AppLovin (APP) 10 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Ryan Gee	Head of Investor Relations and Strategic Finance
Adam Foroughi	Chief Executive Officer and Co-Founder
Herald Chen	President and Chief Financial Officer
Tim Nollen	Macquarie
Youssef Squali	Truist Securities
Eric Sheridan	Goldman Sachs
Clark Lampen	BTIG
Matthew Cost	Morgan Stanley
Stephen Ju	Credit Suisse
Omar Dessouky	Bank of America
Franco Granda Penaherrera	D.A. Davidson
Martin Yang	Oppenheimer
Ralph Schackart	William Blair
David Pang	Stifel

Call transcript

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Ryan Gee

Hello. Good afternoon, everyone. Welcome to AppLovin's Earnings Call for the Third Quarter Ended September 30, 2022.

Joining me today to discuss our results are our Co-Founder, CEO and Chairperson Adam Foroughi; and our President and Chief Financial Officer, Herald Chen. Please note our SEC filings as well as our shareholder letter discussing our third quarter performance, are available at investors.applovin.com.

review may the forward-looking performance market, company our we events, regarding of call, portfolio. and regarding Apps expectations the strategic today's be statements making future the During our of future financial These statements assumptions and law. except assume we them, our obligation update required and to beliefs, no as based are on current by results differ may materially Actual from the results predicted. for our XX, review the third we most XX-Q Form XX-Q our XXXX, the risk recently June ended in in to the factors you quarter, quarter encourage expect Form later We for to and fiscal this filed which file week.

also We sure recorded, remarks, measures measures. available Please conference IR it to Reconciliations are to Adam. or open measures GAAP and review ahead, will this Relations like as available of to opening Adam call superior over financial our discussing be for in Investor non-GAAP up letter the it non-GAAP intended shareholder will we'll advise go GAAP replay and We not non-GAAP reconciliations turn to being measures are results. for included on be the be be our is on the I'd a now substitute Please some financial a our our to GAAP then website. for Q&A. our and website.

Adam Foroughi

for Thanks today. joining us all

nearly to building for going years, not you're this takes any As businesses great to I build easy decades disappointment I've market know the business. continues one to to thing hear not been it me it's disappointed, but now. be quarters get is difficult, from And today. two

today. to at things about several AppLovin have We excited be

to $X of over nearly to We're First, convert a in 'XX. over this billion EBITDA, of growing we're XX% 'XX, to going going majority cash. generate

market. so after business difficult ability much our even and to in market allows go address in opportunities front the a us cash to us of patiently generate Our

Many got but realize right difficult Second, stable. at it our our and look now, It's a games a it's also sector playing well our how mobile of mobile people playing of market-leading to single incredibly us business give to forget confidence really our games. in. industry The mobile Most long-term. and device. how are big in day. business a people Everyone's stability technologies category is easy is lot as as size are easy our we're every

So been what stronger and out, importantly, we're of confidence team. our for one us retaining it contributors great of come our to focused a core at invest that gives working pleasure this today we years. through we are key it? had be to go focused on business lot on most every with going and have at. that work to of place Many as economic many to a going We're downturn each First to for AppLovin and a continue you. at I've at AppLovin of the make company the we're

Second, we're really attracting talent. on focused new

talent Valley. the qualified Over from and there's ever before. new excited. pair resumes to opportunity in talent we're getting team The gets crunch than a our decade, exceptional seen we've More Silicon us incredibly individuals been recently, and with existing very attract better last

we're create investing We'll our use upside we're We'll in to look buybacks. control. utilize these. gives after we're path if successful competencies for will to we'll returns, a initiatives, also coming that very, will be both good our create it market They to share we're bigger our are core What's our our opportunities. enable a shareholders successful multiple immense create we're over very technologies base, today And gets shareholders And moment our If this big at We go opportunities. point and focused we're strategic core tirelessly lastly, we'll improve vision, into as with can going about team. new so. us cash, are. to really our into and we also long-term opportunity successful, on and we're us very If continue and in around low vision to market returns. like of years, going us be here, a allow we're going still technologies. in entry Third, time Fourth, a excited company. so just The working core attract doing see about to to presents it that interesting to investors, try ton new growth and we us we generate market private the outsized executing excited. That is to that cash.

today In fact, off upside. worked than you I'll ever to Herald. now because AppLovin we're that hand at we've harder before working of

