APP

AppLovin's ad engine handles more spend than Pinterest, Snapchat, and Reddit combined, posting $1.92 billion in Q2 2026 revenue at 84% EBITDA margins. Grieve passed, warning a rival could write a better algorithm and erase AppLovin's moat overnight, with 55% of top mobile games already on the platform. Grieve's valuation model reaches a $480 price target implying just a 9% CAGR, making the risk-reward unattractive despite aggressive buybacks and strong guidance. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut. Shares of AppLovin (NASDAQ:APP) closed at $319.05 on September 2, marking a 52.7% year-to-date decline for a stock that spent late 2025 above $656. On the September 3, 2026, episode of The Investor's Podcast Network's We Study Billionaires, hosts Kyle Grieve and Shawn O'Malley devoted a full teardown to the mobile ad platform. Grieve framed the show as "TIP843: AppLovin (APP): The 30-Bagger Down More Than Half." After walking through the model, both hosts passed. The scale is the first thing that lands. Grieve noted that "the advertising spend on AppLovin is more than Pinterest, Snapchat's and Reddit's combined revenue." That comparison puts the AXON 2 engine in context for readers outside ad tech. AppLovin runs a marketplace where mobile game publishers and, increasingly, e-commerce brands bid for user attention through the company's recommendation algorithm. Asset-light in this context means the platform monetizes traffic without owning the audience: no content studio, no consumer app, minimal capex. O'Malley pointed to "over 79% over the last 12 months" adjusted EBITDA margins and $7.6 million in revenue per employee as evidence of that model. Q2 2026 revenue reached $1.92 billion, up 52.82% year over year, with an 84% adjusted EBITDA margin, per AppLovin's Q2 2026 8-K exhibit filed with the SEC. Free Report, Just Released Did Any of Your Stocks Make the Top 10 List? It is an uncomfortable question, and there is now an answer to it. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember. The report is free. Put the ten next to what you own and find out which is which. Enter Your Email and See the Ten → Free from 24/7 Wall St. It lands in your inbox. Grieve recounted CEO Adam Foroughi's 2015 decision to turn down an acquisition offer: "He walked away hoping for a valuation closer to a billion dollars. To give you an idea of how big a mistake that would have been, the company is now valued at a little over a hundred billion dollars today." AppLovin's market cap stands near $107.2 billion as of September 3, 2026. The anecdote set up the hosts' capital-allocation debate. Grieve graded the buyback program highly. AppLovin repurchased 1.1 million Class A shares for $551.3 million in Q2 2026 and 6.4 million shares for $2.58 billion across full-year 2025. O'Malley took a more skeptical view of overall capital allocation, citing prior M&A history that included studio acquisitions later divested. The company recorded a $188.9 million goodwill impairment and a $99.4 million loss from discontinued operations in FY 2025. Grieve graded buybacks well; O'Malley graded the full record as average. Both positions stayed on the table. Grieve's core concern was the durability of an algorithmic moat: "There's just something I don't really like about a business whose core advantage is a really good algorithm, because it feels like another business can just write a better algorithm and then poof, there goes your business model." He layered on saturation risk, noting roughly 55% of top mobile games are already on Max. O'Malley framed the same worry through platform economics. With Google and Meta, "it's sort of transcended just the algorithm" because network effects anchor the business regardless of which quarter's ranking model wins. AppLovin looks more like a pure technology bet in his framing. The hosts invoked a circle-of-competence argument, the Warren Buffett idea that investors should only underwrite businesses they can accurately model. Both said ad-tech algorithms sit outside theirs, echoing their earlier caution on Trade Desk (NASDAQ:TTD). Grieve's base case used a 17% revenue CAGR, 77% EBITDA margins, and a 13x EV/EBITDA multiple to reach a $480 price target implying a 9% CAGR. His verdict: "My thoughts on this business are that it's a pass. While it certainly offers upside, I just don't think I could find myself getting comfortable enough with the business to ever have it in the intrinsic value portfolio or my personal account." Foroughi is running the buyback aggressively, and Q3 2026 guidance calls for revenue of $2.055 billion to $2.085 billion at roughly 83% adjusted EBITDA margin. The CEO's conviction is expressed in capital returns. Grieve and O'Malley's restraint is a reminder that two disciplined investors can pass on one of the best businesses either of them has ever modeled without predicting a break. Readers weighing AppLovin after the drawdown should decide whether an algorithm is the kind of moat they are willing to hold through a competitive shock. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the cut -->"}" class="link ">see which stocks made the cut -->> Contact [email protected] for any questions or corrections.

AppLovin (NASDAQ:APP) provides specialized software solutions that help mobile application developers to market their digital products, optimize advertising inventory through real-time competitive auctions, and securely analyze user data. While facing legal inquiries from a shareholder rights firm and simultaneously releasing a mobile shopping insights report, it generated an operating margin of 78% for the quarter ended June 30, 2026. Meta Platforms (NASDAQ:META) primarily generates its revenue by offering a global suite of digital communication applications and social networks where everyday users share visual media, direct messages, and interactive content. It agreed to a regulatory settlement regarding user safety design changes and announced a strategic data center venture, while reporting an operating margin of 31% for the quarter ended June 30, 2026. Revenue remains essential for investors to continually evaluate because it reveals the total amount of money a business collects from its commercial activities before any operating expenses, corporate taxes, or other financial obligations are deducted. This metric helps investors measure a company's overall size, market footprint, and long-term trajectory. Data source: Company filings. Data as of Aug. 26, 2026. AppLovin and Meta Platforms are almost entirely dependent on digital advertising for income. Examining revenue trends between them reveal interesting insights about how effectively they are capturing this ad spend. The advertising industry experiences seasonal ebbs and flows. Typically, the fourth quarter represents the largest in terms of revenue for digital media companies because of the holiday shopping season. Yet in AppLovin's case, it has defied this trend in recent quarters. The company's Q1 revenue in 2026 was higher than Q4. Meanwhile, Meta displayed the usual pattern of Q1 sales dropping after the Q4 spike. Not only did AppLovin's revenue accelerate in Q1, it continued to grow in Q2, delivering a streak of five consecutive quarters of sales growth. The company expects to maintain this trend in Q3 with a forecast for revenue to come in around $2.1 billion. As the leader in social media, Meta captures the lion's share of ad spending in that market. It's the reason why the company continues to see year-over-year sales growth. It recently settled a social media addiction lawsuit and implemented controls to protect youth using its platforms. Meta's big bet on the artificial intelligence boom led to massive capital expenditures, but the company stated AI is accelerating its business growth and opening doors to new revenue opportunities. Before you buy stock in AppLovin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AppLovin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,308!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,286,826!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 27, 2026. Robert Izquierdo has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy. AppLovin vs. Meta Platforms: Analyzing Quarterly Revenue Trajectories Between These High-Growth Digital Media Companies was originally published by The Motley Fool

