Thoughts on AppLovin $APP q2 results
I don’t think this was some thesis-breaking quarter.
The numbers were a little light by AppLovin’s standards, but revenue still grew 53% and EBITDA margins were 84%. Management basically said their ad model didn’t improve as much as usual during Q2, then they pushed a bigger update right after the quarter ended and growth picked back up.
The problem is the moat still isn’t perfect. Don’t attack me for saying that, but it’s true. $APP depends on Apple and Google’s ecosystems, and advertisers will only stick around as long as the platform keeps delivering good results, so it’s not my highest-conviction play.
Still, there wasn’t any sign that customers were leaving or anything like that. For now, the numbers are solid.
At $349, it trades at around 16.5x estimated 2027 earnings, (estimates per Seeking Alpha). That’s pretty cheap for a business growing this fast with margins this high.
Q3 matters a lot now because management says the slowdown was temporary, but unless that turns out to be wrong, I think the selloff is overdone
What do you guys think?