Applovin Corp (NASDAQ:APP) stock rallies 47.07% (As on November 7, 10:29:14 AM UTC-4, Source: Google Finance) after the company delivered third-quarter earnings that surpassed analyst expectations and raised its guidance for the upcoming quarter. The company’s Software Platform revenue, a key growth driver, surged 66% YoY to $835 million and Software Platform Adjusted EBITDA expanded to $653 million (+79% year-over-year) at an Adjusted EBITDA margin of 78%. Apps revenue grew 1% to $363 million. Segment Adjusted EBITDA increased 24% to $68 million, a 19% margin.

Further, for the third quarter, the company has reported net income of $434 million (+300% year-over-year) at a net margin of 36%, and Adjusted EBITDA of $722 million (+72% year-over-year) at an Adjusted EBITDA margin of 60%. The company has generated net cash from operating activities of $551 million (+177% year-over-year) and Free Cash Flow of $545 million (+182% year-over-year). At the end of 3Q24, the company had $568 million in cash and cash equivalents and 335 million shares of our Class A and Class B common stock outstanding.

APP in the third quarter of FY 24 has reported the adjusted earnings per share of $1.25, beating the analysts’ estimates for the adjusted earnings per share of 92 cents. The company had reported the adjusted revenue growth of 39 percent to $1.2 billion in the third quarter of FY 24, beating the analysts’ estimates for revenue of $1.13 billion.

Additionally, during the third quarter, the company retired and withheld a total of 5.0 million shares of our Class A common stock for a total cost of $437 million. The board of directors has increased its share repurchase authorization by an incremental $2.0 billion, increasing the total aggregate remaining authorization to $2.3 billion, with future repurchases to be funded from Free Cash Flow.

Looking ahead, AppLovin provided an optimistic outlook for the fourth quarter of 2024. The company expects revenue between $1.24 billion and $1.26 billion, surpassing the analyst consensus of $1.18 billion. Adjusted EBITDA is projected to be in the range of $740 million to $760 million, with an adjusted EBITDA margin of 60%. The company’s long term goal is to build a strong capital foundation with sufficient liquidity to support financial flexibility and a net debt leverage ratio below 2.0x.

Also, management reaffirmed its confidence in sustaining 20-30% growth in ad network revenue driven solely by the gaming business, highlighted by a 66% year-over-year increase and a quarterly acceleration to 17%.