AppLovin Corp

Previous wording

We define Adjusted EBITDA for a particular period as net income adjusted for loss (income) from discontinued operations, net of income taxes, interest expense, other (income) expense, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation, transaction-related expense, restructuring costs, and non-operating foreign exchange gain, as we believe these items are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.

Current wording

We define Adjusted EBITDA for a particular period as net income adjusted for loss from discontinued operations, net of income taxes, interest expense, other (income) expense, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation, transaction-related expense and other, restructuring costs (benefits), and non-operating foreign exchange gain, as we believe these items are not reflective of our core operating performance. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue for the same period.

Previous wording

The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for the three and six months ended June 30, 2026 and 2025, and a reconciliation of net income to Adjusted EBITDA:

Current wording

The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2026 and 2025, and a reconciliation of net income to Adjusted EBITDA:

Previous wording

We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payment of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free Cash Flow also reflects cash flows from both continuing and discontinued operations. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

Current wording

We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment and principal payments of finance leases. We use Free Cash Flow to help manage the health of our business, prepare budgets and for capital allocation purposes. We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free Cash Flow also reflects cash flows from both continuing and discontinued operations. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

Previous wording

The following table provides our Free Cash Flow for the six months ended June 30, 2026 and 2025, and a reconciliation of net cash provided by operating activities to Free Cash Flow:

Current wording

The following table provides our Free Cash Flow for the nine months ended September 30, 2026 and 2025, and a reconciliation of net cash provided by operating activities to Free Cash Flow:

Previous wording

In this section, we discuss the results of our operations for the three and six months ended June 30, 2026 and 2025.

Current wording

In this section, we discuss the results of our operations for the three and nine months ended September 30, 2026 and 2025.

Previous wording

Comparison of Our Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of Our Results of Operations for the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

For the three months ended June 30, 2026, our revenue increased by $664.9 million, or 53%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 58%, partially offset by a decrease in the volume of installations of 2%.

Current wording

For the three months ended September 30, 2026, our revenue increased by $779.8 million, or 55%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 55% and the volume of installations increased 2%.

Previous wording

For the six months ended June 30, 2026, our revenue increased by $1.3 billion, or 56%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 75%, partially offset by a decrease in the volume of installations of 10%.

Current wording

For the nine months ended September 30, 2026, our revenue increased by $2.1 billion, or 56%, compared to the same period in the prior year due primarily to improved AppLovin Ads performance, where net revenue per installation increased 68%, partially offset by a decrease in the volume of installations of 7%.

Previous wording

Cost of revenue in the three months ended June 30, 2026 increased by $70.7 million, or 46%, compared to the same period in the prior year, due primarily to an increase of $52.1 million in expenses associated with operating our network infrastructure driven by the growth in our operations.

Current wording

Cost of revenue in the three months ended September 30, 2026 increased by $65.9 million, or 38%, compared to the same period in the prior year, due primarily to an increase of $53.6 million in expenses associated with operating our network infrastructure driven by the growth in our operations.

Previous wording

Cost of revenue in the six months ended June 30, 2026 increased by $122.7 million, or 40%, compared to the same period in the prior year, due primarily to an increase of $92.0 million in expenses associated with operating our network infrastructure driven by the growth in our operations.

Current wording

Cost of revenue in the nine months ended September 30, 2026 increased by $188.6 million, or 39%, compared to the same period in the prior year, due primarily to an increase of $145.5 million in expenses associated with operating our network infrastructure driven by the growth in our operations.

Previous wording

Sales and marketing expenses in the six months ended June 30, 2026 increased by $17.8 million, or 17%, compared to the same period in the prior year, due primarily to an increase of $34.0 million in advertising and marketing program costs, partially offset by a decrease of $18.8 million in personnel-related expenses related to a decrease in stock-based compensation-related payroll costs.

Current wording

Sales and marketing expenses in the three months ended September 30, 2026 increased by $20.2 million, or 42%, compared to the same period in the prior year, due primarily to an increase in advertising and marketing program costs.

Previous wording

Sales and marketing expenses in the three months ended June 30, 2026 increased by $16.5 million, or 35%, compared to the same period in the prior year, due primarily to an increase of $17.2 million in advertising and marketing program costs, partially offset by a decrease of $3.5 million in personnel-related expenses related to a decrease in stock-based compensation-related payroll costs.

