AppLovin reported a blowout Q4 with revenue up 66% and EBITDA margins at 84%, while guiding Q1 2026 above seasonal norms. Management used the call to aggressively rebut bearish narratives around competition from Meta and AI-driven disruption, instead framing increased demand-side competition as a tailwind that expands the ecosystem and trading up low-value impressions for a 5% take rate. AppLovin's Q4 revenue of $1.66B (+66% YoY) and adjusted EBITDA of $1.4B (84% margin) beat expectations.
AppLovin reported a blowout Q4 with revenue up 66% and EBITDA margins at 84%, while guiding Q1 2026 above seasonal norms. Management used the call to aggressively rebut bearish narratives around competition from Meta and AI-driven disruption, instead framing increased demand-side competition as a tailwind that expands the ecosystem and trading up low-value impressions for a 5% take rate. AppLovin's Q4 revenue of $1.66B (+66% YoY) and adjusted EBITDA of $1.4B (84% margin) beat expectations.
Management said its AI models are the core growth driver and are continuously improving, with e-commerce models still early but already competitive. Generative AI creative tools are expected to expand ad supply and lower creation costs, while AI-driven content abundance makes…
Guidance · revenue to $1.76B
Management guides Q1 2026 revenue to $1.745-1.775B, implying 5-7% sequential growth, despite typical seasonality, signaling continued acceleration.
CEO Adam Ferughi delivered a robust defense against the Meta threat, arguing that Meta's historical dominance is not replicable against the Axon 2 model and that its entry into no-ID bidding would face regulatory and platform constraints.
Management said its AI models are the core growth driver and are continuously improving, with e-commerce models still early but already competitive. Generative AI creative tools are expected to expand ad supply and lower creation costs, while AI-driven content abundance makes discovery more valuable. They rejected the bear case that easier AI game creation would commoditize their ecosystem.
Management exudes extreme confidence, guiding a beat on Q1 seasonality and highlighting the strength of its e-commerce launch and model improvements. The tone is defiantly bullish against market fears of AI disruption and competition.
Management repeatedly dismissed competitive fears as disconnected from the strongest operating performance in company history and leaned on execution and long-term results.
“The model uplifts from the team improving the model can be much more substantial. However, the e-commerce business, as you know, even if you took disclosure from last Q1, last Q1 it was roughly 10% of our business. So if you improve 10% of…”
“we're testing in light volume on ads on social and search, and then we're doing referral programs. But right now we're seeing somewhere around day 30 LTV to cost of user acquisition. ... to be able to break even on the media buy in 30 days…”
“We already have in a pilot with over 100 customers, generative AI-based tools for one part of the ad unit. ... We'll roll that out soon as it's showing good performance to the broader set of customers. And shortly, we're going to have the…”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Op margin | FY2026 Q1 | 84% | 84% | GUIDED |
| Revenue | FY2026 Q1 | $1.745B–$1.775B | $1.76B | GUIDED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2026 Q1 | Revenue | FY2026 Q2 | $1.915B–$1.945B | $1.9237B | Met / beat |
AppLovin's partnerships with measurement companies like Triple Whale are generating early demand through sponsorship and brand awareness, indicating a potential new customer acquisition channel is proving effective.
“Some of the coolest yields that we've seen and coolest partnerships are these partnerships with the measurement company. So if you talk to Triple Whale, they've got a sponsorship. From us, TVPN, the podcast, branded their gong with our”
Perfect. That's super helpful. And maybe just one additional question. You know, on the marketing dollars that you're spending against Axon today, where you're earning the 30-day LTV to CAC break even, what are the most effective channels? Like, I see the ads on Google Search. I see the ads on Facebook and Instagram. Where are you finding the most success? Which platforms are you finding the most success in leveraging to acquire customers today?
It's a great question. I mean, we're too early in testing to really assess or give anything directional because we don't want to be misleading, but I'll say – Some of the coolest yields that we've seen and coolest partnerships are these partnerships with the measurement company. So if you talk to Triple Whale, they've got a sponsorship. From us, TVPN, the podcast, branded their gong with our brand, and that's driven a bunch of business. So stuff like that, we're at such an early point. Part of the direct response channel here is actually just building the brand. So when we get placements like that, people start hearing about this Axon Ads platform. Then they go to Google, and we don't have any SEO yet. Once we get history and put more content out on our blog, which we're committed to do and get more link backs, we'll also have SEO. But today, in the absence of it, Google search words are also great. We're starting to get brand recognition. People know our platform is critical. They go search Google, and we're the first ad word now. We're not the first organic link because we don't have that history. So all this stuff is going to improve over time, and we think our job is to combo brand advertising alongside this direct response to really unlock growth in this thing.
Management explicitly targets Shopify merchants as a key growth segment for its e-commerce advertising platform, indicating a direct focus on winning spend from this customer base.
“In brands, that's going to be these performance D2C companies, much more the Shopify merchants, much less of those big brands that people talk about that buy through Madison Avenue agencies.”
Google's transition to bidding in the Max auction is cited as another historical example of how increased competition has benefited AppLovin rather than hurting it, supporting the 'rising tide' narrative for the broader ecosystem.
“You had Google switch to bidding. Every time this has happened, there's been this confusion around, well, in an auction dynamic-based system, competition should decay up Levin's edge. You've never seen that happen.”
Management identifies Amazon as one of the few companies that would not be a customer for its supply-side platform, implicitly acknowledging them as a competitor in the broader advertising market.
“Every publisher wants a monetization platform like ours to help them monetize their business unless they're Facebook, Google, or Amazon.”
Hi, thanks for taking my question. In the past, you referenced expanding supply sources. Where do you rank among the growth drivers? Where do you rank that among the growth drivers for overall performance now?
