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AppLovin Corp

AppLovin CorpAPPEarnings & Financial Report

Nasdaq · software industry

AppLovin Corporation is an American mobile technology company headquartered in Palo Alto, California. Founded in 2012, the company helps developers market, monetize, analyze and publish their apps through its mobile advertising, marketing, and analytics platforms, SSP MAX; DSP AppDiscovery; and SparkLabs creative studio. The company also invests in various mobile game publishers.

What changed in AppLovin Corp's 10-K — 2024 vs 2025

Top changes in AppLovin Corp's 2025 10-K

427 paragraphs added · 624 removed · 341 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

51 edited+5 added−26 removed18 unchanged
Many developers who integrate MAX have experienced a measurable increase in their average revenue per daily active user ("ARPDAU") over traditional monetization tools and save countless hours because they are able to automate manual monetization work through its advanced feature set.
Many developers who integrate MAX have experienced a measurable increase in their average revenue per daily active user over traditional monetization tools and save countless hours because they are able to automate manual monetization work through its advanced feature set.
Despite our efforts to protect our intellectual property rights, unauthorized parties may attempt to copy aspects of our Advertising solutions or Apps or obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult and time consuming. Further, our intellectual property rights may be invalidated, circumvented, or challenged.
Despite our efforts to protect our intellectual property rights, unauthorized parties may attempt to copy aspects of our advertising solutions or obtain and use information that we regard as proprietary. Policing unauthorized use of our proprietary rights is difficult and time consuming. Further, our intellectual property rights may be invalidated, circumvented, or challenged.
We generate our revenue from Advertising and our Apps. As more advertisers use our Advertising solutions to market and monetize their content, we gain access to more data regarding users and user engagement 1 , further strengthening our scaled distribution.
We generate our revenue from advertising solutions. As more advertisers use our advertising solutions to market and monetize their content, we gain access to more data regarding users and user engagement 1 , further strengthening our scaled distribution.
New and evolving laws and regulations, and changes in their enforcement and interpretation, may require changes to our Advertising solutions, Apps, or business practices, and may significantly increase our compliance costs and otherwise adversely affect our business and results of operations.
New and evolving laws and regulations, and changes in their enforcement and interpretation, may require changes to our advertising solutions or business practices, and may significantly increase our compliance costs and otherwise adversely affect our business and results of operations.
Intellectual Property Our success depends in part upon our ability to protect our intellectual property rights with respect to our Advertising solutions and Apps, and to operate without infringing, misappropriating or otherwise violating valid and enforceable third-party intellectual property.
Intellectual Property Our success depends in part upon our ability to protect our intellectual property rights with respect to our advertising solutions, and to operate without infringing, misappropriating or otherwise violating valid and enforceable third-party intellectual property.
AppDiscovery is powered by AXON, our AI-powered advertising engine, and matches advertiser demand with publisher supply through auctions at vast scale and at microsecond-level speeds. • MAX is our monetization solution, utilizing an advanced in-app bidding technology that optimizes the value of a publisher’s advertising inventory by running a real-time competitive auction, driving more competition, and higher returns for publishers. • Adjust is our measurement and analytics marketing platform which provides marketers with the visibility, insights, and data needed to scale their apps marketing and drive more informed results. • Wurl is our connected TV ("CTV") platform that both distributes streaming video for content companies and provides advanced advertising and publishing solutions to attract viewers and maximize revenue.
Axon Ads Manager is powered by our Axon AI advertising recommendation engine and matches advertiser demand with publisher supply through auctions at vast scale and at microsecond-level speeds. • MAX is our monetization solution, utilizing an advanced in-app bidding technology that optimizes the value of a publisher’s advertising inventory by running a real-time competitive auction, driving more competition, and higher returns for publishers. • Adjust is our measurement and analytics marketing platform which provides marketers with the visibility, insights, and data needed to scale their apps marketing and drive more informed results. • Wurl is our connected TV ("CTV") platform that both distributes streaming video for content companies and provides advanced advertising and publishing solutions to attract viewers and maximize revenue.
We encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. 8 Table of Contents
We encourage investors, the media, and others to follow the channels listed above and to review the information disclosed through such channels. Any updates to the list of disclosure channels through which we will announce information will be posted on the investor relations page on our website. 7 Table of Contents
Advertisers are able to set their user acquisition and revenue goals to target the most relevant, highest value users. • Maximize monetization of engagement: Advertisers use MAX to generate incremental revenue by maximizing the monetization of their ad inventory.
Advertisers are able to set their user acquisition and revenue goals to target the most relevant, highest value users. • Maximize monetization of engagement: Advertisers use MAX to generate incremental revenue by maximizing the monetization of their advertising inventory.
Though we rely in part 6 Table of Contents upon these legal and contractual protections, we believe that factors, such as our unique position in the advertising ecosystem, our expertise and determination of our employees, the speed of our technological development and the functionality and flexibility of our Advertising solutions in an ever-evolving industry, are critical contributors to our success.
Though we rely in part upon these legal and contractual protections, we believe that factors, such as our unique position in the advertising ecosystem, our expertise and determination of our employees, the speed of our technological development and the functionality and flexibility of our advertising solutions in an ever-evolving industry, are critical contributors to our success.
Our clients can analyze by retention periods from initial app download onwards, so that advertisers understand the effectiveness of their marketing investments. • Targeted returns: Advertisers set their goals and target return on ad sales and our algorithms adjust cost and campaign specifics to meet them.
Our app-based clients can analyze by retention periods from initial app download onwards, so that advertisers understand the effectiveness of their marketing investments. • Targeted returns: Advertisers set their goals and target return on ad spend and our algorithms adjust cost and campaign specifics to meet them.
We take steps to protect our proprietary information, in part, by entering into confidentiality agreements with our employees, consultants, developers, and vendors, and generally limiting access to and distribution of our proprietary information. However, we cannot assure you that the steps taken by us will prevent misappropriation of our proprietary rights.
We take steps to protect our proprietary information, in part, by entering into confidentiality agreements with our employees, consultants, developers, and 5 Table of Contents vendors, and generally limiting access to and distribution of our proprietary information. However, we cannot assure you that the steps taken by us will prevent misappropriation of our proprietary rights.
We work to comply with, and to help allow developers and advertising ecosystem partners to comply with, applicable laws and regulations relating to privacy, data protection and information security. This helps underpin our strategy of building trust and providing a strong 7 Table of Contents experience to advertising ecosystem partners and clients.
We work to comply with, and to help allow developers and advertising ecosystem partners to comply with, applicable laws and regulations relating to privacy, data protection and information security. This helps underpin our strategy of building trust and providing a strong experience to advertising ecosystem partners and clients.
We announce material information to the public through filings with the SEC, the investor relations page on our website, press releases, public conference calls, webcasts, and our corporate blog at blog.applovin.com in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
We announce material information to the public through filings with the SEC, the investor relations page on our website, press releases, public conference calls, webcasts, and our corporate blog at axon.ai/blog in order to achieve broad, non-exclusionary distribution of information to the public and for complying with our disclosure obligations under Regulation FD.
Data Privacy and Security Laws The data we collect and otherwise process is integral to our Advertising solutions and Apps, providing us with insights to improve our AI-powered advertising engine AXON and our developer tools, to optimize app discovery and monetization and to improve our Apps.
Data Privacy and Security Laws The data we collect and otherwise process is integral to our advertising solutions, providing us with insights to improve Axon AI, our advertising recommendation engine, and our developer tools, to optimize app discovery and monetization.
We believe that the principal competitive factors in our market are: • the ability to enhance and improve technologies and offerings; • knowledge, expertise, and experience in the advertising ecosystem; • relationships with third parties in the advertising ecosystem; • the ability to reach and target a large number of users; • the ability to identify and execute on strategic transactions; • the ability to successfully launch and monetize mobile apps; • the pricing and perceived value of offerings; • brand and reputation; and • ability to expand into new offerings and geographies.
We believe that the principal competitive factors in our market are: • the ability to enhance and improve technologies and offerings; • knowledge, expertise, and experience in the advertising ecosystem; • relationships with third parties in the advertising ecosystem; • the ability to reach and target a large number of users; • the ability to identify and execute on strategic transactions; • the pricing and perceived value of offerings; • brand and reputation; and • ability to expand into new offerings and geographies.
Research and Development Continued investment in research and development is important to advancing our Advertising solutions, and Apps. The continued development of our AI-powered AXON advertising engine is critical to our future growth and competitive advantage. These AI advancements are also key to attaining our strategic objectives and meeting the evolving needs of our customers.
Research and Development Continued investment in research and development is important to advancing our advertising solutions. The continued development of our Axon AI technology is critical to our future growth and competitive advantage. These AI advancements are also key to attaining our strategic objectives and meeting the evolving needs of our customers.
Our Strategy for Growth We have a comprehensive strategy to continue our growth and further enhance our market position in the advertising ecosystem: • Existing market expansion: We continue to have an attractive market opportunity within our current mobile app segment, which we intend to address through the optimization of our Advertising solutions. • Enhance and extend AI-based technologies: As we increase our scale and reach, our customers benefit from compounding improvements to AXON, our AI-powered advertising engine, which in turn improves the efficacy and growth of our Advertising solutions. • New market expansion: We are confident our technology and expertise are applicable to other market segments and geographies we have not historically addressed, including: ◦ Non-gaming mobile app segments and industries: One of our long-term objectives is to provide critical tools to mobile app developers across multiple verticals, including, for example, e-commerce and social media.
Our Strategy for Growth We have a comprehensive strategy to continue our growth and further enhance our market position in the advertising ecosystem: • Existing market expansion: We continue to have an attractive market opportunity within the mobile app ecosystem, which we intend to address through the optimization of our advertising solutions. • Enhance and extend AI-based technologies: As we increase our scale and reach, our customers benefit from compounding improvements to Axon AI, our advertising recommendation engine, which in turn improves the efficacy and growth of our advertising solutions. • New market expansion: We are confident our technology and expertise are applicable to new verticals and content industries we have not historically addressed, including: ◦ New verticals: One of our long-term objectives is to provide critical tools to advertisers across multiple verticals, including, for example, web-based e-commerce and social media.
“AppLovin,” our logo, and our other registered or common law trademarks, service marks, or trade names appearing in this Annual Report on Form 10-K are the property of AppLovin Corporation. Other trademarks and trade names referred to in this Annual Report on Form 10-K are the property of their respective owners.
“AppLovin,” our logo, and our other registered or common law trademarks, service marks, or trade names appearing in this Annual Report on Form 10-K are the property of AppLovin Corporation.
With AppDiscovery, advertisers can define the framework of their campaigns in the following ways: • Reach: Advertisers identify what they are willing to pay to acquire their target users.
With Axon Ads Manager, advertisers can define the framework of their campaigns in the following ways: • Reach: Advertisers identify what they are willing to pay to acquire their target users.
Approximately 45% of our U.S. employees are from one or more diverse groups, including Asian, Hispanic or Latino, Black or African American, Native Hawaiian or Other Pacific Islander, American Indian or Alaska Native, or Two or More Races and approximately 34% of our U.S. employees are female. None of our employees are represented by a labor union.
Approximately 47% of our U.S. employees identify as being from one or more diverse groups, including Asian, Hispanic or Latino, Black or African American, Native Hawaiian or Other Pacific Islander, American Indian or Alaska Native, or Two or More Races and approximately 36% of our U.S. employees identify as female. None of our employees are represented by a labor union.
As of December 31, 2024, we had approximately 788 employees, or 50% of our total headcount, involved in research and development and related activities. Our research and development organization is based in Palo Alto, California with additional resources around the world.
As of December 31, 2025, we had approximately 380 employees, or 42% of our total headcount, involved in research and development and related activities. Our research and development organization is based in Palo Alto, California with additional resources around the world.
Our geographic diversification enhances our ability to retain and attract highly skilled talent as well as manage our headcount costs. As of December 31, 2024, approximately 54% of our global employees were located outside of the U.S. and 46% in the U.S.
Our geographic diversification enhances our ability to retain and attract highly skilled talent as well as manage our headcount costs. As of December 31, 2025, approximately 60% of our global employees were located outside of the U.S. and 40% in the U.S.
As our business expands to further scale our Advertising solutions and include additional Apps, as we continue to operate our AI-powered advertising engine AXON, and as our operations continue to expand internationally, our compliance requirements and costs may increase and we may be subject to increased regulatory scrutiny.
As our business expands to further scale our advertising solutions, as we continue to operate Axon AI technology, and as our operations continue to expand internationally, our compliance requirements and costs may increase and we may be subject to increased regulatory scrutiny.
First, we provide marketing technology that allows advertisers to reach more of the most suitable users with personalized content in order to increase the number of users who download and engage with their content.
Through Axon Ads Manager, we provide marketing technology that allows advertisers to reach more of the most suitable users with personalized content in order to increase the number of users who download and/or engage with their content.
Our Advertising solutions include a comprehensive suite of tools including: • AppDiscovery, our user acquisition solution, is the cornerstone of our Advertising solutions.
Our advertising solutions include a comprehensive suite of tools including: • Axon Ads Manager, our user acquisition solution, is the cornerstone of our advertising solutions.
AppDiscovery includes the following features: • Advanced campaign management: An interface to create, manage, and automatically optimize campaigns based on return on ad sales goals. • Real-time analytics: An interface to see results and optimize against them with our ROI-based analytics environment. • Lifetime Value ("LTV") reporting: A tool that breaks down campaign results by source and location, allowing advertisers to make real-time, informed decisions about the value and longevity of their campaigns. • High quality and quantity creatives: Advertisers can make and test as many creatives as needed.
Axon Ads Manager includes the following features: • Advanced campaign management: An interface to create, manage, and automatically optimize campaigns based on return on ad spend goals. • Real-time analytics: An interface to see results and optimize against them with our ROI-based analytics environment. • Lifetime Value ("LTV") reporting: A tool that breaks down campaign results by source and location, allowing advertisers to make real-time, informed decisions about the value and longevity of their campaigns.
We intend to continue to invest in attracting and retaining exceptional talent who share our values and will drive our future growth. • Pursue strategic investments and partnerships: Given our proven track record in strategic transactions, and our long-standing relationships with key industry players, we have earned a reputation as a partner of choice, and will continue to consider and leverage strategic acquisitions, partnerships, and investment opportunities to accelerate our growth. 5 Table of Contents Our Customers and Developer Community Our globally diverse customers range from the largest enterprises to small and independent businesses and individuals across a variety of industries.
We intend to continue to invest in attracting and retaining exceptional talent who share our values and will drive our future growth. • Pursue strategic transactions: Given our proven track record in strategic transactions, we will continue to consider and leverage strategic acquisitions, partnerships, and investment opportunities to accelerate our growth. 4 Table of Contents Our Customers and Developer Community Our globally diverse customers range from the largest enterprises to small and independent businesses and individuals across a variety of industries.
See the section titled “Risk Factors—Risks Related to Intellectual Property” for more information regarding risks related to intellectual property. Employees and Human Capital Resources As of December 31, 2024, we had a total of 1,563 employees, comprised of 1,533 full-time and 30 part-time/intern employees, located in 17 countries.
