Applovin Corp's stock experienced a significant boost after the company outperformed expectations in their third-quarter financial results. The company's revenue for the quarter stood at $1.2 billion, marking a 39% increase from the previous year and exceeding the $1.13 billion consensus estimate from analysts. Along with this impressive revenue growth, Applovin also announced an expansion of its share repurchase program by $2 billion, signaling confidence in the company's future prospects.
Following the quarterly report, analyst Cory Carpenter from JP Morgan upgraded his outlook on AppLovin, emphasizing the considerable beat in the third-quarter results. He highlighted the strong performance of the Software Platform, which saw a remarkable 17% sequential growth driven by technological advancements like the Axon algorithm. Despite expressing caution about the company's expansion beyond gaming, Carpenter raised the price target to $200, reflecting a positive sentiment regarding the e-commerce potential and overall growth trajectory of AppLovin.
Similarly, Needham's analyst, McTernan, revised upward the adjusted EBITDA estimates for 2025 by 14% after the latest results, indicating a positive outlook for the company's financial performance. The consistent outperformance of AppLovin's software segment, with over 60% year-over-year growth in the past five quarters, has been a key driver of the positive sentiment among analysts. Additionally, the successful launch of the e-commerce advertising platform is garnering positive feedback, with management projecting significant growth potential by 2025, particularly in new markets like connected TV (CTV). These developments have led to increased revenue and adjusted EBITDA estimates for both fiscal 2024 and 2025, signaling a bright future for AppLovin.