitive concerns for AppLovin's AI-powered advertising platform.
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Stock Movement Drivers
Fundamental Drivers
The -42.4% change in APP stock from 12/31/2025 to 4/1/2026 was primarily driven by a -51.2% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4012026 | Change |
|---|---|---|---|
| Stock Price ($) | 673.82 | 387.84 | -42.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 5,147 | 5,806 | 12.8% |
| Net Income Margin (%) | 55.0% | 57.4% | 4.4% |
| P/E Multiple | 80.6 | 39.3 | -51.2% |
| Shares Outstanding (Mil) | 339 | 338 | 0.1% |
| Cumulative Contribution | -42.4% |
Market Drivers
12/31/2025 to 4/1/2026| Return | Correlation | |
|---|---|---|
| APP | -42.4% | |
| Market (SPY) | -5.4% | 44.7% |
| Sector (XLK) | -6.3% | 58.5% |
Fundamental Drivers
The -46.0% change in APP stock from 9/30/2025 to 4/1/2026 was primarily driven by a -60.7% change in the company's P/E Multiple.| (LTM values as of) | 9302025 | 4012026 | Change |
|---|---|---|---|
| Stock Price ($) | 718.54 | 387.84 | -46.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 4,577 | 5,806 | 26.8% |
| Net Income Margin (%) | 53.1% | 57.4% | 8.2% |
| P/E Multiple | 100.1 | 39.3 | -60.7% |
| Shares Outstanding (Mil) | 339 | 338 | 0.1% |
| Cumulative Contribution | -46.0% |
Market Drivers
9/30/2025 to 4/1/2026| Return | Correlation | |
|---|---|---|
| APP | -46.0% | |
| Market (SPY) | -2.9% | 42.6% |
| Sector (XLK) | -4.1% | 53.8% |
Fundamental Drivers
The 46.4% change in APP stock from 3/31/2025 to 4/1/2026 was primarily driven by a 61.1% change in the company's Total Revenues ($ Mil).| (LTM values as of) | 3312025 | 4012026 | Change |
|---|---|---|---|
| Stock Price ($) | 264.97 | 387.84 | 46.4% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 3,604 | 5,806 | 61.1% |
| Net Income Margin (%) | 43.8% | 57.4% | 31.0% |
| P/E Multiple | 56.9 | 39.3 | -30.8% |
| Shares Outstanding (Mil) | 339 | 338 | 0.3% |
| Cumulative Contribution | 46.4% |
Market Drivers
3/31/2025 to 4/1/2026| Return | Correlation | |
|---|---|---|
| APP | 46.4% | |
| Market (SPY) | 16.3% | 51.5% |
| Sector (XLK) | 31.3% | 58.2% |
Fundamental Drivers
The 2362.5% change in APP stock from 3/31/2023 to 4/1/2026 was primarily driven by a 988.9% change in the company's P/S Multiple.| (LTM values as of) | 3312023 | 4012026 | Change |
|---|---|---|---|
| Stock Price ($) | 15.75 | 387.84 | 2362.5% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 2,817 | 5,806 | 106.1% |
| P/S Multiple | 2.1 | 22.6 | 988.9% |
| Shares Outstanding (Mil) | 371 | 338 | 9.7% |
| Cumulative Contribution | 2362.5% |
Market Drivers
3/31/2023 to 4/1/2026| Return | Correlation | |
|---|---|---|
| APP | 2362.5% | |
| Market (SPY) | 63.3% | 44.9% |
| Sector (XLK) | 82.2% | 46.9% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| APP Return | 45% | -89% | 278% | 713% | 108% | -41% | 510% |
| Peers Return | -1% | -62% | 46% | 16% | 48% | -35% | -38% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -5% | 74% |
Monthly Win Rates [3] | |||||||
| APP Win Rate | 67% | 8% | 83% | 83% | 58% | 0% | |
| Peers Win Rate | 47% | 32% | 63% | 50% | 50% | 20% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| APP Max Drawdown | -24% | -90% | -8% | -4% | -32% | -46% | |
| Peers Max Drawdown | -31% | -73% | -26% | -34% | -31% | -40% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: U, TTD, META, APPS, MGNI.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/1/2026 (YTD)
How Low Can It Go
| Event | APP | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -91.9% | -25.4% |
| % Gain to Breakeven | 1134.9% | 34.1% |
| Time to Breakeven | 629 days | 464 days |
Compare to U, TTD, META, APPS, MGNI
In The Past
AppLovin's stock fell -91.9% during the 2022 Inflation Shock from a high on 11/11/2021. A -91.9% loss requires a 1134.9% gain to breakeven.