See the section titled “Risk Factors—Risks Related to Intellectual Property” for more information regarding risks related to intellectual property. Employees and Human Capital Resources As of December 31, 2025, we had a total of 898 employees, comprised of 876 full-time and 22 part-time/intern employees, located in 15 countries.
Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage. We generate revenue when our advertisers achieve their return on spend targets with our Advertising solutions, ensuring that their success directly fuels our growth. AppLovin is critical to the success of advertisers and publishers seeking to solve marketing and monetization challenges.
We generate revenue when our advertisers achieve their return on advertising spend targets with our advertising solutions, ensuring that their success directly fuels our growth. AppLovin is critical to the success of advertisers and publishers seeking to solve marketing and monetization challenges.
We have made our Advertising solutions available to e-commerce advertisers, and while we are early in this market expansion, our e-commerce customers to date have experienced positive results, demonstrating the flexibility and future growth potential of our Advertising solutions. ◦ Other content industries: We believe our deep expertise and capabilities will allow us to successfully apply our solutions to tangential sectors, including with mobile OEMs and carriers through our Array product initiative, as well as the growing CTV industry through Wurl.
We have made our advertising solutions available to web-based advertisers, and while we are early in this market expansion, our new customers have experienced positive results, demonstrating the flexibility and future growth potential of our advertising solutions. ◦ Other content industries: We believe our deep expertise and capabilities will allow us to successfully apply our solutions to tangential sectors, such as the growing CTV industry through Wurl.
The competitive global demand helps maximize average revenue per user on each impression with many developers experiencing a measurable increase when moving to MAX. • Automated monetization: MAX saves developers time through its extensive suite of APIs for automation. • Ad quality assurance and review: MAX drives superior user experience with exclusive features that automatically flag risky content to keep developers’ brands safe. • Powerful insights: MAX helps developers better understand the LTV for each user and increase revenue to maximize yield for each ad opportunity.
The competitive global demand helps maximize average revenue per user on each impression with many developers experiencing a measurable increase when moving to MAX. • Automated monetization: MAX saves developers time through its extensive suite of APIs for automation. • Ad quality assurance and review: MAX drives superior user experience with exclusive features that automatically flag risky content to keep developers’ brands safe. • Powerful insights: MAX helps developers better understand the LTV for each user and increase revenue to maximize yield for each ad opportunity. 3 Table of Contents Adjust Adjust is our measurement and analytics marketing platform which provides the visibility, insights, and tools marketers need to grow their apps from early stage to maturity.
Our customers comprise multiple groups within the advertising ecosystem including advertisers leveraging our platform to find users and advertising networks using our mediation solution to purchase advertising inventory. Our Apps also work with advertising networks who purchase advertising inventory and consumers who purchase in-app products.
Our customers comprise multiple groups within the advertising ecosystem including advertisers leveraging our platform to find users and advertising networks using our mediation solution to purchase advertising inventory. We also work with the mobile app publisher community who leverage our mediation solution to monetize their advertising inventory.
Our tools operate at microsecond-level speeds and at vast scale to enhance monetization for developers while preserving the end user experience. • Leverage proprietary data and insights: Advertisers benefit from accessing comprehensive real-time insights through our customized user dashboards, helping them optimize campaigns, improve user engagement, and manage their return on investment. • Automate time consuming and manual processes: Our Advertising solutions automate marketing and monetization, allowing advertisers to focus on improving their content rather than managing complex go-to-market processes manually. • Seamlessly adapt to industry innovation: Our technology is regularly updated as the advertising ecosystem evolves.
Our tools operate at microsecond-level speeds and at vast scale to enhance monetization for developers while preserving the end user experience. 1 Adjust’s marketing platform is operated by our wholly-owned subsidiary and data generated by Adjust's services is not shared with AppLovin or incorporated into or used to optimize its recommendation engine or other technologies unless directed by a customer. 2 Table of Contents • Leverage proprietary data and insights: Advertisers benefit from accessing comprehensive real-time insights through our customized user dashboards, helping them optimize campaigns, improve user engagement, and manage their return on investment. • Automate time consuming and manual processes: Our advertising solutions automate marketing and monetization, allowing advertisers to focus on improving their content and products rather than managing complex go-to-market processes manually. • Seamlessly adapt to industry innovation: Our technology is regularly updated as the advertising ecosystem evolves.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are filed with the SEC.
Other trademarks and trade names referred to in this Annual Report on Form 10-K are the property of their respective owners. 6 Table of Contents Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, are filed with the SEC.
Advertisers are not only able to attract users that download, but also find a high volume of users that stay and engage with their apps for greater retention and ultimately, increased opportunities for better monetization. Revenue from AppDiscovery comprises a vast majority of our Advertising Revenue.
Advertisers are not only able to attract users that initially download their app or visit their website, but also find a high volume of users that stay and engage for greater retention and ultimately, increased opportunities for better monetization. Revenue from Axon Ads Manager comprises substantially all of our revenue.
Return on advertising spend is measured based on third-party attribution, Advertisers are charged for advertising dynamically based on the revenue they receive from acquired users, rather than a simple fixed price per impression or per action (click or installation).
Return on advertising spend is measured based on either third-party or self-attribution. Advertisers are charged dynamically based on their campaign goals , rather than a simple fixed price per impression or per action (click or installation).
Item 1. Business Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end artificial intelligence-powered ("AI") advertising solutions for businesses to reach, monetize and grow their global audience ("Advertising"). We also operate a portfolio of owned mobile apps (“Apps”).
Item 1. Business Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end artificial intelligence-powered ("AI") advertising solutions for businesses to reach, monetize and grow their global audience. Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage.
For additional information, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments".
AppLovin Apps On June 30, 2025, we completed the sale of our Apps business. For additional information, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments".
We continue to expand our CTV business through the addition of new content advertisers and supply channels as well as through the application of AXON to CTV. ◦ Industry partnerships: We plan to further invest in our sales and marketing teams to increase penetration among new and existing clients, including in expansion markets we are targeting. • Attracting and retaining the best talent: Our employees are at the core of our technology and success.
We continue to expand our CTV business through the addition of new content advertisers and supply channels as well as through the application of Axon AI to CTV. • Attracting and retaining the best talent: Our employees are at the core of our technology and success.
We intend to pursue additional intellectual property protection to the extent we believe it would advance our business objectives and maintain our competitive position. Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual property or that it will provide any competitive advantage.
Notwithstanding these efforts, there can be no assurance that we will adequately protect our intellectual property or that it will provide any competitive advantage.
Adjust Adjust is our measurement and analytics marketing platform which provides the visibility, insights, and tools marketers need to grow their apps from early stage to maturity. Our software-as-a-service ("SaaS") platform is an end-to-end solution for optimizing ad performance and maximizing returns, powered by accurate attribution data and in-depth reporting that are essential for meeting business goals.
Our software-as-a-service ("SaaS") platform is an end-to-end solution for optimizing ad performance and maximizing returns, powered by accurate attribution data and in-depth reporting that are essential for meeting business goals. Adjust allows clients to better understand their users’ journey while allowing marketers to make smarter decisions through measurement, attribution, and fraud prevention.
They also have access to our in-house creative team, SparkLabs, for expert ad creation and testing strategies. MAX MAX is our in-app bidding solution that optimizes the value of publishers' advertising inventory by running a single unbiased, real-time competitive auction, driving more competition and higher returns for publishers.
MAX MAX is our in-app bidding solution that optimizes the value of publishers' advertising inventory by running a single unbiased, real-time competitive auction, driving more competition and higher returns for publishers. MAX auctions are more effective than historical tools and approaches because MAX yields more targeted users for advertisers and enables publishers to achieve better competitive prices for each impression.
Additional laws and regulations relating to these areas likely will be passed in the future, and these or existing laws and regulations may be interpreted or enforced in new or expanded manners, each of which could result in significant limitations on ways we can collect and process data of users, employees and others, communicate with users, and operate our business.
Additional laws and regulations relating to these areas likely will be passed in the future, and these or existing laws and regulations may be interpreted or enforced in new or expanded manners.
Such advertising companies vary in size and include Facebook, Google, Amazon, and Unity Software, as well as various private companies, several of which are also our partners and clients. • There are many companies that develop online and mobile games and other mobile apps.
Advertisers typically engage with several advertising platforms and networks to purchase advertisements on mobile apps, devices, and on CTV, looking to optimize their marketing investments. Such advertising companies vary in size and include Meta, Google, Amazon, and Unity Software, as well as various private companies, several of which are also our partners and clients.
This form of personalized advertising focuses on the end user, enabling the advertisers to find the right users and delivering to users more of what they are likely to be interested in. Advertisers set return goals for their campaigns and AppDiscovery targets users to match those goals.
Axon Ads Manager is powered by Axon AI's predictive algorithms to enable advertisers to match their apps and websites to engaged users, delivering more of what they are likely to be interested in. Advertisers set return goals for their campaigns and Axon Ads Manager targets users to match those goals.
We also work with the mobile app publisher community who leverage our mediation solution to monetize their advertising inventory. The scale and breadth of our customers in terms of size and industry provides us with a competitive advantage. Competition We operate in a fragmented advertising ecosystem composed of divisions of large, well-established companies as well as privately-held companies.
Competition We operate in a fragmented advertising ecosystem composed of divisions of large, well-established companies as well as privately-held companies. The large companies in our advertising and mobile app ecosystems may play multiple different roles given the breadth of their businesses.
Our technology finds the users at that value who are most likely to download and engage with the app. • Global scale: Advertisers can choose to connect with users in different regions around the world, and our technology suggests the best locations based on their parameters. 2 We calculate daily active users as the average number of unique device identities that open a mobile app (whether that mobile app our own or a third party’s) which has our software development kit (SDK) on each day in a period.
Our technology finds the users at that value who are most likely to engage with the app or website. • Global scale: Advertisers can choose to connect with users in different regions around the world, and our technology suggests the best locations based on their parameters. • Retain and engage: Our system is built around optimizing to the advertisers revenue so our algorithms automatically adjust based on the likelihood users will engage.
AppLovin Advertising Our comprehensive, end-to-end Advertising solutions deliver value by helping companies scale their businesses and maximize their revenue. Specifically, our solutions enable advertisers to automate their marketing, engagement, and monetization efforts in three core ways.
As our distribution grows, we gain better insights for Axon AI, which then further enhances the efficiency and effectiveness of the Axon Ads Manager. AppLovin Platform Our comprehensive, end-to-end advertising solutions deliver value by helping companies scale their businesses and maximize their revenue by automating their marketing, engagement, and monetization efforts.
Compliance with Government Regulation We are subject to various federal, state, and international laws and regulations that affect companies conducting business on mobile platforms, including those relating to privacy, data protection, and the use and protection of data from employees, users and others (including minors), the internet, behavioral advertising, mobile apps, content, advertising and marketing activities, sweepstakes and giveaways, e-commerce and anti-corruption.
Compliance with Government Regulation We are subject to various federal, state, and international laws and regulations that affect companies conducting business on mobile platforms, including with respect to intellectual property, securities, privacy, data protection, consumer protection, competition, tax, labor and employment, and commercial and other matters in the United States, Europe, and around the world.
Our Advertising solutions are delivered through an integrated and seamless user interface, which provides the following benefits to advertisers: • Reach and attract users at scale: We provide advertisers with access to approximately 1.6 billion daily active users 2 , enabling developers to target and find the right users for their content worldwide.
We also provide advertisers with monetization and analytics technology to maximize the value of their advertising inventory by obtaining a high price for each impression. Our advertising solutions provide the following benefits to advertisers: • Reach and attract users at scale: We enable advertisers to target and find the right users for their content and products worldwide.
Advertisers benefit from this ongoing advancement and optimization and are able to rapidly adapt to industry changes in marketing and monetization without losing focus on content creation. Our Advertising solutions are primarily made up of four key products: AppDiscovery, MAX, Adjust, and Wurl.
Advertisers benefit from this ongoing advancement and optimization and are able to rapidly adapt to industry changes in marketing and monetization. Axon Ads Manager Axon Ads Manager is a suite of marketing solutions that enables developers to automate, optimize, and manage their marketing efforts.
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As our distribution grows, we gain better insights for our AXON recommendation engine, which then further enhances the efficiency and effectiveness of our Advertising solutions. Our Apps consist of a globally diversified portfolio of over 200 free-to-play mobile games across five genres, run by ten studios, some of which we own and others that we partner with.
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It brings data-driven advertising and measurement to CTV. The technology helps companies engage with the highest-value viewers, and ultimately increase their revenue.
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Our studios generally focus on the development of easy to learn and play games, which appeal to a broad range of demographics, but our portfolio also includes several games for other genres. We report our operating results through two reportable segments: Advertising and Apps.
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Wurl's offerings include: • AdPool: A monetization solution that connects CTV supply with top advertisers and access to exclusive demand. • Global FAST Pass (GFP): A distribution solution that makes it easy to launch free ad-supported CTV channels, monetize them instantly, and access data to grow and retain audiences.
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These segments align with how our Chief Operating Decision Maker ("CODM") allocates resources, makes operating decisions, and manages and assesses the performance of our business.
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We believe we compete favorably with respect to these factors. Seasonality Our revenue may experience seasonality during several periods throughout the year driven by fluctuations in advertising demand associated with mobile gaming and e-commerce activity. These fluctuations may be influenced by factors such as major holidays, promotional events, school-related cycles, and broader shifts in consumer spending patterns.
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For the amount of revenue derived from our two segments and other relevant data for the years ended December 31, 2024, 2023, and 2022, as well as other additional information, see Note 14 of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
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Advertising demand may also vary around the timing of new game launches, content updates, and changes in advertiser budgets. As the breadth and scale of advertisers using our platform continues to expand, including increased participation from large e-commerce advertisers, the magnitude and impact of these seasonal trends may become more pronounced over time.
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Second, we provide advertisers with monetization and analytics technology to maximize the value of their advertising inventory 1 Adjust’s marketing platform is operated by our wholly-owned subsidiary and data generated by Adjust's services is not shared with AppLovin or incorporated into or used to optimize its recommendation engine or other technologies. 2 Table of Contents by obtaining a high price for each impression.
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We have registered, and applied for the registration of, U.S. and international trademarks and domain names, and we also hold patents related to our advertising solutions. We intend to pursue additional intellectual property protection to the extent we believe it would advance our business objectives and maintain our competitive position.
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Third, we provide developers, who are often also advertisers, a set of capabilities to optimize their apps and help streamline their businesses. Additionally, we have entered the CTV advertising market with the integration of Wurl.
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Our Advertising solutions also enable publishers to leverage real-time auctions that optimize the value for each impression, while simultaneously enabling them to attain an attractive value for each of the impressions from their advertising inventory.
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When these mutually reinforcing elements are combined, it creates a robust and successful marketing and monetization engine that both sells attractive advertising inventory to advertisers while monetizing it for publishers.
