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Tag: Earnings Report

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AI Cloud Service Providers Industry Semiconductors Stocks

Credo Technology (CRDO) $46 Is A Great Pick And Shovels Play On AI

Credo Technology Is Essential For Data Center GPUs

While all eyes and ears are on tariff uncertainties and geopolitical risks, we remain focused on finding good investments for the long term – tuning out the drama and volatility.

Excellent Q3-FY2025 results

Credo Technologies (CRDO) supplies high-quality Active Electric Cables (AECs) to data centers, counting on Amazon, Microsoft, and other hyperscalers as its biggest customers. The stock dropped 14% today to $46.75 in spite of excellent Q3-FY2025 results with a 154% increase in sales to $135Mn Vs $120Mn expected and a sizable improvement in gross and operating margins, which is unusual when you’re ramping up production for a customer like Amazon.

Revenue guidance for the next quarter was even more impressive at 162% growth to a midpoint of $160Mn. For the full year ending in April 2025, Credo is expected to grow revenues to $427Mn – a whopping 121% increase, over the previous year.

Good pick and shovels play in data center and AI

Credo is a pick and shovels AI/GPU/Data center play as data centers ramp up all over the world for accelerated computing. Its key products are essentially AEC replacements for optical cables — a play on back-end networking of high, and reliable bandwidth for data center GPUs and GPU systems like the Nvidia Blackwell N36 and N72, which are expected to start ramping up in the 2nd quarter of 2025.

Data center equipment suppliers have become very crucial parts of the AI/GPU supply chain, and Credo’s results certainly speak volumes of their capacity to scale and scale profitably, which is even more admirable.

Its founders are from Marvell (MRVL), there is a fair amount of credibility and experience.

They are general purpose and custom silicon agnostic, which is good because get business from Nvidia and from ASIC players like Amazon and Google.

The business is also GAAP breaking even in FY2025, another exception for such a small company.

Credo had gross GAAP margins of 63.6%, and GAAP operating margins of 20% and a stunning Adjusted Operating Margin of 31.4%, which is astonishing for a fledgling 400Mn operation with Amazon as its main customer.

Key Risks 

Customer concentration – not likely to change soon, the nature of the industry currently needs high volume from hyperscalers.

AEC cables will become a commodity after 3-5 years, so they’ll need to maintain their growth without dropping prices.

Valuation

Credo’s valuation is not expensive at 11x sales as the revenue growth is easily going to surpass 60% in FY2026 and 30% in FY2027, after growing 120% in FY2025. The P/S to growth ratio drops to a low of 0.2 with such high growth. Furthermore, it has an operating profit margin of 20% easily adding to more than the rule of 40, or 60+20 = 80.

The drop today was ostensibly because of customer concentration – Amazon 68%. But analysts and investors should have known this; I believe the correction is overdone and Credo should resume its upward march again. I bought at 45.75 today, the stock is down almost 50% from its all-time high of $86.69, but still up 187% in the past year.

I’m targeting a return of 24% per year or double in 3.

Categories
Industry Stocks Technology

Confluent’s Excellent Quarter Is A Major Inflection Point

Confluent Data Streaming

02/11/2025

Confluent (CFLT) $37 – Still worth buying.

I’ve owned it for over two years but will pyramid (add smaller quantities on a large base) it further.

Why is this company still worth investing in after a 20% post-earning bump?

Four important catalysts

Databricks partnership: The partnership with Databricka, which is much better known and valued increases brand awareness and opens a lot of new opportunities and doors.

This could accelerate growth from the current 22-23%.

Strong customer base: 90% of its revenues are coming from 100K + ARR clients.

The $1Mn+cohort saw the highest growth, and Confluent managed a net ARR of 117%, indicating strong upselling.

A changing data processing market: The entire batch processing model could be up for grabs – customers moving at the speed of light and willing to pay for the latest technology could be a huge TAM. 

This is a paradigm shift, which Confluent has been trying to build into for a decade. 2025 might be that inflection year, with all the AI build-outs and use cases that are likely to need live processing – Confluent is the leader in that field. To be sure it’s not going to throw data processing models into obsolescence, why would you spend money on data that doesn’t need to be processed in real-time, but could take a large chunk of that market?

Snowflake acquiring RedPanda: Snowflake is reportedly trying to buy streaming competitor RedPanda for about 40x sales: While it’s not an obvious comparison, Red Panda is supposedly less than 10% of Confluent’s revenues but growing at 200-300%. But it’s the synergy with the larger data provider that’s getting it a massive price tag – Snowflake would love to have this arrow in its quiver of data tools.

