Applovin Corp (NASDAQ:APP) stock rose 2.45% (As on November 6, 11:24:15 AM UTC-4, Source: Google Finance) after the company’s third-quarter earnings that topped Wall Street forecasts and a bullish revenue outlook for the final stretch of the year. The digital marketing firm reported strong growth in both its software platform and apps segments, continuing its momentum amid structural shifts in mobile advertising. Ad revenue jumped 12% quarter-on-quarter, well ahead of AppLovin’s 6% target, fueled mainly by continued model enhancements in gaming. Adjusted EBITDA surged 79% to $1.16 billion with margin expanding to 82%, up from 77% in the year-ago period. Net income more than doubled to $836 million, reflecting increased operating efficiency and reduced expenses in R&D and marketing.
Meanwhile, the MAX platform ecosystem is growing really quickly. It happens from a couple of different factors. One is as the ads become higher quality, and we look at e-commerce shopping and just demand density as higher quality because the user stops seeing game, game, game, game, game when they’re stuck to a game that they actually like.
APP in the third quarter of FY25 has reported the adjusted earnings per share of $2.45, beating the analysts’ estimates for the adjusted earnings per share of $2.37. The company had reported the adjusted revenue growth of 68 percent to $1.41 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $1.34 billion.
AppLovin also offered a robust revenue outlook for the fourth quarter, guiding to a range of $1.57 billion to $1.6 billion, above Wall Street’s $1.55 billion estimate. It also expects Q4 adjusted EBITDA of between $1.29 billion and $1.32 billion, implying sustained margin strength of 82% to 83%. The company plans to broaden its self-service platform in 2026 and continue enhancing its conversion rates and model improvements. These initiatives are expected to drive further growth and strengthen AppLovin’s market position.
Additionally, the company continued aggressively returning capital to shareholders, repurchasing 1.3 million shares for $571 million in Q3 and expanding its buyback authorization by an additional $3.2 billion. Free cash flow for the quarter came in at $1.05 billion, matching operating cash flow and highlighting strong underlying liquidity. Net cash from operating activities was $1.05 billion. Free cash flow margin improved sequentially given no semiannual cash interest paid on our debt this quarter, as those payments occur in Q2 and Q4 of each year. The company ended the quarter with $1.7 billion in cash and cash equivalents.