AppLovin · Earnings release

AppLovin Announces Fourth Quarter and Full Year 2024 Financial Results

PALO ALTO – February 12, 2025 – AppLovin Corporation (NASDAQ: APP) (“AppLovin”), a leading marketing platform, today announced financial results for the quarter and full year ended December 31, 2024 and posted a letter to its shareholders and a financial update on its Investor Relations website located at https://investors.applovin.com.

Fourth Quarter and Full Year 2024 Financial Highlights:

Quarter Ended

Year Ended

(In thousands, except percentages)

% Change

% Change

Advertising Revenue1

Apps Revenue

(1)%

3%

Total Revenue

Advertising Adjusted EBITDA

Apps Adjusted EBITDA

Adjusted EBITDA

Net Income

Additional Financial Highlights:

●Net cash from operating activities was $701 million and $2.1 billion, and Free Cash Flow was $695 million and $2.1 billion for the fourth quarter and full year 2024, respectively.

●During the fourth quarter and full year 2024, we retired and withheld 1.6 million and 25.7 million of our Class A common stock, for a total cost of $0.5 billion and $2.1 billion, respectively2. At the end of 4Q 2024, we had 340 million shares of our Class A and Class B common stock outstanding.

First Quarter 2025 Financial Guidance Summary3

(In millions, except percentages)

Low

High

G1Advertising Revenue

G2Apps Revenue

G3Total Revenue

G4Advertising Adjusted EBITDA

G5Apps Adjusted EBITDA

G6Total Adjusted EBITDA

G7Total Adjusted EBITDA Margin

1 Our core advertising business now represents substantially all of the revenue in this segment and our future focus for the company. As a result, we have renamed our "Software Platform" segment to "Advertising" to better align with the nature of this business.

2Includes repurchased shares as well as withholdings upon net share settlement of vested equity awards. Total cost includes repurchase costs, including commissions and fees, as well

as cash paid in connection with tax withholding and remittance obligations upon net share settlement

3 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 letter.

1

Webcast and Conference Calls

AppLovin will host a webinar today at 2:00 PM PT / 5:00 PM ET, during which management will discuss the Company’s fourth quarter and full year 2024 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 software and AI solutions for businesses to reach, monetize and grow their global audiences. For more information about AppLovin, visit: www.applovin.com.

Contacts

Investors

David Hsiao

ir@applovin.com

Press

Kim Hughes

press@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 growth prospects.

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 Advertising to support new users, the competitive advertising and mobile app ecosystems, and our inability to adapt to emerging technologies and business models. The forward-looking statements contained in this letter 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 September 30, 2024.

Additional information will also be set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The forward-looking statements in this letter 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.

2

Non-GAAP Financial Metrics

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), this shareholder letter 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 (loss) before interest expense and loss on settlement of debt, other income, net (excluding certain recurring items), provision for (benefit from) income taxes, amortization, depreciation and write-offs and as further adjusted for non-operating foreign exchange (gains) losses, stock-based compensation expense, acquisition-related expense, restructuring costs, loss on disposal of long-lived assets, as well as certain other items that we believe 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. 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.

3

AppLovin Corporation

Consolidated Balance Sheets

(In thousands, except share and per share data)

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Goodwill

Intangible assets, net

Other assets

Total assets

$

$

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

$

Accrued and other current liabilities

Short-term debt

—

Deferred revenue

Operating lease liabilities, current

Total current liabilities

Long-term debt

Operating lease liabilities, non-current

Other non-current liabilities

Total liabilities

Stockholders’ equity:

Preferred stock, $0.00003 par value—100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024 and 2023

—

—

Class A, Class B, and Class C Common stock, $0.00003 par value—1,850,000,000 (Class A 1,500,000,000, Class B 200,000,000, Class C 150,000,000) shares authorized, 340,041,739 (Class A 309,353,198, Class B 30,688,541, Class C nil) and 339,886,712 (Class A 268,774,090, Class B 71,112,622, Class C nil) shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

