AppLovin Corp
For the period ended Mar 31, 2025. Filed May 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 7, 2025
APP$391.22+9.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001751008-24-000062
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001751008-25-000053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 146 previous paragraphs and 134 current paragraphs.
62 unchanged; 55 reworded; 17 added; 25 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Advertising Revenue
Current report
Recent Developments
Current report
On May 7, 2025, we, along with our subsidiaries Morocco, Inc. and AppLovin GmbH (collectively, the “Sellers”) entered into a Purchase Agreement (the “Agreement”) with Tripledot (“Purchaser Parent”) and its subsidiaries Eton Games Inc. and Tripledot Group Holdings Limited (collectively, with Purchaser Parent, the “Purchasers”). On the terms and subject to the conditions set forth in the Agreement, Sellers will transfer the equity interests of certain wholly-owned subsidiaries that are engaged in our mobile gaming business (the “Gaming Business”) to Purchasers, for total consideration (the “Purchase Price,” and such sale, together with the other transactions contemplated by the Agreement, the “Transactions”) consisting of (i) $400.0 million in cash consideration, comprised of (a) $150.0 million to be paid in cash at the closing of the Transactions (the “Closing”) and (b) a $250.0 million secured promissory note to be issued by Eton Games Inc. (collectively with any other U.S. subsidiaries of Purchaser Parent designated as a co-Borrower thereunder, “Borrowers”) to us or our designated affiliate at the Closing (the “Promissory Note”), and (ii) equity consideration comprised of ordinary shares of Purchaser Parent representing approximately 20% of the fully-diluted equity capitalization of Purchaser Parent at the Closing. Purchaser Parent anticipates financing a portion of the cash Purchase Price payable at the Closing with debt.
Current report
The terms of the Promissory Note provide for a maturity of 18 months from the Closing, with no amortization. The Borrowers are permitted to voluntarily prepay the outstanding principal amount of the Promissory Note, in whole or in part, without premium or penalty. The advance under the Promissory Note bears interest at a rate per annum equal to eleven percent (11%). As of the Closing, the obligations of the Borrowers under the Promissory Note will be guaranteed by all U.S. and U.K. subsidiaries of the Purchaser Parent, subject to certain exceptions, and secured by (i) substantially all assets of the Borrowers and the U.S. guarantors and (ii) a pledge by Tripledot Group Holdings Limited of the equity interests held by it in each Borrower and U.S. guarantor, in each case subject to permitted liens and certain customary exceptions. Within 90 days after the Closing, the obligations of the Borrowers under the Promissory Note will also be guaranteed by Purchaser Parent and secured by (a) substantially all assets of the U.K. guarantors and (b) a share pledge by Purchaser Parent of the equity interests held by it in each U.K. guarantor and U.S. guarantor, in each case subject to permitted liens and certain customary exceptions. The Promissory Note includes negative covenants limiting, with certain exceptions, (1) dispositions, (2) changes in business, (3) mergers or acquisitions, (4) indebtedness, (5) liens, (6) distributions and investments and (7) transactions with affiliates; provided that the foregoing covenants allow redemptions and repurchases of a certain series of stock of Purchaser Parent up to an aggregate amount of $205 million. The Promissory Note also contains certain customary affirmative covenants and events of default.
Current report
The consummation of the Transactions is subject to the satisfaction or waiver of certain customary closing conditions, including (i) the approval of the Agreement and the Transactions by the requisite shareholders of Purchaser Parent and the occurrence of certain pre-Closing actions with respect to Purchaser Parent’s capitalization structure, (ii) the absence of any law or order preventing or prohibiting the consummation of the Transactions, (iii) expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iv) the accuracy of each party’s representations and warranties (subject to customary materiality and other qualifiers), (v) each party’s performance and compliance with its covenants contained in the Agreement, (vi) the absence of a material adverse effect on the Gaming Business or on Purchaser Parent, and (vii) other closing deliverables. The Transactions are not subject to any financing condition.
Current report
1 Excludes recurring operational foreign exchange gains and losses.
Current report
Goodwill impairment. Goodwill impairment expenses consist of a non-cash impairment loss recognized for the goodwill of the Apps reporting unit in the three months ended March 31, 2025, as a result of the impairment analysis we performed during the first quarter of 2025.
Current report
In this section, we discuss the results of our operations for the three months ended March 31, 2025 and 2024.
Current report
General and administrative expenses in the three months ended March 31, 2025 increased by $12.1 million, or 29%, compared to the same period in the prior year, due primarily to an increase of $6.2 million in professional services costs primarily associated with transaction-related expenses and an increase of $3.2 million in personnel-related expenses including an increase in stock-based compensation.
Current report
Goodwill impairment
Current report
For the three months ended March 31, 2025, we recorded a non-cash goodwill impairment charge of $188.9 million resulting from an interim quantitative goodwill impairment analysis performed in the first quarter of 2025 for the Apps reporting unit. There was no goodwill impairment expense in the prior year period. For additional information, see Note 5 – Goodwill and Intangible Assets in the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current report
In the three months ended March 31, 2025, interest expense decreased by $21.3 million, or 29%, compared to the same period in the prior year, due primarily to a $20.6 million decrease in interest expense as a result of lower interest rates under our senior unsecured notes and our unsecured credit agreement compared to our prior credit agreement.
