APP/Unity 3Q25: Difficult Problems

Subscribers familiar with our work know we are passionate AppLovin analysts. Out of our past 200 reports, AppLovin-related coverage accounts for 10 pieces.

In our 4Q24 Preview, we were the first to mention that SHEIN/TEMU were becoming AppLovin’s fastest-growing clients, and that 4Q24 and CY2025 performance would be strong—all of which was later validated. However, we made a small error at the time: SHEIN/TEMU were running App Download Campaigns, not EC Campaigns.

In our 1Q25 Preview, we spent substantial time systematically refuting each short-seller report, conducting extensive expert interviews on every critique to prove AppLovin had none of the issues alleged. This was quickly vindicated by 1Q25 results.

In our 1Q25 Preview, we were the first to note that AppLovin’s Hardcore Game Contribution had surpassed Casual Games. The D28 Campaign thoroughly activated Hardcore Games. Now more people are discussing Hardcore Games and D28’ contribution to AppLovin.

In our 2Q25 Preview, we noted that e-commerce progress was slower than the market expected, and that AppLovin was cleaning up some high-risk verticals. Therefore, 2Q25 quarterly results might show the smallest beat margin in recent quarters, and guidance might fall short of market expectations. But the reason e-commerce was progressing slowly was that AppLovin was unwilling to provide more e-commerce ad inventory, meaning e-commerce advertisers wanted to spend but couldn’t increase budgets. This gave Adam ample room to craft narratives. So do you remember that day after 2Q25 when AppLovin went from AH -15% to green, then to +10%?