APP 3Q25: Extremely Bullish 4Q25 Guidance

In our APP 3Q25 Preview, we highlighted that gaming and short drama were tracking very strong in 3Q25, which would drive AppLovin’s 5% beat for the quarter. However, since AppLovin has been actively throttling e-commerce client onboarding, creative approvals, and other processes since October, and given that advertisers typically need 2 weeks to adapt to the platform, e-commerce in October actually showed only minimal growth versus September. Based on this, we see Q4 guide potentially light vs bogey, but that’s largely due to the dynamics discussed above. With Nov/Dec acceleration coming, Sam has tons of ammunition for the call - should be a strong performance.

But management’s latest guidance implies 4Q25 QoQ growth far exceeds our expectations. This means either gaming, short drama, or the Apple tax benefit is contributing very strongly, or e-commerce will see incredible ramp-up in November and December. Makes us feel even more bullish.

Please refer to these two previous pieces we wrote for key context on the Apple tax impact Adam mentioned on the earnings call.

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Earnings Highlights

• 4Q25 revenue up 68% YoY to $1.405B, in line with our estimate of $1.406B, beating high-end guidance by 5%

• 4Q25 high-end revenue guide up 60% YoY to $1.6B, 1% above our estimate. 4Q25 doesn’t really have consensus bogey - one survey has a very high bogey, others slightly below $1.6B

• 4Q5 share buybacks totaled $571M. Board increased buyback authorization by $3.2B, bringing total authorization to $3.3B