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Travis Hoium, and Jon Quast discuss: MercadoLibre's rapid revenue growth and contracting margins. Has Unity Software finally turned the corner? The changing strategy for Celsius Holdings. Applovin's revenue continues to decelerate. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » A full transcript is below. Before you buy stock in MercadoLibre, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and MercadoLibre wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!* Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 21, 2026. This podcast was recorded on Aug. 6, 2026. Tyler Crowe: Big earnings moves today on Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe. Today, I'm joined by longtime Fool contributors, Travis Hoium and Jon Quast. Travis is doing the full gamut this week with hosting and analyst duties. Travis Hoium: A lot of Travis time. Tyler Crowe: Burning the candle on both ends this week. I think today might be the busiest day when it comes to earnings out there. I think it's something like 530 companies. Obviously, we can't get to all of them. What we did before the show was look at No. 1, companies that are moving or their stocks are moving big time after earnings releases, and also, we want to pick companies that are either Motley Fool favorites of our members, or some of our analysts, and some of our personal favorites as well. We're going to start today with MercadoLibre. Shares are down about 7% after the company reported earnings. Across the board, they beat expectations, but one of the things that was noticeable was that earnings have declined for a couple of quarters. Jon Quast: Well, let's start with the top line there, Tyler. This is its fastest growth in the last four years. That's really saying something because this is a company that has averaged 50% quarterly growth over the last 10 years. Growth is so important when it comes to the stocks that we're investing in. It's not the only factor, but it is a very crucial factor when it comes to market-beating investments. Mercado Libre, as you look at what it has done over the long-term, this has to be near the top of investors' minds when it comes to creating a list of long-term compounders. Travis Hoium: That growth rate was 50% for this quarter, just to be clear. I think this is just the place that the market is in today. This was a phenomenal quarter from a growth perspective, but the downside is margins are down, and this is an explicit trade-off that management is making, saying, you know what? We're going to give people more perks. We're going to give sellers more perks to try to drive more revenue to the business. In theory, you're playing something like an Amazon game where once people get used to both shopping on your platform and also building a business on your platform from a seller side, that should be a phenomenal place to be. But they're giving up that profitability short-term. That's what investors are saying, there's a yin and a yang here going, revenue growth is great, but I'm not seeing the profitability. How much do I really want to pay for this stock? I think that's the reaction today, and it's not just MercadoLibre. This is happening across the market. You look at a company like Duolingo, also down big today, same trade-off that they're making, we're going for user growth. We're not going for profitability today, and shares are selling off. This is the challenge when you get to a relatively highly valued market is when you're starting to make those tradeoffs, you never know which one the market wants to see. Jon Quast: Well, Travis, if I could jump in there on that trade-off, you look at the lower threshold for free shipping that it chose to do in Brazil a while back. That is actually working when it comes to the Amazon game that you referenced. User growth is up over 20% when you look at that. Then also, I think really key, the ratio of daily users to monthly users is at its highest level ever. This is becoming more of a daily habit for MercadoLibre users in its key markets, and then also items per buyer in Brazil are up 19%. I think that is a really crucial data point because this is basically saying that MercadoLibre is becoming more of a go-to platform on a daily basis for more things. I think that's a habit-forming trend, and I think that it's directly a result of that free shipping decision. Travis Hoium: This is where you want to know what investor you are. If you are a Foolish investor with a capital F, you're looking at this, going, we want this company to be bigger long-term. This is a great discount if I have been looking at this stock, because you know what? That profitability, that's not the short-term answer that I want as an investor. I want that long-term growth. But if you're trying to guess what's going to happen quarter to quarter, you maybe got this wrong. That's where I think, stepping back and going, what do I really want from this company, and knowing that going into earnings is really important. Tyler Crowe: We brought up the Amazon conversation because comparisons are pretty easy. You look at this. It's a digital fintech, e-commerce platform as well. But one of the things I do think about because we're talking about profitability margins and things like that, and the comparison is always Amazon, I think it's fair to say that Amazon had a very long leash with the market in its growth phase, willing to overlook profitability for a very long time because it was like, it's growing. It's doing all these new things. It seems to be worth it. It was generating enough cash that could make those investments in other things. Then it found AWS, and that's when profitability really took off here. With MercadoLibre, we're at a point where it's making similar moves, where it's like, we're going to forgo profitability now, credit card perks, lowering the threshold for order value for free shipping, and things like that. It is running the playbook. One thing I'm curious, though, is, to have that much growth and then still see earnings declining, that's a pretty aggressive choice in that cost versus revenue growth paradigm. I do wonder is revenue growth almost too prioritize here? 50% growth is amazing. It's incredibly hard to sustain, and you're doing it in a declining earnings environment. I can't help but think that management is too focused on revenue growth here and maybe not growth with economic scale. Jon Quast: Well, Tyler, I push back on the wording here that you chose with foregoing profitability because I'd be inclined to agree with you here, but MercadoLibre is not in the red. In fact, it invested 2 billion in its credit portfolio. This is one area the business that the market is a little bit concerned about the riskiness of the portfolio, investing $2 billion into that credit portfolio and still free cash flow positive. I think that's a huge thing. It had nearly a 7% margin for income from operations. These are the free cash flow and the income from operations. These are two really important profitability metrics and still solidly in the black. Think about this. This is 50% growth, and this isn't tech, for the most part, this is actually people buying things on the platform. It is tech, but not in the same way that we're accustomed to with the strong growth rates in the market right now. This is a retail play, and that is so interesting to think about in the reverse. You pull back on some of this growth investment right now. What's the alternative? Better profitability to what end? Are we going to pay a dividend? Are we going to buy back stock? I'm not really sure where the money is used for the benefit of shareholders if we pull back on the growth. I think that it needs to keep the pedal to the metal. Tyler Crowe: Always a fascinating conversation, I'm sure that we're going to be having this next quarter when MercadoLibre reports earnings because this is always that push and pull that always happens. Coming up after the break, we're going to hit a stock that is doing much better, at least in the market reaction today, and it's Unity Software. ADVERTISEMENT: You just found out that your sales team is at risk of missing quota. Don't panic. Just ask Rippling AI. Since it's built on your real-time people and business data, Rippling AI can pull metrics from Rippling and Salesforce into a meeting-ready dashboard showing quota attainment, headcount plan, and monthly revenue to quota by region. In seconds, you'll see exactly what's behind your quota risk and fix it before it's missed. Question answered, action taken, crisis averted. When you have critical business questions that need answers, don't just file a ticket and wait weeks for an outdated report. Describe what you need and have Rippling AI build it instantly from your live people and business data, whether it's a dashboard with detailed charts or automated workflows with the right triggers, conditions, and approvals. 