December 2, 2023
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AppLovin generated $864 million in revenue in the third quarter of 2023, according to its latest quarterly report. This represents a 21% increase compared to the same period last year.

The company also saw strong performance in terms of net income, which stood at $109 million at a net margin of 13%, representing a massive 354% increase from $24 million and a net margin of 3% in the third quarter of 2023.

AppLovin’s adjusted EBITDA increased 63% year-on-year, standing at $419 million compared to $258 million in the third quarter of 2022, with the margin increasing from 36% to 49%.

“We are thrilled to announce another quarter of solid execution leading to very strong financial results,” wrote the company in its shareholder’s letter. “We exceeded the high-end of our quarterly guidance thanks to our incredible team and unwavering commitment to growing the mobile app ecosystem. Our success this quarter was primarily driven by the continued performance of AXON 2.0, the AI-based advertising engine behind our AppDiscovery platform.”

Success in software

The company’s software platform proved to be massively successful in Q3, with revenue increasing 65% year-on-year from $307 million in the third quarter of 2022 to $504 million in the most recent quarter.

“Our Software Platform business continues to sustain its strong growth trajectory throughout 2023,” wrote the company. “We grew Software Platform revenue 24% from last quarter to a record $504 million (+65% yr/yr), and expanded Adjusted EBITDA by 33% from last quarter to $364 million (+91% yr/yr), equal to a 72% Adjusted EBITDA margin. Our Apps business also delivered quarterly growth with revenue increasing 5% from last quarter to $360 million (-11% yr/yr) and Adjusted EBITDA of $55 million (-18% yr/yr), a 15% Adjusted EBITDA margin.”

Looking forward, AppLovin has set its guidance for Q4, forecasting revenue of $910 million to $930 million, and adjusted EBITDA of $420 million to $440 million.

When discussing AppLovin’s future, it’s also worth considering one of the most interesting rumours to hit the mobile industry this year: that AppLovin may make a fresh attempt to acquire Unity.

The company initially attempted to acquire the company last year, following Unity’s announcement of its merger with AppLovin competitor ironSource, and turned down AppLovin’s offer. With Unity falling into the bad graces of the industry following the announcement of the controversial Unity Runtime Fee, AppLovin is well positioned to capitalise on their stumble, increasing its own market share by effectively absorbing it and getting the last laugh in one of the biggest stories of last year.

We listed AppLovin as one of the top 50 mobile game makers of 2023.

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