AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Repeated monetization gains and integrated auctions support a current technology advantage. Exclusive data access, causal network effects and competitor inferiority are not demonstrated.
durability · 2/4 · Improvements persisted across multiple reporting periods, but continued innovation is necessary. Intellectual-property protections do not establish a durable exclusionary barrier, and clients can use alternatives.
customer dependency · 1/4 · Automation creates utility, but disclosed multihoming and cancellation rights show weak contractual dependency. Material migration costs or indispensable access are not established.
erosion resilience · 2/4 · Revenue and monetization continued growing despite declining installations, demonstrating some operating resilience. This does not prove resilience to competitor parity or platform-policy disruption. Historical interruptions are disclosed without quantified business harm.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Net revenue per installation rose 22% in 2024, 72% in 2025 and 75% in first-half 2026. These are strong repeated realized monetization outcomes, although they do not isolate price, mix or take-rate changes.
retention · 2/4 · Multi-period revenue growth despite cancelable contracts provides indirect evidence of continuing demand. Multihoming and falling installation volumes temper the assessment; aggregate growth cannot distinguish retained customers from new business.
margin resilience · 3/4 · Cost of revenue fell from 19% of revenue in 2023 to 12% in 2025 and from 13% to 11% in the first-half comparison, despite increasing infrastructure expenses. This demonstrates gross-margin resilience during growth, without proving recession resilience or independently establishing a moat.
contractual freedom · 2/4 · Real-time competitive auctions and absence of long-term advertising commitments support flexible market-based pricing. Substantially all contracts are cancelable, limiting enforceable pricing power; unilateral fee-reset rights are not supplied.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- netDebtEbitGrade
- 95.06
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Net debt / operating income (x)
- 0.25
- Interest coverage (x)
- 20.06
- Current ratio (x)
- 3.32
Capital allocation—
Missing required inputs: cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 60.45
- 3-year average dilution (%)
- -3.00
- 3-year average SBC / revenue (%)
- 7.58
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flow rose to approximately $4.0 billion in 2025, stock-based compensation declined, the Apps sale closed and actual repurchases occurred in 2025 and 2026. Reported impairments, continuing equity awards and substantial cloud commitments make the record mixed. Repurchases alone do not establish value creation, and investment-level returns are unavailable.
incentive alignment · 2/4 · Actual equity-ownership compliance, equity-heavy pay and lack of annual cash bonuses support alignment. One-year RSU vesting and historical PSU vesting tied to stock appreciation limit evidence of durable operating-performance alignment. Individual economic ownership percentages are missing.
execution · 3/4 · Repeated revenue and monetization growth, increased operating cash generation and the completed Apps divestiture demonstrate strong execution. Product effectiveness is inferred partly from aggregate operating outcomes rather than controlled advertiser comparisons; installation declines remain a counterweight.
governance · 2/4 · Disclosed independent board and committee practices and the actual April 2026 chairperson appointment strengthen oversight. The voting agreement still concentrates influence over directors and major transactions, limiting minority-stockholder control. These are current structural disclosures, not assumed governance failures.
Evidence
Comparison of Our Results of Operations for the Twelve Months Ended December 31, 2025, 2024, and 2023 Revenue Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Revenue $ 5,480,717 $ 3,224,058 $ 1,841,762 70 % 75 % For the twelve months ended December 31, 2025, our revenue increased by $2.3 billion, or 70%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 3% and net revenue per installation increased 72% compared to the prior year period.
MD&A / 2025 revenue and installation metrics · Filed 19/02/2026
For the twelve months ended December 31, 2024, our revenue increased by $1.4 billion, or 75%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 50% and net revenue per installation increased 22% compared to the prior year period.
MD&A / 2024 revenue and installation metrics · Filed 19/02/2026
Comparison of Our Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025 Revenue Three Months Ended June 30, 2025 to 2026 % Change Six Months Ended June 30, 2025 to 2026 % Change 2026 2025 2026 2025 (In thousands, except percentages) Revenue $ 1,923,686 $ 1,258,754 53 % $ 3,766,135 $ 2,417,728 56 % Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 For the three months ended June 30, 2026, our revenue increased by $664.9 million, or 53%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 58%, partially offset by a decrease in the volume of installations of 2%.
MD&A / second-quarter 2026 revenue and installation metrics · Filed 05/08/2026
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 For the six months ended June 30, 2026, our revenue increased by $1.3 billion, or 56%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 75%, partially offset by a decrease in the volume of installations of 10%.
