AppLovin (APP, Financials) shares jumped 33.75% to $508.68 in early trading Thursday after the company reported fourth-quarter earnings that exceeded Wall Street estimates and announced plans to divest its Apps business.
The firm exceeded forecasts by $0.47 with profits per share of $1.73. Rising 44% year over year to $1.37 billion, revenue exceeded analyst estimates by $110.2 million. With adjusted profits before interest, taxes, depreciation, and amortization rising 78% to $848 million, the adjusted EBITDA margin came out to be 62%.
Reflecting a 78% margin, AppLovin's advertising sector produced $999 million in sales and $777 million in adjusted EBITDA. With an adjusted EBITDA of $71 million, the company's Apps business—which it intends to sell—generated $373 million in income, down 1% from a year earlier.
Comprising cash of $500 million and a minority equity investment in the merged private firm, the corporation inked an exclusive term sheet to sell its Apps division for an estimated $900 million. Given regulatory clearance, the agreement is projected to finalize in the second quarter of 2025.
AppLovin said demand from advertisers outside of gaming is rising as early e-commerce and other sectors demonstrate success. To enroll additional advertisers at scale, the business intends to extend self-service capabilities.
With adjusted EBITDA between $805 million and $825 million, the company's first quarter of 2025 financial projection shows expected advertising income between $1.03 billion and $1.05 billion.
