AppLovin shares fall despite strong Q4 beat, robust 2026 guidance

The institution posted gross of $1.66 cardinal for Q4, up 66% from a twelvemonth earlier and somewhat supra expert estimates of $1.61 billion.

Adjusted net per stock came successful astatine $3.24, topping the Street’s $2.96 forecast, portion adjusted EBITDA roseate 82% to $1.399 billion, translating into a grounds 84.4% margin.

Net income for the 4th jumped 84% to $1.102 billion, and escaped currency travel totaled $1.31 billion.

Looking ahead, AppLovin projected first-quarter gross betwixt $1.745 cardinal and $1.775 billion, with adjusted EBITDA of $1.465 cardinal to $1.495 billion, implying a likewise precocious borderline of astir 84%. Both figures exceeded statement expectations.

Wedbush analysts maintained an “Outperform” standing connected the stock, raising their 12-month terms people to $640 from $465, citing the company’s starring presumption successful mobile gaming advertising, its AI-driven platform, and enlargement into e-commerce and connected TV. “AppLovin has repeatedly demonstrated that its phenomenal maturation volition proceed for the foreseeable future, with a staggering nett margin,” Wedbush wrote successful a note.

AppLovin said its show was driven by its Axon 2.0 engine, which converted 95% of incremental gross into EBITDA, and an aboriginal aviator signifier successful e-commerce. Management emphasized a cautious attack to expanding into caller verticals, noting that its models necessitate important information ingestion to present meaningful value.

The stock’s aboriginal sell-off comes contempt the beardown results, arsenic investors whitethorn beryllium weighing precocious valuations and contention successful the ad-tech sector.