AppLovin reported third-quarter 2026 revenue of $2.18 billion on November 4, 2026, up 55% from $1.41 billion a year earlier, as a partial rollout of a new generation of its advertising models lifted spending by mobile game developers and pushed the company about $100 million past the top of its own forecast. Net income rose 72% to $1.44 billion, equal to 66% of revenue, and the board added roughly $3.2 billion to the share buyback. The quarterly report on Form 10-Q, filed the same day, disclosed something the earnings release did not: a new securities class action, filed on September 16, 2026, alleging that AppLovin misled investors about how fast its advertising models were improving and about the development timeline for an ad-generation tool.

In Short

AppLovin, which sells ads that run inside mobile games and apps, took in $2.18 billion between July and September 2026, 55% more than a year earlier, and kept about 66 cents of every dollar as profit. Most of the jump came from game companies spending more after AppLovin began switching to new prediction models, while online shops buying ads through the company at least doubled their spending from a year earlier. AppLovin expects slower growth of 43% to 44% in the last three months of 2026, and a shareholder has sued, saying the company misled investors about how quickly its models were improving and when a planned ad-making tool would be ready.

The quarter in numbers

The headline figures came from the earnings release and an eight-page financial update posted to AppLovin's investor relations site. Revenue for the quarter ended September 30, 2026 was $2,184.8 million, against $1,405.0 million in the same period of 2025. Over nine months, revenue reached $5.95 billion, up 56% from $3.82 billion.

Adjusted EBITDA, AppLovin's preferred profit measure, rose 59% to $1.84 billion, a margin of 84%. Net income from continuing operations was $1.44 billion, against $835.5 million a year earlier. Diluted earnings per share came to $4.30, up from $2.45. Net cash from operating activities was $1.43 billion and free cash flow $1.42 billion.

Revenue grew 14% from the second quarter. In dollar terms that was an increase of $261.1 million, the largest quarter-on-quarter step in the 12 quarters shown in the financial update, according to PPC Land's calculation from those figures. The previous largest was $252.9 million, between the third and fourth quarters of 2025. Chief executive Adam Foroughi opened the call with the same point. "We delivered a record quarter, revenue of $2.18 billion, up 55% year-over-year, the largest sequential dollar step-up in revenue, with well over $200 million more than last quarter," he said.

The beat was large by AppLovin's own yardstick. When it reported second-quarter revenue of $1.92 billion, up 53% on August 5, 2026, the company guided third-quarter revenue to between $2,055 million and $2,085 million and adjusted EBITDA to between $1,710 million and $1,740 million, an 83% margin. Actual revenue exceeded the top of that range by $99.8 million and adjusted EBITDA exceeded it by $102.2 million, according to PPC Land's calculation. "Revenue grew 14% sequentially and exceeded the high end of our guidance by approximately $100 million, primarily driven by the core mobile gaming business due to model improvements during the quarter, with continued scaling in the consumer vertical," chief financial officer Matt Stumpf said.

Growth had been slowing through 2026. Year-on-year revenue growth ran at 59% in the first quarter and 53% in the second before rising to 55% in the third, according to PPC Land's calculation from the quarterly series in the financial update. For comparison, AppLovin reported 68% growth in the third quarter of 2025 and 66% growth to $1.66 billion in the fourth quarter of 2025.

A partial rollout of new models

AppLovin does not publish revenue by advertiser category. The only split it gives is geographic, and the descriptions of what drove the quarter came from the call.

Foroughi tied the result to a change in the models that predict which ad to show and how much to bid. "During the quarter, we partially rolled out the next generation of our models, built on the architectural changes I described last quarter. Performance was strong. Advertisers saw more spend deploying profitably at their target return on ad spend goals, and budgets stepped up," he said.

The phrase "target return on ad spend goals" describes how AppLovin sells. Advertisers set a target return on ad spend, and the system spends their budget at the volume it predicts will meet that target. If the models predict better, more budget can be deployed at the same target, which is the mechanism Foroughi described.

Gaming re-accelerates

"Our gaming business grew nearly 50% year-over-year, re-accelerating right alongside the rollout," Foroughi said. He framed the rollout as incomplete. "As always, model gains won't land on a perfect quarterly schedule, and we won't promise a cadence, but the headroom is real, and we're still very early."

