AppLovin shares surged after hours on Wednesday and continued to rally Thursday after the company posted third-quarter results that exceeded Wall Street expectations and signaled its AI-driven advertising platform still has room to expand. Revenue reached $2.18 billion, up 55% year over year, while earnings per share came in at $4.30, above the roughly $4.03–$4.04 analysts expected. Net income climbed 72% to $1.44 billion, and adjusted EBITDA rose 59% to $1.84 billion, reflecting an 84% adjusted EBITDA margin.
The company generated $1.4 billion in free cash flow, up sharply from $863 million in the second quarter, despite higher spending on computing power for its AI advertising models. Management said next-generation advertising models are still only partially deployed, suggesting further efficiency gains may come without proportional cost increases. AppLovin also repurchased or withheld 4.1 million Class A shares for $1.4 billion and expanded its buyback authorization by $3.2 billion to $3.6 billion.
Fourth-quarter revenue guidance of $2.365 billion to $2.395 billion topped the $2.25 billion consensus. Following the report, RBC Capital raised its price target on APP to $520 and maintained an Outperform rating. The stock jumped as much as 24% after hours, though it remains well below its prior high for the year.
For crypto markets, the event has no direct sector-specific impact; it is a traditional equity earnings story centered on AI advertising and share buybacks.