Current report
The $451.2 million, or 92%, increase in Advertising Adjusted EBITDA for the three months ended March 31, 2025 was primarily driven by an increase in Advertising Revenue of $480.6 million and a decrease of $4.5 million in personnel-related expenses, partially offset by an increase of $28.2 million in expenses associated with operating our network infrastructure driven by the growth in our operations.
Current report
In March 2025, we borrowed $200.0 million under our revolving credit facility pursuant to the credit agreement entered in 2024 to fund share repurchases under our repurchase program. As of March 31, 2025, $793.7 million remained available for borrowing under the facility, net of $6.3 million in outstanding letters of credit. We repaid $100.0 million of the outstanding borrowings in April 2025 and the remaining $100.0 million in May 2025.
Current report
Stock Repurchase Program
Current report
An accounting estimate is considered critical if it involves significant subjectivity and judgment, and if changes in the estimate have had or are reasonably likely to have a material effect on our consolidated financial statements.
Current report
For additional information on all of our significant accounting policies, see Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024.
Removed paragraphs (25)
Previous report
Software Platform Revenue
Previous report
1 We calculate daily active users as the average number of unique device identities that open a mobile app (whether that mobile app our own or a third party’s) which has our software development kit (SDK) on each day in a period. We measure this figure through our SDK. An individual who uses an app in more than one country on a particular day will be counted as more than one unique device identity; however, if an individual uses more than one app in the same day, such individual is only counted once. This figure does not include any users who have opted out of allowing apps to track on their mobile phone.
Previous report
management believes that MAPs is a useful metric to measure the engagement and monetization potential of our games.
Previous report
Current Economic Conditions
Previous report
We are subject to risks and uncertainties caused by global economic conditions and events with significant macroeconomic impacts, including, but not limited to, international conflicts in Ukraine and the Middle East and actions taken to counter inflation. Inflation, rising interest rates and reduced consumer confidence have caused and may continue to cause our clients to be cautious in their spending. The full impact of these macroeconomic events and the extent to which these macro factors may impact our business, financial condition, and results of operations in the future remains uncertain. The risks related to our business are further described in the section titled “Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
For the nine months ended September 30, 2024, our Apps Revenue increased by $47.3 million, or 4%, from the prior year period, of which, our IAP Revenue from Apps increased by $23.8 million, or 3%, primarily due to a 1% increase in the volume of in-app purchases and a 3% increase in price per in-app purchase, and our IAA Revenue from Apps increased by $23.5 million, or 7%, due primarily to an 53% increase in the volume of advertising impressions, partially offset by a 30% decrease in price per advertising impression.
Previous report
Sales and marketing expenses in the nine months ended September 30, 2024 increased by $26.8 million, or 4%, compared to the same period in the prior year, due primarily to an increase of $14.9 million in personnel-related expenses primarily related to an increase in stock-based compensation expense and related payroll costs, and other individually insignificant factors.
Previous report
Research and development expenses in the three months ended September 30, 2024 decreased by $9.3 million, or 6%, compared to the same period in the prior year, due primarily to a decrease in stock-based compensation expense, driven by reduced stock-based compensation related to PSUs.
Previous report
Research and development expenses in the nine months ended September 30, 2024 increased by $27.6 million, or 6%, compared to the same period in the prior year, primarily due to an increase of $24.8 million in personnel-related expenses primarily related to an increase in stock-based compensation related payroll costs.
Previous report
General and administrative expenses in the three months ended September 30, 2024 decreased by $3.4 million, or 8%, compared to the same period in the prior year, due primarily to a decrease of $5.9 million in bad debt expense.
Previous report
In the three months ended September 30, 2024, interest expense decreased by $3.4 million compared to the same period in the prior year, due primarily to $4.3 million in loss on settlement of debt resulting from a debt refinancing transaction in the prior year.
Previous report
In the nine months ended September 30, 2024, interest expense increased by $20.0 million compared to the same period in the prior year, due primarily to a net gain of $15.8 million related to interest rate swaps in the prior year period, with the remaining increase driven primarily by an increase in debt outstanding.
Previous report
In the nine months ended September 30, 2024, other income, net decreased by $7.6 million, or 28%, compared to the same period in the prior year. The decrease was primarily due to a decrease in interest income driven by a combination of lower interest rates and a reduction in cash and cash equivalents.
Previous report
The $289.3 million, or 79%, increase in Software Platform Adjusted EBITDA for the three months ended September 30, 2024 was primarily driven by an increase in Software Platform revenue of $330.7 million, partially offset by an increase of $28.1 million in expenses associated with operating our network infrastructure driven by the growth in our operations and an increase of $8.4 million in personnel-related expenses.
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
The $810.2 million, or 95%, increase in Software Platform Adjusted EBITDA for the nine months ended September 30, 2024 was primarily driven by an increase in Software Platform revenue of $959.3 million, partially offset by an increase of $98.5 million in expenses associated with operating our network infrastructure driven by the growth in our operations and an increase of $26.6 million in personnel-related expenses.
Previous report
The $34.9 million, or 20%, increase in Apps Adjusted EBITDA for the nine months ended September 30, 2024 was primarily driven by an increase in Apps Revenue of $47.3 million, partially offset by an increase of $9.0 million in professional services costs related to development of new games by third parties and an increase of $4.5 million in personnel-related costs.
Previous report
Since inception, we have financed our operations primarily through payments received from clients using our Software Platform, advertising on our Apps, from IAPs from our Apps, through net proceeds we received from the sales of our convertible preferred stock, Class A common stock in our initial public offering, and debt borrowings, including borrowings made under our credit agreement. As of September 30, 2024, we had cash and cash equivalents of $567.6 million.
