Applovin Corp (NASDAQ:APP) stock surges 28.78% (As on February 13, 11:19:38 AM UTC-4, Source: Google Finance) after the company reported fourth-quarter earnings that topped Wall Street estimates. 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. The adjusted EBITDA increased 78% to $848 million, achieving a 62% adjusted EBITDA margin. This represents an 89% flow-through from revenue to adjusted EBITDA. At the end of the fourth quarter, the company had $741 million in cash and cash equivalents.

Moreover, the Advertising business generated $999 million in revenue and $777 million in adjusted EBITDA, achieving a 78% margin. Quarter-over-quarter flow-through from revenue to adjusted EBITDA was 75%, which is slightly lower than the normal levels.  Apps revenue for the quarter was $373 million, a 1% decrease from last year with $71 million in adjusted EBITDA, representing a 19% margin.

APP in the fourth quarter of FY 24 has reported the adjusted earnings per share of $1.73, beating the analysts’ estimates for the adjusted earnings per share of $1.25. The company had reported the adjusted revenue growth of 44 percent to $1.37 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $1.26 billion.

AppLovin projected revenue in the range of $1.355 billion to $1.385 billion for the first quarter of 2025, above analysts’ expectations of $1.321 billion. In the first quarter of 2025, for the Advertising business, the company anticipates to deliver between $1.030 billion and $1.050 billion in revenue, with adjusted EBITDA between $805 million and $825 million. The company expect Apps revenue to be between $325 million and $335 million at an adjusted EBITDA of between $50 million and $60 million.

On the other hand, the company disclosed that its Chief Marketing Officer, Katie Jansen, will be stepping down from her role effective March 14, 2025.

In addition, AppLovin revealed that it has agreed to a term sheet for selling its mobile gaming division to an undisclosed private entity. The deal is valued at $900 million, comprising $400 million in the acquirer’s common equity and $500 million in cash, subject to standard adjustments. Additionally, the agreement includes a clause allowing the acquirer to secure up to $250 million in financing for the cash portion of the deal. If the acquirer fails to obtain this financing, AppLovin has agreed to provide a promissory note for the same amount.