Applovin Corp - Ordinary Shares - Class A

Strong Financial Performance: AppLovin reported Q1 2025 total revenue of $1.5 billion, a 40% increase year-over-year. Adjusted EBITDA rose 83% to $1 billion, achieving a remarkable 68% adjusted EBITDA margin. The company generated $826 million in free cash flow, up 113% year-over-year, indicating strong financial health and operational efficiency.

Market Growth Opportunities: The company is optimistic about expanding its offerings beyond gaming, focusing on e-commerce and web advertising solutions. Despite being less than 0.1% of the potential advertiser market, the early performance in their web advertising initiative is encouraging. They aim to launch a self-service dashboard that may catalyze significant advertiser growth, expected to unlock a massive opportunity in the coming quarters.

Challenging Seasonality: While forecasting a sequential revenue growth of 3% to 5% for Q2, which is lower than the company’s long-term growth aspirations of 20% to 30%, this performance is attributed to seasonal challenges typical for Q1. The company notes that Q2 often experiences a decline due to these factors, which might cause some investors concern regarding short-term performance but is viewed as a predictable ebb and flow.