In his prepared remarks Foroughi called it "a model transition as significant as Axon 2.0", the name AppLovin gave an earlier overhaul of its engine. Asked by Ralph Schackart of William Blair whether the new generation should be thought of as "Axon 3.0", he said: "I would put it from a technology standpoint in terms of technical complexity on that level." He declined to give a completion date for the rollout. "We cannot tell you or commit to when we can actually see a full rollout or how the progression of these models will go," he told James Heaney.

The 10-Q gives one measure of how the growth was produced. Revenue rose "due primarily to improved AppLovin Ads performance, where net revenue per installation increased 55% and the volume of installations increased 2%," according to the filing. Over nine months the pattern was more pronounced: net revenue per installation rose 68% while the volume of installations fell 7%. In other words, AppLovin's revenue growth in 2026 has come almost entirely from earning more per install rather than from delivering more installs.

Consumer advertisers

The other half of the business is what AppLovin calls its consumer vertical, mostly web-based e-commerce advertisers. "Consumer advertisers' spend continues to have healthy growth, with spend up double digits quarter-over-quarter and growing triple digits from the same quarter last year," Stumpf said. Neither executive gave a dollar figure.

Foroughi said the new architecture helps most where data is thin. "It also improves performance most where data is sparser, newer advertisers, smaller advertisers, newer categories, exactly where our consumer vertical lives," he said.

Access to that consumer business has changed this year. PPC Land reported in May that AppLovin's Axon advertising platform was scheduled to open to all advertisers worldwide in June 2026, with self-serve sign-up replacing a referral-based system that began on October 1, 2025. On November 4, Foroughi described results that still depend heavily on hand-holding. "If a customer goes through our team, much higher likelihood to succeed than they just go through self-service channel and they are on their own," he said in response to Rob Sanderson of Loop Capital.

Small merchants are not yet the target. "We are not at the point yet where somebody can just plug in tiny business selling jewelry, we have never seen them before, very little data, very little GMV, and it just plugs in and they go," Foroughi said. He added that the company is prioritising more sophisticated customers, partly through partnership deals.

New advertisers also test before they scale, typically with incrementality studies that measure the sales an ad caused rather than the sales it was merely near. "If you talk to the customers, not only do they want to see spend and return on ad spend, they need to run incrementality studies too. So, there is a slow ramp-up," Foroughi told Martin Yang of Oppenheimer.

APAC pixels and the Wayfair line

Alec Brondolo of Wells Fargo noted that analyst pixel counts suggest most of the growth in e-commerce customers is coming from Asia-Pacific. Foroughi attributed the pattern partly to how those merchants operate. "Sometimes those pixel sites are brand new sites that just didn't exist that are spun up specifically for our channel," he said. North American customers, by contrast, are "bigger enterprises. They're not going to go spin up the next version of Wayfair, right?" He cautioned against reading pixel counts as a measure of penetration: one APAC merchant may generate many sites.

Where the money went

Total costs and expenses rose 46% to $475.8 million, well below revenue growth, and income from operations rose 58% to $1.71 billion, a 78% operating margin. Stumpf put flow-through at 87%: of each additional dollar of revenue between the second and third quarters, 87 cents reached adjusted EBITDA.

Compute

AppLovin's segment note breaks out datacenter costs, which reached $194.6 million in the quarter, up 38% from $141.0 million. As a share of revenue they fell to 8.9% from 10.0% a year earlier, and from 9.1% across the first half of 2026, according to PPC Land's calculation from the 10-Q. Foroughi said the decline came despite higher spending on training. "While part of the team trained the new models, our engineers optimized how we serve them. So even as training investment increased, data center costs declined as a percentage of revenue. Every dollar of this investment is gated on return," he said.

The company's main cloud contract remains its largest disclosed commitment. In August 2024, AppLovin amended its agreement with a cloud computing provider, committing to spend a minimum of $1.3 billion over three years. By September 30, 2026 it had paid $1.1 billion toward that commitment, according to the 10-Q, which does not name the provider.

Stumpf added a line that bears on future margins. "We manage this business to EBITDA dollars and free cash flow rather than to a margin percentage, and we'll continue to deploy dollars when we see an opportunity to produce more revenue," he said.