MD&A / first-half 2026 revenue and installation metrics · Filed 05/08/2026
Many developers who integrate MAX have experienced a measurable increase in their average revenue per daily active user over traditional monetization tools and save countless hours because they are able to automate manual monetization work through its advanced feature set.
Business / claimed MAX publisher monetization and automation benefits · Filed 19/02/2026
MAX includes the following features: •Advanced in-app bidding technology: MAX’s competitive auctions happen in real time with most bidding platforms in the industry bidding simultaneously for developers’ inventory at high volume.
Business / MAX real-time competitive auctions · Filed 19/02/2026
•Enhance and extend AI-based technologies: As we increase our scale and reach, our customers benefit from compounding improvements to Axon AI, our advertising recommendation engine, which in turn improves the efficacy and growth of our advertising solutions.
Growth strategy / claimed scale-driven Axon AI improvements · Filed 19/02/2026
We seek to accomplish that objective by establishing intellectual property rights in and protecting those assets through a combination of registered and unregistered trademarks, copyrights, trade secrets, license agreements, confidentiality procedures, non-disclosure agreements with third parties, and other contractual measures.
Business / intellectual-property protection methods · Filed 19/02/2026
Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual property or that it will provide any competitive advantage.
Intellectual property / uncertain protection and competitive benefit · Filed 19/02/2026
Advertisers often engage with numerous advertising platforms and networks to purchase advertisements and developers often engage with numerous tools to market and monetize their apps.
Competition / advertiser and developer multihoming · Filed 19/02/2026
These companies vary in size and include Meta, Google, Amazon, and Unity Software as well as various private companies, several of which are also our partners and clients.
Competition / named competitors, partners and clients · Filed 19/02/2026
Substantially all of the Company's contracts with customers are cancelable at any time.
Revenue recognition / customer contract cancellation rights · Filed 05/08/2026
Additionally, we rely on certain third-party providers for our increasing network capacity and computing power needs, and if we fail to properly anticipate our needs or secure sufficient capacity at a reasonable cost, our ability to scale and grow our business, or our profitability, could be negatively impacted.
Risk factors / third-party infrastructure capacity and cost dependence · Filed 05/08/2026
•changes that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes to policies by mobile operating system and third-party platform providers, and the degree to which users opt in or opt out of certain types of ad targeting as a result of changes and controls implemented in connection with such policy changes and with the E.U.
Risk factors / operating-system and platform-policy changes · Filed 19/02/2026
Cost of revenue Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Cost of revenue $ 665,140 $ 520,613 $ 356,613 28 % 46 % Percentage of revenue 12 % 16 % 19 % Cost of revenue in 2025 increased by $144.5 million, or 28%, compared to 2024, due primarily to an increase of $150.2 million in expenses associated with operating our network infrastructure driven by the growth in our operations.
MD&A / 2023–2025 cost of revenue and infrastructure expenses · Filed 19/02/2026
Cost of revenue Three Months Ended June 30, 2025 to 2026 % Change Six Months Ended June 30, 2025 to 2026 % Change 2026 2025 2026 2025 (In thousands, except percentages) Cost of revenue $ 225,801 $ 155,076 46 % $ 429,433 $ 306,756 40 % Percentage of revenue 12 % 12 % 11 % 13 % 23 Table of Contents Cost of revenue in the three months ended June 30, 2026 increased by $70.7 million, or 46%, compared to the same period in the prior year, due primarily to an increase of $52.1 million in expenses associated with operating our network infrastructure driven by the growth in our operations.
MD&A / 2026 cost of revenue ratios and infrastructure expenses · Filed 05/08/2026
As is common in the advertising ecosystem, our clients do not have long-term advertising commitments with us.
Risk factors / absence of long-term advertising commitments · Filed 27/02/2025
The following table summarizes our cash flows for the periods indicated (all periods include cash flows from continuing and discontinued operations): Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 3,971,094 $ 2,099,011 $ 1,061,510 Net cash provided by (used in) investing activities $ 358,428 $ (106,754) $ (77,829) Net cash used in financing activities $ (2,593,069) $ (1,749,844) $ (1,562,791) Operating Activities Net cash provided by operating activities was $4.0 billion for 2025, primarily consisting of $3.3 billion of net income, adjusted for certain non-cash items, such as $210.4 million of stock-based compensation, $194.8 million of amortization, depreciation and write-offs, $188.9 million of goodwill impairment, $50.0 million of impairment of non-marketable equity securities, and a net increase in the operating assets and liabilities of $77.9 million, partially offset by a gain from the divestiture of our Apps business, net of transaction costs, of $106.2 million.