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AppDiscovery AppDiscovery is a suite of marketing solutions that enables developers to automate, optimize, and manage their marketing efforts. AppDiscovery is powered by AXON's predictive algorithms to enable advertisers to match their apps to users that are more likely to download them.
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We measure this figure through our SDK. An individual who uses an app in more than one country on a particular day will be counted as more than one unique device identity; however, if an individual uses more than one app in the same day, such individual is only counted once.
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This figure does not include any users who have opted out of allowing apps to track on their mobile phone . 3 Table of Contents • Retain and engage: Our system is built around optimizing to the advertisers revenue so our algorithms automatically adjust based on the likelihood users will engage.
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MAX auctions are more effective than historical tools and approaches because MAX yields more targeted users for advertisers and enables publishers to achieve better competitive prices for each impression.
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Adjust allows clients to better understand their users’ journey while allowing marketers to make smarter decisions through measurement, attribution, and fraud prevention.
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It brings data-driven advertising and measurement to Connected TV.
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The technology helps companies engage with the highest-value viewers, and ultimately increase their revenue. 4 Table of Contents Wurl has built the following products to meet their customers’ needs: • AdPool: is a monetization solution that connects CTV supply with top advertisers and access to exclusive demand. • TVBits: is an AI-powered interactive, personalized, short-form CTV application that allows viewers to discover content and content companies and streamers the ability to increase viewership, engagement, and revenue. • BrandDiscovery: is an AI-powered CTV advertising tool that identifies contextual segments based on genre, brand safety, and the emotion of each scene to help advertisers deliver the right ad at the right time. • ContentDiscovery: is an AI-powered advertising solution that grows audiences, increases engagement, and reduces churn for streaming platforms and apps. • Global FAST Pass (GFP): is a distribution solution that makes it easy to launch Free Ad-supported CTV channels, monetize them instantly, and access data to grow and retain audiences.
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AppLovin Apps Today, our Apps consist of a globally diversified portfolio of over 200 free-to-play mobile games across five genres, run by ten studios located worldwide with a deep bench of talented developers. Our studios have developed and published games across a number of genres including: casual, match-three, card/casino, mid-core, and hyper-casual.
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A large portion of our portfolio are casual, match-three and card/casino games that have a lower risk of development and generally have more predictable revenue streams and return. These games can be played a few minutes at a time and appeal to a wide range of users across many highly attractive demographics.
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Our studios leverage live ops to quickly iterate and increase in-game monetization by optimizing app economies and improving in-game conversion on items and offers. The studios operating our portfolio of Apps utilize our Advertising solutions to market, scale, and monetize our Apps.
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On February 12, 2025, we announced that we had entered into a term sheet for the sale of our mobile gaming business to a privately held company for total consideration of $900.0 million, consisting of $400.0 million in shares of the acquirer’s common equity and $500.0 million in cash, subject to customary purchase price adjustments.
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The large companies in our advertising and mobile app ecosystems may play multiple different roles given the breadth of their businesses. • Advertisers typically engage with several advertising platforms and networks to purchase advertisements on mobile apps, devices, and on CTV, looking to optimize their marketing investments.
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The larger gaming companies in our gaming ecosystem include Activision Blizzard (Microsoft), Tencent, and Zynga (Take-Two Interactive), as well as other public and private companies, many of which are also our partners and clients. We also expect new developers to enter the market and existing companies to allocate more resources to develop and market more mobile games and apps.
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We believe we compete favorably with respect to these factors. Seasonality The revenue we generate from our Advertising solutions may experience seasonality in the fourth quarter of the year due in part to seasonal holiday demand. As the breadth of advertisers using our Advertising solutions increases, the impact of this seasonality may become more pronounced over time.
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As of December 31, 2024, we owned the following trademarks related to the business: 58 registered trademarks in the United States, 16 pending trademark applications in the United States, as well as 400 registered trademarks in non-U.S. jurisdictions, and 31 pending trademark applications in various non-U.S. jurisdictions.
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We also have registered domain names for websites that we use in our business, such as www.applovin.com. As of December 31, 2024, we owned seven patents related to our Advertising solutions and four related to our Apps business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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If clients or users prefer our competitors’ products or services over our own, or if our competitors are better able to adapt to changes in the preferences of advertisers or users, regulations, or other developments, our business, financial condition, and results of operations could be adversely affected.
If clients prefer our competitors’ products or services over our own, or if our competitors are better able to adapt to changes in the preferences of advertisers or users, regulations, or other developments, our business, financial condition, and results of operations could be adversely affected.
Further, completing larger acquisitions or other strategic transactions can involve significantly more risk in that such transactions involve complicated integrations and require significant management attention to complete, and these large strategic transactions could introduce additional exposure to regulatory and compliance risk.
Further, completing larger acquisitions or other strategic transactions can involve significantly more risk in that such transactions can involve complicated integrations and require significant management attention to complete, and these large strategic transactions could introduce additional exposure to regulatory and compliance risk.
Our efforts to comply with the CCPA, as modified by the CPRA, and other existing and future legal requirements have required us and will continue to require us to devote significant operational resources and incur significant costs and expenses.
Our efforts to comply with the CCPA, as modified by the CPRA, and other existing and future legal requirements have required and will continue to require us to devote significant operational resources and incur significant costs and expenses.
We are subject to a variety of laws in the United States and abroad, and it is possible that a number of laws and regulations may be adopted or construed to apply to us in the United States and elsewhere that could affect our business and restrict the advertising ecosystem or development of our technologies, including state and federal laws regarding antitrust, consumer protection, electronic marketing, protection of minors, data protection, and privacy, communications, content suitability, distribution, competition, taxation, intellectual property, machine learning and AI, money transmission, money laundering, investment screening, export, national security, and climate change, which are continuously evolving and developing and any such policy and regulatory changes could impose operational and compliance burdens.
We are subject to a variety of laws in the United States and abroad, and it is possible that a number of laws and regulations may be adopted or construed to apply to us in the United States and elsewhere that could affect our business and restrict the advertising ecosystem or development of our technologies, including state and federal laws regarding antitrust, consumer protection, electronic marketing, protection of minors, data protection, privacy, communications, content suitability, distribution, competition, taxation, intellectual property, machine learning and AI, money transmission, money laundering, investment screening, sanctions, export, national security, and climate change, which are continuously evolving and developing and any such policy and regulatory changes could impose operational and compliance burdens.
Any of the foregoing developments, or any reports of them occurring or the perception that any of them has occurred, could adversely affect user trust and engagement, harm our brand and reputation, require us to change our business practices, result in claims, demands, investigations, and other proceedings by private parties or governmental actors, and fines, penalties, and other liability or obligations, and adversely affect our business, financial condition, and results of operations.
Any of the foregoing developments, or any reports of them occurring or the perception that any of them has occurred, could adversely affect trust and engagement, harm our brand and reputation, require us to change our business practices, result in claims, demands, investigations, and other proceedings by private parties or governmental actors, and fines, penalties, and other liability or obligations, and adversely affect our business, financial condition, and results of operations.
For example, these obligations could among other things: • require us to dedicate a substantial portion of our cash flow from operations to service and repay the indebtedness, reducing the amount of cash flow available for other purposes • make it difficult for us to pay other obligations; • increase our cost of borrowing; • make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, strategic acquisitions and partnerships, debt service requirements, or other purposes; • restrict us from making strategic acquisitions and partnerships or cause us to make divestitures or similar transactions; • adversely affect our liquidity and result in a material adverse effect on our financial condition upon repayment of the indebtedness; • increase our vulnerability to adverse and economic and industry conditions; • increase our exposure to interest rate risk from variable rate indebtedness; • place us at a competitive disadvantage compared to our less leveraged competitors; and • limit our flexibility in planning for and reacting to changes in our business.
For example, these obligations could among other things: • require us to dedicate a significant portion of our cash flow from operations to service and repay the indebtedness, reducing the amount of cash flow available for other purposes; • make it difficult for us to pay other obligations; • increase our cost of borrowing; • make it difficult to obtain favorable terms for any necessary future financing for working capital, capital expenditures, strategic acquisitions and partnerships, debt service requirements, or other purposes; • restrict us from making strategic acquisitions and partnerships or cause us to make divestitures or similar transactions; • adversely affect our liquidity and result in a material adverse effect on our financial condition upon repayment of the indebtedness; • increase our vulnerability to adverse economic and industry conditions; • increase our exposure to interest rate risk from variable rate indebtedness; • place us at a competitive disadvantage compared to our less leveraged competitors; and • limit our flexibility in planning for and reacting to changes in our business.
These laws, regulations, and sanctions are rapidly evolving and may be in conflict across international jurisdictions, leading to uncertainty and difficulty in achieving full compliance. Should we violate such existing or similar future sanctions or regulations, we may be subject to substantial monetary fines or suffer reputational damage and other penalties that could negatively impact our business.
These laws and regulations are rapidly evolving and may be in conflict across international jurisdictions, leading to uncertainty and difficulty in achieving full compliance. Should we violate such existing or similar future laws or regulations, we may be subject to substantial monetary fines or suffer reputational damage and other penalties that could negatively impact our business.
Malware (including ransomware), viruses, social engineering (predominantly spear phishing attacks or smishing), and general hacking have become more prevalent in the advertising and mobile app ecosystems. Some of these have occurred on our systems and otherwise in our business in the past, and we expect will continue to occur in the future.
Malware (including ransomware), viruses, social engineering (predominantly spear phishing attacks or smishing), and general hacking have become more prevalent in the advertising and mobile app ecosystems. Some of these have occurred on our systems and otherwise in our business in the past, and we expect they will continue to occur in the future.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our reputation, financial condition, or results of operations.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material and adverse effect on our business, including our reputation, financial condition, or results of operations.
Any actual or attempted breaches, incidents, or attacks may cause disruptions or interruptions to our Advertising solutions, Apps, or other offerings, degrade the user experience, impair, disrupt, or interrupt our systems and networks and other systems and networks used in our business, or adversely affect our reputation, business, financial condition, and results of operations.
Any actual or attempted breaches, incidents, or attacks may cause disruptions or interruptions to our advertising solutions, or other offerings, degrade the user experience, impair, disrupt, or interrupt our systems and networks and other systems and networks used in our business, or adversely affect our reputation, business, financial condition, and results of operations.
If we are unable to do any of the foregoing, we may not be able to develop our Advertising solutions and Apps effectively or achieve our expected product roadmap on a timely basis, which could adversely affect our business, financial condition, and results of operations.
If we are unable to do any of the foregoing, we may not be able to develop our advertising solutions effectively or achieve our expected product roadmap on a timely basis, which could adversely affect our business, financial condition, and results of operations.
Changes in our Advertising solutions or Apps, or future changes in export and import regulations may create delays in the introduction of our products and the underlying technology in international markets, prevent our clients with global operations from deploying our products globally, or, in some cases, prevent the export or import of our products to certain countries, governments, or persons altogether.
Changes in our advertising solutions, or future changes in export and import regulations may create delays in the introduction of our products and the underlying technology in international markets, prevent our clients with global operations from deploying our products globally, or, in some cases, prevent the export or import of our products to certain countries, governments, or persons altogether.
The market price of our Class A common stock has, and may continue to, fluctuate substantially depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance.
The market price of our Class A common stock has fluctuated, and may continue to fluctuate, substantially depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance.
Our Advertising solutions and Apps, as well as our internal systems, rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in our systems, could adversely affect our business, financial condition, and results of operations.
Our advertising solutions, as well as our internal systems, rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in our systems, could adversely affect our business, financial condition, and results of operations.
Our Advertising solutions and Apps, as well as our internal systems, rely on software and hardware, including AI technologies, that are highly technical and complex. In addition, our Advertising solutions and Apps, as well as our internal systems, depend in part on the ability of such software and hardware to store, retrieve, process, and manage immense amounts of data.
Our advertising solutions, as well as our internal systems, rely on software and hardware, including AI technologies, that are highly technical and complex. In addition, our advertising solutions, as well as our internal systems, depend in part on the ability of such software and hardware to store, retrieve, process, and manage immense amounts of data.
If, on the other hand, we do not continue to enhance our Advertising solutions or Apps, or do not appropriately allocate our resources amongst opportunities, or we otherwise elect not to pursue new business models that achieve significant commercial success, we may face adverse consequences.
If, on the other hand, we do not continue to enhance our advertising solutions, or do not appropriately allocate our resources amongst opportunities, or we otherwise elect not to pursue new business models that achieve significant commercial success, we may face adverse consequences.
We regard our Advertising solutions and Apps and related source code as proprietary and rely on a variety of methods, including a combination of copyright, patent, trademark, and trade secret laws and employee and third-party non-disclosure agreements, to protect our proprietary rights.
We regard our advertising solutions and related source code as proprietary and rely on a variety of methods, including a combination of copyright, patent, trademark, and trade secret laws and employee and third-party non-disclosure agreements, to protect our proprietary rights.
This concentrated control may have the effect of delaying, preventing, or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of our Class A common stock. 36 Table of Contents Future transfers by the holders of Class B common stock will generally result in those shares automatically converting into shares of Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning or other transfers among the Voting Agreement Parties.
This concentrated control may have the effect of delaying, preventing, or deterring a change in control of our company, could deprive our stockholders of an opportunity to receive a premium for their capital stock as part of a sale of our company, and might ultimately affect the market price of our Class A common stock. 29 Table of Contents Future transfers by the holders of Class B common stock will generally result in those shares automatically converting into shares of Class A common stock, subject to limited exceptions, such as certain transfers effected for estate planning or other transfers among the Voting Agreement Parties.
During periods of macroeconomic uncertainty, levels of advertising and discretionary spending have historically decreased and are likely to decrease and therefore this competition may intensify, which has at times harmed and may in the future harm our revenue.
During periods of macroeconomic uncertainty, levels of advertising spending have historically decreased and are likely to decrease and therefore this competition may intensify, which has at times harmed and may in the future harm our revenue.
In addition, we may need to issue significant amounts of equity or equity-linked consideration, which may dilute our current stockholders’ ownership and could adversely affect the price of our Class A common stock.
In addition, we may need to issue significant amounts of equity or equity-linked consideration, which would dilute our current stockholders’ ownership and could adversely affect the price of our Class A common stock.
A ratings downgrade, including any announcement that our ratings are under further review for a downgrade, could adversely impact our ability to access debt markets in the future and increase the cost of current or future debt and may adversely affect our share price. 35 Table of Contents We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
A ratings downgrade, including any announcement that our ratings are under further review for a downgrade, could adversely impact our ability to access debt markets in the future and increase the cost of current or future debt and may adversely affect our share price. 28 Table of Contents We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which could have a material and adverse effect on our business, financial condition, results of operations, and cash flows.
Our tax obligations are based in part on our corporate operating structure and intercompany arrangements, including the manner in which we develop, value, manage, and use our intellectual property and the valuation of our intercompany transactions.
Our tax obligations are based in part on our corporate operating structure and intercompany arrangements, including the manner in which we develop, value, manage, and use our intellectual property; the valuation of our intercompany transactions; and our corporate governance structure.