Engineers and stock awards

Research and development expenses more than doubled, rising 132% to $101.8 million. The 10-Q attributes $55.1 million of the $58.0 million increase to personnel-related expenses "related to an increase in stock-based compensation-related payroll costs." Stock-based compensation charged to research and development was $68.1 million in the quarter, against $15.6 million a year earlier. Total stock-based compensation rose to $84.2 million from $33.8 million.

That cost does not appear in adjusted EBITDA, which excludes stock-based compensation. It does appear in net income. Sales and marketing rose 42% to $68.8 million, driven primarily by advertising and marketing program costs, according to the filing. Foroughi described AppLovin "promoting ourselves through referrals and advertising" to reach new customers.

Net income grew faster than the business

Net income rose 72%, but income from operations rose 58%, according to PPC Land's calculation. Most of the gap came from below the operating line. Other income, net, swung to an $86.0 million gain from a $6.6 million loss a year earlier. The 10-Q attributes that swing primarily to a $46.9 million net fair value gain on certain non-marketable equity securities, compared with a $20.4 million loss in the prior-year quarter, and to a $15.9 million increase in interest income on a larger cash balance.

The fair value gains relate to interests in private equity funds measured at net asset value. Their carrying value reached $222.3 million at September 30, 2026, up from $118.7 million at the end of 2025. Unrealised gains on those holdings totalled $97.5 million over nine months, according to the filing. Those gains are excluded from adjusted EBITDA.

The effective tax rate in the quarter was 17.5%, against 18.2% a year earlier, according to PPC Land's calculation. Cash paid for income taxes over nine months was $926.2 million, against $167.3 million in the first nine months of 2025, which Stumpf said had depressed second-quarter cash conversion.

The 10-Q's other disclosures

Geography

Revenue from users located in the United States was $1.10 billion, up 60% from $687.9 million. Revenue from the rest of the world was $1.09 billion, up 52% from $717.1 million, according to PPC Land's calculation from the 10-Q. The United States accounted for 50.3% of revenue, against 49.0% a year earlier.

How AppLovin books revenue

The filing describes AppLovin as an agent rather than a principal in its advertising transactions. "The Company does not control the advertising inventory prior to its transfer to the advertiser," it says, and so presents revenue net of what it pays publishers. Revenue for impression-based campaigns is recognised when an ad is delivered; for action-based campaigns, when the specified action, such as a click or install, occurs. "Substantially all of the Company's contracts with customers are cancelable at any time," the 10-Q states. Payment terms are generally 30 days after month end, and accounts receivable stood at $2.39 billion on September 30, up from $1.82 billion on December 31, 2025.

The single reportable segment comprises AppLovin Ads, MAX, Adjust and Wurl. AppLovin Ads, which the filing calls the company's "AI-powered demand-side advertising solution", generates substantially all revenue.

Tripledot

AppLovin sold its apps business to Tripledot on June 30, 2025 for $430.6 million in cash and about 22% of Tripledot's shares, valued at $285.0 million, according to the 10-Q. Tripledot is now both an equity investee and an advertiser. AppLovin recognised $1.8 million of revenue from Tripledot and its subsidiaries in the third quarter and $44.7 million over nine months, which implies $42.9 million in the first half, according to PPC Land's calculation. The filing does not explain the drop.

Directors

Two directors terminated pre-arranged share sale plans during the quarter. Victoria Valenzuela ended a Rule 10b5-1 plan on August 20, 2026 that provided for sales of up to 55,500 shares plus up to 10,118 shares from vesting restricted stock units. Eduardo Vivas ended a plan on September 13, 2026 covering up to 491,730 shares, two days before it was scheduled to expire. The 10-Q also files a consulting agreement with Valenzuela, a board member, effective August 1, 2026, which pays her $150,000 in monthly instalments through May 31, 2027 for advisory services to executive officers and senior management.

Cash, buybacks and a falling share price

AppLovin ended September with $3.17 billion of cash and cash equivalents against $3.52 billion of long-term debt. Stumpf said that left net leverage "below 0.1 times adjusted EBITDA, comfortably below the roughly one times net leverage where we expect to operate over the long term." On trailing 12-month adjusted EBITDA of $6.41 billion, net debt of $342 million works out at about 0.05 times, according to PPC Land's calculation.

