AppLovin today reported second-quarter revenue of $1.92 billion, a 53 percent year-over-year increase that marks the slowest growth rate in the company's own restated quarterly series, while guiding third-quarter adjusted EBITDA margin down to 83 percent from the 84 percent recorded in the June quarter.

AppLovin Corporation released results for the quarter ended June 30, 2026 on August 5, 2026, filing a Form 8-K with the United States Securities and Exchange Commission under Item 2.02 and posting a separate financial update deck to its investor relations website. The filing was signed by chief financial officer Matthew A. Stumpf. According to the earnings release, revenue reached $1,923.686 million against $1,258.754 million in the second quarter of 2025.

Net income was $1,266.538 million, up 55 percent. Because the prior-year period still carried $47.675 million of income from the divested apps business, the comparison on a continuing-operations basis is wider: net income from continuing operations rose 64 percent from $771.856 million. Adjusted EBITDA, a non-GAAP measure the company defines as net income adjusted for discontinued operations, interest, taxes, depreciation, amortisation, stock-based compensation and several other items, came in at $1,613.823 million, an increase of 58 percent.

Basic earnings per share reached $3.77 and diluted earnings per share $3.76, according to the consolidated statements of operations. Net margin held at 66 percent, one percentage point above the year-earlier figure on a reported basis and five points above it on a continuing-operations basis.

Growth decelerates for a fourth consecutive quarter

The headline figure that carries the most information for media buyers is not the absolute revenue number but the rate of change beneath it. The financial update deck published alongside the release sets out twelve quarters of revenue on a continuing-operations basis, running from the third quarter of 2023 through the second quarter of 2026. That series makes the trajectory legible.

Year-over-year growth in the eight quarters where a comparison is possible within the disclosed data ran 66 percent, 73 percent, 71 percent, 77 percent, 68 percent, 66 percent, 59 percent and now 53 percent. The 77 percent peak arrived in the second quarter of 2025, the same period in which AppLovin completed the sale of its gaming business to Tripledot Studios for $400 million. Every quarter since has printed a lower rate. Four consecutive decelerations now sit in the record.

Sequential movement tells a sharper version of the same story. Revenue advanced from $1,842 million in the first quarter of 2026 to $1,923.686 million in the second, a gain of roughly 4.5 percent. That is the smallest quarter-on-quarter increase anywhere in the twelve-quarter series the company itself published. The comparable figure three months earlier, when first-quarter revenue reached $1.84 billion, was about 11 percent. In the fourth quarter of 2025 it was 18 percent.

None of this describes a business in retreat. A 53 percent annual growth rate at a $7.7 billion revenue run rate remains an outlier across public advertising technology. But the arithmetic of large numbers is now visible in the disclosures, and the second quarter of 2026 is the first period in which the sequential increase fell below five percent.

Research spending more than doubles

Total costs and expenses rose 42.6 percent to $429.409 million, comfortably below the 53 percent revenue increase, which is why operating margin expanded to 77.7 percent from 76.1 percent. The composition of that spending, however, shifted markedly.

Research and development reached $99.901 million against $44.032 million a year earlier, an increase of 127 percent. Across the first six months the line ran $194.005 million versus $100.438 million. As a share of revenue, R&D moved from 3.5 percent to 5.2 percent. No other expense category behaved this way. Cost of revenue grew 45.6 percent to $225.801 million, slower than revenue, trimming its share from 12.3 percent to 11.7 percent. Sales and marketing rose 35.1 percent to $63.394 million. General and administrative expense fell 26.8 percent to $40.313 million.

Stock-based compensation of $85.783 million in the quarter compares with $34.552 million a year earlier, an increase of 148 percent. The press release does not break out headcount or attribute the research spending to specific products, and no executive commentary accompanies the numbers in the written materials.

The direction is nonetheless consistent with what the company has described publicly over the preceding year: automated creative production, agent-driven campaign workflows, and the infrastructure needed to onboard advertisers at volume. AppLovin also published a consumer social application called Gist in May 2026 without a press release, a move read at the time as an attempt to build first-party inventory alongside the third-party supply its mediation stack aggregates.

Cash conversion weakens against reported profit

The gap between accounting profit and cash is the most instructive detail in the filing. Net cash provided by operating activities was $869.040 million for the quarter, up 12.5 percent from $772.226 million. Free cash flow, defined as operating cash flow less purchases of property and equipment and principal payments on finance leases, was $863.317 million against $768.063 million, a 12.4 percent gain.