Liquidity / operating cash generation, compensation and impairments · Filed 19/02/2026
During the six months ended June 30, 2026, the Company repurchased and subsequently retired 3,275,252 shares of Class A common stock for an aggregate amount, including commissions, taxes, and fees, of $1.5 billion.
Equity / completed first-half 2026 repurchases and retirements · Filed 05/08/2026
Stock-based Compensation Stock-based compensation included in the Company's consolidated statements of operations was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 1,425 $ 4,799 $ 3,834 Sales and marketing 34,055 76,824 69,903 Research and development 114,463 229,577 216,236 General and administrative 58,015 46,231 52,578 Stock-based compensation from continuing operations 207,958 357,431 342,551 Stock-based compensation from discontinued operations 3,663 19,024 20,556 Total stock-based compensation $ 211,621 $ 376,455 $ 363,107 As of December 31, 2025, the total unrecognized stock-based compensation was $489.0 million, which is expected to be recognized over a weighted-average period of 1.95 years.
Stock-based compensation / recognized expense and unrecognized awards · Filed 19/02/2026
In August 2024, the Company amended its agreement with the provider, committing to spending a minimum of $1.3 billion over a three-year period.
Commitments / three-year cloud spending obligation · Filed 05/08/2026
By June 30, 2026, the Company had made payments of $953.5 million towards this commitment.
Commitments / cloud payments through June 2026 · Filed 05/08/2026
What We Do What We Don’t Do RSUs as primary component of executive compensation to maintain stockholder alignment No executive base salary increases since initial public offering Independent compensation consultant advises on executive and outside director compensation No annual cash bonus program for executive officers Equity ownership guidelines exceeded by all officers and directors No “Golden Parachute” tax reimbursements Compensation Committee oversees compensation for key engineering talent in addition to executive officers No single-trigger change of control acceleration for executive officers Hedging and pledging limitations in our insider trading policy No “evergreen” increases to our equity plans for 2026 AppLovin Corporation 2 2026 Proxy Statement Table of Contents PROPOSAL NO.
Compensation highlights / equity ownership and compensation practices · Filed 21/04/2026
In October 2025, the Company issued equally-sized RSU awards, vesting over one year, to each of Messrs.
Executive compensation / issued October 2025 RSUs and one-year vesting · Filed 21/04/2026
Each of our executive officers meaningfully exceeds the requirements of our Equity Ownership Guidelines.
Executive compensation / actual compliance with equity ownership guidelines · Filed 21/04/2026
For example, the “compensation actually paid” in each of 2023 and 2024 was impacted by certain grants of PSUs in 2023 that fully vested based on stock price appreciation achieved during 2023 and 2024.
Pay versus performance / historical PSU vesting based on stock appreciation · Filed 21/04/2026
[2] https://www.sec.gov/ix?doc=/Archives/edgar/data/0001050606/000119312523149534/d650502d8k.htm; https://www.sec.gov/ix?doc=/Archives/edgar/data/1649744/000119312525133351/d93898d8k.htm AppLovin Corporation 55 2026 Proxy Statement Table of Contents Instead, we maintain the following governance practices: •a majority of the members of our Board of Directors are independent; •all members of our Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee are independent; •we have an independent Chairperson to help maintain a strong, independent, and active board, and previously utilized a lead independent director role; •our independent directors meet regularly in executive sessions—without non-independent directors or management present—following Board of Directors and committee meetings; and •we conduct annual performance evaluations of the Board and all Board committees.
Governance / independent board majority, committees and evaluations · Filed 21/04/2026
In April 2026, in connection with a periodic review of its leadership structure, the Board appointed Craig Billings as Chairperson of the Board.
Board leadership / April 2026 chairperson appointment · Filed 21/04/2026
Foroughi and Mr. Chen. As a result, the Voting Agreement Parties will collectively be able to determine or significantly influence any action requiring the approval of our stockholders, including the election of our board of directors, the adoption of amendments to our certificate of incorporation and bylaws, and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction.
Governance risks / voting agreement and concentrated control · Filed 05/08/2026
On June 30, 2025, we completed the sale of our Apps business.
Business / completed June 2025 Apps divestiture · Filed 19/02/2026
We also continued to deliver value for stockholders, repurchasing $2.2 billion of our Class A common stock throughout the year and increasing our repurchase program authorization by $3.2 billion in October.
Stockholder letter / completed 2025 share repurchases · Filed 21/04/2026
We have in the past experienced, and may in the future experience, interruptions in the availability or performance of our offerings from time to time.
Infrastructure risks / historical availability or performance interruptions · Filed 05/08/2026