Herald Chen

Adam. our on outlined much we letter, we in the challenging very as we Thanks, are what shareholder given backdrop, And control. focused

grew that of creation. and Firstly, third of products; in XX% dollar And then core in bolstering invest quarter. initiatives retention from a XX% business, our on value the that generally XX% in year-over-year third core positions and flow had using XXX based software quarter, that our long-term was year-over-year. to an Starting the also it which leadership We enterprise that the XXX%. are flat growth, increasing to retention durability and on record third guidance really a expected, NDRR, ultimately the our leading focused the will our as quarter. second, margin to had and to SPECs, -- revenue Shifting our the grew behind second Adam cash mentioned, the to we quarter, quarter. markets lead EBITDA business, achieved this with net

XX% operational midstream a revenue which is is down up EBITDA, previously the but up which year-over-year, XX% changes a was where as we're -- what to focused, side, was App or XX% was we discussed, change, margin. the On

what in guidance $X.X future. would billion structure software We margin. only we mid-XXs will billion similarly quarter more up Of the achieved at forward billion $X component revenue see providing up a see do the margin margin we'll little cash down in over be a that's year-over-year, guidance the detail. billion to stream to fairly and shifting in So outlook on plan a our EBITDA we if going forward, year, rate case, being a And combined would around in margin note, $XXX adjusted XX% coming end with our The billion million, for on providing QX. a see We talking EBITDA. QX. be XX%. then to was this on a $X.X-plus we will full-year with with Then EBITDA and flow year. Then to about And basis, a generating XX% $X XX% EBITDA total of was in not achieved application slightly but mid-teens. revenue run an EBITDA be $X of side, the revenue QX the that to structure we in the

able financial on balance also on a you our not to chase tech long-term we're invest our reinvest plan invest finishing but then spot year yield flow, flexibility over described, high dollars in And that team, the the growth things of that all our ensure behind those in and projects, and amount really return, the don't convert Adam And quarter-to-quarter We very on we're cash percentage trying talent to the know, to great to our going patience we're as and have forward. CapEx. limited our given sheet. of free EBITDA of billion as a with cash to $X to able

structure, high million operating have stock over multiples, that, fall valuations our attractive plan. of We we into market levers could as a also availability think And go the to turn today rerating bottom combined for We through where shareholders well $XXX we buybacks have in the high -- we in our to with those return given on cash high considering operating as stock dollars $XXX and margin, leverageable growth, Thank return. And and highly with stock combination Ryan do think Q&A. you. it of availability growth be to business, of risk very for back stock I'll and to the when stock million us have ability our today's line. the the repurchase environment flow of if

Ryan Gee

Herald. Thanks,

question-and-answer Go begin Tim. Instructions] the that the question to from now take call. is So of we'll ahead, So we're Tim going Macquarie. from portion the [Operator first Nollen

Tim Nollen

me? Great, hear can guys you

Adam Foroughi

good, All Tim. thanks,

Tim Nollen

little however, in the software previously Excellent, will there, a and look of You've is all mediation got integrations does, the integration game use to the like got simply position bit of that to platform, makers that thanks. you've I have the said given continue MoPub platform Could we've promote growth you've side, to slowing. please? the their It a on great the got there. market dig and advertising great such scale games

pulling? developers as and some from these And sort are could update developers a in us Just increased lead into your therefore, this, maybe high any of where problems own, back funding how financial like of their they on pulling there or running are to near-term wondering interest spending. small their you some to about might advertising and game maybe that going thought if is of them Thanks. crunch they're game being risk rates process on

Adam Foroughi

Tim. Thanks,

going couple a things that I'm of there So address. packed in to

platform, First, we're mediation has on running our in the gaming ad solution platform, that's we're the sector majority also through probably leaders. The vast inventory it. our market all AppDiscovery the of mediation MAX platform and

have dependent individual advertisers about where one. most set it any that is this of gives their year us And to really and going been through P&L cutting Now what's access companies interesting a not diverse we're on costs.

the been much ever from That flow, you've ago. biggest marketing stable of because a at and our referenced minutes because stability as because sector now and business of had I market but and seeing consumers the diversity just investment handicap lot was point big not of where games shift that confidence also us focus a are because growth in change of before. mobile in. engaged that's companies that so with they've couple so lot you're of a baked my OpEx, still comments is of So cash And happen. got on flow already a the growing this And and engaging of to gaming gives in we've as are most that the the cash

Ryan Gee

have follow-ups? Tim, any did you

Tim Nollen

No, jump back in in. let Thanks. I'll go others queue, some

Ryan Gee

Youssef Okay. go to We'll Squali next Truist Securities. with

ahead. go Youssef,

Youssef Squali

Hi guys, can me? you hear

Adam Foroughi

Yes, we can.