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About AppLovin (APP)
AI Analysis | Feedback
1. Think of it like a **Google for mobile app advertising.**
2. It's like a **Salesforce for mobile app developers.**
AI Analysis | Feedback
- AppDiscovery: A marketing software solution that matches advertiser demand with publisher supply through auctions.
- Adjust: An analytics platform that helps marketers grow their mobile apps with solutions for measuring, optimizing campaigns, and protecting user data.
- MAX: An in-app bidding software that optimizes the value of an app's advertising inventory by running a real-time competitive auction.
AI Analysis | Feedback
AppLovin (APP) sells primarily to other companies, providing a software-based platform for mobile app developers to enhance the marketing and monetization of their apps. Based on the provided information, specific names of major customer companies are not disclosed. Instead, AppLovin's business clients are broadly identified by the following categories:
- Mobile app developers
- Advertisers
- Publishers
- Internet platforms
AI Analysis | Feedback
Alphabet Inc. (GOOGL)
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Adam Foroughi, Chief Executive Officer & Co-Founder
Adam Foroughi is the co-founder and Chief Executive Officer of AppLovin. He co-founded AppLovin in 2012, aiming to create a comprehensive platform for mobile app developers. Prior to AppLovin, he founded two other marketing technology companies, Lifestreet Media Inc. and Social Hour Inc. Foroughi began his career as a derivatives trader after graduating from the University of California, Berkeley, with a degree in economics. He led AppLovin through its successful Initial Public Offering (IPO) in April 2021.
Matt Stumpf, Chief Financial Officer
Matt Stumpf is AppLovin's Chief Financial Officer. He joined the company in 2020 as Vice President of Finance, where he was instrumental in building the corporate finance team and guiding the company through its initial public offering.
Herald Chen, Director (Former President & Chief Financial Officer)
Herald Chen serves as a Director on AppLovin's Board, and previously held the roles of President and Chief Financial Officer for AppLovin from November 2019 to December 2023. Prior to joining AppLovin, Mr. Chen was a Partner at the global investment firm Kohlberg Kravis Roberts & Co. L.P. (KKR), where he led the Technology, Media & Telecom (TMT) industry team from 2007 to 2019. He also previously worked for Goldman Sachs and has extensive board experience, serving on the boards of both public and private technology companies, including GoDaddy, Inc.
Victoria Valenzuela, Chief Administrative & Legal Officer
Victoria Valenzuela has served as AppLovin's Chief Administrative & Legal Officer and Corporate Secretary since July 2025. She initially joined the company as Chief Legal Officer and Corporate Secretary in May 2020 following AppLovin's acquisition of Machine Zone, where she had been the Chief Legal Officer since 2015. Earlier in her career, she served as General Counsel, Vice President, Legal Affairs, and Corporate Secretary of Cypress Semiconductor Corporation from 2004 to 2014.
Basil Shikin, Chief Technology Officer
Basil Shikin is the Chief Technology Officer at AppLovin. He holds a Masters in Mathematics from Saint-Petersburg State University.
AI Analysis | Feedback
The key risks to AppLovin's (APP) business primarily stem from regulatory challenges related to data privacy, intense competition in the mobile advertising sector, and ongoing legal issues.
- Regulatory Scrutiny and Data Privacy Concerns: AppLovin faces significant regulatory risk due to investigations by the Securities and Exchange Commission (SEC) and several state attorneys general (including Delaware, Oregon, and Connecticut) concerning its data collection practices and alleged violations of platform partners' service agreements and privacy rules. This scrutiny centers on whether AppLovin impermissibly harvested user identifiers for targeted advertising, potentially circumventing privacy restrictions imposed by platforms like Apple (App Tracking Transparency) and Google (Android Privacy Sandbox). Such investigations could result in substantial financial penalties, reputational damage, and mandated alterations to AppLovin's core data-driven business model. The company has already discontinued its "Array" product following allegations of installing apps without proper user consent.
