Applovin delivered another 'beat and raise' quarter, with revenue growing 59% and margins at an all-time high. Management highlighted the strategic shift toward opening its Axon platform to the public in June, and notably revealed that its consumer vertical is growing so fast it is already beating Q4 peak months in April, a sign of counter-seasonal strength. Revenue for Q1 2026 came in at $1.84B (up 59% YoY), with Adjusted EBITDA of $1.56B (85% margin), beating guidance.
Applovin delivered another 'beat and raise' quarter, with revenue growing 59% and margins at an all-time high. Management highlighted the strategic shift toward opening its Axon platform to the public in June, and notably revealed that its consumer vertical is growing so fast it is already beating Q4 peak months in April, a sign of counter-seasonal strength. Revenue for Q1 2026 came in at $1.84B (up 59% YoY), with Adjusted EBITDA of $1.56B (85% margin), beating guidance.
Executives emphasized record outperformance, a major platform opening, and accelerating consumer spend, with no material headwinds acknowledged.
Axon platform opens to public in June, expanding advertiser access. Executives emphasized record outperformance, a major platform opening, and accelerating consumer spend, with no material headwinds acknowledged.
Management framed AI as the main accelerator: model releases are improving ROAS and driving advertiser budget, AI creative tools are designed to remove onboarding friction, and Axon is being built for AI-agent access. AI is also lowering game development costs and pushing more…
The full self-serve Axon platform opens to the public in June, with pre-registration on track. Management projects >$70k in year-one ad spend from each new customer.
Management framed AI as the main accelerator: model releases are improving ROAS and driving advertiser budget, AI creative tools are designed to remove onboarding friction, and Axon is being built for AI-agent access. AI is also lowering game development costs and pushing more hybrid-monetized content into the ecosystem.
Axon platform opens to public in June, expanding advertiser access. Executives emphasized record outperformance, a major platform opening, and accelerating consumer spend, with no material headwinds acknowledged.
Management said GPU needs will rise as models get more complex and more customers join, and they will likely keep buying GPUs. The AI creative tool uses third-party compute and is not expected to pressure margins. Capital allocation priorities remain organic investment plus buybacks.
Executives emphasized record outperformance, a major platform opening, and accelerating consumer spend, with no material headwinds acknowledged.
“April reaching a record month in advertiser spend, higher than any peak Q4 month. That kind of acceleration is exactly what you want to see”
“10x the market opportunity for that same customer. So these in-app purchasing developers are really starting to understand that there's massive growth in this mixed monetization model.”
“we're projecting well over $70,000 a year from every new customer... If we open up the platform and sign on 100,000 customers in the next year, first year revenue from them or ad spend, advertising spend, would be roughly $7 billion.”
“At our use, the best ad there is, you get over 30 seconds of viewer time, and the user can't do anything else.”
| 지표 | 기간 | 범위 | 중간값 | 상태 |
|---|---|---|---|---|
| Op margin | FY2026 Q2 | 84%–85% | 84.5% | GUIDED |
| Revenue | FY2026 Q2 | $1.915B–$1.945B | $1.93B | GUIDED |
| 제시 시점 | 지표 | 목표 기간 | 가이던스 | 실제 | 결과 |
|---|---|---|---|---|---|
| FY2025 Q4 | Revenue | FY2026 Q1 | $1.745B–$1.775B | $1.8424B | Met / beat |
Applovin was a user of OpenAI's Sora model for its AI video creation tool. Its discontinuation doesn't hurt Applovin, but highlights dependency on third-party generative AI models.
“Sora 2 is a good product. Obviously, it's one of the ones that we use underneath the hood. It going away doesn't change a whole lot.”
The consumer vertical's April ad spend is already higher than any peak Q4 month, showing that AppLovin's platform is counter-seasonal, unlike the rest of the digital advertising industry which typically sees a Q1 slump. — This indicates AppLovin is rapidly taking share from the larger ad platforms like Meta and Google, which normally report significant Q1 over Q4 declines.