We use open source software in our Advertising solutions and Apps and expect to continue to use open source software in the future. In addition, we contribute software source code to open source projects under open source licenses or release internal software projects under open source licenses, and anticipate continuing to do so in the future.
We use open source software in our advertising solutions and expect to continue to use open source software in the future. In addition, we contribute software source code to open source projects under open source licenses or release internal software projects under open source licenses, and anticipate continuing to do so in the future.
We face a number of challenges that may affect our ability to sustain our corporate culture, including: failure to identify, attract, reward, and retain people in critical technical and leadership positions in our organization who share and further our culture and values; the increasing size and geographic diversity of our workforce; competitive pressures to move in directions that may divert us from our culture and values; the continued challenges of a rapidly-evolving industry; the increasing need to develop expertise in new areas of business that affect us; a negative perception of our treatment of employees or our response to employee 14 Table of Contents sentiment related to political or social causes or actions of management; and the integration of new personnel and businesses from acquisitions.
We face a number of challenges that may affect our ability to sustain our corporate culture, including: failure to identify, attract, reward, and retain people in critical technical and leadership positions in our organization who share and further our culture and values; the increasing size and geographic diversity of our workforce; competitive pressures to move in directions that may divert us from our culture and values; the continued challenges of a rapidly-evolving industry; the increasing need to develop expertise in new areas of business that affect us; a negative perception of our treatment of employees or our response to employee sentiment related to political or social causes or actions of management; and the integration of new personnel and businesses from acquisitions.
If we are found to be in violation of U.S. sanctions or export control regulations, including failure to obtain appropriate import, export, or re-export licenses or permits, it can result in significant penalties and government investigations, as well as reputational harm and loss of business. Knowing and willful violations can result in possible incarcerations for responsible employees and managers.
If we are found to be in violation of sanctions or export control regulations, including failure to obtain appropriate import, export, or re-export licenses or permits, it can result in significant penalties and government investigations, as well as reputational harm and loss of business. Knowing and willful violations can result in possible incarcerations for responsible employees and managers.
As of December 31, 2024, we had a total of $3.6 billion in aggregate principal amount of senior unsecured notes outstanding (the “Senior Notes”). We also had $1.0 billion of commitments (with a $100 million letter of credit sublimit) under our senior unsecured credit agreement that provides for an unsecured revolving credit facility (the “Credit Agreement”).
As of December 31, 2025, we had a total of $3.6 billion in aggregate principal amount of senior unsecured notes outstanding (the “Senior Notes”). We also had $1.0 billion of commitments (with a $100 million letter of credit sublimit) under our senior unsecured credit agreement that provides for an unsecured revolving credit facility (the “Credit Agreement”).
We also face competition from providers of developer tools that enable developers to reach their audiences or manage or optimize their advertising campaigns. These companies vary in size and include Facebook, Google, Amazon, and Unity Software as well as various private companies, several of which are also our partners and clients.
We also face competition from providers of developer tools that enable developers to reach their audiences or manage or optimize their advertising campaigns. These companies vary in size and include Meta, Google, Amazon, and Unity Software as well as various private companies, several of which are also our partners and clients.
Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which we rely have in the past led to, and may in the future lead to, outcomes including a negative experience for clients and users who use our offerings, compromised ability of our offerings to perform in a manner consistent with our terms, contracts, or policies, delayed product or App launches or enhancements, targeting, measurement, or billing errors, compromised ability to protect data and/or our intellectual property, or reductions in our ability to provide some or all of our services.
Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which we rely have in the past led to, and may in the future lead to, outcomes including a negative experience for clients who use our offerings and their end users, compromised ability of our offerings to perform in a manner consistent with our terms, contracts, or policies, delayed product launches or enhancements, targeting, measurement, or billing errors, compromised ability to protect data and/or our intellectual property, or reductions in our ability to provide some or all of our services.
It is also possible that laws, policies, legal obligations, or industry codes of conduct may be implemented, modified, or interpreted, in manners that could prevent us from offering services to categories of users, such as residents of a certain jurisdiction, or may make it costlier or more difficult for us to do so.
It is also possible that laws, policies, legal obligations, or industry codes of conduct may be implemented, modified, or interpreted in manners that could prevent us from offering services to categories of persons, such as residents of a certain jurisdiction, or may make it costlier or more difficult for us to do so.
If our clients do not adopt our new Advertising offerings, or develop or further invest in their own competing alternatives, or if we are unable to successfully launch or acquire new Apps or products or maintain or improve existing Apps or successfully enter a new market, our business and results of operations could be adversely affected.
If our clients do not adopt our new advertising offerings or develop or further invest in their own competing alternatives, or if we are unable to successfully launch or acquire new products or features or maintain or improve existing products or features, or enter a new market, our business and results of operations could be adversely affected.
The occurrence of any of these or other factors in the future could result in a reduction in demand for our Advertising solutions and use of our Apps, which may reduce the prices we receive for our advertisements or cause clients to stop advertising with us altogether, either of which would adversely affect our business and results of operations.
The occurrence of any of these or other factors in the future could result in a reduction in demand for our advertising solutions, which may reduce the prices we receive for our advertisements or cause clients to stop advertising with us altogether, either of which would adversely affect our business and results of operations.
In addition, we are subject to federal, state, and local taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and our worldwide provision for (benefit from) taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain.
In addition, we are subject to federal, state, and local taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and our worldwide provision for taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain.
Factors that may be considered a change in circumstances, indicating a requirement to reevaluate whether our goodwill continues to be recoverable, include a significant decline in the market price of our Class A common stock and our market capitalization, slower growth rates in our industry, underperformance of certain assets, or other materially adverse events.
Factors that may be considered a change in circumstances, indicating a requirement to reevaluate whether our goodwill continues to be recoverable, include a significant decline in the market price of our Class A common stock and our market capitalization, slower growth rates in our industry, underperformance of certain assets, or other material and adverse events.
We also store and implement measures designed to secure the source code for our Advertising solutions and Apps as they are created.
We also store and implement measures designed to secure the source code for our advertising solutions as they are created.
While to date these third-party platform privacy changes have had some impact on the discoverability of apps across these platforms, and have had a relatively muted aggregate impact on our results of operations, the ultimate impact of these or any similar or future changes to the policies of Apple or Google may adversely affect our business, financial condition, and results of operations.
While to date these third-party platform privacy changes have had some impact on the discoverability of apps across these platforms, and have had a relatively muted aggregate impact on our results of operations, the ultimate impact of these or any similar or future changes to the policies of any third-party platform may adversely affect our business, financial condition, and results of operations.
As the result of any court judgment or settlement, we may be obligated to alter our Advertising solutions or Apps, in a particular geographic region or worldwide, pay royalties or significant settlement costs, purchase licenses, or develop substitutes. In certain of our agreements, we also indemnify our licensees and other business partners.
As a result of any court judgment or settlement, we may be obligated to alter our advertising solutions, in a particular geographic region or worldwide, pay royalties or significant settlement costs, purchase licenses, or develop substitutes. In certain of our agreements, we also indemnify our licensees and other business partners.
We may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill is determined. We have a substantial amount of indebtedness and our obligations thereunder may limit our operational flexibility or otherwise adversely affect our business, financial condition, and results of operations.
We may be required to record a significant charge to earnings in our financial statements during the period in which any impairment of our goodwill is determined. We have indebtedness, and our obligations thereunder may limit our operational flexibility or otherwise adversely affect our business, financial condition, and results of operations.
Our revenue has been concentrated in the mobile app ecosystem and any failure to successfully expand and diversify our revenue sources beyond the mobile ecosystem could adversely affect our business, financial condition, and results of operations. We face concentration risk in that our Advertising solutions and Apps operate in the mobile app ecosystem and specifically mobile gaming.
Our revenue has been concentrated in the mobile app ecosystem and any failure to successfully expand and diversify our revenue sources beyond the mobile ecosystem could adversely affect our business, financial condition, and results of operations. We face concentration risk in that our advertising solutions primarily operate in the mobile app ecosystem and specifically mobile gaming.
Although we believe 39 Table of Contents these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees.
Although we believe these exclusive forum provisions benefit us by providing increased consistency in the application of Delaware law and federal securities laws in the types of lawsuits to which each applies, the exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or any of our directors, officers, stockholders, or other employees, which may discourage lawsuits with respect to such claims against us and our current and former directors, officers, stockholders, or other employees.
Factors that have in the past caused and could in the future cause fluctuations in the market price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment; • volatility in the market and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our Class A common stock by us or our stockholders; • rumors and market speculation involving us or other companies in our industry; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • actual or perceived significant data breaches involving our Advertising solutions or Apps; • the financial or non-financial metric projections we may provide to the public, any changes in those projections or our failure to meet those projections; • third-party data published about us or other advertising or mobile gaming companies, whether or not such data accurately reflects circumstances; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • fluctuations in the trading volume of shares of our Class A common stock or the size of our public float; 37 Table of Contents • short selling of our Class A common stock or related derivative securities, and the publication of short seller reports; • actual or anticipated changes or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • our issuance or repurchase of shares of our Class A common stock; • litigation or regulatory action involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws, regulations or app store policies or new interpretations of existing laws, regulations or app store policies applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • major catastrophic events in our domestic and foreign markets; • any significant change in our management; and • general economic conditions and slow or negative growth of our markets.
Factors that have in the past caused and could in the future cause fluctuations in the market price of our Class A common stock include the following: • price and volume fluctuations in the overall stock market from time to time, including fluctuations due to general economic uncertainty or negative market sentiment; • volatility in the market and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our Class A common stock by us or our stockholders; • rumors and market speculation involving us or other companies in our industry; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • actual or perceived significant data privacy or cybersecurity incidents involving our advertising solutions; • the financial or non-financial metric projections we may provide to the public, any changes in those projections or our failure to meet those projections; • third-party data published about us or other advertising companies, whether or not such data accurately reflects circumstances; • announcements by us or our competitors of new products or services; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • fluctuations in the trading volume of shares of our Class A common stock or the size of our public float; 30 Table of Contents • short selling of our Class A common stock or related derivative securities, and the publication of short seller reports; • actual or anticipated changes or fluctuations in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • our issuance or repurchase of shares of our Class A common stock; • litigation or regulatory action involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses or technologies by us or our competitors; • new laws, regulations or app store policies or new interpretations of existing laws, regulations or app store policies applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • major catastrophic events in our domestic and foreign markets; • any significant change in our management; and • general economic conditions and slow or negative growth of our markets.
If these third parties fail to adopt or adhere to adequate data security practices, or experience a breach of, or other security incident impacting, their networks or systems, our data or our users’ data may be lost, destroyed, or accessed, modified, disclosed, or otherwise processed in unauthorized manners.
If these third parties fail to adopt or adhere to adequate data security practices, or experience a breach of, or other security incident impacting, their networks or systems, our data, our clients' data, or their end users’ data may be lost, destroyed, or accessed, modified, disclosed, or otherwise processed in unauthorized manners.
It is difficult for us to predict with certainty when we will expand our Advertising solutions, launch a new App or product, or enter a new market as we may require longer development schedules or soft launch periods to meet our quality standards and expectations.
It is difficult for us to predict with certainty when we will expand our advertising solutions, launch a new product or feature, or enter a new market as we may require longer development schedules or soft launch periods to meet our quality standards and expectations.
We endeavor to comply with industry standards and are subject to the terms of our privacy-related obligations and commitments to users and third parties. We strive to comply with all applicable laws, policies, legal obligations, and certain industry codes of conduct relating to privacy and data protection, to the extent reasonably attainable.
We endeavor to comply with applicable industry standards and are subject to the terms of our privacy-related obligations and commitments to clients, end users, and third parties. We strive to comply with all applicable laws, policies, legal obligations, and certain industry codes of conduct relating to privacy and data protection, to the extent reasonably attainable.
If our offerings are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not use our offerings as often in the future, or at all, which could adversely affect our business and results of operations.
If our offerings are unavailable when clients attempt to access them, or if they do not load as quickly as expected, clients may not use our offerings as often in the future, or at all, which could adversely affect our business and results of operations.
Our growth strategy includes further expanding our operations and client and user base in international markets and acquiring companies that may operate in countries where we do not already do business. Such acquisitions may subject us to additional or expanded export regulations.
Our growth strategy includes further expanding our operations and client base in international markets and acquiring companies that may operate in countries where we do not already do business. Such acquisitions may subject us to additional or expanded export and sanctions regulations.
Enhancements of our existing technology and offerings, and new offerings, may not be introduced in a timely or 16 Table of Contents cost-effective manner and may contain errors or defects, both of which could adversely affect our business, financial condition, and results of operations.
Enhancements of our existing technology and offerings, and new offerings, 14 Table of Contents may not be introduced in a timely or cost-effective manner and may contain errors or defects, both of which could adversely affect our business, financial condition, and results of operations.
If we are unable to successfully integrate and manage our acquisitions and strategic partnerships, we may not realize the expected benefits of such transactions or become exposed to additional liabilities, and our business, financial condition, and results of operations could be adversely affected.
If we are unable to successfully integrate and manage our strategic transactions, we may not realize the expected benefits of such transactions or become exposed to additional liabilities, and our business, financial condition, and results of operations could be adversely affected.
Our business depends in part on our ability to maintain and scale our technical infrastructure, and any significant disruption to our Advertising solutions or Apps could damage our reputation, result in a potential loss of engagement, and adversely affect our business, financial condition, and results of operations.
Our business depends in part on our ability to maintain and scale our technical infrastructure, and any significant disruption to our advertising solutions could damage our reputation, result in a potential loss of engagement, and adversely affect our business, financial condition, and results of operations.
If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest, and 30 Table of Contents penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our business, with some changes possibly affecting our tax obligations in future or past years.
If such a disagreement were to occur, and our position were not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of our business, with some changes possibly affecting our tax obligations in future or past years.
Our reputation and ability to attract and retain our clients and users depends in part on the reliable performance of our Advertising solutions and Apps. We have in the past experienced, and may in the future experience, interruptions in the availability or performance of our offerings from time to time.
Our reputation and ability to attract and retain our clients depends in part on the reliable performance of our advertising solutions. We have in the past experienced, and may in the future experience, interruptions in the availability or performance of our offerings from time to time.
Our efforts to protect our Advertising solutions, Apps, and other offerings, our systems and other systems used in our business, and our data, user data, and information from clients, partners, and other third parties, and to disable or otherwise respond to undesirable activities on our offerings, may also be unsuccessful due to software bugs or other technical defects, errors, or malfunctions; employee, contractor, vendor, or partner error or malfeasance, including defects or vulnerabilities in information technology systems or offerings; cyberattacks, attacks designed to disrupt systems or facilities, or breaches of physical security of our facilities or technical infrastructure; or other threats that evolve.