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If you're a long-term shareholder, this still has not worked out particularly well. It almost seems to me like they're just figuring out this business and, in particular, figuring out how to monetize the software that they've been making and the ad platform that they've been trying to build. Just as a point, where the mobile business in general is getting old and dodgy, it reminds me a little bit of the console business a decade ago. Consoles have just been in a steady decline over that period of time. I don't know. Are we still going to be excited about apps on an iPhone app store in 10 years from now, and that's really where Unity really dominates things. It's just so interesting to see that they have started to increase their revenue. The market is starting to react a little bit positively because they've gotten their stuff together. But it still trades for almost 10 times sales, and I just can't get my head around why I should be excited about this company long term. Jon Quast: Tyler, you pointed out four straight quarters of accelerating revenue growth. I just have to ask, is that good? Because MercadoLibre has four straight quarters of revenue growth, too. Really [inaudible] here today. Sorry, I just had to get that point in. But it is interesting to Travis' point, this is actually growing now with ads. There are two parts of the business, we have the create side of things, and I feel like what Unity is more known for. That game creation, that video creation software, and that's really plateaued here, only 5% growth in this quarter, all of this revenue growth coming from the Ads network, 63% growth in the revenue segment, and expecting an accelerating growth rate yet again in the upcoming quarter of roughly 70% growth. This is very interesting, a business shift is taking place. If you recall a few years ago when Unity really had problems, it was because the ads were suffering, and now it does seem like it's getting its act together there in that segment, but the create segment, is not really showing anything. Tyler Crowe: Management did put out a plan last quarter. They're going to shed some of those mobile publishing divisions, things like that. Some of its ad networks. They're like, This isn't working for us, there have been some deliberate changes. It does appear to be working. Guidance for the next quarter is actually even faster revenue growth than we saw this most recent quarter. Things are working, but to your point, Travis, this is a company that's been wandering the woods. They're starting to figure some stuff out, but there are also some macro challenges related to what the environment is for its users, the mobile game space. How can this company grapple with these challenges going forward and perhaps get back to not being down 80% for its long-term shareholders? Travis Hoium: I don't know that I have a great answer for this. I think this has been the frustrating thing watching Unity as a business. This is a piece of software that I started to learn a little bit, a handful of years ago when I was in the world of VR. This was the go-to thing. You had to use Unity. It was the best thing to use. That paradigm obviously didn't work out the way I think they hoped. But a lot of the changes that they made to the business and that are showing up now in the income statement are not really businesses that I want to be in as an investor. It's those slimy ads that you see when you're playing a game, or you maybe see your kids see. I know my son will come in and go, "Dad, can I download this game?" I'm like, This looks like a terrible game. It's just built to be able to serve you even more ads to try to get you to download more things. Guess what? Most of those things are coming from Unity. They're touting these developments, they're not the things that I want to invest in. The problem is the core problem for them is that they had a phenomenal platform game engine to be able to create these games, but they had no great way to monetize it. When you don't know how to make money on the thing that you do really well, that's just a really challenging place to be in as a business. Jon Quast: I wonder if that great platform that it did have is really the edge that it is being whittled away at by all the AI tooling that's out there. I know that it's implementing its own AI into its product, but at the same time, you just wonder, and then it does become an ads business, and to your point, is that where you want to be as an investor? You have to make that decision. Tyler, I think one of the challenging things here going forward is stock-based compensation, one thing that's near and dear to your heart, I know, but management here, clinking their champagne glasses, saying it was down at its lowest level at 14% of revenue for the quarter. That's still really high. If you look over the last five years, revenue trailing 12 months is up 89%, but revenue per share is only up 24%. A big part of that is the ongoing dilution. It's going to have to continue to deliver some incredible growth if it's going to continue to provide stock-based compensation at these levels. Right now, it is growing really well with the ads, but is that sustainable? We'll find out. Tyler Crowe: While we're on the topic of mobile gaming, coming up in the next segment, we're going to talk about AppLovin and Celsius Holdings, who are maybe not having the best day today. ADVERTISEMENT: This episode is brought to you by Accenture. 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Tyler Crowe: Two groups of shareholders that probably aren't having as good a time today as Unity Technologies or Celsius Holdings, and AppLovin. Two stocks are both down double digits today, and, while both of them posted relatively decent revenue growth, some of them didn't exactly meet expectations. I gave you assignments for each of them. Travis, you did Celsius, Jon, you did AppLovin. Travis, what did you see in the Celsius report? Travis Hoium: Celsius isn't in such an interesting spot right now because the results were fine, but that's not really what the market was looking for. Revenue was up 11% in the quarter, but you dig underneath that, 21% growth at Alani Nu. That's the company that they bought. I completed that acquisition about a year ago. Now, you're lapping those easier comps. Might remember a couple of quarters ago, you'd see, oh my gosh, 100% growth. That was actually because of that Alani Nu acquisition, and then the Celsius brand is actually down 12% in this quarter. This is showing sure, that the portfolio is doing OK. But the entire space, this energy space, maybe it's like alternatives to traditional soda drinks, is just getting really, really competitive. I know that a handful of years ago, Jon talked about Celsius before we even had it here in Minnesota. Once we started getting it, now suddenly Celsius is everywhere. Well, now I go down those same aisles, and there are a dozen other brands. It's not just Celsius. This isn't a world where Monster and Red Bull dominated everything for what? Two decades. Now, you're getting it's easier and easier to bring up these brands, these co-packers that Celsius was actually grown up on. Remember, they did not own their own manufacturing facilities. They had other companies manufacture their products, and they were just a brand in a sales business. Well, everybody else can just copy that. That's something that we've seen more and more in this space. That's a real challenge. Now, you're going from, is it a growth stock, or is it a value stock, 16 times forward earnings? It's maybe getting close to that value territory, but I don't know, investors just don't seem to know what to think about the company's future. Tyler Crowe: Anecdotally speaking. I live overseas. I've mentioned a couple of times on the show, and when I go to the aisle, I see Red Bull, but other than that, there is no other American comparable. At the same time, there are still 20 different brands. Again, this is an intensely competitive industry where the barriers to entry aren't exactly the hardest in the world. As I mentioned too, Jon, I assigned you to AppLovin. I would say the growth numbers were similar to Unity, but the market did not react nearly as well. Jon Quast: Yes, and it's interesting that you bring up Unity, because at this point, they are more directly competitive than maybe