AppLovin Beat Estimates as Revenue Jumped 55% and Profit Rose 72%

AppLovin beat earnings estimates in the third quarter, as revenue jumped 55% and the advertising platform turned 66 cents of every sales dollar into profit.

AppLovin reported revenue of $2.19 billion for the quarter ended September 30, 2026, up 55% from $1.41 billion a year earlier. That beat the $2.08 billion average estimate from analysts polled by FactSet.

Net income rose 72% to $1.44 billion. Diluted earnings were $4.30 a share, up from $2.45 a year earlier and above the $4.03 average estimate from analysts polled by FactSet.

AppLovin runs an advertising platform: software that matches advertisers with audiences inside mobile apps and prices ads largely on the installs and sales they produce. The quarter showed how little extra cost that model carries when volume surges.

The margin is the story

Adjusted earnings before interest, taxes, depreciation and amortization came to $1.84 billion, up 59%. That is an 84% margin, up from 82% a year earlier.

The statutory margin was nearly as striking. Net income was 66% of revenue, up from 59% a year earlier, and operating income reached $1.71 billion.

About 81% of the added revenue became operating income, a calculation from the release's figures. Revenue rose $780 million from a year earlier, and operating income rose $630 million.

Costs rose, but from a small base. Total costs and expenses were $476 million, against $326 million a year earlier, and research and development spending more than doubled to $102 million.

The nine-month picture has the same shape. Revenue for the first nine months was $5.95 billion, up 56%, and net income was $3.91 billion, up 75%.

Guidance clears the consensus

For the fourth quarter, AppLovin guided revenue to between $2.37 billion and $2.4 billion. The $2.38 billion midpoint, a calculation from the range, sits above the $2.25 billion that FactSet said analysts were modeling.

The company guided adjusted earnings on the same basis to between $2 billion and $2.03 billion. It expects the adjusted margin to hold at 84% to 85%.

The beat was not only against Wall Street. Barron's noted the third-quarter result also topped the guidance AppLovin itself issued with its second-quarter results.

Cash, taxes and a bigger buyback

Free cash flow rose to $1.42 billion from $863 million in the second quarter. Operating cash flow was $1.43 billion, and free cash flow was up 35% from $1.05 billion a year earlier.

Cash conversion is carrying a heavier tax bill. Cash paid for income taxes in the first nine months was $926 million, more than five times the $167 million paid a year earlier.

Receivables are also absorbing cash as sales grow. Accounts receivable stood at $2.39 billion at September 30, up from $1.82 billion at the end of 2025.

Shareholders are the other destination for the cash. AppLovin repurchased and withheld 4.1 million shares in the quarter at a total cost of $1.4 billion, and 331 million shares remained outstanding.

The board then enlarged the program. Citing continued confidence in the company's future, it approved a $3.2 billion increase to the repurchase authorization, bringing the total to $3.6 billion as of the end of October.

A stock that needed a reason

The shares had already risen 10.7% in Wednesday's regular session to close at $271.75, before the results were released. That gain came in a broad post-election rally and is not a reaction to the print.

The reaction came after the close. In recent late trades reported by Investor's Business Daily, the stock was ahead more than 25% at $340.57.

Even after that jump, the context is a beaten-down stock. Shares had closed Wednesday down about 60% for the year, after a June closing high of $613.70.

What remains unknown

The release gives no revenue split by advertiser type, so how much of the growth came from outside mobile gaming cannot be verified from the primary document. That split is the central question behind the company's expansion into retail and e-commerce advertising.

The company also provided no statutory equivalent or reconciliation for its forward adjusted earnings guidance, which it said is not available without unreasonable effort. Management's webinar commentary on Wednesday evening was not part of the release, and this article does not rely on it.

What to watch next

Watch the fourth-quarter print first: revenue against the guided $2.37 billion to $2.4 billion range, and the adjusted margin against 84% to 85%.

Watch for any breakout of non-gaming revenue, for the buyback pace against the $3.6 billion authorization, and for the share count against this quarter's 331 million. Also watch whether free cash flow keeps pace with profit as the tax bill grows.