Our efforts to protect our advertising solutions, and other offerings, our systems and other systems used in our 10 Table of Contents business, and our data, user data, and information from clients, partners, and other third parties, and to disable or otherwise respond to undesirable activities on our offerings, may also be unsuccessful due to software bugs or other technical defects, errors, or malfunctions; employee, contractor, vendor, or partner error or malfeasance, including defects or vulnerabilities in information technology systems or offerings; cyberattacks, including attacks designed to disrupt systems or facilities; breaches of physical security of our facilities or technical infrastructure; or other threats that evolve.
The mobile app ecosystem depends in part on a relatively small number of third-party distribution platforms, such as the Apple App Store, the Google Play Store, and Facebook, some of which are direct competitors.
The mobile app ecosystem depends in part on a relatively small number of third-party distribution platforms, such as the Apple App Store, the Google Play Store, and Meta, some of which are direct competitors.
If we are unable to promptly or properly react to new developments in these and other international regions, our business, financial condition, and results of operations could be adversely affected. Our principal offices are located in Palo Alto, an area known for earthquakes and susceptible to fires, and are thus vulnerable to damage.
If 16 Table of Contents we are unable to promptly or properly react to new developments in these and other international regions, our business, financial condition, and results of operations could be adversely affected. Our principal offices are located in Palo Alto, an area known for earthquakes and susceptible to fires, and are thus vulnerable to damage.
Our use of AI technologies, and the use of AI technologies in third-party products and services, may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents, and related liability and harm to our reputation.
Our use of AI technologies, and the use of AI technologies in third-party products and services, may create additional cybersecurity risks or increase cybersecurity risks, including risks of security breaches and incidents, and related monetary liability and harm to our reputation and business.
Demand-side platforms may be given access to personal information in order to bid on advertising inventory, and they may misappropriate and engage in unauthorized use of our information, technology or customers' data.
Demand-side platforms may be given access to personal information in order to bid on advertising inventory and in violation of our contracts, and they may misappropriate and engage in unauthorized use of our information, technology or customers' data.
As our Advertising solutions grow and evolves, including through the use of and integration of AI technologies, and our Advertising solutions and our Apps are used in a greater number of countries and on a larger scale, we may also become subject to new laws and regulations in additional jurisdictions or jurisdictions may claim that we are required to comply with their laws and regulations.
As our advertising solutions grow and evolve, including through the use of and integration of AI technologies, and are used in a greater number of countries and on a larger scale, we may also become subject to new laws and regulations in additional jurisdictions or jurisdictions may claim that we are required to comply with their laws and regulations.
Additionally, in January 2024, Google started to roll out new CMP requirements for ads served in the EEA and UK, which require publishers using Google AdSense, Ad Manager, or AdMob to use CMPs certified by Google and integrated with the IAB's Transparency and Consent Framework when serving ads to users in the EEA or the UK.
Also, in January 2024, Google started to roll out new CMP requirements for ads served in the EEA and UK, which require publishers using Google AdSense, Ad Manager, or AdMob to use CMPs certified by Google and integrated with the IAB's Transparency and Consent Framework when serving personalized ads to users in the EEA or the UK.
For example, the GDPR, which became effective in May 2018, created new individual privacy rights and imposed worldwide obligations on companies processing personal data of European Union ("EU") users, which has created a greater compliance burden for us and other companies with European users, and subjects violators to substantial monetary penalties.
For example, the GDPR, which became effective in May 2018, created new individual privacy rights and imposed worldwide obligations on companies processing personal data of European Union ("EU") users, which has created a greater compliance burden and subjects violators to substantial monetary penalties.
The advertising and mobile app ecosystems are prone to cyberattacks by third parties seeking unauthorized access to our data or the data of our clients or users or to disrupt our ability to provide service.
The advertising and mobile app ecosystems are prone to cyberattacks by third parties seeking unauthorized access to our data or the data of our clients or their end users or to disrupt our ability to provide service.
To the extent we explore entering into new markets or new business opportunities in the advertising ecosystem, mobile gaming, or otherwise, we may also compete with established businesses with more experience in such areas.
To the extent we explore entering into new markets or new business opportunities in the advertising ecosystem, or otherwise, we may also compete with established businesses with more experience in such areas.
Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the U.S. Department of Treasury’s Office of Foreign Assets Control that prohibit the provision of services and the export of hardware, software, and technology to embargoed jurisdictions or sanctioned parties without the required export authorizations.
Furthermore, our activities are subject to U.S. economic sanctions laws and regulations administered by the U.S. Department of Treasury’s Office of Foreign Assets Control that prohibit transactions with sanctioned parties, including the provision of services and the export of hardware, software, and technology to embargoed jurisdictions or sanctioned parties without the required authorizations.
The success of our business depends in part on our ability to develop and enhance our Advertising solutions, including expansion into new markets, and consistently and timely launch new Apps and products.
The success of our business depends in part on our ability to develop and enhance our advertising solutions, including expansion into new markets, and consistently and timely launch new products and features.
Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.
Security breaches, improper access to or disclosure of our data or client data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.
Additionally, any such breach, incident, attack, malfunction, defect, or vulnerability, or the perception that any of these has occurred, may cause clients or users to lose confidence and trust in our Advertising solutions, Apps, or other offerings and otherwise harm our reputation and market position.
Additionally, any such breach, incident, attack, malfunction, defect, or vulnerability, or the perception that any of these has occurred, may cause clients or their end users to lose confidence and trust in our advertising solutions, or other offerings and otherwise harm our reputation and market position.
Any failure to prevent or mitigate security breaches or incidents impacting our Advertising solutions, Apps, or our systems or other systems used in our business, or improper access to or disclosure of our data, including source code, or user data, including personal information, content, or payment information from users, or information from clients or other third parties, that is stored or otherwise processed in our business could result in the unauthorized loss, modification, disclosure, destruction, or other processing of such data, or unavailability of data or of our Advertising solutions, Apps, or other offerings.
Any failure to prevent or mitigate security breaches or incidents impacting our advertising solutions, or our systems or other systems used in our business, or improper access to or disclosure of our data, including source code, or user data, including personal information, or information from clients or other third parties, that is stored or otherwise processed in our business could result in the unauthorized loss, modification, disclosure, destruction, or other unauthorized processing of such data, or unavailability of data or of our advertising solutions, or other offerings.
Further, in the event a court finds either exclusive forum provision contained in our amended and restated bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. Item 1B. Unresolved Staff Comments Not applicable.
In the event a court finds either exclusive forum provision 32 Table of Contents contained in our amended and restated bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. Item 1B. Unresolved Staff Comments Not applicable.
Further, AI technologies may be used in connection with certain cybersecurity attacks, resulting in heightened risks of security breaches and incidents. In addition to our efforts to mitigate cybersecurity risks, we are working to combat misuse of our services and user data by third parties.
AI technologies may also be used in connection with certain cybersecurity attacks, resulting in heightened risks of security breaches and incidents. In addition to our efforts to mitigate cybersecurity risks, we are working to combat misuse of our services and end user data by third parties.
Further, we generally devote more time and resources towards performing diligence on larger transactions and may be required to devote more resources towards regulatory requirements in connection with such transactions.
We also generally devote more time and resources towards performing diligence on larger transactions and may be required to devote more resources towards regulatory requirements in connection with such transactions.
There have been and may continue to be significant attacks on certain third-party providers, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or compromised or do not contain defects or bugs that could result in a disruption, breach, or other incident impacting our systems and networks or those of third parties that support us and our platform and service.
There have been and may continue to be significant attacks on certain third-party providers, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or compromised or do not contain defects or bugs that could result in a disruption, breach, or other incident impacting our systems and networks or those of third parties that support us and our advertising solutions.
Subject to compliance with applicable rules and regulations, we may issue shares of Class A common stock or securities convertible into shares of our Class A common stock 38 Table of Contents from time to time in connection with a financing, acquisition, investment, our equity incentive plans, or otherwise.
Subject to compliance with applicable rules and regulations, we may issue shares of Class A common stock or securities convertible into shares of our Class A common stock from time to time in connection with a financing, acquisition, investment, our equity incentive plans, or otherwise.
We use AI technologies in connection with the development of our Advertising solutions, including our latest AI-powered advertising engine, AXON, and other product offerings, as well as in other aspects of our business, and we will continue to invest in the expansion of our AI capabilities, including possibly generative AI.
We use AI technologies in connection with the development of our advertising solutions, including Axon AI, our advertising recommendation engine, and other product offerings, as well as in other aspects of our business, and we will continue to invest in the expansion of our AI capabilities, including possibly generative AI.
Any decreased use of our products or limitation on our ability to export or sell our products in major international markets could adversely affect our business, financial condition, and results of operations. Changes in tax laws or tax rulings could adversely affect our effective tax rates, business, financial condition, and results of operations.
Any decreased use of our products or limitation on our ability to export or sell our products in major international markets could adversely affect our business, financial condition, and results of operations. 23 Table of Contents Changes in tax laws or tax rulings could adversely affect our effective tax rates, business, financial condition, and results of operations.
We must continually anticipate and adapt to emerging technologies to stay competitive, including the development of AI and its impacts on the advertising ecosystem and mobile gaming.
We must continually anticipate and adapt to emerging technologies to stay competitive, including the development of AI and its impacts on the advertising ecosystem.
If we become liable for these types of claims as a result of the content that is included in our Apps or the advertisements that are served through our Advertising solutions, then our business may be adversely affected. Litigation to defend these claims could be costly and the expenses and damages arising from any liability could adversely affect our business.
If we become liable for these types of claims as a result of the content or the advertisements that are served through our advertising solutions, then our business may be adversely affected. Litigation to defend these claims could be costly and the expenses and damages arising from any liability could adversely affect our business.
We regularly encounter attempts to create false or undesirable user accounts or take other actions for purposes such as spamming or other objectionable ends.
We regularly encounter attempts to create false or undesirable client accounts or take other actions for purposes such as spamming or other objectionable ends.
If such an event were to occur, users may be subject to service disruptions or outages and we may not be able to recover our technical infrastructure and user data in a timely manner to restart or provide our services.
If such an event were to occur, clients may be subject to service disruptions or outages and we may not be able to recover technical infrastructure and data in a timely manner to restart or provide our services.
A platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how mobile apps are labeled or are able to advertise on its platform, change how the personal information of its users is made available to developers on its platform, limit the use of personal information for advertising purposes, restrict how users can share information on its platform or across platforms, or significantly increase the level of compliance or requirements necessary to use its platform.
A platform provider may also change its fee structure, add fees associated with access to and use of its platform, alter how mobile apps are able to advertise on its platform, limit the use of personal information for advertising purposes, restrict how developers or end users can share information on its platform or across platforms, or significantly increase the level of compliance or requirements necessary to use its platform.
Our Advertising solutions, Apps, and other offerings involve the collection, storage, transmission, and other processing of a large amount of data, including personal information, and we and our third-party service providers otherwise store and process information, including our confidential and 11 Table of Contents proprietary business information, and personal information and other information relating to our employees and clients or other third parties.
Our advertising solutions, and other offerings involve the collection, storage, transmission, and other processing of a large amount of data, including personal information, and we and our third-party service providers otherwise store and process information, including our confidential and proprietary business information, and personal information and other information relating to our employees, clients or other third parties.
All of our facilities are also vulnerable to damage from natural or manmade disasters, including power loss, earthquakes, fires, explosions, floods, communications failures, terrorist attacks, contagious disease outbreak (such as the COVID-19 pandemic), and similar events.
All of our facilities are also vulnerable to damage from natural or manmade disasters, including power loss, earthquakes, fires, explosions, floods, communications failures, terrorist attacks, contagious disease outbreak or other public health matters (such as the COVID-19 pandemic), and similar events.
As of December 31, 2024, the Voting Agreement Parties collectively held approximately 68% of the voting power of our outstanding capital stock in the aggregate. This voting power includes shares of Class A common stock deemed beneficially owned in accordance with Rule 13d-3(d)(1) under the Exchange Act.
As of December 31, 2025, the Voting Agreement Parties collectively held approximately 67% of the voting power of our outstanding capital stock in the aggregate. This voting power includes shares of Class A common stock deemed beneficially owned in accordance with Rule 13d-3(d)(1) under the Exchange Act.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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For information about these risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K, including the risk factor entitled “Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.” Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
For information about these risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K, including the risk factor entitled “Security breaches, improper access to or disclosure of our data or client data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.” Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Our Head of Information Security and Compliance provides quarterly and as needed briefings to the Audit Committee regarding our company’s cybersecurity program and information security risks, including any recent AppLovin-related cybersecurity incidents and possible responses, internal and third-party cybersecurity systems testing, third-party risk management, and other topics related to cybersecurity.
Our Head of Information Security and Compliance provides periodic and as needed briefings to the Audit Committee regarding our company’s cybersecurity program and information security risks, including any recent AppLovin-related cybersecurity incidents and possible responses, internal and third-party cybersecurity systems testing, third-party risk management, and other topics related to cybersecurity.
Our InfoSec management team is comprised of qualified cybersecurity professionals whose collective expertise includes penetration testing, cyber threat intelligence, data privacy, information security, and risk and compliance in the healthcare, financial, and technology industries, with certifications such as CISA, CRISC, CISSP, CCSP, CIPP, GIAC, and OSCP.
Our InfoSec management team is comprised of qualified cybersecurity professionals whose collective expertise includes penetration testing, cyber threat intelligence, data 33 Table of Contents privacy, information security, and risk and compliance in the healthcare, financial, and technology industries, with certifications such as CISA, CRISC, CISSP, CCSP, CIPP, GIAC, and OSCP.
Our Head of Information Security and Compliance has over two decades of experience leading cybersecurity, data privacy and risk management programs for large, multi-national organizations and Fortune 500 companies, and CISSP and CRISC certifications.
Our Head of Information Security and Compliance and our InfoSec management team are primarily responsible for assessing and managing our material risks from cybersecurity threats. Our Head of Information Security and Compliance has over two decades of experience leading cybersecurity, data privacy and risk management programs for large, multi-national organizations and Fortune 500 companies, and CISSP and CRISC certifications.
Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face.
Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our executive officers are responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly as a whole, as well as through the Audit Committee.
Removed
Our Board of Directors administers its cybersecurity risk oversight function directly as a whole, as well as through the Audit Committee. 40 Table of Contents Our Head of Information Security and Compliance and our InfoSec management team are primarily responsible for assessing and managing our material risks from cybersecurity threats.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications.
Item 3. Legal Proceedings We are currently involved in, and may in the future be involved in, legal proceedings and claims that arise in the ordinary course of business, as well as governmental and other regulatory investigations and proceedings.
Removed
We are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Added
In addition, third parties have in the past, and may in the future, assert claims against us in the form of letters and other communications.
Added
Securities Litigation Beginning in early March 2025, certain alleged stockholders filed putative class action complaints against the Company, Adam Foroughi, Matthew Stumpf, and/or Herald Chen asserting claims for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and seeking unspecified monetary relief, interest, and attorneys’ fees.
Added
On March 5, 2025, Michael Quiero filed the first complaint against the Company, Adam Foroughi, and Matthew Stumpf in the U.S.