Current wording

Sales and marketing expenses in the nine months ended September 30, 2026 increased by $38.1 million, or 25%, compared to the same period in the prior year, due primarily to an increase of $58.7 million in advertising and marketing program costs, partially offset by a decrease of $22.9 million in personnel-related expenses related to a decrease in stock-based compensation-related payroll costs.

Previous wording

Research and development expenses in the three months ended June 30, 2026 increased by $55.9 million, or 127%, compared to the same period in the prior year, due primarily to an increase of $54.8 million in personnel-related expenses related to an increase in stock-based compensation-related payroll costs.

Current wording

Research and development expenses in the three months ended September 30, 2026 increased by $58.0 million, or 132%, compared to the same period in the prior year, due primarily to an increase of $55.1 million in personnel-related expenses related to an increase in stock-based compensation-related payroll costs.

Previous wording

Research and development expenses in the six months ended June 30, 2026 increased by $93.6 million, or 93%, compared to the same period in the prior year, due primarily to an increase of $91.3 million in personnel-related expenses related to an increase in stock-based compensation-related payroll costs.

Current wording

Research and development expenses in the nine months ended September 30, 2026 increased by $151.5 million, or 105%, compared to the same period in the prior year, due primarily to an increase of $146.4 million in personnel-related expenses related to an increase in stock-based compensation-related payroll costs.

Previous wording

General and administrative expenses in the six months ended June 30, 2026 decreased by $22.2 million, or 21%, compared to the same period in the prior year, due to a decrease of $15.7 million in bad debt expense and a decrease of $7.3 million in professional services costs primarily associated with transaction-related expenses.

Current wording

General and administrative expenses in the three months ended September 30, 2026 increased by $5.7 million, or 10%, compared to the same period in the prior year, due to an increase in professional service costs.

Previous wording

General and administrative expenses in the three months ended June 30, 2026 decreased by $14.7 million, or 27%, compared to the same period in the prior year, due to a decrease of $9.5 million in bad debt expense and a decrease of $5.2 million in professional services costs primarily associated with transaction-related expenses.

Current wording

General and administrative expenses in the nine months ended September 30, 2026 decreased by $16.5 million, or 10%, compared to the same period in the prior year, due to a decrease in bad debt expense.

Previous wording

Interest expense remained relatively flat for the three and six months ended June 30, 2026 compared to the same periods in the prior year.

Current wording

Interest expense remained relatively stable for the three and nine months ended September 30, 2026 compared to the same periods in the prior year.

Previous wording

In the six months ended June 30, 2026, other income (expense), net increased by $119.8 million compared to the same period in the prior year, due primarily to a net fair value remeasurement gain of $52.0 million related to certain non-marketable equity securities in the current period compared to a net fair value remeasurement loss of $20.4 million in the prior period, an increase in interest income of $35.4 million driven by an increase in cash and cash equivalents, and an increase in net foreign currency gains of $14.4 million.

Current wording

In the three months ended September 30, 2026, other income (expense), net increased by $92.7 million compared to the same period in the prior year, due primarily to a net fair value remeasurement gain of $46.9 million related to certain non-marketable equity securities in the current period compared to a net fair value remeasurement loss of $20.4 million in the prior period and an increase in interest income of $15.9 million driven by an increase in cash and cash equivalents.

Previous wording

In the three months ended June 30, 2026, other income (expense), net increased by $84.7 million compared to the same period in the prior year, due primarily to a net fair value remeasurement gain of $31.3 million related to certain non-marketable equity securities in the current period compared to a net fair value remeasurement loss of $20.4 million in the prior period, an increase in interest income of $21.3 million driven by an increase in cash and cash equivalents, and an increase in net foreign currency gains of $12.0 million.

Current wording

In the nine months ended September 30, 2026, other income (expense), net increased by $212.5 million compared to the same period in the prior year, due primarily to a net fair value remeasurement gain of $97.5 million related to certain non-marketable equity securities in the current period compared to a net fair value remeasurement loss of $42.7 million in the prior period, an increase in interest income of $51.3 million driven by an increase in cash and cash equivalents, and an increase in net foreign currency gains of $13.5 million.