Accumulated other comprehensive loss

Retained earnings (Accumulated deficit)

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$

4

AppLovin Corporation

Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Quarter Ended December 31,

Year Ended December 31,

Revenue

$

$

$

$

Costs and expenses:

Cost of revenue

Sales and marketing

Research and development

General and administrative

Total costs and expenses

Income from operations

Other income (expense):

Interest expense and loss on settlement of debt

Other income (expense), net

Total other expense, net

Income before income taxes

Provision for (benefit from) income taxes

Net income

Net income attributable to AppLovin

$

$

$

$

Less: Net income attributable to participating securities

Net income attributable to common stock—Basic

$

$

$

$

Net income attributable to common stock—Diluted

$

$

$

$

Net income per share attributable to Class A and Class B common stockholders:

Basic

$

$

$

$

Diluted

$

$

$

$

Weighted average common shares used to compute net income per share attributable to Class A and Class B common stockholders:

Basic

Diluted

5

AppLovin Corporation

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Year Ended December 31,

Operating Activities

Net income

$

$

Adjustments to reconcile net income to operating activities:

Amortization, depreciation and write-offs

Stock-based compensation, excluding cash-settled awards

Impairment of investments

—

Loss on settlement of debt

Change in operating right-of-use assets

Amortization of debt issuance costs and discount

Loss on disposal of long-lived assets

—

Other

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets

Other assets

Accounts payable

Operating lease liabilities

Accrued and other liabilities

Deferred revenue

Net cash provided by operating activities

Investing Activities

Purchase of non-marketable equity securities

Acquisitions of businesses and intangible assets

Purchase of property and equipment

Proceeds from sale of assets and other

Net cash used in investing activities

Financing Activities

Principal repayments of debt

Payments of withholding taxes related to net share settlement

Repurchases of common stock

Payments of deferred acquisition costs

—

Payments of licensed asset obligation

—

Payments of debt issuance cost

Principal payments of finance leases

Proceeds from issuance of debt

Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares

Net cash used in financing activities

Effect of foreign exchange rate on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of the period

Cash and cash equivalents at end of the period

$

$

6

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

Year Ended December 31,

Net cash provided by operating activities

Less:

Purchase of property and equipment

Principal payments on finance leases

Free Cash Flow

$

$

$

$

Net cash used in investing activities

$

$

$

$

Net cash used in financing activities

$

$

$

$

7

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

Year Ended December 31,

Revenue

$

$

$

$

Net income

$

$

$

$

Net Margin

Interest expense and loss on settlement of debt

Other income (expense), net

Provision for (benefit from) income taxes

Amortization, depreciation and write-offs

Loss on disposal of long-lived assets

—

—

—

Non-operating foreign exchange loss (gain)

Stock-based compensation

Acquisition-related expense

5

Restructuring costs

—

Total adjustments

Adjusted EBITDA

$

$

$

$

Adjusted EBITDA Margin

%

%

%

%

8

AppLovin Corporation

Reconciliation of Segment Adjusted EBITDA to Income Before Taxes

(in thousands, except percentages)

The following table provides selected financial data for our reportable segments for the periods indicated:

Quarter Ended

Year Ended December 31,

Revenue:

Advertising

$

$

$

$

Apps

Total Revenue

$

$

$

$

Segment Adjusted EBITDA:

Advertising

$

$

$

$

Apps

Total Segment Adjusted EBITDA

$

$

$

$

Interest expense and loss on settlement of debt

Other income (expense), net

Amortization, depreciation and write-offs

Loss on disposal of long-lived assets

—

—

—

Non-operating foreign exchange gain (loss)

Stock-based compensation

Acquisition-related expense

(5)

Restructuring costs

—

Income before income taxes

$

$

$

$

Segment Adjusted EBITDA Margin:

Advertising

%

%

%

%

Apps

%

%

%

%

9