AppLovin Announces Third Quarter 2026 Financial Results

AppLovin posted record third quarter earnings: net income grew 72% year-over-year to $1.44 billion on record revenue of $2.18 billion, up 55% year-over-year, with industry-leading 66% net income margin and 84% Adjusted EBITDA margin. PALO ALTO, Calif.--(BUSINESS WIRE)-- AppLovin Corporation (NASDAQ: APP) (“AppLovin” or the "Company"), a leading marketing platform, today announced financial results for the quarter ended September 30, 2026 and posted a financial update on its Investor Relations website located at https://investors.applovin.com. Third Quarter 2026 Financial Highlights: Quarter Ended September 30, Nine Months Ended September 30, (In millions, except percentages) 2026 2025 % Change 2026 2025 % Change Revenue $ 2,185 $ 1,405 55 % $ 5,951 $ 3,823 56 % Net Income $ 1,439 $ 836 72 % $ 3,911 $ 2,231 75 % Net Income from Continuing Operations $ 1,439 $ 836 72 % $ 3,911 $ 2,331 68 % Adjusted EBITDA $ 1,842 $ 1,158 59 % $ 5,013 $ 3,114 61 % Additional Financial Highlights: Net cash from operating activities and Free Cash Flow were $1.4 billion for the third quarter 2026. Basic and Diluted earnings per share ("EPS") were $4.31 and $4.30, respectively, for the third quarter 2026. During the third quarter 2026, we repurchased and withheld 4.1 million shares of our Class A common stock, for a total cost of $1.4 billion 1 . At the end of 3Q 2026, we had 331 million shares of our Class A and Class B common stock outstanding. Given continued confidence in the Company's future, our board of directors approved an increase to our share repurchase authorization of $3.2 billion, bringing our total current share repurchase authorization to $3.6 billion as of the end of October. Fourth Quarter 2026 Financial Guidance Summary 2 4Q26 (In millions, except percentages) Low High Revenue $ 2,365 $ 2,395 Adjusted EBITDA $ 1,995 $ 2,025 Adjusted EBITDA Margin 84 % 85 % ____________________ 1 Includes repurchased shares as well as withholdings upon net share settlement of vested equity awards. Total cost includes repurchase costs, including commissions, taxes, and fees, as well as cash paid in connection with tax withholding and remittance obligations upon net share settlement. Future repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. 2 We have not provided the forward-looking GAAP equivalents for forward-looking non-GAAP metrics, specifically Adjusted EBITDA and Adjusted EBITDA margin, or a GAAP reconciliation as a result of the uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results. We have provided historical reconciliations of GAAP to non-GAAP metrics in tables at the end of this press release. Webcast and Conference Call AppLovin will host a webinar today at 2:00 PM PT / 5:00 PM ET, during which management will discuss the Company’s third quarter 2026 results and provide commentary on its business performance. A question-and-answer session will follow the prepared remarks. The webinar may be accessed on the Company’s investor relations website or via webinar registration. A replay of the webinar will also be available under the Events & Presentations section of our Investor Relations website. About AppLovin AppLovin makes technologies that help businesses of every size connect to their ideal customers. The company provides end-to-end advertising solutions for businesses to reach, monetize and grow their global audiences. For more information about AppLovin, visit: www.applovin.com. Source: AppLovin Corp. Forward Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “going to,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions. Forward-looking statements in this press release include our expected financial results and guidance and statements regarding our share repurchase program. Our ability to utilize the full amount authorized by our share repurchase program will depend on a variety of factors, including compliance with legal requirements, such as solvency and surplus requirements; contractual restrictions; market conditions; our capital allocation strategy; and our other capital requirements from time to time, including any strategic transactions we may undertake. Over time, we may modify our capital allocation strategy or pursue alternative objectives and strategies. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in our plans or assumptions, which could cause actual results to differ materially from those projected. These risks include our inability to forecast our business effectively, the macroeconomic environment, fluctuations in our results of operations, our ability to execute on our operational and financial priorities, our ability to scale our business to support new customers, the competitive advertising ecosystem, and our inability to adapt to emerging technologies and business models. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2026. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2026. The forward-looking statements in this press release are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law. Non-GAAP Financial Measures To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release includes certain financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow. A reconciliation of each such non-GAAP financial measure to the most directly comparable GAAP measure can be found below. We define Adjusted EBITDA for a particular period as net income adjusted for loss from discontinued operations, net of income taxes, interest expense, other (income) expense, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for non-operating foreign exchange gain, stock-based compensation, transaction-related expense and other, restructuring costs (benefits), as we believe these items are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period. We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payments on finance leases. We subtract both purchases of property and equipment and payment of finance leases in our calculation of Free Cash Flow because we believe these items represent our ongoing requirements for property and equipment to support our business, regardless of whether we utilize a finance lease to obtain such property or equipment. We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations and operating performance, as they are similar to measures reported by our public competitors and are regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted EBITDA margin are key measures we use to assess our financial performance and are also used for internal planning and forecasting purposes. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We use Free Cash Flow in addition to GAAP measures to help manage our business and prepare budgets and annual planning, and we believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Free Cash Flow reflects cash flows from both of continuing and discontinued operations. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP. AppLovin Corporation Consolidated Balance Sheets (In thousands, except per share data) (Unaudited) September 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 3,173,731 $ 2,487,096 Accounts receivable, net 2,388,782 1,819,366 Prepaid expenses and other current assets 141,842 124,330 Total current assets 5,704,355 4,430,792 Property and equipment, net 113,342 122,445 Goodwill 1,516,423 1,539,986 Intangible assets, net 336,185 396,714 Equity method investments 298,333 287,666 Other non-current assets 614,111 482,007 Total assets $ 8,582,749 $ 7,259,610 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 838,172 $ 746,977 Accrued and other current liabilities 661,182 586,811 Total current liabilities 1,499,354 1,333,788 Long-term debt 3,516,136 3,512,987 Other non-current liabilities 268,557 278,164 Total liabilities 5,284,047 5,124,939 Stockholders’ equity: Preferred Stock, $0.00003 par value—100,000 shares authorized, no shares issued and outstanding as of September 30, 2026 and December 31, 2025 — — Class A, Class B, and Class C Common Stock, $0.00003 par value—1,850,000 (Class A 1,500,000, Class B 200,000, Class C 150,000) shares authorized, 331,322 (Class A 301,258, Class B 30,064, Class C nil) and 338,313 (Class A 307,955, Class B 30,358, Class C nil) shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively 11 11 Additional paid-in capital 649,790 446,550 Accumulated other comprehensive loss (76,530 ) (46,987 ) Retained earnings 2,725,431 1,735,097 Total stockholders’ equity 3,298,702 2,134,671 Total liabilities and stockholders’ equity $ 8,582,749 $ 7,259,610 AppLovin Corporation Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Quarter Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Revenue $ 2,184,815 $ 1,405,045 $ 5,950,950 $ 3,822,773 Costs and expenses: Cost of revenue 240,765 174,855 670,198 481,611 Sales and marketing 68,803 48,575 192,948 154,875 Research and development 101,817 43,852 295,822 144,290 General and administrative 64,462 58,756 148,804 165,326 Total costs and expenses 475,847 326,038 1,307,772 946,102 Income from operations 1,708,968 1,079,007 4,643,178 2,876,671 Other income (expense): Interest expense (51,066 ) (51,429 ) (153,381 ) (155,726 ) Other income (expense), net 86,032 (6,632 ) 191,071 (21,389 ) Total other income (expense), net 34,966 (58,061 ) 37,690 (177,115 ) Income before income taxes 1,743,934 1,020,946 4,680,868 2,699,556 Provision for income taxes 305,032 185,401 769,815 368,617 Net income from continuing operations 1,438,902 835,545 3,911,053 2,330,939 Loss from discontinued