Confluent is best positioned to take advantage of the possible shift from batch processing to processing in data streaming; its founders invented Apache Kafka, the open-source model for data streaming. And while its own invention is available for free – managing and maintaining it at scale needs the paid version. Over the years with the focus on Confluent Cloud, Confluent gets 90% of its $1Bn revenue from customers over $100K in annual revenue. 

Confluent has the cash the tech chops and the focus – sure Apache Kafka is open source and many cloud service providers like AWS and Microsoft also provide enough competition, but no one has the product breadth that Confluent does.

I would not be surprised if Confluent’s multiple expands from the current 8x sales after this earnings call.

Here are the details of the December 2024, 4th quarter earnings:

  • Q4 Non-GAAP EPS of $0.09 beat by $0.03.
  • Revenue of $261.2Mn (+22.5% Y/Y) beat by $4.32Mn.
  • Q4 subscription revenue of $251Mn up 24% YoY
  • Confluent Cloud revenue of $138Mn up 38% YoY
  • 2024 subscription revenue of $922Mn up 26% YoY
  • Confluent Cloud revenue of $492Mn up 41%YoY
  • 1,381 customers with $100,000 or greater in ARR, up 12% YoY.
  • 194 customers with $1Mn or greater in ARR, 23% YoY.

Financial Outlook

Q1 2025 OutlookFY 2025 Outlook
Subscription Revenue$253-$254 million$1.117-$1.121 billion
Non-GAAP Operating Margin~3%~6%
Non-GAAP Net Income Per Diluted Share$0.06-$0.07 vs. consensus of $0.06~$0.35 vs. consensus of $0.35

Categories
AI Industry Semiconductors Stocks

ASML – An Excellent Company That’s Still A Bargain

ASML- EUV

The Monopoly

As the source of all things AI and related, ASML is (and has been for the past decade) the monopoly for EUV lithography machines that power the most advanced GPUs from Nvidia and others. There’s no other manufacturer that can do this at scale.

Around October 2024, on their earnings call, they disappointed the market with a 10-15% lower than forecast revenue for 2025-2026, as one of their customers (very likely Intel) did not place orders for a large order of EUV machines as expected. Intel’s troubles are well known and this order is unlikely to come back. They also feared export controls to China and/or weakness in Chinese demand after 3-4 years of rapid growth.

I bought and recommended buying on 10/27/2024 at $690, with the following comments

Sure it could stay sluggish, range-bound, or fall till there’s some improvement in bookings, export controls to China, etc. Perhaps, that may not even happen for a while.

I think that’s an acceptable risk, now I’m getting a monopoly at a 37% drop from its 52-week high of $1,110, still growing revenue at 12% and EPS at 22%, selling for 8x sales and 25x earnings.

With TSM’s results, we saw how strong AI semiconductor demand still is and there was absolutely no let-up in their guidance.

A monopoly for AI chip production – an essential cog, without which AI is not possible – is definitely worth the risk

Fast Forward to the next quarter, the dynamic is much better and the price hasn’t shot beyond affordable.  

Bottom line: A must-have, it’s always going to be priced at a premium given its monopoly status and the strength of the AI market, so returns are likely not going to be like a fast grower tech but I’m confident of getting 14-16% annualized return in the next 5-10 years.

ASML’s Q4-2024 results on 01/29/2025 were excellent:

ASML beats expectations as bookings soared.

The EUV, machines leader grew Q4 revenues 28% YoYr to €9.26B, and 24% QoQ, beating estimates.

Bookings: ASML’s Q4 bookings came in huge at €7.09B, way ahead of estimates of €3.53B., with net new adds of €3B.

On the earnings call, CEO Christophe Fouquet had this to say about AI and sales to China:

AI is the clear driver. I think we started to see that last year. In fact, at this point, we really believe that AI is creating a shift in the market and we have seen customers benefiting from it very strongly. Others maybe a bit less.

We had a lot of discussion about China in 2023-2024 because our revenue in China was extremely high. We have explained that this was caused by the fact that we are still working on some backlog created in 2022, when our capacity was not big enough to fulfil the whole market. 2025 will be a year where we see China going back to a more normal ratio in our business. We are going to see numbers people used to see before 2023.

USA led sales with with 28% share in the fourth quarter of 2024, edging China’s 27% of about €7.12Bn

Challenges remain as the AI arms race gets hotter:

ASML has not been able to sell its EUV machines to China because of U.S.-led export curbs to restrict China from getting advanced lithography equipment to manufacture cutting-edge chips like the H100s from Nvidia, or the new generation Blackwells.

