APP US S&P 500NASDAQ-100Russell 1000 Earnings call · transcribed from the recording
AppLovin (APP) · Q3 2026 results and valuation
Share price: $404.77 · 2026-11-11
Results Q3 2026 vs Q2 2026 · previous quarter · published 4 Nov 2026 and 5 Aug 2026
Net income up 13.6% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
+13.6%
Net income vs Q2 2026
Outlook given
Net income 1.44B vs 1.27B
Revenue +13.6%
Against the same quarter last year (Q3 2025) it is +72.2%, so it is not just seasonal.
2 · How management spoke
Typical
Less upbeat than 53% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Guidance
AppLovin still expects full-year free cash flow conversion of roughly 70 to 75% of adjusted EBITDA.
Valuation
Is AppLovin undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 10.0% growth a year (3-year revenue growth), the model's fair value is $224.27 a share — the stock trades 80% above it. Today's price assumes 17.5% growth a year.
Current price
$404.77
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+17.5% for 10 yrs
Fair value / share
$224.27
Buy below
$168.20
Price vs fair value
Overvalued 80%
Price vs buy-below price
Overvalued 141%
Management expects
Revenue +8% · from the Q3 2026 report: “Turning to our outlook for the fourth quarter of 2026, we expect revenue between $2.365 billion and $2.395 billion, representing approximately 43% to 44%…”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Rising
AppLovin manages this business EBITDA dollars in free cash flow rather than to a margin percentage and will continue to deploy dollars…
Source quote
“We manage this business EBITDA dollars in free cash flow rather than to a margin percentage and will continue to deploy dollars... Our data center cost declined as a percentage of revenue due to optimizations rolled out by our infrastructure team, even as we invested in additional compute for training our existing models and for new model development.”
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Guidance
Turning to its outlook for the fourth quarter of 2026, AppLovin expects revenue between $2.365 billion and $2.395 billion, representing approximately 43% to 44% year-over-year growth, or 8%...
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Figure
AppLovin delivered a record quarter, revenue of $2.18 billion, up 55% year over year, the largest sequential dollar step up in revenue...
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Fading
Lengthy video plus interactive end card, which is in a common ad unit, AppLovin can auto-generate the interactive end card…
Source quote
“Lengthy video plus interactive end card, which is in a common ad unit, we can auto-generate the interactive end card... So nothing has really changed there. We're not at the point where we can get a high-quality video for 30 to 60 seconds in the hand of an advertiser out of the box.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“To close, we exceeded the high end of our guidance on both revenue and adjusted diva debt, grew revenue 55% year-over-year, expanded margins, generated $1.4 billion of free cash flow,...”
“Net income grew 72% year-over-year to $1.44 billion on record revenue of $2.18 billion, up 55% year-over-year, with an industry-leading 66% net income margin and 84% adjusted EBITDA margin.”
“Revenue grew 14% sequentially and exceeded the high end of our guidance by approximately $100 million, primarily driven by the core mobile gaming business due to model improvements during the...”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 2.18B | 1.92B | +13.6% | 1.41B | +55.5% |
| Gross profit | 1.94B | 1.70B | +14.5% | 1.23B | +58.0% |
| Operating income | 1.71B | 1.49B | +14.4% | 1.08B | +58.4% |
| Net income | 1.44B | 1.27B | +13.6% | 835.5M | +72.2% |
| EPS | 4.30 | 3.76 | +14.4% | 2.45 | +75.5% |
| P/E today 26.3 | 19.6 | 39.6 | −20.0 | 87.3 | −67.7 |
Topics
Most discussed now
- As always, model gains won't land on a perfect quarterly schedule and AppLovin won't promise a cadence, but the headroom...
- People have to go, this is a bigger ad tech company that's sort of independent ad tech without a first...
- When you've got this market that's in the tens of billions, AppLovin can go get new supply.
- What you've seen with its team and the opportunity that AppLovin put in front of it with these different business...
Faded since Q2 2026
- Fading Lead gen business is still work in progress.
- Fading Advertiser spend set another record, finishing 28% above Q4 2025 levels.
- Fading AppLovin's pace of meaningful model improvement was lighter than normal during the quarter and the next step-up in model performance...
- Fading Adjusted EBITDA was $1.61 billion, up 58% year-over-year, with margins expanding approximately 300 basis points from the same period last...
Latest announcements
Official filings, newest first.
- Results of operations; Shareholder vote results · SEC 8-K
- Results of operations · SEC 8-K
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K
- Results of operations · SEC 8-K