AppLovin Third-Quarter Revenue Rises 55% as Net Income Climbs 72%

AppLovin announced third-quarter 2026 results on November 4, 2026, reporting revenue of $2.185 billion, up 55% from $1.405 billion a year earlier. Net income climbed 72% to $1.439 billion from $835.5 million, and the advertising platform paired the results with fourth-quarter guidance and a larger share-repurchase authorization.

Profit growth outpaced sales growth as total costs and expenses increased to $475.8 million from $326.0 million, a much smaller rise than the increase in revenue. Income from operations reached $1.709 billion, versus $1.079 billion, while diluted earnings per share rose to $4.30 from $2.45. The reported net margin expanded to 66% from 59%.

The cost base nevertheless showed heavier investment. Research and development expense more than doubled to $101.8 million from $43.9 million, and stock-based compensation increased to $84.2 million from $33.8 million. Earnings also received support below the operating line: other income was $86.0 million, compared with a $6.6 million expense a year earlier, contributing to pretax income of $1.744 billion versus $1.021 billion.

Cash Generation Supports Repurchases

Quarterly operating cash flow rose to $1.429 billion from $1.053 billion. Free cash flow, which AppLovin defines as operating cash flow less purchases of property and equipment and principal payments on finance leases, increased to $1.418 billion from $1.049 billion.

AppLovin repurchased and withheld 4.1 million Class A shares during the quarter at a total cost of $1.4 billion, including repurchase expenses and cash associated with tax withholding on vested equity awards. That outlay was almost equal to the quarter’s free cash flow, directly linking the period’s cash generation to its capital returns.

The Form 10-Q shows the scale of the broader program: 7,329,450 Class A shares were repurchased and retired for an aggregate $2.9 billion in the first nine months of 2026. This left $394.3 million available at September 30, 2026, when cash and equivalents were $3.174 billion against $3.516 billion of long-term debt. In October 2026, the board authorized approximately $3.2 billion more, bringing the available total to $3.6 billion.

Advertising Growth and the Fourth-Quarter Outlook

In the 10-Q, AppLovin describes one reportable segment providing advertising solutions through AppLovin Ads, MAX, Adjust and Wurl, with AppLovin Ads generating the vast majority of revenue. It presents revenue net of advertising-inventory costs because it acts as an agent in those arrangements, an important basis for interpreting its margins. Revenue based on user location was closely divided between $1.098 billion in the United States and $1.087 billion in the rest of the world.

For the fourth quarter, AppLovin projected revenue of $2.365 billion to $2.395 billion, putting even the low end above third-quarter revenue, alongside adjusted EBITDA of $1.995 billion to $2.025 billion and an adjusted EBITDA margin of 84% to 85%. Adjusted EBITDA is a company-defined measure that adjusts net income for interest, taxes, other income and expense, amortization, depreciation and write-offs, stock-based compensation, and specified transaction, restructuring and foreign-exchange items. The margin is adjusted EBITDA divided by revenue.

Management expects continued spending on datacenters and engineering talent as it launches enhancements to its Axon AI recommendation system. Quarterly datacenter costs already increased to $194.6 million from $141.0 million. The fourth-quarter outlook therefore carries a clear operational question: whether that investment can support further growth without weakening the margins and cash generation funding the enlarged repurchase program.