AppLovin stock jumps more than 20% as execs consider selling one business as the other finds a new gear


The shares of AppLovin Inc. they rose to the extended session on Wednesday after executives from the app monetization company said they expect about $ 2 billion from their software business in 2023 alone and could sell their app business.

APP Lovin,
-5.90%
the shares, which stopped trading shortly after the market closed, rebounded by up to 50% at some point after the earnings results were announced and ended the extended session with a 23% increase.

The Palo Alto, California-based company offers marketing, monetization, and analytics software that helps application developers grow their business, similar to Unity Software Inc. software. U,
-37.05%
sells to video game makers. It also has a portfolio of more than 200 free mobile games, which is part of a business that executives intend to structurally separate from the software business and review, which on Wednesday “could lead to the retention, restructuring or sale of certain assets or any changes to our application portfolio “.

“Given our recent superior performance in our technology, the current scale of our software platform, and the immense reach of our MAX solution, we can significantly reduce our data reliance on our applications.” the company said in its letter to shareholders. “Therefore, we have decided to operate our application business as if it were a stand-alone business rather than a strategically integrated asset.”

The upbeat color of the software business contrasts with Unity, which reported on Tuesday afternoon. Unit shares were saved on Wednesday, losing more than a third of their value after revealing a flaw in their ad targeting tool, which used inaccurate end-user engagement data and performance data. of the platform. Unit’s ad targeting and monetization service seemed to be able to operate around Apple Inc.’s AAPL.
-5.18%
disable the use of Advertiser ID, or IDFA, in your privacy update, a change that has affected online ad companies such as the Meta Platforms Inc. FB.
-4.51%
Facebook.

In addition, AppLovin said its board approved a $ 750 million share repurchase for the company. Shares closed the regular session at 5.9% to $ 27.28, bringing them to a record high of $ 114.85 on November 11th. At the company’s initial public offering on April 15, the shares were priced at $ 80, but closed nearly 20% at their debut.

AppLovin said it expects $ 1.24 billion to $ 1.290 billion in software platform revenue in 2022, more than $ 674 million in 2021, and about $ 2 billion in revenue in 2023. Analysts surveyed by FactSet expects $ 1.44 billion in 2022 and $ 2.205 billion in $ 2.205 billion.

The company said it now expects year-round revenue of $ 3.1 billion to $ 3.44 billion, while Street is looking for $ 3.69 billion.

Shares fell last quarter when the company provided a 2022 forecast that disappointed Wall Street, demanding year-round revenue of between $ 3.55 billion and $ 3.85 billion when, at the time, analysts were looking for $ 3.83 billion. dollars.

AppLovin reported a $ 115 million loss in the first quarter, or 31 cents per share, on Wednesday, compared to a loss of $ 10.5 million, or 5 cents per share, in the period last year. The company did not list the adjusted earnings per share figures.

The company reported revenue of $ 625.4 million (or $ 835 million, including $ 210 million in non-recurring publisher bonuses), compared to $ 604 million in the quarter. past.

Analysts surveyed by FactSet had predicted earnings of 4 cents per share with revenue of $ 815 million.

Reads: AppLovin IPO: 5 Things to Know About the $ 30 Billion Software Company

In April, AppLovin added video streaming company Wurl to a $ 430 million cash and stock acquisition, following its $ 1.05 billion acquisition of app monetization company MoPub. which closed on January 3, and its $ 1 billion acquisition a year ago from Germany. Adjust mobile application measurement and marketing company.



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