3Q24 Shareholder Letter

AppLovin reported a robust third-quarter 2024 performance, with revenue rising to $1.20 billion—up 39% YoY—and net income reaching $434 million, a 300% increase and a 36% margin. Adjusted EBITDA climbed to $722 million, a 72% jump and a 60% margin. Operating cash flow surged to $551 million, while free cash flow hit $545 million, both up more than 170% YoY. Cash and equivalents stood at $568 million with 335 million shares outstanding.

The Software Platform segment dominated growth, generating $835 million in revenue (+66%) and $653 million in Adjusted EBITDA (+79%), achieving a 78% margin. The Apps segment remained stable, with revenue at $363 million (+1%) and Adjusted EBITDA of $68 million (19% margin). Share repurchases totaled 5.0 million shares at a cost of $437 million, and the board increased repurchase authorization by $2.0 billion, aiming to fund future buybacks from free cash flow.

Guidance for Q4 2024 projects total revenue of $1.24–$1.26 billion and Adjusted EBITDA of $740–$760 million, maintaining a 60% margin. The company emphasizes continued investment in talent and technology to drive organic growth, disciplined capital allocation through share buybacks and equity grants, and maintaining a net debt leverage ratio below 2.0×.

Financials are presented in US GAAP terms, with non-GAAP Adjusted EBITDA and Free Cash Flow defined for investor clarity. The letter notes forward-looking statements, risks, and the intent to rename the Software Platform segment to “Advertising” in future filings.