Applovin Stock Set to Open at Record High As Earnings, Outlook Beat Estimates

Key Takeaways

• Applovin shares are set to open at a record high Thursday morning after its third-quarter results and fourth quarter projections beat estimates.
• Revenue rose nearly 40% from the same time last year as the company said its AI-powered advertising tools are improving.
• The company also announced an additional $2 billion in approved stock buybacks.

Applovin (APP) shares are set to open at a record high Thursday morning after the company's third-quarter earnings and outlook for the fourth quarter each beat expectations.

The software maker, which partners with app makers to provide advertising and grow their user base, reported $1.2 billion in revenue after the bell Wednesday, a jump of nearly 40% from the same time last year and better than the $1.13 billion analysts expected, according to estimates compiled by Visible Alpha. Net income also came in well above estimates at $434.42 million, as analysts had projected $319.2 million.

Expanded Stock Buyback, Q4 Guidance Above Estimates

The company said its board has also approved an additional $2 billion in stock buybacks, as it had about $300 million left in its previous buyback program after spending about $437 million on buybacks in the third quarter.

For the fourth quarter, Applovin projects $1.24 billion to $1.26 billion in revenue, above the $1.17 billion analysts had expected coming into Wednesday's earnings.

Applovin said its artificial intelligence (AI)-powered advertising tools now make up nearly all of its "software platform" segment's revenue. The company's monthly active payers (MAP) figure, which counts each user who makes an in-app purchase in the quarter, fell to 1.6 billion users from 1.8 billion a year ago. However, its average revenue per MAP rose to $52 from $46.

Applovin shares surged nearly 33% in premarket trading Thursday, poised to open at a record high of $224 as they have skyrocketed more than 400% since the start of the year.

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