they've been in the past because Unity is growing with the ad network. Really, that's what AppLovin is, same business here. Mobile gaming is the main focus, and that's where they display their ads. That's where they generate their revenue. Up 53% this quarter. That's really good growth, but it is behind what Unity posted. That is worth noting. Also, revenue growth is accelerating, to be fair. It had over 70% growth this time last year. It's also guiding for 47% growth in the upcoming third quarter, so 53% to 47%. It's still really great growth. One of the things I want to point out here is that existing customers' their spend has gone up 28% since the end of last year. That's actually a really meaningful data point, I think, is that the customers who are using them are now spending more than they were to me, that signals that they're getting a return here and are willing to increase that spend. I think that is good. But to be fair, the growth rate is slowing down, so I get it. Trading at 20 times forward earnings, growing at over 40%, profits are growing faster than revenue. You're looking at a 66% net profit margin. I think this is getting a little bit interesting here. Travis Hoium: I also thought it was hilarious that it came up on the conference call that they should change their name. This is one of the most strangely named companies in the market. It does sound like from the movie McLovin I can't get that out of my head every time I hear the company. Sometimes name changes are positive, and interestingly, it's actually being brought up by investors. Jon Quast: The analysts there are mentioning maybe we should change it to MAX, and that is the name of its ad product. To point out, I think another thing investors are responding to negatively today is that it updates its MAX models, its AI models, from time to time. Each time it has done that in the past, it has seen a jump in its revenue growth rate, and this time, releasing the new model still means great growth, but not seeing that uplift right away. I think that's a little bit concerning for investors, especially in light of Unity's results, it's like man, did they not make the right changes that they need to make? I think it just puts a question mark on it. CEO is saying, "We're not changing from AppLovin. We are AppLovin." Tyler Crowe: Stick to your guns. But hey, look, I think the biggest takeaway that we have from this quarter, it wasn't just today's earnings. We've seen this across pretty much the entire earnings season so far. The market seems very demanding right now. We have companies that are posting incredible growth and still getting double-digit declines. Whether that continues, who knows? We seem to be in a very volatile individual stock time. But you know what? That's just how it is with long-term investing. Try to stay the course and plow through when we have all these volatile earnings times, even when the business is doing pretty good. Always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. To see our full advertising disclosure, please check out our show notes. Thanks to producer Dan Boyd and the rest of The Motley team, were Jon, Travis, and myself. Thanks for listening, and we'll chat again soon. Jon Quast has positions in Celsius Holdings, Duolingo, and MercadoLibre. Travis Hoium has positions in Duolingo, MercadoLibre, and Unity Software. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Duolingo, MercadoLibre, Monster Beverage, Salesforce, and Unity Software. The Motley Fool recommends Celsius Holdings. The Motley Fool has a disclosure policy. The Wild Swings of Earnings Season Continue was originally published by The Motley Fool

Track your investments for FREE with Simply Wall St, the portfolio command center trusted by over 7 million individual investors worldwide. AppLovin stock has fallen sharply in the short term while still showing a very large gain over three years, and the current valuation checks point to neither a clear bargain nor a clear premium. AppLovin has delivered roughly 7x over the past three years, which means many holders are now sitting on sizeable gains even after the recent pullback. Investor expectations for continued growth from the AXON advertising engine can support the current price, while recent revenue shortfalls and analyst downgrades highlight the risk that future growth may fall short of earlier hopes. On Simply Wall St's broader valuation framework, AppLovin scores 4 out of 6 checks, which points to a mixed picture rather than an obviously cheap or clearly expensive stock. The stock's next move may depend on whether recent concerns about growth durability justify a lower valuation or whether the long term earnings potential of AppLovin still supports today's price. Find out why AppLovin's -28.1% return over the last year is lagging behind its peers. The P/E ratio is a useful way to look at AppLovin because the company is currently profitable and widely covered by analysts. Right now AppLovin trades on about 23.9x earnings, which is very close to the broader media industry average of roughly 23.5x. That puts the stock in line with the sector rather than clearly cheap or expensive on a simple sector comparison. Simply Wall St's fair P/E for AppLovin is around 35.3x, based on its growth profile, margins, size and risk factors. This is well above the current multiple. That gap and the large premium to the peer group average of about 50.4x suggest the market is pricing AppLovin below what this framework would expect for its earnings power. Despite the recent downgrades and growth concerns after the revenue miss and guidance update, the P/E still screens as supportive rather than stretched. On the P/E multiple, AppLovin stock currently looks undervalued relative to the earnings level implied by this model. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for AppLovin pick up where this valuation puzzle leaves off by spelling out which future paths for growth, margins and earnings would line up with a much higher or much lower share price than today. Each one sets out a fair value as a clear thesis about AppLovin's business that you can revisit over time to see how well it fits what actually happens, and they sit on the stock's Community page. One of the top community narratives on AppLovin: 51% undervalued Read one of the top narratives on AppLovin Do you think there's more to the story for AppLovin? Head over to our Community to see what others are saying! AppLovin screens as undervalued on the current P/E based framework, although the broader checks are mixed rather than overwhelmingly supportive. The sharp recent move in the share price means sentiment and expectations around the AXON engine now do a lot of the heavy lifting in the valuation. For you as an investor, the key question is whether AppLovin can sustain earnings growth that justifies a sector level multiple or better. The crux of the bull versus bear debate is whether concerns about growth durability prove temporary or whether they point to a lasting ceiling on what the stock should be worth. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include APP. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

AppLovin’s second quarter results were met with a significant negative market reaction as revenue and adjusted EBITDA both came in just below Wall Street expectations. Management attributed the shortfall to a slower pace of model improvements within its core gaming advertising business, which CEO Adam Foroughi described as “lighter than normal during the quarter.” Foroughi emphasized that the timing of these improvements, which landed just after quarter end, was the primary factor behind the weaker performance, not a change in advertiser demand or competitive dynamics. He added, “We know what happened, and it’s already been addressed.” Is now the time to buy APP? Find out in our full research report (it’s free). Revenue: $1.92 billion vs analyst estimates of $1.95 billion (52.8% year-on-year growth, 1.2% miss) Adjusted EPS: $3.97 vs analyst expectations of $4.21 (5.7% miss) Adjusted EBITDA: $1.61 billion vs analyst estimates of $1.64 billion (83.9% margin, 1.5% miss) Revenue Guidance for Q3 CY2026 is $2.07 billion at the midpoint, below analyst estimates of $2.08 billion EBITDA guidance for Q3 CY2026 is $1.73 billion at the midpoint, below analyst estimates of $1.75 billion Operating Margin: 77.7%, up from 76.1% in the same quarter last year Market Capitalization: $106.6 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jason Bazinet (Citi) asked about the strategy behind