- Intensified Competition and AI Disruption in Mobile Advertising: AppLovin operates in a highly competitive and rapidly evolving mobile advertising landscape. Major technology companies such as Google (AdMob, Ad Manager), Meta (App Ads), and Unity (LevelPlay) are significant competitors, continuously enhancing their AI-powered advertising platforms. There is a growing concern that these larger, vertically integrated ecosystems, with their deeper resources and advanced AI capabilities, could challenge AppLovin's market position, compress its high margins, or reduce the need for intermediaries in digital advertising.
- Class Action Lawsuits and Allegations of Misleading Practices: AppLovin has been subject to multiple class-action lawsuits alleging securities fraud and misleading investors, specifically concerning its AI technology (AXON 2.0) and deceptive advertising practices. Short-seller reports have also accused the company of improper user tracking, a murky business model, and poor data hygiene, which have led to significant stock price declines following their publication. While the company denies many of these allegations, these legal and reputational challenges can impact investor confidence and operational stability.
AI Analysis | Feedback
The increasing control over user data and app functionality by mobile operating system providers (Apple and Google), leading to further restrictions on third-party tracking, targeting, and measurement capabilities. This trend, exemplified by Apple's App Tracking Transparency (ATT) framework and Google's ongoing development of the Privacy Sandbox for Android, directly impacts AppLovin's core business by making personalized advertising and effective attribution more challenging.
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The addressable markets for AppLovin's main products and services are as follows:- In-App Advertising (AppDiscovery and MAX): The global in-app advertising market was valued at approximately USD 390.5 billion in 2024 and is projected to reach USD 952 billion by 2034, demonstrating a compound annual growth rate (CAGR) of 9.2% from 2025 to 2034. Other estimates indicate a global market size of USD 387.76 billion in 2025, expected to reach USD 614.74 billion by 2031 at a CAGR of 7.99% from 2026-2031. Asia Pacific holds a significant share of this market, accounting for over 37.6% in 2025. North America also represents a substantial portion, with a 37.78% revenue share in 2025.
- Mobile App Analytics (Adjust): The global mobile app and web analytics market was valued at approximately USD 12.77 billion in 2024 and is estimated to reach around USD 58.34 billion by 2034, with a CAGR of 16.40% from 2025 to 2034. Another report estimates the global app analytics market at USD 8.22 billion in 2025, projected to reach USD 23.74 billion by 2031, growing at a 19.32% CAGR from 2026-2031.
- Mobile Marketing Platforms (broader category): The global mobile marketing platforms market was valued at USD 43.21 billion in 2026 and is projected to grow to USD 173.74 billion by 2035, at an estimated CAGR of 19% from 2026 to 2035.
- E-commerce Advertising (Future Opportunity): AppLovin's CEO has indicated that the addressable market outside of gaming, which includes e-commerce, could be "5x to 10x the size" of the gaming market.
AI Analysis | Feedback
Expected Drivers of Future Revenue Growth for AppLovin (APP)
AppLovin (APP) is anticipated to drive future revenue growth over the next 2-3 years through several key initiatives and market trends:
- Expansion into E-commerce Advertising: AppLovin is aggressively expanding its presence in the e-commerce advertising market, which CEO Adam Foroughi has indicated could be "five to 10 times bigger than gaming." This expansion involves scaling its self-service platform for e-commerce clients and introducing new generative AI-powered advertising tools, such as 30- to 60-second AI video ads and dynamic product catalogs. The company's AXON ads manager is slated for a global public launch in the first half of 2026, which is expected to further support this push.
- Advancements in AI Technology: The continuous development and deployment of AppLovin's core AI technologies, particularly the AXON platform and its upgraded version, AXON 2, are crucial for future growth. These AI models enhance ad optimization, increase bid density, and improve the value of content discovery, leading to more effective advertising campaigns for clients. The integration of generative AI creative tools is also expected to boost the volume of ad creatives and attract new advertisers.
- Sustained Growth in Mobile Gaming Advertising: The company's foundational mobile gaming advertising business is projected to maintain a strong growth trajectory, with management expecting sustained annual growth rates of 20% to 30%. Ongoing technological advancements within its core mobile gaming business continue to contribute significantly to its robust performance.
