AppLovin reports 77% revenue growth in second quarter 2025

AppLovin Corporation completed its strategic transformation on June 30, 2025, as the company announced second quarter financial results and finalized the sale of its Apps business to Tripledot Studios for $400 million in cash. The mobile advertising platform reported revenue of $1.26 billion for the quarter ended June 30, marking a 77% increase from the same period last year.

According to AppLovin's financial statements, the company achieved net income from continuing operations of $772 million, representing a 156% increase compared to $301 million in the second quarter of 2024. Adjusted EBITDA reached $1.02 billion with an 81% margin, nearly doubling from $511 million in the prior year quarter.

The Palo Alto-based company generated $772 million in net cash from operating activities and $768 million in Free Cash Flow during the six months ended June 30, 2025. These figures reflect a substantial increase from $847 million and $833 million respectively in the same period of 2024.

Apps Business divestiture finalizes strategic focus

The June 30 completion of the Apps Business sale marked a significant milestone in AppLovin's strategic pivot toward advertising technology. According to the purchase agreement, Tripledot Studios acquired AppLovin's gaming division for $400 million in cash, subject to closing adjustments, plus equity consideration representing approximately 20% of Tripledot's fully-diluted equity.

"At the end of the quarter, we closed the sale of our apps business to Triple Dot Studios," CFO Matt Stumpf explained during the earnings call. CEO Adam Foroughi emphasized the strategic rationale: "Our aspirations are to help any business of any size be able to acquire customers profitably. And if we can do that, we'll achieve the goals that we've set for ourselves."

The divested Apps Business generated $640.8 million in revenue during the six months ended June 30, 2025, but recorded a loss from discontinued operations of $99.4 million due to a $188.9 million goodwill impairment charge taken in the first quarter. CFO Matt Stumpf noted that "this quarter, the financial results for the apps business were included within discontinued operations, and we will keep our commentary limited to the advertising business only."

Revenue surge driven by advertising technology improvements

AppLovin's advertising solutions demonstrated strong performance across key metrics. According to the company's quarterly update, net revenue per installation increased 70% while installation volume grew 8% compared to the second quarter of 2024. These improvements reflect continued enhancements to the company's AI-powered advertising recommendation engine, AXON.

"Revenue grew 77% to $1.26 billion. Net revenue per installation increased 70% and installations increased 8%," the company reported in its financial overview. The advertising platform now serves over 1 billion users daily across mobile applications and continues to benefit from improvements in targeting accuracy and campaign optimization.

During the earnings call, CEO Foroughi highlighted the platform's expanding reach: "The Max Marketplace creates the supply that drives our growth as well as the growth in the market. As marketing technologies in the industry continue improving, we expect the supply will keep growing quickly."

Financial position strengthens with strong cash generation

AppLovin ended the quarter with $1.19 billion in cash and cash equivalents, including $425 million in net proceeds from the Apps Business sale. The company's balance sheet reflects total assets of $5.96 billion as of June 30, 2025, compared to $5.87 billion at December 31, 2024.

"We generated $772 million of net cash from operating activities and $768 million of Free Cash Flow," according to the company's financial overview. CFO Matt Stumpf noted during the earnings call: "This quarter, we repurchased and withheld approximately 900,000 shares for a total cost of $341,000,000 funded through free cash flow."

During the quarter, AppLovin maintained its disciplined approach to capital allocation. Long-term debt remained stable at $3.51 billion, consisting primarily of senior unsecured notes. The company briefly borrowed $200 million under its revolving credit facility during the quarter to fund share repurchases but repaid the full amount by May 2025.

Third quarter guidance reflects continued momentum

For the third quarter of 2025, AppLovin provided revenue guidance between $1.32 billion and $1.34 billion, with Adjusted EBITDA expected to range from $1.07 billion to $1.09 billion. This represents continued sequential growth and maintains the company's targeted 81% Adjusted EBITDA margin.

The guidance incorporates the full elimination of Apps Business revenue following the June 30 divestiture. Management emphasized that the advertising business alone demonstrates the financial strength to support the company's growth trajectory and capital allocation strategy.

International expansion and platform development

AppLovin announced plans to launch a referral-based self-serve platform on October 1, 2025, followed by a global public launch of the Axon platform in 2026. The company expects this expansion to enable businesses of all sizes to access its advertising technology through automated onboarding and credit card billing systems.

"On 10/01/2025, we plan to open the Axon Ads Manager on a referral basis, perfectly timed for the holiday season," CEO Foroughi explained during the earnings call. "Feedback from these partners will guide our global public launch in the 2026."

The self-serve platform represents a significant expansion beyond AppLovin's traditional managed service model. Foroughi emphasized the company's broader vision: "As we open up the platform, the goal that we have is to see that any small business of any type can market on our platform." He added that once the platform launches globally, "we plan to begin paid marketing to recruit new advertisers, which will drive predictable compounding growth."

Technology infrastructure investments continue

Research and development expenses declined to $44 million in the second quarter from $99 million in the prior year, primarily due to reduced stock-based compensation costs. However, the company continues investing in AI capabilities and platform improvements to maintain its competitive advantage in mobile advertising technology.

AppLovin's MAX mediation platform maintains high penetration in the mobile gaming market, while the company's AppDiscovery platform enables advertisers to automate user acquisition campaigns. The integration of these technologies with AXON's machine learning capabilities provides the foundation for the company's advertising recommendation engine.

Cost of revenue increased to $155 million from $122 million in the prior year quarter, driven primarily by higher data center costs to support growing platform usage. The company expects these infrastructure investments to support continued revenue growth as advertiser adoption expands.

Why this matters

AppLovin's strong financial performance demonstrates the growing importance of AI-powered advertising technology in mobile marketing. The company's ability to improve both targeting efficiency and campaign scale simultaneously represents a significant technical achievement for programmatic advertising platforms.