using partnerships to bring in new advertisers. CEO Adam Foroughi explained that targeted partnerships with analytics firms like Triple Whale are effective for attracting high-quality, mid-market advertisers. James Heaney (Jefferies) sought clarity on the model breakthroughs that were delayed. Foroughi acknowledged that model improvements were less impactful in Q2 but materialized early in Q3, which he expects to drive a rebound. Stephen Ju (UBS) questioned the ability of advertisers to scale spend and whether AppLovin is ready for larger brands. Foroughi responded that mid-market is the current focus due to data and model maturity, with expectations to address the long tail as the platform evolves. Ralph Schackart (William Blair) inquired about diagnosing the lack of model uplift and the long-term margin outlook. Foroughi described the unpredictable nature of R&D and Stumpf reiterated that higher compute costs are justified when they lead to revenue growth. Omar Dessouky (Bank of America) asked about the early results from the public launch of Ads Manager and the approach to onboarding advertisers. Foroughi said that current growth is concentrated among a few high-spending advertisers, with gradual expansion planned as data volume increases. Looking forward, our analysis will focus on (1) the impact of recent model improvements on gaming advertiser spend and platform growth, (2) the pace at which mid-market consumer advertisers are onboarded and drive incremental results, and (3) the effectiveness of ongoing compute investments in boosting model sophistication and revenue. Additionally, we will monitor progress in creative tools, ad format innovation, and the expansion of strategic partnerships as indicators of sustainable growth. AppLovin currently trades at $319.32, down from $417.80 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Stocks are often volatile around earnings, and even the slightest misstep can sometimes lead to big sell-offs. For long-term investors, though, these dips can be great buying opportunities, as the reasons behind them often have very little impact on a company's future prospects. Sandisk (NASDAQ: SNDK), AppLovin (NASDAQ: APP), and Dutch Bros (NYSE: BROS) all crashed after earnings and now look like good long-term buys. Let's look at the case for each. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » If you were to look at Sandisk's recent fiscal fourth-quarter earnings in a vacuum, they were incredible. Its revenue surged 372% year over year to $9 billion, while its adjusted earnings per share (EPS) skyrocketed from $0.29 a year earlier to $39.25. The results were driven by soaring NAND (flash) memory prices, which drove revenue growth and helped its gross margin expand from 26.2% last year to 84.6%. However, investors sent its shares sinking nearly 12% the following session as its fiscal Q1 guidance, which calls for revenue between $10.3 billion and $10.8 billion ($10.55 billion at the midpoint), came up just shy of the $10.62 billion consensus, and it projected its gross margin would slip slightly sequentially. However, the big reason behind the "light" forecast was that Sandisk decided to forgo some near-term revenue and gross margin gains in favor of locking in longer-term five-year deals for more sustained growth. It now has eight contracts with revenue floor pricing of $93.9 billion and $16.5 billion in financial guarantees. This is actually the type of visibility investors should want to see from a company that has historically been in a very cyclical industry. Trading at a forward price-to-earnings (P/E) ratio of 5.7, based on fiscal 2027 analyst estimates, the stock looks like a buy on the dip. AppLovin is another company that saw robust revenue growth, but whose stock fell on high expectations. The company's revenue soared 53% to $1.92 billion, but that was just short of the $1.94 billion analyst consensus, sending its shares crashing 20% the next session. The company said the revenue miss stemmed from its adtech AI model not improving at its usual speed, with the next big performance boost not coming until after the quarter ended. This led to a less robust pace of increased ad spending on its platform than expected, but it said the demand had already started to reaccelerate. The plunge in the stock brought its forward P/E ratio to 16, based on 2027 analyst estimates, which is very cheap for a company projecting revenue growth of between 46% and 48% next quarter. This is a growth stock worth buying on the sell-off. Dutch Bros shares sank nearly 17% after the coffee shop operator turned in another strong earnings report, as it forecast that its same-store sales growth would start to decelerate in the second half. However, its overall same-store sales growth remains strong and its expansion story remains unchanged. In Q2, the company saw its revenue jump by 32.5% to $550.9 million, while EPS climbed 40% to $0.28. Its same-store sales rose by 5.8%, on a 1.7% bump in transactions, while company-owned comparable-store sales climbed 8.3% on a 3.4% increase in transactions. However, investors didn't like that Dutch Bros only raised the low end of its prior full-year same-store guidance, taking it from 4% to 6% to a new range of 5% to 6%. Nonetheless, that is still solid same-store growth, and the company has a long growth runway of opening new stores. At the end of Q2, it had 1,225 stores, with plans to have over 2,000 by 2029 and a long-term target of 7,000 in the U.S. With impressive average unit volumes ($2.1 million), this is a company with tremendous growth ahead, making the stock a buy on the dip. Before you buy stock in Sandisk, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sandisk wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. Geoffrey Seiler has positions in Dutch Bros. The Motley Fool has positions in and recommends Dutch Bros. The Motley Fool has a disclosure policy. 3 Stocks to Buy After Post-Earnings Crashes was originally published by The Motley Fool

AppLovin APP reported second-quarter 2026 results on Aug. 5, and a few trading sessions have provided a clearer view of how investors are digesting the report. The stock has declined roughly 17% since the earnings release, suggesting that the market has focused less on the modest earnings beat and more on the revenue shortfall, uneven model-improvement cadence and questions surrounding the pace of consumer-advertiser scaling. Image Source: Zacks Investment Research That reaction is notable because the underlying growth profile remained strong. Moreover, third-quarter guidance points to sequential reacceleration, supported by model improvements deployed after the June quarter ended. The investment debate, therefore, centers on whether the recent weakness represents an attractive entry point or appropriately reflects execution risks that have become more visible. AppLovin reported adjusted earnings of $3.76 per share, surpassing the Zacks Consensus Estimate of $3.72 by 1.08%. Earnings increased 66.4% from $2.26 per share in the year-ago quarter. The company has now exceeded consensus EPS estimates in each of the past four quarters. However, the magnitude of the latest beat narrowed from the preceding quarter, when earnings of $3.56 per share topped expectations by 4.71%. On a sequential basis, second-quarter EPS increased 5.6%. Revenues reached $1.92 billion, up approximately 52.4% from $1.26 billion a year earlier. The top line nevertheless missed the Zacks Consensus Estimate by 0.75%. Revenues increased about 4% sequentially, implying first-quarter revenues of roughly $1.85 billion. Image Source: APP The combination of rapid year-over-year expansion and a sequential slowdown in incremental growth helps explain the mixed interpretation of the quarter. AppLovin continues to expand at an exceptional rate for its scale, but elevated expectations leave relatively little room for execution delays. Adjusted EBITDA climbed 58% year over year to $1.61 billion, implying approximately $1.02 billion in the prior-year quarter. EBITDA growth therefore exceeded revenue growth by roughly six percentage points. More importantly, adjusted EBITDA represented approximately 83.9% of second-quarter revenues. That is an exceptionally high profitability level and demonstrates the operating leverage embedded in AppLovin's technology-driven advertising platform. The quarter also generated $863 million of free cash flow, equivalent to roughly 44.9% of revenues and about 53.6% of adjusted EBITDA. Cash generation was softer than the company's recent earnings profile might