Key insights
- Fitch Ratings upgraded AppLovin's credit rating to BBB+ due to its strong market position in mobile gaming, increasing scale, and robust financial performance, including high EBITDA and free cash flow margins. While acknowledging risks from market concentration and competition, the stable outlook reflects expectations of continued double-digit revenue growth and strong profitability. This upgrade suggests improved financial health and stability for AppLovin, potentially boosting investor confidence and signaling positive momentum within the ad-tech and mobile gaming sectors.
Investing.com - Fitch Ratings upgraded AppLovin Corporation’s long-term issuer default rating to BBB+ from BBB on Monday, citing the company’s strengthened market position in mobile gaming and increased scale of spend on its platforms. The rating agency also upgraded AppLovin’s revolving credit facility and unsecured notes to BBB+ from BBB. The rating outlook is stable.
The upgrade reflects stronger-than-expected operating performance with continued strong double-digit revenue and EBITDA growth. Fitch expects free cash flow margins above 55% over the rating horizon, providing significant financial flexibility. Revenue from non-gaming is increasing, and Fitch expects AppLovin (NYSE:APP) will maintain a conservative financial policy.
Fitch expects AppLovin’s profitability and cash generation to remain robust, with EBITDA margins in the low-80% range and free cash flow margins above 55%. EBITDA expanded to $4.5 billion in 2025 from $2.6 billion in 2024, with margins rising to 83% from 57%. Free cash flow generation was approximately $4 billion in 2025 and is likely to exceed $5 billion in 2026.
The ratings remain constrained by AppLovin’s concentration in mobile gaming and exposure to a fragmented ad-tech market. Potential improvements in technologies from larger, better-scaled competitors in this market may pressure its operating performance. Data exclusivity is limited, and advertisers can share performance data with competing platforms, giving larger peers a way to improve their own AI recommendation engines.
Fitch forecasts revenue growth at approximately 50% in 2026, reflecting strong year-to-date performance, double-digit growth in gross advertiser spend, and increasing contribution from non-gaming consumer verticals. Revenue growth is expected to moderate but remain in the low-20% range over the rating horizon, supported by sustained advertiser spend across AppLovin’s platforms.
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