The company's shift toward software services has propelled gross margins to 88.9% in 2026Q1, up from 71.3% in 2023Q4, signaling a successful transition away from lower-margin mobile gaming applications.
| Sales/Revenue | 6.16B | 5.48B | 4.71B | 3.28B | 2.82B | 2.79B | 1.45B | 994.1M | 483.36M |
| Revenue Growth % | 40% | 16.38% | 43.44% | 16.54% | 0.86% | 92.48% | 45.97% | 105.66% | - |
| Cost of Goods Sold | 717.09M | 665.14M | 1.17B | 1.06B | 1.26B | 988.1M | 555.58M | 241.27M | 53.76M |
| COGS % of Revenue | - | 12.14% | 24.78% | 32.26% | 44.59% | 35.38% | 38.29% | 24.27% | 11.12% |
| Gross Profit | 5.45B | 4.82B | 3.54B | 2.22B | 1.56B | 1.81B | 895.51M | 752.83M | 429.61M |
| Gross Margin % | 88.37% | 87.86% | 75.22% | 67.74% | 55.41% | 64.62% | 61.71% | 75.73% | 88.88% |
| Gross Profit Growth % | - | 35.94% | 59.29% | 42.47% | -13.52% | 101.56% | 18.95% | 75.24% | - |
| Operating Expenses | 695.24M | 663.66M | 1.67B | 1.58B | 1.61B | 1.65B | 957.55M | 558.46M | 187.16M |
| OpEx % of Revenue | - | 12.11% | 35.44% | 47.99% | 57.11% | 59.25% | 65.99% | 56.18% | 38.72% |
| Selling, General & Admin | 431.03M | 437.15M | 1.03B | 983.3M | 1.1B | 1.29B | 694.23M | 513.49M | 181.65M |
| SG&A % of Revenue | - | 7.98% | 21.88% | 29.95% | 39.09% | 46.13% | 47.84% | 51.65% | 37.58% |
| Research & Development | 264.21M | 226.51M | 638.69M | 592.39M | 507.61M | 366.4M | 180.65M | 44.97M | 16.27M |
| R&D % of Revenue | - | 4.13% | 13.56% | 18.04% | 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 | 4.75B | 4.15B | 1.87B | 648.21M | -47.79M | 150.02M | -62.04M | 194.37M | 242.44M |
| Operating Margin % | 77.09% | 75.75% | 39.78% | 19.74% | -1.7% | 5.37% | -4.28% | 19.55% | 50.16% |
| Operating Income Growth % | - | 121.62% | 189.02% | 1456.34% | -131.86% | 341.8% | -131.92% | -19.83% | - |
| EBITDA | 4.82B | 4.35B | 2.32B | 1.14B | 499.29M | 581.08M | 192.91M | 287.18M | 258.51M |
| EBITDA Margin % | 78.26% | 79.31% | 49.31% | 34.64% | 17.72% | 20.8% | 13.29% | 28.89% | 53.48% |
| EBITDA Growth % | 85.11% | 87.18% | 104.2% | 127.77% | -14.07% | 201.22% | -32.83% | 11.09% | - |
| D&A (Non-Cash Add-back) | 114.89M | 194.78M | 448.68M | 489.01M | 547.08M | 431.06M | 254.95M | 92.81M | 16.06M |
| EBIT | 4.71B | 4.16B | 1.89B | 656.24M | -33.31M | 149.48M | -57.83M | 200.19M | 231.68M |
| Net Interest Income | -205.29M | -207.02M | -318.26M | -275.67M | -171.86M | -103.17M | -77.87M | -73.95M | 60M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 60M |
| Interest Expense | 205.29M | 207.02M | 318.26M | 275.67M | 171.86M | 103.17M | 77.87M | 73.95M | 0 |
| Other Income/Expense | -162.15M | -199M | -297.45M | -267.64M | -157.39M | -103.7M | -73.66M | -68.14M | -482.7M |
| Pretax Income | 4.59B | 3.95B | 1.58B | 380.57M | -205.18M | 46.31M | -135.71M | 126.23M | -240.26M |
| Pretax Margin % | 74.46% | 72.12% | 33.47% | 11.59% | -7.28% | 1.66% | -9.35% | 12.7% | -49.71% |
| Income Tax | 674.44M | 519.72M | -3.77M | 23.86M | -12.23M | 10.97M | -9.77M | 7.19M | 19.74M |
| Effective Tax Rate % | 14.69% | 13.15% | -0.24% | 6.27% | 5.96% | 23.69% | 7.2% | 5.7% | -8.21% |
| Net Income | 3.96B | 3.33B | 1.58B | 356.71M | -192.75M | 35.45M | -125.19M | 119.04M | -260M |
| Net Margin % | 64.29% | 60.83% | 33.55% | 10.87% | -6.84% | 1.27% | -8.63% | 11.97% | -53.79% |
| Net Income Growth % | 106.4% | 111.03% | 342.87% | 285.07% | -643.77% | 128.31% | -205.16% | 145.79% | - |
| Net Income (Continuing) | 3.92B | 3.43B | 1.58B | 356.71M | -192.95M | 35.34M | -125.93M | 119.04M | -260M |
| Discontinued Operations | 1000K | -99.44M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 201K | 309K | 0 | 0 |
| EPS (Diluted) | 11.70 | 9.75 | 4.53 | 0.98 | -0.52 | 0.09 | -0.58 | 0.36 | -1.37 |