Previous wording

In the three months ended June 30, 2026, the provision for income taxes increased by $126.8 million compared to the same period in the prior year. The increase was primarily driven by higher pre-tax income from business operations during the three months ended June 30, 2026, foreign income taxed at different rates, and a decrease in stock-based compensation benefits, partially offset by an increase in foreign-derived income deduction.

Current wording

In the three months ended September 30, 2026, the provision for income taxes increased by $119.6 million compared to the same period in the prior year. The increase was primarily driven by higher pre-tax income from business operations during the three months ended September 30, 2026, an increase in foreign income taxed at different rates, and a decrease in stock-based compensation benefits, partially offset by an increase in foreign-derived income deduction.

Previous wording

In the six months ended June 30, 2026, the provision for income taxes increased by $281.6 million compared to the same period in the prior year. The increase was primarily driven by higher pre-tax income from business operations during the six months ended June 30, 2026, an increase in foreign income taxed at different rates, and a decrease in stock-based compensation benefit, partially offset by an increase in foreign-derived income deduction.

Current wording

In the nine months ended September 30, 2026, the provision for income taxes increased by $401.2 million compared to the same period in the prior year. The increase was primarily driven by higher pre-tax income from business operations during the nine months ended September 30, 2026, an increase in foreign income taxed at different rates, and a decrease in stock-based compensation benefits, partially offset by an increase in foreign-derived income deduction.

Previous wording

As of June 30, 2026, we had cash and cash equivalents of $3.1 billion, consisting primarily of cash in checking and interest-bearing deposit accounts, as well as investments in money market funds. We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under our 2024 Credit Agreement that provides for a $1.0 billion unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate; sales and marketing activities; timing and extent of spending to support our research and development efforts; capital expenditures to purchase hardware and software; our continued need to invest in our IT infrastructure to support our growth; and the volume and timing of our share repurchases. In addition, we may enter into additional strategic investments in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate, or we may opportunistically seek additional financing. See the section titled “Risk Factors—Risks Related to Financial and Accounting Matters” for more information regarding risks related to liquidity and capital resources.

Current wording

As of September 30, 2026, we had cash and cash equivalents of $3.2 billion, consisting primarily of cash in checking and interest-bearing deposit accounts, as well as investments in money market funds. We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under the Credit Agreement that provides for a $1.0 billion unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months. Our future capital requirements will depend on many factors, including our revenue growth rate; sales and marketing activities; timing and extent of spending to support our research and development efforts; capital expenditures to purchase hardware and software; our continued need to invest in our IT infrastructure to support our growth; and the volume and timing of our share repurchases. In addition, we may enter into additional strategic investments in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate, or we may opportunistically seek additional financing. See the section titled “Risk Factors—Risks Related to Financial and Accounting Matters” for more information regarding risks related to liquidity and capital resources.

Previous wording

Net cash provided by operating activities was $2.2 billion for the six months ended June 30, 2026, primarily consisting of $2.5 billion of net income, adjusted for certain non-cash items, including $169.0 million of stock-based compensation, $66.2 million of amortization, depreciation and write-offs, and $50.5 million of net gain on fair value remeasurement of financial instruments, which were partially offset by a net decrease in operating assets and liabilities of $504.8 million.

Current wording

Net cash provided by operating activities was $3.6 billion for the nine months ended September 30, 2026, primarily consisting of $3.9 billion of net income, adjusted for certain non-cash items, including $253.1 million of stock-based compensation and $100.4 million of amortization, depreciation and write-offs, which were partially offset by $97.5 million of unrealized gain on non-marketable equity securities and a net change in operating assets and liabilities of $584.0 million.

Previous wording

Net cash provided by operating activities was $1.6 billion for the six months ended June 30, 2025, primarily consisting of $1.4 billion of net income, adjusted for certain non-cash items, including $188.9 million of goodwill impairment, $126.9 million of amortization, depreciation and write-offs, and $97.0 million of stock-based compensation, which were partially offset by a gain on divestiture, net of transaction costs, of $106.2 million and a net decrease in the operating assets and liabilities of $140.3 million.