Previous report
Share Repurchase Program
Previous report
We are party to a credit agreement (the “Credit Agreement”), which provides for senior secured term loans and a revolving credit facility.
Previous report
In March 2024, we entered into Amendment No. 10 to the Credit Agreement which reduces the interest rate margin from 3.1% to 2.5% with respect to SOFR loans (or from 2.0% to 1.5% with respect to base rate loans). In connection with the amendment, we increased the aggregate principal amount of the 2030 Term Loan to $2.09 billion and reduced the aggregate principal amount of the 2028 Term Loan to $1.46 billion. The other material terms of the Credit Agreement remain unchanged.
Previous report
In March 2024, we drew down an additional $418.7 million from the revolving credit facility to fund certain repurchases under the Company's share repurchase program. As of March 31, 2024, the entire outstanding amount under the revolving credit facility of $603.7 million was repaid in full, and the full amount of the revolving credit facility was available to be borrowed.
Previous report
There were no other material changes to our debt and the related Credit Agreement since December 31, 2023.
Previous report
As of September 30, 2024, our non-cancelable minimum purchase commitment was primarily related to a multi-year contractual arrangement with a cloud services provider. In August 2024, we amended our agreement with the cloud services provider. Under the amended agreement, we committed to spend a minimum of $1.26 billion over a three-year period. As of September 30, 2024, no payment had been towards this commitment.
Reworded paragraphs (55)
Previous wording
Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end software and AI-powered solutions for businesses to reach, monetize and grow their global audience. We also operate a portfolio of owned mobile apps and accelerated our market penetration through an active acquisition and partnership strategy. Our scaled business model sits at the nexus of the advertising ecosystem, which creates a durable competitive advantage that has fueled our clients’ success and our strong growth.
Current wording
Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end software and AI-powered solutions for businesses to reach, monetize and grow their global audience. We also operate a portfolio of owned mobile apps and accelerated our market penetration through an active acquisition and partnership strategy. Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage. We generate revenue when our advertisers achieve their return on ad spend targets with our Advertising solutions, ensuring that their success directly fuels our growth.
Previous wording
Since our founding in 2011, we have been focused on building a software-based platform for advertisers to improve the marketing and monetization of their content. Our founders, who are mobile app developers themselves, quickly realized the real impediment to success and growth in the advertising ecosystem was a discovery and monetization problem—breaking through the congested app stores to efficiently find users and successfully grow their business. Their first-hand experience with these challenges led to the development of our infrastructure and Software Platform. We capitalized on our success and understanding of the mobile app ecosystem by entering into the mobile game apps industry in 2018. Our global diversified portfolio of apps now consists of over 200 free-to-play mobile games across five genres, run by ten studios.
Current wording
Since our founding in 2011, we have been focused on building Advertising solutions for advertisers to improve the marketing and monetization of their content. Our founders, who were mobile app developers themselves, quickly realized the real impediment to success and growth in the advertising ecosystem was a discovery and monetization problem—breaking through the congested app stores to efficiently find users and successfully grow their business. Their first-hand experience with these challenges led to the development of our infrastructure and Advertising solutions. We capitalized on our success and understanding of the mobile app ecosystem by entering into the mobile game apps industry in 2018. Our global diversified portfolio of apps now consist of over 200 free-to-play mobile games across five genres, run by ten studios.
Previous wording
For the three months ended September 30, 2024, our revenue increased 39% year-over-year to $1.20 billion, from $864.3 million in the three months ended September 30, 2023. We generated net income of $434.4 million and $108.6 million for the three months ended September 30, 2024 and 2023, respectively. We generated Adjusted EBITDA of $721.6 million and $419.3 million for the three months ended September 30, 2024 and 2023, respectively. Additionally, our net cash provided by operating activities was $1.40 billion and $717.5 million in the nine months ended September 30, 2024 and 2023, respectively. We generated Free Cash Flow of $1.38 billion and $697.3 million for the nine months ended September 30, 2024 and 2023, respectively. Given our strong financial position, we have been able to reinvest in our expansion and growth, and repurchase shares of our Class A common stock. See the section titled “Non-GAAP Financial Measures” below for definitions of our non-GAAP financial measures and reconciliations of the most directly comparable financial measures calculated in accordance with GAAP to these measures.
Current wording
For the three months ended March 31, 2025, our revenue increased 40% year-over-year to $1.5 billion, from $1.1 billion in the three months ended March 31, 2024. We generated net income of $576.4 million and $236.2 million for the three months ended March 31, 2025 and 2024, respectively. We generated Adjusted EBITDA of $1.0 billion and $548.8 million for the three months ended March 31, 2025 and 2024, respectively. Additionally, our net cash provided by operating activities was $831.7 million and $392.8 million in the three months ended March 31, 2025 and 2024, respectively. We generated Free Cash Flow of $825.7 million and $387.6 million for the three months ended March 31, 2025 and 2024, respectively. Given our strong financial position, we have been able to reinvest in our expansion and growth, and repurchase and withhold shares of our Class A common stock. See the section titled “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated in accordance with GAAP.
Previous wording
We collect revenue from our Software Platform and our Apps. During the three months ended September 30, 2024, Software Platform Revenue represented 70% of total revenue and Apps Revenue represented 30% of total revenue.
Current wording
We collect revenue from Advertising and our Apps. During the three months ended March 31, 2025, Advertising Revenue represented 78% of total revenue and Apps Revenue represented 22% of total revenue.
