AppLovin Reports Q4 Earnings Beat, Plans to Divest Apps Business

AppLovin, the mobile advertising powerhouse, has just reported a stellar Q4, with earnings and revenue that sailed past analysts' expectations. The company also announced plans to divest its apps business, a strategic move that could unlock significant growth potential. Let's dive into the details and explore what this means for investors.

Q4 Earnings Beat

AppLovin reported earnings per share of $1.73, well above the expected $1.24, and revenue of $1.37 billion, surpassing the projected $1.26 billion. Net income more than tripled to $599.2 million, or $1.73 per share, compared to $172.3 million, or 51 cents per share, a year earlier. Revenue jumped 43% from $953.3 million a year earlier.

The company's strong performance was driven by its software platform business, which includes AppDiscovery, MAX, and Adjust. Revenue from this segment surged 66% year-over-year, while adjusted EBITDA soared 79% to $6.53 billion. The apps business, however, saw only a 1% increase in revenue.



Divestment of Apps Business

AppLovin announced plans to divest its apps business, a strategic move that could help the company focus on its core strengths and unlock new growth opportunities. The divestment is expected to be completed in the first half of 2025, with the company exploring various options, including a sale or spin-off.

The decision to divest the apps business comes as AppLovin seeks to reduce its dependency on Apple's IDFA (Identifier for Advertisers), which has become less reliable due to Apple's privacy changes. By focusing on its platform business, AppLovin can diversify its revenue streams and mitigate the impact of IDFA-related challenges.

Looking Ahead

AppLovin's strong Q4 results and plans to divest its apps business have set the stage for an exciting 2025. The company expects first-quarter revenue in the range of $1.36 billion to $1.39 billion, with an EBITDA margin expanding to 63.5%. Analysts remain bullish on the company's outlook, with several firms reaffirming their buy ratings and raising price targets.

As an investor, it's essential to stay informed about AppLovin's progress and the broader mobile advertising landscape. Keep an eye on the company's stock price and any developments related to its divestment plans. With its strong platform business and strategic focus, AppLovin is well-positioned to continue its impressive growth trajectory.