stockrowWhat it does
AppLovin is an advertising-technology company headquartered in Palo Alto, California. Adam Foroughi is chief executive officer. It provides artificial-intelligence-powered advertising tools that help businesses find users, buy advertising, measure marketing results and monetize digital content.
Its main product, Axon Ads Manager, helps app and web advertisers run user-acquisition campaigns. An advertiser sets objectives such as a target return on advertising spend, and the system uses predictive algorithms and auctions to match the advertiser with users who may engage with its app or website. The platform also provides reporting on campaign performance, user retention and lifetime value.
For publishers and advertising networks, MAX runs real-time in-app auctions for advertising inventory. It is intended to help app developers receive competing bids for each ad impression and automate monetization tasks. Adjust is a measurement, attribution and fraud-prevention platform for app marketers. Wurl serves content companies and streaming services through connected-TV distribution, advertising and publishing tools.
AppLovin sold its Apps business on June 30, 2025 and now operates as a single advertising business. Its customers include advertisers seeking users and revenue, advertising networks buying app inventory, and mobile-app publishers seeking to monetize their advertising inventory.
How it makes money
AppLovin has one operating and reportable segment following the sale of its Apps business. It primarily earns fees from advertisers that use its advertising solutions to acquire users and monetize content. Revenue from Axon Ads Manager comprises substantially all revenue; advertisers are charged dynamically against campaign goals rather than through a fixed price per impression, click or installation.
The model is tied to advertiser outcomes. Advertisers set return-on-ad-spend and user-growth objectives, while Axon Ads Manager adjusts targeting, cost and campaign settings to pursue those goals. AppLovin states that it generates revenue when advertisers achieve their return-on-advertising-spend targets. The system’s performance therefore affects advertiser spending and the fees AppLovin receives.
MAX generates revenue based on a percentage of client spend. Advertising networks use it to purchase and manage app advertising inventory, while publishers use its auctions to monetize impressions. Adjust primarily earns annual software-subscription fees for measurement, attribution, reporting and fraud prevention. Wurl primarily earns usage-based and/or CPM revenue from content companies, streamers and advertisers.
FY2025 reportable-segment revenue was $5.5 billion; Q2 2026 revenue was $1.92 billion. Management said on the call that Q2 adjusted EBITDA was $1.61 billion and that higher compute spending for existing-model training and new-model development was the primary driver of sequential cost growth. AppLovin treats adjusted EBITDA and free cash flow as supplemental measures rather than substitutes for GAAP measures.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Reportable Segment | $5.5 billion | 100.0% | 70.0% |
Customers and how it sells
AppLovin serves several groups in the advertising ecosystem. Advertisers use the platform to find users for apps and websites and to manage marketing investment. Advertising networks use MAX to purchase app advertising inventory, while mobile-app publishers use MAX to monetize that inventory. Customers range from large enterprises to small businesses, independent developers and individuals across multiple industries.
The company describes gaming as the majority of its revenue in Q2 2026. Management said on the call that consumer-advertiser spend reached a record and finished 28% above Q4 2025 levels. It also said the public launch of AppLovin Ads Manager is being sequenced first toward mid-market advertisers, with partnerships intended to help bring customers onto the platform. Meta and Google are among the global internet platforms identified as advertising clients.
United States revenue was $2.8 billion in FY2025, representing 51.6% of revenue. Revenue from all other countries was $2.7 billion, representing 48.4%. AppLovin’s platform enables advertisers to select regions worldwide, and its customers and developers operate globally. App publishers, advertising networks and advertisers are the main channels through which it reaches advertising demand and inventory supply.
| Region | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| United States | $2.8 billion | 51.6% | 63.8% |
| All other countries | $2.7 billion | 48.4% | 77.2% |
Suppliers and costs
AppLovin depends on third-party platforms, including the Apple App Store and Google Play Store, for app distribution, in-app-payment collection and information that supports relevant advertising. These platforms can set fees, promotion policies and the amount of consumer information made available to advertising networks.
Its cost of revenue consists principally of acquired-technology amortization, finance-lease asset amortization for servers and networking equipment, and datacenter costs, mainly for third-party cloud-computing services. At December 31, 2025, it had $702.8 million of non-cancelable purchase obligations, primarily for third-party cloud computing services, with $398.5 million payable within twelve months. It also had $173.9 million of non-cancelable lease-payment obligations, including $140.3 million for server and network equipment leases.
Other operating costs include sales and marketing, research and development, and general and administrative functions. Management said on the call that higher compute costs were associated with training existing models and developing new models.
- Revenue$5.5B
- Cost of revenue−$665.1M
- Research and development−$226.5M
- Selling, general and administrative−$437.2M
- Operating income$4.2B
Competitive position
AppLovin operates in a fragmented advertising ecosystem. It competes with large companies and private companies that may play more than one role, including advertiser, publisher, advertising platform and network. Advertisers commonly use several platforms and networks to buy advertising on mobile apps, devices and connected TV. Meta, Google, Amazon and Unity Software are named competitors in the advertising and mobile-app ecosystems.