From 2025, ASML will provide a backlog of orders on an annual basis instead of bookings to more accurately reflect its business.

Guidance: 2025 total net sales remain the same, between €30B and €35B. Q1-2025 is slightly higher with total net sales to be between €7.5B and €8.0B versus consensus of €7.24B.

ASML remains an excellent opportunity and I plan to add it on declines.

Categories
AI Semiconductors Stocks

Broadcom Is A Strong AI Contender

ASICs

12/12/2024

Broadcom (AVGO) reported good results and exceeded guidance for Q1-FY2025

Revenue $14.05Bn for Q4-FY2024, up 51% YoY (It acquired VMWare) in line with expectations. Without the VMWare acquisition, organic revenue growth was 11%.

GAAP net income of $4.3Bn; Non-GAAP net income of $ 6.9Bn, slightly higher than estimated.

Adjusted EBITDA of $9.1Bn or 65 percent of revenue – Adjusted margins are high because of the non-cash adjustment of charges for the merger with VMWare.

GAAP diluted EPS of $0.90 for the fourth quarter; Non-GAAP diluted EPS of $1.42 for the fourth quarter – Slightly higher than estimates.

Solid Cash Generation: Cash from operations of $5.6Bn for the fourth quarter, less capital expenditures of $122Mn, resulted in $5.5Bn of free cash flow, or 39 percent of revenue.

First quarter fiscal year 2025 revenue guidance of approximately $14.6Bn, an increase of 22 percent from the prior year period – Slightly higher than estimates of $14.5Bn.

First quarter fiscal year 2025 Adjusted EBITDA guidance of approximately 66 percent of projected revenue.

Surging AI revenues: It exceeded its earlier projection of $11.5Bn AI revenues with $ 12.2Bn, mainly with sales of ASICs to Google, besides selling ethernet solutions to other AI data center clients.

“Broadcom’s fiscal year 2024 revenue grew 44% year-over-year to a record $51.6 billion, as infrastructure software revenue grew to $21.5 billion, on the successful integration of VMware,” said Hock Tan, President and CEO of Broadcom Inc. (AVGO) “Semiconductor revenue was a record $30.1 billion driven by AI revenue of $12.2 billion. AI revenue which grew 220 percent year-on-year was driven by our leading AI XPUs and Ethernet networking portfolio.“

Should the proposed development of semis for Apple go through as planned, they’d be an even stronger contender in AI data center infrastructure.

I own Broadcom and continue to accumulate and plan to hold for at least 3-5 years. The VMWare integration is also going according to plan and will be a source of sustainable and recurring revenue.

Categories
Stocks Technology

Shopify (SHOP) $113 Phenomenal Q3 -24 Results And Guidance

Source:The Realtime Report

11/12/2024

Shopify’s (SHOP) $113 phenomenal results and guidance propels the stock 25% higher to $113 by mid-morning.

I bought and recommended Shopify on 8/8 and 7/19 for around $66 and $63. I also recommended it on Seeking Alpha in July.

Even with the post-earnings bump, which has taken it to $113, I still think it would be worth buying once the euphoria settles. This company is firing on all cylinders and should continue growing for the next 3-5 years.

Shopify excelled on several metrics for the third quarter ended Sep 30th, 2024:

Gross merchandise volume rose 24% to $69.72 billion, beating the consensus estimate of $67.78 billion.

Its revenue rose 26% YoY to $2.16 billion, beating expectations by $50Mn, which was the sixth consecutive quarter of greater than 25% revenue growth for the e-commerce company, excluding logistics.

Monthly recurring revenue rose 28% to $175 million vs. the consensus estimate of $173.6 million. Monthly recurring revenue is a higher-margin subscription revenue business used by larger clients for more features and modules and multi-channel operations. This is Shopify’s growth catalyst for the future, and they’re focused on building and scaling this to differentiate from competitors.

Operating income was up 132% to $283 million, and free cash flow grew 53% to $421 million.

“We have grown free cash flow margin sequentially each quarter this year, consistent with what we delivered last year. These results demonstrate the durability of our business, our multiple avenues for growth, and continued discipline of balancing both future growth investment and operational leverage,” highlighted CFO Jeff Hoffmeister.