- Global Expansion of the AXON Platform: AppLovin plans to broaden its reach by opening its web advertising platform to major international markets. Previously, these campaigns were predominantly limited to the United States. This global rollout of the AXON ads manager, targeted for the first half of 2026, is expected to diversify and significantly expand its advertiser base.
- Transition to a Pure Advertising and Self-Service Platform: AppLovin is strategically evolving into a dedicated advertising technology platform, having divested its gaming arm to sharpen its focus. The development of its self-service platform within the AXON ads manager is a key component of this strategy, enabling the company to efficiently manage an increasing number of clients and scale operations without a proportional rise in costs. This strategic pivot is anticipated to enhance profitability and establish more predictable recurring revenue streams.
AI Analysis | Feedback
Share Repurchases
- AppLovin's Board of Directors increased its share repurchase authorization by $3.2 billion in late October 2025, bringing the total remaining authorization to $3.3 billion.
- The company repurchased and withheld approximately $2.58 billion of its Class A common stock for the full year 2025.
- In February 2024, AppLovin intended to repurchase approximately $570 million of its Class A common stock concurrently with a secondary offering by a selling stockholder.
Share Issuance
- AppLovin became a public company on April 15, 2021, trading on the Nasdaq under the ticker APP.
- In December 2021, an upsized secondary offering of 7,500,000 shares of Class A common stock was priced at $83.00 per share, with all proceeds going to selling stockholders. AppLovin did not offer any shares in this transaction.
- Proceeds from the issuance of common stock upon the exercise of stock options and purchases under the Employee Stock Purchase Plan were $25.329 million for the full year 2025 and $28.8 million for the nine months ended September 30, 2024.
Outbound Investments
- AppLovin completed the sale of its mobile gaming business to Tripledot Studios for $400 million in cash and approximately 20% equity in Tripledot, closing on June 30, 2025.
- In January 2022, AppLovin finalized the acquisition of mobile monetization company MoPub from Twitter for $1.1 billion.
- AppLovin acquired mobile app measurement company Adjust in February 2021.
Capital Expenditures
- AppLovin's net capital expenditures were -$11 million in 2021, -$41 million in 2022, -$4 million in 2023, $4.22 million in 2024, and $0.00 million in 2025.
- The company's capital allocation strategy includes capital expenditures to purchase hardware and software, and continued investment in its IT infrastructure to support growth.
- A focus for capital allocation includes expanding its AI capabilities to support the further development of its advertising solutions, such as Axon AI.
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| 01232026 | APP | AppLovin | Monopoly | MY | Getting CheaperMonopoly-Like with P/S DeclineLarge cap with monopoly-like margins or cash flow generation and getting cheaper based on P/S multiple | -24.1% | -24.1% | -30.0% |
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Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 21.97 |
| Mkt Cap | 10.0 |
| Rev LTM | 2,373 |
| Op Inc LTM | 344 |
| FCF LTM | 592 |
| FCF 3Y Avg | 469 |
| CFO LTM | 708 |