Added
District Court for the Northern District of California (the “Northern District of California”); on March 24, 2025, Ben Brownback filed the second complaint in the same court against the Company, Adam Foroughi, Matthew Stumpf, and Herald Chen in the Northern District of California (the “Brownback Action”); and on April 17, 2025, the Wayne County Employees’ Retirement System filed the third complaint against the Company, Adam Foroughi, Matthew Stumpf, and Herald Chen in the Northern District of California (collectively, the “Securities Complaints”).
Added
In May 2025, Michael Quiero and the Wayne County Employees’ Retirement System voluntarily dismissed the complaints they filed in the Northern District of California. The U.S.
Added
District Court subsequently appointed lead plaintiffs and lead plaintiffs’ counsel in the Brownback Action, and the lead plaintiffs filed an Amended Complaint on September 12, 2025, adding Basil Shikin as a defendant (the "Amended Complaint"). The Amended Complaint alleges that the defendants made materially false and misleading statements regarding the Company's advertising solutions and financial growth.
Added
The Amended Complaint alleges a putative class period running from November 7, 2024 through March 27, 2025. The defendants filed a motion to dismiss the Amended Complaint in November 2025, and a hearing on the defendants’ motion is scheduled in March 2026. We believe that these allegations lack merit and will vigorously contest this action.
Added
Shareholder Derivative Litigation Beginning in late March 2025, certain alleged shareholders filed shareholder derivative complaints in the Northern District of California against the individual then current members of the Company’s board of directors, Adam Foroughi, and Matthew Stumpf (collectively, the “D&O Parties”) alleging claims for violations of Section 14(a) of the Exchange Act, breaches of their fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets (collectively, the “Shareholder Derivative Complaints”).
Added
The Shareholder Derivative Complaints also assert claims for contribution under the Exchange Act against Adam Foroughi and Matthew Stumpf and seek unspecified monetary relief, certain declaratory and injunctive relief, restitution, and attorneys’ fees from the D&O Parties.
Added
Relying on the Securities Complaints, the Shareholder Derivative Complaints allege that the D&O Parties made materially false and misleading statements regarding our advertising solutions and financial growth.
Added
On March 25, 2025, Amit Patel filed the first complaint against the individual then current members of the Company’s board of directors, Adam Foroughi, and Matthew Stumpf in the Northern District of California; and on May 19, 2025, Nathan Smith filed the second complaint against the individual then current members of the Company’s board of 34 Table of Contents directors, Adam Foroughi, and Matthew Stumpf in the Northern District of California.
Added
The Shareholder Derivative Complaints have been consolidated and stayed pending resolution of the defendants’ motion to dismiss in the Brownback Action. We believe that these allegations lack merit and will vigorously contest these actions.
Added
While we remain confident in the Company’s defenses to the asserted allegations in these cases, it is not possible to determine the ultimate outcome at this time, and thus we cannot reasonably estimate the maximum potential exposure or range of possible loss.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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See Note 10 - Equity of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to share repurchases. (2) Average price paid per share includes commissions and fees associated with the repurchases under our repurchase program. Item 6. [Reserved]
See Note 10 — Equity of the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K for additional information related to share repurchases. 36 Table of Contents (2) Average price paid per share includes commissions and fees associated with the repurchases under our repurchase program. Item 6. [Reserved]
The graph below compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the Standard & Poor's 500 Stock Index ("S&P 500") and the S&P 500 Information Technology Index ("S&P IT") through December 31, 2024.
The graph below compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the Standard & Poor's 500 Stock Index ("S&P 500") and the S&P 500 Information Technology Index ("S&P IT") through December 31, 2025.
The graph uses the closing market price on April 15, 2021 of $65.20 per share as the initial value of our Class A common stock. The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A common stock.
The graph uses the closing market price on April 15, 2021 of $65.20 per share as the initial value of our Class A common stock. 35 Table of Contents The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future performance of our Class A common stock.
Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18.
Repurchases may be made from time to time through open market purchases or through privately negotiated transactions, subject to market conditions, applicable legal requirements, including surplus and solvency requirements, and other relevant factors. Open market repurchases may be structured to occur in accordance with the requirements of Rule 10b-18.
We may also, from time to time, enter into Rule 10b-5 trading plans to facilitate repurchases of shares. The repurchase program does not obligate us to acquire any particular amount of our Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at our discretion.
We may also, from time to time, enter into Rule 10b5-1 trading plans to facilitate repurchases of shares. The repurchase program does not obligate us to acquire any particular amount of our Class A common stock, has no expiration date and may be modified, suspended, or terminated at any time at our discretion.
All recipients had adequate access, through their relationships with us or otherwise, to information about us. The issuance of these securities was made without any general solicitation or advertising.
All recipients had adequate access, through their relationships with us or otherwise, to information about us. The issuance of these securities was made without any general solicitation or advertising. Use of Proceeds None.
Holders of Record As of December 31, 2024, there were approximately 39 stockholders of record of our Class A common stock, 8 stockholders of records of our Class B common stock and no holders of record of our Class C common stock.
Holders of Record As of December 31, 2025, there were approximately 32 stockholders of record of our Class A common stock, 8 stockholders of record of our Class B common stock and no holders of record of our Class C common stock.
Use of Proceeds None. 42 Table of Contents Issuer Purchases of Equity Securities The following table summarizes the share repurchase activity for the three months ended December 31, 2024: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (in thousands) (in thousands) (in millions) October 1 - 31 — $ — — $ 2,272 November 1 - 30 — $ — — $ 2,272 December 1 - 31 — $ — — $ 2,272 Total — — (1) In February 2022, our board of directors authorized a repurchase program of up to $750.0 million of our Class A common stock.
Issuer Purchases of Equity Securities The following table summarizes the share repurchase activity for the three months ended December 31, 2025: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (in thousands) (in thousands) (in millions) October 1 - 31, 2025 588 $ 620.79 588 $ 3,327 November 1 - 30, 2025 72 $ 617.64 72 $ 3,282 December 1 - 31, 2025 — $ — — $ 3,282 Total 660 660 (1) In February 2022, our board of directors authorized a share repurchase program to repurchase shares of our Class A common stock.
Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. 41 Table of Contents Stock Performance Graph This performance graph shall not be deemed "soliciting material" or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of AppLovin Corporation under the Securities Act of 1933, as amended (the "Securities Act").
Stock Performance Graph This performance graph shall not be deemed "soliciting material" or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of AppLovin Corporation under the Securities Act of 1933, as amended (the "Securities Act").
Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities During the three months ended December 31, 2024, we issue d 36,557 shares o f our Class A common stock upon the vesting of RSUs under our 2021 Partner Studio Incentive Plan.
Recent Sale of Unregistered Securities and Use of Proceeds Recent Sale of Unregistered Securities During the three months ended December 31, 2025, we issued restricted stock units ("RSUs") covering 14,810 shares of our Class A common stock under our 2021 Partner Studio Incentive Plan (the "PSIP") and issued 16,335 shares of our Class A common stock upon the vesting and settlement of RSUs issued under our PSIP.
In 2023, our board of directors authorized an increase to the repurchase program of $743.6 million. In 2024, our board of directors authorized increases to the repurchase program of an aggregate amount of $3.3 billion.
In October 2025, our board of directors authorized an increase to the repurchase program of $3.2 billion, such that an aggregate amount of approximately $3.3 billion remained available for repurchases as of October 31, 2025.
Added
Dividend Policy We have never paid cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

59 edited+33 added−93 removed22 unchanged
Financing Activities Net cash used in financing activities was $1.7 billion for 2024, primarily consisting of $4.2 billion of principal repayments of debt, $1.1 billion of payments for withholding taxes related to net share settlement of equity awards, and $981.3 million of stock repurchases, partially offset by $4.6 billion of proceeds from issuance of debt.
Net cash used in financing activities was $1.7 billion for 2024, primarily consisting of $4.2 billion in principal repayments of debt, $1.1 billion in payments for withholding taxes related to net share settlement of equity awards, and $981.3 million of stock repurchases, partially offset by $4.6 billion of proceeds from issuance of debt.
Stock-Based Compensation We measure and recognize stock-based compensation expense for share-based awards, primarily including restricted stock units ("RSUs"), performance-based RSUs with both service and market-based conditions, stock options and stock purchase rights granted under the Employee Stock Purchase Plan, based on the grant-date fair value of the awards.
Stock-Based Compensation We measure and recognize stock-based compensation for share-based awards, primarily including restricted stock units ("RSUs"), performance-based RSUs with both service and market-based conditions, stock options and stock purchase rights granted under the Employee Stock Purchase Plan, based on the grant-date fair value of the awards.
We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under our 2024 Credit Agreement that provides for $1.0 billion of unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months.
We believe that our existing cash and cash equivalents, cash flows expected to be generated by our operations, and, if necessary, our borrowing capacity under our 2024 Credit Agreement that provides for a $1.0 billion unsecured revolving credit facility, would be sufficient to satisfy our anticipated working capital and capital expenditures needs for at least the next 12 months.
Other income, net, primarily includes interest earned on our cash and cash equivalents, fair value adjustments relating to our non-marketable equity securities, and foreign currency gains and losses. Provision for (benefit from) income taxes. We are subject to income taxes in the United States and foreign jurisdictions in which we do business.
Other income, net, primarily includes interest earned on our cash and cash equivalents, fair value adjustments relating to our non-marketable equity securities, and foreign currency gains and losses. Provision for income taxes. We are subject to income taxes in the United States and foreign jurisdictions in which we do business.
These impairment assessments involve both qualitative and quantitative evaluations. The qualitative evaluation considers factors such as financial performance, macroeconomic conditions, industry trends, and other relevant events that may impact an reporting unit or asset group.
These impairment assessments involve both qualitative and quantitative evaluations. The qualitative evaluation considers factors such as financial performance, macroeconomic conditions, industry trends, and other relevant events that may impact a reporting unit or asset group.
General and administrative expenses consist primarily of costs incurred to support our business, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and administration, professional services fees for legal, accounting, recruiting, and administrative services (including acquisition-related expenses), insurance, travel, and allocated facilities and information technology costs.
General and administrative expenses consist primarily of costs incurred to support our business, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in finance, accounting, legal, human resources and administration, professional services fees for legal, accounting, recruiting, and administrative services (including acquisition or other transaction-related expenses), insurance, travel, and allocated facilities and information technology costs.
Recent Accounting Pronouncements See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included in this Annual Report on 10-K.
Recent Accounting Pronouncements See Note 2—Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included in this Annual Report on 10-K.
The increase was primarily due to the loss on fair value remeasurement of $20.7 million from the impairment of non-marketable equity securities in the prior year period, partially offset by a decrease in interest income of $10.2 million due to a reduction in average cash balances held during the period.
The increase was primarily due to the loss on fair value remeasurement of $24.2 million from the impairment of non-marketable equity securities in the prior year period, partially offset by a decrease in interest income of $9.1 million due to a reduction in average cash balances held during the period.
In addition, we may enter into additional strategic partnerships as well as agreements to acquire or invest in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate.
In addition, we may enter into additional strategic investments in teams and technologies, including intellectual property rights, which could increase our cash requirements. As a result of these and other factors, we may be required to seek additional equity or debt financing sooner than we currently anticipate, or we may opportunistically seek additional financing.
Interest expense and loss on settlement of debt consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount and issuance costs. 48 Table of Contents Other income, net.
Other Income and Expenses Interest expense and loss on settlement of debt. Interest expense and loss on settlement of debt consists primarily of interest expense associated with our outstanding debt, including accretion of debt discount and issuance costs. Other income, net.
Revenue from MAX is generated based on a percentage of client spend. As more advertising networks move to in-app real-time bidding, we expect growth in the adoption of, and revenue from, MAX. Advertising clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention.
As more advertising networks move to in-app real-time bidding, we expect growth in the adoption of, and revenue from, MAX. Advertising clients use Adjust's measurement and analytics marketing platform to better understand their users' journey while allowing marketers to make smarter decisions through measurement, attribution and fraud prevention.
Revenue from Adjust is primarily generated from an annual software subscription fee. Advertising clients use Wurl's CTV platform to distribute streaming video, maximize Advertising Revenue, and acquire and retain viewers or subscribers. Revenue from Wurl is primarily generated from content companies, typically on a usage-based model.
Revenue from Adjust is primarily generated from an annual software subscription fee. 37 Table of Contents Advertising clients use Wurl's CTV platform to distribute streaming video, maximize revenue, and acquire and retain viewers or subscribers. Revenue from Wurl is primarily generated from content companies, streamers, and advertisers, typically on a usage-based and/or CPM model.
Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities revenue, expenses and related disclosures. On an ongoing basis, we evaluate our estimates based on assumptions that are believed to be reasonable under the circumstances.
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. On an ongoing basis, we evaluate our estimates based on assumptions that are believed to be reasonable under the circumstances.
Growth and structure of the mobile app and advertising ecosystems Our business and results of operations will be impacted by industry factors that drive the overall performance of the mobile app and advertising ecosystems.
Changes to the mobile app and advertising ecosystems Our business and results of operations are and will continue to be impacted by industry factors that drive the overall performance and growth of the mobile app and advertising ecosystems.
Sales and marketing expenses consist primarily of user acquisition costs, marketing programs and other advertising expenses, professional services costs related to the marketing of apps by third parties, personnel-related expenses including salaries, employee benefits, and stock-based compensation for employees engaged in sales and marketing activities, amortization of acquired user-related intangible assets, travel and allocated facilities and information technology costs.
Sales and marketing expenses consist primarily of marketing programs and other advertising expenses, professional services costs, personnel-related expenses including salaries, employee benefits, and stock-based compensation for employees engaged in sales and marketing activities, amortization of acquired user-related intangible assets, travel and allocated facilities and information technology costs. Research and development.
Additionally, our effective tax rate can vary based on the amount of pre-tax income or loss. Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Additionally, our effective tax rate can vary based on the amount of pre-tax income or loss. 40 Table of Contents Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024, as well as a comparison for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The following table provides our Free Cash Flow for 2024, 2023, and 2022, and a reconciliation of net cash provided by operating activities to Free Cash Flow: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 2,099,011 $ 1,061,510 $ 412,773 Less: Purchase of property and equipment (4,776) (4,246) (662) Principal payments of finance leases (20,875) (20,170) (24,083) Free Cash Flow $ 2,073,360 $ 1,037,094 $ 388,028 Net cash used in investing activities $ (106,754) $ (77,829) $ (1,371,468) Net cash used in financing activities $ (1,749,844) $ (1,562,791) $ (526,848) Factors Affecting Our Performance We believe that the future success of our business depends on many factors, including the factors described below.
The following table provides our Free Cash Flow for 2025, 2024, and 2023, and a reconciliation of net cash provided by operating activities to Free Cash Flow: Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 3,971,094 $ 2,099,011 $ 1,061,510 Less: Purchase of property and equipment (473) (4,776) (4,246) Principal payments of finance leases (18,669) (20,875) (20,170) Free Cash Flow $ 3,951,952 $ 2,073,360 $ 1,037,094 Net cash provided by (used in) investing activities $ 358,428 $ (106,754) $ (77,829) Net cash used in financing activities $ (2,593,069) $ (1,749,844) $ (1,562,791) Factors Affecting Our Performance We believe that the future success of our business depends on many factors, including the factors described below.
