Applovin(APP.US) Q1 net profit surged 109% year-on-year, Q2 performance guidance exceeded expectations.

Mobile software company Applovin (APP.US) announced its first quarter performance for 2026, showing a 59% year-on-year increase in revenue to $1.842 billion, exceeding analysts' average expectations of $1.78 billion. Adjusted EBITDA was $1.557 billion, a 66% increase year-on-year; net profit was $1.206 billion, a 109% increase year-on-year; and earnings per share were $3.56, surpassing analysts' average expectation of $3.46. The company also reported that it repurchased 2.2 million shares of Class A common stock in the first quarter, costing $1 billion. Looking ahead to the second quarter, AppLovin expects revenue to be between $1.915 billion and $1.945 billion, higher than analysts' average expectation of $1.89 billion; and adjusted EBITDA profit margin is expected to be between 84% and 85%. Amid the software stock doomsday pessimistic market rhetoric triggered by the AI intelligent trend led by Anthropic previously, AI application leader Applovin focused on AI + Digital Advertising is one of the platform software giants that has been misunderstood and misjudged. AppLovin has successfully embedded generative AI and deep machine learning into its advertising technology core. AppLovin uses the AXON 2.0 engine + MAX/AppDiscovery to create a buy-to-monetize closed-loop, thereby driving revenue and profit towards a steep growth curve. AppLovin has formed a data network effect + economies of scale in the AI + Digital Advertising race, both boosting eCPM and ROI, and rapidly exponentially amplifying EBITDA. AXON matches the highest ROI bidding for each ad display in milliseconds by combining billions of user and contextual signals. AXON AI, initially focusing on acquiring users for mobile games, now covers high-growth verticals such as e-commerce, financial technology, and CTV. AI intelligent agents do indeed pose a valuation impact on automatable white-collar tasks (so functional SaaS software sectors will be systematically slashed by the market), but for large platform software giants that master core operational processes such as data flow/content distribution/trade execution, AI is more like a demand accelerator. AppLovin has used two consecutive quarters of better-than-expected performance and guidance to show that platform software giants that are critical to enterprise workflow are not likely to be completely replaced by AI intelligent agents or generative AI applications; instead, their fundamentals may benefit long-term from AI. For platform software companies like AppLovin that have proven they can completely rewrite product delivery and pricing with AI and hold key business execution nodes, pullbacks often provide better risk-return ratios.