Youssef Squali

Excellent, thank you.

level a growth your Maybe you obviously, us to just and just the And guys then the are comments in XX%. think unpack as at what little budgeting is you a the non-specs can business, guys takes down XXXX. know the But thinking was process, bit you from for puts guess I go I XXXX not. follow-up as revenues or a guiding, about a own stability through about do that Adam, how base are year that not drove that? to you you So

Adam Foroughi

very a first on and just the numbers. from non-spec then small frankly, can of revenue we touch our to percentage think I'll I back So point, come because that's

So the very frankly, it's lot. volatile matter going a again, about you doesn't, strong that be the whole market. When it in business a as metric we're to think is,

very consistent have business. We

when cash in So that there's of us the into core at we a developer. on of us to shift enough economic hesitation lot and is this share don't They is now stable. you and control mobile going a advertiser We well gives out. away right already today when technology anywhere any around, now the to That's no there. our very turn Most long-term work just do And loss is downturn. when in technologies. and growth the sort the we savvy of of flow that is there frankly, economy and having and businesses the gives for will that What we're have that base can't point. the When back there amongst to one confidence baked from are changes company be thing know made reverses game this to business managers get growth. our this bottom really focus guidance been know

more two it. is also that improve. really, lot hard is has our have of cash grow. growth core room we're into to know thing a That I advertisers to paths are we invest technology And touched to flow. and was improve another to willing One that We on really working

and So lower invest going more into dollars their they're goals platform. to our

the outside well of The scale lot one a doing we where our in that, to dollar that have us the what give entirely to as things one efficacy is strong we're on of in cash today. partners. has goals, We that's factor our those both It's that to going our room of of solution that baseline a terms path And are we're have we we're drive other see of so grow confidence the set generate, control. our that factor even of our more a entirely working to at and and able a and within control we're advertising to take to control. spent. tighter improving Both able

Youssef Squali

whether you growth Okay. But you're it at comment guess no guys really high is saying a the not. a on or environment? level, depends XXXX though, I year overall for macro

Adam Foroughi

improve core And our technologies. ability to overall our

Youssef Squali

Right.

the the to because a On platform were is among smaller asking try would non-SPEC, software among reason to non-SPECs the the more clients whether the I you're correct? sense to the be was of weakness of ones, of enterprise the seeing kind tend smaller get

Adam Foroughi

costs. of Yes. under at just a partners look all we now a lot big our make as Honestly, part a individual we up whole, of actually every business. pressure of to know these cut is company don't right business. None each It's that

That's budgetary or businesses, just So cost-cutting impacted sector. there has big. most advertising constraints across small the whether been and

Youssef Squali

it, you. Got thank

Ryan Gee

Youssef. go Sheridan, next We'll Eric go Sachs. ahead. you, Thank to Eric, Goldman

Eric Sheridan

the I question. can me hear if can. Hope two, taking okay. for you Maybe Thanks

selling continuing software Intrigued cases. in out about sketch the to and made about dollar impacted amount just number the historically, longer-term about a nonstrategic First, the bit that invest so from to in platform investment what little as And for by the market the turning find Felt saw? letter, some a business that the new continuing of you're a being elements. you quarter, on to you sort Away of comment number much. maybe and the different potential the then see the of Can be the like of business. those we bit on and some dynamic of the term relevance how Apps talk in puts in the today, two, headwinds in tailwinds was against you assets, would there investing faced use against one. you Thanks a evolve. bit the platform. That yourself the long letter based redirected result QX absolute fair for takes little decisions software

Adam Foroughi

quite second. billions I'll Herald to advertising budget, this billion the When year well we're it Eric, of a and point. about We've take of software revenue. we're first the talked of question, on over year large jump bit, dollars scale a comes core business, at will $X pretty and netting a our processing

built And very good so technologies at scale, of core that we level there.

our These like in It building letters about Frankly, been option of I of a have some said, couple a on touched also We businesses ago over I've investments takes to as main be ours. to on confidence new business the couple initiatives. make in value business. gives decades. these years business same what and able impact after build core the as as technologies business. use they scale core But a competencies our is large us an to going

too, enough are about. there extend a any around forward not together. of thought and couple short that, long-term create we're we business, for go-to-market but shareholder term process which CTV. is to One work We that And differentiated. that of a sophisticated team. our our our baking solution ad technologies those the we two and extending progress, technologies our to the CTV, be technologies acquisition there, team is into an there'll in Initiatives very the will as think or did with we're excited advertising outlook in be to have will like value a immense get core They value to a