Research and development expenses consist primarily of product development costs, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in research and development activities, professional services costs related to development of new apps by third parties, consulting costs, regulatory compliance costs, and allocated facilities and information technology costs.
Research and development expenses consist primarily of product development costs, including personnel-related expenses such as salaries, employee benefits, and stock-based compensation for employees engaged in research and development activities, professional services costs, consulting costs, and allocated facilities and information technology costs. General and administrative.
The increase was primarily due to an increase of $44.9 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs. Research and development expenses in 2023 increased by $84.8 million, or 17%, compared to 2022.
Research and development expenses in 2024 increased by $40.9 million, or 12%, compared to 2023, due primarily to an increase of $39.8 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs.
Contractual Obligations As of December 31, 2024, we had non-cancellable purchase obligations primarily related to an agreement for third-party cloud computing services of $1.2 billion, with $438.9 million payable within twelve months. For additional information, see Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Contractual Obligations As of December 31, 2025, we had non-cancelable purchase obligations of $702.8 million, primarily related to an agreement for third-party cloud computing services, of which $398.5 million is payable within twelve months. For additional information, see Note 6—Commitments and Contingencies to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Mobile app developers, including AppLovin, rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute games, collect payments made for IAPs, and target users with relevant advertising. We expect this to continue for the foreseeable future.
Mobile app developers rely on third-party platforms, such as the Apple App Store and Google Play Store, among others, to distribute apps, collect payments made for in-app purchases, and target users with relevant advertising.
Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA for a particular period as net income (loss) before interest expense and loss on settlement of debt, other income, net (excluding certain recurring items), provision for (benefit from) income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation expense, acquisition-related expense and transaction bonus, publisher bonuses, MoPub acquisition transition services, restructuring costs, loss on disposal of long-lived assets, and non-operating foreign exchange (gain) losses.
Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA for a particular period as net income adjusted for loss from discontinued operations, net of income taxes, interest expense and loss on settlement of debt, other income, net (excluding certain recurring items), provision for income taxes, amortization, depreciation and write-offs and as further adjusted for stock-based compensation, transaction-related expense, restructuring costs, and non-operating foreign exchange (gain) loss, as well as certain other items that we believe are not reflective of our core operating performance.
Revenue is generated from our advertisers, typically on a performance-basis, and shared with our advertising publishers, typically on a cost per impression model. Advertising clients use MAX to optimize purchases of app advertising inventory. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability.
Advertising networks use MAX to optimize purchases of app advertising inventory. The MAX tool provides insights to manage against key performance indicators, understand the long-term value of users, and help manage profitability. Revenue from MAX is generated based on a percentage of client spend.
Investing Activities Net cash used in investing activities was $106.8 million for 2024, primarily consisting of $77.0 million in purchases of non-marketable investments and $25.6 million related to contingent considerations for prior acquisitions and capitalized software development costs.
Net cash used in investing activities was $106.8 million for 2024, primarily consisting of $77.0 million in purchases of non-marketable equity securities and $25.6 million related to purchase of intangible assets.
Since our founding in 2011, we have been focused on building Advertising solutions for advertisers to improve the marketing and monetization of their content.
We generate revenue when our advertisers achieve their return on advertising spend targets with our advertising solutions, ensuring that their success directly fuels our growth. Since our founding in 2011, we have been focused on building advertising solutions for advertisers to improve the marketing and monetization of their content.
The improvement in cash flows from operating activities during 2024 compared to 2023 was primarily due to an increase in cash collection from our customers driven by the increase in revenue, partially offset by higher cash operating expenses, primarily related to data center and payroll related costs, as well as higher interest payments due to an increase of debt.
The improvement in cash flows from operating activities during 2025 compared to 2024 was primarily due to an increase in cash collection from our customers driven by revenue growth and a decrease of interest payments on debt as a result of lower interest rates, partially offset by higher cash operating expenses primarily associated with operating our network infrastructure, as well as higher income tax payments due to revenue growth.
Cost of revenue consists primarily of payment processing fees related to IAP Revenue, amortization of acquired technology-related intangible assets, amortization of finance lease right-of-use assets related to certain servers and networking equipment and data center costs related primarily to third-party cloud computing services. The fees for IAPs are processed and collected by third-party distribution partners.
Cost of revenue consists primarily of amortization of acquired technology-related intangible assets, amortization of finance lease right-of-use assets related to certain servers and networking equipment and datacenter costs related primarily to third-party cloud computing services. Sales and marketing .
We believe Free Cash Flow provides useful supplemental information to help investors understand underlying trends in our business and our liquidity. Free cash flow has certain limitations, including that it does not reflect our future contractual commitments. Our definition may differ from the definitions used by other companies and therefore comparability may be limited.
We believe Free Cash Flow provides useful supplemental information to help investors understand 38 Table of Contents underlying trends in our business and our liquidity. Free Cash Flow also reflects cash flows from both continuing and discontinued operations. Our definition may differ from the definitions used by other companies and therefore comparability may be limited.
As of December 31, 2024, we had non-cancelable payments related to leases of servers and networking equipment of $184.1 million, with $30.5 million payable within twelve months. For additional information, see Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
As of December 31, 2025, we had non-cancelable lease payment obligations of $173.9 million, consisting of $140.3 million for server and network equipment leases and $33.7 million for office leases, of which $37.7 million is payable within twelve months. For additional information, see Note 8—Leases to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For additional information, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Interest is payable semi-annually in arrears on June 1 and December 1 of each year, beginning June 1, 2025. For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Taxes As of December 31, 2024, we had recorded liabilities of $60.9 million related to uncertain tax positions. Due to uncertainties in the timing of potential tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonable estimate of the timing of payments in individual years particularly beyond 12 months.
Due to uncertainties in the timing of potential tax audits, the timing of the resolution of these positions is uncertain and we are unable to make a reasonable estimate of the timing of payments in individual years particularly beyond 12 months. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with GAAP.
As we improve our Advertising solutions and Apps, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world. We believe there is significant room for us to further expand our relationships with these clients and increase their usage of our Advertising solutions.
Attract and retain clients We rely on existing clients for a significant portion of our revenue. As we improve our advertising solutions, we can attract additional spend from these clients. Our clients include indie studio developers and some of the largest advertising platforms in the world.
Net cash used in financing activities was $1.6 billion for 2023, primarily consisting of $1.2 billion of stock repurchases, $498.0 million of principal repayments of debt, and $246.4 million of payments for withholding taxes related to net share settlement of equity awards, partially offset by $395.3 million of proceeds from issuance of debt.
Financing Activities Net cash used in financing activities was $2.6 billion for 2025, primarily driven by $2.2 billion in stock repurchases under our share repurchase program and $392.4 million in payments for withholding taxes related to the net share settlement of equity awards.
The following table summarizes our cash flows for the periods indicated: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by operating activities $ 2,099,011 $ 1,061,510 $ 412,773 Net cash used in investing activities $ (106,754) $ (77,829) $ (1,371,468) Net cash used in financing activities $ (1,749,844) $ (1,562,791) $ (526,848) Operating Activities Net cash provided by operating activities was $2.1 billion for 2024, primarily consisting of $1.6 billion of net income, adjusted for certain non-cash items, such as $448.7 million of amortization, depreciation and write-offs, $369.4 million of stock-based compensation expense, $28.4 million of loss on settlement of debt, $12.7 million of change in operating right of use asset, partially offset by a net decrease in the operating assets and liabilities of $349.5 million.
The following table summarizes our cash flows for the periods indicated (all periods include cash flows from continuing and discontinued operations): Year Ended December 31, 2025 2024 2023 (in thousands) Net cash provided by operating activities $ 3,971,094 $ 2,099,011 $ 1,061,510 Net cash provided by (used in) investing activities $ 358,428 $ (106,754) $ (77,829) Net cash used in financing activities $ (2,593,069) $ (1,749,844) $ (1,562,791) Operating Activities Net cash provided by operating activities was $4.0 billion for 2025, primarily consisting of $3.3 billion of net income, adjusted for certain non-cash items, such as $210.4 million of stock-based compensation, $194.8 million of amortization, depreciation and write-offs, $188.9 million of goodwill impairment, $50.0 million of impairment of non-marketable equity securities, and a net increase in the operating assets and liabilities of $77.9 million, partially offset by a gain from the divestiture of our Apps business, net of transaction costs, of $106.2 million.
In addition, we plan to continue to invest in the AI-based, self-learning capabilities of our advertising recommendation engine, AXON. Our investments will also allow us to enter into and expand into new verticals outside of gaming, such as e-commerce, CTV, original equipment manufacturer ("OEM"), and carrier-related markets.
Our investments will also allow us to continue to enter into and expand into new verticals outside of gaming, such as e-commerce and CTV. We also continue to opportunistically explore strategic transactions related to our advertising solutions and the expansion of the markets we serve.
The increase was primarily due to $12.7 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs and an increase of $11.7 million in legal-related costs. 51 Table of Contents General and administrative expenses in 2023 decreased by $29.0 million, or 16% compared to 2022.
Sales and marketing expenses in 2024 increased by $24.8 million, or 11%, compared to 2023 due primarily to an increase of $12.8 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs and an increase of $4.8 million in marketing costs.
Net cash provided by operating activities was $1.1 billion for 2023, primarily consisting of $356.7 million of net income, adjusted for certain non-cash items, such as $489.0 million of amortization, depreciation and write-offs, $363.1 million of stock- 53 Table of Contents based compensation expense, $28.0 million of impairment of non-marketable equity securities, $17.8 million of change in operating right of use asset, and $9.4 million of amortization of debt issuance costs and discount partially offset by a net increase in the operating assets and liabilities of $208.7 million.
Net cash provided by operating activities was $2.1 billion for 2024, primarily consisting of $1.6 billion of net income, adjusted for certain non-cash items, such as $448.7 million of amortization, depreciation and write-offs, and $369.4 million of stock-based compensation, partially offset by a net decrease in the operating assets and liabilities of $349.5 million.
Our Advertising solutions include AppDiscovery, MAX, Adjust, and Wurl. Clients use AppDiscovery to automate, optimize, and manage their user acquisition investments. They set marketing and user growth goals, and AppDiscovery optimizes their ad spend in an effort to achieve their return on advertising spend targets and other marketing objectives. AppDiscovery comprises the vast majority of Advertising Revenue.
They set marketing and user growth goals, and Axon Ads Manager optimizes their ad spend in an effort to achieve their return on advertising spend targets and other marketing objectives. Axon Ads Manager comprises the vast majority of revenue. The revenue we generate from Axon Ads Manager is determined dynamically based on advertisers’ campaign goals .
This increase was due to loss on extinguishment of debt of $28.4 million in the current period. In addition, the prior year period includes a net gain of $15.8 million related to interest rate swaps. In 2023, interest expense and loss on settlement of debt increased by $103.8 million, or 60%, compared to 2022.
In 2024, interest expense and loss on settlement of debt increased by $43.7 million, or 16%, compared to 2023. This increase was due to loss on extinguishment of debt of $28.4 million in 2024.
Interest expense and loss on settlement of debt Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) Interest expense and loss on settlement of debt $ (318,260) $ (275,665) $ (171,863) 15 % 60 % Percentage of revenue (7) % (8) % (6) % In 2024, interest expense and loss on settlement of debt increased by $42.6 million, or 15%, compared to 2023.
Interest expense and loss on settlement of debt Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Interest expense and loss on settlement of debt $ (207,016) $ (317,209) $ (273,508) (35) % 16 % Percentage of revenue (4) % (10) % (15) % In 2025, interest expense and loss on settlement of debt decreased by $110.2 million, or 35%, compared to 2024.
Credit Agreement In December 2024, we entered into an unsecured credit agreement (the "2024 Credit Agreement"), which provided for a $1.0 billion unsecured revolving credit facility maturing on December 5, 2029, with the option for two one-year extensions as permitted under the agreement.
Credit Agreement Our unsecured revolving credit facility under the 2024 Credit Agreement provides for up to $1.0 billion of borrowing capacity and matures on December 5, 2029, with the option for two one-year extensions, subject to the terms of the agreement.
Overview Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end software and AI-powered solutions for businesses to reach, monetize and grow their global audience. We also operate a portfolio of owned mobile apps and accelerated our market penetration through an active acquisition and partnership strategy.
Overview Our mission is to create meaningful connections between companies and their ideal customers. We provide end-to-end AI-powered advertising solutions for businesses to reach, monetize and grow their global audience. Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage.
Comparison of Our Results of Operations for the Twelve Months Ended December 31, 2024, 2023, and 2022 Revenue Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) Advertising Revenue $ 3,224,058 $ 1,841,762 $ 1,049,167 75 % 76 % In-App Purchases Revenue 1,002,656 989,007 1,179,133 1 % (16) % In-App Advertising Revenue 482,534 452,318 588,758 7 % (23) % Total Apps Revenue 1,485,190 1,441,325 1,767,891 3 % (18) % Total Revenue $ 4,709,248 $ 3,283,087 $ 2,817,058 43 % 17 % For the twelve months ended December 31, 2024, our Advertising Revenue increased by $1.4 billion, or 75%, from the prior year period primarily due to improved AppDiscovery performance, where the volume of installations increased 50% and net revenue per installation increased 22% compared to the prior year period.
Comparison of Our Results of Operations for the Twelve Months Ended December 31, 2025, 2024, and 2023 Revenue Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Revenue $ 5,480,717 $ 3,224,058 $ 1,841,762 70 % 75 % For the twelve months ended December 31, 2025, our revenue increased by $2.3 billion, or 70%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 3% and net revenue per installation increased 72% compared to the prior year period.
The decrease in tax provision was primarily driven by an increase of $172.9 million of stock-based compensation benefit, a benefit of $123.2 million due to foreign income taxed at a different rate, an increase of $31.5 million in the research and development credit, offset by an increase of $251.0 million due to higher pre-tax book income of $1.6 billion in 2024 as compared to pre-tax book income of $380.6 million in 2023, and an increase of $34.7 million related to increase in Global Intangible Low-Taxed Income.
The increase in tax provision was primarily driven by higher pre-tax book income, global minimum tax, a decrease in stock-based compensation benefits, and a decrease in research and development credits, partially offset by an increase in deduction benefits related to foreign-derived intangible income. In 2024, provision for income taxes decreased by $21.4 million compared to 2023.
Provision for (benefit from) Income Taxes Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) Provision for (benefit from) income taxes $ (3,771) $ 23,859 $ (12,230) (116) % (295) % Percentage of revenue — % 1 % — % In 2024, tax provision for income taxes decreased by $27.6 million, or 116%, compared to 2023.
Provision for Income Taxes Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Provision for income taxes $ 519,715 $ 22,419 $ 43,776 ** ** Percentage of revenue 9 % 1 % 2 % ** Not meaningful In 2025, provision for income taxes increased by $497.3 million compared to 2024.