Free cash flow of $1.42 billion equalled 77% of adjusted EBITDA, Stumpf said, "up from 53% in the second quarter." He repeated a full-year target: "We still expect full-year free cash flow conversion of roughly 70%-75% of adjusted EBITDA." Free cash flow also equalled about 65% of revenue, a figure Stumpf attributed to AppLovin's "asset-light model" and contrasted with its peers.

Most of that cash went back to shareholders. AppLovin repurchased and withheld 4.1 million shares for $1.4 billion in the third quarter, according to the release. The monthly table in the 10-Q shows how the price changed underneath that programme:

  • July 2026: 674,000 shares at an average of $442.75
  • August 2026: 2.07 million shares at an average of $316.66
  • September 2026: 1.31 million shares at an average of $311.44

The average price paid in August was 28.5% below the July average, according to PPC Land's calculation. The second-quarter results were published on August 5. Clark Lampen of BTIG told management on the call that, even after the after-hours move, the stock was "still down ballpark 40% year-to-date". Stumpf said the company had stepped up buying deliberately. "That was us opportunistically ramping up the buyback because we saw this dislocation in the stock price versus the actual intrinsic value of the company," he said.

By September 30, $394.3 million remained under the repurchase authorisation. In October the board added approximately $3.2 billion, bringing the total available to $3.6 billion. "Since we began the program, we have repurchased and withheld a total of 104 million shares for $9.4 billion at an average price of $90 per share, returning 85% of our free cash flow over that period," Stumpf said.

Shares outstanding fell to 331.3 million at September 30 from 338.3 million at the end of 2025, and the weighted diluted share count fell about 2% year on year. The cover of the 10-Q lists the same Class A and Class B counts at October 31 as at September 30. Class B shares carry 20 votes each.

Fourth-quarter guidance

For the three months to December 31, 2026, AppLovin expects revenue of $2.365 billion to $2.395 billion and adjusted EBITDA of $1.995 billion to $2.025 billion, a margin of 84% to 85%. Stumpf put that at "approximately 43%-44% year-over-year growth, or 8%-10% sequentially."

Year-on-year growth of 43% to 44% would be the slowest since at least the fourth quarter of 2024, the earliest quarter for which the financial update allows the comparison, according to PPC Land's calculation. At the midpoint, full-year 2026 revenue would be about $8.33 billion, 52% above 2025, and adjusted EBITDA about $7.02 billion, up 56%, by the same calculation. Stumpf described the full-year implication as growth of "more than 50%."

"That outlook reflects normal seasonality, further scaling in our consumer vertical, significant model improvements that are already live and performing, and continued investment in training compute for new model development," Stumpf said. Asked by Heaney why the guide looked conservative after 14% sequential growth, he said the method had not changed. "We're guiding to what we know at that point in time."

Foroughi warned that a larger e-commerce business will make the calendar lumpier. Gaming advertisers have historically spent heavily in the first quarter, a pattern the industry calls "Q5", because competition for impressions falls after the holidays. E-commerce runs the other way. "The same advertiser, like for like, will have a huge Q4 and follow it up with a weak Q1. That's just the reality of the e-commerce business," he said. "As we get more deep into e-commerce, we should see bigger Q4s followed by tougher Q1s."

Over the longer term, Foroughi repeated a growth target the company has cited for two quarters. "We believe this business can compound at roughly 30% annually over the long term," he said.

The lawsuits

The legal proceedings section of the 10-Q describes two older matters and two new ones filed since the second-quarter report.

The older securities case, known as the Brownback action after the plaintiff who filed it on March 24, 2025, names AppLovin, Foroughi, Stumpf, Herald Chen and, since an amended complaint of September 12, 2025, Basil Shikin. It alleges false and misleading statements about AppLovin's advertising solutions and financial growth over a class period from November 7, 2024 to March 27, 2025. The defendants moved to dismiss in November 2025, and the motion was fully briefed by February 2026. The 10-Q reports no ruling. Related derivative suits filed in March and May 2025 are consolidated and stayed.

