AppLovin — Feb 12, 2025 release

PRESS RELEASE, DATED FEBRUARY 12, 2025 Document Exhibit 99.1 AppLovin Announces Fourth Quarter and Full Year 2024 Financial Results PALO ALTO – February 12, 2025 – AppLovin Corporation (NASDAQ: APP) (“AppLovin”), a leading marketing platform, today announced financial results for the quarter and full year ended December 31, 2024 and posted a letter to its shareholders and a financial update on its Investor Relations website located at https://investors.applovin.com . Fourth Quarter and Full Year 2024 Financial Highlights: Quarter Ended Year Ended (In thousands, except percentages) December 31, December 31, 2024 2023 % Change 2024 2023 % Change Advertising Revenue 1 $999,487 $576,489 73% $3,224,058 $1,841,762 75% Apps Revenue 373,292 376,772 (1)% 1,485,190 1,441,325 3% Total Revenue 1,372,779 953,261 44% 4,709,248 3,283,087 43% Advertising Adjusted EBITDA 776,699 420,008 85% 2,442,597 1,275,705 91% Apps Adjusted EBITDA 71,325 56,147 27% 277,008 226,953 22% Adjusted EBITDA $848,024 $476,155 78% $2,719,605 $1,502,658 81% Net Income $599,204 $172,233 248% $1,579,776 $356,711 343% Additional Financial Highlights: ● Net cash from operating activities was $701 million and $2.1 billion, and Free Cash Flow was $695 million and $2.1 billion for the fourth quarter and full year 2024, respectively. ● During the fourth quarter and full year 2024, we retired and withheld 1.6 million and 25.7 million of our Class A common stock, for a total cost of $0.5 billion and $2.1 billion, respectively 2 . At the end of 4Q 2024, we had 340 million shares of our Class A and Class B common stock outstanding. First Quarter 2025 Financial Guidance Summary 3 (In millions, except percentages) 1Q25 Low High Advertising Revenue $1,030 $1,050 Apps Revenue 325 335 Total Revenue 1,355 1,385 Advertising Adjusted EBITDA 805 825 Apps Adjusted EBITDA 50 60 Total Adjusted EBITDA $855 $885 Total Adjusted EBITDA Margin 63% 64% 1 Our core advertising business now represents substantially all of the revenue in this segment and our future focus for the company. As a result, we have renamed our "Software Platform" segment to "Advertising" to better align with the nature of this business. 2 Includes repurchased shares as well as withholdings upon net share settlement of vested equity awards. Total cost includes repurchase costs, including commissions and fees, as well as cash paid in connection with tax withholding and remittance obligations upon net share settlement 3 We have not provided the forward-looking GAAP equivalents for forward-looking non-GAAP metrics, specifically Adjusted EBITDA and Adjusted EBITDA margin, or a GAAP reconciliation as a result of the uncertainty regarding, and the potential variability of, reconciling items such as stock-based compensation expense. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding GAAP equivalents is not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results. We have provided historical reconciliations of GAAP to non-GAAP metrics in tables at the end of this letter.      1 Webcast and Conference Calls AppLovin will host a webinar today at 2:00 PM PT / 5:00 PM ET, during which management will discuss the Company’s fourth quarter and full year 2024 results and provide commentary on its business performance. A question-and-answer session will follow the prepared remarks. The webinar may be accessed on the Company’s investor relations website or via webinar registration . A replay of the webinar will also be available under the Events & Presentations section of our Investor Relations website. About AppLovin AppLovin makes technologies that help businesses of every size connect to their ideal customers. The company provides end-to-end software and AI solutions for businesses to reach, monetize and grow their global audiences. For more information about AppLovin, visit: www.applovin.com. Contacts Investors David Hsiao ir@applovin.com Press Kim Hughes press@applovin.com Source: AppLovin Corp. Forward Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “going to,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions. Forward-looking statements in this press release include our expected financial results and guidance, and growth prospects. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in our plans or assumptions, which could cause actual results to differ materially from those projected. These risks include our inability to forecast our business effectively, the macroeconomic environment, fluctuations in our results of operations, our ability to execute on our operational and financial priorities, our ability to scale our Advertising to support new users, the competitive advertising and mobile app ecosystems, and our inability to adapt to emerging technologies and business models. The forward-looking statements contained in this letter are also subject to other risks and uncertainties, including those more fully described in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024. Additional information will also be set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The forward-looking statements in this letter are based on information available to us as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.      2 Non-GAAP Financial Metrics To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), this shareholder letter includes certain financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow. A reconciliation of each such non-GAAP financial measure to the most directly comparable GAAP measure can be found below. We define Adjusted EBITDA for a particular period as net income (loss) before interest expense and loss on settlement of debt, other income, net (excluding certain recurring items), provision for (benefit from) income taxes, amortization, depreciation and write-offs and as further adjusted for non-operating foreign exchange (gains) losses, stock-based compensation expense, acquisition-related expense, restructuring costs, loss on disposal of long-lived assets, as well as certain other items that we believe are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period. We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payments on finance leases. We subtract both purchases of property and equipment and payment of finance leases in our calculation of Free Cash Flow because we believe these items represent our ongoing requirements for property and equipment to support our business, regardless of whether we utilize a finance lease to obtain such property or equipment. We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations and operating performance, as they are similar to measures reported by our public competitors and are regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA and Adjusted EBITDA margin are key measures we use to assess our financial performance and are also used for internal planning and forecasting purposes. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods. We use Adjusted EBITDA and Adjusted EBITDA margin in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We use Free Cash Flow in addition to GAAP measures to help manage our business and prepare budgets and annual planning, and we believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our non-GAAP financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.      3 AppLovin Corporation Consolidated Balance Sheets (In thousands, except share and per share data) (unaudited) December 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 741,411  $ 502,152  Accounts receivable, net 1,414,246  953,810  Prepaid expenses and other current assets 156,533  160,201  Total current assets 2,312,190  1,616,163  Property and equipment, net 160,530  173,331  Operating lease right-of-use assets 38,069  48,210  Goodwill 1,803,426  1,842,850  Intangible assets, net 896,677  1,292,635  Other assets 658,367  385,998  Total assets $ 5,869,259  $ 5,359,187  Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 563,427  $ 371,702  Accrued and other current liabilities 409,392  265,256  Short-term debt —  215,000  Deferred revenue 69,839  78,559  Operating lease liabilities, current 14,814  13,605  Total current liabilities 1,057,472  944,122  Long-term debt 3,508,983  2,905,906  Operating lease liabilities, non-current 