| CFO 3Y Avg | 551 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 15.3% |
| Rev Chg 3Y Avg | 17.0% |
| Rev Chg Q | 13.4% |
| QoQ Delta Rev Chg LTM | 3.5% |
| Op Mgn LTM | 17.0% |
| Op Mgn 3Y Avg | 7.6% |
| QoQ Delta Op Mgn LTM | 1.5% |
| CFO/Rev LTM | 33.7% |
| CFO/Rev 3Y Avg | 33.0% |
| FCF/Rev LTM | 22.3% |
| FCF/Rev 3Y Avg | 26.5% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 10.0 |
| P/S | 4.4 |
| P/EBIT | 17.3 |
| P/E | 17.8 |
| P/CFO | 11.6 |
| Total Yield | 3.4% |
| Dividend Yield | 0.0% |
| FCF Yield 3Y Avg | 3.0% |
| D/E | 0.1 |
| Net D/E | 0.0 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -10.9% |
| 3M Rtn | -41.3% |
| 6M Rtn | -43.8% |
| 12M Rtn | 4.4% |
| 3Y Rtn | -2.5% |
| 1M Excs Rtn | -8.3% |
| 3M Excs Rtn | -37.1% |
| 6M Excs Rtn | -44.3% |
| 12M Excs Rtn | -10.8% |
| 3Y Excs Rtn | -61.8% |
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| End-to-end advertising solutions including Axon Ads Manager, MAX, Adjust, and Wurl, that allow | 3,224 | ||||
| Advertising | 1,842 | 1,049 | 674 | ||
| Apps | 1,441 | 1,768 | 2,119 | ||
| Business Revenue | 711 | ||||
| Consumer Revenue | 740 | ||||
| Total | 3,224 | 3,283 | 2,817 | 2,793 | 1,451 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| End-to-end advertising solutions including Axon Ads Manager, MAX, Adjust, and Wurl, that allow | 1,590 | ||||
| Total | 1,590 |
Price Behavior
| Market Price | $387.84 | |
| Market Cap ($ Bil) | 131.1 | |
| First Trading Date | 04/15/2021 | |
| Distance from 52W High | -47.1% | |
| 50 Days | 200 Days | |
| DMA Price | $448.39 | $515.94 |
| DMA Trend | up | down |
| Distance from DMA | -13.5% | -24.8% |
| 3M | 1YR | |
| Volatility | 96.3% | 76.1% |
| Downside Capture | 3.02 | 1.56 |
| Upside Capture | 338.42 | 225.65 |
| Correlation (SPY) | 44.6% | 51.2% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 2.37 | 4.42 | 3.39 | 2.69 | 2.06 | 2.27 |
| Up Beta | 2.43 | 2.74 | 3.01 | 3.41 | 1.84 | 1.99 |
| Down Beta | 0.97 | 2.10 | 1.95 | 2.20 | 2.21 | 2.27 |
| Up Capture | 377% | 752% | 408% | 250% | 456% | 15387% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 10 | 21 | 30 | 61 | 135 | 413 |
| Down Capture | 231% | 384% | 339% | 229% | 151% | 112% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 12 | 21 | 33 | 65 | 116 | 336 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with APP | |
|---|---|---|---|---|
| APP | 42.8% | 76.2% | 0.80 | - |
| Sector ETF (XLK) | 31.4% | 27.0% | 0.98 | 58.4% |
| Equity (SPY) | 16.4% | 18.9% | 0.68 | 51.7% |
| Gold (GLD) | 53.1% | 27.9% | 1.52 | 16.2% |
| Commodities (DBC) | 16.2% | 17.6% | 0.77 | 26.1% |
| Real Estate (VNQ) | 2.2% | 16.5% | -0.04 | 19.4% |
| Bitcoin (BTCUSD) | -17.4% | 44.1% | -0.31 | 26.3% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with APP | |
|---|---|---|---|---|
| APP | 42.1% | 78.0% | 0.79 | - |
| Sector ETF (XLK) | 16.7% | 24.7% | 0.61 | 49.8% |
| Equity (SPY) | 12.0% | 17.0% | 0.55 | 47.8% |
| Gold (GLD) | 22.2% | 17.8% | 1.02 | 11.1% |
| Commodities (DBC) | 12.2% | 18.8% | 0.53 | 11.9% |
| Real Estate (VNQ) | 3.5% | 18.8% | 0.09 | 29.0% |
| Bitcoin (BTCUSD) | 5.7% | 56.6% | 0.32 | 23.4% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with APP | |
|---|---|---|---|---|
| APP | 19.2% | 78.0% | 0.79 | - |
| Sector ETF (XLK) | 21.3% | 24.3% | 0.80 | 49.8% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 47.8% |
| Gold (GLD) | 14.2% | 15.9% | 0.75 | 11.1% |
