AppLovin (NASDAQ: APP) net income jumps 72% and the board widens its buyback

What happened

AppLovin Corporation (NASDAQ: APP) reported third-quarter net income of $1.44 billion, up 72% from a year earlier, on revenue of $2.18 billion, up 55%. The board also raised its share repurchase authorization.

The quarter ended Sept. 30. AppLovin's earnings release calls both the earnings and the revenue records. The same filing says holders of a majority of the voting power approved moving the company's incorporation from Delaware to Nevada.

Key numbers

Metric	Latest	Change	Source
Revenue, quarter ended Sept. 30	$2.18 billion	from $1.41 billion, +55%	SEC 8-K, Exhibit 99.1
Net income, quarter ended Sept. 30	$1.44 billion	from $835.5 million, +72%	SEC 8-K, Exhibit 99.1
Adjusted EBITDA, quarter ended Sept. 30	$1.84 billion	from $1.16 billion, +59%	SEC 8-K, Exhibit 99.1
Free Cash Flow, quarter ended Sept. 30	$1.42 billion	from $1.05 billion, +35.2%	Calculated from SEC 8-K
Total share repurchase authorization (cap)	$3.6 billion	+$3.2 billion	SEC 8-K, Exhibit 99.1

Read more: AppLovin (APP) company research

Why it matters

The quarter is a direct test of OptimistFi's investment case. We have argued that AppLovin works if its AI ad-matching advantage keeps turning advertiser demand into high-margin cash flow before platform owners and larger ad networks copy, restrict or reprice it.

Margins widened. Net margin reached 66% against 59% a year earlier. Adjusted EBITDA margin reached 84% against 82%. Adjusted EBITDA rose 59% to $1.84 billion from $1.16 billion.

Operating income rose 58.4% to $1.71 billion from $1.08 billion. That trails the growth in net income. Other income, net swung to an $86.0 million gain from a $6.6 million expense, which explains part of the gap.

Costs are climbing too. Research and development expense more than doubled to $101.8 million from $43.9 million. Stock-based compensation rose to $84.2 million from $33.8 million. Both grew faster than revenue.

Over the nine months ended Sept. 30, revenue reached $5.95 billion, up 56%. Net income grew 75%, but the 2025 period included a $99.4 million loss from discontinued operations. Net income from continuing operations rose 68%.

One strong quarter does not settle the case. AppLovin's own risk list names the competitive advertising ecosystem and a possible inability to adapt to emerging technologies and business models.

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Cash and buybacks

Profit turned into cash. Free Cash Flow was $1.42 billion, up from $1.05 billion in the third quarter of 2025. Cash paid for income taxes in the nine months was $926.2 million, against $167.3 million a year earlier.

In the quarter AppLovin repurchased and withheld 4.1 million Class A shares at a total cost of $1.4 billion. The count includes shares withheld for taxes on vested equity awards. Shares outstanding ended the quarter at 331.3 million, down from 338.3 million at Dec. 31, 2025.

The new authorization is a ceiling, not spending. It brings the total to $3.6 billion as of the end of October. AppLovin says its ability to use the full amount depends on legal requirements, including surplus and solvency tests, and on market conditions.

The company ended the quarter with $3.17 billion in cash and $3.52 billion in long-term debt.

The move to Nevada

On Oct. 29, stockholders holding at least a majority of the voting power approved the move in writing. The group includes Adam Foroughi and Herald Chen, along with a family trust and several LLCs. Together they hold 2.37 million Class A shares and 30.06 million Class B shares, about 67% of the voting power.

AppLovin will file a Schedule 14C information statement and mail it to holders of record as of Oct. 29. It plans to complete the move no earlier than 20 calendar days after mailing begins. The plan of conversion, Nevada articles and Nevada bylaws will be filed as appendices to that statement.

What's next

AppLovin hosts a webinar on Nov. 4 at 2:00 p.m. PT (5:00 p.m. ET), with management commentary and a question-and-answer session. Its Form 10-Q for the quarter ended Sept. 30, 2026 will carry more information.

For the fourth quarter, AppLovin guides to revenue of about $2.37 billion to $2.40 billion and Adjusted EBITDA of about $2.0 billion to $2.03 billion, a margin of 84% to 85%. Results inside those ranges, with margin at 84% or better, would support OptimistFi's view. Slower revenue or a lower margin would weaken it.

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