AppLovin Corporation
Communication Services · Interactive Media & Services
Structural read: ad-tech roll-up turned AI-auction monopoly in mobile gaming UA, now extending the same Axon engine into e-commerce - a much larger TAM than gaming alone. Software Platform is the entire bull case post Apps-divestiture; margins step up as gaming legacy rolls off.
- Software Platform revenue growth ~75% YoY (Axon 2.0 launched Q2 2023, still compounding)
- Apps segment sold to Tripledot 2025 - gross margin steps from ~70% toward 80%+ pure-software
- E-commerce pilot expanding 2025-2026 - early advertiser cohort showing repeat spend
- Buyback cadence ~$2B/yr reduces share count ~3-4% annually
- $META Reels + $GOOGL App Campaigns are the comp set; APP plays in a niche they under-serve
- Customer concentration in mobile gaming (~50% of ad spend from top-tier studios) - gaming UA spend cyclical
- Axon is a black box; any auction-quality regression hits revenue immediately
- E-commerce expansion unproven at scale vs $TTD, $META, $AMZN ad stacks
- iOS ATT and Android Privacy Sandbox compress attribution signal - Adjust mitigates but does not eliminate
- Multiple compression risk: trades at premium to $TTD on similar growth
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