32,608  42,905  Other non-current liabilities 180,378  209,925  Total liabilities 4,779,441  4,102,858  Stockholders’ equity: Preferred stock, $0.00003 par value—100,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024 and 2023 —  —  Class A, Class B, and Class C Common stock, $0.00003 par value—1,850,000,000 (Class A 1,500,000,000, Class B 200,000,000, Class C 150,000,000) shares authorized, 340,041,739 (Class A 309,353,198, Class B 30,688,541, Class C nil) and 339,886,712 (Class A 268,774,090, Class B 71,112,622, Class C nil) shares issued and outstanding as of December 31, 2024 and 2023, respectively 11  11  Additional paid-in capital 593,699  2,134,581  Accumulated other comprehensive loss (103,096) (65,274) Retained earnings (Accumulated deficit) 599,204  (812,989) Total stockholders’ equity 1,089,818  1,256,329  Total liabilities and stockholders’ equity $ 5,869,259  $ 5,359,187       4 AppLovin Corporation Consolidated Statements of Operations (in thousands, except per share data) (unaudited) Quarter Ended December 31, Year Ended December 31, 2024 2023 2024 2023 Revenue $ 1,372,779  $ 953,261  $ 4,709,248  $ 3,283,087  Costs and expenses: Cost of revenue 320,452  273,607  1,166,806  1,059,191  Sales and marketing 214,662  222,963  849,209  830,718  Research and development 169,480  150,823  638,689  592,386  General and administrative 60,205  36,354  181,085  152,585  Total costs and expenses 764,799  683,747  2,835,789  2,634,880  Income from operations 607,980  269,514  1,873,459  648,207  Other income (expense): Interest expense and loss on settlement of debt (94,199) (71,584) (318,260) (275,665) Other income (expense), net 1,343  (19,034) 20,806  8,028  Total other expense, net (92,856) (90,618) (297,454) (267,637) Income before income taxes 515,124  178,896  1,576,005  380,570  Provision for (benefit from) income taxes (84,080) 6,663  (3,771) 23,859  Net income 599,204  172,233  1,579,776  356,711  Net income attributable to AppLovin $ 599,204  $ 172,233  $ 1,579,776  $ 356,711  Less: Net income attributable to participating securities 150  714  2,717  1,769  Net income attributable to common stock—Basic $ 599,054  $ 171,519  $ 1,577,059  $ 354,942  Net income attributable to common stock—Diluted $ 599,057  $ 171,540  $ 1,577,144  $ 354,993  Net income per share attributable to Class A and Class B common stockholders: Basic $ 1.77  $ 0.51  $ 4.68  $ 1.01  Diluted $ 1.73  $ 0.49  $ 4.53  $ 0.98  Weighted average common shares used to compute net income per share attributable to Class A and Class B common stockholders: Basic 339,168,374  337,136,956  336,921,483  351,952,187  Diluted 346,423,848  347,492,545  347,807,555  362,589,246       5 AppLovin Corporation Consolidated Statements of Cash Flows (in thousands) (unaudited) Year Ended December 31, 2024 2023 Operating Activities Net income $ 1,579,776  $ 356,711  Adjustments to reconcile net income to operating activities: Amortization, depreciation and write-offs 448,680  489,008  Stock-based compensation, excluding cash-settled awards 369,367  363,107  Impairment of investments —  27,953  Loss on settlement of debt 28,375  4,337  Change in operating right-of-use assets 12,689  17,842  Amortization of debt issuance costs and discount 5,460  9,363  Loss on disposal of long-lived assets 1,646  —  Other 2,557  1,863  Changes in operating assets and liabilities: Accounts receivable (467,028) (261,279) Prepaid expenses and other current assets 4,056  (12,280) Other assets (189,387) (121,688) Accounts payable 189,585  98,574  Operating lease liabilities (14,106) (18,612) Accrued and other liabilities 133,974  92,754  Deferred revenue (6,633) 13,857  Net cash provided by operating activities 2,099,011  1,061,510  Investing Activities Purchase of non-marketable equity securities (76,983) (17,934) Acquisitions of businesses and intangible assets (25,553) (63,899) Purchase of property and equipment (4,776) (4,246) Proceeds from sale of assets and other 558  8,250  Net cash used in investing activities (106,754) (77,829) Financing Activities Principal repayments of debt (4,225,223) (497,994) Payments of withholding