APP Q3 2024 Earnings

Call Details

• Call Title: Applovin Q3 2024 Earnings Call
• Date: November 6, 2024 at 10:00 PM UTC
• Management Team:
  • Adam Foroughi (Co-founder, CEO, and Chairperson)
  • Matt Stumpf (Chief Financial Officer)
  • David Hsiao (Head of Investor Relations)

Call Summary

Financial Performance

• Total revenue for Q3 2024 was $1.2B and adjusted EBITDA was $722M, representing a 60% adjusted EBITDA margin on a non-GAAP basis.
• Revenue increased 39% year over year and adjusted EBITDA increased 72% year over year, per the prepared remarks.
• The company reported 91% flow through from revenue to adjusted EBITDA for the quarter on a consolidated basis.
• Free cash flow for the quarter was $545M, which was up 182% year over year and up 22% quarter over quarter.
• Cash and cash equivalents were $568M at quarter end and diluted shares outstanding were 335 million.
• The software platform segment generated $835M of revenue and $653M of adjusted EBITDA, equating to a 78% adjusted EBITDA margin and 66% revenue growth year over year.
• Apps revenue was $363M with $68M of adjusted EBITDA, representing a 19% adjusted EBITDA margin and a 1% revenue increase year over year.
• Quarter-over-quarter flow-through from software revenue to adjusted EBITDA was reported at 107%, and normalized flow-through was estimated at approximately 100% after removing non-recurring items.

Guidance

• Q4 2024 revenue guidance was provided at $1.24B to $1.26B on a consolidated basis.
• Q4 2024 adjusted EBITDA guidance was provided at $740M to $760M and the company is targeting a 60% adjusted EBITDA margin on a non-GAAP basis.
• The company reiterated a directional goal of 20-30% year-over-year growth for mobile gaming advertisers alone as a multi-quarter objective.
• Management said it expects 4-5% quarter-over-quarter growth driven by self-learning and market growth with occasional step changes from Axon improvements.
• The company stated that any e-commerce contribution is incremental to the 20-30% gaming growth target and timing remains uncertain.
• Longer-term annual guidance was not provided and the company stated it will not provide long-term annual guidance beyond the directional targets.