The biggest reason behind the 25% jump is the guidance and improving profitability, confirming my earlier thesis that Shopify’s strong focus on providing a rich, multi-channel platform is allowing it to gain market share from plain vanilla, single-feature vendors. Shopify’s management had cited client wins from SalesForce (CRM) earlier as testimonials of its progress.

Guidance

Looking ahead, Shopify sees Q4 revenue growing at a mid-to-high-twenties percentage rate on a year-over-year basis, which is a higher implied rate than the implied guidance. The earlier guidance was 23% so that is quite a large improvement.

Operating Profit Margin will continue to improve, as operating expense as a percentage of revenues decreases to 32% to 33% from an earlier average of 35%.

Free cash flow margin to be similar to Q4 2023 — Around 19.5%, another solid improvement from the previous year.

I plan to buy on declines and hold for the long term of 3-5 years.

Categories
Enterprise Software Stocks

Klaviyo (KVYO) $33, Adding More Shares On Declines

Source: Klaviyo

Klaviyo beat earnings and revenue estimates for Q3-24, handily, but it wasn’t enough for the market, which punished the stock 12-15% after hours. 

I would think that the short interest of 11% also had something to do with the fall, as I don’t believe that the stock is priced to perfection or that earnings “disappointed” investors. Klaviyo had been on a tear, rising from $22, at its low in August 2024, and the 80% rise to $40 needed a breather/correction to consolidate before it resumed rising again; The excellent progress in this quarter confirms the longer-term growth trajectory, and the high-quality business model of the company. I believe it is worth buying on declines, and I bought more at $33 this morning,

Sep 24 quarter results: Adjusted EPS beat by 4 cents or 40% coming in at 14 cents against the 10 cents forecast, and revenue of $235Mn beat by $8Mn or 4%. 

Guidance for the next quarter and full year was also raised from the earlier estimate provided. Klaviyo now expects total revenues of $925Mn V $914 at the midpoint and an adjusted operating income of $105, in line with the earlier forecast of $107. Perhaps the market was expecting more here, but this lower operating income is because of an adjustment for higher cash compensation instead of shares, which will be charged in Q4, and going forward accrued in each quarter. 

Management also mentioned that 2025 growth would decelerate slightly from Q3-24 growth of 28%, which is fine, consensus analysts’ estimates have pegged the next year’s growth at 24%, so it is likely that Klaviyo will outperform those estimates. Some of the lower growth projections can also be attributed to 2024 revenues coming higher at $924 than the earlier forecast of $895Mn — the growth projected is on a higher base.

I smoothened analysts’ estimates over 3 years from 2024 to 2026, I still get an annual estimated revenue growth of 27%. Klaviyo is valued at 9.5X 2025 sales. This is a P/S to Growth ratio of 0.35, (9.5/27%), which is relatively moderate. I get antsy when it goes above 0.4, and growth drops a lot. Clearly, that’s not anticipated in Klaviyo’s case. What’s remarkable is that an enterprise software company still grew over 30% in the SMB (Small and Medium Business) category.

Here are some Wall Street ratings.

“Klaviyo reported another solid sales quarter against a macro continuing to drive a soft sales environment that has been offset by strong up-market sales execution,” Needham analyst Scott Berg wrote in a note to clients. “Revenue outperformance of 3.9% was at the midpoint of its post-IPO results over the last five quarters. We expect modest share weakness after the company implements a new comp strategy, shifting some [stock-based compensation] to cash comp that will drive 4Q operating margins lower due to a catch-up accrual. We expect investors will ultimately like this change, as our math suggests it could drive somewhere around 8%-10% less annual share dilution.”

Berg kept his Buy rating on Klaviyo but upped his price target to $46 from $40.

Loop Capital analyst Yun Kim also upped his price target slightly, moving to $45 from $40, as he pointed out the results and its view of the business are “somewhat contrary to increasing signs of a weakening environment (especially for a marketing automation vendor).”

Morgan Stanley analyst Elizabeth Porter also upped her price target slightly, moving to $38 from $32, as she said the 34% revenue growth seen in the third quarter puts Klaviyo in “rare air amongst software vendors.”

Categories
Stocks Technology

Lyft Is A Great Bargain At $17

I added more Lyft, Inc. (LYFT) shares this morning at $17.50 following their excellent Q3-2024 results. I had first recommended Lyft last month at $13.50

Lyft demonstrated remarkable growth in the third quarter of 2024, posting significant gains in operational metrics and financial performance. The rideshare giant reported record-breaking numbers in active riders and total rides, while substantially improving its financial position through increased revenue and robust cash flow generation.