taxes related to net share settlement (1,143,525) (246,435) Repurchases of common stock (981,297) (1,153,593) Payments of deferred acquisition costs —  (33,903) Payments of licensed asset obligation —  (27,110) Payments of debt issuance cost (35,563) (4,655) Principal payments of finance leases (20,875) (20,170) Proceeds from issuance of debt 4,614,841  395,281  Proceeds from issuance of common stock upon exercise of stock options and purchase of ESPP shares 41,798  25,788  Net cash used in financing activities (1,749,844) (1,562,791) Effect of foreign exchange rate on cash and cash equivalents (3,154) 778  Net (decrease) increase in cash and cash equivalents 239,259  (578,332) Cash and cash equivalents at beginning of the period 502,152  1,080,484  Cash and cash equivalents at end of the period $ 741,411  $ 502,152       6 AppLovin Corporation Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow (in thousands) The following table provides a reconciliation of net cash provided by operating activities to Free Cash Flow for the periods presented: Quarter Ended Year Ended December 31, 4Q24 4Q23 2024 2023 Net cash provided by operating activities 701,003  343,988  2,099,011  1,061,510  Less: Purchase of property and equipment (490) (244) (4,776) (4,246) Principal payments on finance leases (5,351) (3,979) (20,875) (20,170) Free Cash Flow $ 695,162  $ 339,765  $ 2,073,360  $ 1,037,094  Net cash used in investing activities $ (367) $ (6,804) $ (106,754) $ (77,829) Net cash used in financing activities $ (523,157) $ (170,524) $ (1,749,844) $ (1,562,791)      7 AppLovin Corporation Reconciliation of Net Income to Adjusted EBITDA (in thousands, except percentages) The following table provides our Adjusted EBITDA and Adjusted EBITDA Margin and a reconciliation of Net Income to Adjusted EBITDA for the periods presented: Quarter Ended Year Ended December 31, 4Q24 4Q23 2024 2023 Revenue $ 1,372,779  $ 953,261  $ 4,709,248  $ 3,283,087  Net income $ 599,204  $ 172,233  $ 1,579,776  $ 356,711  Net Margin 44% 18% 34% 11% Interest expense and loss on settlement of debt 94,199  71,584  318,260  275,665  Other income (expense), net (8,302) 18,528  (25,440) (7,831) Provision for (benefit from) income taxes (84,080) 6,663  (3,771) 23,859  Amortization, depreciation and write-offs 127,837  119,111  448,680  489,008  Loss on disposal of long-lived assets —  —  1,646  —  Non-operating foreign exchange loss (gain) 1,450  (65) 291  (1,224) Stock-based compensation 100,921  88,049  376,455  363,107  Acquisition-related expense 5  52  885  1,047  Restructuring costs 16,790  —  22,823  2,316  Total adjustments 248,820  303,922  1,139,829  1,145,947  Adjusted EBITDA $ 848,024  $ 476,155  $ 2,719,605  $ 1,502,658  Adjusted EBITDA Margin 62  % 50  % 58  % 46  %      8 AppLovin Corporation Reconciliation of Segment Adjusted EBITDA to Income Before Taxes (in thousands, except percentages) The following table provides selected financial data for our reportable segments for the periods indicated: Quarter Ended Year Ended December 31, 4Q24 4Q23 2024 2023 Revenue: Advertising $ 999,487  $ 576,489  $ 3,224,058  $ 1,841,762  Apps 373,292  376,772  1,485,190  1,441,325  Total Revenue $ 1,372,779  $ 953,261  $ 4,709,248  $ 3,283,087  Segment Adjusted EBITDA: Advertising $ 776,699  $ 420,008  $ 2,442,597  $ 1,275,705  Apps 71,325  56,147  277,008  226,953  Total Segment Adjusted EBITDA $ 848,024  $ 476,155  $ 2,719,605  $ 1,502,658  Interest expense and loss on settlement of debt (94,199) (71,584) (318,260) (275,665) Other income (expense), net 8,302  (18,528) 25,440  7,831  Amortization, depreciation and write-offs (127,837) (119,111) (448,680) (489,008) Loss on disposal of long-lived assets —  —  (1,646) —  Non-operating foreign exchange gain (loss) (1,450) 65  (291) 1,224  Stock-based compensation (100,921) (88,049) (376,455) (363,107) Acquisition-related expense (5) (52) (885) (1,047) Restructuring costs (16,790) —  (22,823) (2,316) Income before income taxes $ 515,124  $ 178,896  $ 1,576,005  $ 380,570  Segment Adjusted EBITDA Margin: Advertising 78  % 73  % 76  % 69  % Apps 19  % 15  % 19  % 16  %      9