AppLovin’s shares jumped as much as 15% in after-hours trading following a strong earnings report and the announcement that it’s selling its mobile gaming division.
Here’s a breakdown of how AppLovin performed versus analyst estimates from LSEG:
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Earnings: $1.67 per share (expected: $1.45)
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Revenue: $1.48 billion (expected: $1.38 billion)
The company also revealed that it’s selling its mobile gaming business to Tripledot Studios for $400 million in cash. As part of the deal, AppLovin will acquire about a 20% stake in Tripledot, known for mobile titles like Sudoku Friends, Puzzletime, and Solitaire Classic. The deal is projected to close in Q2 2025.
Despite the strong Q1 results, AppLovin gave a lower-than-expected revenue forecast for the second quarter, projecting sales between $1.2 billion and $1.22 billion, while analysts were expecting $1.38 billion.
In Q1, AppLovin recorded $576 million in net income, or $1.67 per share, significantly higher than $234 million (67 cents per share) in Q1 2024. Operating costs for the quarter totaled $820.55 million, up 14% year over year.
Back in February, the company said it planned to sell its apps business for a total estimated value of $900 million, including $500 million in cash. AppLovin has long operated with two key divisions—advertising and apps (mainly its acquired gaming studios). However, the surge in advertising growth, driven by advances in AI, has made the apps division less critical.
In Q1, revenue from its apps segment was $325 million, marking a 14% drop from the year before. Meanwhile, advertising revenue soared to $1.16 billion, up from $678 million a year earlier.
Additionally, AppLovin published a blog post revealing its interest in partnering with ByteDance’s TikTok. Rather than buying TikTok’s U.S. operations outright, AppLovin proposed a merger to oversee TikTok’s operations outside of China. The company described the move as a strategic collaboration aimed at enhancing data security and content management.
CEO Adam Foroughi told CNBC that their offer for TikTok is stronger than competing bids. Although he acknowledged that the deal is a “long shot,” he said AppLovin is known for taking bold moves. Under the proposal, AppLovin would manage TikTok’s U.S. presence and international operations (excluding China) to help resolve national security concerns surrounding data and algorithm bias.
