AppLovin shares jump 30% after record quarterly profits

On November 5, AppLovin's shares surged nearly 30 percent after the US advertising technology firm revealed record third-quarter earnings. The board simultaneously increased its share buyback authorization by $3.2 billion. Revenue grew 55 percent to $2.18 billion in the quarter concluding September 30. Analysts had anticipated $2.07 billion.

Net income surged 72 percent to $1.44 billion. Diluted earnings per share reached $4.30, surpassing the consensus of $4.04 and $2.45 a year earlier. Adjusted EBITDA hit $1.84 billion, marking an 84 percent margin. This rally follows a tumultuous year for the stock, which plummeted over 50 percent in 2026 before the report. Gaming proved the catalyst, expanding nearly 50 percent year over year and accelerating as the company gradually introduced its next-generation AI models.

Consumer spending rose by triple digits compared to the previous year. Management disclosed that AppLovin repurchased 4.1 million shares worth $1.4 billion in the quarter, pushing the total buyback authorization to $3.6 billion. CFO Matt Stumpf attributed the heightened buying to a discrepancy between the share price and the company's intrinsic value.

Since the program's inception, AppLovin has acquired 104 million shares for $9.4 billion, averaging $90 per share. The company's guidance for the fourth quarter exceeded expectations. AppLovin expects revenue between $2.365 billion and $2.395 billion, representing a 43 to 44 percent growth. Analysts had previously estimated $2.25 billion.

The company also forecasted adjusted EBITDA between $1.995 billion and $2.025 billion. Management emphasized that the full rollout of its new AI models remains pending. Earlier this year, they had intended to open their Axon advertising platform to self-serve advertisers globally. Following the report, analysts raised their price targets. Several brokerages increased their target to $450 from $396, maintaining a Buy rating.