The upcoming self-serve platform launch could democratize access to sophisticated advertising technology previously available only to large enterprise clients. This aligns with broader industry trends toward automated campaign management and performance-based advertising models.

For digital marketing agencies and advertisers, AppLovin's focus on return on advertising spend optimization addresses key performance challenges in mobile user acquisition. The platform's expansion beyond gaming into e-commerce and other verticals reflects the growing application of mobile-first advertising strategies.

Timeline

• February 12, 2025: AppLovin reports record 2024 results with $4.7 billion revenue and announces plans to sell gaming division
• February 26, 2025: Culper Research and other short-sellers publish reports alleging improper data collection practices
• March 27, 2025: Muddy Waters Research publishes critical report, sending shares down 20%
• May 7, 2025: AppLovin enters purchase agreement to sell Apps Business to Tripledot Studios
• June 30, 2025: Apps Business divestiture closes for $400 million cash consideration
• August 6, 2025: AppLovin announces Q2 2025 results showing $1.26 billion revenue
• November 6, 2024: AppLovin reported Q3 2024 results with $1.2 billion revenue

Key terminology explained

AppLovin Corporation: The Palo Alto-based mobile advertising technology company that has transformed from a gaming-focused business into a pure-play advertising platform. Founded by CEO Adam Foroughi, the company operates one of the largest mobile advertising networks globally, serving over 1 billion daily users through its advertising solutions. The corporation went public on NASDAQ under the ticker APP and has demonstrated significant growth through its AI-powered advertising recommendation engine.

Adjusted EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for specific items including stock-based compensation and transaction-related expenses. AppLovin defines this metric as a key measure for assessing financial performance and uses it for internal planning and forecasting purposes. The company achieved an 81% Adjusted EBITDA margin in Q2 2025, demonstrating its ability to convert revenue growth into profitability while maintaining operational efficiency.

AXON advertising recommendation engine: AppLovin's proprietary AI-powered technology platform that optimizes mobile advertising placements in real-time. The system continuously improves through both self-learning capabilities and directed engineering enhancements, enabling advertisers to scale their spending while maintaining return on advertising spend targets. AXON represents the core technological differentiator that drives AppLovin's competitive advantage in mobile advertising attribution and campaign optimization.

Apps Business divestiture: The strategic sale of AppLovin's mobile gaming division to Tripledot Studios for $400 million in cash, completed on June 30, 2025. This transaction eliminated the company's game development operations and allows AppLovin to focus entirely on advertising technology solutions. The divestiture included ten gaming studios that collectively generated $1.5 billion in revenue during 2024, representing a significant shift in the company's business model.

Revenue growth: AppLovin's financial performance indicator showing 77% year-over-year increase to $1.26 billion in Q2 2025. This growth stems from improvements in both net revenue per installation (up 70%) and installation volume (up 8%), demonstrating the platform's ability to simultaneously improve efficiency and scale. The revenue expansion reflects continued adoption of AppLovin's advertising solutions across mobile gaming and e-commerce verticals.

Free Cash Flow: Net cash provided by operating activities minus purchases of property and equipment and principal payments on finance leases. AppLovin generated $768 million in Free Cash Flow during Q2 2025, representing a substantial increase that supports the company's capital allocation strategy including share repurchases and technology investments. This metric demonstrates the company's ability to convert revenue growth into tangible cash generation.

Mobile advertising platform: The technological infrastructure that enables AppLovin to connect advertisers with mobile app publishers through programmatic advertising auctions. The platform operates at massive scale, processing billions of advertising requests daily while optimizing for performance metrics such as cost per installation and return on advertising spend. AppLovin's platform differentiation comes from its integration of machine learning algorithms with real-time bidding capabilities.

MAX mediation platform: AppLovin's mobile app monetization solution that helps publishers maximize advertising revenue by connecting them with multiple advertising networks. MAX maintains high market penetration in mobile gaming and serves as a critical supply source for AppLovin's advertising marketplace. The platform enables publishers to optimize their advertising inventory through automated mediation and real-time bidding mechanisms.

Self-serve platform: The upcoming automated advertising management system scheduled for referral-based launch on October 1, 2025, followed by global availability in 2026. This platform will enable businesses of all sizes to access AppLovin's advertising technology through credit card billing and automated onboarding, expanding beyond the company's traditional managed service model. The self-serve approach represents a significant market expansion opportunity for AppLovin's advertising solutions.

E-commerce advertising: AppLovin's expansion beyond mobile gaming into e-commerce and other verticals, leveraging its AI technology to help online retailers acquire customers through mobile advertising campaigns. This diversification strategy has contributed to revenue growth and demonstrates the broader applicability of AppLovin's advertising optimization technology. The e-commerce focus aligns with growing mobile commerce trends and represents a substantial total addressable market expansion opportunity.

Summary

Who: AppLovin Corporation, a mobile advertising technology company based in Palo Alto, California, led by CEO Adam Foroughi and CFO Matt Stumpf.

What: AppLovin reported second quarter 2025 financial results showing $1.26 billion in revenue (77% growth) and completed the sale of its Apps Business to Tripledot Studios for $400 million in cash.

When: The financial results cover the quarter ended June 30, 2025, with the Apps Business divestiture closing on the same date. Results were announced on August 6, 2025.

Where: The mobile advertising platform operates globally, serving over 1 billion daily users, with headquarters in Palo Alto and operations expanding internationally through the planned October 2025 platform launch.

Why: The strong results reflect continued improvements to AppLovin's AI-powered advertising technology and the strategic completion of its transformation from a gaming-focused company to a pure-play advertising technology platform, enabling focus on higher-margin advertising solutions.