AppLovin is the hottest stock in the market today — but what does the company actually do?
AppLovin’s stock was one of Wall Street’s darlings of 2024, gaining more than 700% last year. Investors seem to be lovin’ it again in 2025, with shares in the company up more than 30% this morning after it reported adjusted earnings per share of $1.73, crushing Wall Street’s expectations and taking the company’s market cap north of $170 billion. That makes it bigger than Uber, Pfizer, Boeing, and Starbucks.
But what does the company actually do?
Wall Street’s hottest stock has nothing to do with a fake Hawaiian driver’s license from 2007 movie “Superbad”; instead, it’s a gaming company turned software business. From the company’s 10Q in November:
“The Company is a leader in the advertising ecosystem providing an end-to-end software platform that allows businesses to reach, monetize and grow their global audiences.”
That’s not hugely enlightening, of course.
Digging deeper, the company essentially runs a marketplace-like platform where app developers can place ads to help brands reach new users that will hopefully download their apps. Indeed, AppLovin reported making money from two main ways:
Advertising: A division that used to be called “Software Platform” until yesterday, AppLovin makes the bulk of its revenue from matching advertisers with owners of digital advertising inventory “via auctions at large scale and microsecond-level speeds.” This brought in about $3.2 billion and change in 2024, some 68% of the company’s total. If a user sees an add delivered by an AppLovin network, the company gets paid.
Apps: Remember those stories where a kid spends hundreds of dollars on in-app purchases in a game? There’s a decent chance AppLovin’s technology was involved. This segment, which brought in some $1.5 billion in 2024 for the company, was described in a recent SEC filing as incorporating “fees collected from users to purchase virtual goods to enhance their gameplay experience.”
Interestingly, the company did start its journey as a public company as a gaming business, riding a Covid-era hype in online games. But recently it’s sought to boost its advertising efforts. Per AdExchanger, the company is reportedly selling off “the 10 remaining gaming studios in its portfolio” for some $900 million, helping it become what CEO Adam Foroughi called “a pure advertising platform.”
AppLovin has also been doubling down, like so many other public companies, on its AI capabilities, with senior execs talking up the company’s “self-learning” AI called “AXON” that’s based on the large first-party data that it has collected from its own gaming titles.
Wall Street’s hottest stock has nothing to do with a fake Hawaiian driver’s license from 2007 movie “Superbad”; instead, it’s a gaming company turned software business. From the company’s 10Q in November:
“The Company is a leader in the advertising ecosystem providing an end-to-end software platform that allows businesses to reach, monetize and grow their global audiences.”
That’s not hugely enlightening, of course.
Digging deeper, the company essentially runs a marketplace-like platform where app developers can place ads to help brands reach new users that will hopefully download their apps. Indeed, AppLovin reported making money from two main ways:
Advertising: A division that used to be called “Software Platform” until yesterday, AppLovin makes the bulk of its revenue from matching advertisers with owners of digital advertising inventory “via auctions at large scale and microsecond-level speeds.” This brought in about $3.2 billion and change in 2024, some 68% of the company’s total. If a user sees an add delivered by an AppLovin network, the company gets paid.
Apps: Remember those stories where a kid spends hundreds of dollars on in-app purchases in a game? There’s a decent chance AppLovin’s technology was involved. This segment, which brought in some $1.5 billion in 2024 for the company, was described in a recent SEC filing as incorporating “fees collected from users to purchase virtual goods to enhance their gameplay experience.”
Interestingly, the company did start its journey as a public company as a gaming business, riding a Covid-era hype in online games. But recently it’s sought to boost its advertising efforts. Per AdExchanger, the company is reportedly selling off “the 10 remaining gaming studios in its portfolio” for some $900 million, helping it become what CEO Adam Foroughi called “a pure advertising platform.”
AppLovin has also been doubling down, like so many other public companies, on its AI capabilities, with senior execs talking up the company’s “self-learning” AI called “AXON” that’s based on the large first-party data that it has collected from its own gaming titles.
