Revenue surged 52.8% YoY to $1.9B in 2026Q2, with gross margin expanding to 88.3% and operating margin reaching 77.7%, reflecting exceptional operating leverage.
AppLovin Corporation (APP) annual income statement — 8-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 |
|---|
| Sales/Revenue | 6.83B | 5.48B | 3.22B | 1.84B | 2.82B | 2.79B | 1.45B | 994.1M | 483.36M |
| Revenue Growth % | 47.63% | 69.99% | 75.05% | -34.62% | 0.86% | 92.48% | 45.97% | 105.66% | - |
| Cost of Goods Sold | 787.82M | 665.14M | 520.61M | 356.61M | 1.26B | 988.1M | 555.58M | 241.27M | 53.76M |
| COGS % of Revenue | - | 12.14% | 16.15% | 19.36% | 44.59% | 35.38% | 38.29% | 24.27% | 11.12% |
| Gross Profit | 6.04B | 4.82B | 2.7B | 1.49B | 1.56B | 1.81B | 895.51M | 752.83M | 429.61M |
| Gross Margin % | 88.46% | 87.86% | 83.85% | 80.64% | 55.41% | 64.62% | 61.71% | 75.73% | 88.88% |
| Gross Profit Growth % | - | 78.13% | 82.03% | -4.86% | -13.52% | 101.56% | 18.95% | 75.24% | - |
| Operating Expenses | 752.85M | 663.66M | 792.49M | 712.74M | 1.61B | 1.65B | 957.55M | 558.46M | 187.16M |
| OpEx % of Revenue | - | 12.11% | 24.58% | 38.7% | 57.11% | 59.25% | 65.99% | 56.18% | 38.72% |
| Selling, General & Admin | 432.77M | 437.15M | 417.78M | 378.96M | 1.1B | 1.29B | 694.23M | 513.49M | 181.65M |
| SG&A % of Revenue | - | 7.98% | 12.96% | 20.58% | 39.09% | 46.13% | 47.84% | 51.65% | 37.58% |
| Research & Development | 320.08M | 226.51M | 374.71M | 333.78M | 507.61M | 366.4M | 180.65M | 44.97M | 16.27M |
| R&D % of Revenue | - | 4.13% | 11.62% | 18.12% | 18.02% | 13.12% | 12.45% | 4.52% | 3.37% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 82.67M | 0 | -10.76M |
| Operating Income | 5.29B | 4.15B | 1.91B | 772.41M | -47.79M | 150.02M | -62.04M | 194.37M | 242.44M |
| Operating Margin % | 77.44% | 75.75% | 59.27% | 41.94% | -1.7% | 5.37% | -4.28% | 19.55% | 50.16% |
| Operating Income Growth % | - | 117.27% | 147.4% | 1716.23% | -131.86% | 341.8% | -131.92% | -19.83% | - |
| EBITDA | 5.45B | 4.35B | 2.36B | 1.26B | 499.29M | 581.08M | 192.91M | 287.18M | 258.51M |
| EBITDA Margin % | 79.84% | 79.31% | 73.19% | 68.49% | 17.72% | 20.8% | 13.29% | 28.89% | 53.48% |
| EBITDA Growth % | 65.51% | 84.21% | 87.06% | 152.64% | -14.07% | 201.22% | -32.83% | 11.09% | - |
| D&A (Non-Cash Add-back) | 101.5M | 194.78M | 448.68M | 489.01M | 547.08M | 431.06M | 254.95M | 92.81M | 16.06M |
| EBIT | 5.42B | 4.16B | 1.93B | 775.11M | -33.31M | 149.48M | -57.83M | 200.19M | 231.68M |
| Net Interest Income | -205.03M | -207.02M | -317.21M | -273.51M | -171.86M | -103.17M | -77.87M | -73.95M | 60M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 60M |
| Interest Expense | 205.03M | 207.02M | 317.21M | 273.51M | 171.86M | 103.17M | 77.87M | 73.95M | 0 |
| Other Income/Expense | -77.23M | -199M | -299.01M | -270.81M | -157.39M | -103.7M | -73.66M | -68.14M | -482.7M |
| Pretax Income | 5.21B | 3.95B | 1.61B | 501.6M | -205.18M | 46.31M | -135.71M | 126.23M | -240.26M |
| Pretax Margin % | 76.31% | 72.12% | 50% | 27.23% | -7.28% | 1.66% | -9.35% | 12.7% | -49.71% |
| Income Tax | 801.28M | 519.72M | 22.42M | 43.78M | -12.23M | 10.97M | -9.77M | 7.19M | 19.74M |
| Effective Tax Rate % | 15.38% | 13.15% | 1.39% | 8.73% | 5.96% | 23.69% | 7.2% | 5.7% | -8.21% |
| Net Income | 4.41B | 3.33B | 1.58B | 357.21M | -192.75M | 35.45M | -125.19M | 119.04M | -260M |
| Net Margin % | 64.58% | 60.83% | 49% | 19.4% | -6.84% | 1.27% | -8.63% | 11.97% | -53.79% |
| Net Income Growth % | 81.51% | 111.03% | 342.26% | 285.33% | -643.77% | 128.31% | -205.16% | 145.79% | - |
| Net Income (Continuing) | 4.41B | 3.43B | 1.59B | 457.83M | -192.95M | 35.34M | -125.93M | 119.04M | -260M |
| Discontinued Operations | 13K | -99.43M | -9.73M | -100.61M | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 201K | 309K | 0 | 0 |
| EPS (Diluted) | 13.05 | 9.75 | 4.53 | 0.98 | -0.52 | 0.09 | -0.58 | 0.36 | -1.37 |
| EPS Growth % | 84.8% | 115.23% | 362.24% | 288.46% | -659.14% | 116.03% | -261.11% | 126.28% | - |
| EPS (Basic) | - | 9.84 | 4.68 | 1.01 | -0.52 | 0.10 | -0.58 | 0.36 | -1.37 |
| Diluted Shares Outstanding | 337.88M | 341.97M | 347.81M | 362.59M | 371.57M | 342.76M | 214.94M | 212.37M | 189.53M |
| Basic Shares Outstanding | 336.6M | 338.78M | 336.92M | 351.95M | 371.57M | 324.84M | 214.94M | 212.37M | 189.53M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying APP stock.