Previous wording
We report our operating results through two reportable segments: Software Platform and Apps.
Current wording
We report our operating results through two reportable segments: Advertising and Apps.
Previous wording
The Software Platform and Apps segments provide a view into the organization of our business and generate revenue as follows:
Current wording
The Advertising and Apps segments provide a view into the organization of our business and generate revenue as follows:
Previous wording
We primarily generate Software Platform Revenue from fees paid by advertisers who use our Software Platform to grow and monetize their content. We are able to grow our Software Platform Revenue by improving our various software technologies.
Current wording
We primarily generate Advertising Revenue from fees paid by advertisers who use our Advertising solutions to grow and monetize their content. We are able to grow our Advertising Revenue by improving our various technologies.
Previous wording
Software Platform clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Facebook and Google. Our Software Platform provides advertisers with access to over 1.4 billion daily active users 1. As such, we see multiple opportunities to gain new Software Platform clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful.
Current wording
Advertising clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Facebook and Google. We see multiple opportunities to gain new Advertising clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful.
Previous wording
Our Software Platform includes AppDiscovery, MAX, Adjust, and Wurl. Clients use AppDiscovery to automate, optimize, and manage their user acquisition investments. They set marketing and user growth goals, and AppDiscovery optimizes their ad spend in an effort to achieve their return on advertising spend targets and other marketing objectives. AppDiscovery comprises the vast majority of revenue from our Software Platform. Revenue is generated from our advertisers, typically on a performance basis, and shared with our advertising publishers, typically on a cost per impression model.
Current wording
Our Advertising solutions include AppDiscovery, MAX, Adjust, and Wurl. Clients use AppDiscovery to automate, optimize, and manage their user acquisition investments. They set marketing and user growth goals, and AppDiscovery optimizes their ad spend in an effort to achieve their return on advertising spend targets and other marketing objectives. AppDiscovery comprises the vast majority of Advertising Revenue. Revenue is generated from our advertisers, typically on a performance basis, and shared with our advertising publishers, typically on a cost per impression model.
Previous wording
Software Platform clients use MAX to optimize purchases of app advertising inventory. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability. Revenue from MAX is generated based on a percentage of client spend. As more advertising networks move to in-app real-time bidding, we expect growth in the adoption of, and revenue from, MAX.
Current wording
Advertising clients use MAX to optimize purchases of app advertising inventory. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability. Revenue from MAX is generated based on a percentage of client spend. As more advertising networks move to in-app real-time bidding, we expect growth in the adoption of, and revenue from, MAX.
Previous wording
Software Platform clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention. Revenue from Adjust is primarily generated from an annual software subscription fee.
Current wording
Advertising clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention. Revenue from Adjust is primarily generated from an annual software subscription fee.
Previous wording
Software Platform clients use Wurl's connected TV ("CTV") platform to distribute streaming video, maximize advertising revenue, and acquire and retain viewers or subscribers. Revenue from Wurl is primarily generated from content companies, typically on a usage-based model.
Current wording
Advertising clients use Wurl's connected TV ("CTV") platform to distribute streaming video, maximize Advertising Revenue, and acquire and retain viewers or subscribers. Revenue from Wurl is primarily generated from content companies, typically on a usage-based model.
Previous wording
Our Apps are generally free-to-play mobile games and generate IAP Revenue through IAPs. IAPs consist of virtual goods used to enhance gameplay, accelerate access to certain features or levels, and augment other mobile game progression opportunities for the user. IAPs drive more engagement and better economics from our Apps. The vast majority of our IAP revenue flows through two app stores, Apple App Store and Google Play, which charge us a standard commission on IAPs. IAP Revenue represented 68% of total Apps Revenue for the three months ended September 30, 2024.
Current wording
Our Apps are generally free-to-play mobile games and generate IAP Revenue through IAPs. IAPs consist of virtual goods used to enhance gameplay, accelerate access to certain features or levels, and augment other mobile game progression opportunities for the user. IAPs drive more engagement and better economics from our Apps. The vast majority of our IAP Revenue flows through two app stores, Apple App Store and Google Play, which charge us a standard commission on IAPs. IAP Revenue represented 70% of total Apps Revenue for the three months ended March 31, 2025.
Previous wording
During the three months ended September 30, 2024, we had an average of 1.6 million Monthly Active Payers ("MAPs") across our portfolio of Apps. Over that period, we had an Average Revenue Per Monthly Active Payer ("ARPMAP") of $52. See “Key Metrics” below for additional information on how we calculate MAPs and ARPMAP.
Current wording
During the three months ended March 31, 2025, we had an average of 1.5 million Monthly Active Payers ("MAPs") across our portfolio of Apps. Over that period, we had an Average Revenue Per Monthly Active Payer ("ARPMAP") of $52. See “Key Metrics” below for additional information on how we calculate MAPs and ARPMAP.
Previous wording
IAA clients that purchase advertising inventory from our Apps are able to target highly relevant users from our diverse and global portfolio of over 200 mobile games. Our clients leverage a broad set of high-performing mobile ad formats, including playable and rewarded video, and are able to match these ads with relevant users resulting in a better return on their advertising spend. By increasing the number of users and their engagement, as well as better matching ads with the appropriate target audience, we are able to increase our revenue from IAA clients that purchase advertising inventory from our Apps. IAA Revenue represented 32% of total Apps Revenue for the three months ended September 30, 2024.