Herald Chen

progress a growth. our margin to the I then app on against very terms both position side, we want get and think in our of get position making we're good to the for portfolio to in Eric, initiatives the

of back was the [indiscernible] data, on to we And have ROA. more come to driving just I'd sure there. make even strong as UA that know are driving gain users that we marketplace, cut is there's by. place taken really, say, really in So to instead we the three One, things difficult this

managed And UA so that spend. we've

ones ability So that value saying, well, we're And is need team, the the others and exchange long-term. second investment just and more won't there's profitability. and us for to And more have drive enterprise taking hit portfolio for the revenue the there. which that some in really frankly real in then through get there's going lever actually

winning back a of And down the or we're in actually were of And through process some others renegotiating earnouts. shut studios few of to new so some the quite we've the sold Founder. the that, again, investing in We're games. just

us, end with may now, is it. on the selling figuring get for there, be macroeconomic So ultimately road. the really third be be right really of of all much for value portfolio any year to what is could lever there, of and assets. it the and about. be a up it or owning owning a terms to actually creation where portion enterprise We what will the talked the hope We be not portfolio. valuations focus up then then given get optimizing we out those market we that grow to had relative when value whether we price significant to that in depends think very to the on and be And our then the recovers may accretive to all portfolio. deleveraging multiples we right will if of our right end monetize want is significant we and current bid, of the We the of by think, from very purchase environment And and might forward. down it, But there own healthy would able this or end out with value them amount assets we'd

Ryan Gee

follow-ups other there any you, Were Eric? for

Eric Sheridan

you. All good, thank

Ryan Gee

We'll Okay. Clark, to Thanks, BTIG. Clark Lampen next ahead. at go Eric. go

Clark Lampen

those a talked to could and in a technologies, small us couple September. you sort of and on, that you own maybe you alluded little into and I've with if of also a help terms a along improving times vessel just appreciating of core maybe and couple you more like in comfortable more sort intra-quarter And And NFT I what for on next change now. utility want of wanted good priority focus. a has then sort businesses or long-term you I you're of you got scaling and your right Wurl progressing that investing growth And August Adam, bit are perhaps this of on said, operating back guys, business more that's working give to Hi scale or and year. in private a diversification to evening. do entity, see mindset window array are how as to about the like growing. think, of two. apples Thanks focus times those in-App businesses, lines, a around which you of change new what's lot. guys drive

Adam Foroughi

Thanks, businesses the then beginning. We're the we cash first focused but go Clark. back initiatives first build second with how I'll and very in investing mindset the from flow know to to a new question. on

we to businesses us. business a them also that running at those we and new profitable start-up. We lot opportunity fit numbers, time, theory, operation. company to the of it not making that the market early, something talk in a as investments new that And that think trying behind make material And overinvest there, that growth and to able We market of we when the first about take that's comes you have it a we'll because to we incremental our initiatives, predicated and The and whole resources impact invest error any the we engine. second an continue a in the on business download as are from want you same when have be times, them have AppLovin, what to We're startups then you're As leverage both to predict will our making opportunity. approach users that think GMs these sure in at the organically, CEO not going driving the every to into in that the in they about of our is We'll excited know these we and build, are them measure technology, next is of hot. one were value do product rate they'll lot have point cost. And way. into. we and that and given the engage of question, being a advertisers. predictive we on we're opportunity comes always to already as with revenue month incubate place of present that Value revenue. And model our businesses approach core

excited very, and We're But lot event. that we to company, of rebuilt of got a system. at we've of systems years incremental predicting obviously technology in go do our and very know very of which our error And technology think, we, about future facilitated a of doing AXON, investments be our good initial release our There's get in changes We're about as the lot lot two all we'll there's that a a And an last at time future. rarely, both our potential try So core we very times. our was to core in now. upgrade a a of ago business. the I ton into right all system. to the will of rebuild actually now, growth was

Clark Lampen

maybe, the just authorization for attractive of sort you now. fit you. allocation have Herald, north have your of helpful. the capital now? follow-up, really How option know that I could, I right overall priority of you does of buyback sort And lot in a of quick stock as million if front buyback a in into right That's set $XXX opportunities

Herald Chen

there's maybe people Look, assets we'd of we or have just thanks, than lot our before. to cheaper to when a hiring And to want high is lot it's have there's didn't us other market, priority arise. maybe own this allocate access gotten particularly wisely, around that Clark. a capital Yes, in it great opportunities that that for a it's stock,

the do of yield out EBITDA upside so the glad project making that period out, at amount in certainly of cash buyback to balance of use these free have. flow and have think given all see just we And we we figure taking cash-on-cash the we certainly, and and at we're and what's opportunities out the the in we to stock advantage stock the considering and these prices we're time cash lemonade $XXX But that to we sheet characteristics time. lemons, have of right that the million. are We'll sizing what this

Clark Lampen

guys. Thanks

Ryan Gee

Okay. Thanks, to Stanley. at Clark. Matt, We'll Matt next ahead. go Cost go Morgan

Matthew Cost

Hey, can you me? hear

Adam Foroughi

Yes, we can.

