Highlights

  • Second quarter 2026 revenue rose 53% to $1.92 billion, while diluted earnings per share increased to $3.76 from $2.39.
  • Net income was $1.27 billion, and non-GAAP adjusted EBITDA reached $1.61 billion, an 83.9% margin.
  • The company repurchased 3.3 million Class A shares for $1.5 billion in six months, with $1.8 billion of authorization remaining.
  • Cash stood at $3.1 billion against $3.6 billion of senior unsecured notes, and securities class action litigation remains pending.

AppLovin (NASDAQ:APP) shares were trading near their 52-week low at USD 266.74 on October 21, 2026, down 2.10%. The advertising technology company reported second quarter 2026 results in a Form 10-Q filed on August 5, 2026, with higher revenue and earnings, continued share repurchases and pending securities litigation.

Based in Palo Alto, California, AppLovin is a Delaware corporation that says it provides end-to-end, AI-powered advertising solutions to help businesses reach, monetize and grow their audiences. Founded in 2011, it operates as a single reportable segment through AppLovin Ads, MAX, Adjust and Wurl. AppLovin Ads makes up the vast majority of revenue, MAX serves publishers selling app advertising inventory, Adjust provides measurement and analytics, and Wurl supports connected TV distribution. Its fiscal year ends December 31.

Revenue Up 53%, Net Margin Near 66%

Revenue for the quarter ended June 30, 2026 was $1.92 billion, up $664.9 million from $1.26 billion a year earlier. The company attributed the increase mainly to better AppLovin Ads performance: net revenue per installation rose 58%, partly offset by a 2% decline in installation volume. For the six months, revenue grew 56% to $3.77 billion, with revenue per installation up 75% and installation volume down 10%.

Income from operations rose to $1.49 billion from $957.7 million, and operating expenses were $429.4 million versus $301.1 million. Research and development expense more than doubled to $99.9 million, while general and administrative expense fell to $40.3 million from $55.0 million. Stock-based compensation climbed to $85.8 million from $34.6 million. Income tax expense was $239.0 million versus $112.1 million.

Net income was $1.27 billion versus $819.5 million, which included income from discontinued operations in the prior-year quarter after the sale of the Apps business on June 30, 2025. Diluted EPS was $3.76 compared with $2.39. Adjusted EBITDA, a non-GAAP measure, grew to $1.61 billion from $1.02 billion.

Cash Returns, Debt and Litigation

Operating cash flow for the six months was $2.16 billion, compared with $1.60 billion, and free cash flow, a non-GAAP measure, was $2.15 billion. Financing activities used $1.58 billion, mainly for share repurchases. The company repurchased and retired 3.3 million Class A shares, and $1.8 billion remained available under a program that has no expiration date and can be modified or suspended at any time.

Cash and cash equivalents were $3.1 billion at June 30, 2026. The company had $3.6 billion of senior unsecured notes outstanding, plus a $1.0 billion unsecured revolving credit facility. Management believes cash, operating cash flow and, if needed, revolver capacity will cover working capital and capital expenditure needs for at least 12 months, though it noted it could seek additional financing sooner than it anticipates.

The filing details putative securities class action complaints filed beginning in March 2025 against the company and certain executives. The consolidated case alleges misleading statements about its advertising solutions and financial growth over a class period from November 7, 2024 through March 27, 2025. A motion to dismiss has been fully briefed since February 2026, and related shareholder derivative suits are stayed. The company says the allegations lack merit, but it cannot estimate a range of possible loss.

Investment Priorities and Risks Cited

The company said it expects to keep investing in its technology, including engineering talent and datacenter costs, as it enhances its Axon AI recommendation system. It plans to expand into verticals outside gaming, such as e-commerce and connected TV, and to explore strategic transactions opportunistically.

Management pointed to risks including changes in Apple App Store and Google Play policies, an evolving data protection, privacy and AI regulatory landscape, concentration of revenue sources, the lack of long-term client agreements and the possibility of short seller reports. The filing includes no quantitative revenue or earnings guidance.