Key insights
- AppLovin reported a significant earnings beat with strong revenue growth and high EBITDA margins, exceeding expectations. The company also raised guidance. Despite a mixed shelf offering announcement causing after-hours volatility, the offering is likely a routine filing and doesn't reflect a need for capital. Expect analyst upgrades and positive market reaction.
Simply put, AppLovin (APP) just smashed their ER with a top and bottom beat + raised guidance. They are going to receive on onslaught of upgrades in the morning IMO.
For context, AppLovin is growing revenue faster than both AMD and ARM (59% vs. 38% and 42%), yet it is priced at less than half their earnings multiples. AppLovin (Forward P/E 24x) is cheaper than Apple (Forward P/E 28x), yet Apple is growing revenue at roughly 5% and AppLovin is growing at 59% with 85% EBITDA margins - not that's not a misprint.
Additional Financial Highlights:
- Net cash from operating activities was $1.3 billion and Free Cash Flow was $1.3 billion for the first quarter 2026. * Basic and Diluted earnings per share ("EPS") were $3.57 and $3.56, respectively, for the first quarter 2026. * During the first quarter 2026, we repurchased and withheld 2.2 million shares of our Class A common stock, for a total cost of $1.0 billion ^(1). At the end of 1Q 2026, we had 336 million shares of our Class A and Class B common stock outstanding.
The only reason the stock seesawed in AH is because they also filed a mixed shelf offering. What most don't seem to know or comprehend is that this was a standard operating procedure because they expire after three years and their last one was filed on June 1, 2023. As you can see above, they have plenty of cash on hand and zero need to execute against this shelf.
Do with this what you will. I think the market is sleeping on a massive beat with pending upgrades.