Matthew Cost

Great. Hey Adam. Herald. Hi

course like So has not year-on-year has gaming app reach we've it seems XXXX, over the got decelerating where install market the of market been mobile overall mobile seen gaming but spending ad reached on decline. the level that consumer you've and

fair market it try are to? indications lagging to reacting looking for consumers to or is bottomed So when investment there what for ad that you'll That's question but Question assess to for? games? maybe that on data year, and looking you here any is, does be you the opportunities mobile that be be to And that are a maybe you're points point? a harder next more will for statement I can't risk the spending the on future, which one. maybe business create at looking that is you'll know two indicator has predict push

Adam Foroughi

Yes.

We've got a just of the entrepreneurial business been since we've team mind. exceptional the investing because high of run top Look, we've output. but margin take is. as business, an I'll second it we're So run that We in creates a get-go. lean team, got first a lot again, our

for to We've new of of investment a that the a initiatives advantageous that years forward. investing opportunities. as we're We've the going we're made So got last more acquisitions of there's investing business got rerate we couple we've things see technological lot that against be organizing over no that we're And into. into. our shortage

deem not come stopped with opportunities that us that in growth we've the and we'll future. investing in those that to that able and things market. see generate right in today's because in we Nothing continue do enough even up now market in to to front worthwhile both opportunistic be we the about we invest So to enough of we is going to cash change invest be

market is, been it same been are has flow into there's revenue as a of One cash two when focused games, changes. we've the talked mobile still People ecosystem. from growth. change, The though. to the That's away That's gaming Now lot the about just and advertising comes companies macroeconomic, mobile on of requirement. itself, already amount consuming a big are where baked declining.

and those at the buys able to were grow. Those subsidize return hit use growth. away, had both spend. our be The to to social fell properties those two changes revenue sector they spend around happen big best things highly gaming namely a same mobile off the able Take time. targeted, user on some able change. economy that the and And same their on ad were They time that the obviously you the that future of have came other were back profits right to in really that is category. companies the traditionally, in as lot acquisition, IDFA And to

So the really you also can't into are decouple business. baked Both them.

market in Our a massive the have business, to we're we penetration fortunate in. enough operate

any is mobile no single when product it market about we've advertiser. it thing to is gaming commoditized nice is a on leading product Our our mediation market dependency got comes that leading. very And advertising. The industry is and AppDiscovery

same, about gaming have them games the you puzzle All of if of platform. and or most different of there's some look certainly gaming all games, our other mobile to advertisers, them categories But that biggest of ones similar marketing look They our our XXX eye. make solitary that make think on they products. multiple are they and naked the companies have very

and the forward. much So we look stable very we even if businesses a gap. fill couple going at our deteriorating of them place, start more just struggling other as Therefore, businesses, ones in a don't in see the

Matthew Cost

be quarter it deterioration? contemplate material then ahead does to would fair further that guidance So not assume your

Adam Foroughi

think stable. I Yes, said, we

Matthew Cost

it. Got Thank you.

Ryan Gee

Matt. you, Thank

ahead. Stephen at question go Stephen, next Okay. Credit We'll from take Ju our Suisse.

Stephen Ju

guys. Thanks right. All

So more. to into a topic bit dig the little Adam, AXON

think are I guys improvement I as you've accuracy about the XXX% was drive how of previously it talked think it showing. what a helped you has in you

the of mediation longer-term? from, years? couple update you of of been could CPI drive to Or kind show real-time Thanks. improvements can about the in the transition up you solution improvements are over large in on the those last I have And if fairly as effective think bidding? you us you the what do So also they more tend steady steps where waterfall to guess, over

Adam Foroughi

Yes.

the advertisers. step-ups a has on growth. the core roll adopted you obviously, by AXON when all there rolled huge we that, technology upgrade, your So out when like get out were it And to first, of

we really the for So into think your came improve changes up every That incremental upgrade engine. It's with XX% material have do had from Then four isn't the CPI around the we've upgrades accuracy predictable function in the step a to baked engine I very end numbers. the step not of CPI. upgrade to growth incremental subsequent that A it double-digits, is that quarters. This though. way. the was able to were whereas we drive just up your accuracy opportunity, and in

