A maker of AI-powered advertising software, AppLovin helps app developers and businesses reach, monetize, and grow their audiences through tools like Axon Ads Manager, MAX, Adjust, and Wurl. Founded in 2012 in Palo Alto by Adam Foroughi, John Krystynak, and Andrew Karam, the company was bootstrapped for years before going public. Its name was inspired by Bloglovin', a content-organizing site — not the Superbad character, despite the rumors.
AppLovin's Q2 revenue rose 53% to $1.92B as pricing gains on its ad platform more than offset a decline in ad volume.
Pricing power on the Axon Ads Manager accelerated again, pushing up 58%. rose 53% to $1.92 billion and climbed 55% to $1.27 billion, even as installation volume fell. The company is generating more profit from fewer ads, but the volume decline is deepening.
Key takeaways
rose 53% to $1.92 billion, driven by a 58% increase in on the Axon Ads Manager platform, which more than offset a decline in installation volume.
rose 55% to $1.27 billion, and diluted rose 57% to $3.76, as total costs and expenses grew more slowly than .
widened 1.6 percentage points to 77.7%, though it narrowed 0.5 points sequentially from Q1 2026.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 53% YoY to $1.92B driven by 58% higher net revenue per AppLovin Ads installation.
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grew 53% to $1.92B in Q2 and 56% to $3.77B in H1, primarily from improved AppLovin Ads performance with net revenue per installation up 58% and 75%, respectively.
expanded to 83.9% in Q2 (from 80.9%) and 84.2% in H1, as growth outpaced cost increases.
Research and development expense more than doubled , rising 127% to $113 million, driven by higher for engineering talent.
was $869 million for the quarter, up 12.5% but down 33% sequentially from Q1 2026, while the company repurchased $500 million of stock during the quarter.
Cash and equivalents rose to $3.05 billion, up 156% from a year ago, while remained essentially flat at $3.52 billion.
What changed
The 58% increase in accelerated from the 75% rise reported for the first half of 2025, but installation volume, which grew 8% in Q2 2025 and then declined 1% in Q3 2025 and 18% in Q1 2026, continued to fall — the filing does not state the exact volume decline for Q2 2026, but the pricing gain needed to offset it implies a further drop.
The motion to dismiss the consolidated securities class action was fully briefed by February 2026, moving the case closer to a ruling that could determine its trajectory, though the company still cannot estimate potential loss exposure.
Research and development expense more than doubled for a second consecutive quarter, rising 127% after a 67% increase in Q1 2026, as the company continues to invest heavily in engineering talent through .
What to watch
Whether installation volume stabilizes or continues to decline, and at what point the pricing gains on Axon Ads Manager can no longer fully offset the volume drop.
The ruling on the motion to dismiss in the consolidated securities class action, now that briefing is complete, and any subsequent disclosure of potential loss exposure.
How the company deploys its $3.05 billion cash balance — whether toward debt reduction on the $3.52 billion in variable-rate debt, further share repurchases, or acquisitions.
The trajectory of R&D expense and whether the doubling of spending on engineering talent begins to translate into renewed installation volume growth or new streams outside mobile gaming.
Research and development expense more than doubled in Q2 (+127%) and H1 (+93%), driven by higher for engineering talent.
General and administrative expense fell 27% in Q2 and 21% in H1, helped by lower bad debt and professional services costs.
reached $2.15B in H1, up from $1.59B, while $1.5B was deployed for share repurchases, with $1.8B remaining under the program.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information presented in Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes in market risk from the information presented in Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025.
Company faces securities and derivative suits over ad-solution and growth statements; motions to dismiss are pending.
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A consolidated securities class action (Brownback Action) alleges false statements about advertising solutions and financial growth from Nov 2024–Mar 2025.
An amended complaint filed Sep 2025 added Basil Shikin as a defendant; the was fully briefed by Feb 2026.
Shareholder derivative suits allege fiduciary breaches, , and waste tied to the same advertising and growth claims.
The derivative actions are consolidated and stayed pending the ruling on the in the Brownback Action.
The company believes the allegations lack merit and intends to contest them vigorously.
No loss estimate is provided because the outcome is not determinable and potential exposure cannot be reasonably estimated.
Key risks include reliance on third-party platforms, AI and privacy regulation, rapid growth management, and concentrated voting control.
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Changes to policies by Apple, Google, or Meta—such as privacy frameworks or tracking restrictions—could reduce the effectiveness of our advertising solutions and harm .
Evolving global privacy, data protection, and AI regulations (e.g., GDPR, CCPA, EU AI Act) may increase compliance costs, limit data use, and expose us to significant penalties.
Our recent rapid growth, driven by the Axon AI advertising system, may not be sustainable; failure to manage expansion or integrate acquisitions like Adjust and Wurl could strain operations.
We depend on our co-founder/CEO and a lean organizational structure; losing key personnel or failing to maintain our culture could disrupt strategy and innovation.
The multi-class stock structure and Voting Agreement concentrate approximately 67% of voting power with insiders, limiting shareholder influence on major corporate decisions.
We face intense competition from major platforms (Meta, Google, Amazon) and risk client concentration, with no long-term client agreements and significant reliance on the mobile gaming ecosystem.