Set that beside adjusted EBITDA growth of 58 percent and the divergence is stark. In the second quarter of 2025, free cash flow equated to roughly 75 percent of adjusted EBITDA. In the second quarter of 2026 the ratio fell to about 54 percent.

Two mechanics explain most of the gap. Cash paid for income taxes, net of refunds, reached $639.820 million across the first six months of 2026 against $100.621 million in the same period of 2025, a more than sixfold increase. The provision for income taxes in the quarter alone was $238.988 million versus $112.148 million, lifting the effective rate to roughly 15.9 percent from 12.7 percent.

Working capital absorbed the remainder. Accounts receivable, net, stood at $2,171.017 million at June 30, 2026 against $1,819.366 million at December 31, 2025, an increase of $351.651 million over six months. Receivables now exceed a full quarter of revenue. That pattern is common to platforms billing large advertiser cohorts on extended terms, and it is the kind of line that tends to expand when a customer base broadens rather than deepens.

The deck's own quarterly cash flow series shows operating cash flow of $1,291 million in the first quarter of 2026 falling to $869 million in the second, alongside a corresponding decline in ending shares outstanding from 336 million to 335 million.

Balance sheet and buybacks

Cash and cash equivalents closed the half at $3,053.306 million against $2,487.096 million at the end of 2025. Long-term debt was effectively unchanged at $3,515.072 million, and interest expense held flat at $51.156 million for the quarter. Total assets reached $8,269.131 million and total stockholders' equity $3,163.016 million, up from $2,134.671 million at the turn of the year on the strength of retained earnings.

During the quarter AppLovin repurchased and withheld 1.1 million shares of Class A common stock at a total cost of $551.3 million. The company notes that this figure combines open-market repurchase costs, commissions, taxes and fees with cash paid for tax withholding on net share settlement of vested equity awards, so it does not translate cleanly into an average purchase price. Combined Class A and Class B shares outstanding stood at 335 million at the end of the period, down from 338.313 million at December 31, 2025. Across six months, repurchases of common stock consumed $1,532.952 million of cash and withholding tax payments a further $46.451 million.

Goodwill declined slightly to $1,518.587 million from $1,539.986 million and accumulated other comprehensive loss widened to $73.805 million from $46.987 million, movements consistent with foreign exchange translation rather than any disclosed impairment. The prior-year six-month period, by contrast, included a $188.943 million goodwill impairment and a $106.229 million gain on divestiture, which is why the half-year net income comparison shows 77 percent growth against 65 percent on a continuing-operations basis.

Guidance points to further slowing

For the third quarter of 2026 the company guided revenue to a range of $2,055 million to $2,085 million and adjusted EBITDA to $1,710 million to $1,740 million, with adjusted EBITDA margin at 83 percent at both ends of the range.

Measured against third-quarter 2025 revenue of $1,405.045 million, that range implies year-over-year growth of 46.3 percent to 48.4 percent. Sequentially it implies 6.8 percent to 8.4 percent. The margin figure is the first guided step down in the disclosed sequence: adjusted EBITDA margin ran 82 percent in the third quarter of 2025, 84 percent in the fourth, 85 percent in the first quarter of 2026 and 84 percent in the second.

AppLovin declined to publish forward-looking GAAP equivalents for the non-GAAP guidance, citing the variability of reconciling items including stock-based compensation expense, according to a footnote in the release. That caveat carries more weight than usual given that stock-based compensation grew 148 percent in the quarter just reported.

The Axon opening sits inside this quarter

The reporting period covers the months in which AppLovin removed the last access restriction on its advertising platform. Management had told investors in May that Axon would open to all advertisers worldwide in June 2026, closing what chief executive Adam Foroughi described on that earnings call as a fourteen-year period of operating a closed system.

The written second-quarter materials contain no operational disclosure about how that opening performed. There is no advertiser count, no spend-per-advertiser figure, no geographic split and no separate line for the e-commerce cohort. The company scheduled a webinar for 2:00 PM Pacific on August 5, 2026, at which management said it would discuss the quarter and provide commentary on business performance, followed by a question-and-answer session.

What the numbers do show is that the quarter containing the global opening produced the slowest sequential revenue increase in three years of disclosed data. Onboarding cycles in performance advertising rarely convert into revenue within weeks, so the absence of an immediate step-change is not itself surprising. The relevant test arrives with the third and fourth quarters, and the guidance issued today does not yet embed one.

