AppLovin Corporation's stock experienced a sharp after-hours plunge of 7.62% on Wednesday, following the release of its fourth-quarter financial results. The mobile advertising technology company reported earnings that exceeded analyst expectations, yet investors reacted negatively to emerging concerns about the company's future growth trajectory.
Despite posting earnings per share of $3.24, beating the consensus estimate of $2.95, and revenue of $1.66 billion that surpassed the $1.60 billion forecast, the stock declined significantly in extended trading. The company's forward guidance, while still strong, indicated a deceleration in revenue growth, contributing to investor apprehension.
Market sentiment was further weighed down by broader concerns about artificial intelligence disruption in the software and adtech sectors, ongoing regulatory scrutiny including an SEC investigation, and negative spillover from competitor Unity Software's disappointing earnings report earlier in the day. These factors collectively overshadowed the strong quarterly performance, leading to the after-hours selloff.