Our goal goals. advertisers their is to say have

they've willing spend. in on Our goals today advertisers the of to platform ad amount that spend to they're our set, whatever return are spend willing

able We budget to today. lot that fulfill excess of have a we're not

similar budget engine, rates predictive able the that fulfill we're to where and if of So advertiser to accuracy they we'll excess our are. to be able improve maintain

our that about. business. excited the its business we're core. opportunity we're a the growing is at advertiser happy, that's and So And performance that That's

support technology point incidents. to time. move is And bidding past. to move real There lot companies a there's of in the on this and some real were of we've getting of bidding, the the mediation there talked that time early the the about second market over are able So bidding, from time some just question, being to adopters to still time real and going

publisher excited that publishers, Now will interesting back really the We're we Google months of charge together, We're real-time market future their there. of time flow see moving real can announcement revenue that. for They're of there an towards a gains into There for then ago and partners efficiency is biggest the And We end the up for create the bidding. was facilitate us the if to we for it. in majority to that couple over Obviously, Google. the for strong incremental it can launch efforts about love partnership. tilting it. about It in starting acquisition. there. will user their will bidding, success investment most partner one

So it MAX improves the the we business with products. have opportunity

there's think there gains and the to years. of a had we quarters so And be coming lot over

Stephen Ju

revenue revenue think Herald, And had of your dollar a little that up you of squeeze to on bit. U.S. the given XX% guys from growth put the for in I to strength coming base have the is international

Thanks. headwinds for perhaps software So the can as as separated business well you about probably apps? talk FX the

Herald Chen

of us, for dollars side is stores. app a the and through app in transacted Yes, lot

into the FX currency, translated for probably so headwind if always is are And And us. of really transacting it's then just dollars in a more more macroeconomic. then people

see for us So have a FX well, as we for don't someone software P&L, example, there was the headwind we actually like it directly, impact. for some itself, But our not might side don't would our a it's of just translation you specific game a in a P&L. It big good there. on big currency on be buying if

Stephen Ju

Got you. Thank you.

Ryan Gee

We'll, Thank ahead. please Jason your check ahead yourself. please go your that with unmuted you, Hey go Go Citi. to -- question. that Stephen. Jason, ask Jason Bazinet you've and next

America. you've Bank go please Omar at Omar, We'll unmuted Dessouky that please yourself. Okay. ahead. of check to Omar go next

Omar Dessouky

Okay. now? Can you me hear

Adam Foroughi

We can.

Omar Dessouky

You can. Great.

Yes. Okay.

completing market use, general terms of a Facebook dominant some how get they get market these been was could to back of that prior players in how on would like of in that infrastructure long of these have lot once privacy-enhancing technologies and to have before take IDFA. and share that other kind specifically players look, They're I into -- the So investments you shift presumably and of kind around making like if them. there? any thoughts many years for available had to wondering it could And big

Adam Foroughi

now And If Yes. the are is what how had of the pie up We growing, into comment pie our people macroeconomic properties the is IDFA IDFA that including ROA-based be business mobile Take it change. a or that that efficacious dollars on handicap. burden sector fuel We've share user the had creates gaming to of growing lot gaming really the efforts Thanks pie. of change that reality that question, change the successfully strong as other the growing. are strong the we've general share decade growth. just We investment own our prior caught into we're can't for want means studios can. long away change these got the advertising, is The deployment on to take. a to will Omar. But we invest it creates of sector. able consistent this and they a cycle. investing the did a category be to our of whole after advertisers, We and and in reality upside whole strong We to in companies But more didn't on a very and other to possibly a IDFA in growth those is advertisers, of acquisition. able the dollars pie. a reinvest as always Facebook want

fear continue that. no technologies improve. and in to So we the to ecosystem all innovate have that We the hope

improve, to then It business of our never possible go stable that as are more also, advertisers our more and places more We which to Google it advertising efforts businesses and Apple into grow their our talked other to Apple means their bringing for and be platform that continues online, again that advertisers as back the online they've inventory in bring because just up and about will budget. platforms creates invest means a growth these -- more invest other them Because performance-based, opportunity same and inventory reinvest hoping as business. is allowing companies that we lose ends and well. the

Omar Dessouky

Okay.

resurgence companies of actually rather sounds if benefit a guys those of for a right, that more dominant you're So heard tailwind you I pre-IDFA it and… you like like and is saying headwind than

Adam Foroughi

Yes. have growing monetization, growing reinvest technologies companies And We and Everyone together. sector. one their sector winning when In a growth. it mediation and to where want dollars. leadership market predictably a we can comes is growing a

very we've a more strong these technologies again. always so and consistently growing afterwards to efficient got do we'll very And well, were IDFA totally if base doing to make their prior change companies our see fine We the that business.

Ryan Gee

follow-ups, Any other Omar?

