Mobile app advertising platform AppLovin (NASDAQ: APP) reported revenue ahead of Wall Street’s expectations in Q1 CY2025, with sales up 40.3% year on year to $1.48 billion. On the other hand, next quarter’s revenue guidance of $1.21 billion was less impressive, coming in 14.3% below analysts’ estimates. Its GAAP profit of $1.67 per share was 16.2% above analysts’ consensus estimates.
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Revenue: $1.48 billion vs analyst estimates of $1.38 billion (40.3% year-on-year growth, 7.3% beat)
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EPS (GAAP): $1.67 vs analyst estimates of $1.44 (16.2% beat)
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Adjusted EBITDA: $943.2 million vs analyst estimates of $867.2 million (63.6% margin, 8.8% beat)
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Advertising Revenue Guidance for Q2 CY2025 is $1.21 billion at the midpoint
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EBITDA guidance for Q2 CY2025 is $980 million at the midpoint, above analyst estimates of $914.1 million
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Operating Margin: 44.7%, up from 32.1% in the same quarter last year
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Free Cash Flow Margin: 55.6%, up from 50.7% in the previous quarter
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Market Capitalization: $103.1 billion
Co-founded by Adam Foroughi, who was frustrated with not being able to find a good solution to market his own dating app, AppLovin (NASDAQ:APP) is both a mobile game studio and provider of marketing and monetization tools for mobile app developers.
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, AppLovin’s 22.2% annualized revenue growth over the last three years was decent. Its growth was slightly above the average software company and shows its offerings resonate with customers.
This quarter, AppLovin reported magnificent year-on-year revenue growth of 40.3%, and its $1.48 billion of revenue beat Wall Street’s estimates by 7.3%. Company management is currently guiding for a 11.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 15.1% over the next 12 months, a deceleration versus the last three years. Still, this projection is commendable and suggests the market is forecasting success for its products and services.
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