Current wording
IAA clients that purchase advertising inventory from our Apps are able to target highly relevant users from our diverse and global portfolio of over 200 mobile games. Our clients leverage a broad set of high-performing mobile ad formats, including playable and rewarded video, and are able to match these ads with relevant users resulting in a better return on their advertising spend. By increasing the number of users and their engagement, as well as better matching ads with the appropriate target audience, we are able to increase our revenue from IAA clients that purchase advertising inventory from our Apps. IAA Revenue represented 30% of total Apps Revenue for the three months ended March 31, 2025.
Previous wording
We review the following key metrics on a regular basis in order to evaluate the health of our business, identify trends affecting our performance, prepare financial projections, and make strategic decisions.
Current wording
We review the following key metrics on a regular basis in order to evaluate the health of our Apps segment, identify trends affecting its performance, prepare financial projections, and make strategic decisions.
Previous wording
Monthly Active Payers ("MAPs"). We define a MAP as a unique mobile device active on one of our Apps in a month that completed at least one IAP during that time period. A consumer who makes IAPs within two separate Apps on the same mobile device in a monthly period will be counted as two MAPs. MAPs for a particular time period longer than one month are the average MAPs for each month during that period. We estimate the number of MAPs by aggregating certain data from third-party attribution partners. We estimate that our counted MAPs generated substantially all of our IAP Revenue during the three months ended September 30, 2024, and as such,
Current wording
Monthly Active Payers ("MAPs"). We define a MAP as a unique mobile device active on one of our Apps in a month that completed at least one IAP during that time period. A consumer who makes IAPs within two separate Apps on the same mobile device in a monthly period will be counted as two MAPs. MAPs for a particular time period longer than one month are the average MAPs for each month during that period. We estimate the number of MAPs by aggregating certain data from third-party attribution partners.
Previous wording
We define Adjusted EBITDA for a particular period as net income before interest expense, other income, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation expense, transaction-related expense and transaction bonus, publisher bonuses, restructuring costs, impairment and (gain) loss in connection with the disposal of long-lived assets, non-operating foreign exchange (gain) losses, and change in the fair value of contingent consideration. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.
Current wording
We define Adjusted EBITDA for a particular period as net income before interest expense, other income, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation expense, transaction-related expense, restructuring costs, loss on disposal of long-lived assets, goodwill impairment, and non-operating foreign exchange (gain) losses. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.
Previous wording
The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2024 and 2023, and a reconciliation of net income to Adjusted EBITDA:
Current wording
The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for the three months ended March 31, 2025 and 2024, and a reconciliation of net income to Adjusted EBITDA:
Previous wording
We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payments of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free cash flow has certain limitations, including that it does not reflect our future contractual commitments. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
Current wording
We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payment of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free cash flow has certain limitations, including that it does not reflect our future contractual commitments. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.
Previous wording
The following table provides our Free Cash Flow for the nine months ended September 30, 2024 and 2023, and a reconciliation of net cash provided by operating activities to Free Cash Flow:
Current wording
The following table provides our Free Cash Flow for the three months ended March 31, 2025 and 2024, and a reconciliation of net cash provided by operating activities to Free Cash Flow:
Previous wording
MAX, will further improve effectiveness for advertisers. In addition, we plan to continue to invest in the AI-based, self-learning capabilities of our advertising recommendation engine, AXON. Our investments will also allow us to enter into and expand into new verticals outside of gaming, such as e-commerce, CTV, original equipment manufacturer ("OEM"), and carrier-related markets. While our investments in research and development and acquisitions and partnerships may not result in revenue in the near term, we believe these investments position us to increase our revenue over time.
Current wording
We have made, and intend to continue to make, significant investments in our Advertising solutions to enhance their effectiveness and value proposition for our clients. We expect that these investments will require spending on research and development, and acquisitions and partnerships related to technology components and products. We believe investments in our technology, including our AI-powered advertising recommendation engine AXON, AppDiscovery, Adjust, and MAX, will further improve effectiveness for advertisers. In addition, we plan to continue to invest in the AI-based, self-learning capabilities of our advertising recommendation engine, AXON. Our investments will also allow us to enter into and expand into new verticals outside of gaming, such as e-commerce, CTV, original equipment manufacturer ("OEM"), and carrier-related markets. While our investments in research and development and acquisitions and partnerships may not result in revenue in the near term, we believe these investments position us to increase our revenue over time.
Previous wording
We rely on existing clients for a significant portion of our revenue. As we improve our Software Platform and Apps, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world. Our Software Platform provides advertisers with access to over 1.4 billion daily active users. As such, we believe there is significant room for us to further expand our relationships with these clients and increase their usage of our Software Platform. We have invested in targeted sales and account-based marketing efforts to identify and showcase opportunities to clients and plan to continue to do so in the future.
Current wording
We rely on existing clients for a significant portion of our revenue. As we improve our Advertising solutions and Apps, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world. We believe there is significant room for us to further expand our relationships with these clients and increase their usage of our Advertising solutions.
Previous wording
In the past, our clients have generally increased their usage of our Software Platform, and as a result, growth from existing clients has been a primary driver of our revenue growth. We must continue to retain our existing clients and expand their spend with us over time to continue to grow our revenue, increase profitability and drive greater cash flow.