Omar Dessouky

Thank follow-ups. very you other No much.

Ryan Gee

go with Davidson. D.A. Granda Franco Okay. next Franco Great. We'll ahead. go to Omar. Thanks,

Franco Granda Penaherrera

you I me Yes. about studios for are was Good do the how a how letting revenues? ask How the expected videos afternoon Thanks down for we the couple performance-based think these everyone. here. many you given lower wondering, to questions payments moment? of at many own? should And

Herald Chen

process some and about before, renegotiating The those vast now, studios I Yes, paid of a we've of have I payments. think as have are -- that mentioned been in we already dozen majority out.

And studios and either. their are some not hit performing obviously those of earnouts not going to

alignment terribly way projected the not way. hope we that that they more the a them earn-out world the we new restructure are the so significant. in as payments along succeed succeed and new expectations And for We there's and

much very to our aligned success forward. going they're So going be with

Franco Granda Penaherrera

Awesome. then your Thanks revenue And entering And speak customer like to year? engagements you out world is it what maybe color the of the you to for translate the do color. for expectations next the to the that expect year? into then around business moment? end the relative can at could any year Where

Herald Chen

it's Wurl. big Yes, Wurl. category. very a to Obviously, own We're excited

of releases to involved some looking been place CTV that there's you've seems some in the one and at If the category companies that growth. be green are shoots some

of terms small terms range of to very in of assessing the revenue relatively still category strategies excited $XX in to best be near our it's there. the Wurl grow but the going million $XX to million, in where we're So and It's entering million, itself in growthful. in term. and $XX --

right. interesting that's up experience play to inventory to So what and our expertise all operate standpoint the technology technology our with, partners content. but with think use going not it that revenue way of be Wurl trying people they that for We partnered a very out is in And is a best dynamic. the for side, day. of distribution is CTV figure A big get a meaningful from to given on and It figure it in strategic, tech how the together. much out given using coming got that they've it our And them category to the as team an a start. it every us. We But very going plays of ad standing players want to longer-term do It's category. category the of very them the about earlier, instead Adam are. groups their mentioned space. enter single thinking and from the And are we're lot to it's us up

but and early. focused about, something on it's we're still very excited So pretty

Franco Granda Penaherrera

you. Thank for it me. That's

Ryan Gee

ahead. Yang Okay. with next Martin, Thank Martin you, We'll go go to Franco. Oppenheimer.

Martin Yang

Hey Ryan, can you me? hear

Ryan Gee

Martin. you hear can We

Martin Yang

and I focus How customer's And afternoon. scale assuming -- impact and back the does mechanics same dig a on yours Exchange, on Good in UA your want publisher the it to your to apps? ROEs. how you as diversified respectively? does AppDiscovery treat AppLovin a

Adam Foroughi

Yes.

day sources AppDiscovery aggregate only on directly first a same spend on are make demand willing XX of a to yield advertising product, us, customer business return that have wants side, to will ad very hours, Martin, $X,XXX demand us. at them that the AppDiscovery impactful to spend, to may a driving day is that So systems $XXX third-party that's models in for to if at XX% return. say, our lot the or But good a the on different that for the ALX there's the instance,

a looking may let's economy on anymore spent, saying, Now on spend, $X,XXX we that on where may it, and and back around, day break return breakeven ad they to to this even wait afford XXX into invested. call can't somewhere days XXX they the $X at be

ad first get system, back to again, spend XX% return in we're in us it's would but the that date. And programmatic. the spend go, willing pull that on XX What is hours. do they they'd they all same now our $X,XXX, So

will advertising So and have yielded. will twice try yield they and ad yesterday's the and flow the that spend on instantly would now return gone targets system the the will changed through budget goal, find users to it that

as so acquisition. system. that really the had advertisers our industry to And able get is flow flowed invest they're just that's has with through cash tighter that have change that on the Those automatically through user the to

go their back to dollars to a point get and their where we drive they can spend it growth have goes period, will in the hopefully a we the that at other future, other their into this automatically way economy on way behalf and go step the goals as goals. economic lower also will Now them some new up the

Martin Yang

follow-up software margins platform. on for more One

investment own anything and your what from in aside that your regarding control, decisions your are impact that software So else OpEx platform the factors potential could margin? are

Herald Chen

basis net Hey revenue no on we to a start Martin, report with.

our revenue. do we having take So net net vagaries in of to a gross out the

place we we So line the in below there, have that have and very about cost we before, a the really on to though, talked which what handle be. good that contract data know will it's and costs, our center

place. Yes, we were talking that's trying Our available dozens a talent dozens But people awesome about team is and we're us in to to at of time. not add now.

