AppLovin Corporation

AppLovin Corporation had a disappointing quarter as it delivered significantly wider-than-expected losses and a negative bottom-line even though its revenues were above Wall Street expectations. Its results in the quarter included the performance of the software platform, which increased 24% year over year. For the first quarter of the upcoming year, they anticipate total revenue and EBITDA to be roughly flat compared to the fourth quarter which implies another possible loss-making quarter. The management is working on AXON 2, another new platform and is upgrading to its core technology, AXON, which may have a profound effect on both the company’s operations and business partners. Moreover, AppLovin’s marketing solutions are currently being actively extended to the Connected TV device. This area of advertising is both larger and expanding more quickly. In the upcoming years, they anticipate this to grow rapidly and play a significant role in their software platform. We give AppLovin Corporation a ‘Hold’ rating with a revised target price.