| Commodities (DBC) | 8.3% | 17.6% | 0.39 | 11.9% |
| Real Estate (VNQ) | 5.0% | 20.7% | 0.21 | 29.0% |
| Bitcoin (BTCUSD) | 66.5% | 66.8% | 1.06 | 23.4% |
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Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/11/2026 | -19.7% | -9.8% | 0.4% |
| 11/5/2025 | 0.7% | -5.2% | 11.8% |
| 8/6/2025 | 12.0% | 14.3% | 25.5% |
| 5/7/2025 | 11.9% | 24.1% | 37.7% |
| 2/12/2025 | 24.0% | 18.3% | -23.0% |
| 11/6/2024 | 46.3% | 68.5% | 138.2% |
| 8/7/2024 | 14.2% | 26.0% | 25.9% |
| 5/8/2024 | 14.4% | 13.6% | 10.7% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 14 | 16 | 13 |
| # Negative | 6 | 4 | 7 |
| Median Positive | 21.7% | 23.5% | 32.3% |
| Median Negative | -5.6% | -13.3% | -20.8% |
| Max Positive | 46.3% | 68.5% | 138.2% |
| Max Negative | -19.7% | -25.4% | -31.5% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 12/31/2025 | 02/19/2026 | 10-K |
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/06/2025 | 10-Q |
| 03/31/2025 | 05/07/2025 | 10-Q |
| 12/31/2024 | 02/27/2025 | 10-K |
| 09/30/2024 | 11/06/2024 | 10-Q |
| 06/30/2024 | 08/07/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/26/2024 | 10-K |
| 09/30/2023 | 11/08/2023 | 10-Q |
| 06/30/2023 | 08/09/2023 | 10-Q |
| 03/31/2023 | 05/10/2023 | 10-Q |
| 12/31/2022 | 02/28/2023 | 10-K |
| 09/30/2022 | 11/10/2022 | 10-Q |
| 06/30/2022 | 08/12/2022 | 10-Q |
| 03/31/2022 | 05/13/2022 | 10-Q |
Recent Forward Guidance [BETA]
Latest: Q4 2025 Earnings Reported 2/11/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Revenue | 1.75 Bil | 1.76 Bil | 1.77 Bil | 11.0% | Higher New | Guidance: 1.58 Bil for Q4 2025 | |
| Q1 2026 Adjusted EBITDA | 1.47 Bil | 1.48 Bil | 1.50 Bil | 13.4% | Higher New | Guidance: 1.30 Bil for Q4 2025 | |
| Q1 2026 Adjusted EBITDA Margin | 84.0% | 84.0% | 84.0% | 1.8% | 1.5% | Higher New | Guidance: 82.5% for Q4 2025 |
Prior: Q3 2025 Earnings Reported 11/5/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q4 2025 Revenue | 1.57 Bil | 1.58 Bil | 1.60 Bil | 19.2% | Higher New | Guidance: 1.33 Bil for Q3 2025 | |
| Q4 2025 Adjusted EBITDA | 1.29 Bil | 1.30 Bil | 1.32 Bil | 20.8% | Higher New | Guidance: 1.08 Bil for Q3 2025 | |
| Q4 2025 Adjusted EBITDA margin | 82.0% | 82.5% | 83.0% | 1.8% | 1.5% | Higher New | Guidance: 81.0% for Q3 2025 |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Valenzuela, Victoria | CALO & Corp. Secretary | Direct | Sell | 12192025 | 657.13 | 7,609 | 5,000,102 | 182,097,294 | Form |
| 2 | Harvey, Dawson Alyssa | Direct | Sell | 12102025 | 693.32 | 150 | 103,998 | 1,961,402 | Form | |
| 3 | Shikin, Vasily | Chief Technology Officer | See footnote | Sell | 11262025 | 549.09 | 15,540 | 8,532,891 | 19,706,366 | Form |
| 4 | Shikin, Vasily | Chief Technology Officer | See footnote | Sell | 11262025 | 548.45 | 14,708 | 8,066,634 | 19,683,399 | Form |
| 5 | Shikin, Vasily | Chief Technology Officer | See footnote | Sell | 11262025 | 546.93 | 14,867 | 8,131,244 | 19,628,857 | Form |
APP Trade Sentinel
ACCUMULATE (Score 7-8)
CONVICTION RATIONALE
AppLovin scores a 7 (Accumulate) due to its elite financial profile, exceptional growth, and a widening competitive moat driven by superior technology. The business quality is undeniable. However, the conviction is capped by the significant, unquantified regulatory risk from the SEC investigation, which represents the primary friction on the thesis and prevents a higher, 'Overweight' rating.