suggest, but the weakness primarily reflected timing rather than a deterioration in underlying economics. Costs increased sequentially as AppLovin directed additional resources toward computing capacity for existing and new artificial-intelligence models. This is worth watching because model training and inference requirements could create some quarter-to-quarter margin variability even if the investments ultimately support higher revenues. The 17% post-earnings decline appears more closely connected to execution expectations than to current profitability. Second-quarter revenues came in slightly below consensus, while the company indicated that meaningful improvements to its gaming models arrived later than expected. Since APP's valuation is closely tied to sustained advertising efficiency and rapid model advancement, even a timing-related interruption can prompt investors to reassess near-term growth assumptions. There was also a mismatch between current-quarter expectations and the timing of product improvements. The next meaningful performance enhancement became available shortly after quarter-end rather than contributing materially during the second quarter. At the same time, the report did not indicate a broad deterioration in advertiser demand or competitive positioning. Consumer advertiser spending reached a new record and stood 28% above fourth-quarter 2025 levels. The challenge is that this business has not yet reached sufficient scale to fully offset periods when gaming-model improvements arrive more slowly. That distinction matters. A demand-driven slowdown would represent a more fundamental concern, whereas delayed model improvements are primarily an execution and timing risk. The sharp share-price reaction suggests investors are demanding evidence that the latter explanation translates into stronger subsequent results. Third-quarter guidance provides one of the strongest counterarguments to the post-earnings pessimism. AppLovin expects revenues between $2.055 billion and $2.085 billion. The $2.07 billion midpoint implies approximately 7.8% sequential growth from the second quarter’s $1.92 billion, representing a meaningful acceleration from the second quarter's roughly 4% sequential increase. Adjusted EBITDA is projected between $1.71 billion and $1.74 billion. At the $1.725 billion midpoint, EBITDA would increase approximately 7.1% sequentially from $1.61 billion. The company expects an adjusted EBITDA margin of approximately 83% in the third quarter. That would be modestly below the second quarter's roughly 83.9%, reflecting, in part, higher AI-related infrastructure spending. Still, sustaining a margin above 80% while investing aggressively in model development would underline the strength of APP's operating model. Importantly, the outlook incorporates model enhancements already deployed and does not depend on additional releases that have yet to reach production. That makes the guidance somewhat more tangible than an outlook dependent on future technological breakthroughs. AppLovin ended the quarter with $3.05 billion in cash and $3.7 billion of total debt. The resulting $650 million gap between debt and cash is modest relative to the company's EBITDA generation, with net leverage standing at approximately 0.1 times trailing adjusted EBITDA. During the quarter, the company repurchased or withheld approximately 1.14 million shares for $551 million. Repurchase activity moderated compared with the first quarter as management balanced capital returns against temporarily softer free cash flow. The combination of strong profitability, substantial cash holdings and minimal net leverage gives AppLovin flexibility to fund AI infrastructure, pursue product expansion and continue returning capital without placing meaningful stress on the balance sheet. The consumer opportunity remains one of the biggest variables in APP's longer-term growth story. Advertiser spending continues to expand, but onboarding is being approached gradually, with emphasis on mid-market customers that currently fit the platform's capabilities particularly well. Creative production remains a meaningful bottleneck. Generating consistently high-quality longer-form video advertisements is still developing, which can limit how quickly smaller advertisers are able to scale campaigns. Other opportunities, including lead generation and connected television, remain earlier in development. These initiatives provide potential extensions to AppLovin's addressable market, but investors should avoid assigning full value to them before the company demonstrates repeatable execution. The Trade Desk TTD and Unity Software U offer useful reference points for investors assessing APP's position within digital advertising and app technology. The Trade Desk competes for digital advertising budgets through a technology-led platform, making advertising demand, customer spending and platform efficiency important metrics for both The Trade Desk and AppLovin. However, APP's unusually high adjusted EBITDA margin distinguishes its current earnings profile. Unity Software provides another relevant comparison because of its exposure to the mobile-app and gaming ecosystem. The company has also been navigating the intersection of software, monetization and advertising technology. While Unity Software and APP differ substantially in their business mix, their exposure to developer and mobile ecosystems makes execution around product innovation important for both. For investors comparing growth-oriented technology names, The Trade Desk and Unity Software help frame APP's opportunity, but AppLovin's combination of rapid revenue growth, very high EBITDA margins and expanding consumer advertising exposure gives it a distinctive financial profile. The biggest near-term issue is the unpredictability of model improvements. AI-driven advertising performance does not necessarily advance smoothly every quarter, creating the possibility that periods of extraordinary growth alternate with quarters of more modest gains. Higher compute requirements add another layer of uncertainty. Third-quarter guidance already incorporates increased training and inference expenses, and continued investment could constrain incremental margin expansion. Consumer onboarding also needs to broaden beyond a relatively concentrated group of larger contributors. Partnerships could improve advertiser acquisition, but creative tools and data integration must mature before APP can efficiently capture a much larger long-tail opportunity. Those risks are particularly important because the market's expectations for AppLovin remain elevated. Strong absolute growth may not always be enough if reported results fall short of the trajectory embedded in investor expectations. AppLovin remains an unusually profitable growth company with powerful advertising technology, expanding consumer opportunities and a balance sheet capable of supporting continued investment. The post-earnings selloff improves the risk-reward profile, while management’s outlook suggests the recent slowdown may prove temporary. However, the quarter also exposed greater variability in model-driven growth, rising infrastructure requirements and unresolved onboarding constraints. Investors should therefore resist treating the pullback alone as sufficient reason to become more aggressive. Evidence of sustained reacceleration and broader consumer adoption would strengthen the investment case. Until that confirmation emerges, existing shareholders should retain APP, making the stock a Hold. APP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AppLovin Corporation (APP) : Free Stock Analysis Report The Trade Desk (TTD) : Free Stock Analysis Report Unity Software Inc. (U) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Retail traders are treating recent post-earnings declines as buying opportunities, favoring companies with strong long-term growth potential. A Stocktwits poll ranked AppLovin first (33%) and Dutch Bros second (32%), followed by Celsius (21%) and Axon Enterprise (14%). Scotiabank and Wedbush maintained bullish ratings on AppLovin despite lowering their price targets. Growth stocks including AppLovin (APP), Dutch Bros (BROS), Celsius Holdings (CELH) and Axon Enterprise (AXON) took a hit after second-quarter (Q2) earnings, but retail investors are hunting for opportunities. AppLovin and Dutch Bros emerged as the top dip-buying targets, with traders betting on AI-powered advertising growth and aggressive store expansion despite concerns over margins and valuations. Retail traders see the recent stock drops as buying opportunities, looking past short-term cost and margin pressures to focus on long-term growth in AI and consumer businesses. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox A Stocktwits poll showed that retail investors were most leaned toward buying AppLovin and Dutch Bros after their post-earnings declines. AppLovin received 33% of the votes, while Dutch Bros followed closely with 32%, making them the top two choices among the stocks polled. Celsius finished third in the poll as investors weighed its strong Q2 revenue of $817.9 million against lower profits due to higher promotional and operating costs. Axon Enterprise received 14% of the votes, the lowest among the four companies, as higher component costs hurt margins despite reporting $904.3 million in revenue. AppLovin stock sank 19% on Thursday as weak Q2 revenue and outlook weighed on the stock. CEO Adam Foroughi linked the softness to AI model upgrade timing, not demand weakness, while citing record advertiser spending and a strong Q3 start. Scotiabank and Wedbush analysts trimmed their price targets, though both firms maintained bullish ratings and pointed to long-term growth opportunities. Scotiabank reduced its price target on AppLovin to $515 from $775 while keeping an ‘Outperform’ rating. The firm said the quarter’s weakness appeared tied to the timing of AI model improvements rather than a broader deterioration in the business. Wedbush also lowered its AppLovin price target, moving it to $610 from $640, but retained an ‘Outperform’ recommendation. The firm highlighted continued expansion in AppLovin’s gaming business, growth from its consumer advertising platform and the company’s ability to maintain a competitive advantage through its AI infrastructure. Dutch Bros stock dropped 18% in Thursday’s session despite both Q2 revenue and earnings coming in above Street expectations. also became a favored target among investors looking beyond near-term pressure. Higher commodity expenses and expansion-related costs weighed on the coffee-chain’s sentiment, but traders pointed to store growth plans and improving sales trends as reasons to consider the decline attractive. The company received mixed reactions from Wall Street, with analysts lowering price targets but maintaining positive views on it’s long-term growth prospects. DA Davidson reduced its price target for Dutch Bros to $85 from $90 while keeping a ‘Buy’ rating, saying the company’s quarterly performance showed strength in key areas despite the market’s negative response. The firm noted strong same-store sales, solid store productivity and better-than-expected EBITDA performance, supporting confidence that the recent pullback may be temporary. RBC Capital analyst Logan Reich also lowered the price target to $70 from $75, while maintaining an ‘Outperform’ rating. The analyst pointed to improved margins, stronger performance from newer locations and progress in customer targeting efforts as reasons for optimism. So far this year, APP, BROS, AXON and CELH stocks have declined between 8% and 50%. Also See: WEN Stock Rises Overnight Ahead Of Q2 Results: Retail Bulls Eagerly Hope For 'Short Squeeze' For updates and corrections, email newsroom[at]stocktwits[dot]com. Shivani Kumaresan has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: TG Q2 2026 Earnings Summary S&P 500 Hits Record Highs — But BofA Warns Bullish Sentiment Has Gone Too Far Duos Technologies Group Completes Sale of Duos Technologies, Inc. to Sandbank Acosta, LLC

This article first appeared on GuruFocus. Revenue: $1.92 billion in Q2 2026, up 53% year over year and 4% sequentially. Adjusted EBITDA: $1.61 billion, up 58% year over year, with margins expanding approximately 300 basis points. Free Cash Flow: $863 million for the quarter, with conversion expected to normalize to roughly 75% of adjusted EBITDA for the full year. Cash and Debt: Ended the quarter with $3.05 billion in cash against $3.7 billion in total debt, resulting in net leverage of approximately 0.1 times trailing 12-month adjusted EBITDA. Share Repurchases: Repurchased and withheld approximately 1.14 million shares for $551 million during the quarter, with approximately $1.8 billion remaining under the authorization. Q3 2026 Outlook: Revenue expected between $2.055 billion and $2.085 billion (46% to 48% year-over-year growth), and adjusted EBITDA between $1.71 billion and $1.74 billion (48% to 50% year-over-year growth). Warning! GuruFocus has detected 3 Warning Sign with SD. Is APP fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 53% year-over-year to $1.92 billion, with adjusted EBITDA up 58% to $1.61 billion, reflecting strong underlying business momentum. Consumer vertical advertiser spend hit a record, finishing 28% above Q4 2025 levels, demonstrating rapid scaling in a seasonally slow quarter. Model improvements that landed after Q2 are already live and performing, driving a strong start to Q3 and reaccelerating growth. The SEC concluded its inquiry with no recommended action, removing a potential overhang on the stock. Free cash flow generation remains robust at $863 million for the quarter, with net leverage at just 0.1 times trailing twelve-month adjusted EBITDA. Q2 revenue and adjusted EBITDA came in just below the midpoint and range of guidance, respectively, due to lighter-than-expected model improvements. The pace of meaningful model improvement was lighter than normal during the quarter, leading to slower sequential growth of only 4%. Higher compute costs for training and new model development pressured margins, with flow-through to adjusted EBITDA at 70% quarter-over-quarter. Free cash flow conversion was below normal cadence in Q2 due to timing of international cash tax and interest payments. The consumer vertical is not yet large enough to fully smooth out quarterly volatility, as evidenced by the Q2 miss. Q: Can you expand on the partnership opportunity you see to bring in more customers?A: Adam Foroughi (CEO): We've done a couple of deals with third-party companies, including one of the larger analytics companies in e-commerce. Going to the source that works with these companies on the advertiser side is a more targeted way to get the right kinds of advertisers onto our platform. Rather than starting with long-tail advertisers, which is harder to make work with where the model evolution is today, we're using these partnerships to get very targeted customers into the platform. Q: Can you get under the hood of the gaming advertising business and explain the model breakthroughs that didn't happen in the quarter?A: Adam Foroughi (CEO): Over the last 12 quarters, we've had really good growth, except for Q2 in single digits. Every quarter with outsized growth rates has had improvements to our model. In Q2, we didn't have the same amount of uplift we normally have, but that came right after the quarter ended. That's why Q3 has started really well and why we've guided strong going forward. Q: Can you provide an update on the progress you saw in the consumer vertical in the second quarter?A: Adam Foroughi (CEO): Advertiser spend set another record, finishing 28% above Q4 2025 levels, which is the seasonal peak. Growing well past peak season levels in a seasonally slow quarter shows how steep this curve is. The customers we have on the platform are seeing a lot of success, and new advertisers aren't going to drive impact to that growth rate yet. Q: Are e-commerce advertisers hitting their efficient frontier of ROAS ceilings, and has your perspective on working with larger advertisers changed?A: Adam Foroughi (CEO): Advertisers haven't reached their maximum amount of spend for the return they're getting. We're a new platform, and these companies manage budgets slowly, usually one to four quarters ahead. Mid-market is the sweet spot right now because they know there's a learning cost to marketing campaigns. As data builds, we have no reason to believe the long tail won't be covered, given in gaming we're able to support any type of game at any level. Q: Why didn't you get the model uplift you expected in the quarter, and how should we think about the margin profile as compute costs increase?A: Adam Foroughi (CEO) & Matt Stumpf (CFO): It's R&D there's no guarantee we'll always have lifts in every three-month period. We compound multiple small lifts, but the impact was smaller in Q2, followed by a material uplift in early Q3. On margins, we may see short-term fluctuation, but investors should look at that as positive because we only spend if there's incremental revenue behind