Current wording
In the past, our clients have generally increased their usage of our Advertising solutions and Apps, and as a result, growth from existing clients has been a primary driver of our revenue growth. We must continue to retain our existing clients and expand their spend with us over time to continue to grow our revenue, increase profitability and drive greater cash flow.
Previous wording
Our future success depends in part on our ability to acquire new clients. During the three months ended September 30, 2024, 47% of our revenue from Software Platform and IAA Revenue clients was generated from outside of the United States. We believe that the global opportunity is significant and will continue to expand as developers and advertisers outside the United States adopt our Software Platform and advertise on our Apps. We also see opportunities to acquire new clients outside of mobile gaming, as the capabilities of our Software Platform are relevant to the broader advertising ecosystem. We are investing in direct sales, product development, education, and other capabilities to drive increased awareness and adoption of our Software Platform and Apps, which investments may impact our profitability in the near term as we seek further scale.
Current wording
Our future success depends in part on our ability to acquire new clients. During the three months ended March 31, 2025, 45% of our revenue was generated from outside of the United States. We believe that the global opportunity is significant and will continue to expand as developers and advertisers outside the United States adopt our Advertising solutions and advertise on our Apps. We also see opportunities to acquire new clients outside of mobile gaming, as the capabilities of our Advertising solutions are relevant to the broader advertising ecosystem, including in areas such as e-commerce. We are investing in direct sales, product development, education, and other capabilities to drive increased awareness and adoption of our Advertising solutions and Apps, which investments may impact our profitability in the near term as we seek further scale.
Previous wording
We continue to explore strategic partnership opportunities related to our Software Platform, and the expansion of the markets it serves and we may from time to time evaluate strategic acquisitions and partnerships opportunistically. From the beginning of 2018 through September 30, 2024, we have invested approximately $4.1 billion in 33 strategic acquisitions and partnerships with mobile app developers and for technologies or relationships to enhance our Software Platform including the acquisition of MAX in 2018, Adjust in April 2021, MoPub in January 2022, and Wurl in April 2022. We believe our future results of operations will be affected by our ability to continue to identify and execute such transactions that are accretive to our growth and profitability.
Current wording
We continue to explore strategic partnership opportunities related to our Advertising solutions and the expansion of the markets it serves and we may from time to time evaluate strategic acquisitions and partnerships opportunistically. From the beginning of 2018 through March 31, 2025, we have invested approximately $4.1 billion in 33 strategic acquisitions and partnerships with mobile app developers and for technologies or relationships to enhance our Advertising solutions, including the acquisition of MAX in 2018, Adjust in April 2021, MoPub in January 2022, and Wurl in April 2022. We believe our future results of operations will be affected by our ability to continue to identify and execute such strategic transactions that are accretive to our growth and profitability. In April 2025, we provided an indication of interest to the President of the United States to explore a purchase of TikTok in all markets outside of China. This indication of interest is preliminary and there can be no assurance that a transaction involving us will proceed.
Previous wording
Our business and results of operations will be impacted by industry factors that drive the overall performance of the mobile app and advertising ecosystems. Mobile app developers, including AppLovin, rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute games, collect payments made for IAPs, and target users with relevant advertising. We expect this to continue for the foreseeable future. These third-party platforms have significant market power and discretion to set platform fees, select which apps to promote, and decide how much consumer information to provide to advertising networks that enable our Software Platform to target users with personalized and relevant advertising and allocate marketing campaigns in an efficient and cost-effective manner. Any changes made in the policies of third-party platforms could drive rapid change across the mobile app and advertising ecosystems. For example, in April 2021, Apple started implementing its application tracking transparency framework that, among other things, requires users' opt-in consent for certain types of tracking. While this transparency framework has not had a significant impact on our overall business, it may do so in the future, including with respect to the effectiveness of our advertising practices and/or our ability to efficiently generate revenue for our Apps. We rely in part on Identifier for Advertisers ("IDFA") to provide us with data that helps our Software Platform better market and monetize Apps. In light of the IDFA and transparency changes, we made changes to our data collection practices. To the extent we are unable to utilize IDFA or a similar offering, or if the transparency changes and any related opt-in or other requirements result in decreases in the availability or utility of data relating to Apps, our Software Platform may not be as effective, we may not be able to continue to efficiently generate revenue for our Apps, and our revenue and results of operations may be harmed. Additionally, Apple implemented new requirements for consumer disclosures regarding privacy and data processing practices in
Current wording
Our business and results of operations will be impacted by industry factors that drive the overall performance of the mobile app and advertising ecosystems. Mobile app developers, including AppLovin, rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute games, collect payments made for IAPs, and target users with relevant advertising. We expect this to continue for the foreseeable future. These third-party platforms have significant market power and discretion to set platform fees, select which apps to promote, and decide how much consumer information to provide to advertising networks that enable our Advertising solutions to target users with personalized and relevant advertising and allocate marketing campaigns in an efficient and cost-effective manner. Any changes made in the policies of third-party platforms could drive rapid change across the mobile app and advertising ecosystems. For example, in April 2021, Apple started implementing its application tracking transparency framework that, among other things, requires users' opt-in consent for certain types of tracking. While this transparency framework has not had a significant impact on our overall business, it may do so in the future, including with respect to the effectiveness of our advertising practices and/or our ability to efficiently generate revenue for our Apps. We rely in part on Identifier for Advertisers ("IDFA") to provide us with data that helps our Advertising solutions better market and monetize Apps. In light of the IDFA and transparency changes, we made changes to our data collection practices. To the extent we are unable to utilize IDFA or a similar offering, or if the transparency changes and any related opt-in or other requirements result in decreases in the availability or utility of data relating to Apps, our Advertising solutions may not be as effective, we may not be able to continue to efficiently generate revenue for our Apps, and our revenue and results of operations may be harmed. Additionally, Apple implemented new requirements for consumer disclosures regarding privacy and data processing practices in December 2020, which has resulted in increased compliance requirements and could result in decreased usage of our Apps. Apple incorporated new SDK privacy controls into iOS 17, which was released in September 2023, including privacy manifests and signatures designed to allow app developers to outline the data practices for SDKs embedded in their apps, manage tracking domains within SDKs, and curb device fingerprinting by requiring app developers to select allowed reasons for using data received through certain APIs. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers' ability to collect app and user data across Android devices. In January 2024, Google commenced rolling out a Chrome feature, called Track…
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Previous wording
We generate Software Platform Revenue primarily from fees collected from advertisers spending on AppDiscovery, typically on a performance basis, then shared with our advertising publishers, typically on a cost per impression basis. Software Platform Revenue also includes fees generated based on a percentage of client spend through MAX and subscription fees for Adjust's measurement and analytics marketing platform. Revenue from other services within the Software Platform was not material.