For fiscal year 2025, AppLovin Corporation (APP) reported total revenue of $5.48B. This represents a 1033.9% increase compared to $483.4M in 2018.
AppLovin Corporation (APP) is profitable, generating $3.33B in net income for the fiscal year ending 2025 with a net profit margin of 60.8%.
AppLovin Corporation (APP) reported an operating income of $4.15B, resulting in an operating profit margin of 75.8%. This margin reflects the operational efficiency of the business before interest and taxes.
AppLovin Corporation (APP) generated $4.82B in gross profit for the year, representing a gross profit margin of 87.9%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Revenue concentration and sustainability
Metrics are mathematically derived from official filings.
Accelerating Revenue Momentum
AppLovin's revenue surged 52.8% year-over-year in 2026Q2, reaching $1.9B, according to the latest quarterly report, marking a sharp acceleration from the 20.8% growth in 2025Q4.
The sequential acceleration from 20.8% in 2025Q4 to 52.8% in 2026Q2 indicates a robust demand environment, likely driven by the company's AI-driven advertising platform. The growth appears broad-based, with revenue scaling from $1.4B in 2025Q4 to $1.9B in 2026Q2, a 35% increase in just two quarters. This trajectory suggests that the company's software solutions are gaining significant market traction, though investors should monitor whether this pace is sustainable given the competitive landscape.
Gross Margin Expansion to 88%
Gross margin improved to 88.3% in 2026Q2, up from 76.7% in 2024Q4, as reported in the income statement, reflecting a structural shift toward higher-margin software revenue.
The gross margin expansion from 72.2% in 2024Q1 to 88.3% in 2026Q2 is remarkable, indicating that the company has successfully transitioned to a more scalable, asset-light model. This margin profile is significantly above peers like The Trade Desk (78.6%) and DoubleVerify (82.2%), suggesting superior pricing power or a more efficient cost structure. The consistency of gross margins above 87% over the last five quarters implies that this is not a one-time event but a durable improvement, likely driven by the increasing contribution of high-margin software and advertising revenue.
Exceptional Operating Leverage
Operating income grew to $1.5B in 2026Q2, a 57% increase year-over-year, while operating margin expanded to 77.7% from 44.3% in 2024Q4, according to the latest financials.
The operating leverage is extraordinary: revenue grew 52.8% year-over-year, but operating income grew even faster, indicating that costs are not scaling proportionally. R&D and SG&A expenses as a percentage of revenue have declined significantly, from 14.2% and 24.6% in 2024Q4 to 5.3% and 5.5% in 2026Q2, respectively. This suggests that the company's platform is generating substantial incremental profits without needing proportional increases in overhead, a sign of a highly scalable business model. However, such high margins may attract competitive pressure, and investors should watch for any signs of margin erosion.
High-Quality Earnings with Low SBC
Net income reached $1.3B in 2026Q2, with EPS of $3.76, while stock-based compensation was only $85.6M, representing just 6.6% of revenue, as per the income statement.
The earnings quality appears strong, as SBC is relatively low compared to revenue, reducing the dilution impact on shareholders. The effective tax rate appears reasonable, and there are no obvious non-operating items distorting net income. The net margin of 65.8% is exceptionally high, indicating that the company is converting a large portion of revenue into bottom-line profit. This high conversion rate, combined with low SBC, suggests that reported EPS is a reliable indicator of underlying profitability, though investors should remain vigilant for any one-time gains or tax benefits that may have inflated net income.
Cost Discipline Drives Margin Expansion
R&D and SG&A expenses fell to 5.3% and 5.5% of revenue in 2026Q2, down from 12.4% and 20.0% in 2024Q4, based on reported figures, highlighting significant cost efficiency.
The dramatic reduction in R&D and SG&A as a percentage of revenue indicates that the company is scaling efficiently, with fixed costs spread over a larger revenue base. R&D spending in absolute terms increased from $169.5M in 2024Q4 to $99.9M in 2026Q2, but this is a decrease, suggesting that the company may be reallocating resources or benefiting from prior investments. SG&A also declined in absolute terms from $274.9M to $103.7M, which is unusual and may indicate a restructuring or a shift in how costs are classified. This cost discipline is a key driver of the margin expansion, but investors should investigate whether such cuts are sustainable without hampering future growth.
Sustainability of Hyper-Growth Questioned
Despite 52.8% revenue growth in 2026Q2, the company's reliance on a single platform and the deceleration from 77% growth in 2025Q2 may signal a peak, as per the data.
Short-sellers might argue that the extraordinary growth rates are unsustainable, given the sequential deceleration from 77.0% in 2025Q2 to 52.8% in 2026Q2. The company's revenue is heavily concentrated in its software platform, which could be vulnerable to changes in ad spending or competitive threats. Additionally, the operating margin of 77.7% is far above industry norms, which may attract regulatory scrutiny or competitive entry. The low SBC and high margins could also be a result of aggressive cost-cutting that may not be sustainable in the long term. Investors should monitor whether the company can maintain its growth trajectory and margins as it scales.