I mean, look, our supply is growing very quickly because Max is growing very quickly, right? So I do fixate people on the marketplace that we have. It's a really large marketplace. If we go get a big publisher tomorrow, it's not going to move the needle in the business because the percentage growth from that publisher to the whole of our market. isn't all that much. I mean, you're talking about a marketplace. If you know the scale of our business and the ad dollars that we gave you, and then we're not the whole market, the max marketplace is well over $10 billion a year. There's not a lot of publishers that can put a dent in those overall numbers. We will eventually go out to new publishers. We get calls all the time. Every publisher wants a monetization platform like ours to help them monetize their business unless they're Facebook, Google, or Amazon. And so there's a lot of opportunity out there for us to expand supply. But right now we're focused on the demand side because that conversion rate can go up so much more than where it is today. We've got a lot of growth in front of us just by doing the demand generation well and improving our core models.
Meta is increasing bidding on IDFA traffic in Max, but is not yet bidding on probabilistic no-ID traffic. Management dismisses the threat of Meta dominating the space again, citing AppLovin's superior Axon 2 model and closed-loop data advantage, and questioning the logic of Meta violating Apple's terms.
Hey, everybody. Thanks for taking the questions. I guess starting just to put a finer point on some of the comments from your prepared remarks, because the data points from the channel were a little unusual and thin. Did you see a test from Meta doing more advertising in the in-game ad environment? And whether or not you did, How should the market think about what potential impacts a scale player like Meta, for example, getting more aggressive in that market would mean? And then a second question just around Max. You've been in the business of convincing people to switch mediation platforms for a long time. I guess in light of that experience, how would you characterize the moat around Max?
Yeah, so two good questions. So the Meta thing, Meta was a launch partner of Max. They're a good partner. They've been in the Max platform for a long time. They are a bidder on anything that has an ID today, and they're not a bidder on anything that does not have an ID. So think IDFA off. That's about two-thirds of the full-screen ad units that they currently bid on. They – Started bidding more on that, as you saw on LinkedIn. They did not start bidding on no ID traffic, and they might very well bid on no ID traffic in the next couple quarters. As you know from our business over the last couple years that you've been following, there have been numerous times where we've added more competition in the max auction. Unity has grown with Vector. Liftoff rolled out Cortex, and it's growing really quickly. Moloco has been growing, and we turned them into a bidder in the last year. You had Google switch to bidding. Every time this has happened, there's been this confusion around, well, in an auction dynamic-based system, competition should decay up Levin's edge. You've never seen that happen, and this is what I tried to cover in the talk track. The reason is that, one, we're really big and really good at what we do, but, two, every impression is not worth the same thing. Our model is exceptionally good at valuing the impression for what it is, for our data and our customers. Sometimes it values it really high where we make a lot of money. Sometimes it values it low where we make less money or potentially lose a lot of money. And what happens when you get these bidders getting better is that they take some of those impressions that we value low where we might not have made any money or any material money, and now we get a 5% amount that we can tax the bidder in our ecosystem. So growth in the ecosystem allows the max market economics to improve, and we've never seen growth in the ecosystem cause harm to our app-loving bidding system. environment since we got so good. Now, this is post-Axon 2, where we became the market's dominant player. So I do think it's an important point that people are getting lost on. So I want to see if you have another question on that before I go on to the mediation discussion. No, that was very clear. Thank you. Okay. So on mediation, look, We got in the market with Max when we bought it and built that technology. We didn't buy technology. …
Management discusses the constraints Apple's terms place on Meta's ability to bid deterministically on no-ID traffic, which they view as a protective factor for AppLovin's business.
Yeah, hey, thanks so much for the question. I appreciate it. I want to double-click on the meta thing because I kind of think that's the most – out of all the noise in the market, I think meta is by far the most important. You know, right now, probabilistic targeting is the basis of competition between all the mobile game and app networks. I think there's no doubt that you could definitely compete effectively against meta on a probabilistic basis. When I talk to investors, I think the concern in the market is that Meta could find a way to bid deterministically and opt out ATC traffic with their audience graph, which would give them an advantage over the vertical ad networks. Do you think…
Yeah, I mean, look, I think it's possible from a technology perspective. I think it's blatantly against Apple's terms. I don't think the space is big enough for Meta to say they want to violate the platform they depend on's terms. So I'm skeptical what you said is going to happen. It'd make no logical sense. In a world where they're bidding deterministically or probabilistically on no IDFA, they're still competing against the Axon 2 model. Five years ago, when Meta was really big in the space, and I think this is what's throwing people off, people recall a time Meta was half the space. They think it's going to be half the space again. Meta has been on IDFA-based and Google Ad ID-based traffic since that no IDFA change. Nothing has changed for them. What's changed in the marketplace is that the other ad platforms that are built for this category, Unity, Liftoff, Moloko, et cetera, have gotten better. Now, we've gotten the best. Axon 2 was the biggest breakthrough in a model in this category, period. And we were able to end up becoming the number one by a lot. Axon Cube didn't exist five years ago. So there's no world where Meta is going to end up becoming that kind of a dominant player in the face of this competition. In fact, I don't see a world anyone else can because they're going up against that dominance. And these models, as they build more data, it's a closed-loop model that's continuously reinforcing itself and getting smarter. Our model is so far into getting smart for this niche. The niche isn't that small, and we've got such a strong position, it's highly unlikely that someone else is going to come in and materially disrupt it. So long way of saying again, no, we don't see what people are so afraid of. We think psychologically people just index on numbers from five years ago and think, oh, Meta is going to ramp to that. But just ask the customers you talk to, what's the share of wallet between us to them and to everyone else? on IDFA-based traffic, and that will give you an indicator of how good we are.