AppLovin's Q2 Performance Falls Short On Revenue Estimate, Cuts FY22 Outlook

AppLovin Corp APP reported second-quarter revenue growth of 16% year-over-year to $766.23 million, missing the consensus of $839.67 million.

The increase was led by a +118% Y/Y increase in Software Platform revenue to $318 million, and its Segment Adjusted EBITDA grew 114% Y/Y to $197 million, a 62% margin.

Apps revenue declined 12% Y/Y to $459 million due to a decline in the Project Makeover app; and Segment Adjusted EBITDA decreased 21% Y/Y to $73 million, a 16% margin.

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Software Platform Enterprise Clients (SPEC) grew 142% Y/Y to 503. NDBRR was +204%.

Adjusted EPS was $(0.06), down from $0.04 in 2Q21. The operating income increased 52.5% Y/Y to $53.35 million, and the margin expanded by 165 bps to 6.9%.

Also Read: Unity Software Reports Q2 Earnings In Wake Of AppLovin M&A Offer: Revenue Miss, Guidance Disappointment And More

Adjusted EBITDA increased 47% Y/Y to $270 million and margin improved to 35% from 27% in 2Q21. The company has repurchased ~$339 million of stock through August 10, 2022, at a weighted average price of ~$38 per share.

APP’s Net cash provided by operating activities year-to-date totaled $75.09 million, compared to $152.27 million a year ago. It held cash and cash equivalents of $951.56 million as of June 31, 2022.

FY22 Outlook: AppLovin expects total revenue of $2.84 billion - $3.140 billion (prior $3.14 billion - $3.440 billion) vs. consensus of $3.29 billion; Adjusted EBITDA of $1.2 billion, and Adjusted EBITDA Margin of 37% - 40%.

Price Action: APP shares are trading lower by 11.10% at $35.99 during the post-market session on Wednesday.