AppLovin (NASDAQ:APP) Surprises With Q4 Sales, Stock Jumps 13%
Stock Story
Published Feb 14, 2024 04:47PM ET
Updated Feb 14, 2024 05:00PM ET
AppLovin (NASDAQ:APP) Surprises With Q4 Sales, Stock Jumps 13%
Mobile app advertising platform AppLovin (NASDAQ: NASDAQ:APP) reported results ahead of analysts' expectations in Q4 FY2023, with revenue up 35.7% year on year to $953.3 million. It made a GAAP profit of $0.49 per share, improving from its profit of $0.25 per share in the same quarter last year.
Is now the time to buy AppLovin? Find out by reading the original article on StockStory.
AppLovin (APP) Q4 FY2023 Highlights:
- Revenue: $953.3 million vs analyst estimates of $928 million (2.7% beat)
- EPS: $0.49 vs analyst estimates of $0.35 (39.3% beat)
- Q1 2024 revenue guidance of $965 million at the midpoint vs analyst estimates of $926 million (4.2% beat)
- Q1 2024 adjusted EBITDA guidance of $485 million at the midpoint vs analyst estimates of $437 million (11.1% beat)
- Free Cash Flow of $350.3 million, up 76.1% from the previous quarter
- Gross Margin (GAAP): 71.3%, up from 55% in the same quarter last year
- Market Capitalization: $15.39 billion
Advertising SoftwareThe digital advertising market is large, growing, and becoming more diverse, both in terms of audiences and media. As a result, there is a growing need for software that enables advertisers to use data to automate and optimize ad placements.
Sales GrowthAs you can see below, AppLovin's revenue growth has been unremarkable over the last two years, growing from $793.5 million in Q4 FY2021 to $953.3 million this quarter.
This was a standout quarter for AppLovin with quarterly revenue up 35.7% year on year, above the company's historical trend. However, its growth did slow down compared to last quarter as the company's revenue increased by just $89.01 million in Q4 compared to $114.1 million in Q3 2023. While we'd like to see revenue increase by a greater amount each quarter, a one-off fluctuation is usually not concerning.
Cash Is KingIf you've followed StockStory for a while, you know that we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. AppLovin's free cash flow came in at $350.3 million in Q4, up 115% year on year.
Get The News You Want
AppLovin has generated $1.06 billion in free cash flow over the last 12 months, an eye-popping 32.6% of revenue. This robust FCF margin stems from its asset-lite business model, scale advantages, and strong competitive positioning, giving it the option to return capital to shareholders or reinvest in its business while maintaining a healthy cash balance.
Key Takeaways from AppLovin's Q4 Results It was great to see AppLovin beat and guide above expectations. Revenue and adjusted EBITDA beat. Guidance for Q1 2024 revenue and adjusted EBITDA were both convincingly ahead as well. Overall, we think this was a really good quarter that should please shareholders. The stock is up 13% after reporting and currently trades at $53 per share.
Written By: Stock Story
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.