Current wording

Net cash provided by operating activities was $2.7 billion for the nine months ended September 30, 2025, primarily consisting of $2.2 billion of net income, adjusted for certain non-cash items, including $188.9 million of goodwill impairment, $162.0 million of amortization, depreciation and write-offs, $130.2 million of stock-based compensation and $50.0 million of impairment of non-marketable equity securities, which were partially offset by a gain on divestiture of our Apps Business, net of transaction costs, of $106.2 million and a net change in operating assets and liabilities of $29.9 million.

Previous wording

The improvement in cash flows from operating activities during the six months ended June 30, 2026 compared to the same period in the prior year was primarily driven by increased cash collections from customers due to revenue growth, partially offset by increased publisher payments, operational spending, and cash paid for income taxes.

Current wording

The improvement in cash flows from operating activities during the nine months ended September 30, 2026 compared to the same period in the prior year was primarily driven by increased cash collections from customers due to revenue growth, partially offset by increased publisher payments, operational spending, and cash paid for income taxes.

Previous wording

Net cash used in investing activities was $7.7 million for the six months ended June 30, 2026, primarily related to payments for initial direct costs of certain new leases and purchases of property and equipment.

Current wording

Net cash used in investing activities was $25.4 million for the nine months ended September 30, 2026, primarily related to payments for purchases of property and equipment, acquisitions of intangible assets, and initial direct costs of certain new leases.

Previous wording

Net cash provided by investing activities was $378.9 million for the six months ended June 30, 2025, primarily consisting of $424.7 million in proceeds from divestiture net of cash divested, which were partially offset by $22.4 million in earn-out payments related to prior acquisitions of intangible assets and $18.7 million in purchases of non-marketable equity securities.

Current wording

Net cash provided by investing activities was $359.3 million for the nine months ended September 30, 2025, primarily consisting of $407.3 million in proceeds from the divestiture of our Apps Business, net of cash divested, which were partially offset by $22.4 million in earn-out payments related to prior acquisitions of intangible assets and $20.2 million in purchases of non-marketable equity securities.

Previous wording

Net cash used in financing activities was $1.6 billion for the six months ended June 30, 2026, primarily consisting of $1.5 billion in share repurchases under our share repurchase program and $46.5 million in payments for withholding taxes related to the net share settlement of equity awards.

Current wording

Net cash used in financing activities was $2.9 billion for the nine months ended September 30, 2026, primarily consisting of $2.8 billion in share repurchases under our share repurchase program and $55.8 million in payments for withholding taxes related to the net share settlement of equity awards.

Previous wording

Net cash used in financing activities was $1.5 billion for the six months ended June 30, 2025, primarily consisting of $1.3 billion in share repurchases under our share repurchase program, $256.7 million in payments for withholding taxes related to the net share settlement of equity awards, and payments of licensed asset obligation of $13.5 million, partially offset by proceeds of $200.0 million from borrowings under the revolving credit facility pursuant to the 2024 Credit Agreement.

Current wording

Net cash used in financing activities was $2.1 billion for the nine months ended September 30, 2025, primarily consisting of $1.8 billion in share repurchases under our share repurchase program, and $316.9 million in payments for withholding taxes related to the net share settlement of equity awards.

Previous wording

During the six months ended June 30, 2026, we repurchased and retired 3.3 million shares of Class A common stock for $1.5 billion. As of June 30, 2026, $1.8 billion remained available for repurchases under the program. The program has no expiration date, does not obligate us to repurchase any specific amount of stock, and may be modified, suspended, or terminated at any time at our discretion. For additional information, see Note 7 – Equity in the notes to condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

During the nine months ended September 30, 2026, we repurchased and retired 7.3 million shares of Class A common stock for $2.9 billion. As of September 30, 2026, $394.3 million remained available for repurchases under the program. In October 2026, our board of directors authorized an increase to the repurchase program of approximately $3.2 billion, such that an aggregate amount of $3.6 billion remained available for repurchases. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. The program has no expiration date, does not obligate us to repurchase any specific amount of stock, and may be modified, suspended, or terminated at any time at our discretion. For additional information, see Note 7 – Equity in the notes to condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

There have been no material changes to our critical accounting estimates during the six months ended June 30, 2026, as compared to those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. For additional information on all of our significant accounting policies, see Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

There have been no material changes to our critical accounting estimates during the nine months ended September 30, 2026, as compared to those disclosed in our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2025. For additional information on all of our significant accounting policies, see Note 2 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025.