AppLovin posted quarterly results that topped expectations, although this failed to reverse the pressure on its stock, which fell about 2% in after-hours trading on Wednesday. The group generated Q1 revenue of $1.84bn, up 59% y-o-y and up 11% sequentially, beating the consensus of $1.77bn. Diluted EPS reached $3.56, ahead of the $3.444 anticipated, while adjusted EBITDA rose to $1.56bn, representing an 85% margin and confirming the high profitability of its advertising engine.
This release underscores the strength of AppLovin's model, which has transitioned into a pure-play online advertising firm following the divestment of its legacy mobile apps and games business in June 2025. Its AI-driven advertising engine, Axon, now accounts for the vast majority of its revenue and continues to drive robust cash flow generation, with free cash flow for the quarter reaching approximately $1.29bn, up 55% y-o-y.
However, the market appears to be increasingly focusing on areas of uncertainty than on the solid headline figures. Revenue growth slowed slightly compared to the 66% recorded in Q4, while margins are already approaching peak levels, leaving less leeway for further expansion. The stock has already shed about 30% since the start of the year, weighed on by a broader sell-off in software publishers, as well as an SEC investigation into its AI-related data collection practices and repeated attacks from short sellers, including Fuzzy Panda and Culper Research.
AppLovin now forecasts Q2 revenue of $1.93bn on average. Investors will also be monitoring its ambitions in social media, an embryonic project for which no launch date has yet been set.
AppLovin Corporation specializes in the development of mobile marketing and monetization software for advertisers and owners of digital advertising space.
The United States accounts for 51,6% of net sales.
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