The platform's supply-side foundation remains the MAX mediation layer, which the company has said reaches more than one billion daily active users, mostly adults playing casual mobile titles. That audience profile was the subject of a Kantar study published in March 2026 finding that 71 percent of mobile gamers who buy after seeing a game advertisement do so the same day. Access to that supply, and the AI bidding engine sitting on top of it, is what advertisers are buying.

Why the numbers matter for the advertising market

AppLovin's results land at the end of a second-quarter reporting season that has been unusually informative about where performance budgets are moving.

Alphabet reported on July 22 that Search advertising revenue rose 17 percent to $63.3 billion while Network revenue, covering ads served on non-Google properties, fell 1 percent. Microsoft disclosed on July 29 that search advertising growth had slowed to 10 percent. Meta posted advertising revenue of $59.36 billion, up 27 percent, but net income down 8 percent after legal and severance charges. Reddit reported advertising revenue of $762 million, up 64 percent, and saw its shares fall 12.5 percent on concerns about search referral volatility. Snap disclosed on August 3 that advertising revenue grew 9 percent while ad prices rose 10 percent.

Against that field, a 53 percent growth rate and an 84 percent adjusted EBITDA margin remain exceptional. The comparison that matters for planners, though, is not with social platforms but with the direction of AppLovin's own curve. Budgets allocated to a channel growing at 77 percent behave differently from budgets allocated to one growing at 53 percent and guiding to 47 percent, particularly where the channel operates as a closed auction with limited third-party verification.

Those verification questions have not gone away. Short-seller reports in early 2025 alleged unauthorised data collection practices, and Foroughi published a detailed defence of the business model in February 2026 addressing scale and transparency concerns raised by marketers. The absence of advertiser-level operating metrics in the second-quarter written materials leaves those questions where they were.

Competitive pressure is also becoming more visible. Liftoff listed on Nasdaq in June 2026, giving the mobile performance category a second public benchmark. The press release itself lists risk factors including "the competitive advertising ecosystem" and an inability "to adapt to emerging technologies and business models", language that has appeared in the company's filings before but reads differently against a decelerating growth curve.

For publishers monetising through the mediation layer, the relevant read is the margin guidance rather than the revenue line. An 83 percent adjusted EBITDA margin at $2.07 billion of revenue implies a modest reallocation of gross economics, and the company has not said where that reallocation lands. For advertisers, the operative variable is whether the June opening expands the auction enough to move clearing prices. Neither question is answered by the documents filed today.

Timeline

Summary

Who: AppLovin Corporation (NASDAQ: APP), the Palo Alto advertising technology company headquartered at 1100 Page Mill Road, reported the results. Chief financial officer Matthew A. Stumpf signed the Form 8-K. The figures affect advertisers buying through Axon, mobile publishers monetising through the MAX mediation layer, and investors tracking the mobile performance advertising category.

What: Second-quarter revenue of $1,923.686 million, up 53 percent year over year; net income of $1,266.538 million, up 55 percent, or 64 percent on a continuing-operations basis; adjusted EBITDA of $1,613.823 million at an 84 percent margin; free cash flow of $863.317 million, up 12.4 percent; diluted earnings per share of $3.76. Research and development spending rose 127 percent to $99.901 million. The company repurchased and withheld 1.1 million Class A shares at a total cost of $551.3 million. Third-quarter guidance was set at $2,055 million to $2,085 million in revenue and $1,710 million to $1,740 million in adjusted EBITDA, at an 83 percent margin.

When: The results were released on August 5, 2026, covering the quarter ended June 30, 2026, with a management webinar scheduled the same day at 2:00 PM Pacific.

Where: The Form 8-K was filed with the United States Securities and Exchange Commission and the financial update deck posted to AppLovin's investor relations website. The company operates globally, with Axon opened to advertisers worldwide during the quarter.

Why: The quarter records the fourth consecutive deceleration in year-over-year revenue growth and the smallest sequential revenue increase in the twelve quarters the company discloses, while free cash flow growth of 12.4 percent lagged adjusted EBITDA growth of 58 percent on a sixfold increase in cash taxes paid. Third-quarter guidance implies growth of 46 to 48 percent and a one-point step down in adjusted EBITDA margin, the first guided margin decline in the disclosed sequence.