Current wording
We generate Advertising Revenue primarily from fees collected from advertisers spending on AppDiscovery, typically on a performance basis, then shared with our advertising publishers, typically on a cost per impression basis. Advertising Revenue also includes fees generated based on a percentage of client spend through MAX and subscription fees for Adjust's measurement and analytics marketing platform. Revenue from other services under Advertising was not material.
Previous wording
Cost of revenue. Cost of revenue consists primarily of third-party payment processing fees for distribution partners, amortization of acquired technology-related intangible assets, amortization of finance lease right-of-use assets related to certain servers and networking equipment and costs for third-party cloud service providers. Third-party payment processing fees relate to IAP Revenue. The fees for IAPs are processed and collected by third-party distribution partners. We expect our cost of revenue to increase in absolute dollars over the long term as our business and revenue continue to grow. We also expect our cost of revenue as a percentage of revenue to fluctuate period-over-period.
Current wording
Cost of revenue. Cost of revenue consists primarily of payment processing fees related to IAP Revenue, amortization of acquired technology-related intangible assets, amortization of finance lease right-of-use assets related to certain servers and networking equipment and data center costs related primarily to third-party cloud computing services. The fees for IAPs are processed and collected by third-party distribution partners. We expect our cost of revenue to increase in absolute dollars over the long term as our business and revenue continue to grow. We also expect our cost of revenue as a percentage of revenue to fluctuate period-over-period.
Previous wording
We plan to continue to invest in sales and marketing to grow our Software Platform customer base and increase brand awareness. We also plan to continue to invest in new App launches to the extent we see opportunities for cost-effective growth. We expect sales and marketing expenses to fluctuate period-over-period as we launch new games. We also expect our sales and marketing expenses as a percentage of revenue to fluctuate period-over-period in the near term as we invest to grow our customer base and increase brand awareness, and to decrease over the long term as we benefit from greater scale.
Current wording
We plan to continue to invest in sales and marketing to grow our Advertising customer base and increase brand awareness. We expect sales and marketing expenses to fluctuate period-over-period as we launch new games. We also expect our sales and marketing expenses as a percentage of revenue to fluctuate period-over-period in the near term as we invest to grow our customer base and increase brand awareness, and to decrease over the long term as we benefit from greater scale.
Previous wording
We plan to continue to invest in research and development to continue to enhance our Software Platform and to improve existing games and develop new games. We expect our research and development expenses as a percentage of revenue to fluctuate period-over-period in the near term as we invest to enhance our Software Platform and improve our existing Apps and develop new Apps, and to decrease over the long term as we benefit from greater scale.
Current wording
We plan to continue to invest in research and development to continue to enhance our Advertising solutions and to improve existing games and develop new games. We expect our research and development expenses as a percentage of revenue to fluctuate period-over-period in the near term as we invest to enhance our Advertising solutions and improve our existing Apps and develop new Apps, and to decrease over the long term as we benefit from greater scale.
Previous wording
General and administrative. General and administrative expenses consist primarily of costs incurred to support our business, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and administration, professional services fees for legal, accounting, recruiting, and administrative services (including transaction-related expenses), insurance, travel, and allocated facilities and information technology costs.
Current wording
General and administrative. General and administrative expenses consist primarily of costs incurred to support our business, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and administration, professional services fees for legal, accounting, recruiting, and administrative services (including acquisition or other transaction-related expenses), insurance, travel, and allocated facilities and information technology costs.
Previous wording
Interest expense. Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount, and gains and losses of interest rate swap related to the variable interest payments associated with our outstanding debt.
Current wording
Interest expense. Interest expense consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount, and issuance costs.
Previous wording
The following table summarizes our historical condensed consolidated statements of operations data:
Current wording
The following tables summarize our historical condensed consolidated statements of operations:
Previous wording
Comparison of Our Results of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
Current wording
Comparison of Our Results of Operations for the Three Months Ended March 31, 2025 and 2024
Previous wording
For the three months ended September 30, 2024, our Software Platform Revenue increased by $330.7 million, or 66%, compared to the same period in the prior year primarily due to improved AppDiscovery performance, where net revenue per installation increased 22% and the volume of installations increased 39%. We do not recognize Software Platform Revenue from transactions with our studios.