it. Over the longer term, we have high confidence we'll be within the low 80% EBITDA margin. Q: How would you evaluate the performance of your platform onboarding since opening to the public, and should we think of the consumer business as tens of thousands of advertisers or a few that spend a lot?A: Adam Foroughi (CEO): It's the latter todayfew advertisers contributing more. We're targeting mid-market brands first, not the very big or very small. These systems take a long time to build out; it took us 14 years to be fully penetrated in gaming. We're seeing very quick growth because customers on the platform are seeing success, and they're not even at a ceiling of what they can spend. Q: Can you talk about the funnel for self-service customers and what's working well with the self-service platform now that it's GA?A: Adam Foroughi (CEO): Creative is the biggest hurdle. We can auto-generate interactive end cards with high efficiency, but we're not at the point where we can get a high-quality 30-60 second video out of the box. Once we can do that or create alternative templates that don't require video, we'll be able to hand advertisers one-click campaign creation. Mid-market and up probably has templates that match our creative needs, but SMBs signing up directly probably don't. Q: How do you feel about the health of the mobile game ecosystem given reports of CPI inflation and waning ROAS?A: Adam Foroughi (CEO): The ad-supported market is growing really quickly. The in-app purchasing market has misleading data because analytics providers can't track purchases going off-platform. We drive a lot of the market, especially for Discovery. When we have a quarter where we don't push lifts, that's not great for the category. When we push a model release early in Q3, advertisers will say install rates went up, CPIs went down, and performance improved. Q: Is the AppLovin brand hurting your ability to acquire advertisers, and do you have the right branding for the next 100,000 longer-tail advertisers?A: Adam Foroughi (CEO): There's an awareness problem, but we're early in this category. You earn brand loyalty with performance. It took Google a couple of decades to become the de facto standard and Facebook well over a decade. If we continue to compound improvements in technology and templates, customers will find out about our platform over time. Analytics providers also help as they talk to customers and see us performing as a top channel. Q: How should we think about the incremental investment in tech and compute going forward, and how much visibility do you have into those costs?A: Matt Stumpf (CFO): We don't expect any departure from the guidance that of the incremental dollar in revenue, we're spending about $0.10 on compute. We're at that level within the guide. We may see variability over the longer term, but today we don't expect any change. Adam Foroughi (CEO) added: If engineers figure out a way to write a more complex model with material revenue uplift, we're not going to hold it back. Q: Can you talk about the nature of your partnerships and what customers of these partners benefit from having AppLovin?A: Adam Foroughi (CEO): If you're an attribution company, and we're willing to pay for leads and they benefit from their customers having more complex attribution, it's a win-win-win across the board. Triple Whale is a good example we're iter For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Trade Desk stock crashed 28% after Q2 revenue of $715M missed estimates and Q3 guidance of at least $650M fell $155M short of the $805M consensus. MoffettNathanson slashed its Trade Desk stock price target to $6 from $23, leading a wave of downgrades as Truist and Wells Fargo warn a turnaround could take several quarters. AppLovin's steady trading and Magnite's raised full-year outlook confirm that Trade Desk stock's collapse today is company-specific, not a signal of a broken ad-tech market. It sounds nuts, but SoFi1 is giving new Active Invest users up to $3,000 in stock for a limited time, and all it takes is a $50 deposit to get started.2 See for yourself (Sponsor) The Trade Desk (NASDAQ:TTD) stock is plunging 28% to $12.76 in Friday morning trading after the advertising-technology company delivered a disappointing second-quarter report and offered a sharply weaker outlook for the third quarter. The collapse comes one day after The Trade Desk stock fell 6.8% to $17.67 without any obvious company-specific news, making Friday's selloff a much clearer signal about the company's own business. The contrast with other ad-tech stocks is striking. AppLovin (NASDAQ:APP) stock is up 1% to $340.55, while Magnite (NASDAQ:MGNI) stock is down just 1% to $24.15, and the Invesco QQQ Trust (NASDAQ:QQQ) is up 0.82% to $720.61 as investors digest a weaker-than-expected July jobs report. The Trade Desk reported second-quarter revenue of $715 million, below expectations of $751 million, while adjusted earnings per share came in at $0.34 versus the $0.40 consensus estimate. The Trade Desk's third-quarter outlook was even more concerning, with revenue expected to reach at least $650 million compared with expectations of roughly $805 million. Management pointed to macroeconomic pressure affecting consumer packaged goods and automotive advertisers, along with execution problems and a shift toward lower-cost programmatic fixed-price media. The Trade Desk also faces competition from cheaper alternatives, creating a difficult combination of weaker demand, pricing pressure and potential market-share losses. SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor) Wall Street responded with an unusually broad wave of downgrades and price-target cuts. BMO Capital downgraded The Trade Desk stock to Market Perform with a $15 target from $38, while Citi moved to Sell with an $11 target from $21 and Evercore ISI cut its target to $13 from $27. Guggenheim downgraded The Trade Desk to Neutral and reduced its target to $12 from $25, while RBC Capital moved to Sector Perform with a $15 target from $33. MoffettNathanson went further by cutting its target to $6 from $23, underscoring how dramatically expectations have changed. AppLovin stock is holding up despite the broader market uncertainty, while Magnite stock is also showing relative strength after Magnite delivered a better-than-expected second quarter and raised its full-year outlook. Yesterday's ad-tech split therefore appears even more significant today, with investors increasingly distinguishing between companies facing company-specific problems and those showing stronger operating momentum. AppLovin and Magnite also provide an important counterpoint to the argument that Friday's Trade Desk collapse simply reflects a weak advertising market. Trade Desk's pricing pressure, execution issues and advertiser losses appear to be more specific problems, although softer economic conditions could still create headwinds across the broader industry. The bullish case for Trade Desk stock is that the 28% plunge could eventually price in a significant portion of the company's near-term deterioration. UBS remains constructive with a $16 price target and believes improved sales execution, product updates and growing joint-business-plan momentum could provide early signs of a recovery. However, the bearish case currently has more immediate evidence behind it. Raymond James downgraded Trade Desk to Underperform, while Truist argued that fixing the company's problems could take several quarters, and Wells Fargo warned that trends could continue deteriorating unless Trade Desk aligns pricing with the broader industry. Investors can watch for whether Trade Desk can stabilize advertiser relationships, reverse share losses and turn product improvements into renewed spending growth. Given the magnitude of the earnings-driven reset and the wide range of reduced price targets, investors choosing to own Trade Desk stock may want to keep their position sizes moderate, even if the sharp decline makes the shares appear increasingly tempting to contrarian buyers. Looking to grow your money but unsure where to begin? SoFi Active Invest is offering a limited-time promotion—open a new Active Invest account, fund it with $50 or more, and you could receive up to $3,000 in complimentary stock. From $0 commission trading3 to fractional shares4 and automated investing, this app is designed to simplify investing for everyone, whether you’re just starting or already experienced. Its easy to sign up and secure your bonus.(Sponsor) Contact [email protected] for any questions or corrections.