AppLovin Revenue Climbs as Growth Pace Slows
Free cash flow fell 34% sequentially to $863.3 million.
AppLovin (APP), the advertising-technology company, reported a 53% increase in second-quarter revenue as its growth rate moderated from recent quarters.
Revenue growth slowed from 59% in the first quarter, 66% in the fourth quarter of 2024 and 68% in the third quarter. Sales still increased 4.5% sequentially, extending the company's expansion at a slower pace.
Revenue reached $1.924 billion, within AppLovin's guidance range of $1.915 billion to $1.945 billion. Net income rose 55% from a year earlier and 5.1% sequentially to $1.267 billion, while diluted earnings increased to $3.76 a share from $3.56 in the first quarter.
Adjusted EBITDA rose 58% from a year earlier to $1.614 billion, $1 million below the previous guidance range. Its 83.9% margin slipped from 84.5% in the first quarter, while remaining above the roughly 82.4% recorded in the third quarter of 2024.
Cash generation weakened more sharply. Operating cash flow fell to $869.0 million from $1.3 billion in the first quarter, alongside the decline in free cash flow.
For the third quarter, AppLovin expects revenue of $2.055 billion to $2.085 billion, implying sequential growth of roughly 6.8% to 8.4%. The company projects adjusted EBITDA of $1.710 billion to $1.740 billion and a margin of 83%, below the second quarter's actual margin.
AppLovin repurchased or withheld 1.1 million shares for $551.3 million during the quarter, down from 2.2 million shares for $1.0 billion in the first quarter. Shares outstanding declined by one million to 335 million as the company reduced the pace of its capital returns.