These are its major strengths

Excellent revenue, EBITDA, and Cash Flow growth 

  • Gross Bookings: Reached $4.1 billion, marking a 16% year-over-year increase
  • Revenue: Hit $1.5 billion, showing substantial growth of 32% year-over-year
  • Net Loss: Posted $(12.4) million, including a $36.4 million restructuring charge
  • Adjusted EBITDA: Achieved $107.3 million, up from $92.0 million in Q3’23
  • Free Cash Flow: Generated $242.8 million, a significant improvement from $(30.0) million in Q3’23

Solid Operational Achievements

The company set new records in its core operational metrics:

  • Reached 24.4 million Active Riders (9% YoY growth)
  • Delivered 217 million Rides (16% YoY growth)
  • Maintained strong driver engagement with record driver hours

Strategic Initiatives In Autonomous Vehicles

Lyft announced significant partnerships in the autonomous vehicle space, positioning itself for future growth:

  • Formed alliances with Mobileye, May Mobility, and Nexar
  • Plans to launch autonomous vehicle service in Atlanta by 2025

Strategic Partnership with DoorDash

  • Established collaboration with DoorDash, the leading U.S. local delivery platform
  • Introduced exclusive benefits for DashPass members using Lyft services

Lyft has several weaknesses and challenges too.

  • Secondary player to Uber (UBER) in the rideshare market, with only a 30% market share compared to Uber’s 70%.
  • Doesn’t have the secondary revenue stream of Uber Eats to absorb fixed costs
  • Smaller market share and geographic footprint
  • Limited brand recognition internationally
  • Heavy reliance on incentives to attract/retain drivers and riders
  • High customer acquisition costs
  • Competitive pressure on pricing

Wall Street seems to like it as well


“We think the strong after-hours move is deserved,” Sanderson adds, and think the results will ease concern about Lyft’s ability to grow profitably. “But management’s 15% multi-year [gross bookings] target will still be a debate, as will the company’s position for autonomous vehicles.”

“Efficiencies are driving EBITDA ahead of expectations, and the profitability of the rides business model shined, even through increased investment into rider/demand-based incentives,” Morgan Stanley’s Nowak added, raising his FY25/26 adjusted EBITDA estimates by 9% and 2%, respectively, contributing to a higher price target of $18 from $16, previously.

BofA Securities also lifted its price target, now at $19, as the company has “seemingly limited incremental share losses, focusing on core customers and commuters that are still growing order frequency.”

“We have a Buy rating on Lyft as tailwinds from mobility/transportation recovery in urban areas are outweighing risk factors like driver wage inflation, inflation’s impact on consumer travel, and competition risk from Uber and new autonomous entrants,” BofA’s Michael McGovern and Justin Post said in their research note.

Conclusion – Continuing to accumulate for 3-5 years.


Lyft has a long way to go, but the first and second quarters of adjusted operating profits in a row and strong cash flow generation suggest that it is a serious competitor to Uber.

I had recommended and started buying Lyft in October at around $13-$14, calling it an attractive GARP (Growth At A Reasonable Price), and a very reasonable valuation compared to Uber, which is unlikely to have a monopoly in the ride-sharing market.

Lyft deserves a seat at the table and with excellent Q3 results and raised guidance it looks even more compelling. Sure, there was a massive bump from $14 to $17. post earnings but the valuation is still attractive at 1.1x sales for 12-15% sales growth and at 17x earnings for a 15-17% grower.

Categories
AI Semiconductors Stocks

Qualcomm, (QCOM) Solid Beat On Turbocharged Auto Sales

Post earnings the stock was up 9% to $188, yesterday, but has given up most of its gains, today. I’m continuing to accumulate.

I’ve owned Qualcomm for a while now, and recommended it in July 2024, and earlier in September 2023, when I wrote a lengthy article on the auto-tech industry. I believe in its long-term strengths and plan to keep the investment for the next three to five years.

Key Strengths include:

  • The Crown Jewel – Its licensing business with its treasure trove of patents generating 70% margins.
  • Strong growth from autos – one of the market leaders with Nvidia and Mobile Eye.
  • Its partnership with Microsoft (MSFT) for AI PCs

Sep Q-2024 Results

QCT sales rose 18% year-over-year to $8.678B.

Within QCT, Auto was the best performer – sales jumped 68% to $899M. This was the biggest surprise as Qualcomm’s auto sales growth cadence is in the mid-thirties. Auto sales tend to be lumpy so this was a really big positive.

