AppLovin: The Ad Tech Underdog Outperforming Competitors

Jack Elias
300 Followers

Summary

  • AppLovin is transforming into a pure-play software company, leveraging its AI-driven AXON platform to disrupt digital advertising beyond mobile gaming.
  • The company’s advertising segment is the primary growth engine, with strong Q1 FY25 results: 71% YoY revenue growth and expanding margins.
  • The strategic divestiture of the mobile gaming business and a new focus on web-based advertising unlock a much larger total addressable market.
  • While financial discipline is strong and buybacks support EPS, I am cautious about declining R&D investment given the industry’s competitive intensity.

Close-up of woman professional with infographic report on digital tablet in office

Luis Alvarez

Introduction

AppLovin (NASDAQ:APP) delivered another set of exceptional results in the first quarter of FY25, with sustained revenue growth and continued margin expansion. The company continues to benefit from its unparalleled AXON platform, which is unlocking better returns on

This article was written by

300 Followers
Hello and welcome to my Seeking Alpha page. My name is Jack Elias, and I am a dedicated business student with a fervent passion for the world of investing. With a solid foundation in both theoretical knowledge and practical experience, I bring a unique perspective to the realm of financial analysis.My journey into the world of investing began during my undergraduate studies in Finance at Arizona State University, where I developed a keen interest in dissecting financial markets and evaluating investment opportunities. Throughout my academic tenure, I have actively sought to deepen my understanding of investment principles, honing my analytical skills through rigorous coursework and hands-on research projects.Driven by a relentless curiosity and a desire to uncover hidden gems in the market, I immerse myself in thorough research and analysis across a diverse array of companies. My overarching goal is to identify opportunities where intrinsic value diverges from market price, with a particular emphasis on companies that are undervalued relative to their fundamentals.While my research spans various industries, I have developed a specialized interest in Real Estate Investment Trusts (REITs). I firmly believe that the REIT sector presents abundant opportunities for astute investors, given its unique dynamics and potential for long-term growth. Through meticulous analysis, I aim to unearth undervalued REITs poised for substantial appreciation.In terms of my investing approach, I adhere to a fundamental philosophy rooted in rigorous analysis and a long-term perspective. I prioritize thorough due diligence, focusing on factors such as financial health, competitive positioning, and management quality. By maintaining a disciplined approach and staying attuned to market trends, I aim to generate sustainable returns for myself and my followers.Thank you for visiting my page, and I invite you to join me on this enriching journey of exploration and discovery in the world of investing.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in APP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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