STOCK ARCHETYPE
High-Beta CompounderAppLovin's classification is driven by its exceptionally high revenue growth (+66% YoY in the last reported quarter, +41% consensus for FY26) and its dominant position in a high-growth market. Following the divestiture of its lower-margin Apps business, it operates as a pure-play, high-margin (82-84% Adj. EBITDA) software platform, fitting the profile of a company where growth durability and competitive moat are the primary investment considerations.
INVESTMENT THESIS
The primary long thesis is that AppLovin's proprietary AXON AI engine provides a durable technological advantage, delivering superior Return on Ad Spend (ROAS) that is causing a structural market share shift away from competitors, particularly Unity. This technology moat, combined with the network effects of its dominant MAX mediation platform, allows AppLovin to capture a disproportionate share of the growing mobile advertising and e-commerce markets.
- Software Platform revenue grew 66% YoY to $1.66B in Q4 2025, significantly outpacing key competitor Unity's Grow Solutions segment.
- AXON 2.0 rollout led to a quadrupling of ad spend on the platform, indicating a step-change in performance and advertiser adoption.
- The company is successfully expanding its Total Addressable Market (TAM) beyond mobile gaming into the larger e-commerce vertical, with a self-service platform launched in H2 2025.
- Adjusted EBITDA margins of 82-84% and FCF margins of ~72% demonstrate significant pricing power and operating leverage.
PRIMARY RISK
The most significant risk is the ongoing SEC investigation and inquiries from multiple state attorneys general into AppLovin's data collection and ad targeting practices. Adverse findings could force fundamental changes to its core AXON AI model, which relies on vast data sets for its performance advantage. This represents a Type 4 (Regulatory) risk that could impair the company's primary competitive moat.
- Bloomberg reported an active SEC investigation in October 2025, spurred by a whistleblower complaint and short-seller reports.
- Attorneys general of Delaware, Oregon, and Connecticut have concurrent inquiries into the company's handling of consumer data.
- The risk is a 'New Shock' with multiple investigations launched in the last six months, creating a high level of uncertainty around the outcome.
| KPI | Threshold | Rationale |
|---|---|---|
| Software Platform Revenue Growth YoY | > 35% | This is the primary driver of the business. A sustained growth rate above 35% validates the 'High-Beta Compounder' thesis and justifies the premium valuation. A drop below this level would signal market saturation or competitive pressure. |
| Adjusted EBITDA Margin | > 75% | The elite margin profile is a key differentiator and evidence of pricing power. Any meaningful compression below 75% would suggest a degradation of its competitive advantage or a need to increase spending to defend its position. |
| E-commerce Revenue Contribution | Disclosure of metric & >10% of Software Revenue | This is the most important leading indicator for TAM expansion. Management needs to provide specific disclosures on this new vertical. Achieving a meaningful contribution (>10%) would validate the growth runway beyond mobile gaming. |
Execution vs. Existential Regulatory Risk
BULL VIEW
The AXON AI engine's superior ROAS is driving durable market share gains from competitors like Unity, justifying a premium valuation and sustaining >35% growth.
CORE TENSION
Can elite operational performance, driven by the AXON AI, continue to outweigh the significant, unquantified risk of a regulatory crackdown on its core data collection practices?
PREVAILING SENTIMENT
Software Platform revenue grew 66% YoY in Q4 2025, while an SEC investigation was reported in October 2025. The bull case is winning on metrics, the bear case on risk.
BEAR VIEW
The active SEC and State AG investigations will force changes to data collection, impairing the AXON engine's effectiveness, causing growth to decelerate sharply.