operations, net of income taxes — — — (99,444 ) Net income 1,438,902 835,545 3,911,053 2,231,495 Net income (loss) per share attributed to Class A and Class B common stockholders - Basic: Continuing operations $ 4.31 $ 2.47 $ 11.65 $ 6.87 Discontinued operations — — — (0.29 ) Basic net income per share $ 4.31 $ 2.47 $ 11.65 $ 6.58 Net income (loss) per share attributed to Class A and Class B common stockholders - Diluted: Continuing operations $ 4.30 $ 2.45 $ 11.61 $ 6.80 Discontinued operations — — — (0.29 ) Diluted net income per share $ 4.30 $ 2.45 $ 11.61 $ 6.51 Weighted-average common shares used to compute net income (loss) per share attributable to Class A and Class B common stockholders: Basic 333,628 338,531 335,595 338,990 Diluted 334,769 340,974 336,829 342,668 AppLovin Corporation Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2026 2025 Operating Activities Net income $ 3,911,053 $ 2,231,495 Adjustments to reconcile net income to net cash provided by operating activities: Amortization, depreciation and write-offs 100,418 162,042 Goodwill impairment — 188,943 Stock-based compensation, excluding cash-settled awards 253,138 130,167 Gain on divestiture, net of transaction costs — (106,229 ) Other (91,330 ) 80,887 Changes in operating assets and liabilities: Accounts receivable (571,015 ) (326,747 ) Prepaid expenses and other assets 2,671 84,474 Accounts payable 88,410 2,069 Accrued and other liabilities (104,070 ) 210,259 Net cash provided by operating activities 3,589,275 2,657,360 Investing Activities Proceeds from divestiture, net of cash divested — 407,297 Purchase of non-marketable equity securities — (20,178 ) Other investing activities (25,375 ) (27,863 ) Net cash provided by (used in) investing activities (25,375 ) 359,256 Financing Activities Repurchases of common stock (2,811,222 ) (1,774,329 ) Payment of withholding taxes related to net share settlement (55,818 ) (316,882 ) Principal repayments of debt — (200,000 ) Payments of licensed asset obligation — (13,532 ) Proceeds from issuance of debt — 200,000 Other financing activities (5,913 ) 4,889 Net cash used in financing activities (2,872,953 ) (2,099,854 ) Effect of foreign exchange rate on cash and cash equivalents (4,312 ) 8,726 Net increase in cash and cash equivalents, including cash from discontinued operations 686,635 925,488 Less: net decrease in cash from discontinued operations — (44,381 ) Net increase in cash and cash equivalents 686,635 969,869 Cash and cash equivalents at beginning of the period 2,487,096 697,030 Cash and cash equivalents at end of the period $ 3,173,731 $ 1,666,899 Supplemental disclosure of cash flow information: Cash paid for interest $ 100,834 $ 101,023 Cash paid for income taxes, net of refunds $ 926,151 $ 167,291 AppLovin Corporation Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow (In thousands) The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow for the periods presented: Quarter Ended September 30, 2026 2025 Net cash provided by operating activities 1,428,842 1,053,422 Less: Purchase of property and equipment (7,476 ) (105 ) Principal payments of finance leases (2,923 ) (4,318 ) Free Cash Flow $ 1,418,443 $ 1,048,999 Net cash used in investing activities $ (17,687 ) $ (19,628 ) Net cash used in financing activities $ (1,290,302 ) $ (560,260 ) AppLovin Corporation Reconciliation of Net Income to Adjusted EBITDA (In thousands, except percentages) The following table provides our Adjusted EBITDA and Adjusted EBITDA Margin and a reconciliation of Net Income to Adjusted EBITDA for the periods presented: Quarter Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Revenue $ 2,184,815 $ 1,405,045 $ 5,950,950 $ 3,822,773 Net income 1,438,902 835,545 3,911,053 2,231,495 Net margin 66 % 59 % 66 % 58 % Loss from discontinued operations, net of income taxes — — — 99,444 Net income from continuing operations 1,438,902 835,545 3,911,053 2,330,939 Net margin from continuing operations 66 % 59 % 66 % 61 % Adjusted as follows: Interest expense 51,066 51,429 153,381 155,726 Other (income) expense, net (84,501 ) 9,079 (185,724 ) 13,233 Provision for income taxes 305,032 185,401 769,815 368,617 Amortization, depreciation and write-offs 34,190 34,978 100,418 97,988 Non-operating foreign exchange gain (2,055 ) (570 ) (5,685 ) (2,100 ) Stock-based compensation 84,165 33,767 253,417 127,434 Transaction-related expense and other 15,477 6,565 15,487 16,245 Restructuring costs (benefits) 1 (46 ) 1,460 810 5,691 Adjusted EBITDA $ 1,842,230 $ 1,157,654 $ 5,012,972 $ 3,113,773 Adjusted EBITDA margin 84 % 82 % 84 % 81 % 1 Negative amount reflects a reversal of amounts expensed in prior periods Investors David Hsiao ir@applovin.com Press Emelyne Interior press@applovin.com Source: AppLovin Corp.