“We work with Google Cloud on it, and we can go to any cloud, but we have the GPUs that we need to process the business today”
Thank you. I wanted to focus on the gaining business for a second. Right, because it kept on getting bigger and bigger. So the past several quarters, your quarterly run rate derived from mobile game advertisers has increased every quarter. And more specifically, the amount by which it steps up has also increased in the last several quarters. Did you see that trend continue in the first quarter? Do you expect it to continue the rest of the year? And how does your capacity change? to fund GPU capacity separate you from some of your competitors, you know, who are also adding a lot quarter on quarter? Obviously, you're the biggest, but it seems like there's a number of firms growing here. So…
… part of our business, comes from the gaming vertical. We have yet, since we launched Axon 2, seen a slowdown. I also touched on a couple of bullets that were important to understand on the talk track. We've got a lot of these IAP game companies that are really, really good at monetizing an existing game now able to create more games at lower cost. Much of those more games will be ad-supported and in-app purchasing supported. This hybrid category is explosive growth on our platform. So as you think about that, we're going into a period post growing really quickly, the one where there's going to be a lot more games from the highest quality developers and more games that are targeted directly at what we're very good at, ads and IAPs. So at least thus far, we haven't seen a slowdown in growth. We've talked about 20 to 30% long-term growth in the games category. I think we mentioned that maybe six to eight quarters ago. We've never had a single quarter that's come close to those growth numbers. We've been way over those rates. And we've never stated any different view on our long-term growth rates on the gaming vertical alone. I think you can sort of bank on that at this point. We're doing really well. On the GPU capacity, as the models get more complex, as we continue adding more customers, We're going to need more GPUs. We work with Google Cloud on it, and we can go to any cloud, but we have the GPUs that we need to process the business today, and it's very likely we're going to need to continue to buy GPUs. In the market we exist in, the amount of GPUs you have is not the direct indicator of who's going to have the most success. If you compare us to the mobile gaming ad platforms, we probably have the largest infrastructure. However, if you compare us to Google and Facebook, we certainly don't have anywhere near the largest infrastructure. And the reality is different businesses use infrastructure for different purposes. What makes our business really compelling is that for this space, we've written the best models and products for the advertisers. That's super critical. That's what allows us to do so well. And we process that data and create a better output than anyone else. And that technology lead plus the data expansion plus all the budgets being on our platform first and foremost drives the scale, growth, and success you've seen from us. Okay, thanks.
Applovin is evaluating ByteDance's video generation models as alternatives to OpenAI's Sora, showcasing direct competition between the two AI model leaders.
“You mentioned Seed Dance. There's other ones out of China as well. We can deploy any form of model, whether open source or closed source,”
You got to remember them all.
… There are big customers that make ads for our platform. So if you think about, like, the gaming companies, not as beneficial for them. They're already investing heavily in creating ads for our platform. I mentioned on the last earnings call some of the top ones at 50,000 ads plus live at any given time. This tool isn't meant for them. But the tool is meant for the long tail that we're about to onboard and a lot of these e-commerce slash consumer brands that just aren't ramped up on creative production. Now, when it comes to cost, which was your last question, we're going to roll it out where we're going to give them sort of an unlimited access. But if people start over-delivering creatives, one, it's beneficial. It means the tool works really well. But two, it's a revenue stream for us. We can start charging. We can tap credits. There's companies out there that are raising tons of money at insanely high valuations. They're simply doing this. So if we see that kind of adoption – we can just start charging for it. And frankly, the cost is going to be so low compared to what they can generate in human-generated creatives. That would be a really good sign for the success of what we're building here. And then, so I wouldn't factor this into our economic profile at all. I would not expect margin compression. This is also not our own compute. This is utilizing third-party services. So it's really just a tax that we have to pay to third-party services to utilize their computer. So then to your last question, which third-party services do we utilize or How is the market evolving when it comes to image and video generation? Soar 2 is a good product. Obviously, it's one of the ones that we use underneath the hood. It going away doesn't change a whole lot. One of the nice things about being an independent company, looking at all the large language models, is we don't have to be favored toward any of them. And so you mentioned Seed Dance. There's other ones out of China as well. We can deploy any form of model, whether open source or closed source, in any of the categories, text, image, or video. and utilize the one that's best for the purposes that we have. And you can assume we do that. We don't stick to just one. We want to be optimized for the field. And so that's something that we constantly do. Therefore, score two being deprecated didn't impact us at all.