| EPS Growth % | 110.11% | 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 | 338.73M | 341.97M | 347.81M | 362.59M | 371.57M | 342.76M | 214.94M | 212.37M | 189.53M |
| Basic Shares Outstanding | 337.4M | 338.78M | 336.92M | 351.95M | 371.57M | 324.84M | 214.94M | 212.37M | 189.53M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - |
Platform Privacy Policy Sensitivity
According to quarterly financial disclosures, AppLovin achieved a 24.2% year-over-year revenue growth in 2026Q1, signaling a sustained upward trajectory that appears increasingly decoupled from the cyclical volatility of the legacy mobile gaming market as the software platform segment captures a larger share of total output.
The transition toward a software-centric revenue model suggests that the company is successfully leveraging its AXON recommendation engine to drive higher-margin, scalable growth. Investors should monitor whether this growth rate remains durable as the company faces tougher year-over-year comparisons and potential saturation in its core mobile advertising markets.
As reported in recent income statements, AppLovin's gross margin reached 88.9% in 2026Q1, a significant improvement from the 71.3% levels observed in 2023Q4, which suggests a successful shift in business mix toward high-margin software services and away from the more capital-intensive, lower-margin mobile gaming applications.
This margin expansion appears to be a direct result of the AXON engine's efficiency, which allows for higher flow-through as revenue scales. The structural shift implies that the company is effectively monetizing its proprietary data, though the sustainability of these margins may depend on maintaining competitive pricing within the MAX mediation platform.
Based on the provided income statement data, operating margins have expanded from 28.3% in 2023Q4 to 78.2% in 2026Q1, indicating that the company is achieving significant operating leverage as incremental revenue growth far outpaces the growth of its core operating expenses like R&D and SG&A.
The ability to scale operating income while keeping overhead relatively contained suggests that the underlying software infrastructure is highly efficient. This trend warrants further investigation into whether the company can continue to optimize its cost base or if future R&D requirements will necessitate a higher level of reinvestment to maintain its technological edge.
Analysis of recent filings reveals that while net income has grown substantially to $1.2B in 2026Q1, the consistent presence of stock-based compensation, totaling $83.4M in the same period, remains a non-cash expense that investors must account for when evaluating the true cash-generating capacity of the business.
The divergence between GAAP net income and cash flow metrics suggests that while profitability is strong, the dilution impact of stock-based compensation remains a relevant factor for shareholders. Analysts should continue to scrutinize the relationship between these non-cash charges and the company's aggressive share repurchase programs to determine the net impact on long-term shareholder value.
While current performance is robust, the potential for future privacy-related regulatory shifts, as noted in industry context, poses a risk to the proprietary data signals that currently fuel the AXON engine, which could lead to a contraction in conversion efficiency and a subsequent decline in software revenue.
Short-sellers may focus on the potential for the Apps segment's decline to starve the software platform of the high-fidelity data required for its AI models. If the company's competitive advantage is indeed tied to this data feedback loop, any degradation in signal quality could lead to a significant re-rating of the company's valuation multiples.
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.