any increase real wouldn't significant see I So there.

new initiatives, we already. against are spending Our

in is it So of operating expenses P&L today. the and part our

return bring very We'll scale on But down on potentially. the a get past, the and But of as of right Adam basis that ad catches game that. and one visibility been them degree Makeover see others. and as we spend our see if margins game if likewise, on portfolio, we've cash there focused. targeting to we But side, the our up. that And game. and Project a there. there's always great app will that with to do the spend, But by we've and high a we we margins on a return been Now we quarterly increase possibly is in done the there said, into a do there we dramatically way, has that flow-focused we've software thing confidence have fire,

as And the paid team fixed core amount fact to ramps technology our dollar has that our our there's new incremental the for line point basically well. well given of flow-through initiatives. a significant including structure, as bottom per is up, as margin mid-XXs at infrastructure this Now if

Martin Yang

Got it. Thank you.

Ryan Gee

you, Ralph Thank go Ralph, We'll William with Schackart Blair. next Martin. to go ahead.

Ralph Schackart

maybe said saw for the But asked. I feel sort I maybe you that stuff you talk think that this stabilized. is if of Thanks on you jumped sort of so softness the quarter And has been that the that. and you I of the the has -- apologize question. can in that on the had taking business about call, late, pace

stabilization? Just linear one. sort sort first area trying That's the comments a please. I And the and the have around of of understand of then the to pullback follow-up,

Adam Foroughi

that in quarter. we that all last call, referenced at signaled big then. been we since quarter step-up seeing the growth thought pretty We not late Ralph, any it Yes. stable we're last It's but in the we've it our change since in would be Right forward. trends on relatively going thing flat on targeting of same now, see ecosystem an this in the on was. side. priced the we're all it difficulty difficulty macro that We quarter, side sort the and the of has

with And of so gives we at at. a see stability we're that us this and business moment, where everywhere lot comfort the in

Ralph Schackart

business clarifying Apps a about something quarter? sale just talked shareholder then of from during the QX nonstrategic the the sell within Did during you off And about Okay. letter assets. question

Herald Chen

the wasn't going a Yes, the actually entity founders. that that to that that game to we a very asset forward. to new were one come own very, trying they to They small wanted sold fruition so was to there going back develop

very, a very small asset. it's So

Ralph Schackart

Okay. Thanks Thanks Adam. Herald.

Ryan Gee

and Ralph. last ahead with go question Pang take ahead. Okay. you, Thank We'll our from go Stifel. David, David

David Pang

question. guys. Hey the Thanks for

highlighted you then provide could to last wanted you see thinking in from environment? Herald, leverage a on that general MoPub rising And about the to Thanks. an update in if how Just transitioning rate DSPs were that you for are MAX quarter.

Adam Foroughi

side, stable. TSB word again, the use we stable super

at cut them. dollars over what They year those on. a ecosystem. is go is like platform. tap lot shift new MoPub A for us than big our something for the and all focused the because into MAX plus pretty on traditionally infrastructure brand MoPub DSPs more is dollars, very of which they're the not system. live MoPub are a our advantageous there's point. Really, in this of hedged ago, They the lot we've brand are business. Xx We doing And They're these well. all on was on bigger over DSPs are vendors much

there DSPs being we're materially were spend pipes able to So them actually as connected to much of well more DSPs than in were economy dollars in be the bigger. past, the in for because in the business opportunity to these flow our our terms to more there this they of really so being as the there is But there's up terms doing to long-term, an system. recovers going

Herald Chen

David, Yes, question. the for thanks Yes.

Xx just So today. we We're on side, net sit comfortable very which where over we very leverage, reasonable. feel is leverage the at with

terms the We rating. of have XBs in

as there comfortable feel we So well.

more hedge fixed half significantly some up out Of the something that interest -- course, gone we have watch. the year, We of did rates of the the and for or actually interest than for year. interest to

is duration strong. also Our fairly

no in have but 'XX, as or with that 'XX we term maturities There's So can maintenance anything and loans. well. on coming covenants it like live we our

does it provide flexibility. So quite us of bit a

we're interest comfortable the with after leverage very, very So flow. cost, amount levels, still of current generate and significant we free cash

tax a given As we of rate, described before, a deductions. we have relatively modest bunch

us We expense. have to there, just CapEx of bit little very in lease little a

we're to strong are of carrying a very through able We leverage percentage the flow even amount today. with

Ryan Gee

David, did follow-ups you have there? any

David Pang

good. we're No,

Ryan Gee

That quarter. Okay. call conclude does all speak next you everyone, for you our We for joining. on, with appreciate Well, hopping and today. we'll thank you

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