Applovin (APP) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue grew 40% year-over-year to $1.48 billion, driven by strong advertising performance and technology enhancements.

• Net income rose 144% year-over-year to $576 million, with Adjusted EBITDA up 83% to $1.01 billion and a 68% margin.

• Announced definitive agreement to sell the mobile gaming business for $400 million in cash and a 20% equity stake in Tripledot Studios.

• Free cash flow reached $826 million, supporting significant share repurchases and ongoing investments.

• Strategic priorities include advancing machine learning, expanding web and e-commerce advertising, and launching a self-service dashboard.

Financial highlights

• Advertising revenue rose 71% year-over-year to $1.16 billion, now 78% of total revenue.

• Apps revenue declined 14% to $325 million, with in-app purchases down 12% and in-app ad revenue down 19%.

• Adjusted EBITDA increased 83% to $1.01 billion, with a 68% margin.

• Free cash flow margin was 55.7%.

• Repurchased and withheld 3.4 million shares for $1.2 billion, reducing outstanding shares to 338 million.

Outlook and guidance

• Q2 2025 advertising revenue is expected between $1.195 billion and $1.215 billion, with Adjusted EBITDA of $970–$990 million and an 81% margin.

• Long-term annual growth rate is targeted at 20–30%, driven by reinforcement learning and periodic model enhancements.

• The self-service dashboard is set for phased rollout, expected to catalyze advertiser onboarding and future growth.

• No further guidance provided for Apps segment due to pending sale.