| Timeline | Event & Metric To Watch |
|---|---|
Anytime | SEC Investigation Update Watch: Any announcement regarding the investigation's status (conclusion, enforcement action, or settlement). This is the primary overhang on the stock. |
Late April 2026 | Q1 2026 Earnings Call Watch: Software Platform Revenue Growth YoY. Must remain above 35% to support the bull thesis and premium valuation. |
Next 30-90 Days | Major Publisher Partnership with CloudX Watch: Press releases or earnings call mentions from major publishers (Tencent, Take-Two) validating CloudX's technology, signaling a credible threat. |
Ongoing | EU Digital Markets Act (DMA) Enforcement Watch: Policy updates from Apple or Google regarding API deprecations or data access restrictions on mobile OS to comply with DMA. |
| Date | Event | Stock Impact |
|---|---|---|
Sep 8, 2025 | E-commerce Self-Service Platform Launch Details: The company launched its self-service platform for the e-commerce vertical, a key strategic initiative to expand its Total Addressable Market beyond mobile gaming, driving positive sentiment. | Surged +11.6% $490.24 -> $547.04 |
Oct 6, 2025 | SEC Investigation & State AG Inquiries Reported Details: Bloomberg reported an active SEC investigation into data collection practices, spurred by a whistleblower. This news introduced a major regulatory overhang, causing a sharp stock decline. | Plummeted -14.0% $682.76 -> $587.00 |
Nov 5, 2025 | Q3 2025 Earnings Report Details: The company reported its third-quarter financial results. The market reaction was muted, suggesting the results were in line with expectations during this period of high growth. | Flat (0.7%) $617.05 -> $621.36 |
Jan 15, 2026 | Short-Seller Report (CapitalWatch) Details: A short-seller report alleged ties to criminal enterprises. The company denied the claims and the source later retracted key parts, resulting in a muted market reaction. | Slight -1.7% pullback $617.76 -> $606.99 |
Jan 29, 2026 | Q4 2025 Earnings & Q1 Guidance Details: Despite reporting strong 66% YoY revenue growth, the stock fell sharply. The negative reaction was attributed to broader ad-tech sector concerns, overshadowing the company's strong execution. | Plummeted -16.9% $569.24 -> $473.11 |
Feb 2, 2026 | New Competitor Launch (CloudX) Details: New AI ad-stack CloudX became generally available, aiming to disrupt incumbents with SDK-less bidding. The news created immediate, significant pressure on APP's stock. | Plummeted -18.1% $473.11 -> $387.34 |
Position Sizing
4%-6%
NORMAL
Stock is in an Explosive Volatility regime (6.5x S&P). While fundamentals like a widening moat and high visibility are strong, the Neutral sentiment and high volatility cap sizing to manage drawdown risk.
Diversification Alternatives
TTD
SECTORSuperior alternative to APP due to its diversification beyond mobile gaming into CTV/web, reducing exposure to mobile-specific regulatory and saturation risks.
DDOG
SECTOROffers a comparable high-growth, high-margin software model but avoids APP's primary risk factor of consumer data privacy regulation by selling to enterprise IT departments.
AppLovin has transformed from a hybrid mobile game publisher into a pure-play, high-margin (84% Adj. EBITDA Margin) AI-driven advertising software platform, with its stock now trading at a ~39x P/E ratio as of Feb 2026.
Filter all news through the lens of a pure-play AI advertising platform's ability to maintain hyper-growth and elite margins as it scales beyond gaming into e-commerce.
Sustained revenue growth >20% YoY; evidence of scaling and increasing spend from e-commerce customers on the self-service platform; announcements of new AI-driven creative or optimization tools (part of AXON engine); maintaining Adjusted EBITDA margins above 80%.
Deceleration of revenue growth below management's guidance (Q1'26 guided at 5-7% sequential growth); any negative regulatory action from the SEC or other bodies regarding data privacy or ad practices; signs of market share loss to competitors like Unity/ironSource or increased competitive pressure from Meta.
Short-term stock price volatility despite strong earnings; individual mobile game market fluctuations (company is now diversified); insider selling (has been consistent); new AI startups in ad-tech (AppLovin's scale and data are the moat).
Repricing Catalyst
The primary catalyst is the successful expansion into the e-commerce advertising vertical via its new self-service platform. Management noted on the Q4 2025 earnings call that spend from these customers is a key driver of growth, demonstrating the AXON AI engine's applicability beyond the mobile gaming market and significantly expanding the company's Total Addressable Market.
AI-Powered Advertising & Monetization Platform
$5481000.0B TTM (100% of Total) · 88.6% MarginWhat It Is
A suite of software tools including Axon Ads Manager (a demand-side platform), MAX (a supply-side mediation platform), and Adjust (a mobile measurement partner).
Who Pays & How
Mobile app developers and e-commerce businesses pay AppLovin to acquire high-value users and maximize ad revenue. They pay because AppLovin's AXON AI engine provides superior return on ad spend (ROAS) through performance-based campaigns, creating a data-driven network effect that is difficult to replicate.
Competition
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