AppLovin Corporation shares plunged 15.03% in pre-market trading, as investors reacted to the company's second-quarter earnings report released after the previous session's close, which revealed revenue falling short of expectations and a softer-than-anticipated third-quarter outlook.

The advertising technology company reported Q2 revenue of $1.92 billion, up 53% year-over-year but slightly below the consensus estimate of $1.94 billion. Adjusted EBITDA came in at $1.61 billion, also missing forecasts, while earnings per share of $3.76 met expectations. For the third quarter, AppLovin guided for revenue between $2.06 billion and $2.09 billion, roughly in line with estimates, but its adjusted EBITDA outlook of $1.71 billion to $1.74 billion fell below the $1.76 billion Wall Street had anticipated.

CEO Adam Foroughi acknowledged that the results fell short of the company's own standards, attributing the lighter-than-expected quarter to the timing of AI model improvements that landed just after the quarter ended. He emphasized that advertiser demand remains strong and the business is already back on track. However, the combination of the revenue miss, soft profit guidance, and elevated expectations heading into the report triggered a sharp sell-off, with multiple analysts including Jefferies, BTIG, and RBC cutting their price targets following the results.