The company identifies technology improvement, advertising expertise, third-party relationships, reach and user targeting, pricing, brand, strategic transactions, and expansion into new offerings and geographies as competitive factors. It also operates MAX auctions that connect publisher inventory with advertising demand. As advertiser use expands, AppLovin says it gains more data about users and engagement, which can improve Axon AI and the efficiency of Axon Ads Manager.
Google is also a particularly relevant competitor in Android advertising because management said on the call that the company owning Google Play provides installs and spend for customers on that platform. AppLovin stated that it remains competitive on both major mobile platforms.
Our reading: The feedback loop between advertiser activity, user-engagement data, auction-scale distribution and Axon AI is a meaningful moat source because the company describes each element as reinforcing the others.
Our reading: MAX can support that position by linking publisher inventory to simultaneous bids, but advertising clients’ use of multiple platforms limits exclusivity.
Our reading: The moat remains exposed to platform-policy changes because Apple and Google control important distribution and data-access rules.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Meta | mobile-app and connected-TV advertising | High |
| mobile-app advertising and Android distribution | High | |
| Amazon | advertising and mobile-app ecosystems | Medium |
| Unity Software | advertising and mobile-app ecosystems | Medium |
Growth opportunities
AppLovin’s growth strategy centers on improving Axon AI and expanding use of its advertising solutions within the mobile-app ecosystem. It says larger scale and reach can produce compounding improvements in its recommendation engine, improving the effectiveness of the advertising platform. The company also intends to expand beyond its historical markets, including web-based e-commerce, social media and connected TV through Wurl.
It has made its advertising tools available to web-based advertisers and says it is early in that expansion. Management said on the call that gaming remains the majority of revenue, while consumer advertising provides an additional category of demand. It said consumer-advertiser spend was 28% above Q4 2025 levels in Q2 2026 and that the business operates one auction across multiple advertiser categories.
Management said on the call that the platform was opened to public access as AppLovin Ads Manager, initially targeting mid-market advertisers. It expects customer and data growth to improve models and creative templates over time. Management also said the likely first route for supply expansion is non-gaming apps and open-web placements, followed by connected TV when there are sufficient advertiser budgets.
The company says its longer-term objective is to provide tools to advertisers across multiple verticals. Management said on the call that it believes the business can compound at roughly 30% annually over the longer term. For Q3 2026, the company expects revenue between $2.055 billion and $2.085 billion and adjusted EBITDA between $1.71 billion and $1.74 billion.
- $2.8BFY2021
- $2.8BFY2022
- $1.8BFY2023
- $3.2BFY2024
- $5.5BFY2025
Structural risks
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AppLovin relies on third-party mobile platforms, particularly for app distribution, payments and data used in advertising. Policy changes by those platforms can affect the design and effectiveness of its advertising solutions.
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Substantially all revenue comes from Axon Ads Manager. The company also relies on existing clients for a significant portion of revenue and notes that it does not have long-term agreements with clients.
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Privacy, data-protection, consumer-protection, advertising, tracking, targeting and AI rules are evolving across jurisdictions. New requirements or different enforcement could require changes to products and business practices and increase compliance costs.
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The company processes data that is integral to improving Axon AI and its developer tools. Security breaches, improper access to or disclosure of data, and cyber incidents are identified risks.
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Competition and technological change can affect the ability to attract clients, retain spending and expand into new opportunities. Advertisers commonly use multiple advertising platforms and networks.
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AppLovin has debt obligations and needs sufficient cash flow to service them. It also faces risks from rapid growth, international operations, strategic transactions, intellectual-property disputes and the ability to protect proprietary rights.
Leadership
AppLovin has a multi-class common-stock structure and a Voting Agreement among the Voting Agreement Parties. It is a controlled company under Nasdaq corporate-governance requirements.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Adam ForoughiChief Executive Officer | — | $13.0 million | |
| Matthew StumpfChief Financial Officer | — | $13.0 million | |
| Vasily ShikinChief Technology Officer | — | $13.4 million | |
| Victoria ValenzuelaChief Administrative & Legal Officer and Corporate | Secretary | — | $13.0 million |
Bottom line
Our reading
Our reading: AppLovin is a single-segment advertising-technology business whose revenue is concentrated in Axon Ads Manager and whose economics depend on advertiser campaign outcomes, model performance and access to advertising inventory.
Our reading: Its operating model combines outcome-based advertiser fees with auction, measurement and monetization tools, while gaming remains the principal revenue category and consumer advertising is an expansion effort.
Our reading: The same reliance on data, compute, third-party platforms and a concentrated revenue source creates operating and regulatory exposure alongside the scale-based feedback loop.