AppLovin posts record profit and expands buyback capacity

Record revenue and profit set a high bar

AppLovin Corporation (NASDAQ:APP) produced another quarter of unusually strong expansion, with revenue rising 55% year over year to US$2.185 billion and GAAP net income increasing 72% to US$1.439 billion. The marketing technology company said both figures were records for the third quarter, while its net profit margin reached 66%, up from 59% a year earlier.

The result was not simply a top-line story. Adjusted EBITDA, a non-GAAP measure, rose 59% to US$1.842 billion, implying an 84% adjusted margin compared with 82% in the corresponding quarter. AppLovin's GAAP operating income was US$1.709 billion, up from US$1.079 billion, while diluted earnings per share increased to US$4.30 from US$2.45.

Cash generation is funding an aggressive buyback

Cash generation gave the quarter an equally striking dimension. Net cash from operating activities was US$1.429 billion, and free cash flow, another non-GAAP measure, was US$1.418 billion after property and equipment purchases and finance-lease payments.

AppLovin repurchased or withheld 4.1 million Class A shares during the quarter at a total cost of US$1.4 billion. The board then approved a further US$3.2 billion of repurchase capacity, taking the total current authorisation to US$3.6 billion at the end of October. The filing says future purchases remain subject to market conditions, legal requirements and the company's capital needs, so the authorisation is not a commitment to spend the full amount.

Fourth-quarter guidance points to continued momentum

For the fourth quarter, AppLovin guided to revenue of US$2.365 billion to US$2.395 billion and Adjusted EBITDA of US$1.995 billion to US$2.025 billion, equivalent to an adjusted margin of 84% to 85%. Those figures are company guidance rather than GAAP forecasts; AppLovin said it could not provide forward-looking GAAP reconciliations because of uncertainty around items including stock-based compensation.

The balance sheet showed US$3.174 billion in cash and cash equivalents at September 30, against US$3.516 billion of long-term debt. Shares outstanding had fallen to 331.3 million from 338.3 million at the end of 2025, although stock-based compensation remained a material adjustment in the company's non-GAAP presentation.

Nevada reincorporation approved through written consent

Alongside the earnings release, AppLovin disclosed that a group of stockholders holding approximately 67% of voting power had approved the company's reincorporation from Delaware to Nevada. The approval was obtained by written consent rather than at a stockholder meeting, and the company plans to circulate an information statement to all holders of voting stock before completing the conversion.

The corporate move is secondary to the earnings numbers financially, but it adds a governance question to the investment case. The filing does not state the rationale for the proposed Nevada structure. Completion cannot occur until at least 20 calendar days after mailing of the information statement, leaving the proposed Nevada articles and bylaws as the next substantive documents for shareholders to assess.