AppLovin (APP.US) Earnings Surpass, Shares Drop on AI Headwinds Despite 84% Margin

AppLovin (APP.US) reported results for Q4 and full-year 2025 on February 11, 2026, showing revenue and margins that surpassed expectations despite a sharp post-market decline on fears of AI disruption and competition from larger platforms. Key metrics: Q4 revenue of $16.6B, up 66% year-over-year, beating analyst expectations; EPS of $3.24, up 87%; adjusted EBITDA of $14B, a 82% YoY increase, and a profit margin of 84%. Free cash flow for the year reached $39.5B, up 91%. CEO Adam Foroughi said market sentiment outpaced business fundamentals, with AI expected to drive a “content explosion” making discovery a scarce resource and strengthening the value of platforms that match the right content to users. The company’s MAX auction-based model expands market size as higher-quality advertisers win, allowing AppLovin to capture fees on lower-value impressions. AppLovin is expanding into e-commerce with a self-service platform, with over 100 clients试点ing generative AI ad creative tools. A Hebrew kitchenware client boosted revenue from $400K to $16M, with LTV:CAC breakeven within 30 days. Guidance for Q1 2026: revenue $17.45B–$17.75B, up 5–7% year-over-year, and EBITDA margin to remain at 84%. The company has repurchased about $25.8B in 2025 and maintains $33B of authorization remaining.