The new case was filed on September 16, 2026 in the Northern District of California by Stephen Talbot, an alleged stockholder, against AppLovin, Foroughi and Stumpf. According to the 10-Q, the complaint "alleges that the defendants made materially false and misleading statements concerning the pace of improvement of the Company's advertising models and the development timeline for a certain ad-generation tool." The putative class period runs from February 12, 2026 to August 5, 2026, the date of the second-quarter results. On October 7, 2026, Amit Patel, who also filed one of the 2025 derivative complaints, filed a derivative complaint relying on the Talbot allegations against current and former directors, Foroughi and Stumpf.

The filing does not identify the tool. PPC Land reported in May, after the first-quarter call, that a video ad generator was in final testing and that Foroughi had said it would reach all accounts before the June opening of Axon. Neither the 10-Q nor the November 4 call says whether that is the tool referred to in the complaint, and no specific creative tool was named on the call. AppLovin said of all four cases that it believes "these allegations lack merit" and will contest them, and that it "cannot reasonably estimate the maximum potential exposure or range of possible loss."

Two other disputes PPC Land has covered do not appear in the legal proceedings section. In September 2026, AppLovin went to court to stop Unity collecting data through its Ad Quality SDK, and on October 5, 2026, San Diego County sued AppLovin over adult advertising shown in children's games. The 10-Q states that AppLovin had "no material loss contingencies related to legal proceedings for which accrual or disclosure was required" at September 30. Neither matter was raised on the call.

What the call added

Analysts spent much of the hour on pricing, data and competition. Several answers bear directly on how advertisers and publishers deal with AppLovin.

Prices

Stephen Ju of UBS said some advertisers had told him they were moving budget to competitors in anticipation of higher prices as e-commerce bidders join the auction. Foroughi dismissed the checks. "I think these industry checks tend to end up being flawed because you're looking at a small sub-segment of the ecosystem, and the customers that are taking time talking to you all probably aren't working that hard," he said. He did not say prices were flat. "That doesn't mean that just looking at a CPM, the price is not going up. In fact, if we get better targeted so that our conversion rate goes up, the CPM will go up."

Vasily Karasyov of Cannonball asked about take rate, the share of advertiser spend AppLovin keeps after paying publishers. Foroughi said the company does not manage to one. "When you have a conversion rate that's a little bit over 1%, if we were buying on 1,000 impressions, somewhere around 987 of them we're losing money on," he said. He described gaming and consumer advertisers competing in one auction at close prices. "Let's say gaming has a predicted value of $20 CPM, so $0.02 for the impression, and a consumer comes in and wins that impression at $21."

Data, mediation and acquisitions

Tim Nollen of SSR asked who owns the data generated in auctions run through MAX, AppLovin's mediation platform for app publishers. Foroughi said AppLovin's own models see little from rival bids. "The only data that is available to our Axon models or our system are, did we win the ad or did we not win the ad? What was the price for the winning auction? And then everyone who loses gets the price for the losing auction. That is it," he said.

He said the models need more data than AppLovin currently collects. "We're going to be starved for data," he told Benjamin Black of Deutsche Bank, and he raised the possibility of "some sort of data acquisition." Pressed by Brondolo, he pointed to AppLovin's purchase of MoPub as the template. "This crazy company bought a company and put it out of business. I mean, we put it out of business in 90 days," he said. The test, he said, is simple: "Can we buy data relationships, customer relationships that are valuable for us?" He named no target.

On supply, Foroughi said the MAX market is "growing a very strong double-digit growth rate every year." As publishers earn more per impression, he said, AppLovin either pays more for inventory or has to improve its technology at least as fast.

Creative and watch time

Foroughi said advertisers that feed the platform more creative get more scale, and he gave a figure on attention. "You load 10 ads into our platform, on average, you're getting over 35 seconds of watch time. User can't do anything else on the screen. It's a full-screen ad," he said. He acknowledged that shops struggle to fill that time. "We are asking the customer to create 60 seconds of content to showcase a shop. I mean, what are you even showing that ad? It is like shops aren't that exciting." Game advertisers, by contrast, build mini-games that let users play a preview, he said.

On generative tools, he said outside development has been slower than some expected because "the large language model companies in the West are focused on something else, and so you have less R&D outside of us on this problem."