Revenue from handsets rose 12% year-over-year to $6.096B. Handsets tend to struggle sometimes –  based on Apple’s fortunes and after drops in the previous year, this was a welcome return to growth.

Its IoT segment has been a slow grower – usually mid-single digits, but it grew 22% this quarter to $1.683Bn. 

Licensing revenue rose 21% year-over-year to $1.521B. Licensing is its most lucrative segment with gross margins over 70% – pretty much its crown jewel.

Q1FY2025 Guidance:

Revenue of $10.5B-$11.3B vs $10.61B consensus. At the midpoint, that’s an increase of 3% Non-GAAP diluted EPS of $2.85-$3.05 vs $2.87 consensus, which at the midpoint is also an increase of 3%. from handsets rose 12% year-over-year to $6.096B.

The CEO, Cristiano Anon, had this to say about the quarter

“We are pleased to conclude the fiscal year with strong results in the fourth quarter, delivering greater than 30% year-over-year growth in EPS,” “We are excited about our recent product announcements at Snapdragon Summit and Embedded World, as they continue to extend our technology leadership and position us well across Handsets, PC, Automotive and Industrial IoT. We look forward to providing an update on our growth and diversification initiatives at our Investor Day on November 19.”

Analysts from UBS and J.P. Morgan upped their price targets, while Barclays analyst Tom O’Malley (who kept his Overweight rating and $200 price target) pointed out that there is now a “bifurcation in Android between the high and low end” and Qualcomm is benefiting both in units and average selling price.

At $180, Qualcomm is very reasonably priced at 16x next year’s estimated earnings and 4x next year’s forecasted sales.

Given its market leadership in auto-tech, AI PCs, and sustainable, and recurring high-margin licensing business, Qualcomm should be priced between 20-22x earnings. It spends a good 25% of its revenues on R&D, which will enable it to continue innovating and growing. Even after that, it still returned $1.6Bn to shareholders with $0.7Bn in share buybacks and $0.9Bn in dividends.

Categories
Ad Tech Stocks

Applovin (APP) – What An Impressive Quarter!

Source:AppLovin.com

Applovin (APP) – What An Impressive Quarter! Shares +28% to $216! HOLDING NOW, Way Too Rich For Me.

I first bought and recommended AppLovin on July 5th, at $84, here’s a link to the first article on Seeking Alpha, and I continue to hold 70% after taking profits of around $150.

But hats off for an amazing quarter, Applovin’s Q3 GAAP EPS of $1.25 beats by $0.32 – This looks like some serious sandbagging.

Revenue of $1.2B (+38.8% Y/Y) beats by $70M. We forget that AppLovin is a $5Bn revenue company, and with these growth rates in a competitive Ad-Tech market, it is seriously behaving like a $1Bn start-up!

What is AppLovin’s secret sauce?: It introduced the new version of its AI-backed ad mediation platform AXON in q1-2023, and the results have been astounding since then. Advertising mediation platforms depend on the strength of the black box that matches targeted customers with relevant ads in real-time, with the best return on investment for the advertiser. It isn’t called performance marketing without reason. You’re only as good as the value that you executed immediately for the publisher or advertiser, which is vastly different from brand building. Clearly AXON has performed for its advertising clients, and this quarter’s outperformance was proof that AXON is the real deal.

From the CEO’s letter to shareholders:

“Our AXON models continue to improve through self-learning and, more importantly, this quarter, from technology enhancements by our engineering team. As we continue to improve our models our advertising partners are able to successfully spend at a greater scale. We’re proud to be a catalyst for reinvigorating growth in our industry.”

In Q3, AppLovin had these amazing metrics:

  • Revenue of $1.20 billion 39% YoY growth
  • Net income of $434 million 300% YoY growth at a net margin of 36%
  • Adjusted EBITDA of $722 million (+72% YoY) at an Adjusted EBITDA margin of 60%.
  • Net cash from operating activities of $551 million (+177% YoY)
  • Free Cash Flow of $545 million (+182% YoY).

Financial Guidance Summary 4Q – 24

Total Revenue $1,240 to $1,260 million – Previously $1,180 – At the midpoint that’s a very impressive upward revision of 6%.

Adjusted EBITDA $740 to $760 million

Adjusted EBITDA Margin 60%

AppLovin is sharing this wealth with its shareholders having bought back a total of 5.0 million shares for a total cost of $437Mn, last quarter. The board also authorized an incremental $2.0 billion for buybacks, increasing the total aggregate remaining authorization to $2.3 billion.