While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to continue to grow profitably while maintaining strong cash flow. 46 Table of Contents Continue to invest in innovation We have made, and intend to continue to make, significant investments in our Advertising solutions to enhance their effectiveness and value proposition for our clients.
Continue to invest in innovation We have made, and intend to continue to make, significant investments in our advertising solutions to enhance their effectiveness and value proposition for our clients.
Advertising clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Facebook and Google. We see multiple opportunities to gain new Advertising clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful.
We are able to grow our revenue by improving our various technologies, including improvements to our Axon AI recommendation engine. Advertising clients include a wide variety of advertisers, from indie developer studios to some of the largest global internet platforms, such as Meta and Google.
As of December 31, 2024, $2.3 billion remained available and authorized for repurchases under our stock repurchase program. For additional information on the stock repurchase program, see Note 10 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The program has no expiration date, does not obligate us to repurchase any specific amount of stock, and may be modified, suspended, or terminated at any time at our discretion. For additional information, see Note 10—Equity to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
For the twelve months ended December 31, 2023, our IAP Revenue from Apps decreased by $190.1 million, or 16%, from the prior year period, primarily due to a 12% decrease in the volume of IAPs and a 5% decrease in price per IAP.
For the twelve months ended December 31, 2024, our revenue increased by $1.4 billion, or 75%, from the prior year period primarily due to improved Axon Ads Manager performance, where the volume of installations increased 50% and net revenue per installation increased 22% compared to the prior year period.
Sales and marketing Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) Sales and marketing $ 849,209 $ 830,718 $ 919,550 2 % (10) % Percentage of revenue 18 % 25 % 33 % Sales and marketing expenses in 2024 increased by $18.5 million, or 2%, compared to 2023 due primarily to an increase of $10.3 million in depreciation and amortization driven by write-offs of certain intangible assets, an increase of $9.4 million increase in personnel-related expenses primarily related to an increase in stock-based compensation related payroll costs and an increase of $9.6 million in professional services costs associated with the marketing of apps by third parties.
Cost of revenue in 2024 increased by $164.0 million, or 46%, compared to 2023, due primarily to an increase of $141.3 million in expenses associated with operating our network infrastructure driven by the growth in our operations. 42 Table of Contents Sales and marketing Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Sales and marketing $ 203,651 $ 252,863 $ 228,025 (19) % 11 % Percentage of revenue 4 % 8 % 12 % Sales and marketing expenses in 2025 decreased by $49.2 million, or 19%, compared to 2024 due primarily to a decrease of $57.1 million in personnel-related expenses related to a decrease in stock-based compensation related payroll costs and a reduction in headcount.
General and administrative Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) General and administrative $ 181,085 $ 152,585 $ 181,627 19 % (16) % Percentage of revenue 4 % 5 % 6 % General and administrative expenses in 2024 increased by $28.5 million, or 19% compared to 2023.
General and administrative Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) General and administrative $ 233,502 $ 164,916 $ 150,932 42 % 9 % Percentage of revenue 4 % 5 % 8 % General and administrative expenses in 2025 increased by $68.6 million, or 42% compared to 2024, due primarily to an increase of $31.6 million in professional services costs primarily associated with transaction support and an increase of $24.5 million in bad debt expense primarily related to new initiatives.
Sales and marketing expenses in 2023 decreased by $88.8 million, or 10%, compared to 2022 primarily due to a $126.5 million decrease in user acquisition costs and a $12.3 million decrease in professional services costs associated with the strategic review and optimization of our Apps segment, offset by a $47.5 million increase in personnel-related expense primarily due to an increase in stock-based compensation.
General and administrative expenses in 2024 increased by $14.0 million, or 9% compared to 2023, due primarily to an increase of $9.5 million in indirect tax costs and an increase of $5.5 million in personnel-related expenses related to an increase in stock-based compensation related payroll costs, partially offset by a decrease of $6.3 million in bad debt expense.
Any changes made in the policies of third-party platforms could drive rapid change across the mobile app and advertising ecosystems. For example, in April 2021, Apple started implementing its application tracking transparency framework that, among other things, requires users' opt-in consent for certain types of tracking.
Any changes made to the policies of these third party platforms can drive rapid change across the mobile app and advertising ecosystems.
For additional information, see Note 3 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 54 Table of Contents As of December 31, 2024, we had a non-cancelable payment related to a third-party intellectual property license of $12.8 million, which was paid in January 2025.
For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 45 Table of Contents Long-term Debt As of December 31, 2025, we had $3.6 billion of senior unsecured notes outstanding, issued in multiple series that mature between 2029 and 2054 and bear fixed annual interest rates ranging from 5.125% to 5.950%.
Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $741.4 million, consisting primarily of cash on deposit with banks and short-term liquid investments in money market deposit accounts.
We evaluated the provisions of OBBBA effective in 2025 and its impact on the consolidated financial statements was immaterial. 44 Table of Contents Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of $2.5 billion, consisting primarily of cash held in checking and interest-bearing deposit accounts, as well as investments in money market funds .
Research and development Year Ended December 31, 2023 to 2024 % change 2022 to 2023 % change 2024 2023 2022 (in thousands, except percentages) Research and development $ 638,689 $ 592,386 $ 507,607 8 % 17 % Percentage of revenue 14 % 18 % 18 % Research and development expenses in 2024 increased by $46.3 million, or 8%, compared to 2023.
Research and development Year Ended December 31, 2024 to 2025 % change 2023 to 2024 % change 2025 2024 2023 (in thousands, except percentages) Research and development $ 226,510 $ 374,710 $ 333,781 (40) % 12 % Percentage of revenue 4 % 12 % 18 % Research and development expenses in 2025 decreased by $148.2 million, or 40%, compared to 2024, due primarily to a decrease of $151.1 million in personnel-related expenses related to a decrease in stock-based compensation related payroll costs.
The Advertising and Apps segments provide a view into the organization of our business and generate revenue as follows: Advertising Revenue We primarily generate Advertising Revenue from fees paid by advertisers who use our Advertising solutions to grow and monetize their content. We are able to grow our Advertising Revenue by improving our various technologies.
See Note 2 — Summary of Significant Accounting Policies and Note 3 – Discontinued Operations of the Notes to consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. Our Business Model We primarily generate revenue from fees paid by advertisers who use our advertising solutions to grow and monetize their content.
We expect that these investments will require spending on research and development, and acquisitions and partnerships related to technology components and products. We believe investments in our technology, including our AI-powered advertising engine AXON, AppDiscovery, Adjust, and MAX, will further improve effectiveness for advertisers.
We expect to continue to invest in our technology and solutions and to incur related costs, including costs to attract and retain critical engineering talent, such as stock-based compensation, as well as datacenter costs as we continue to launch enhancements to our Axon AI recommendation engine. We believe investments in our technology will further improve effectiveness for advertisers.
The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize deferred tax assets to the extent that these assets are more likely than not to be realized.
We consider both positive and negative evidence regarding the realizability of deferred tax assets in assessing the need for valuation allowances, and if necessary, adjust the valuation allowance so that the net deferred tax assets are recorded only to the extent we conclude it is more likely than not that these deferred tax assets will be realized.
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Our scaled business model is intricately linked to the advertising ecosystem, providing a durable competitive advantage. We generate revenue when our advertisers achieve their return on spend targets with our Advertising solutions, ensuring that their success directly fuels our growth.
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Recent Developments On May 7, 2025, we, along with our subsidiaries Morocco, Inc. and AppLovin GmbH (collectively, the “Sellers”) entered into a Purchase Agreement (the “Agreement”) with Tripledot and its subsidiaries Eton Games Inc. ("Eton") and Tripledot Group Holdings Limited (collectively, with Tripledot, the “Purchasers”) relating to the sale of our Apps business.
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We capitalized on our success and understanding of the mobile app ecosystem by entering into the mobile game apps industry in 2018. Our global diversified portfolio of apps now consist of over 200 free-to-play mobile games across five genres, run by ten studios.
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On June 30, 2025, we and Tripledot entered into an amendment to the Agreement to provide, among other things, that in lieu of the issuance of a secured promissory note by Eton to us or our designated affiliate to fund a portion of the full Cash Consideration (as defined in the Agreement), Tripledot may elect to pay such amount in cash.
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For 2024, our revenue grew 43% year-over-year from 2023, from $3.3 billion in 2023 to $4.7 billion in 2024. For 2023, our revenue grew 17% year-over-year from 2022, from $2.8 billion in 2022 to $3.3 billion in 2023.
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On June 30, 2025, we consummated the sale of the Apps business to the Purchasers for $400 million in cash, subject to closing adjustments, and equity consideration representing approximately 20% of Tripledot’s fully-diluted equity at the time of closing. No promissory note was issued as part of the transaction.
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We generated net income of $1.6 billion in 2024, net income of $356.7 million in 2023, and net loss of $192.9 million in 2022. We generated Adjusted EBITDA of $2.7 billion, $1.5 billion, and $1.1 billion in 2024, 2023, and 2022, respectively.
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Following the sale of the Apps business, we operate as a single operating and reportable segment. Results related to our Apps business are presented as discontinued operations in our consolidated financial statements.
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Additionally, we have generated strong cash flows, with net cash provided by operating activities of $2.1 billion, $1.1 billion, and $412.8 million in 2024, 2023, and 2022, respectively. Given our strong financial position, we have been able to reinvest in our expansion and growth, and repurchase and withhold shares of our Class A common stock.
Added
We see multiple opportunities to gain new clients, and to increase spend from existing clients, as we help them grow their businesses and make them more successful. Our advertising solutions include Axon Ads Manager, MAX, Adjust, and Wurl. Clients use Axon Ads Manager to automate, optimize, and manage their user acquisition investments.
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See the section titled “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated in accordance with GAAP. 43 Table of Contents Recent Developments On February 12, 2025, we announced that we entered into a term sheet for the sale of our mobile gaming business to a privately held company (the “Acquirer”) for total consideration of $900.0 million (the “Term Sheet”).
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Thus, our Adjusted EBITDA and Adjusted EBITDA margin should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
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The Term Sheet provides for the total consideration to consist of $400.0 million in shares of the Acquirer’s common equity and $500.0 million in cash, subject to customary purchase price adjustments.
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The following table provides our Adjusted EBITDA and Adjusted EBITDA margin for 2025, 2024, and 2023, and a reconciliation of net income to Adjusted EBITDA: Year Ended December 31, 2025 2024 2023 (in thousands, except percentages) Revenue $ 5,480,717 $ 3,224,058 $ 1,841,762 Net income 3,333,751 1,579,776 356,711 Net margin 60.8% 49.0% 19.4% Loss from discontinued operations, net of income taxes 99,444 9,748 101,115 Net income from continuing operations 3,433,195 1,589,524 457,826 Net margin from continuing operations 62.6% 49.3% 24.9% Adjusted as follows: Interest expense and loss on settlement of debt 207,016 317,209 273,508 Other income, net 1 (15,694) (23,396) (4,729) Provision for income taxes 519,715 22,419 43,776 Amortization, depreciation and write-offs 130,724 128,791 119,152 Non-operating foreign exchange (gain) loss (3,949) 1,642 837 Stock-based compensation 207,958 357,431 342,551 Transaction-related expense 27,579 885 1,047 Restructuring costs 5,908 17,259 2,316 Adjusted EBITDA $ 4,512,452 $ 2,411,764 $ 1,236,284 Adjusted EBITDA margin 82.3% 74.8% 67.1% 1 Excludes recurring operational foreign exchange gains and losses.
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The Term Sheet also provides that the Acquirer will borrow up to $250.0 million of the cash portion of the total consideration and that, if the Acquirer is unable to obtain such financing, we agree to provide financing in such amount to the Acquirer through the issuance of a promissory note.
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We believe there is significant room for us to further expand our relationships with existing clients and increase their usage of our advertising solutions, as well as to onboard new clients both inside and outside of mobile gaming. We expect to continue to invest in sales and marketing to enhance awareness of the Axon brand and drive new client acquisition.
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The Term Sheet is non-binding, except with respect to an agreement by the parties to use commercially reasonable best efforts in good faith to negotiate and finalize definitive agreements for the proposed transaction, a prohibition on us from engaging in discussions or negotiations with any third party other than the Acquirer regarding the sale of our mobile gaming business for a specified period, and customary terms such as fees and expenses, governing law, and termination.
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Both the Apple App Store and Google Play Store have made various changes to their policies in recent years, as further discussed in the section titled “Risk Factors–Risks Related to Our Business, Operations and Industry–-If third-party platforms change their policies in a way that harms our business, including the design and effectiveness of our advertising solutions, our business, financial condition, and results of operations could be adversely affected.” The mobile app and advertising ecosystems also continue to be subject to an evolving legal and regulatory landscape, including with respect to data protection, privacy, and AI.
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Our Business Model We collect revenue from Advertising and our Apps. During the twelve months ended December 31, 2024, Advertising Revenue represented 68% of total revenue and Apps Revenue represented 32% of total revenue. We report our operating results through two reportable segments: Advertising and Apps.
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Components of Results of Operations Revenue We generate substantially all of our revenue from fees collected from advertisers spending on Axon Ads Manager, which are determined dynamically based on advertisers’ campaign goals . Revenue from other services was not material.
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Our CODM, the Chief Executive Officer, evaluates performance of each segment based on several factors, of which the financial measures are segment revenue and segment adjusted EBITDA, as defined in Note 14 to our consolidated financial statements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Because the interest rates applicable to borrowings under the 2024 Credit Agreement are variable, we are exposed to market risk from changes in the underlying index rates, which affect our cost of borrowing. For additional information, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Because the interest rates applicable to borrowings under the 2024 Credit Agreement are variable, we are exposed to market risk from changes in the underlying index rates, which affect our cost of borrowing. For additional information, see Note 9—Debt to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
We are also exposed to fluctuations in our net income (loss) as a result of transaction gains or losses related to remeasuring monetary asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.
We are also exposed to fluctuations in our net income as a result of transaction gains or losses related to remeasuring monetary asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded.
If there is a change in foreign currency exchange rates, the translating adjustments resulting from the conversion of our foreign subsidiaries’ financial statements into U.S. dollars would result in a gain or loss recorded as a component of accumulated other comprehensive income (loss), which is part of stockholders’ equity.
If there is a change in foreign currency exchange rates, the translating adjustments resulting 47 Table of Contents from the conversion of our foreign subsidiaries’ financial statements into U.S. dollars would result in a gain or loss recorded as a component of accumulated other comprehensive income (loss), which is part of stockholders’ equity.
Foreign currency transaction gains and losses were not material for the year ended December 31, 2024, 2023, or 2022. 56 Table of Contents
Foreign currency transaction gains and losses were not material for the year ended December 31, 2025, 2024, or 2023. 48 Table of Contents
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in interest rates and foreign exchange. Interest Rate Fluctuation Risk As of December 31, 2024, we had unrestricted cash and cash equivalents of $741.4 million.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in interest rates and foreign exchange. Interest Rate Fluctuation Risk As of December 31, 2025, we had unrestricted cash and cash equivalents of $2.5 billion.

Other APP 10-K year-over-year comparisons