By Adam Levine
AppLovin reported solid fourth-quarter earnings Wednesday afternoon. Its shares were down sharply in after-hours trading.
Earnings per share were $3.24, ahead of Wall Street's consensus estimate of $2.95. Revenue for the quarter reached $1.66 billion, above expectations of $1.6 billion, and up 66% on the year after accounting for a 2025 divestment.
Guidance for current-quarter revenue also exceeded Wall Street projections. The company forecasted continued strong profit margins.
Despite the beat in guidance, the sales outlook represented a deceleration of revenue growth.
Shares were down 5% in after-hours trading following the report.
This is breaking news. Read a preview of AppLovin's earnings below and check back for more analysis soon.
Adtech company AppLovin reports its fourth-quarter earnings under a cloud of negative reports and AI disruption. But there is little disagreement over the rapid growth of sales and earnings.
On average, Wall Street analysts project fourth-quarter earnings-per-share of $2.95, up from $1.73 last year, a 71% jump, after accounting for a 2025 divestment. Sales are seen rising 60% to $1.6 billion.
AppLovin has an ad platform that facilitates ads surrounding mobile apps, especially games, one of the last untamed wildernesses of digital advertising.
But clouds are gathering over AppLovin. Last year saw short seller reports that claimed widespread violations of Apple and Google app store policies, though neither company has publicly acknowledged any wrongdoing. There is also an ongoing SEC investigation into its data collection practices. But 2026 has brought a flood of headwinds to the stock, which is down over 30% this year.
Another short-seller report from CapitalWatch in January made the more salacious claim that AppLovin had ties to international crime syndicates. CapitalWatch describes itself on its website as "A Vigilante of the Capital Flowing in and out of Stock Markets Around the World." After AppLovin denied the allegations, CapitalWatch retracted its claim.
January also saw a negative catalyst from the debut of an experimental Google AI product called Project Genie, which can generate three-dimensional virtual worlds and place controllable characters in them. Many saw the future of game design in this, and the entire gaming segment got crushed that day. AppLovin shares were down 17%.
But as analyst Jefferies Brent Thill wrote, "Assuming a proliferation [of] AI games, platforms that enable discovery and distribution of content become even more valuable. Ads are already how the vast majority of how mobile games are installed today, with APP the leading market share."
AppLovin would likely be a winner, not a loser, in this new AI-game world.
AppLovin faces competition from Unity Software, but in February an AI-powered mobile adtech product launched from a start-up called CloudX. This played into the current narrative that AI will upend software as much as any industry. AppLovin stock was down 16% that day.
Finally, this morning Unity reported its earnings, and its guidance for the current quarter was disappointing. Unity stock was down nearly 27% in midday trading, and it took AppLovin with it, with its shares down about 4%.
Write to Adam Levine at adam.levine@barrons.com
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February 11, 2026 16:28 ET (21:28 GMT)
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