AppLovin shares jump 31% after revenue grows 55% and beats forecasts
Key Facts
AppLovin shares jumped 31% on Thursday, November 5, after the marketing platform reported revenue and earnings above analyst expectations, according to The Associated Press. The gain followed third-quarter results for the period ended September 30, 2026, which included strong growth in revenue and earnings alongside higher guidance for the next quarter. Revenue reached $2.185 billion, up 55% year over year, the company said. Diluted earnings per share came to $4.30, exceeding the $4.07 estimate cited by Benzinga. The agency said the stock rose after the company beat expectations for both revenue and earnings.
Earnings improved alongside sales growth, with net income reaching $1.439 billion in the third quarter, compared with $836 million in the same period of 2025, an annual increase of 72%. Net income margin was 66%, according to the official results statement. Adjusted EBITDA was $1.842 billion, up 59% from $1.158 billion a year earlier. The figures show earnings expanding as revenue grew during the quarter, while the company statement said net cash from operating activities and free cash flow were both $1.4 billion. The cash generated provided financial support for the board's decision to raise the share repurchase authorization.
The board approved a $3.2 billion increase in the share repurchase authorization, bringing the current total authorization to $3.6 billion at the end of October, the company said. During the third quarter, AppLovin repurchased or withheld 4.1 million Class A shares at a total cost of $1.4 billion. The company said in its statement that the board approved the increase, "bringing our current total share repurchase authorization to $3.6 billion at the end of October." The quarterly execution shows the company used some of its cash to repurchase or withhold shares while raising the amount available under the program. Open sources for this story did not establish specific plans to expand in e-commerce.
Analyst commentary attributed part of the operating momentum to a model update in the core gaming business. Wedbush said the update lifted growth in that business to nearly 50% year over year in the third quarter, and that its rollout is ongoing. BTIG said the main driver of the quarterly results was the partial rollout of a hybrid model combining the recommendation system and large language models. The published assessments thus linked gaming business growth to the new model's deployment, as the rollout continued after a partial implementation during the quarter. This context is tied to the reported results, while the full rollout's impact remains among the catalysts Investing.com cited for the coming periods.
The reaction extended to analyst price targets; Wedbush raised its target to $600 from $560, while maintaining its Outperform rating, Benzinga reported. BTIG raised its target to $450 from $396, reiterating its Buy rating. The changes came on November 5 after the third-quarter results. The stock's move differed from reactions following earlier reports: Investing.com cited declines of 20.02% after the second-quarter 2026 results and 22.42% after the fiscal 2025 fourth-quarter results. The comparison puts November's jump in the context of the stock's varying responses to earnings announcements, without changing the reported moves after the prior periods.
AppLovin provided a fourth-quarter revenue range of $2.365 billion to $2.395 billion, compared with an analyst estimate of $2.25 billion cited by Benzinga. The low end of the company's range is above that estimate, while the high end is $2.395 billion. The company also forecast adjusted EBITDA of $1.995 billion to $2.025 billion. The guidance puts the coming quarter at the center of investor attention after third-quarter results beat expectations. Catalysts identified by Investing.com include the fourth-quarter report, the full rollout of the model architecture and expansion beyond gaming; the site linked a test of whether growth continues to accelerate to monitoring the partial rollout and its progress.