Applovin's blowout earnings forecast helps send its stock soaring

By Emily Bary

Company also boosts its buyback program

App-monetization company Applovin Corp. had a strong holiday season that helped power it to better-than-expected results for the latest quarter.

Shares surged 17% in Wednesday's extended session, as Applovin (APP) also blew past estimates with its outlook for the current quarter.

The company generated fourth-quarter revenue of $953 million, up 36% from a year before and ahead of the FactSet consensus view, which was for $929 million.

Applovin notched net income of $172 million, or 49 cents a share, whereas it recorded a loss of $80 million, or 21 cents a share, in the year-earlier period. Analysts had been modeling 35 cents in earnings per share.

The business benefited from strength around the holidays, general growth in the mobile-app advertising market and bidding enhancements, Applovin said in its shareholder letter.

"The combination of these factors is helping the market improve advertising efficiency, which we believe will lead to continued compounding growth for our partners," Applovin said.

The company expects $955 million to $975 million in total revenue for the first quarter, along with $475 million to $495 million in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda). The FactSet consensus was for $912 million and $440 million, respectively.

Applovin announced Wednesday that it would also be boosting its stock-buyback program by $1.25 billion. "We remain focused on delivering long-term shareholder value through a combination of share management and free-cash-flow generation," it said.

Shares of peer Unity Software Inc. (U) were up about 1% in aftermarket action Wednesday.

-Emily Bary

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02-14-24 2038ET

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