Connected TV

Connected TV returned to AppLovin's list of priorities, which Matthew Cost of Morgan Stanley noted the company had not highlighted for a while. "We've got pilot campaigns going now," Foroughi said, adding that "it's a whole new market, so I wouldn't bank on it at all for being accretive to numbers anytime soon." His case for entering the market was that "there's not a true top of funnel to bottom of funnel performance offering on connected TV." AppLovin already owns Wurl, a CTV distribution business that the 10-Q describes as operating in markets "which remain nascent and may not develop as we expect over time."

Guidance record and the second quarter

Foroughi said that "it has been 14 out of 16 that we have beaten the high end of our guidance." The second quarter was one of the exceptions. Revenue of $1,923.7 million landed inside the $1,915 million to $1,945 million range AppLovin had given in May, below the midpoint. "A quarter ago, we stood here answering questions about a miss. We told you what had happened, that it was fixed, and that the business was re-accelerating, and everything we told you showed up in this quarter's numbers," Foroughi said. On competition, he said the second-quarter slowdown "was our own foot fault," not share loss to rivals.

Why this matters for advertisers

AppLovin's numbers are a reference point for anyone buying or selling mobile game inventory. Competitors named in the 10-Q include Meta, Google, Amazon, Unity Software and Liftoff Mobile. Liftoff priced its IPO at $23 and rose past $30 on its Nasdaq debut in June 2026. The AppsFlyer Performance Index published in October found ad spend rose on 9 of the top 10 mobile media sources, with AppLovin among the leaders on iOS.

Stumpf set AppLovin's growth against the largest platforms, which he said "reported third quarter revenue growth between roughly 10% and the mid-20%s year-over-year." PPC Land's coverage of the season fits that range for the biggest names: Meta's advertising revenue gained 26%, Amazon's advertising growth fell to 11% and YouTube's ad revenue rose 9% to $11.2 billion. Smaller platforms grew faster: Reddit's ad revenue rose 54% to $847 million, close to AppLovin's rate.

For e-commerce marketers, the call described a channel that is open to self-serve sign-up but still works best with direct support, needs a steady supply of long-form creative, and expects advertisers to prove results through incrementality studies before scaling. Foroughi's comments on seasonality also matter for anyone budgeting the first quarter of 2027: as more retail spend enters the same auction, AppLovin expects a sharper drop after the holidays than its gaming-only business used to show.

For publishers, the disclosures were thinner. AppLovin does not report MAX revenue or volumes separately, and the take rate question went unanswered. The 10-Q shows AppLovin earning 55% more net revenue per install on 2% more installs. Because that figure is measured after publisher payouts, the rise could reflect higher prices paid by advertisers, a larger share kept by AppLovin, or both; the filing does not separate them.

Investors and advertisers also have a pending question that the earnings release does not mention. The September 16 complaint concerns statements made between February and August 2026, a period that included the May call at which AppLovin set out the June opening of Axon and the status of its video ad generator. The case is at the earliest stage, and AppLovin says the allegations lack merit.

Timeline

Summary

Who: AppLovin Corporation, the Palo Alto-based mobile advertising company, with chief executive Adam Foroughi and chief financial officer Matt Stumpf presenting results to analysts from firms including Citi, Morgan Stanley, UBS, BTIG and Wells Fargo.

What: Third-quarter 2026 revenue of $2.18 billion, up 55%, and net income of $1.44 billion, up 72%, driven mainly by mobile gaming after a partial rollout of new prediction models, with consumer advertiser spend growing at a triple-digit rate. The board added about $3.2 billion to the buyback. The 10-Q disclosed a new securities class action over statements about model improvement and an ad-generation tool. Fourth-quarter guidance implies 43% to 44% growth.

When: Results, the 10-Q and the earnings call were all published on November 4, 2026, covering the quarter ended September 30, 2026. The new class action was filed on September 16, 2026.

Where: AppLovin is listed on Nasdaq and headquartered in Palo Alto, California. The lawsuits are in the U.S. District Court for the Northern District of California. Revenue was split almost evenly between users in the United States and the rest of the world.

Why: AppLovin runs one of the largest platforms for in-app advertising, and its expansion from gaming into e-commerce and connected TV puts it in direct competition with Meta, Google and Amazon for performance budgets. Its results, its pricing and its legal disputes affect what advertisers pay for mobile inventory and what game publishers earn from it.