The consumer vertical's April ad spend is already higher than any peak Q4 month, showing that AppLovin's platform is counter-seasonal, unlike the rest of the digital advertising industry which typically sees a Q1 slump. — This indicates AppLovin is rapidly taking share from the larger ad platforms like Meta and Google, which normally report significant Q1 over Q4 declines.
… improves scale and return on ad spend significantly for our consumer advertisers. These are the types of compounding improvements we have talked about on prior calls. The team improves the model, advertisers see better returns, and they put more budget into our system. It is a virtuous cycle and it is working. The consumer vertical exited the quarter very strong, with March growing roughly 25% more than the numbers we did in January, in April reaching a record month in advertiser spend, higher than any peak Q4 month. That kind of acceleration is exactly what you want to see from a product that is still early in its development curve. Advertisers are seeing real success on our platform and they are ramping aggressively. We are thrilled that this is happening and we are really excited about what comes next. When we open up our platform in June, and start pursuing our mission of helping all the businesses in the world add another material marketing channel to their set of opportunities, that is when this thing just continues to compound. We've always said we want to help the smaller businesses scale. Last quarter, I highlighted an Israeli cookware company that went from $4 …
AppLovin's plan to monetize IAP-only games with non-competitive ads could significantly increase its inventory supply by converting a subset of the $100B IAP market into hybrid monetization. — As more game publishers like those of the largest IAP titles shift to hybrid monetization, they could unlock a $7.5B+ supply opportunity per year, expanding AppLovin's addressable ad market at the expense of other ad networks.
Okay.
Especially on the fly. The in-app purchasing market is mature. We know it's around $100 billion market. Most of the largest in-app purchasing games are some of our big advertisers. There's been a few that are new, but most are pretty old games. Almost all new games and a lot of these older games are really looking at this hybrid strategy because the growth in that hybrid category has been phenomenal. There was a company out of Turkey this past quarter that just with a dozen people roughly sold for nearly a billion dollars about six months after launch. Vast majority of all their user acquisition was on our platform, hybrid game, and the growth was phenomenal. Got up to a nine-figure-a-year business literally in half a year. And so why is that? Well, the people who are likely to pay in a mobile game are probably all people on our platform, given we service adults. But at any given time inside a mobile game, sub-10% of the population will pay in a short window. And we optimized the 28-day window. Now, when you look at that and go, okay, if I'm a really good developer and I'm making an in-app purchasing game and I'm coming to this really strong marketing platform, Axon, and I'm only buying 10% of their audience, what am I doing? Well, let me go in later on hybrid monetization. And what happens? 10x the market opportunity for that same customer. So these in-app purchasing developers are really starting to understand that there's massive growth in this mixed monetization model. You've got this ad-supported market that's much smaller, but as you know from the growth rates of all of our peers in the ecosystem and our own, has to be growing way faster than the single-digit growth rate in the in-app purchasing market. It's also starting smaller. Where it is today, I would guess, is going to continue to converge to where the in-app purchasing market is over the next five years, and it's going to make it a really strong market opportunity for us and all other players in the ecosystem, given how much more available inventory there will be to monetize Then what gets us excited is you pair that with all this extra demand that we're bringing in and the model improvements, and that's really what catalyzes all the growth that you've seen from us. Thank you.