A week ago, AppLovin looked like a stock nobody wanted. On October 30, it hit a low of about $225, way down from its August high near $420. Then Wednesday's earnings landed, and the mood flipped almost instantly. Shares closed at $271.75 before the report and jumped more than 20% after hours, trading around $326.
The numbers explain why. AppLovin, which runs an AI-powered ad platform called Axon that matches ads to app users, posted third-quarter revenue of $2.18 billion. That's up 55% from a year ago and about $100 million above analyst expectations. Adjusted earnings came in at $4.30 a share versus forecasts of $4.04. Net income climbed 72% to $1.44 billion, and adjusted EBITDA hit $1.84 billion, for an 84% margin. Most companies would be thrilled with half that.
The outlook was just as strong. AppLovin expects fourth-quarter revenue of $2.37 billion to $2.40 billion, well above the roughly $2.25 billion Wall Street had pencilled in. It's also handing money back to shareholders. The company bought back $1.4 billion of stock during the quarter, and the board approved another $3.2 billion in buybacks.
What's driving it? Revenue per install rose 55% while install volume barely moved, up just 2%. In plain terms, AppLovin is making a lot more money from each ad it places, not just placing more ads. It's also pushing beyond mobile games into advertisers like e-commerce brands, though that part of the business is still early.
The big swing shows how jumpy investors are about AI-linked stocks right now. One bad week sends them running, and one great quarter brings them right back.