Current wording
For the three months ended March 31, 2025, our Advertising Revenue increased by $480.6 million, or 71%, compared to the same period in the prior year due primarily to improved AppDiscovery performance, where net revenue per installation increased 49% and the volume of installations increased 22%. We do not recognize Advertising Revenue from transactions with our studios.
Previous wording
For the three months ended September 30, 2024, our Apps Revenue increased by $3.2 million, from the prior year period, of which, our IAP Revenue from Apps decreased by $1.0 million, due primarily to a 5% decrease in the volume of in-app purchases, partially offset by a 4% increase in price per in-app purchase, and our IAA Revenue from Apps increased by $4.2 million, or 4%, due primarily to an 8% increase in the volume of advertising impressions, partially offset by a 4% decrease in price per advertising impression.
Current wording
For the three months ended March 31, 2025, our Apps Revenue decreased by $54.7 million, or 14%, from the prior year period. For the three months ended March 31, 2025, our IAP Revenue from Apps decreased by $31.7 million, or 12%, due primarily to a 15% decrease in the volume of in-app purchases, partially offset by a 3% increase in price per in-app purchase, and our IAA Revenue from Apps decreased by $23.0 million, or 19%, due primarily to a 43% decrease in the volume of advertising impressions, partially offset by a 43% increase in price per advertising impression.
Previous wording
Cost of revenue in the three months ended September 30, 2024 increased by $4.6 million, or 2%, compared to the same period in the prior year, due primarily to an increase of $27.9 million in expenses associated with operating our network infrastructure driven by the growth in our Software Platform operations, offset by a decrease of $23.4 million in amortization of intangible assets resulting from the end of the useful life of certain intangible assets.
Current wording
Cost of revenue in the three months ended March 31, 2025 decreased by $22.9 million, or 8%, compared to the same period in the prior year, due primarily to a decrease of $35.7 million in amortization of intangible assets resulting from the end of the useful life of certain intangible assets and a decrease of $13.2 million in third-party payment processing fees as a result of the decline in IAP revenue, partially offset by an increase of $27.6 million in expenses associated with operating our network infrastructure driven by the growth in our Advertising operations.
Previous wording
Sales and marketing expenses in the three months ended September 30, 2024 decreased by $6.6 million, or 3%, compared to the same period in the prior year, due primarily to a decrease in user acquisition costs of $9.7 million.
Current wording
Sales and marketing expenses in the three months ended March 31, 2025 decreased by $43.7 million, or 19%, compared to the same period in the prior year, due primarily to a decrease in user acquisition costs of $39.2 million.
Previous wording
General and administrative expenses in the nine months ended September 30, 2024 increased by $4.6 million, or 4%, compared to the same period in the prior year, due primarily to an increase of $6.3 million in personnel-related expenses related to an increase in stock-based compensation expense.
Current wording
Research and development expenses in the three months ended March 31, 2025 decreased by $32.4 million, or 21%, compared to the same period in the prior year, due primarily to a decrease of $39.3 million in personnel-related expenses related to a decrease in stock-based compensation expense, partially offset by an increase of $7.6 million in professional services costs related to development of new games by third parties.
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Previous report — wording carried elsewhere
We have made, and intend to continue to make, significant investments in our Software Platform to enhance its effectiveness and value proposition for our clients. We expect that these investments will require spending on research and development, and acquisitions and partnerships related to technology components and products. We believe investments in our software, including our AI-powered advertising engine AXON, AppDiscovery, Adjust, and
Previous report — wording carried elsewhere
December 2020, which has resulted in increased compliance requirements and could result in decreased usage of our Apps. Apple incorporated new SDK privacy controls into iOS 17, which was released in September 2023, including privacy manifests and signatures designed to allow app developers to outline the data practices for SDKs embedded in their apps, manage tracking domains within SDKs, and curb device fingerprinting by requiring app developers to select allowed reasons for using data received through certain APIs. In February 2022, Google announced its Privacy Sandbox initiative for Android, a multi-year effort expected to restrict tracking activity and limit advertisers' ability to collect app and user data across Android devices. In January 2024, Google commenced rolling out a Chrome feature, called Tracking Protection, which limits cross-site tracking. In May 2023, Google announced new consent management platform ("CMP") requirements for ads served in the European Economic Area ("EEA") and UK, which requires, as of January 2024, publishers using Google AdSense, Ad Manager, or AdMob to use a CMP that has been certified by Google and has integrated with the Interactive Advertising Bureau’s (“IAB”) Transparency and Consent Framework when serving ads to users in the EEA or the UK. While to date these third-party platform privacy changes have had some impact on the discoverability of apps across these platforms and have had a relatively muted aggregate impact on our results of operations, the ultimate impact of these or any similar or future changes to the policies of Apple or Google could adversely affect our business, financial condition, and results of operations.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, our Software Platform Revenue increased by $959.3 million, or 76%, compared to the same period in the prior year, due to improved AppDiscovery performance, where net revenue per installation increased 11% and the volume of installations increased 64%. We do not recognize Software Platform Revenue from transactions with our studios.
Previous report — wording carried elsewhere
Cost of revenue in the nine months ended September 30, 2024 increased by $60.8 million, or 8%, compared to the same period in the prior year, due primarily to an increase of $98.5 million in expenses associated with operating our network infrastructure driven by the growth in our Software Platform operations, offset by a decrease of $44.1 million in amortization of intangible assets resulting from the end of the useful life of certain intangible assets.