AppLovin shares jump 30% after record quarterly profits

AppLovin shares jumped nearly 30 per cent on November 5 after the US advertising technology company reported record third-quarter earnings. The board also raised its share buyback authorization by $3.2 billion.

Revenue rose 55 per cent to $2.18 billion in the quarter ended September 30. A year earlier, it was $1.4 billion. Analysts had forecast $2.07 billion.

Net income climbed 72 per cent to $1.44 billion. Diluted earnings per share reached $4.30, against a consensus of $4.04 and $2.45 a year ago. Adjusted EBITDA hit $1.84 billion, an 84 per cent margin.

Free cash flow came in at $1.4 billion. The rally follows a rough year. The stock had fallen more than 50 per cent in 2026 before the report.

Gaming drove the beat. That business grew nearly 50 per cent year on year, reaccelerating as the company partially rolled out its next-generation AI models. Spending in the consumer vertical rose triple digits from a year earlier. Management noted that the largest digital advertising platforms grew between roughly 10 per cent and the mid-20s this season.

What management plans

The company spent $1.4 billion repurchasing 4.1 million shares in the quarter. The new authorization lifts the total to $3.6 billion.

Chief Financial Officer Matt Stumpf attributed the faster buying to a gap between the share price and the company's intrinsic value. Since the programme began, AppLovin has bought back 104 million shares for $9.4 billion, at an average of $90 each.

Guidance for the fourth quarter surprised on the upside. AppLovin expects revenue of $2.365 billion to $2.395 billion, or 43 to 44 per cent growth. Analysts had penciled in $2.25 billion. Adjusted EBITDA is guided at $1.995 billion to $2.025 billion.

Management also said the full rollout of its new AI models is still pending. Earlier this year, it had planned to open its Axon advertising platform to self-serve advertisers worldwide.

Analysts raised targets after the report. Some brokerages have lifted its price target to $450 from $396 and kept a Buy rating.